Bitauto (BITA) Misses Q1 EPS by 46c, Slight Miss on Revenuse; Offers 2Q Revenue Outlook Below Consensus

Bitauto (NYSE: BITA) reported Q1 EPS of ($1.27), $0.46 worse than the analyst estimate of ($0.81). Revenue for the quarter came in at $245.5 million versus the consensus estimate of $245.96 million.

Bitauto First Quarter 2020 Highlights

Revenue in the first quarter of 2020 was RMB1.74 billion (US$245.5 million), compared to RMB2.73 billion (US$386.2 million) in the corresponding period in 2019.
Gross profit in the first quarter of 2020 was RMB1.11 billion (US$156.6 million), compared to RMB1.67 billion (US$235.7 million) in the corresponding period in 2019.
Net loss in the first quarter of 2020 was RMB1.28 billion (US$180.6 million), compared to net income of RMB92.8 million (US$13.1 million) in the corresponding period in 2019. Non-GAAP net loss in the first quarter of 2020 was RMB1.04 billion (US$146.6 million), compared to Non-GAAP net income of RMB284.7 million (US$40.2 million) in the corresponding period in 2019.
Net loss attributable to Bitauto in the first quarter of 2020 was RMB832.1 million (US$117.5 million), compared to net income attributable to Bitauto of RMB32.5 million (US$4.6 million) in the corresponding period in 2019.Non-GAAP net loss attributable to Bitauto in the first quarter of 2020 was RMB643.5 million (US$90.9 million), compared to Non-GAAP net income attributable to Bitauto of RMB152.1 million (US$21.5 million) in the corresponding period in 2019.

Mr. Andy Zhang, chief executive officer of Bitauto, said, "The COVID-19 outbreak and subsequent nationwide lockdown contributed to a significant year-over-year decline in new passenger vehicle sales for the first quarter of 2020, adversely impacting our advertising and transaction businesses. However, we were pleased that our key operational metrics maintained stable growth despite the challenging situation."

"We were encouraged that daily active users (DAU) of our Bitauto media app and the combined DAU of both the Bitauto media app and Auto Pricing app increased by 259% and 46%, respectively, in April 2020 compared with October 2018, when we introduced the upgraded Bitauto app, according to QuestMobile. Despite the industry headwinds, our overall number of sales leads in the first quarter remained resilient with only a slight decline year-over-year and the proportion of our organic sales leads maintained an upward trajectory, reaching approximately 73%. With continuous improvement in the quantity and quality of our sales leads, our subscription business continued to gain recognition from our dealer customers. As a result, our annual retention rate for paying subscribers achieved a record high in the first quarter of 2020. We also further enhanced ARPU as more dealer customers upgraded to our premium and deluxe premium services packages. Our advertising business experienced a downturn due to the pandemic in the first quarter, but it is recovering robustly as auto sales rebound and automakers become increasingly aware of our improved traffic and sales leads."

"As part of Bitauto's on-going strategic branding campaign, our intensive advertising push during the Chinese New Year holiday across multiple channels helped to raise our profile among consumers, as demonstrated by a surge in third-party online awareness metrics during the period. In May, we also rolled out new TV commercials and posters to accompany our 'Auto Price Bargaining Shopping Season' campaign. We believe that our continuous efforts to enhance Bitauto's brand recognition will help drive our growth in the months and years ahead."

"Decreased automobile sales volume during the quarter significantly impacted Yixin's transaction business. Yixin's total transactions were approximately 52,000 for the first quarter, representing a 64.6% year-over-year decline. In spite of the uncertainties in the sector, we are confident that Yixin's industry leadership and clear competitive advantages will allow it to further strengthen relationships with business partners and capture more business opportunities in the months ahead."

Mr. Ming Xu, chief financial officer of Bitauto, said, "Although revenue from our advertising and transaction businesses was impacted in the first quarter due to the COVID-19 outbreak, we have seen a strong recovery in these businesses as the automobile market picked up in April. Our profitability during first quarter was under pressure mainly due to the increase in provision for credit losses of finance receivables by Yixin, as well as Bitauto's continued investment in branding and marketing initiatives. While we are closely monitoring the impact of COVID-19 on our business, particularly on the asset quality in our transaction services, with the worst of epidemic largely behind us, we are confident that our operating and financial performance will continue to improve for the rest of 2020 as the auto industry recovers from the temporary downturn. In the long run, we believe Bitauto's strategies will enhance operating efficiency and create strong value for our shareholders."

GUIDANCE:

Bitauto sees Q2 2020 revenue of $261.3-275.4 million, versus the consensus of $301.19 million.

Bitauto currently expects to generate revenue in the range of RMB1.85 billion (US$261.3 million) to RMB1.95 billion (US$275.4 million) in the second quarter of 2020.

This forecast takes into consideration of seasonality factors in Bitauto's business, and excludes any impact of foreign currency fluctuation. The above reflects management's current and preliminary view, which is subject to change.

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

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