QandK international Group Ltd (NASDAQ:QK) Q1 2020 Earnings Conference Call - Final Transcript
Sep 30, 2020 • 07:30 am ET
companies pursuing growth based on asset quality and operating efficiency. We believe we will be able to capture abundant opportunities based on our substantial competitive advantages when the time comes. Benefitting from the abovementioned strategies, our net revenues for the period increased by 6.5% year-over-year while non-GAAP adjusted EBITDA was negative RMB72 million, compared with a loss of RMB93 million in the same period of fiscal year 2019.
Such results demonstrate our ability to weather economic downturns. We owe such resilience to our strategies positioning. Our focus is on the market segment with monthly rental below RMB2,000 which accounts for approximately 80% of the market in China. Geographically speaking, we are focused on Yangtze mega-city cluster centered around Shanghai, which is a strategic region of China with vibrant growth.
Although the long-term apartment rental industry will not be spared from challenges related to the broader economic pressures and the impact of COVID-19, we should still recognize that it is still a nascent industry as the central government makes housing policy a priority nationwide, such as housing for living, not for speculation, and allowing renters to enjoy the same rights as homeowners. Both the supply and demand in the rental housing market are on the rise in China. We believe that the highest-quality industry leaders will be able to increase their market share meaningfully in the next stage of our industry development.
As China's first long-term apartment rental platform listed in the U.S., we will continue to strengthen our technology and management capabilities to further improve our user experience while scaling our business with the aim to become the standard setter for China's long-term rental industry.
Now, I will pass the call over to our CFO, Frank, to discuss our financial results. Thank you.
Thank you, Mr. Qu. Now, let's go over the first half of fiscal year 2020 financial results in details. We believe year-over-year comparisons are the best way to review our performance. All percentage changes I'm going to give will be on that basis but again, please note that all figures I mention will be in RMB unless otherwise stated. Total net revenues increased 6.5% to RMB627 million. Breaking this down, rental service revenue increased 6% to RMB556 million from RMB525 million in the same period of last year mainly driven by an increase in leased-out rental unit nights, that's partially offset by a decrease in average monthly rental after discount for rental prepayment due to COVID-19 pandemic.
Net revenues from value-added services and others increased by 12% to RMB71 million from RMB64 million in the same period of last year, primarily due to an increase of revenues from broadband internet and utility services, which is in line with the increase in leased-out rental unit nights, that's partially offset by a decrease in revenue from indemnity as a decreased number of tenants and landlords terminate their leases with us before expiration of the lock-in period and we forfeited their deposits