Bitauto (BITA) Reports Q4 Loss of $1.16

Bitauto (NYSE: BITA) reported Q4 EPS of ($1.16). Revenue for the quarter came in at $385.5 million, versus $448.1 million reported last year.

Bitauto Fourth Quarter and Fiscal Year 2019 Highlights

• Revenue in the fourth quarter of 2019 was RMB2.69 billion (US$385.8 million), compared to RMB3.12 billion (US$448.1 million) in the corresponding period in 2018. Revenue in fiscal year 2019 was RMB10.75 billion (US$1.54 billion), a 1.6% increase from 2018.
• Gross profit in the fourth quarter of 2019 was RMB1.59 billion (US$228.4 million), compared to RMB1.69 billion (US$242.9 million) in the corresponding period in 2018. Gross profit in fiscal year 2019 was RMB6.51 billion (US$934.8 million), a 2.7% increase from 2018.
• Net loss in the fourth quarter of 2019 was RMB978.2 million (US$140.5 million), compared to RMB398.3 million (US$57.2 million) in the corresponding period in 2018. Net loss in fiscal year 2019 was RMB1.18 billion (US$169.9 million), compared to RMB679.3 million (US$97.6 million) in 2018.
• Non-GAAP net loss in the fourth quarter of 2019 was RMB576.5 million (US$82.8 million), compared to Non-GAAP net income of RMB199.0 million (US$28.6 million) in the corresponding period in 2018. Non-GAAP net income in fiscal year 2019 was RMB33.6 million (US$4.8 million), compared to RMB934.7 million (US$134.3 million) in 2018.
• Net loss attributable to Bitauto in the fourth quarter of 2019 was RMB922.4 million (US$132.5 million), compared to RMB416.7 million (US$59.9 million) in the corresponding period in 2018. Net loss attributable to Bitauto in fiscal year 2019 was RMB1.20 billion (US$172.4 million), compared to RMB608.4 million (US$87.4 million) in 2018.
• Non-GAAP net loss attributable to Bitauto in the fourth quarter of 2019 was RMB573.5 million (US$82.4 million), compared to Non-GAAP net income attributable to Bitauto of RMB118.6 million (US$17.0 million) in the corresponding period in 2018. Non-GAAP net loss attributable to Bitauto in fiscal year 2019 was RMB214.1 million (US$30.8 million), compared to Non-GAAP net income attributable to Bitauto of RMB708.9 million (US$101.8 million) in 2018.

Mr. Andy Zhang, chief executive officer of Bitauto, said, "The automobile industry in China remained challenging in the fourth quarter of 2019, as new passenger vehicle sales continued to decline year-over-year. Despite the substantial industry headwinds, Bitauto's total revenue reached RMB2.69 billion in the fourth quarter of 2019, exceeding the higher end of our guidance of RMB2.55 billion."

"We were pleased to make further progress in increasing our mobile traffic, as well as improving the quantity and quality of our sales leads. According to QuestMobile, in January 2020 daily active users (DAU) of the Bitauto media app increased by 256%, compared to October 2018 when we rolled out the upgraded version. Moreover, the combined DAU of both the Bitauto media app and our Auto Pricing app increased by approximately 40% year-over-year in January 2020. Amid declining new passenger vehicle sales, we grew our number of sales leads by 8.8% year-over-year in the fourth quarter of 2019, with the proportion of organic sales leads rising to nearly 70%. We have also seen improved quality of sales leads in terms of higher conversion rates as measured by store visits and number of transactions. Backed by these solid operating metrics, Bitauto's revenue from advertising and subscription business reached RMB1.07 billion for the fourth quarter of 2019, exceeding management's expectation."

"We have been achieving very encouraging progress from our ongoing strategic branding campaign which we started in the fourth quarter of 2019. Based on online awareness metrics such as Baidu Index and third party offline consumer surveys, Bitauto has recorded a significant improvement in brand recognition among automobile consumers over a fairly short period of time. We view brand building as a long-term commitment which will allow us to broaden our user base and provide a better value proposition for our automaker and dealer customers."

"In our transaction services business, despite the unfavourable industry environment in the fourth quarter, Yixin further expanded its loan facilitation services, which grew 3% year-over-year and contributed 82% of total financed transactions. For the full year 2019, Yixin maintained steady growth and further solidified its industry-leading position by leveraging its leadership advantages and trackable credibility. Yixin continued to tighten its risk control standards to better adapt to the changing regulatory environment, as many local governments began to implement stricter rules for the collection of delinquent consumer accounts."

"Looking into 2020, we will remain committed to investing resources in key strategic initiatives that strengthen our long-term competitiveness. First, we will continue enhancing our content, products and services to provide better value and experience to automobile consumers and car owners. We will continue to roll out and optimize our AI-based, result-driven marketing solution to more mainstream automakers. We will also increase our R&D investments to improve functionality and user experience of our business to business (B2B) products for our automaker and dealer customers. Second, to further broaden Bitauto's user base and improve our value proposition to our business partners, we will continue working on increasing our mobile traffic, as well as quantity and quality of our sales leads. Third, we will continue investing in our brand building campaign to raise Bitauto's brand recognition among automobile consumers. We are confident that all of these efforts will help form a solid foundation to boost our long-term growth going forward. Lastly, Yixin will proactively adopt a more conservative risk assessment methodology, while partnering with dealers and financial institution partners to identify opportunities within China's automobile market as we adapt to the industry uncertainties we have been facing, as well as the impact from the coronavirus epidemic."

Mr. Ming Xu, chief financial officer of Bitauto, said, "Bitauto's total revenue and revenue from our advertising and subscription business for the fourth quarter of 2019 were both better than expected, as our efforts to enhance Bitauto's brand and increase traffic as well as the quality and quantity of sales leads continue to pay off. While our strategic investments in branding will weigh on our profitability in the near-term, we are confident that this will significantly strengthen Bitauto's long-term competitiveness and profitability."

For earnings history and earnings-related data on Bitauto (BITA) click here.

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