Cheche Group Reports First Quarter 2024 Unaudited Financial Results
Cheche Group (NASDAQ: CCG), China's leading auto insurance technology platform, reported a 1.0% year-over-year increase in net revenues to RMB787.1 million (US$109.0 million) for Q1 2024. The net loss decreased by 28.8% to RMB31.3 million (US$4.3 million). However, adjusted net loss increased to RMB12.2 million (US$1.7 million). Total written premiums rose by 9.2% to RMB5.4 billion (US$751.1 million), and the total number of policies issued climbed by 21.2% to 4.0 million. Metrics from partnerships with NEV companies showed significant growth: 119,000 policies embedded in NEV deliveries, marking a 124.5% increase, and corresponding premiums of RMB370.3 million (US$51.3 million), up 78.5%. Operating expenses saw an 18.5% decrease, while specific categories like selling and marketing expenses were down by 27.6%, and research and development costs dropped by 52.4%. The company has RMB234.0 million (US$32.4 million) in cash and equivalents and forecasts full-year 2024 revenues to be in the range of RMB3.5 billion to RMB3.7 billion.
- Net revenues increased by 1.0% to RMB787.1 million (US$109.0 million).
- Total written premiums rose by 9.2% to RMB5.4 billion (US$751.1 million).
- Total number of policies issued increased by 21.2% to 4.0 million.
- Net loss decreased by 28.8% to RMB31.3 million (US$4.3 million).
- Selling and marketing expenses decreased by 27.6% to RMB22.3 million (US$3.1 million).
- Research and development expenses decreased by 52.4% to RMB9.4 million (US$1.3 million).
- Total operating expenses decreased by 18.5% to RMB65.7 million (US$9.1 million).
- Cash and cash equivalents and short-term investments total RMB234.0 million (US$32.4 million).
- Partnerships with NEV companies resulted in 119,000 policies and RMB370.3 million (US$51.3 million) in premiums, up 124.5% and 78.5% respectively.
- Adjusted net loss increased by RMB4.4 million to RMB12.2 million (US$1.7 million).
- General and administrative expenses increased by 12.9% to RMB34.0 million (US$4.7 million).
- Adjusted total operating expenses increased by 3.4% from the prior-year quarter.
- Net loss per share remains at RMB0.41 (US$0.06).
- Decrease in cash and cash equivalents from RMB264.9 million to RMB234.0 million.
The financial results for Cheche Group Inc. reflect moderate yet noteworthy progress in certain areas. The net revenues increased by a minor
The decrease in selling and marketing expenses by
The adjusted net loss rose to
In the short term, there are mixed signals: revenue growth is slow but stable and cost control is improving in some areas but remains a challenge in others. Long-term, the company’s ability to achieve profitability will depend on sustained revenue growth and better control over rising administrative costs.
Cheche Group's significant partnerships with New Energy Vehicle (NEV) manufacturers are strategically sound, given the increasing penetration of NEVs in the Chinese market. Notably, NEVs now account for more than
This sharp growth aligns with the broader industry trend towards electric and smart vehicles. The strategic partnerships with major players like Xiaomi and Volkswagen Anhui enhance the company’s market position and signify its ability to capitalize on digital auto insurance solutions tailored for NEVs, which is a burgeoning segment.
For a retail investor, the partnership with Sinopec is particularly noteworthy. Deploying services across more than 5,000 gas stations is a substantial expansion of Cheche’s presence in the auto insurance market. The scale of this partnership has the potential to drive considerable revenue growth, leveraging Sinopec’s extensive nationwide network.
In summary, Cheche’s strategic alignment with the NEV market and significant partnerships suggest strong long-term growth potential. This positions the company well to benefit from ongoing shifts in the automotive and insurance industries towards digital and electric solutions.
Cheche Group's technical solutions in the auto insurance space are noteworthy, especially regarding their involvement with NEV manufacturers. The company’s investments in AI and digital insurance technology are tailored to meet the evolving needs of NEV owners, which is important given the rapid adoption of electric vehicles in China.
The company's claim of leveraging AI technology to optimize auto insurance services is particularly compelling. This approach not only enhances customer experience but also streamlines operational efficiency. The integration of these technologies can potentially reduce insurance claim processing times, improve accuracy in risk assessment and offer personalized insurance products.
However, the challenge remains in ensuring that technology investments translate into tangible financial benefits. While reduced R&D expenses suggest a more focused approach, continuous innovation is essential to maintain a competitive edge in the tech-driven insurance market. The balance between managing costs and driving innovation will be critical for long-term success.
For investors, understanding how Cheche’s technology enhances its competitive positioning in the NEV insurance market will be key. The ongoing development and deployment of these solutions signify a forward-thinking approach, aiming to capture a growing market segment by addressing specific needs through technology.
Financial and Operational Highlights
- Net revenues for the quarter increased
1.0% year-over-year toRMB787.1 million (US ).$109.0 million - Net loss for the quarter decreased
28.8% year-over-year toRMB31 .3 million (US ).$4.3 million - Adjusted net loss(1) for the quarter increased by
RMB4.4 million , fromRMB7.8 million in the prior-year period toRMB12.2 million (US .7 million).$1 - Total written premiums placed for the quarter increased
9.2% year-over-year toRMB5.4 billion (US .1 million).$751 - Total number of policies issued for the quarter increased
21.2% from 3.3 million for the prior-year quarter to 4.0 million. - Partnerships with New Energy Vehicle (NEV) companies(2) in the quarter led to 119,000 policies embedded in new NEV deliveries and corresponding written premium of
RMB370.3 million (US .3 million) with 11 partnerships with NEV manufacturers, representing an increase of$51 124.5% and78.5% compared to the prior-year quarter, respectively. - New referral partners of 49,600+ were added in the quarter.
(1) Adjusted Net Loss is a non-GAAP measure. For further information on the non-GAAP financial measures presented above, see the "Non-GAAP Financial Measures" section below.
(2) The rapid growth of the NEV market has created new opportunities for auto insurance offerings and propelled revenue growth of auto insurance providers. Cheche started to collaborate with NEV manufacturers in 2022, and such collaborations yielded considerable results in 2023. Cheche believes that the further growth of the NEV market and the introduction of innovative NEV auto insurance solutions will further fuel the revenue contribution of its partnership with NEV manufacturers. The management of Cheche utilizes the number of partnerships with NEV manufacturers, the number of insurance policies embedded in the new NEV deliveries, and the amount of corresponding premium generated from such embedded policies as the main operating metrics to evaluate its business and presents such operating metrics for investors to better understand and evaluate Cheche's business.
Management Comments
"Cheche demonstrated a continued improvement in revenues driven in part by our investments in technology solutions that resolve challenges for our insurance partners, auto manufacturers, and intermediaries. We are a front runner in empowering NEVs with insurance technology, and we believe our industry-leading technology will help us garner greater market influence and capture more market shares," said Lei Zhang, Founder, CEO, and Chairman of Cheche Group.
"Since April, we've seen NEVs begin to account for more than
(3) Source: According to China Automobile Dealers Association, as reported by CCTV.com on April 22, 2024.
Unaudited First Quarter 2024 Financial Results
Net Revenues were
Cost of Revenues increased by
Selling and Marketing Expenses decreased by
General and Administrative Expenses increased by
Research and Development Expenses decreased by
Total Operating Expenses decreased by
Net Loss decreased
Net Loss attributable to Cheche's shareholders decreased by
Adjusted Net Loss attributable to Cheche's shareholders was
Net Loss Per Share, basic and diluted, was
Adjusted Net Loss Per Share, basic and diluted, was
Business Highlights
- On March 5, 2024, Cheche announced its expanded partnership with Sinopec, whose non-oil businesses cover a nationwide retail footprint of over 30,000 gas stations. Cheche currently provides embedded auto insurance services to the unified digital platform of a subsidiary of Sinopec and has deployed services in over 5,000 gas stations in its nationwide retail footprint.
- On March 28, 2024, Cheche announced its partnership with Beijing Houji Insurance Brokerage Co., Ltd. ("Beijing Houji"), an affiliate of Xiaomi Corporation ("Xiaomi Group"). As an insurance service partner of Beijing Houji, the insurance brokerage firm in the Xiaomi Group, Cheche offers a digital auto insurance transaction SaaS service platform with operational support. Cheche provides auto insurance service solutions to Xiaomi car owners in multiple cities across the country, including
Beijing ,Shenzhen ,Hangzhou , and others. - On May 13, 2024, Cheche announced its partnership with Volkswagen (
Anhui ) Digital Sales and Services Co., Ltd. As the exclusive service provider of NEV insurance business for Volkswagen (Anhui ) Automotive Company Limited ("Volkswagen Anhui"), Cheche aims to support Volkswagen Anhui's branded insurance needs. This is expected to enhance the attractiveness of Volkswagen Anhui's branded insurance product, boosting its penetration rate.
Balance Sheet
As of March 31, 2024, the Company had
Business Outlook
For the full year of 2024, Cheche expects:
- Net revenues to range from
RMB3.5 billion toRMB3.7 billion , representing an increase of6.1% to12.1% , compared to the full year of 2023. - Total written premiums placed to range from
RMB24.5 billion toRMB26.5 billion , representing an increase of8.4% to17.3% , compared to the full year of 2023.
Conference Call
Cheche will host a webcast and conference call to discuss its first quarter 2024 results today at 8:00 a.m. EDT. A live webcast and a slide presentation will be available on Cheche's investor relations website in the "Events" section of the Company's investor relations website under the "News & Events" header at ir.chechegroup.com.
The dial-in numbers for the conference call are as follows:
- Participant (toll-free): 1-888-346-8982
- Participant (international): 1-412-902-4272
- Hong Kong LT - Unassisted: 852-301-84992
- Hong Kong Toll Free: 800-905945
- China Toll-Free Passcode: 4001-201203
Please dial in 10 to 15 minutes before the scheduled start time.
A webcast replay of the call will be available at ir.chechegroup.com for one year following the call.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into
About Cheche Group Inc.
Established in 2014 and headquartered in
Cheche Group Inc.:
Crocker Coulson
crocker.coulson@aummedia.org
(646) 652-7185
Non-GAAP Financial Measures
Cheche has provided non-GAAP financial measures in this press release that have not been prepared in accordance with generally accepted accounting principles (GAAP) in
Cheche uses adjusted total operating expenses, adjusted net loss, and adjusted net loss per share, which are non-GAAP financial measures, in evaluating our operating results and for financial and operational decision-making purposes.
Cheche defines adjusted total operating expenses as total operating expenses adjusted for the impact of share-based compensation and listing-related professional service fees. Cheche defines adjusted net loss as net loss adjusted for the impact of share-based compensation expenses, amortization of intangible assets, and changes in fair value of amounts due to a related party related to the acquisition of Cheche Insurance Sales & Services Co., Ltd. (previously named Fanhua Times Sales and Service Co., Ltd), change in fair value of warrants, and listing related professional service fees. Adjusted net loss per share, basic and diluted, is calculated as adjusted net loss divided by weighted-average ordinary shares outstanding.
Cheche believes that these non-GAAP financial measures help identify underlying trends in its business that could otherwise be distorted by the impact of share-based compensation expenses, amortization of intangible assets related to acquisition, and change in fair value of amounts due to a related party related to the acquisition of Cheche Insurance Sales & Services Co., Ltd. (previously named Fanhua Times Sales and Service Co., Ltd), change in fair value of warrants, and listing related professional service fees. Cheche believes that such non-GAAP financial measures also provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects, and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.
The non-GAAP financial measures are not defined under
Safe Harbor Statements
This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "estimate," "plan," "project," "forecast," "intend," "will," "expect," "anticipate," "believe," "seek," "target" or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements also include, but are not limited to, statements regarding projections, estimations, and forecasts of revenue and other financial and performance metrics, projections of market opportunity and expectations, the Company's ability to scale and grow its business, the Company's advantages and expected growth, and its ability to source and retain talent, as applicable. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of the Company's management and are not predictions of actual performance. These statements involve risks, uncertainties, and other factors that may cause the Company's actual results, levels of activity, performance, or achievements to materially differ from those expressed or implied by these forward-looking statements. Further information regarding these and other risks, uncertainties, or factors is included in the Company's filings with the
Unaudited Condensed Consolidated Balance Sheets (All amounts in thousands, except for share and per share data) | |||||
December 31, | March 31, | March 31, | |||
2023 | 2024 | 2024 | |||
RMB | RMB | USD | |||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | 243,392 | 219,566 | 30,410 | ||
Short-term investments | 21,474 | 14,416 | 1,997 | ||
Accounts receivable, net | 466,066 | 483,599 | 66,978 | ||
Prepayments and other current assets | 49,321 | 50,696 | 7,020 | ||
Total current assets | 780,253 | 768,277 | 106,405 | ||
Non-current assets: | |||||
Restricted Cash | 5,000 | 5,000 | 692 | ||
Property, equipment and leasehold improvement, net | 1,667 | 2,372 | 329 | ||
Intangible assets, net | 8,050 | 7,525 | 1,042 | ||
Right-of-use assets | 10,249 | 9,768 | 1,353 | ||
Goodwill | 84,609 | 84,609 | 11,718 | ||
Other non-current assets | 4,149 | 4,121 | 571 | ||
Total non-current assets | 113,724 | 113,395 | 15,705 | ||
Total assets | 893,977 | 881,672 | 122,110 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
Current liabilities: | |||||
Accounts payable | 316,868 | 322,131 | 44,615 | ||
Short-term borrowings | 20,000 | 17,000 | 2,354 | ||
Contract liabilities | 4,295 | 4,216 | 584 | ||
Salary and welfare benefits payable | 73,609 | 76,747 | 10,629 | ||
Tax payable | 950 | 605 | 84 | ||
Amounts due to related party | 55,251 | 56,991 | 7,893 | ||
Accrued expenses and other current liabilities | 25,759 | 21,090 | 2,922 | ||
Short-term lease liabilities | 3,951 | 4,371 | 605 | ||
Warrant | 850 | 209 | 29 | ||
Total current liabilities | 501,533 | 503,360 | 69,715 | ||
Non-current liabilities: | |||||
Deferred tax liabilities | 2,013 | 1,881 | 261 | ||
Long-term lease liabilities | 5,398 | 4,652 | 644 | ||
Deferred revenue | 1,432 | 1,432 | 198 | ||
Warrant | 5,419 | 5,603 | 776 | ||
Total non-current liabilities | 14,262 | 13,568 | 1,879 | ||
Total liabilities | 515,795 | 516,928 | 71,594 | ||
Ordinary shares | 5 | 5 | 1 | ||
Treasury stock | (1,025) | (1,025) | (142) | ||
Additional paid-in capital | 2,491,873 | 2,509,141 | 347,512 | ||
Accumulated deficit | (2,113,821) | (2,145,092) | (297,093) | ||
Accumulated other comprehensive income | 1,150 | 1,715 | 238 | ||
Total Cheche's shareholders' equity | 378,182 | 364,744 | 50,516 | ||
Total liabilities and shareholders' equity | 893,977 | 881,672 | 122,110 |
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss (All amounts in thousands, except for share and per share data) | ||||
For the Three Months Ended | ||||
March 31, | March 31, | March 31, | ||
2023 | 2024 | 2024 | ||
RMB | RMB | USD | ||
Net revenues | 779,650 | 787,144 | 109,018 | |
Cost of revenues | (745,943) | (753,372) | (104,341) | |
Gross profit | 33,707 | 33,772 | 4,677 | |
Operating expenses: | ||||
Selling and marketing expenses | (30,812) | (22,319) | (3,092) | |
General and administrative expenses | (30,127) | (34,008) | (4,710) | |
Research and development expenses | (19,734) | (9,397) | (1,301) | |
Total operating expenses | (80,673) | (65,724) | (9,103) | |
Other expenses: | ||||
Interest income | 375 | 1,975 | 274 | |
Interest expense | (221) | (234) | (32) | |
Foreign exchange gains/(losses) | 1,447 | (252) | (35) | |
Government grants | 3,047 | 234 | 32 | |
Changes in fair value of warrant | (23) | 468 | 65 | |
Changes in fair value of amounts due to related party | (1,761) | (1,731) | (240) | |
Others, net | 27 | 213 | 30 | |
Loss before income tax | (44,075) | (31,279) | (4,332) | |
Income tax credit | 128 | 8 | 1 | |
Net loss | (43,947) | (31,271) | (4,331) | |
Accretions to preferred shares redemption value | (20,539) | - | - | |
Net loss attributable to the Cheche's ordinary shareholders | (64,486) | (31,271) | (4,331) | |
Net loss | (43,947) | (31,271) | (4,331) | |
Other comprehensive (loss)/income: | ||||
Foreign currency translation adjustments, net of nil tax | (2,728) | 574 | 79 | |
Fair value changes of amounts due to related party due to own credit risk | (347) | (9) | (1) | |
Total other comprehensive (loss)/income | (3,075) | 565 | 78 | |
Total comprehensive loss | (47,022) | (30,706) | (4,253) | |
Net loss per ordinary shares outstanding | ||||
Basic | (2.00) | (0.41) | (0.06) | |
Diluted | (2.00) | (0.41) | (0.06) | |
Weighted average number of ordinary shares outstanding | ||||
Basic | 32,322,187 | 75,487,093 | 75,487,093 | |
Diluted | 32,322,187 | 75,487,093 | 75,487,093 |
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited) (All amounts in thousands) | ||||
For the Three Months Ended | ||||
March 31, | March 31, | March 31, | ||
2023 | 2024 | 2024 | ||
RMB | RMB | USD | ||
Selling and marketing expenses | (30,812) | (22,319) | (3,092) | |
Add: Share-based compensation expenses | 9,059 | 2,607 | 361 | |
Adjusted Selling and marketing expenses | (21,753) | (19,712) | (2,731) | |
General and administrative expenses | (30,127) | (34,008) | (4,710) | |
Add: Share-based compensation expenses | 13,701 | 13,821 | 1,914 | |
Listing related professional expenses | 2,361 | - | - | |
Adjusted General and administrative expenses | (14,065) | (20,187) | (2,796) | |
Research and development expenses | (19,734) | (9,397) | (1,301) | |
Add: Share-based compensation expenses | 8,665 | 837 | 116 | |
Adjusted Research and development expenses | (11,069) | (8,560) | (1,185) | |
Total operating expense | (80,673) | (65,724) | (9,103) | |
Adjusted total operating expenses | (46,887) | (48,459) | (6,712) |
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (All amounts in thousands, except for share data and per share data) | ||||
For the Three Months Ended | ||||
March 31, | March 31, | March 31, | ||
2023 | 2024 | 2024 | ||
RMB | RMB | USD | ||
Net loss | (43,947) | (31,271) | (4,331) | |
Add: Share-based compensation expenses | 31,495 | 17,268 | 2,392 | |
Amortization of intangible assets related to acquisition | 525 | 525 | 73 | |
Listing related professional expenses | 2,361 | - | - | |
Change in fair value of warrant | 23 | (468) | (65) | |
Changes in fair value of amounts due to related party | 1,761 | 1,731 | 240 | |
Adjusted net loss | (7,782) | (12,215) | (1,691) | |
Accretions to preferred shares redemption value | (20,539) | - | - | |
Adjusted net loss attributable to Cheche's ordinary shareholders | (28,321) | (12,215) | (1,691) | |
Weighted average number of ordinary shares used in computing non-GAAP adjusted net loss per ordinary share | ||||
Basic | 32,322,187 | 75,487,093 | 75,487,093 | |
Diluted | 32,322,187 | 75,487,093 | 75,487,093 | |
Net loss per ordinary share | ||||
Basic | (2.00) | (0.41) | (0.06) | |
Diluted | (2.00) | (0.41) | (0.06) | |
Non-GAAP adjustments to net loss per ordinary share | ||||
Basic | 1.12 | 0.25 | 0.04 | |
Diluted | 1.12 | 0.25 | 0.04 | |
Adjusted net loss per ordinary share | ||||
Basic | (0.88) | (0.16) | (0.02) | |
Diluted | (0.88) | (0.16) | (0.02) |
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SOURCE Cheche Group Inc
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