eHi Car Services Announces Second Quarter 2015 Results

Net revenues increased 69.4% year-over-year

Aug 20, 2015, 06:00 ET from eHi Car Services Limited

SHANGHAI, Aug. 20, 2015 /PRNewswire/ -- eHi Car Services Limited ("eHi" or the "Company") (NYSE: EHIC), a leading car rentals and car services provider in China, today announced its unaudited financial results for the second quarter ended June 30, 2015.

Second Quarter 2015 Highlights

  • Net revenues increased by 69.4% year-over-year to RMB339.9 million (US$54.8 million[1]) for the second quarter of 2015 from RMB200.6 million for the second quarter of 2014.

Three months ended June 30,

Year-Over-Year

(RMB '000)

2014

2015

Comparison

Car rentals

137,228

251,982

83.6%

Car services

63,394

87,889

38.6%

Total Net Revenues

200,622

339,871

69.4%

  • Non-GAAP adjusted EBITDA[2] increased by 59.5% year-over-year to RMB126.0 million (US$20.3 million) for the second quarter of 2015 from RMB79.0 million for the second quarter of 2014.
  • Non-GAAP adjusted EBITDA margin was 37.1% for the second quarter of 2015, compared with 39.4% for the second quarter of 2014.
  • Net income for the second quarter of 2015 was RMB699.1 million (US$112.8 million), compared with a net loss of RMB2.8 million for the second quarter of 2014. Net income for the second quarter of 2015 included RMB803.1 million (US$129.5 million) in gains from sale of cost method investment.
  • Total period-end fleet size[3] increased by 98.1% year-over-year to 30,530 vehicles as of June 30, 2015 from 15,409 vehicles as of June 30, 2014.
  • Average available fleet size[4] increased by 63.5% year-over-year to 24,175 vehicles for the second quarter of 2015 from 14,785 vehicles for the second quarter of 2014.
  • Total fleet RevPAC[5] increased to RMB155 for the second quarter of 2015 from RMB149 for the second quarter of 2014.
  • Fleet utilization rate[6] for car rentals was 71.7% for the second quarter of 2015, compared with 70.0% for the second quarter of 2014.

 

[1]

 

The Company's business is conducted in China and substantially all of its revenues are denominated in Renminbi (RMB). However, this earnings announcement contains translations of RMB amounts into U.S. dollars (US$) at a rate of US$1.00 equal to RMB6.2000 solely for the convenience of the reader.

[2]

 

Non-GAAP adjusted EBITDA is defined as net income or loss before depreciation and amortization, share-based compensation, interest expenses, interest income, provision for income taxes, gains from waiver of warrants and gains from sale of cost method investment. For more information, refer to "About Non-GAAP Financial Measures" and "Reconciliation of GAAP and Non-GAAP Results" at the end of this press release.

[3]

 

"Period-end fleet size" refers to the aggregate number of vehicles in the Company's car rentals and car services fleets as of the last day of a given period to which the Company holds legal title, including vehicles that the Company has written off in accordance with its accounting policy and vehicles that are currently missing but have not been written off.

[4]

 

"Average available fleet size" is calculated by dividing the aggregate number of days in which the Company's fleet was in operation during a given period by the total number of days during the same period. In determining the size of the Company's fleet in operation, eHi includes all vehicles in its car rentals and car services fleets except for vehicles that have been written off in accordance with its accounting policy and vehicles that have not been consistently made available for rent and that which it may consider to dispose when appropriate opportunities arise.

[5]

 

"RevPAC" refers to average daily net revenue per available car, which is calculated by dividing the net revenues during a given period by the aggregate number of days in which the Company's fleet was in operation during the same period.

[6]

"Fleet utilization rate" refers to the aggregate transaction days for the Company's car rental fleet during a given period divided by the aggregate days the car rental fleet was in operation during the same period.

Mr. Ray Zhang, eHi's Chairman and Chief Executive Officer, said, "Our car rentals and car services businesses continued to thrive during the second quarter as we executed on our strategic initiatives to further penetrate the market and expand our fleet size, while maintaining industry-benchmark operating efficiency. We will continue to build on our strong foundation as there are many exciting growth opportunities ahead of us. With the support from our equity financing, sales of investments and credit facility from China Development Bank in the second quarter of 2015, we have the resources to further expand our network and fleet size, and fulfill our future business development needs. "

Mr. Colin Sung, eHi's Chief Financial Officer, said, "During the second quarter, we continued to drive significant revenue growth by expanding fleet size both in car rentals and car services, while leveraging our services network. Second quarter revenues increased by 69.4% year-over-year with growth from each of our business segments. We are also exploring investment opportunities in our related industries."

Second Quarter 2015 Financial Results

Net revenues for the second quarter of 2015 were RMB339.9 million (US$54.8 million), up 69.4% year-over-year, which was attributable to increases in net revenues from both car rentals and car services.

Net revenues from car rentals for the second quarter of 2015 were RMB252.0 million (US$40.6 million), up 83.6% year-over-year, primarily driven by increases in the Company's average available fleet size for car rentals.

Net revenues from car services for the second quarter of 2015 were RMB87.9 million (US$14.2 million), up 38.6% year-over-year, primarily driven by increased demand from the Company's corporate clients.

Vehicle operating expenses for the second quarter of 2015 were RMB275.0 million (US$44.4 million), up 66.9% year-over-year, primarily due to increases in depreciation, labor and insurance costs.

The Company disposed of 1,503 used vehicles during the second quarter of 2015 through various sales channels and recorded a loss of RMB2.1 million (US$0.3 million). The loss was recognized as an adjustment to the vehicle-related depreciation expense as part of the Company's vehicle operating expenses.

Selling, general and administrative expenses for the second quarter of 2015 were RMB61.4 million (US$9.9 million), up 73.6% year-over-year, primarily due to increases in employee-related costs such as salaries and welfare expenses, and to a lesser extent, increases in advertising and promotion expenses.

Profit from operations for the second quarter of 2015 was RMB4.4 million (US$0.7 million), compared with RMB13.0 million for the second quarter of 2014.

Net income for the second quarter of 2015 was RMB699.1 million (US$112.8 million), compared with a net loss of RMB2.8 million for the second quarter of 2014. Net income for the second quarter of 2015 included RMB803.1 million (US$129.5 million) in gains from sale of cost method investment.

Non-GAAP adjusted EBITDA for the second quarter of 2015 was RMB126.0 million (US$20.3 million), up 59.5% year-over-year, mainly due to the continuously increasing average available fleet size.

Non-GAAP adjusted EBITDA margin for the second quarter of 2015 was 37.1%, compared with 39.4% for the second quarter of 2014.

As of June 30, 2015, the Company's cash and cash equivalents balance was RMB1.8 billion (US$284.2 million).

Recent Developments

On June 24, 2015, the Company announced that it entered into a definitive agreement on June 2, 2015, pursuant to which the Company transferred 100% equity interest in its wholly owned subsidiary Elite Plus Developments Limited ("Elite Plus") to Eagle Legend Global Limited, an independent third party, for gross proceeds of US$160.9 million. This transaction was closed on June 24, 2015. Elite Plus currently holds a stake in Xiaoju Kuaizhi Inc., which the Company invested in April 2014 at a consideration of approximately US$25 million. The net proceeds received from this transaction will be used to further expand eHi's car rental and car services fleets and to fund eHi's operations across China.

On June 30, 2015, the Company held an extraordinary general meeting of shareholders in Shanghai and announced that eHi's shareholders approved the issuance of 10,900,000 Class A common shares to Tiger Global Mauritius Fund, SRS Partners I Mauritius Limited and SRS Partners II Mauritius Limited (collectively, the "Buyers") in connection with the second closing of the private placement transaction pursuant to the Securities Purchase Agreement dated May 22, 2015 (the "SPA"). The first closing of the transaction was completed on May 27, 2015 and the second closing was completed on June 30, 2015. As part of the closing conditions to the SPA, the Company entered into a Registration Rights Agreement pursuant to which the Buyers will be entitled to Form F-3 and other registration rights.

On July 20, 2015, the Company announced that it entered into a five-year framework agreement (the "Agreement") with China Development Bank Shanghai Branch that will include various financing products for an aggregate amount of RMB1.5 billion. The Agreement also allows eHi and China Development Bank Shanghai Branch to establish an innovative strategic cooperation in various areas, including vehicle fixed-asset investment. As of today, the Company has not drawn down any amount under this framework agreement.

Outlook

The Company estimates that its fiscal year 2015 net revenues will be in the range of RMB1.5 billion to RMB1.6 billion, which would represent an increase of approximately 76% to 88% from RMB851.2 million in 2014. The Company estimates that its total period-end fleet size as of December 31, 2015 will be in the range of 37,000 to 40,000 vehicles, which would represent an increase of approximately 87% to 103% from 19,746 vehicles as of December 31, 2014. This forecast reflects the Company's current and preliminary view, which is subject to change.

Conference Call Information

The Company's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on August 20, 2015 (8:00 PM Beijing/Hong Kong time on August 20, 2015).

Dial-in details for the earnings conference call are as follows:

United States (toll free):

1-888-346-8982

International:

1-412-902-4272

Hong Kong:

852-3018-4992

China:

400-120-1203

Participants should call in at least 5 minutes before the scheduled start time and ask to be connected to the "eHi Car Services call."

Additionally, a live and archived webcast of the conference call will be available on the investor relations section of eHi's website at http://ir.ehi.com.cn.

A replay of the conference call will be accessible by phone at the following numbers until August 27, 2015:

United States (toll free):

1-877-344-7529

International:

1-412-317-0088

Replay Access Code:

10071075

About eHi Car Services Limited

eHi Car Services Limited (NYSE: EHIC) is China's No. 1 car services provider and No. 2 car rentals provider in terms of market share by revenues in 2013, according to Frost & Sullivan. The Company's mission is to provide comprehensive mobility solutions as an alternative to car ownership by best utilizing existing resources and sharing economy to create optimal value. eHi distinguishes itself in China's fast-growing car rental and car services market through its complementary business model, customer-centric corporate culture, broad geographic coverage, efficient fleet management, leading brand name, and commitment to technological innovation. eHi is the exclusive strategic partner in China of Enterprise, the largest car rental company in the world, and is the designated and preferred business partner of Ctrip, a leader in the online travel agency industry in China. For more information regarding eHi, please visit http://en.1hai.cn/.

About Non-GAAP Financial Measures

To supplement its unaudited condensed consolidated financial statements which are presented in accordance with U.S. GAAP, the Company uses adjusted EBITDA as a non-GAAP financial measure. Adjusted EBITDA represents net income or loss before depreciation and amortization, share-based compensation, interest expenses, interest income, provision for income taxes, gains from waiver of warrants and gains from sale of cost method investment. The Company's management believes that adjusted EBITDA facilitate better understanding of operating results from quarter to quarter and provide management with a better capability to plan and forecast future periods. For more information on the non-GAAP financial measures, please see the table captioned "Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.

Non-GAAP information is not prepared in accordance with GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The presentation of this additional information should not be considered a substitute for GAAP results. A limitation of using adjusted EBITDA is that adjusted EBITDA excludes depreciation and amortization, share-based compensation, interest expenses, interest income and provision for income taxes that have been and will continue to be significant recurring portions of the Company's business for the foreseeable future.

Safe Harbor Statement

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. eHi may also make written or oral forward-looking statements in its reports filed with or furnished to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about eHi's beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: eHi's goals and strategies; its future business development, financial condition and results of operations; its ability to achieve and sustain profitability; its heavy reliance on its proprietary technology platform; its ability to compete successfully against current and future competitors; its ability to sustain its growth rates and manage its expansion plan; its ability to dispose used vehicles at desirable prices or timing or through appropriate channels; its ability to raise sufficient capital to fund and expand its operations at a reasonable cost; various government policies on automobile control and purchase restrictions in certain Chinese cities; its ability to enhance its brand recognition and maintain a high level of customer satisfaction; its ability to control the losses resulting from customer violation of traffic rules; and its ability to obtain all of the requisite permits, licenses or making all of the requisite filings or registrations or meeting other regulatory requirements for operating car rentals and car services business in China. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the SEC. All information provided in this press release is current as of the date of the press release, and eHi does not undertake any obligation to update such information, except as required under applicable law.

For investor and media inquiries, please contact:

eHi Car Services Limited Tel: +86 (21) 6468-7000 ext. 8742 E-Mail: ir@ehic.com.cn

The Piacente Group, Inc. Mr. Don Markley Tel: +1-212-481-2050 E-Mail: ehi@thepiacentegroup.com

-tables to follow-

 

eHi Car Services Limited

Unaudited Condensed Consolidated Balance Sheets

December 31, 2014

June 30,

2015

June 30,

2015

RMB

RMB

USD

Unaudited

Unaudited

Unaudited

ASSETS

Current assets:

Cash and cash equivalents

926,207,744

1,762,307,942

284,243,216

Restricted cash

192,758,072

204,600,000

33,000,000

Accounts receivable, net

111,885,971

113,290,711

18,272,695

Prepayments and other current assets

195,605,733

282,813,141

45,615,024

Total current assets

1,426,457,520

2,363,011,794

381,130,935

Cost method investment

152,975,000

-

-

Property and equipment, net

1,940,047,599

2,853,876,558

460,302,671

Intangible assets

38,246,326

45,157,243

7,283,426

Vehicle purchase deposits

174,184,628

98,751,322

15,927,633

Other non-current assets

23,728,439

31,063,805

5,010,291

Total assets

3,755,639,512

5,391,860,722

869,654,956

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

5,487,316

7,404,242

1,194,233

Accrued expenses and other current liabilities

127,913,033

161,151,556

25,992,186

Income tax payable

2,095,273

85,703,494

13,823,144

Short-term borrowings

540,519,348

625,099,068

100,822,430

Total current liabilities

676,014,970

879,358,360

141,831,993

Long-term borrowings

713,232,869

1,040,396,019

167,805,810

Other non-current liabilities

-

1,400,000

225,806

Total liabilities

1,389,247,839

1,921,154,379

309,863,609

Shareholders' equity

Common shares

727,825

865,226

139,553

Additional paid-in capital

3,621,645,725

4,423,152,407

713,411,679

Accumulated other comprehensive income

1,144,629

1,000,045

161,298

Subscriptions receivable

-

(399,829,312)

(64,488,599)

Accumulated deficits

(1,257,126,506)

(554,482,023)

(89,432,584)

Total shareholders' equity

2,366,391,673

3,470,706,343

559,791,347

Total liabilities and shareholders' equity

3,755,639,512

5,391,860,722

869,654,956

 

 

eHi Car Services Limited

Unaudited Condensed Consolidated Statements of Comprehensive Income/(Loss)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

2014

2015

2015

2014

2015

RMB

RMB

USD

RMB

RMB

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Net revenues:

Car rentals

137,227,750

251,981,712

40,642,212

267,552,100

478,370,321

Car services

63,393,891

87,888,937

14,175,635

116,986,131

157,008,213

Total net revenues

200,621,641

339,870,649

54,817,847

384,538,231

635,378,534

Vehicle operating expenses

(164,814,498)

(275,047,104)

(44,362,436)

(316,012,844)

(514,849,655)

Selling and marketing expenses

(8,030,606)

(13,576,457)

(2,189,751)

(16,026,713)

(24,159,500)

General and administrative expenses

(27,311,279)

(47,773,962)

(7,705,478)

(55,963,646)

(81,791,640)

Other operating income

12,575,783

877,939

141,603

12,681,695

2,386,741

Total operating expenses

(187,580,600)

(335,519,584)

(54,116,062)

(375,321,508)

(618,414,054)

Profit from operations

13,041,041

4,351,065

701,785

9,216,723

16,964,480

Interest income

759,033

640,412

103,292

2,831,356

1,271,177

Interest expense

(15,786,245)

(29,802,150)

(4,806,798)

(30,953,820)

(55,975,391)

Gains from waiver of warrants

-

-

-

-

16,869,935

Gains from sale of cost method investment

-

803,059,728

129,525,763

-

803,059,728

Other income/(expense), net

(138,171)

6,370,604

1,027,516

(395,807)

6,299,770

Income/(loss) before income taxes

(2,124,342)

784,619,659

126,551,558

(19,301,548)

788,489,699

Provision for income taxes

(725,165)

(85,535,202)

(13,796,000)

(1,384,301)

(85,845,216)

Net income/(loss)

(2,849,507)

699,084,457

112,755,558

(20,685,849)

702,644,483

Accretion on Series A convertible redeemable     preferred shares to redemption value

(19,696)

-

-

(39,386)

-

Accretion on Series B convertible redeemable     preferred shares to redemption value

(976,134)

-

-

(1,949,164)

-

Accretion on Series C convertible redeemable     preferred shares to redemption value

(21,147,961)

-

-

(41,570,345)

-

Accretion on Series D convertible redeemable     preferred shares to redemption value

(14,418,552)

-

-

(28,324,812)

-

Accretion on Series E convertible redeemable     preferred shares to redemption value

(28,749,721)

-

-

(51,282,092)

-

Accretion on Class A convertible redeemable     preferred shares to redemption value

(6,359,345)

-

-

(12,587,297)

-

Net income/(loss) attributable to common shareholders

(74,520,916)

699,084,457

112,755,558

(156,438,945)

702,644,483

Net income/(loss)

(2,849,507)

699,084,457

112,755,558

(20,685,849)

702,644,483

Changes in cumulative foreign currency     translation adjustment, net of tax of nil

(2,203,230)

(2,868,498)

(462,661)

739,152

(144,584)

Comprehensive income/(loss)

(5,052,737)

696,215,959

112,292,897

(19,946,697)

702,499,899

Weighted average number of common     shares used in computing net     income/(loss) per share

Basic

6,096,842

119,217,341

119,217,341

6,096,842

116,643,839

Diluted

6,096,842

121,751,506

121,751,506

6,096,842

118,863,159

Net income/(loss) per share attributable to     common shareholders

Basic

(12.22)

5.86

0.95

(25.66)

6.02

Diluted

(12.22)

5.74

0.93

(25.66)

5.91

 

 

eHi Car Services Limited

Reconciliation of GAAP and Non-GAAP Results

For the Three Months Ended June 30,

For the Six Months Ended June 30,

2014

2015

2015

2014

2015

RMB

RMB

USD

RMB

RMB

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Net Income/(Loss)

(2,849,507)

699,084,457

112,755,558

(20,685,849)

702,644,483

Add / (subtract):

Depreciation and     amortization

65,029,807

112,037,723

18,070,600

121,947,689

212,244,688

Share-based compensation

1,053,958

3,199,526

516,053

2,261,308

6,166,574

Interest income

(759,033)

(640,412)

(103,292)

(2,831,356)

(1,271,177)

Interest expense

15,786,245

29,802,150

4,806,798

30,953,820

55,975,391

Provision for income taxes

725,165

85,535,202

13,796,000

1,384,301

85,845,216

Gains from waiver of     warrants

-

-

-

-

(16,869,935)

Gains from sale of cost     method investment

-

(803,059,728)

(129,525,763)

-

(803,059,728)

Adjusted EBITDA

78,986,635

125,958,918

20,315,954

133,029,913

241,675,512

 

 

SOURCE eHi Car Services Limited



RELATED LINKS

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