Bitauto Holdings Limited (NYSE:BITA) Q2 2018 Earnings Conference Call - Final Transcript

Aug 22, 2018 • 08:15 am ET

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Bitauto Holdings Limited (NYSE:BITA) Q2 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Hello and thank you for standing by for Bitauto's Second Quarter 2018 Earnings Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time.

I would like to turn the meeting over to your host for today's conference.

Executive
Unidentified Speaker

Thank you. Welcome to Bitauto's Second Quarter 2018 Earnings Conference Call. Speakers from the company today are Mr. Andy Zhang, CEO; Mr. Ming Xu, CFO; and Mr. Xiaoke Liu, COO. After their prepared remarks, Andy and Ming will be available to answer your questions. In addition, Catherine Liu, CFO of Yixin, will be available to answer your questions related to Yixin. (Forward-Looking Cautionary Statements) This call will include discussions of certain unaudited non-GAAP financial measures. Please refer to our earnings release, which was issued earlier today for reconciliations of these unaudited non-GAAP measures to the most directly comparable unaudited GAAP measures. As a reminder, this conference is being recorded. In addition, a live and archived webcast of the conference will be available on our website.

I will now turn the call over to Andy Zhang, CEO of Bitauto.

Executive
Andy Zhang

Hello, everyone, and thank you for joining us for our second quarter 2018 earnings conference call. We're pleased to deliver a set of healthy results across our business lines in the second quarter of 2018 with total revenue growth, growing 28.5% year-over-year to RMB2.56 billion. In particular, our transaction services revenue expanded rapidly with 50.2% year-over-year growth to RMB1.27 billion. We also maintained solid momentum in our advertising and subscription businesses with 15.9% revenue growth year-over-year to RMB1.07 billion driven by our ongoing revamping initiatives.

During the quarter, we rolled out initiatives in our advertising business to deepen our collaboration with key opinion leaders. This has helped us to develop more customized content and services for automakers creating win-win-win connections between automakers, self-media, and Bitauto. These new services have been well received by our customers and helped to drive our advertising revenue in the second quarter. In our subscription business, in addition to price increases across multiple product lines, we continued to optimize our business mix by converting more subscribers to our premium package. As the penetration rate by our subscription services among auto dealers is already quite high, we have begun providing tailored services to China's vast number of unauthorized auto dealers to unlock the growth potential of this particular business.

In our transaction services business, Yixin posted resilient results amid industry-wide weakness conducting approximately 103,000 financed automobile transactions representing a 19% year-over-year increase. In August, Yixin entered into strategic collaborations with WeBank for loan facilitation services. With five loan facilitation service partners in place, we expect to further expand Yixin's third-party loan facilitation services, which features strong scalability and an attractive margin profile. In the second quarter, 19% of our total financed automobile transactions were through third-party loan facilitation services, up from 8% in the previous quarter.