Yunji Announces First Quarter 2023 Unaudited Financial Results

Rhea-AI Summary

Yunji Inc. announces unaudited financial results for Q1 2023, with total revenues of RMB178.7 million ($26.0 million), a decrease from the same period in 2022. The company attributes the decline to strategic product selection and optimization of suppliers and merchants. Repeat purchase rate in the twelve months ended March 31, 2023, was 80.2%. Operating income was RMB1.0 million ($0.1 million), and net loss was RMB22.9 million ($3.3 million).

Positive

• Yunji recorded a repeat repurchase rate of 80% in Q1 2023, demonstrating user loyalty and the popularity of its products.
• The company successfully generated RMB1.0 million ($0.1 million) operating income and narrowed net losses by 37.8% in Q1 2023.

Negative

• Total revenues decreased from RMB342.6 million in Q1 2022 to RMB178.7 million ($26.0 million) in Q1 2023.
• Net loss was RMB22.9 million ($3.3 million) in Q1 2023, compared to RMB36.9 million in the same period in 2022.

HANGZHOU, China, June 2, 2023 /PRNewswire/ -- Yunji Inc. ("Yunji" or the "Company") (NASDAQ: YJ), a leading membership-based social e-commerce platform, today announced its unaudited financial results for the first quarter ended March 31, 2023^[1].

First Quarter 2023 Highlights

• Total revenues in the first quarter of 2023 were RMB178.7 million (US$26.0 million), compared with RMB342.6 million in the same period of 2022. The change was primarily due to 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. Also, consumer confidence and spending power require further momentum before witnessing a full recovery.
• Repeat purchase rate^[2] in the twelve months ended March 31, 2023 was 80.2%.

Mr. Shanglue Xiao, Chairman and Chief Executive Officer of Yunji, said, "The first quarter marked a transitional phase as China reopened, following a challenging year in which we faced numerous obstacles. We took proactive measures to address these challenges through a series of strategic upgrades and realignments. Notably, we recorded a repeat repurchase rate of 80% during the quarter, which demonstrated the loyalty of our users and the strength and popularity of our wide range of featured products. Looking ahead, we will continue to operate flexibly while nimbly adapting and responding to emerging trends as the consumer market recovers. At the same time, we remain committed to developing innovative private label products to reward our devoted users who have accompanied us on this journey."

"Our continued efforts to optimize cost structures and enhance efficiency have delivered significant results. We have successfully generated RMB1.0 million (US$0.1million) operating income and narrowed our net losses by 37.8% in the first quarter of 2023. Moving forward, we will continue to operate prudently and efficiently, laying a solid foundation for our future development," said Mr. Peng Zhang, Yunji's Vice President of Finance.

First Quarter 2023 Unaudited Financial Results

Total revenues were RMB178.7 million (US$26.0 million), compared with RMB342.6 million in the same period of 2022. This change was primarily due to 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 RMB143.0 million (US$20.8 million), compared with RMB290.5 million in the same period of 2022.
• Revenues from the marketplace business were RMB32.9 million (US$4.8 million), compared with RMB47.4 million in the same period of 2022.
• Other revenues were RMB2.8 million (US$0.4 million), compared with RMB4.7 million in the same period of 2022.

Total cost of revenues decreased by 51.1% to RMB93.5 million (US$13.6 million), or 52.3% of total revenues, from RMB191.3 million, or 55.8% of total revenues, in the same period of 2022. 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 first quarter of 2023.

Total operating expenses decreased by 45.0% to RMB85.3 million (US$12.4 million) from RMB154.9 million in the same period of 2022.

• Fulfillment expenses decreased by 44.6% to RMB27.1 million (US$3.9 million), or 15.2% of total revenues, from RMB48.9 million, or 14.3% of total revenues, in the same period of 2022. The decrease was primarily due to (i) reduced warehousing and logistics expenses due to lower merchandise sales, (ii) reduced personnel costs as a result of staffing structure refinements, and (iii) a decrease in share-based compensation expenses.
• Sales and marketing expenses decreased by 41.6% to RMB29.6 million (US$4.3 million), or 16.6% of total revenues, from RMB50.7 million, or 14.8% of total revenues, in the same period of 2022. The decrease was mainly due to (i) the reduction in personnel costs as a result of staffing structure refinements, (ii) a decrease in member management fees, and (iii) reduced business promotion expenses.
• Technology and content expenses decreased by 44.7% to RMB13.4 million (US$1.9 million), or 7.5% of total revenues, from RMB24.1 million, or 7.0% of total revenues, in the same period of 2022. The decrease was mainly due to (i) the reduction in personnel costs as a result of staffing structure refinements, and (ii) reduced cloud server costs.
• General and administrative expenses decreased by 51.4% to RMB15.2 million (US$2.2 million), or 8.5% of total revenues, from RMB31.2 million, or 9.1% of total revenues, in the same period of 2022, primarily due to (i) reduced personnel costs as a result of staffing structure refinements, (ii) lower professional service fees, and (iii) a decrease in share-based compensation expenses.

Income from operations was RMB1.0 million (US$0.1 million), compared with RMB2.4 million in the same period of 2022.

Financial loss, net was RMB22.2 million (US$3.2 million), compared with RMB35.3 million in the same period of 2022, primarily due to a continuous decline in the fair value changes of equity securities investments.

Net loss was RMB22.9 million (US$3.3 million), compared with RMB36.9 million in the same period of 2022.

Adjusted net loss (non-GAAP)^[3] was RMB27.2 million (US$4.0 million), compared with RMB30.6 million in the same period of 2022.

Basic and diluted net loss per share attributable to ordinary shareholders were both RMB0.01, compared with RMB0.02 in the same period of 2022.

Use of Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses adjusted net income/(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 income/(loss) as net income/(loss) excluding share-based compensation.

The Company presents adjusted net income/(loss) because it is used by management to evaluate operating performance and formulate business plans. Adjusted net income/(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 income/(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 income/(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, June 2, 2023, 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	3419777

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: Yunji.IR@icrinc.com
Phone: +1 (646) 224-6957

ICR, LLC
Robin Yang
Email: Yunji.IR@icrinc.com
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, 2022		March 31, 2023
		RMB		RMB		US$
ASSETS
Current Assets
Cash and cash equivalents		414,634		321,101		46,756
Restricted cash		42,109		34,940		5,088
Short-term investments		212,003		211,695		30,825
Accounts receivable, net (Allowance for credit losses of RMB16,762 and RMB17,106, respectively)		94,111		93,379		13,597
Advance to suppliers		32,738		26,594		3,871
Inventories, net		54,651		41,425		6,032
Amounts due from related parties		202		1,907		278
Prepaid expenses and other current assets[4] (Allowance for credit losses of RMB14,510 and RMB9,427, respectively)		362,065		326,768		47,581
Total current assets		1,212,513		1,057,809		154,028
Non-current assets
Property and equipment, net		168,928		169,878		24,736
Long-term investments		414,325		411,663		59,943
Deferred tax assets		-		-		-
Operating lease right-of-use assets, net		231		221		32
Other non-current assets (Allowance for credit losses of RMB2,091 and RMB1,945, respectively)		96,414		97,545		14,204
Total non-current assets		679,898		679,307		98,915
Total assets		1,892,411		1,737,116		252,943

 

 

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, 2022		March 31, 2023
		RMB		RMB		US$
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable		138,903		94,794		13,803
Deferred revenue		21,748		15,800		2,301
Incentive payables to members[5]		207,331		188,917		27,508
Member management fees payable		11,087		12,448		1,813
Other payable and accrued liabilities		145,527		118,211		17,213
Amounts due to related parties		10,608		10,461		1,523
Operating lease liabilities - current		1,162		669		97
Total current liabilities		536,366		441,300		64,258
Non-current liabilities
Operating lease liabilities		145		58		8
Total non-current liabilities		145		58		8
Total Liabilities		536,511		441,358		64,266

 

 

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, 2022		March 31, 2023
		RMB		RMB		US$
Shareholders' equity
Ordinary shares		70		70		10
Less: Treasury stock		(98,709)		(116,309)		(16,936)
Additional paid-in capital		7,333,144		7,325,460		1,066,670
Statutory reserve		16,078		16,078		2,341
Accumulated other comprehensive income		63,113		51,186		7,453
Accumulated deficit		(5,958,666)		(5,981,598)		(870,988)
Total Yunji Inc. shareholders' equity		1,355,030		1,294,887		188,550
Non-controlling interests		870		871		127
Total shareholders' equity		1,355,900		1,295,758		188,677
Total liabilities and shareholders' equity		1,892,411		1,737,116		252,943

 

 

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
		March 31, 2022		March 31, 2023
		RMB		RMB		US$
Revenues:
Sales of merchandise, net		290,455		142,958		20,816
Marketplace revenue		47,426		32,957		4,799
Other revenues		4,698		2,829		412
Total revenues		342,579		178,744		26,027
Operating cost and expenses:
Cost of revenues		(191,317)		(93,462)		(13,609)
Fulfilment		(48,914)		(27,118)		(3,949)
Sales and marketing		(50,650)		(29,585)		(4,308)
Technology and content		(24,140)		(13,352)		(1,944)
General and administrative		(31,223)		(15,172)		(2,209)
Total operating cost and expenses		(346,244)		(178,689)		(26,019)
Other operating income		6,109		909		132
Income from operations		2,444		964		140
Financial loss, net		(35,270)		(22,192)		(3,231)
Foreign exchange (loss)/income, net		(313)		2,363		344
Other non-operating income, net		2,023		486		71
Loss before income tax expense, and equity in loss of affiliates, net of tax		(31,116)		(18,379)		(2,676)
Income tax expense		(5,324)		(3,079)		(448)
Equity in loss of affiliates, net of tax		(455)		(1,475)		(215)
Net loss		(36,895)		(22,933)		(3,339)
Less: net loss attributable to non- controlling interests shareholders		(399)		-		-
Net loss attributable to YUNJI INC.		(36,496)		(22,933)		(3,339)

 

 

 

 

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
		March 31, 2022		March 31, 2023
		RMB		RMB		US$
Net loss attributable to ordinary shareholders		(36,496)		(22,933)		(3,339)
Net loss		(36,895)		(22,933)		(3,339)
Other comprehensive loss
Foreign currency translation adjustment		(4,972)		(11,927)		(1,737)
Total comprehensive loss		(41,867)		(34,860)		(5,076)
Less: total comprehensive loss attributable to non-controlling interests shareholders		(399)		-		-
Total comprehensive loss attributable to YUNJI INC.		(41,468)		(34,860)		(5,076)
Net loss attributable to ordinary shareholders		(36,496)		(22,933)		(3,339)
Weighted average number of ordinary shares used in computing net loss per share, basic and diluted		2,147,541,470		1,983,680,743		1,983,680,743
Net loss per share attributable to ordinary shareholders
Basic		(0.02)		(0.01)		-
Diluted		(0.02)		(0.01)		-

 

 

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
		March 31, 2022		March 31, 2023
		RMB		RMB		US$
Share-based compensation expenses included in:
Technology and content		1,196		(139)		(20)
General and administrative		4,778		(715)		(104)
Fulfillment		618		(2,820)		(411)
Sales and marketing		(325)		(631)		(92)
Total		6,267		(4,305)		(627)

 

 

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
		March 31, 2022		March 31, 2023
		RMB		RMB		US$
Reconciliation of Net Loss to Adjusted Net Loss:
Net loss		(36,895)		(22,933)		(3,339)
Add: Share-based compensation		6,267		(4,305)		(627)
Adjusted net loss		(30,628)		(27,238)		(3,966)

 

 

[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 RMB6.8676 to US$1.00, the exchange rate in effect as of March 31, 2023 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. [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 March 31, 2023, Short-term loan receivables of amount RMB228,596 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].  As of March 31, 2023, the decrease in incentive payables was mainly due to derecognition of long-aged payables to inactive members.

 

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SOURCE Yunji Inc.

FAQ

What were Yunji's total revenues in Q1 2023?

Yunji's total revenues in Q1 2023 were RMB178.7 million ($26.0 million).

What was Yunji's repeat purchase rate in the twelve months ended March 31, 2023?

Yunji's repeat purchase rate in the twelve months ended March 31, 2023, was 80.2%.

What was Yunji's net loss in Q1 2023?

Yunji's net loss in Q1 2023 was RMB22.9 million ($3.3 million).

Did Yunji generate operating income in Q1 2023?

Yes, Yunji generated RMB1.0 million ($0.1 million) operating income in Q1 2023.

Did Yunji narrow its net losses in Q1 2023 compared to the same period in 2022?

Yes, Yunji narrowed its net losses by 37.8% in Q1 2023 compared to the same period in 2022.