YUNJI INC (NASDAQ:YJ) Q2 2020 Earnings Conference Call - Final Transcript

Aug 25, 2020 • 07:30 am ET

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YUNJI INC (NASDAQ:YJ) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
Chen Chen

decreasing member management fees as we continue to improve the efficiency of our member management operations. Technology and the content expenses in the second quarter of 2020 decreased to RMB58.6 million from RMB91.6 million. This decrease was mainly due to our realization of better contract terms with our server providers, which helped to reduce our server costs as well as partially due to the decrease in personnel costs as a result of headcount optimizations.

General and administrative expenses in the second quarter of 2020 increased by 8.1% to RMB70.7 million or 4.8% of total revenues from RMB65.4 million. This increase was mainly due to first, increased share-based compensation expenses, resulting from new grants of share-based awards, and second, increased professional service fees, including auditor and attorney fees, which were partially offset by reduced personnel costs as a result of headcount optimization.

Overall, total operating expenses in the second quarter of 2020 decreased by 38.6% to RMB486.6 million from RMB792.9 million. This reduction was due to our ongoing improvements to logistics efficiency, increased member management efficiency as a result of enhanced service manager relationships and our ability to secure better terms with our partners.

Loss from operations in the second quarter of 2020 were RMB45.2 million including share-based compensation expenses of RMB37.6 million compared with RMB103.9 million. Net loss in the second quarter of 2020 was RMB17.5 million compared with RMB84.5 [Phonetic] million. Adjusted net income in the second quarter of 2020 was RMB20.1 million compared with an adjusted net loss of RMB39.2 million.

Basic and diluted net loss per share, attributable to ordinary shareholders in the second quarter of 2020 were both RMB0.01 compared with RMB0.28 in the same period of 2019.

Now, let's also take a look at our cash and the liquidity positions. During this quarter our ability to maintain a healthy level of working capital despite the macro headwinds and uncertainties in the period enabled us to support our operational liquidity demands. As of June 30, 2020, we had a total of RMB1.7 billion in cash and cash equivalents, restricted cash and short-term investments on our balance sheet.

Looking ahead, we plan to continue accelerating the development of both our marketplace business and the merchandise sales business. At the same time we also aim to leverage our competitive value proposition for users, service managers and quality suppliers in order to explore new initiatives, and partnerships with strong, synergistic potential.

Going forward, we believe that such efforts will enable us to not only enhance our core financials at a steady pace, but also ramp up our overall profitability, setting the stage for high quality growth in the long run. This concludes our prepared remarks for today. Operator, we are now ready to take questions.