Fangdd Network Group Ltd. (NASDAQ: DUO) (“FangDD” or “the
Company”), a leading property technology company in China, today
announced its unaudited financial results for the three months and
the year ended December 31, 2022.
Fourth Quarter 2022 Financial Highlights
- Revenue for the
three months ended December 31, 2022 decreased by 25.8% to RMB59.9
million (US$8.7 million) from RMB80.7 million for the same period
of 2021.
- Net loss for
the three months ended December 31, 2022 decreased by 94.6% to
RMB32.7 million (US$4.7 million) from RMB604.1 million for the same
period of 2021.
- Non-GAAP1 net
loss was RMB30.1 million (US$4.4 million) for the three months
ended December 31, 2022, compared to non-GAAP net loss of RMB591.6
million for the same period of 2021.
Full Year 2022 Financial Highlights
- Revenue in 2022
decreased by 73.9% to RMB245.9 million (US$35.7 million) from
RMB942.4 million in 2021.
- Net loss in
2022 decreased by 80.1% to RMB239.6 million (US$34.7 million) from
RMB1,203.0 million in 2021.
- Non-GAAP net
loss was RMB222.9 million (US$32.3 million) in 2022, compared to
non-GAAP net loss of RMB1,155.9 million in 2021.
Fourth Quarter 2022 Operating Highlights
- The number of
active agents2 was 37.1 thousand for the three months ended
December 31, 2022, representing a decrease of 49.2% from
73.0 thousand for the same period of 2021.
- Total
closed-loop GMV3 facilitated on the Company’s platform for the
three months ended December 31, 2022 decreased by 55.5% to RMB3.4
billion (US$0.5 billion) from RMB7.5 billion for the same period of
2021.
Full Year 2022 Operating Highlights
- The number of
active agents in the Company’s marketplace was 143.7 thousand in
2022, representing a decrease of 62.0% from 378.0 thousand in
2021.
- Total
closed-loop GMV facilitated on the Company’s platform in 2022
decreased by 72.6% to RMB22.5 billion (US$3.3 billion) from RMB82.2
billion in 2021.
Mr. Xi Zeng, Chairman and Chief Executive
Officer of FangDD, commented, “In 2022, new property sales
decreased by 26.7% year-over-year in China, which represents the
largest decline on record, leading to the outbreak of real estate
developer liquidity risk. In 2022, the Company continued to control
risks and losses to survive the market downturn. Going forward, the
Company will proactively shrink the transaction size on our
marketplace for new property business and improve the
account-receivable management to control the operation risk caused
by developer credit risk outbreak. The Company plans to strengthen
cooperation with high-quality developers and carry out new projects
with caution. At the same time, the Company will continue to
explore the second growth curve in combination with the Company’s
existing strengths and the industry’s new trajectory.”
Fourth Quarter 2022 Financial Results
REVENUE
Revenue for the three months ended December 31, 2022 decreased
by 25.8% to RMB59.9 million (US$8.7 million) from RMB80.7 million
for the same period of 2021.
COST OF REVENUE
Cost of revenue for the three months ended
December 31, 2022 decreased by 34.4% to RMB49.9 million (US$7.2
million) from RMB76.0 million for the same period of 2021.
GROSS PROFIT
Gross profit for the three months ended December
31, 2022 increased to RMB10.0 million (US$1.5 million) from RMB4.7
million for the same period of 2021.
OPERATING EXPENSES
Operating expenses for the three months ended
December 31, 2022, which included share-based compensation expenses
of RMB2.6 million (US$0.38 million), decreased by 83.4% to RMB66.7
million (US$9.7 million) from RMB402.0 million, which included
share-based compensation expenses of RMB12.4 million, for the same
period of 2021.
- Sales and
marketing expenses for the three months ended December 31, 2022
decreased to RMB1.7 million (US$0.25 million) from RMB5.4 million
for the same period of 2021.
- Product
development expenses for the three months ended December 31, 2022
decreased to RMB12.0 million (US$1.7 million) from RMB25.5 million
for the same period of 2021.
- General and
administrative expenses for the three months ended December 31,
2022 decreased to RMB53.0 million (US$7.7 million) from RMB371.1
million for the same period of 2021.
NET LOSS
Net loss for the three months ended December 31,
2022 decreased by 94.6% to RMB32.7 million (US$4.7 million) from
RMB604.1 million for the same period of 2021.
Non-GAAP net loss was RMB30.1 million (US$4.4
million) for the three months ended December 31, 2022, compared to
non-GAAP net loss of RMB591.6 million for the same period of
2021.
NET LOSS PER ADS
Basic and diluted net loss per American
depositary share (“ADS”) for the three months ended December 31,
2022 were both RMB5.63 (US$0.82). In comparison, the Company’s
basic and diluted net loss attributable to ordinary shareholders
per ADS for the same period of 2021 were both RMB110.25. Each ADS
currently represents 375 Class A ordinary shares of the
Company.
Full Year 2022 Financial Results
REVENUE
Revenue in 2022 decreased by 73.9% to RMB245.9
million (US$35.7 million) from RMB942.4 million in 2021. The
decrease was mainly due to the decrease in total closed-loop GMV
facilitated on the Company’s platform by 72.6% to RMB22.5 billion
(US$3.3 billion) from RMB82.2 billion in 2021, which in turn
resulted from i) the continued property market downturn and the
Company’s actions to cease business cooperation with high credit
risk developers to avoid further losses caused by developer credit
risk, ii) the resurgence of COVID-19 outbreaks in China, which
significantly affected the Company’s business development, and iii)
the measures that the Company has taken to reduce its business
scale of new property and resale property transaction service
business to minimize its exposure to the systematic risk of real
estate industry in the continued downturn.
COST OF REVENUE
Cost of revenue in 2022 decreased by 73.5% to
RMB221.2 million (US$32.1 million) from RMB835.9 million in 2021.
The decrease was primarily due to the significant drop in revenue
for both new property and resale property transaction services,
which resulted in a decrease in the commission fees payable to
agents for their services rendered.
GROSS PROFIT AND GROSS MARGIN
Gross profit in 2022 decreased by 76.8% to
RMB24.7 million (US$3.6 million) from RMB106.5 million in 2021.
Gross margin in 2022 decreased to 10.1% from 11.3% in 2021.The
decrease was mainly because: i) we strategically adjusted our
resale property and new property business scale to cease business
cooperation with high credit risk developers to avoid further
losses due to continuous downturn of real estate transactions
market, which resulted in a significant decrease of the gross
profit, and ii) the development of other value added services
offered to various platform participants with higher gross profit
margins has not yet reached a scale, so its contribution to our
gross profit is currently limited.
OPERATING EXPENSES
Operating expenses in 2022, which included
share-based compensation expenses of RMB RMB16.7 million (US$2.4
million), decreased by 74.2% to RMB274.1 million (US$39.7 million)
from RMB1,063.8 million, which included share-based compensation
expenses of RMB47.1 million, in 2021.
- Sales and
marketing expenses in 2022 decreased to RMB13.2 million (US$1.9
million) from RMB64.9 million in 2021. The decrease was primarily
due to the optimization of the sales department composition, the
reduced spending on marketing activities related to new property
transaction services, and reduced scale of the resale property
transactions.
- Product
development expenses in 2022 decreased to RMB66.0 million (US$9.6
million) from RMB167.5 million in 2021. The decrease was
attributable to the decreases in personnel-related expenses
following the Company’s decision to significantly cut investments
in research and development for resale property business.
- General and
administrative expenses in 2022 decreased to RMB195.0 million
(US$28.3 million) from RMB831.4 million in 2021. The decrease was
mainly due to: i) the decrease in provision of impairment of
certain assets, such as accounts receivable due from developers,
other accounts receivable of project deposits and short-term
investments, and ii) the actions that the Company has taken to
improve operating efficiency, including the action to reduce
redundant positions, due to the expected continuation of the
current market condition in the foreseeable future.
NET LOSS
Net loss in 2022 was RMB239.6 million (US$34.7
million), compared to a net loss of RMB1203.0 million in 2021.
Non-GAAP net loss in 2022 was RMB222.9 million (US$32.3
million), compared to non-GAAP net loss of RMB1,155.9 million in
2021.
NET LOSS PER ADS
Basic and diluted net loss per ADS in 2022 were
both RMB43.88 (US$6.36). In comparison, the Company’s basic and
diluted net loss attributable to ordinary shareholders per ADS in
2021 were both RMB217.13. Each ADS currently represents 375 Class A
ordinary shares of the Company.
Liquidity
As of December 31, 2022, the Company had cash
and cash equivalents, restricted cash and short-term investments of
RMB184.7 million (US$26.8 million), short-term bank borrowings of
RMB72.5 million (US$10.5 million), and unutilized bank facilities
of RMB80.0 million (US$11.60 million). In 2022, net cash used in
operating activities was RMB127.0 million (US$18.4 million).
Recent Development
On March 2, 2023, the Company entered into
securities purchase agreements with several investors, pursuant to
which the Company agreed to sell and issue an aggregate of
1,000,000 ADSs to such investors at a purchase price of US$0.6208
per ADS in a registered direct offering. On March 3, 2023, 322,164
ADSs were issued to one investor at the first closing. The offering
is subject to terms and conditions, among others, that the closings
shall consummate on or before March 16, 2023. As the additional
closings did not take place by such date, the Company and the
investors have mutually agreed to terminate the agreements. The
Company intends to use the net proceeds from this offering for
general corporate purposes.
Exchange Rate
This press release contains translations of
certain Renminbi amounts into U.S. dollars at specified rates
solely for the convenience of readers. Unless otherwise noted, all
translations from Renminbi to U.S. dollars, in this press release,
were made at a rate of RMB6.8972 to US$1.00, the exchange rate set
forth in the H.10 statistical release of the Federal Reserve Board
on December 30, 2022. The Company makes no representation that the
Renminbi or U.S. dollar amounts referred could be converted into
U.S. dollar or Renminbi, as the case may be, at any particular rate
or at all.
Non-GAAP Financial Measures
To supplement the financial measures prepared in
accordance with generally accepted accounting principles in the
United States, or U.S. GAAP, this press release presents non-GAAP
income (loss) from operations, non-GAAP operating margin, non-GAAP
net income (loss) and non-GAAP net margin by excluding share-based
compensation expenses from income (loss) from operations and net
income (loss). The non-GAAP financial measures are not defined
under U.S. GAAP and are not presented in accordance with U.S. GAAP.
The Company believes these non-GAAP financial measures are
important to help investors understand the Company’s operating and
financial performance, compare business trends among different
reporting periods on a consistent basis and assess the Company’s
core operating results, as they exclude certain expenses that are
not expected to result in cash payments. Using the above non-GAAP
financial measures has certain limitations. Share-based
compensation expenses have been and will continue to be incurred in
the future and are not reflected in the presentation of the
non-GAAP financial measures, but should be considered in the
overall evaluation of the Company’s results. These non-GAAP
financial measures should be considered in addition to financial
measures prepared under U.S. GAAP, but should not be considered a
substitute for, or superior to, financial measures prepared under
U.S. GAAP. The Company compensates for these limitations by
reconciling these non-GAAP financial measures to the most directly
comparable U.S. GAAP measures, which should be considered when
evaluating the Company’s performance. Reconciliation of each of
these non-GAAP financial measures to the most directly comparable
U.S. GAAP financial measure is set forth at the end of this
release.
About FangDD
Fangdd Network Group Ltd. (Nasdaq: DUO) is a
leading property technology company in China, operating one of the
largest online real estate marketplaces in the country. Through
innovative use of mobile internet, cloud, big data, artificial
intelligence, among others, FangDD has fundamentally revolutionized
the way real estate transaction participants conduct their business
through a suite of modular products and solutions powered by SaaS
tools, products and technology. For more information, please visit
http://ir.fangdd.com.
Safe Harbor Statement
This announcement contains forward-looking
statements. These statements are made under the “safe harbor”
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology such as “aim,” “anticipate,” “believe,” “estimate,”
“expect,” “hope,” “going forward,” “intend,” “ought to,” “plan,”
“project,” “potential,” “seek,” “may,” “might,” “can,” “could,”
“will,” “would,” “shall,” “should,” “is likely to” and the negative
form of these words and other similar expressions. Among other
things, statements that are not historical facts, including
statements about FangDD’s beliefs and expectations, the business
outlook and quotations from management in this announcement, as
well as FangDD’s strategic and operational plans, are or contain
forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the
following. The general economic and business conditions in China
may deteriorate. The growth of Internet and mobile user population
in China might not be as strong as expected. FangDD’s plan to
attract new and retain existing real estate agents, expand property
listings, develop new products and increase service offerings might
not be carried out as expected. FangDD might not be able to
implement all of its strategic plans as expected. Competition in
China may intensify further. All information provided in this press
release is as of the date of this press release and are based on
assumptions that the Company believes to be reasonable as of this
date, and FangDD undertakes no obligation to update any
forward-looking statement, except as required under applicable
law.
Investor Relations Contact
FangDDMs. Linda LiDirector, Capital Markets
DepartmentPhone: +86-0755-2699-8968E-mail:ir@fangdd.com
Fangdd Network Group Ltd. |
SELECTED UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
DATA |
(All amounts in thousands of Renminbi, except for share and
per share data) |
|
|
As of December 31, |
|
|
As of December 31, |
|
|
2021 |
|
|
2022 |
|
Assets |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
492,107 |
|
|
143,934 |
|
Restricted cash |
24,131 |
|
|
38,811 |
|
Short-term investments |
6,150 |
|
|
2,000 |
|
Accounts receivable, net |
884,740 |
|
|
470,997 |
|
Prepayments and other current assets |
220,171 |
|
|
191,996 |
|
Inventory |
- |
|
|
11,157 |
|
Total current assets |
1,627,299 |
|
|
858,895 |
|
|
|
|
|
Total assets |
1,912,983 |
|
|
1,076,679 |
|
|
|
|
|
LIABILITIES |
|
|
|
Current liabilities |
|
|
|
Short-term bank borrowings |
134,780 |
|
|
72,500 |
|
Accounts payable |
1,175,943 |
|
|
659,215 |
|
Customers’ refundable
fees |
30,997 |
|
|
30,747 |
|
Accrued expenses and other payables |
238,198 |
|
|
181,140 |
|
Income taxes payable |
813 |
|
|
4,876 |
|
Operating lease liabilities-current |
|
|
1,243 |
|
Total current liabilities |
1,580,731 |
|
|
949,721 |
|
|
|
|
|
Total liabilities |
1,609,306 |
|
|
981,285 |
|
|
|
|
|
Total Fangdd Network
Group Ltd. shareholders' equity |
313,259 |
|
|
100,116 |
|
Non-controlling interests |
(9,582 |
) |
|
(4,722 |
) |
Total
equity |
303,677 |
|
|
95,394 |
|
|
|
|
|
Total liabilities and
equity |
1,912,983 |
|
|
1,076,679 |
|
|
Fangdd Network Group Ltd. |
SELECTED UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME (LOSS) DATA |
(All amounts in thousands of Renminbi, except for share and
per share data) |
|
|
For the Three Months EndedDecember
31, |
|
For the Fiscal Year EndedDecember
31, |
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
Revenue |
80,705 |
|
|
59,904 |
|
|
942,380 |
|
|
245,948 |
|
Cost of revenues |
(76,000 |
) |
|
(49,888 |
) |
|
(835,873 |
) |
|
(221,213 |
) |
Gross profit |
4,705 |
|
|
10,016 |
|
|
106,507 |
|
|
24,735 |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Sales and marketing expenses |
(5,351 |
) |
|
(1,726 |
) |
|
(64,914 |
) |
|
(13,195 |
) |
Product development expenses |
(25,473 |
) |
|
(11,957 |
) |
|
(167,530 |
) |
|
(65,971 |
) |
General and administrative expenses |
(371,145 |
) |
|
(53,007 |
) |
|
(831,358 |
) |
|
(194,962 |
) |
Total operating expenses |
(401,969 |
) |
|
(66,690 |
) |
|
(1,063,802 |
) |
|
(274,128 |
) |
|
|
|
|
|
|
|
|
Loss from operations |
(397,264 |
) |
|
(56,674 |
) |
|
(957,295 |
) |
|
(249,393 |
) |
|
|
|
|
|
|
|
|
Net loss |
(604,083 |
) |
|
(32,739 |
) |
|
(1,202,997 |
) |
|
(239,588 |
) |
Net loss/(gain) attributable
to minority shareholders |
3,859 |
|
|
169 |
|
|
31,832 |
|
|
(4,450 |
) |
Net loss attributable
to ordinary shareholders |
(600,224 |
) |
|
(32,570 |
) |
|
(1,171,165 |
) |
|
(244,038 |
) |
|
|
|
|
|
|
|
|
Net loss |
(604,083 |
) |
|
(32,739 |
) |
|
(1,202,997 |
) |
|
(239,588 |
) |
Other comprehensive
(loss) income |
|
|
|
|
|
|
|
Foreign currency translation
adjustment, net of nil income taxes |
(5,283 |
) |
|
(8,353 |
) |
|
(7,926 |
) |
|
11,036 |
|
Total comprehensive
loss, net of income taxes |
(609,366 |
) |
|
(41,092 |
) |
|
(1,210,923 |
) |
|
(228,552 |
) |
Total comprehensive
loss/(gain) attributable to minority shareholders |
3,859 |
|
|
169 |
|
|
31,832 |
|
|
(4,450 |
) |
Total comprehensive
loss attributable to ordinary shareholders |
(605,507 |
) |
|
(40,923 |
) |
|
(1,179,091 |
) |
|
(233,002 |
) |
|
|
|
|
|
|
|
|
Net loss per share |
|
|
|
|
|
|
|
- Basic |
(0.29 |
) |
|
(0.02 |
) |
|
(0.58 |
) |
|
(0.12 |
) |
- Diluted |
(0.29 |
) |
|
(0.02 |
) |
|
(0.58 |
) |
|
(0.12 |
) |
Net loss per ADS |
|
|
|
|
|
|
|
- Basic |
(110.25 |
) |
|
(5.63 |
) |
|
(217.13 |
) |
|
(43.88 |
) |
- Diluted |
(110.25 |
) |
|
(5.63 |
) |
|
(217.13 |
) |
|
(43.88 |
) |
Weighted average number of ordinary shares used in computing net
loss per share, basic and diluted |
|
|
|
|
|
|
|
- Basic |
2,040,120,324 |
|
|
2,166,802,622 |
|
|
2,022,446,988 |
|
|
2,078,624,721 |
|
- Diluted |
2,040,120,324 |
|
|
2,166,802,622 |
|
|
2,022,446,988 |
|
|
2,078,624,721 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP and Non-GAAP Results |
(All amounts in thousands of Renminbi, except for share and
per share data) |
|
|
|
For the Three Months EndedDecember
31, |
|
For the Fiscal Year EndedDecember
31, |
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
GAAP loss from
operations |
(397,264 |
) |
|
(56,674 |
) |
|
(957,295 |
) |
|
(249,393 |
) |
Share-based compensation
expenses |
12,447 |
|
|
2,642 |
|
|
47,066 |
|
|
16,724 |
|
Non-GAAP loss from
operations |
(384,817 |
) |
|
(54,032 |
) |
|
(910,229 |
) |
|
(232,669 |
) |
|
|
|
|
|
|
|
|
GAAP net
loss |
(604,083 |
) |
|
(32,739 |
) |
|
(1,202,997 |
) |
|
(239,588 |
) |
Share-based compensation
expenses |
12,447 |
|
|
2,642 |
|
|
47,066 |
|
|
16,724 |
|
Non-GAAP net
income/(loss) |
(591,636 |
) |
|
(30,097 |
) |
|
(1,155,931 |
) |
|
(222,864 |
) |
|
|
|
|
|
|
|
|
GAAP operating
margin |
(492.24 |
%) |
|
(94.61 |
%) |
|
(101.58 |
%) |
|
(101.40 |
%) |
Share-based compensation
expenses |
15.42 |
% |
|
4.41 |
% |
|
4.99 |
% |
|
6.80 |
% |
Non-GAAP operating
margin |
(476.82 |
%) |
|
(90.20 |
%) |
|
(96.59 |
%) |
|
(94.60 |
%) |
|
|
|
|
|
|
|
|
GAAP net
margin |
(748.51 |
%) |
|
(54.65 |
%) |
|
(127.66 |
%) |
|
(97.41 |
%) |
Share-based compensation
expenses |
15.42 |
% |
|
4.41 |
% |
|
4.99 |
% |
|
6.80 |
% |
Non-GAAP net
margin |
(733.08 |
%) |
|
(50.24 |
%) |
|
(122.66 |
%) |
|
(90.61 |
%) |
_______________________
1 Non-GAAP net loss is defined as net loss
excluding share-based compensation expenses. For more information
on these non-GAAP financial measures, please see the section
captioned “Non-GAAP Financial Measures” and the tables captioned
“Reconciliation of GAAP and Non-GAAP Results” set forth at the end
of this release.2 “Active agents” refer to real estate agents who
have visited our marketplace and used one or more of its functions
within a period of time.3 “Closed-loop GMV” refers to the GMV of
closed-loop transactions facilitated in the Company’s marketplace
during the specified period. Closed-loop transactions refer to
property transactions in which the major steps are completed or
managed by real estate agents in the Company’s marketplace.
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