Yunji Inc. Reports Q2 2024 Financial Results: Navigating Challenges in China's E-commerce Landscape

Earnings call: Yunji reports Q2 2024 financial results amid market shifts By Investing.com

In the recent earnings call, Yunji (NASDAQ:YJ) Inc. (ticker symbol undisclosed) discussed its financial performance for the second quarter of 2024. The company reported total revenues of RMB106 million, a decrease from RMB167.1 million in the previous year. Despite market headwinds and adjustments to their product range, Yunji maintained a strong gross margin of 46.6%. Expenses across various departments decreased due to cost optimization efforts, leading to a net loss of RMB11.9 million, an improvement from a net loss of RMB41.5 million in the same period last year. The company highlighted its strategic initiatives, including expanding into offline retail and enhancing product offerings, especially in the health sector. Yunji's financial director, Yeqing Cui, provided a detailed analysis of the financial results, noting that the company's strategic initiatives are supported by a stable financial position. He also highlighted the company's focus on operational efficiencies and adapting to market changes. The management concluded the call with an open invitation for further questions and a look forward to the next quarter's discussion. Yunji Inc .'s recent earnings call shed light on its financial performance, revealing both challenges and strategic responses to the current market environment. To provide further context on the company's financial health and stock performance, here are some key insights based on real-time data from InvestingPro: These InvestingPro Tips and data points offer a snapshot of Yunji's financial landscape and market perception. For a deeper dive and to access more InvestingPro Tips, investors can visit https://www.investing.com/pro/YJ, where additional insights are available. Currently, there are 11 more tips listed on InvestingPro that can provide further guidance on Yunji's stock and financial status. Operator: Good morning, and good evening, ladies and gentlemen. Thank you for standing by and welcome to Yunji's Second Quarter 2024 Earnings Conference Call. With us today are Mr. Shanglue Xiao, Chairman and Chief Executive Officer; Mr. Yeqing Cui, Senior Financial Director; and Ms. Kaye Liu, Investor Relations Director of the Company. As a reminder, this conference call is being recorded. Now I would like to turn the conference over to our first speaker, Ms. Kaye Liu, IRD of Yunji. Please go ahead, ma'am. Kaye Liu: Hello, everyone. Welcome to our Second Quarter 2024 Earnings Call. Before we start, please note that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on our current expectations and current market operating conditions, and relate to events that involve known and unknown risks, uncertainties and other factors of the Yunji's industry. These forward-looking statements can be identified by terminologies such as will, expect, anticipate, continue or other similar expressions. For a detailed discussion of these risks and uncertainties, please refer to our related documents filed with US SEC. Any forward-looking statements that we make on this call are based on assumptions as of today and are expressly qualified entirely by cautionary statements, risk factors and details of the Company's filings with SEC. Yunji do not undertake any obligation to update these statements, expect as required under applicable law. With that I will now turn over to Shanglue Xiao, Chairman and CEO of Yunji. Shanglue Xiao: [Foreign Language] Hello, everyone. Welcome to Yunji's Second Quarter 2024 Earnings Call. [Foreign Language] Yunji has been operating for nine years. During this time, we have seen our users grown from new parents to those welcoming second child or entering new life stages. Our goal is to be a long-term partner for our users, supporting the health of their families. In light of China's aging population and the zero economy, we are looking to expand our user base further. [Foreign Language] Now let's discuss some of our ongoing initiatives. As part of our initiatives to provide our users with a holistic health solution, we plan to extend our presence into offline communities and establish wellness spaces, bringing our health care products directly to consumers. [Foreign Language] In July, we opened our first offline store, focusing on traditional Chinese medicine and wellness. This marks a new chapter for us in the health sector. The offline store will strengthen the connection between our online and offline services and lay the ground work for expanding our customer base. We aim to create a word-of-mouth network based on local committees offering retail services and expand our target customers' groups to those aged 41 to 55. This demographic values personal connections and can help us attract quality customers through referrals. [Foreign Language] In addition to our offline expansion, we plan to increase more organic grain and health products. We remain committed to our product selection criteria. We do not offer mediocre product or attempt to be or encompassing platform. Instead, we carefully choose quality products, set reasonable prices and ensure value for our users. This approach allows our service managers to earn a fair profit margin. [Foreign Language] Since our funding, we have focused on quality and followed an expensive but curated product selection strategy. We use data-driven metrics to evaluate and adjust our product launch cycles based on our user feedback. Additionally, we emphasize product traceability. Beyond our private label brand, we will visit the origins and factories of the key partner brands, especially in food and health. We encourage our managers to lead teams in these traceability efforts to understand the production processes of quality products. Personally, I visit various regions across the country multiple times each month to share my experience and build trust with our users and the service providers. [Foreign Language] Moving onto another important area, our beauty business. In the beauty sector of our private label brand, SUYE, recently celebrated its 14th anniversary. Over the years, SUYE has grown alongside our loyal users. Our product development continues to focus on antiaging solutions, where we try to create exceptional products. Antiaging is a high-end sector that has our technology and raw materials. We have developed a comprehensive product line, including UV resistance sunscreens, collagen supplement and eye care products. We are forming a complete antiaging metrics to meet users' diverse needs. [Foreign Language] Another key number of focus for us is marketing innovation. We are also innovating in our marketing efforts. We are combining our technology and AI development with short video content creation. General content no longer works in the short video era. We believe that creating unique content is key to driving traffic. We are seizing this opportunity to explore new avenues in our short video projects. Our goal is to nurture talent by teaching users how to create original content. We provide AI support and share marketing skills to help them become distinctive content creators. As in time, we are enhancing our service capabilities to offer content creators, more resources and useful tools. [Foreign Language] While the challenges remain, we are committed to our long-term strategic goals, we are focused on improving our operations and adapting to the evolving market landscape. With that I will turn the call over to Mr. Cui, our Senior Financial Director to go through the financial results. Yeqing Cui: Okay. Thank you, Shanglue. Hello, everyone. Before I go through our financial results, please note that all numbers stated in the following remarks are in RMB terms and all comparisons and percentage changes are on a year-over-year basis unless otherwise noted. During the second quarter of 2024, we encountered some market dynamics that influenced our operations. However, our current financial positions allow us to support our strategic initiatives as we regularly assess the profitability of both new and existing business lines, making thoughtful adjustments in response to market changes. This approach help us maintain a stable financial position in a shifting business landscape. While we continue to refine our inventory management protocols, which contribute to a gross margin of 46.6%. We are also focused on optimizing our product range and supplier network to better align with customer preferences. As we move forward, we will continue to pursuing growth opportunities prudently while ensuring our financial stability. Now let's take a close look at our financials. Total revenues were RMB106 million compared to RMB167.1 million a year ago. Revenues from sales of merchandise were RMB83 million and the revenues from our marketplace business were RMB21.1 million. The changes were primarily driven by softer consumer confidence and ongoing adjustments to our product range across all categories. Additionally, the optimization of our supplier and merger network contribute to a short-term impact on sales. Despite these changes, our gross margin remained relatively strong at 46.6%. This strength is attributed to continued customer loyalty towards our product labels and our effective product creation strategy. Now let's take a look at our operating expense. Fulfillment expense were RMB20.7 million compared to RMB29.9 million a year ago, this was mainly due to low warehousing and logistics costs resulting from decreased merchandise sales as well as reduced personal cost from staffing optimization. Sales and marketing expense decreased to RMB21.7 million from RMB33.4 million a year ago. This was primarily a result of a decline in member management fee. Technology and content expense were RMB12.2 million compared to RMB14.3 million a year ago. This was largely due to lower personnel costs from staffing optimizations and a reduction in server service cost. General and administrative expense were RMB18.7 million compared to RMB33.2 million a year ago. This was mainly due to a reduced allowance for credit loss and lower personnel costs from staffing adjustments. Total operating expense in the second quarter decreased to RMB73.3 million from RMB110.8 million in the same period of 2023. Loss from operations were RMB23.1 million compared to RMB11.8 million a year ago. Net loss was RMB11.9 million compared to RMB41.5 million a year ago, while adjusted net loss were RMB9.7 million compared with RMB39.8 million a year ago. Basic and diluted net loss per share attributed to ordinary shareholders were both RMB0.01 compared to RMB0.02 in the same period of 2023. Turning to liquidity. As of June 30, 2024, we had a total of RMB324.5 million in cash and cash equivalents, restricted cash and short-term investments on our balance sheet compared to RMB561.9 million as of December 31, 2023. Our liquidity assets were sufficient to cover our payable obligations, and we do not hold any long-term bank loans or debits on our balance sheet. In addition, we are dedicated to making the most of our working capital and smartly managing our assets to better support our operations. Looking ahead, we remain committed to enhancing our operational efficiencies and adapting our strategy to navigate the evolving market landscape. We believe that our ongoing improvements in inventory management and cost optimization will position us favorable for future growth as we continue to innovate and refine our product offerings. We are confident in our ability to regain moment and driving long-term value for our shareholders. This concludes our prepared remarks for today. Operator, we are now ready to take questions. Operator: We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Ethan Yu with First Trust China. Please go ahead. Ethan Yu: Hi. Good evening. Thanks for taking my question. I have a question about our business operation. Mr. Xiao just mentioned that you have participated in numerous product traceability efforts. Could you share more color from this experience? And how will these insights be applied to our product selection and operation at Yunji. [Foreign Language] Shanglue Xiao: [Foreign Language] Thank you for your question. [Foreign Language] I've been traveling across the country almost every week for product traceability. In fact, there are many good merchants and the supply chains in China, especially for high demand and high repurchase rate products like meat, eggs and diary. [Foreign Language] However, we cannot simply rely on inspection reports, historical sales data and various promotional materials to confidently introduce those merchants to our platform. Only more authentic cost effective and healthy products which are better suited to the physique of the Chinese people can bring real value to our users. This requires our team to explore and experience personally. This generates sharing material from Yunji's traceability activities can gain more consumer trust. [Foreign Language] Additionally, along with offline traceability, we can host more offline loans and taking events, leveraging the advantages of a face-to-face communication to acquire loyal customers. [Foreign Language] Within such offline loan and offline traceability activities, we are going to create the products that are going to go to the deep part of the consumers. [Foreign Language] And those products and the related materials are going to encourage the consumer to buy on our platform. [Foreign Language] Thank you for your question. Ethan Yu: [Foreign Language] Great, thanks. I have no more questions. Thanks. Operator: As there are no further questions at this time. I'd like to hand the call back over to the management for any closing remarks. Kaye Liu: Thank you for joining us today. Please do not hesitate to contact us if you have any further questions and we look forward to talking with you next quarter. Bye. Operator: The conference is now concluded. Thank you for attending. You may now disconnect.

Yunji Inc. (YJ) Q2 2024 Earnings Call Transcript

Kaye Liu - Investor Relations Director Shanglue Xiao - Chairman and Chief Executive Officer Yeqing Cui - Senior Financial Director Good morning, and good evening, ladies and gentlemen. Thank you for standing by and welcome to Yunji's Second Quarter 2024 Earnings Conference Call. With us today are Mr. Shanglue Xiao, Chairman and Chief Executive Officer; Mr. Yeqing Cui, Senior Financial Director; and Ms. Kaye Liu, Investor Relations Director of the Company. As a reminder, this conference call is being recorded. Now I would like to turn the conference over to our first speaker, Ms. Kaye Liu, IRD of Yunji. Please go ahead, ma'am. Kaye Liu Hello, everyone. Welcome to our Second Quarter 2024 Earnings Call. Before we start, please note that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on our current expectations and current market operating conditions, and relate to events that involve known and unknown risks, uncertainties and other factors of the Yunji's industry. These forward-looking statements can be identified by terminologies such as will, expect, anticipate, continue or other similar expressions. For a detailed discussion of these risks and uncertainties, please refer to our related documents filed with US SEC. Any forward-looking statements that we make on this call are based on assumptions as of today and are expressly qualified entirely by cautionary statements, risk factors and details of the Company's filings with SEC. Yunji do not undertake any obligation to update these statements, expect as required under applicable law. With that I will now turn over to Shanglue Xiao, Chairman and CEO of Yunji. Shanglue Xiao [Foreign Language] Hello, everyone. Welcome to Yunji's Second Quarter 2024 Earnings Call. [Foreign Language] Yunji has been operating for nine years. During this time, we have seen our users grown from new parents to those welcoming second child or entering new life stages. Our goal is to be a long-term partner for our users, supporting the health of their families. In light of China's aging population and the zero economy, we are looking to expand our user base further. [Foreign Language] Now let's discuss some of our ongoing initiatives. As part of our initiatives to provide our users with a holistic health solution, we plan to extend our presence into offline communities and establish wellness spaces, bringing our health care products directly to consumers. [Foreign Language] In July, we opened our first offline store, focusing on traditional Chinese medicine and wellness. This marks a new chapter for us in the health sector. The offline store will strengthen the connection between our online and offline services and lay the ground work for expanding our customer base. We aim to create a word-of-mouth network based on local committees offering retail services and expand our target customers' groups to those aged 41 to 55. This demographic values personal connections and can help us attract quality customers through referrals. [Foreign Language] In addition to our offline expansion, we plan to increase more organic grain and health products. We remain committed to our product selection criteria. We do not offer mediocre product or attempt to be or encompassing platform. Instead, we carefully choose quality products, set reasonable prices and ensure value for our users. This approach allows our service managers to earn a fair profit margin. [Foreign Language] Since our funding, we have focused on quality and followed an expensive but curated product selection strategy. We use data-driven metrics to evaluate and adjust our product launch cycles based on our user feedback. Additionally, we emphasize product traceability. Beyond our private label brand, we will visit the origins and factories of the key partner brands, especially in food and health. We encourage our managers to lead teams in these traceability efforts to understand the production processes of quality products. Personally, I visit various regions across the country multiple times each month to share my experience and build trust with our users and the service providers. [Foreign Language] Moving onto another important area, our beauty business. In the beauty sector of our private label brand, SUYE, recently celebrated its 14th anniversary. Over the years, SUYE has grown alongside our loyal users. Our product development continues to focus on antiaging solutions, where we try to create exceptional products. Antiaging is a high-end sector that has our technology and raw materials. We have developed a comprehensive product line, including UV resistance sunscreens, collagen supplement and eye care products. We are forming a complete antiaging metrics to meet users' diverse needs. [Foreign Language] Another key number of focus for us is marketing innovation. We are also innovating in our marketing efforts. We are combining our technology and AI development with short video content creation. General content no longer works in the short video era. We believe that creating unique content is key to driving traffic. We are seizing this opportunity to explore new avenues in our short video projects. Our goal is to nurture talent by teaching users how to create original content. We provide AI support and share marketing skills to help them become distinctive content creators. As in time, we are enhancing our service capabilities to offer content creators, more resources and useful tools. [Foreign Language] While the challenges remain, we are committed to our long-term strategic goals, we are focused on improving our operations and adapting to the evolving market landscape. With that I will turn the call over to Mr. Cui, our Senior Financial Director to go through the financial results. Yeqing Cui Okay. Thank you, Shanglue. Hello, everyone. Before I go through our financial results, please note that all numbers stated in the following remarks are in RMB terms and all comparisons and percentage changes are on a year-over-year basis unless otherwise noted. During the second quarter of 2024, we encountered some market dynamics that influenced our operations. However, our current financial positions allow us to support our strategic initiatives as we regularly assess the profitability of both new and existing business lines, making thoughtful adjustments in response to market changes. This approach help us maintain a stable financial position in a shifting business landscape. While we continue to refine our inventory management protocols, which contribute to a gross margin of 46.6%. We are also focused on optimizing our product range and supplier network to better align with customer preferences. As we move forward, we will continue to pursuing growth opportunities prudently while ensuring our financial stability. Now let's take a close look at our financials. Total revenues were RMB106 million compared to RMB167.1 million a year ago. Revenues from sales of merchandise were RMB83 million and the revenues from our marketplace business were RMB21.1 million. The changes were primarily driven by softer consumer confidence and ongoing adjustments to our product range across all categories. Additionally, the optimization of our supplier and merger network contribute to a short-term impact on sales. Despite these changes, our gross margin remained relatively strong at 46.6%. This strength is attributed to continued customer loyalty towards our product labels and our effective product creation strategy. Now let's take a look at our operating expense. Fulfillment expense were RMB20.7 million compared to RMB29.9 million a year ago, this was mainly due to low warehousing and logistics costs resulting from decreased merchandise sales as well as reduced personal cost from staffing optimization. Sales and marketing expense decreased to RMB21.7 million from RMB33.4 million a year ago. This was primarily a result of a decline in member management fee. Technology and content expense were RMB12.2 million compared to RMB14.3 million a year ago. This was largely due to lower personnel costs from staffing optimizations and a reduction in server service cost. General and administrative expense were RMB18.7 million compared to RMB33.2 million a year ago. This was mainly due to a reduced allowance for credit loss and lower personnel costs from staffing adjustments. Total operating expense in the second quarter decreased to RMB73.3 million from RMB110.8 million in the same period of 2023. Loss from operations were RMB23.1 million compared to RMB11.8 million a year ago. Net loss was RMB11.9 million compared to RMB41.5 million a year ago, while adjusted net loss were RMB9.7 million compared with RMB39.8 million a year ago. Basic and diluted net loss per share attributed to ordinary shareholders were both RMB0.01 compared to RMB0.02 in the same period of 2023. Turning to liquidity. As of June 30, 2024, we had a total of RMB324.5 million in cash and cash equivalents, restricted cash and short-term investments on our balance sheet compared to RMB561.9 million as of December 31, 2023. Our liquidity assets were sufficient to cover our payable obligations, and we do not hold any long-term bank loans or debits on our balance sheet. In addition, we are dedicated to making the most of our working capital and smartly managing our assets to better support our operations. Looking ahead, we remain committed to enhancing our operational efficiencies and adapting our strategy to navigate the evolving market landscape. We believe that our ongoing improvements in inventory management and cost optimization will position us favorable for future growth as we continue to innovate and refine our product offerings. We are confident in our ability to regain moment and driving long-term value for our shareholders. This concludes our prepared remarks for today. Operator, we are now ready to take questions. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Ethan Yu with First Trust China. Please go ahead. Ethan Yu Hi. Good evening. Thanks for taking my question. I have a question about our business operation. Mr. Xiao just mentioned that you have participated in numerous product traceability efforts. Could you share more color from this experience? And how will these insights be applied to our product selection and operation at Yunji. [Foreign Language] [Foreign Language] I've been traveling across the country almost every week for product traceability. In fact, there are many good merchants and the supply chains in China, especially for high demand and high repurchase rate products like meat, eggs and diary. [Foreign Language] However, we cannot simply rely on inspection reports, historical sales data and various promotional materials to confidently introduce those merchants to our platform. Only more authentic cost effective and healthy products which are better suited to the physique of the Chinese people can bring real value to our users. This requires our team to explore and experience personally. This generates sharing material from Yunji's traceability activities can gain more consumer trust. [Foreign Language] Additionally, along with offline traceability, we can host more offline loans and taking events, leveraging the advantages of a face-to-face communication to acquire loyal customers. [Foreign Language] Within such offline loan and offline traceability activities, we are going to create the products that are going to go to the deep part of the consumers. [Foreign Language] And those products and the related materials are going to encourage the consumer to buy on our platform. [Foreign Language] Great, thanks. I have no more questions. Thanks. As there are no further questions at this time. I'd like to hand the call back over to the management for any closing remarks. Kaye Liu Thank you for joining us today. Please do not hesitate to contact us if you have any further questions and we look forward to talking with you next quarter. Bye. The conference is now concluded. Thank you for attending. You may now disconnect.

Yunji Announces Second Quarter 2024 Unaudited Financial Results By Investing.com

Total revenues in the second quarter of 2024 were RMB106.0 million (US$14.6 million), compared with RMB167.1 million in the same period of 2023. The change was primarily due to soft consumer confidence and the Company's continued strategy to refine its product selection across all categories and optimize its selection of suppliers and merchants, which had a near-term impact on sales. Mr. Shanglue Xiao, Chairman and Chief Executive Officer of Yunji, said, "In the second quarter of 2024, we continued to enhance our efforts in short videos and livestreaming while also integrating offline initiatives alongside our digital presence. Recognizing the significant potential within the silver economy in , we diversified our product mix and services to better serve the mature adult demographic. By complementing our online efforts with these offline initiatives and refining our product offerings, we aim to broaden our customer base and increase repeat purchases. This balanced approach reflects our commitment to adaptability and sustainable growth in a dynamic market environment." "Our current financial position allows us to support our strategic initiatives. We regularly assess the profitability of both new and existing business lines, making thoughtful adjustments in response to market changes. This approach helps us maintain a stable financial position in a shifting business landscape. As we move forward, we will continue to pursue growth opportunities prudently while ensuring our financial stability," said Mr. , Senior Financial Director of Yunji. Second Quarter 2024 Unaudited Financial Results Total revenues were (), compared with in the same period of 2023. This change was primarily due to soft consumer confidence and the Company's continued strategy to refine its product selection across all categories and optimize its selection of suppliers and merchants, which had a near-term impact on sales. Total cost of revenues decreased by 30.0% to (), or 53.4% of total revenues, from , or 48.4% of total revenues, in the same period of 2023. The decrease was mainly attributable to the change in merchandise sales, for which revenues are recognized on a gross basis. Total cost of revenues was mainly comprised of the costs related to the sales of merchandise in the second quarter of 2024. In evaluating the business, the Company considers and uses adjusted net loss as a supplemental measure to review and assess operating performance. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. The Company defines adjusted net loss as net loss excluding share-based compensation. The Company presents adjusted net loss because it is used by management to evaluate operating performance and formulate business plans. Adjusted net loss enables management to assess operating performance without considering the impact of share-based compensation recorded under ASC 718, "Compensation-Stock Compensation." The Company also believes that the use of this non-GAAP measure facilitates investors' assessment of operating performance. This non-GAAP financial measure is not defined under GAAP and is not presented in accordance with GAAP. The non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using adjusted net loss is that it does not reflect all items of income and expense that affect the Company's operations. Share-based compensation has been and may continue to be incurred in Yunji's business and is not reflected in the presentation of adjusted net loss. Further, this non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore its comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP financial measure to the nearest GAAP performance measure, all of which should be considered when evaluating performance. Yunji encourages investors and others to review its financial information in its entirety and not rely on a single financial measure. For more information on the non-GAAP financial measures, please see the table captioned "Reconciliation of Non-GAAP Measures to the Most Directly Comparable Financial Measures" set forth at the end of this press release. A telephone replay of the call will be available after the conclusion of the conference call for one week. This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "confident," "potential," "continue" or other similar expressions. Among other things, the quotations from management in this announcement, as well as Yunji's strategic and operational plans, contain forward-looking statements. Yunji may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Yunji's beliefs and expectations, are 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: Yunji's growth strategies; its future business development, results of operations and financial condition; its ability to understand buyer needs and provide products and services to attract and retain buyers; its ability to maintain and enhance the recognition and reputation of its brand; its ability to rely on merchants and third-party logistics service providers to provide delivery services to buyers; its ability to maintain and improve quality control policies and measures; its ability to establish and maintain relationships with merchants; trends and competition in e-commerce market; changes in its revenues and certain cost or expense items; the expected growth of e-commerce market; PRC governmental policies and regulations relating to Yunji's industry, and general economic and business conditions globally and in and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Yunji's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Yunji undertakes no obligation to update any forward-looking statement, except as required under applicable law. About Yunji Inc. Yunji Inc. is a leading social e-commerce platform in that has pioneered a unique, membership-based model to leverage the power of social interactions. The Company's e-commerce platform offers high-quality products at attractive prices across a wide variety of categories catering to the day-to-day needs of Chinese consumers. In addition, the Company uses advanced technologies including big data and artificial intelligence to optimize user experience and incentivize members to promote the platform as well as share products with their social contacts. Through deliberate product curation, centralized merchandise sourcing, and efficient supply chain management, Yunji has established itself as a trustworthy e-commerce platform with high-quality products and exclusive membership benefits, including discounted prices. For more information, please visit https://investor.yunjiglobal.com/

Yunji Announces Second Quarter 2024 Unaudited Financial Results - Yunji (NASDAQ:YJ)

HANGZHOU, China, Aug. 23, 2024 /PRNewswire/ -- Yunji Inc. ("Yunji" or the "Company") YJ, a leading membership-based social e-commerce platform, today announced its unaudited financial results for the second quarter ended June 30, 2024[1]. Second Quarter 2024 Highlights Total revenues in the second quarter of 2024 were RMB106.0 million (US$14.6 million), compared with RMB167.1 million in the same period of 2023. The change was primarily due to soft consumer confidence and the Company's continued strategy to refine its product selection across all categories and optimize its selection of suppliers and merchants, which had a near-term impact on sales.Repeat purchase rate[2] in the twelve months ended June 30, 2024 was 73.5%. Mr. Shanglue Xiao, Chairman and Chief Executive Officer of Yunji, said, "In the second quarter of 2024, we continued to enhance our efforts in short videos and livestreaming while also integrating offline initiatives alongside our digital presence. Recognizing the significant potential within the silver economy in China, we diversified our product mix and services to better serve the mature adult demographic. By complementing our online efforts with these offline initiatives and refining our product offerings, we aim to broaden our customer base and increase repeat purchases. This balanced approach reflects our commitment to adaptability and sustainable growth in a dynamic market environment." "Our current financial position allows us to support our strategic initiatives. We regularly assess the profitability of both new and existing business lines, making thoughtful adjustments in response to market changes. This approach helps us maintain a stable financial position in a shifting business landscape. As we move forward, we will continue to pursue growth opportunities prudently while ensuring our financial stability," said Mr. Yeqing Cui, Senior Financial Director of Yunji. Second Quarter 2024 Unaudited Financial Results Total revenues were RMB106.0 million (US$14.6 million), compared with RMB167.1 million in the same period of 2023. This change was primarily due to soft consumer confidence and the Company's continued strategy to refine its product selection across all categories and optimize its selection of suppliers and merchants, which had a near-term impact on sales. Revenues from sales of merchandise were RMB83.0 million (US$11.4 million), compared with RMB131.2 million in the same period of 2023.Revenues from the marketplace business were RMB21.1 million (US$2.9 million), compared with RMB34.3 million in the same period of 2023.Other revenues were RMB1.9 million (US$0.3 million), compared with RMB1.6 million in the same period of 2023. Total cost of revenues decreased by 30.0% to RMB56.6 million (US$7.8 million), or 53.4% of total revenues, from RMB80.8 million, or 48.4% of total revenues, in the same period of 2023. The decrease was mainly attributable to the change in merchandise sales, for which revenues are recognized on a gross basis. Total cost of revenues was mainly comprised of the costs related to the sales of merchandise in the second quarter of 2024. Total operating expenses decreased by 33.9% to RMB73.3million (US$10.1 million) from RMB110.8 million in the same period of 2023. Fulfillment expenses decreased by 30.9% to RMB20.7 million (US$2.8 million), or 19.5% of total revenues, from RMB29.9 million, or 17.9% of total revenues, in the same period of 2023. The decrease was mainly due to (i) reduced warehousing and logistics expenses due to lower merchandise sales, and (ii) reduced personnel costs as a result of staffing structure refinements.Sales and marketing expenses decreased by 35.0% to RMB21.7 million (US$3.0 million), or 20.5% of total revenues, from RMB33.4 million, or 20.0% of total revenues, in the same period of 2023. The decrease was mainly due to the reduction in member management fees.Technology and content expenses decreased by 14.4% to RMB12.2 million (US$1.7 million), or 11.5% of total revenues, from RMB14.3 million, or 8.5% of total revenues, in the same period of 2023. The decrease was mainly due to (i) the reduction in personnel costs as a result of staffing structure refinements, and (ii) reduced server service fees.General and administrative expenses decreased by 43.8% to RMB18.7 million (US$2.6 million), or 17.6% of total revenues, from RMB33.2 million, or 19.9% of total revenues, in the same period of 2023. The decrease was mainly due to (i) the reduction in the allowance for credit losses, and (ii) reduced personnel costs as a result of staffing structure refinements. Loss from operations was RMB23.1 million (US$3.2 million), compared with RMB11.8 million in the same period of 2023. Financial income, net was RMB10.9 million (US$1.5 million), compared with financial loss, net of RMB12.7 million in the same period of 2023, mainly due to an increase in the fair value changes of equity securities investments. Net loss was RMB11.9 million (US$1.6 million), compared with RMB41.5 million in the same period of 2023. Adjusted net loss (non-GAAP)[3] was RMB9.7 million (US$1.3 million), compared with RMB39.8 million in the same period of 2023. Basic and diluted net loss per share attributable to ordinary shareholders were both RMB0.01, compared with RMB0.02 in the same period of 2023. Use of Non-GAAP Financial Measures In evaluating the business, the Company considers and uses adjusted net loss as a supplemental measure to review and assess operating performance. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines adjusted net loss as net loss excluding share-based compensation. The Company presents adjusted net loss because it is used by management to evaluate operating performance and formulate business plans. Adjusted net loss enables management to assess operating performance without considering the impact of share-based compensation recorded under ASC 718, "Compensation-Stock Compensation." The Company also believes that the use of this non-GAAP measure facilitates investors' assessment of operating performance. This non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. The non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using adjusted net loss is that it does not reflect all items of income and expense that affect the Company's operations. Share-based compensation has been and may continue to be incurred in Yunji's business and is not reflected in the presentation of adjusted net loss. Further, this non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore its comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP financial measure to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating performance. Yunji encourages investors and others to review its financial information in its entirety and not rely on a single financial measure. For more information on the non-GAAP financial measures, please see the table captioned "Reconciliation of Non-GAAP Measures to the Most Directly Comparable Financial Measures" set forth at the end of this press release. Conference Call The Company will host a conference call on Friday, August 23, 2024, at 7:30 A.M. Eastern Time or 7:30 P.M. Beijing/Hong Kong Time to discuss its earnings. Listeners may access the call by dialing the following numbers: International: 1-412-902-4272 United States Toll Free: 1-888-346-8982 Mainland China Toll Free: 4001-201203 Hong Kong Toll Free: 800-905945 Conference ID: Yunji Inc. A telephone replay of the call will be available after the conclusion of the conference call for one week. Dial-in numbers for the replay are as follows: United States Toll Free 1-877-344-7529 International 1-412-317-0088 Replay Access Code 3316837 Safe Harbor Statements 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 "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "confident," "potential," "continue" or other similar expressions. Among other things, the quotations from management in this announcement, as well as Yunji's strategic and operational plans, contain forward-looking statements. Yunji may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Yunji's beliefs and expectations, are 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: Yunji's growth strategies; its future business development, results of operations and financial condition; its ability to understand buyer needs and provide products and services to attract and retain buyers; its ability to maintain and enhance the recognition and reputation of its brand; its ability to rely on merchants and third-party logistics service providers to provide delivery services to buyers; its ability to maintain and improve quality control policies and measures; its ability to establish and maintain relationships with merchants; trends and competition in China's e-commerce market; changes in its revenues and certain cost or expense items; the expected growth of China's e-commerce market; PRC governmental policies and regulations relating to Yunji's industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Yunji's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Yunji undertakes no obligation to update any forward-looking statement, except as required under applicable law. About Yunji Inc. Yunji Inc. is a leading social e-commerce platform in China that has pioneered a unique, membership-based model to leverage the power of social interactions. The Company's e-commerce platform offers high-quality products at attractive prices across a wide variety of categories catering to the day-to-day needs of Chinese consumers. In addition, the Company uses advanced technologies including big data and artificial intelligence to optimize user experience and incentivize members to promote the platform as well as share products with their social contacts. Through deliberate product curation, centralized merchandise sourcing, and efficient supply chain management, Yunji has established itself as a trustworthy e-commerce platform with high-quality products and exclusive membership benefits, including discounted prices. For more information, please visit https://investor.yunjiglobal.com/ Investor Relations Contact Yunji Inc. Investor Relations Email: [email protected] Phone: +1 (646) 224-6957 ICR, LLC Robin Yang Email: [email protected] Phone: +1 (646) 224-6957 YUNJI INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (All amounts in thousands, except for share and per share data, unless otherwise noted) As of December 31, 2023 June 30, 2024 RMB RMB US$ ASSETS Current Assets Cash and cash equivalents 517,542 299,255 41,179 Restricted cash 27,169 25,253 3,475 Short-term investments 7,195 - - Accounts receivable, net (Allowance for credit losses of RMB35,159 and RMB34,660, respectively) 64,312 64,663 8,898 Advance to suppliers 14,058 8,825 1,214 Inventories, net 42,716 31,696 4,362 Amounts due from related parties 1,361 861 118 Prepaid expenses and other current assets[4] (Allowance for credit losses of RMB13,017 and RMB19,185, respectively) 134,247 150,578 20,720 Total current assets 808,600 581,131 79,966 Non-current assets Property and equipment, net 175,451 174,176 23,967 Long-term investments 364,159 381,225 52,458 Operating lease right-of-use assets, net 16,507 15,925 2,191 Other non-current assets[5] (Allowance for credit losses of RMB22,213 and RMB13,395, respectively) 189,067 338,457 46,573 Total non-current assets 745,184 909,783 125,189 Total assets 1,553,784 1,490,914 205,155 YUNJI INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) (All amounts in thousands, except for share and per share data, unless otherwise noted) As of December 31, 2023 June 30, 2024 RMB RMB US$ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable 96,782 79,810 10,982 Deferred revenue 9,412 9,388 1,292 Incentive payables to members[6] 124,889 86,726 11,934 Member management fees payable 4,373 2,861 394 Other payable and accrued liabilities 109,200 104,827 14,422 Amounts due to related parties 3,535 2,976 410 Operating lease liabilities - current 3,376 5,773 794 Total current liabilities 351,567 292,361 40,228 Non-current liabilities Operating lease liabilities 11,122 9,967 1,371 Total non-current liabilities 11,122 9,967 1,371 Total Liabilities 362,689 302,328 41,599 YUNJI INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) (All amounts in thousands, except for share and per share data, unless otherwise noted) As of December 31, 2023 June 30, 2024 RMB RMB US$ Shareholders' equity Ordinary shares 70 70 10 Less: Treasury stock (116,108) (116,045) (15,968) Additional paid-in capital 7,328,680 7,329,968 1,008,637 Statutory reserve 16,254 16,254 2,237 Accumulated other comprehensive income 85,291 89,412 12,304 Accumulated deficit (6,123,971) (6,131,951) (843,785) Total Yunji Inc. shareholders' equity 1,190,216 1,187,708 163,435 Non-controlling interests 879 878 121 Total shareholders' equity 1,191,095 1,188,586 163,556 Total liabilities and shareholders' equity 1,553,784 1,490,914 205,155 YUNJI INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (All amounts in thousands, except for share and per share data, unless otherwise noted) For the Three Months Ended For the Six Months Ended June 30, 2023 June 30, 2024 June 30, 2023 June 30, 2024 RMB RMB US$ RMB RMB US$ Revenues: Sales of merchandise, net 131,231 82,979 11,418 274,189 185,025 25,460 Marketplace revenue 34,269 21,110 2,905 67,226 45,167 6,215 Other revenues 1,629 1,890 260 4,458 3,645 502 Total revenues 167,129 105,979 14,583 345,873 233,837 32,177 Operating cost and expenses: Cost of revenues (80,831) (56,566) (7,784) (174,293) (121,311) (16,693) Fulfilment (29,888) (20,660) (2,843) (57,006) (42,568) (5,857) Sales and marketing (33,368) (21,680) (2,983) (62,953) (47,488) (6,535) Technology and content (14,253) (12,205) (1,680) (27,605) (25,531) (3,513) General and administrative (33,244) (18,686) (2,571) (48,416) (33,521) (4,613) Total operating cost and expenses (191,584) (129,797) (17,861) (370,273) (270,419) (37,211) Other operating income 12,668 729 100 13,577 4,161 573 Loss from operations (11,787) (23,089) (3,178) (10,823) (32,421) (4,461) Financial (loss)/income, net (12,723) 10,928 1,504 (34,915) 25,593 3,522 Foreign exchange (loss)/income, net (9,741) 2,571 354 (7,378) 2,330 321 Other non-operating (loss)/income, net (3,550) 118 16 (3,064) 118 16 Loss before income tax expense, and equity in loss of affiliates, net of tax (37,801) (9,472) (1,304) (56,180) (4,380) (602) Income tax expense (2,328) (962) (132) (5,407) (1,293) (178) Equity in loss of affiliates, net of tax (1,411) (1,463) (201) (2,886) (2,359) (325) Net loss (41,540) (11,897) (1,637) (64,473) (8,032) (1,105) Less: net loss attributable to non- controlling interests shareholders (1) (3) - (1) (1) - Net loss attributable to YUNJI INC. (41,539) (11,894) (1,637) (64,472) (8,031) (1,105) YUNJI INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (CONTINUED) (All amounts in thousands, except for share and per share data, unless otherwise noted) For the Three Months Ended For the Six Months Ended June 30, 2023 June 30, 2024 June 30, 2023 June 30, 2024 RMB RMB US$ RMB RMB US$ Net loss attributable to ordinary shareholders (41,539) (11,894) (1,637) (64,472) (8,031) (1,105) Net loss (41,540) (11,897) (1,637) (64,473) (8,032) (1,105) Other comprehensive income Foreign currency translation adjustment 40,983 2,706 372 29,056 4,121 567 Total comprehensive loss (557) (9,191) (1,265) (35,417) (3,911) (538) Less: total comprehensive loss attributable to non-controlling interests shareholders (1) (3) - (1) (1) - Total comprehensive loss attributable to YUNJI INC. (556) (9,188) (1,265) (35,416) (3,910) (538) Net loss attributable to ordinary shareholders (41,539) (11,894) (1,637) (64,472) (8,031) (1,105) Weighted average number of ordinary shares used in computing net loss per share, basic and diluted 1,966,698,843 1,967,086,032 1,967,086,032 1,975,321,887 1,967,050,455 1,967,050,455 Net loss per share attributable to ordinary shareholders Basic (0.02) (0.01) - (0.03) - - Diluted (0.02) (0.01) - (0.03) - - YUNJI INC. NOTES TO UNAUDITED FINANCIAL INFORMATION (All amounts in thousands, except for share and per share data, unless otherwise noted) For the Three Months Ended For the Six Months Ended June 30, 2023 June 30, 2024 June 30, 2023 June 30, 2024 RMB RMB US$ RMB RMB US$ Share-based compensation expenses included in: Technology and content 682 403 55 543 823 113 General and administrative 778 1,696 233 63 448 62 Fulfillment 173 154 21 (2,647) 36 5 Sales and marketing 62 (19) (2) (569) 44 6 Total 1,695 2,234 307 (2,610) 1,351 186 YUNJI INC. RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE FINANCIAL MEASURES (All amounts in thousands, except for share and per share data, unless otherwise noted) For the Three Months Ended For the Six Months Ended June 30, 2023 June 30, 2024 June 30, 2023 June 30, 2024 RMB RMB US$ RMB RMB US$ Reconciliation of Net Loss to Adjusted Net Loss: Net loss (41,540) (11,897) (1,637) (64,473) (8,032) (1,105) Add: Share-based compensation 1,695 2,234 307 (2,610) 1,351 186 Adjusted net loss (39,845) (9,663) (1,330) (67,083) (6,681) (919) 1. This announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at a specified rate solely for the convenience of the reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB7.2672 to US$1.00, the exchange rate in effect as of June 28, 2024 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System. 2. "Repeat purchase rate" in a given period is calculated as the number of transacting members who purchased not less than twice divided by the total number of transacting members during such period. "Transacting member" in a given period refers to a member who successfully promotes Yunji's products to generate at least one order or places at least one order on Yunji's platform, regardless of whether any product in such order is ultimately sold or delivered or whether any product in such order is returned. "Repeat purchase rate" only considers orders placed through the Company's app. Repeat purchases made through the Company's mini-programs are excluded from the calculation. 3. Adjusted net loss is a non-GAAP financial measure, which is defined as net loss excluding share-based compensation expense. See "Reconciliation of Non-GAAP Measures to the Most Directly Comparable Financial Measures" set forth at the end of this press release. 4. As of June 30, 2024, short-term loan receivables of amount RMB104,618 were included in the prepaid expenses and other current assets balance, which represent the principal and interest to be collected on loans provided by the Group to third-party companies. 5. In June 2024, the Company won the bid for a parcel of land located in Xiaoshan District, Hangzhou, China, covering approximately 10 thousand square meters (the "Hangzhou Land Parcel") and entered into an agreement with the local government to acquire the land use right of the Hangzhou Land Parcel for an aggregate consideration of approximately RMB171.5 million. The prepayment for land use right was recorded in other non-current assets. The Company intends to construct a new office building on the Hangzhou Land Parcel to use it as its new headquarters and also lease offices to external parties. The total amount for the land acquisition and office building construction is expected to be approximately RMB600.0 million. The Company intends to fund the land acquisition and building construction through cash on hand and bank financing. 6. As of June 30, 2024, the decrease in incentive payables was mainly due to derecognition of long-aged payables to inactive members. 7. As of June 30, 2024, the Group, as one of the five co-defendants, was involved in an on-going legal proceeding that arose in the ordinary course of business (the "Case"). The plaintiff sought monetary damages jointly and severally from all co-defendants. As of the date of this earnings release, the Case is still under the appeal trial process and subject to final judgment by the Guangzhou Intermediate People's Court, and the amount involved is approximately RMB23.1 million. Based on the currently available information, management believes that the claims by the plaintiff have no merit and the Group has valid defence and will defend vigorously in the Case. Accordingly, the Group has not made accrual for the Case as of June 30, 2024. View original content:https://www.prnewswire.com/news-releases/yunji-announces-second-quarter-2024-unaudited-financial-results-302229380.html SOURCE Yunji Inc. Market News and Data brought to you by Benzinga APIs