Le Lézard
Classified in: Science and technology, Business, Covid-19 virus
Subjects: ERN, ERP

Yunji Announces Second Quarter 2022 Unaudited Financial Results


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

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 40.6% compared with 35.1% in the same period of 2021 and we aim to further enhance our cost structure to increase operational efficiency in the second half of 2022." said Mr. Peng Zhang, Yunji's Vice President of Finance.

Second Quarter 2022 Unaudited Financial Results

Total revenues were RMB284.0 million (US$42.4 million), compared with RMB570.7 million in the same period of 2021. This decrease was 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. 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.

Total cost of revenues decreased by 54.5% to RMB168.8 million (US$25.2 million), or 59.4% of total revenues, from RMB370.5 million, or 64.9% of total revenues, in the same period of 2021. The decrease was mainly attributable to the decline 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 2022.

Total operating expenses decreased by 16.2% to RMB156.6 million (US$23.4 million) from RMB186.9 million in the same period of 2021.

Loss from operations was RMB30.0 million (US$4.5 million), compared with income from operations of RMB16.0 million in the same period of 2021.

Financial income, net was RMB12.3 million (US$1.8 million), compared with RMB7.8 million in the same period of 2021, primarily due to (i) increased fair value of equity securities with readily determinable fair value and (ii) increased wealth management products interest income.

Net loss was RMB25.0 million (US$3.7 million), compared with net income of RMB17.0 million in the same period of 2021.

Adjusted net loss (non-GAAP)4 was RMB17.1 million (US$2.6million), compared with adjusted net income of RMB23.9 million in the same period of 2021.

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$20 million share repurchase program for another six months. The Company's board of directors will continue to review the share repurchase program periodically, and may authorize further adjustment of its terms and size.

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: [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,

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
credit losses of RMB7,225 and
RMB7,139, respectively)


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
(Allowance for credit losses of RMB4,791
and RMB5,443, respectively)


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
credit losses of RMB488 and RMB483,
respectively)


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'
EQUITY

 







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
expense, and equity in loss of
affiliates, net of 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
non-controlling interests shareholders


(56)


183


27


(205)


(216)


(32)

Net income/(loss) attributable to
YUNJI INC.


17,014


(25,215)


(3,766)


13,191


(61,711)


(9,214)

 

 

 

YUNJI INC.


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME
(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,

2021


June 30,

2022


June 30,

2021


June 30,

2022



RMB


RMB


US$


RMB


RMB


US$

Net income/(loss) attributable to
ordinary shareholders


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
adjustment


(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
(loss)/income attributable to non-
controlling interests shareholders


(56)


183


27


(205)


(216)


(32)

Total comprehensive (loss)/income
attributable to YUNJI INC.


(2,205)


27,821


4,152


447


(13,647)


(2,038)

Net income/(loss) attributable to
ordinary shareholders


17,014


(25,215)


(3,766)


13,191


(61,711)


(9,214)

Weighted average number of
ordinary shares used in computing
net earnings/(loss) per share, basic
and diluted


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
attributable to ordinary
shareholders













  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
in:













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
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,

2021


June 30,

2022


June 30,

2021


June 30,

2022



RMB


RMB


US$


RMB


RMB


US$

Reconciliation of Net income/(loss) to
Adjusted Net income/(loss):













  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$1.00, the exchange rate in effect as of June 30, 2022 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.

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.

 

SOURCE Yunji Inc.


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