Bitauto Holdings Limited (NYSE:BITA) Q2 2020 Earnings Conference Call - Final Transcript

Aug 24, 2020 • 08:15 am ET

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Bitauto Holdings Limited (NYSE:BITA) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Hello, and thank you for standing by for Bitauto's Second Quarter of 2020 Earnings Conference Call. At this time, all participants are in listen-only mode, and after the management's prepared remarks, there will be a question-and-answer session. Today's conference is being recorded. If you have any objection, you may disconnect at this time.

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

Executive
Unidentified Speaker

Thank you. Welcome to Bitauto's second quarter 2020 earnings conference call. Speakers from the Company today are Mr. Andy Zhang, CEO, and Mr. Ming Xu, CFO.

Before we proceed, please note that discussions today will contain certain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities and Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties, which may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC, including registration statement on Form F1. Bitauto does not undertake any obligations to update any forward-looking statement except as required under applicable law.

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 Xuan Zhang

Hello, everyone, and thank you for joining us for our second quarter 2020 earnings call. In the second quarter, China's domestic automobile industry remained challenging with sluggish retail passenger vehicle sales and the rising levels of dealer inventories, especially considering a resurgence of the COVID-19 outbreak in some major cities in June. While these factors adversely impacted our business, we are confident that the gradual macroeconomic recovery across many industries will present strong opportunities for Bitauto in the months ahead.

Looking at our advertising and the subscription businesses, weak vehicle sales and increasingly fierce competition in China's online automobile advertising sector put pressure on our advertising business during the second quarter. However, our subscription business achieved mild revenue growth, thanks to the slight increase in Bitauto's paying subscriber base.

Turning to our transaction services business, during the quarter, Yixin recorded about 69,000 total transactions in the second quarter, representing a year-over-year decrease of approximately 49.9%. Decrease was primarily driven by Yixin's more conservative risk control approach. Looking ahead, in response to the uncertainties in China's overall environment and particularly the automobile sector, we will stay focused on our core strategies -- strategic initiatives. First, we will continue to upgrade and improve our content and product offerings, which we believe will provide better value to automobile consumers, car owners, automakers, and dealer customers. Second, we continue focusing on our ongoing strategic brand building campaigns to further raise Bitauto's brand recognition in order to