Q&K International Group Ltd. (QK) Reports Q4 Revenues of $47M

Q&K International Group Ltd. (NASDAQ: QK) reported Q4 EPS of ($0.08). Revenue for the quarter came in at $47 million.

Fourth Quarter of Fiscal Year 2019 Financial Highlights

• Net revenues were RMB335.8 million (US$47.0 million), an increase of 13.1% from RMB296.9 million in the same quarter of fiscal year 2018.
• Net loss attributable to the Company was RMB125.1 million (US$17.5 million), a decrease of 29.0% from RMB176.3 million in the same quarter of fiscal year 2018.
• EBITDA1(Non-GAAP) was negative RMB45.2 million (negative US$6.3 million), a decrease of 57.5% from negative RMB106.4 million in the same quarter of fiscal year 2018.
• Adjusted EBITDA1(Non-GAAP) was negative RMB31.4 million (negative US$4.4 million), a decrease of 46.9% from negative RMB59.1 million in the same period of fiscal year 2018.

Fourth Quarter of Fiscal Year 2019 Operational Highlights

• Number of rental units contracted2 was 99,656 as of September 30, 2019, compared to 96,529 as of September 30, 2018.
• Number of available rental units3 was 97,297 as of September 30, 2019, compared to 83,948 as of September 30, 2018.
• Number of occupied rental units4 was 92,513 as of September 30, 2019, compared to 77,266 as of September 30, 2018.
• Period-average occupancy rate5 was 94.4%, compared to 91.2% in the same period of fiscal year 2018.
• Average month-end occupancy rate6 was 95.8%, compared with 92.2% in the same period of fiscal year 2018.
• Rental spread margin before discount for rental prepayment7 was 23.8%, compared to 30.5% in the same period of fiscal year 2018.
• Rental spread margin after discount for rental prepayment8 was 19.1%, compared to 25.7% in the same period of fiscal year 2018.

Mr. Guangjie Jin, founder and Chief Executive Officer of Qingke, commented, “We are pleased to report that we achieved reasonable growth while narrowing our losses in the fourth quarter. We also further widened our leading position in the industry, evidenced by the number of awards granted to us by prominent industry organizations in recognition of our asset quality.

During the quarter, we adopted a defensive strategy after a prudent assessment of the broader macroeconomic downturn by consolidating our internal resources，further improving our operating efficiencies and focusing on asset quality improvement rather than aggressive expansion. In the fourth quarter, our average month-end occupancy rate reached 95.8%, increasing 360 basis points year-over-year, and our period-average occupancy rate was 94.4%, an increase of 320 basis points year-over-year, a new record high, even by peak season standards.

We believe we are well positioned in the Yangtze mega-city cluster centered around Shanghai, which is a strategically important region in China with particularly vibrant growth, and we have built a resilient business model that can effectively weather an economic downturn. As we continue to strengthen our technology and management capabilities, and further improve the user experience while scaling our business, we are confident that we will be able to become the standard setter in China’s long-term apartment rental industry.”

Business Outlook

For the first quarter of fiscal year 2020, based on the information available as of the date of this press release, we expect net revenues to be between RMB310.0 million and RMB325.0 million.

The above outlook is based on the current market conditions and reflects our current and preliminary estimates of market and operating conditions, which are all subject to substantial uncertainty.

For earnings history and earnings-related data on Q&K International Group Ltd. (QK) click here.

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