Stock Update (NYSE:BITA): Bitauto Hldg Ltd (ADR) Announces First Quarter 2016 Results


Bitauto Hldg Ltd (ADR) (NYSE:BITA), a leading provider of internet content and marketing services for China’s fast-growing automotive industry, today announced its unaudited financial results for the first quarter ended March 31, 2016[1].

First Quarter 2016 Highlights[2]

  • Revenue in the first quarter of 2016 was RMB1.08 billion (US$168.0 million), a 46.3% increase from the corresponding period in 2015.
  • Gross profit in the first quarter of 2016 was RMB731.0 million (US$113.4 million), a 46.5% increase from the corresponding period in 2015.
  • Non-GAAP net profit in the first quarter of 2016 was RMB69.2 million (US$10.7 million), a 272.0% increase from the corresponding period in 2015.
  • Non-GAAP basic and diluted net profit per ADS in the first quarter of 2016 was RMB0.48 (US$0.07) and RMB0.47(US$0.07), respectively.

Mr. William Li, chief executive officer and chairman of Bitauto commented, “We are pleased to deliver a set of steady results for the first quarter of 2016, with revenue growing 46.3% year-over-year. Our automobile transaction services business continued to show exciting growth as we expanded the scale of our transaction services and improved our monetization capability. ”

“Bitauto has strived to provide automobile customers with world class automotive marketing solutions and automobile transaction services. In the first quarter of 2016, we generated approximately 27 million sales leads for our automobile customers, with over 70% of leads generated from mobile. Our automobile transaction services business maintained its industry leadership with over 50,000 revenue-generating transactions executed in the first quarter of 2016.”

“In 2016, Bitauto will continue to execute on our core business strategies to enhance our long-term competitiveness. First, we plan to further develop our automobile transaction services, including automobile transactions, CRM and online automotive financial platform services, with better consumer purchasing experience and greater efficiency of our online and offline service infrastructure. Second, we will strive to further increase our mobile monetization capability as we continue to improve our mobile offerings with more targeted marketing solutions enabled by our big data analytics. Third, we will continue to strengthen our dealer services offering particularly on mobile devices and social media.”

Mr. Andy Zhang, chief operating officer and chief financial officer of Bitauto, said, “We are pleased to see healthy growth across our three business segments in the first quarter of 2016 as our strategic investments in expanding and improving our service offerings and buildingBitauto’s brand over the past year continue to show results. Looking forward, we will further improve our operating efficiency while pursuing various growth initiatives especially within the automobile transaction services business. ”

First Quarter 2016 Results

Bitauto reported revenue of RMB1.08 billion (US$168.0 million) for the first quarter of 2016, representing a 46.3% increase from the corresponding period in 2015. The increase in revenue was attributable to the growth of the Company’s transaction services business, advertising and subscription business and digital marketing solutions business.

  • Revenue from the advertising and subscription business for the first quarter of 2016 was RMB714.5 million (US$110.8 million), representing a 17.7% increase from RMB607.1 million (US$94.2 million) in the corresponding period in 2015. The increase was primarily attributable to an increase in advertising and subscription fees spending by customers.
  • Revenue from the transaction services business for the first quarter of 2016 was RMB201.4 million (US$31.2 million), representing a 590.5% increase from RMB29.2 million (US$4.5 million) in the corresponding period in 2015. The increase was attributable to a higher volume of transaction services.
  • Revenue from the digital marketing solutions business for the first quarter of 2016 was RMB167.6 million (US$26.0 million), representing a 60.9% increase from RMB104.2 million (US$16.2 million) in the corresponding period in 2015, which was primarily due to an increase in the number of advertising customers.

Cost of revenue for the first quarter of 2016 was RMB352.5 million (US$54.7 million), representing a year-over-year increase of 45.9% from the corresponding period in 2015. Cost of revenue as a percentage of revenue in the first quarter of 2016 was 32.5%, compared to 32.6% in the corresponding period in 2015.

Gross profit for the first quarter of 2016 was RMB731.0 million (US$113.4 million), representing a 46.5% increase from the corresponding period in 2015 in line with revenue growth.

Selling and administrative expenses were RMB718.5 million (US$111.4 million) for the first quarter of 2016, representing an increase of 57.7% from the corresponding period in 2015. This increase was primarily attributable to the increase in headcount and related expenses, marketing efforts as well as amortization of intangible assets relating to the strategic cooperation with JD.com.

Product development expenses were RMB98.3 million (US$15.2 million) for the first quarter of 2016, representing a 62.6% increase from the corresponding period in 2015. The increase was primarily due to an increase in product development headcount and related expenses.

Share-based payment expenses, which were allocated to related operating expense line items, were RMB24.0 million (US$3.7 million) in the first quarter of 2016, compared to RMB37.1 million (US$5.8 million) in the corresponding period in 2015.

Operating loss in the first quarter of 2016 was RMB77.6 million (US$12.0 million), compared to an operating loss of RMB13.8 million(US$2.1 million) in the corresponding period in 2015.

Non-GAAP operating profit in the first quarter of 2016 was RMB99.5 million (US$15.4 million), representing a 191.5% increase from the corresponding period in 2015.

Income tax expense in the first quarter of 2016 was RMB23.6 million (US$3.7 million), compared to an income tax expense of RMB16.1 million (US$2.5 million) in the corresponding period in 2015.

Net loss in the first quarter of 2016 was RMB108.2 million (US$16.8 million), compared to a net profit of RMB60.5 million (US$9.4 million) in the corresponding period in 2015. Basic and diluted net loss per ADS, each representing one ordinary share, in the first quarter of 2016 amounted to RMB2.40 (US$0.37) and RMB2.40 (US$0.37), respectively.

Non-GAAP net profit in the first quarter of 2016 was RMB69.2 million (US$10.7 million), a 272.0% increase from the corresponding period in 2015. Non-GAAP basic and diluted net profit per ADS in the first quarter of 2016 amounted to RMB0.48 (US$0.07) andRMB0.47 (US$0.07), respectively.

As of March 31, 2016, the Company had cash and cash equivalents and restricted cash of RMB3.72 billion (US$577.5 million). Cash used in operating activities, cash from investing activities, and cash from financing activities in the first quarter of 2016 wereRMB805.3 million (US$124.9 million), RMB93.9 million (US$14.6 million), and RMB1.15 billion (US$178.4 million), respectively.

Bills receivables, representing short-term notes receivable issued by financial institutions that entitle the Company to receive the full face amount from the financial institutions at maturity, which generally range from three to six months from the date of issuance, was RMB78.3 million (US$12.1 million) as of March 31, 2016, compared to RMB147.7 million (US$22.9 million) as of December 31, 2015.

Trade receivables was RMB2.24 billion (US$347.1 million) as of March 31, 2016, compared to RMB1.90 billion (US$294.6 million) as ofDecember 31, 2015. This increase was in line with revenue growth.

The number of employees totaled 5,692 as of March 31, 2016, including employees of the entities in which Bitauto acquired and holds controlling interests. This represented a 64.5% increase from March 31, 2015, which was primarily due to higher headcount in Bitauto’scustomer support service teams as the Company expands its offline service infrastructure to enhance the automobile buying experience, as well as increased headcount in Bitauto’s mobile product development team.

As of March 31, 2016, the Company had a total of 63,311,294 outstanding ordinary shares, with 34,388,244 ADSs issued and outstanding. Each ADS represents one ordinary share of the Company. Non-GAAP basic and diluted per ADS figures for the first quarter of 2016 were calculated using a weighted average of 60,698,068 and 62,407,252 ADSs, respectively.

Second Quarter 2016 Outlook

Bitauto currently expects to generate revenue in the range of RMB1.35 billion (US$209.4 million) to RMB1.40 billion (US$217.1 million) in the second quarter of 2016.

This forecast takes into consideration seasonality factors in Bitauto’s business, and excludes any impact of foreign currency fluctuation. It reflects management’s current and preliminary view, which is subject to change. (Original Source)

Shares of Bitauto closed today at $24.56, up $0.23 or 0.95%. BITA has a 1-year high of $67.73 and a 1-year low of $16.09. The stock’s 50-day moving average is $25.79 and its 200-day moving average is $25.00.

On the ratings front, Bitauto has been the subject of a number of recent research reports. In a report issued on May 4, Brean Murray Carret analyst Fawne Jiang reiterated a Hold rating on BITA. Separately, on March 9, CLSA’s Nathan Snyder upgraded the stock to Buy and has a price target of $30.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Fawne Jiang and Nathan Snyder have a total average return of 4.5% and -5.4% respectively. Jiang has a success rate of 44.0% and is ranked #673 out of 3845 analysts, while Snyder has a success rate of 33.3% and is ranked #2676.

Bitauto Holdings Ltd. is engaged in the provision of internet content and marketing services for China’s automotive industry. It operates through the following segments: Bitauto.com, Toache.com and Digital marketing solutions. The Bitauto.com segment provides advertising services to dealers and automakers on the bitauto.com website. The Toache.com segment engages in the provision of listing services to used automobile dealers that enable them to display used automobile inventory information on the toache.com website and partner websites. It also provides advertising services to used automobile dealers and automakers with certified pre-owned automobile programs in toache.com. The Digital marketing segment provides automakers with one-stop digital marketing solutions, including website creation and maintenance, online public relations, online marketing campaigns and advertising agent services.