Bitauto (NYSE: BITA) reported Q2 EPS of $0.53, $0.15 better than the analyst estimate of $0.38. Revenue for the quarter came in at $387.5 million versus the consensus estimate of $366.58 million.

• Revenue in the second quarter of 2018 was RMB2.56 billion (US$387.5 million), a 28.5% increase from the corresponding period in 2017.
• Gross profit in the second quarter of 2018 was RMB1.62 billion (US$245.3 million), a 17.7% increase from the corresponding period in 2017.
• Income from operations in the second quarter of 2018 was RMB107.0 million (US$16.2 million), compared to RMB12.8 million (US$1.9 million) in the corresponding period in 2017.
• Non-GAAP income from operations in the second quarter of 2018 was RMB429.1 million (US$64.8 million), a 45.8% increase from the corresponding period in 2017.
• Net income in the second quarter of 2018 was RMB27.4 million (US$4.1 million), compared to a net loss of RMB63.3 million (US$9.6 million) in the corresponding period in 2017.
• Non-GAAP net income in the second quarter of 2018 was RMB353.7 million (US$53.5 million), a 53.4% increase from the corresponding period in 2017.
• Basic and diluted net loss per ADS in the second quarter of 2018 was RMB0.02 (US$0.00) and RMB0.05 (US$0.01), respectively.
• Non-GAAP basic and diluted net income per ADS in the second quarter of 2018 was RMB3.50 (US$0.53) and RMB3.22 (US$0.49), respectively.

Mr. Andy Zhang, chief executive officer of Bitauto, said, "We were pleased to deliver a set of healthy results across our business lines in the second quarter of 2018, with total revenue growing 28.5% year-over-year to RMB2.56 billion. In particular, our transaction services revenue expanded rapidly with 50.2% year-over-year growth to RMB1.27 billion. We also maintained solid momentum in our advertising and subscription business, with 15.9% revenue growth year-over-year to RMB1.07 billion, driven by our ongoing revamping initiatives."

"In our advertising business, we deepened our collaboration with key opinion leaders to develop customized content and services for automakers, creating win-win-win connections between automakers, self-media and Bitauto. In our subscription business, we continued to optimize our business mix by converting more subscribers to our premium service package. We also expanded our subscription membership base by providing tailored services to China\'s vast number of unauthorized auto dealers. In our transaction services business, Yixin posted resilient results amid industry weakness, facilitating approximately 103,000 financed automobile transactions, a 19% increase from the corresponding period in 2017. In August, Yixin entered into strategic collaborations with WeBank for loan facilitation services. With five loan facilitation service partners in place, we expect to further expand Yixin\'s third-party loan facilitation services, which features strong scalability and an attractive margin profile. In the second quarter, 19% of total financed automobile transactions were through third-party loan facilitation services, up from 8% in the previous quarter."

"Looking ahead, we will continue to focus on our three core business strategies. First, we will further develop synergies between Bitauto, Yixin and other Bitauto family companies to build up more diversified offerings for consumers and our business partners. Second, we will continue to enhance the content and services that we provide to our user community to cover the entire automobile purchase and ownership cycle. This will allow us to increase user stickiness and engagement, and develop more comprehensive customer profiles. Third, we will continue to leverage our big data capabilities and support from our strategic shareholders to enable more user touchpoints and data crossover throughout the Bitauto ecosystem. Building on our market leading position, we are confident that we will achieve our goal of becoming China's top online auto media and transaction services platform."

Mr. Ming Xu, chief financial officer of Bitauto said, "We achieved steady topline growth from our media services in the second quarter, thanks mainly to higher ASPs as a result of rising spending by OEM advertisers, higher price points for subscription packages and a greater contribution from sales of premium membership packages. In addition, we made solid progress in improving our profitability through various measures to optimize our cost structure, including marketing expenses. As Yixin further expands its revenue contribution from its third party loan business, we also expect to see margin improvement in our transaction services business in the second half of 2018."

GUIDANCE:

Bitauto sees Q3 2018 revenue of $402-4009.5 million, versus the consensus of $388.21 million.

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