Yunji Announces Second Quarter 2022 Unaudited Financial Results
Yunji Inc. (NASDAQ: YJ) announced its Q2 2022 financial results, reporting total revenues of RMB284.0 million (US$42.4 million), down 50% year-over-year, primarily due to COVID-19 impacts. The company’s gross margin improved to 40.6% from 35.1% a year ago. A net loss of RMB25.0 million (US$3.7 million) contrasts with net income of RMB17.0 million in Q2 2021. Despite challenges, Yunji's repeat purchase rate stood at 79.0%. The board extended a $20 million share repurchase program, reflecting confidence in financial resilience and commitment to shareholder value.
- Gross margin improved to 40.6%, up from 35.1% year-over-year.
- Repeat purchase rate remained high at 79.0%.
- Extension of $20 million share repurchase program indicating board confidence.
- Total revenues decreased by 50% year-over-year.
- Net loss of RMB25.0 million compared to net income of RMB17.0 million in Q2 2021.
- Significant decline in revenues from merchandise sales by 49.8%.
HANGZHOU, China, Aug. 25, 2022 /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 second quarter ended June 30, 20221.
Second Quarter 2022 Highlights
- Total revenues in the second quarter of 2022 were RMB284.0 million (US
$42.4 million ), compared with RMB570.7 million in the same period of 2021, primarily due to the negative impact of the outbreaks of the highly-transmissible Delta and Omicron variants of COVID-19 in the first half of 2022 on the Company's operations and the Company's continued strategy to refine its product selection across all categories and optimize its selection of suppliers and merchants, causing near-term decreases in sales. The COVID-19 outbreaks in the first half of 2022 have caused varying degrees of temporary shutdowns and delays in production and operation of the Company's suppliers (especially private label suppliers), third-party merchants, third-party logistics service providers and other business partners, leading to temporary shortages of certain merchandise and delays in logistics services as well as delays in the research and development and new product launch processes associated with the Company's private label suppliers. Consumers' willingness to spend on discretionary products in the first half of 2022 has also declined compared with that in the same period of 20212. This has negatively affected and may continue to negatively affect the Company's revenues and operations in 2022, depending on the future development of the COVID-19 pandemic. - Repeat purchase rate3 in the twelve months ended June 30, 2022 was
79.0% .
Mr. Shanglue Xiao, Chairman and Chief Executive Officer of Yunji, said, "During the second quarter, the resurgence of COVID-19 and widespread pandemic-related control measures limited our promotional activities and customer outreach efforts, and caused disruptions throughout our supply chain. In the face of these transitory macro headwinds, we have been increasingly focused on our private label brands and optimization of our online marketing and customer service. In June, as the majority of the areas impacted by the pandemic returned to a normalized situation, our operations, including logistics, customer service, and new product launches, gradually recovered."
"Our financial resilience has enabled us to successfully navigate this challenging quarter. We improved our gross margin to
Second Quarter 2022 Unaudited Financial Results
Total revenues were RMB284.0 million (US
- Revenues from sales of merchandise, net decreased by
49.8% to RMB237.1 million (US$35.4 million ) from RMB472.1 million in the same period of 2021. - Revenues from the marketplace business were RMB42.1 million (US
$6.3 million ), compared with RMB88.2 million in the same period of 2021. - Other revenues decreased by
55.3% to RMB4.7 million (US$0.7 million ) from RMB10.5 million in the same period of 2021.
Total cost of revenues decreased by
Total operating expenses decreased by
- Fulfillment expenses decreased by
14.1% to RMB43.1 million (US$6.4 million ), or15.2% of total revenues, from RMB50.1 million, or8.8% of total revenues, in the same period of 2021. The decrease was primarily due to (i) reduced warehousing and logistics expenses due to lower merchandise sales and (ii) decreased service fees charged by third-party payment settlement platforms. - Sales and marketing expenses decreased by
5.3% to RMB58.2 million (US$8.7 million ), or20.5% of total revenues, from RMB61.5 million, or10.8% of total revenues, in the same period of 2021. The decrease was mainly due to a decrease in member management fees, partially offset by an increase in private label promotion expenses. - Technology and content expenses decreased by
27.1% to RMB23.6 million (US$3.5 million ), or8.3% of total revenues, from RMB32.4 million, or5.7% of total revenues, in the same period of 2021. The decrease was mainly due to (i) the reduction in personnel costs as a result of staffing structure refinements and (ii) reduced server costs. - General and administrative expenses decreased by
26.1% to RMB31.7 million (US$4.7 million ), or11.2% of total revenues, from RMB42.9 million, or7.5% of total revenues, in the same period of 2021, primarily due to (i) reduced personnel costs as a result of staffing structure refinements and (ii) lower professional service fees.
Loss from operations was RMB30.0 million (US
Financial income, net was RMB12.3 million (US
Net loss was RMB25.0 million (US
Adjusted net loss (non-GAAP)4 was RMB17.1 million (US
Basic and diluted net loss per share attributable to ordinary shareholders were both RMB0.01, compared with basic and diluted net earnings per share attributable to ordinary shareholders of RMB0.01 in the same period of 2021.
Share Repurchase Program
The Company's board of directors has approved to extend the term of its previously announced US
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 Thursday, August 25, 2022, 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 | 3420633 |
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, 2021 | June 30, 2022 | |||||
RMB | RMB | US$ | ||||
ASSETS | ||||||
Current Assets | ||||||
Cash and cash equivalents | 567,204 | 252,432 | 37,687 | |||
Restricted cash | 62,528 | 48,811 | 7,286 | |||
Short-term investments | 380,052 | 343,924 | 51,346 | |||
Accounts receivable, net (Allowance for | 118,166 | 116,673 | 17,419 | |||
Advance to suppliers | 59,437 | 57,750 | 8,622 | |||
Inventories, net | 84,500 | 97,446 | 14,548 | |||
Amounts due from related parties | 2,532 | 1,926 | 288 | |||
Prepaid expenses and other current assets | 430,717 | 418,534 | 62,486 | |||
Total current assets | 1,705,136 | 1,337,496 | 199,682 | |||
Non-current assets | ||||||
Property and equipment, net | 12,842 | 171,403 | 25,590 | |||
Long-term investments | 381,401 | 412,369 | 61,565 | |||
Deferred tax assets | 17,497 | 15,022 | 2,243 | |||
Operating lease right-of-use assets, net | 5,420 | 2,722 | 407 | |||
Other non-current assets (Allowance for | 227,674 | 147,297 | 21,991 | |||
Total non-current assets | 644,834 | 748,813 | 111,796 | |||
Total assets | 2,349,970 | 2,086,309 | 311,478 | |||
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, 2021 | June 30, 2022 | |||||
RMB | RMB | US$ | ||||
LIABILITIES AND SHAREHOLDERS'
| ||||||
Current Liabilities | ||||||
Accounts payable | 254,839 | 203,329 | 30,356 | |||
Deferred revenue | 105,752 | 28,078 | 4,192 | |||
Incentive payables to members5 | 265,612 | 234,123 | 34,954 | |||
Member management fees payable | 15,570 | 10,320 | 1,541 | |||
Other payable and accrued liabilities | 202,786 | 158,421 | 23,652 | |||
Amounts due to related parties | 15,630 | 11,637 | 1,737 | |||
Operating lease liabilities - current | 5,571 | 4,529 | 676 | |||
Total current liabilities | 865,760 | 650,437 | 97,108 | |||
Non-current liabilities | ||||||
Operating lease liabilities | 3,123 | 606 | 91 | |||
Deferred tax liabilities | 2,572 | - | - | |||
Total non-current liabilities | 5,695 | 606 | 91 | |||
Total Liabilities | 871,455 | 651,043 | 97,199 | |||
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, 2021 | June 30, 2022 | |||||
RMB | RMB | US$ | ||||
Shareholders' equity | ||||||
Ordinary shares | 70 | 70 | 10 | |||
Less: Treasury stock | (44,228) | (53,143) | (7,934) | |||
Additional paid-in capital | 7,342,344 | 7,320,091 | 1,092,861 | |||
Statutory reserve | 14,019 | 14,019 | 2,093 | |||
Accumulated other comprehensive (loss)/income | (15,664) | 32,400 | 4,837 | |||
Accumulated deficit | (5,818,645) | (5,879,043) | (877,718) | |||
Total Yunji Inc. shareholders' equity | 1,477,896 | 1,434,394 | 214,149 | |||
Non-controlling interests | 619 | 872 | 130 | |||
Total shareholders' equity | 1,478,515 | 1,435,266 | 214,279 | |||
Total liabilities and shareholders' equity | 2,349,970 | 2,086,309 | 311,478 | |||
YUNJI INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME (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, 2021 | June 30, 2022 | June 30, 2021 | June 30, 2022 | |||||||||
RMB | RMB | US$ | RMB | RMB | US$ | |||||||
Revenues: | ||||||||||||
Sales of merchandise, net | 472,081 | 237,135 | 35,403 | 1,043,969 | 527,590 | 78,767 | ||||||
Marketplace revenue | 88,174 | 42,140 | 6,291 | 183,548 | 89,566 | 13,372 | ||||||
Other revenues | 10,467 | 4,676 | 699 | 18,602 | 9,374 | 1,399 | ||||||
Total revenues | 570,722 | 283,951 | 42,393 | 1,246,119 | 626,530 | 93,538 | ||||||
Operating cost and expenses: | ||||||||||||
Cost of revenues | (370,521) | (168,758) | (25,195) | (809,886) | (360,075) | (53,758) | ||||||
Fulfilment | (50,118) | (43,067) | (6,430) | (114,952) | (91,981) | (13,732) | ||||||
Sales and marketing | (61,477) | (58,193) | (8,688) | (157,802) | (108,843) | (16,250) | ||||||
Technology and content | (32,407) | (23,612) | (3,525) | (69,895) | (47,752) | (7,129) | ||||||
General and administrative | (42,888) | (31,714) | (4,735) | (116,956) | (62,937) | (9,396) | ||||||
Total operating cost and expenses | (557,411) | (325,344) | (48,573) | (1,269,491) | (671,588) | (100,265) | ||||||
Other operating income | 2,657 | 11,417 | 1,704 | 19,571 | 17,526 | 2,617 | ||||||
Income/(loss) from operations | 15,968 | (29,976) | (4,476) | (3,801) | (27,532) | (4,110) | ||||||
Financial income/(loss) net | 7,795 | 12,259 | 1,830 | 28,281 | (23,011) | (3,436) | ||||||
Foreign exchange loss, net | (1,248) | (7,400) | (1,105) | (1,077) | (7,713) | (1,152) | ||||||
Other non-operating income, net | 7,489 | 40 | 6 | 8,402 | 2,063 | 308 | ||||||
Income/(loss) before income tax | 30,004 | (25,077) | (3,745) | 31,805 | (56,193) | (8,390) | ||||||
Income tax (expense)/benefit | (7,714) | 919 | 137 | (10,963) | (4,405) | (658) | ||||||
Equity in loss of affiliates, net of tax | (5,332) | (874) | (131) | (7,856) | (1,329) | (198) | ||||||
Net income/(loss) | 16,958 | (25,032) | (3,739) | 12,986 | (61,927) | (9,246) | ||||||
Less: net (loss)/income attributable to | (56) | 183 | 27 | (205) | (216) | (32) | ||||||
Net income/(loss) attributable to | 17,014 | (25,215) | (3,766) | 13,191 | (61,711) | (9,214) | ||||||
YUNJI INC. | ||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME (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, 2021 | June 30, 2022 | June 30, 2021 | June 30, 2022 | |||||||||
RMB | RMB | US$ | RMB | RMB | US$ | |||||||
Net income/(loss) attributable to | 17,014 | (25,215) | (3,766) | 13,191 | (61,711) | (9,214) | ||||||
Net income/(loss) | 16,958 | (25,032) | (3,739) | 12,986 | (61,927) | (9,246) | ||||||
Other comprehensive (loss)/income | ||||||||||||
Foreign currency translation | (19,219) | 53,036 | 7,918 | (12,744) | 48,064 | 7,176 | ||||||
Total comprehensive (loss)/income | (2,261) | 28,004 | 4,179 | 242 | (13,863) | (2,070) | ||||||
Less: total comprehensive | (56) | 183 | 27 | (205) | (216) | (32) | ||||||
Total comprehensive (loss)/income | (2,205) | 27,821 | 4,152 | 447 | (13,647) | (2,038) | ||||||
Net income/(loss) attributable to | 17,014 | (25,215) | (3,766) | 13,191 | (61,711) | (9,214) | ||||||
Weighted average number of | 2,140,954,126 | 2,109,469,102 | 2,109,469,102 | 2,137,900,343 | 2,128,400,114 | 2,128,400,114 | ||||||
Net earnings/(loss) per share | ||||||||||||
Basic | 0.01 | (0.01) | - | 0.01 | (0.03) | - | ||||||
Diluted | 0.01 | (0.01) | - | 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, 2021 | June 30, 2022 | June 30, 2021 | June 30, 2022 | |||||||||
RMB | RMB | US$ | RMB | RMB | US$ | |||||||
Share-based compensation expenses included | ||||||||||||
Technology and content | 787 | 968 | 144 | 2,681 | 2,164 | 323 | ||||||
General and administrative | 5,934 | 6,621 | 989 | 24,781 | 11,399 | 1,702 | ||||||
Fulfillment | (152) | 212 | 32 | (215) | 830 | 124 | ||||||
Sales and marketing | 335 | 133 | 20 | 695 | (192) | (29) | ||||||
Total | 6,904 | 7,934 | 1,185 | 27,942 | 14,201 | 2,120 | ||||||
YUNJI INC. | ||||||||||||
RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE (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, 2021 | June 30, 2022 | June 30, 2021 | June 30, 2022 | |||||||||
RMB | RMB | US$ | RMB | RMB | US$ | |||||||
Reconciliation of Net income/(loss) to | ||||||||||||
Net income/(loss) | 16,958 | (25,032) | (3,739) | 12,986 | (61,927) | (9,246) | ||||||
Add: Share-based compensation | 6,904 | 7,934 | 1,185 | 27,942 | 14,201 | 2,120 | ||||||
Adjusted net income/(loss) | 23,862 | (17,098) | (2,554) | 40,928 | (47,726) | (7,126) | ||||||
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 RMB6.6981 to US |
2. According to the National Bureau of Statistics of China. |
3. "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. |
4. Adjusted net income/(loss) is a non-GAAP financial measure, which is defined as net income/(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. |
5. As of June 30, 2022, the decrease in incentive payables was mainly due to derecognition of long-aged payables to inactive members starting this year. |
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SOURCE Yunji Inc.
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