Cogobuy Announces 2016 Third Quarter Unaudited Operation Summary
HONG KONG, Nov. 17, 2016 /PRNewswire/ --
Highlights for the three months ended September 30, 2016:
- The Group's Gross Merchandise Value ("GMV") was RMB5,773.7 million, an increase of 54.2% year-on-year ("YoY")
- Online transaction customers1 as at September 30, 2016 reached 17,420, up 104.6% YoY
- Non-GAAP profit attributable to equity shareholders2 of the Company was approximately RMB142.0 million, up 35.8% YoY
- INGDAN.com contributed RMB1,701.5 million GMV, up 386.7% YoY
Cogobuy Group ("Cogobuy" or the "Company", stock code: 400.HK; with its subsidiaries (the ''Group'')), the largest e-commerce platform serving the electronics manufacturing industry in China, is pleased to announce its unaudited operation summary for the three months ended September 30, 2016 (the "Period").
The Company saw healthy growth across its three major business lines during the Period. Total GMV of the Company's operations grew to RMB5,773.7 million, a YoY increase of 54.2%; with 59.0% from direct sales, 27.3% from online marketplace platforms, and 13.7% from supply chain financing business. In total, 33.2% of GMV came from blue chip customers, while 66.8% came from small and medium enterprise ("SME") customers. INGDAN.com, the Company's platform connecting global smart hardware developers with supply chain resources, contributed RMB1,701.5 million GMV, which accounted for 29.5% of the total GMV.
Cogobuy's growth during the Period was due to both significant growth in new customers and INGDAN.com's monetization strategy, which exceeded our expectations. Online transaction customers reached 17,420 as of September 30, 2016. This was an increase of 104.6% over the Company's 8,513 customers over the previous year. As of September 30, 2016, the number of registered customers reached 81,262, compared to 45,858 as of September 30, 2015.
Cogobuy also recorded a total revenue of RMB3,453.3 million during the Period, a YoY increase of 38.0%. Net profit attributable to equity shareholders of the Company grew significantly, to approximately RMB133.2 million, a YoY increase of 50.8%. Gross margin was 8.2%. Non-GAAP profit attributable to equity shareholders2 of the Company was approximately RMB142.0 million, representing an increase of 35.8% YoY. Non-GAAP operating expenses3 were RMB99.5 million. Non-GAAP operating margin4 was 5.3%. The effective tax rate of the Group was 14.3% and its non-GAAP effective tax rate5 was 13.8%.
During the Period, the Group generated positive operating cash flow of approximately RMB101.1 million. Cash and cash equivalents and pledged deposits amounted to RMB4,432.6 million as of September 30, 2016. Inventory turnover days6 and trade receivables turnover days7 were 35.2 days and 36.9 days, respectively.
Business Highlights
- INGDAN.com was selected as a speaker at the second Shenzhen Maker Week to represent "new commercial activities" companies.
- Cogobuy launched EZ-ROBOT.CN to complement Cogobuy's electronic manufacturing O2O platform. The site is a global industrial robotics O2O e-commerce platform supplying technical support services from industry experts; it also serves as a professional community for industrial robot manufacturers, component manufacturers, and system integrators.
- Cogobuy recently completed the placement of approximately 160 million new shares at HK$12.50 per share. The placement helped us bring on institutional investors such as Da Cheng International Asset Management Co., Ltd. Net proceeds of the placement were approximately HK$2.0 billion.
Outlook
Mr. Jeffrey Kang, CEO of Cogobuy Group, said, "We were pleased to see our company achieved strong growth during the third quarter, despite a periodic slowdown in the Chinese economy. This was largely attributable to two main growth drivers. First, Cogobuy benefited from accelerated growth in new customers, who we see as being key for the Company's long-term development. During the third quarter, over 17,420 customers completed online transactions with us, a 104.6 % increase from the third quarter last year. Second, our monetization strategy for INGDAN.com has not only been successful, it has also exceeded our expectations. The platform has brought in a wealth of incremental markets and clients to Cogobuy, and client numbers from the INGDAN.com pipeline are only expected to increase. The intelligent hardware industry has grown exponentially in the past several years, and INGDAN.com has positioned us well by investing in and serving as a key player in the intelligent hardware ecosystem.
"In particular, in addition to makers and small innovative companies, many of the large manufacturing corporations have also started registering on INGDAN.com, where they are looking to achieve overall business transformation and update their product offerings from traditional hardware to smart hardware. These customers have started generating significant GMVs, and serve as a continuous growth driver going forward.
"INGDAN.com has been gaining traction and recognition with clients both in China and around the world. The organizers of the second Shenzhen Maker Week, a global conference for the intelligent hardware industry, chose INGDAN.com to present on stage. At the end of the third quarter, INGDAN.com reached approximately 16.1 million followers, registered over 16,000 IoT intelligent hardware innovative projects on the platform. During the first three quarters, INGDAN.com generated RMB3,300.7 million in GMV, an increase of 378.9% YoY. During the third quarter, INGDAN.com contributed 29.5% of our total GMV, and we expect an increase in its contributions in the fourth quarter.
"Looking to next year, we are confident in our momentum and consistent growth. In addition to organic customer acquisition and new, incremental business from INGDAN.com, we will also begin looking for accretive acquisition opportunities. Recently, we completed a Placing of Shares, which helped us bring on institutional investors such as Da Cheng International Asset Management Co., Ltd. The approximately HK$2.0 billion net proceeds from the placement will be used to look for these accretive acquisition opportunities, especially in overseas mergers and acquisitions ("M&A"). These M&A activities will help us realize our geographic expansion in key markets such as the US, Korea, and Taiwan. We will also be seeking M&A opportunities that will enrich the products or services offered on our platform. Levering these three growth drivers, we expect to create greater returns for our shareholders.
"Lastly, we anticipate further benefits and diversification of our shareholder base under the Shenzhen-Hong Kong Stock Connect scheme. Likewise a healthy balance sheet and operating cash flow will serve as a strong foundation for Cogobuy's continued growth in the future, and will also enable us to repurchase shares in the open market when the financial market fluctuates, to the benefit of our shareholders. We are fully confident in our continued performance in the fourth quarter of this year as well as into next year."
| 1 |
Customers who had completed at least one online transaction during the current period and had completed at least one other online transaction in the previous fiscal year. |
| 2 |
Net profit attributable to equity shareholders add share-based compensation costs, amortization of intangible assets and its related deferred taxation effect. |
| 3 |
Total operating expenses less share-based compensation costs and amortization of intangible assets, and expense incurred. |
| 4 |
Non-GAAP operating margin is non-GAAP profit of the period divided by revenue for the period. Non-GAAP profit is gross profit less non-GAAP operating expenses of the period. |
| 5 |
Non-GAAP effective tax rate is income tax expense less deferred taxation related to amortization of intangible assets divided by income before tax less share-based compensation costs and amortization of intangible assets. |
| 6 |
The average of the opening and closing balances of inventories of the period divided by cost of sales of the period and multiplied by 92 days. |
| 7 |
The average of the opening and closing balances of trade receivables for the period divided by revenue of the period and multiplied by 92 days. |
Caution Statement
The information contained in this document has not been independently verified. No representation, warranty or undertaking, express or implied, is made by the Company or any of its affiliates, advisers or representatives as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions presented or contained herein. The information contained in this document should be considered in the context of the circumstances prevailing at the time, is subject to change without notice and the Company makes no undertaking to update the information in this document to reflect any developments that occur after the date of the presentation. It is not the Company's intention to provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of the Company, or its financial or trading position or prospects. Neither of the Company nor any of its affiliates, advisers or representatives accept any responsibility or have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document.
This document may contain statements that reflect the Company's current intent, beliefs and expectations about the future as of the respective dates indicated herein. These forward-looking statements are not guarantees of future performance and are based on a number of assumptions about the Company's operations and factors beyond the Company's control and are subject to significant risks and uncertainties, and accordingly, actual results may differ materially from those described in these forward-looking statements. Neither the Company nor any of its affiliates, advisers or representatives has any obligation, nor do they undertake, to update these forward-looking statements for any events or developments including the occurrence of unanticipated events that occur subsequent to such dates.
About Cogobuy Group
Cogobuy Group is the largest e-commerce service platform serving the electronics manufacturing industry in China. Through the e-commerce platform, which includes a direct sales platform, an online marketplace, and a dedicated team of technical consultants and professional sales representatives, the Company provides customers with comprehensive online and offline services across pre-sale, sale, and post-sale stages. The Company serves mainly SME electronics manufacturers.
For further information, please refer to the Company's website at http://www.cogobuy.com/.
About INGDAN.com
INGDAN.com is a platform dedicated to connecting global intelligent hardware entrepreneurs and China-based supply chain resources. The platform provides information on hardware innovation, supply chain data, and supply chain demand docking for global IoT innovators and entrepreneurs. It is a one-stop hardware innovation business platform with its core being the "supply chain."
For further information, please refer to the Company's website at http://www.ingdan.com/
For investor and media enquiries
Please contact Ms. Wanyee Ho / Ms. Amy Guo at [email protected].
SOURCE Cogobuy Group
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