Cheche Group Reports Second Quarter 2024 Unaudited Financial Results
Rhea-AI Summary
Cheche Group Inc. (NASDAQ: CCG), China's leading auto insurance technology platform, reported Q2 2024 financial results. Highlights include:
- Net revenues increased 2.5% YoY to RMB851.8 million (US$117.2 million)
- Net loss decreased 16.4% YoY to RMB23.6 million (US$3.2 million)
- Adjusted net loss decreased 38.8% YoY to RMB12.2 million (US$1.7 million)
- Total policies issued increased 11.1% YoY to 4.0 million
- Partnerships with NEV companies led to 225,000 policies embedded in new NEV deliveries, up 147.3% YoY
The company affirmed its full-year 2024 outlook, expecting net revenues of RMB3.5-3.7 billion and total written premiums of RMB24.5-26.5 billion.
Positive
- Net revenues increased 2.5% year-over-year to RMB851.8 million
- Net loss decreased 16.4% year-over-year to RMB23.6 million
- Adjusted net loss decreased 38.8% year-over-year to RMB12.2 million
- Total number of policies issued increased 11.1% to 4.0 million
- Partnerships with NEV companies led to 225,000 policies embedded in new NEV deliveries, up 147.3% year-over-year
- Affirmed full-year 2024 outlook with expected revenue growth of 6.1% to 12.1%
Negative
- Selling and Marketing Expenses increased 14.2% year-over-year to RMB19.3 million
- General and Administrative Expenses increased 41.8% year-over-year to RMB27.7 million
- Total Cost and Operating Expenses increased 2.7% year-over-year to RMB877.1 million
News Market Reaction – CCG
On the day this news was published, CCG gained 0.70%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Financial and Operational Highlights
- Net revenues for the quarter increased
2.5% year-over-year toRMB851.8 million (US ), while net revenues for the first half of 2024 increased$117.2 million 1.8% over the comparable prior year period toRMB1.6 billion (US ).$225.5million - Net loss for the quarter decreased
16.4% year-over-year toRMB23 .6 million (US ), while net loss for the first half of 2024 decreased$3.2 million 24.0% toRMB54.9 million (US ) over the prior-year period.$7.6 million - Adjusted net loss (1) for the quarter decreased
38.8% , fromRMB20.0 million in the prior-year period toRMB12.2 million (US .7 million), while adjusted net loss for the first half of 2024 decreased$1 12.0% toRMB24.4 million (US .4 million), compared to the prior-year period.$3 - Total written premiums placed for the quarter was
RMB5.6 billion (US ) and remained stable as compared to the prior-year period, while total written premiums placed for the first half of 2024 increased$0.78 billion 4.2% over the comparable prior-year period toRMB11.1 billion (US ).$ 1.5 billion - Total number of policies issued for the quarter increased
11.1% to 4.0 million from 3.6 million for the prior-year quarter, while the total number of policies issued over the first half of 2024 increased15.9% over the comparable prior-year period to 8.0 million. - Partnerships with New Energy Vehicle (NEV) companies (2) numbered 12 in the quarter and led to 225,000 policies embedded in new NEV deliveries with corresponding written premium of
RMB662 .6 million (US ), representing an increase of$91.2 million 147.3% and99.6% compared to the prior-year quarter, respectively. Policies embedded in the new NEV deliveries and corresponding written premium for the first half of 2024 reached 344,000 andRMB1.0 billion (US .1 million), respectively, representing growth of$142 140.6% for policies embedded and91.3% for written premium compared to the prior-year period.
(1) Adjusted Net Loss is a non-GAAP measure. For further information on the non-GAAP financial measures presented above, see the "Non-GAAP Financial Measures" section below.
(2) The rapid growth of the NEV market has created new opportunities for auto insurance offerings and propelled revenue growth of auto insurance providers. Cheche started to collaborate with NEV manufacturers in 2022, and such collaborations yielded considerable results in 2023. Cheche believes that the further growth of the NEV market and the introduction of innovative NEV auto insurance solutions will further fuel the revenue contribution of its partnership with NEV manufacturers. The management of Cheche utilizes the number of partnerships with NEV manufacturers, the number of insurance policies embedded in the new NEV deliveries, and the amount of corresponding premium generated from such embedded policies as the main operating metrics to evaluate its business and presents such operating metrics for investors to better understand and evaluate Cheche's business.
Management Comments
"Cheche reported positively-trending bottom-line results and continues to see revenue growth driven in part by increased engagement with our ever-evolving technology platform," said Lei Zhang, Founder, CEO, and Chairman of Cheche. "As we continue to gain scale as the technology partner for NEVs and our visibility increases with traditional vehicle manufacturers, our market influence and ability to generate efficiencies continues to improve.
"The first two months of this quarter have seen retail sales of NEVs rebound to the second highest sales on record in
Unaudited Second Quarter 2024 Financial Results
Net Revenues were
Cost of Revenues increased
Selling and Marketing Expenses increased
General and Administrative Expenses increased
Research and Development Expenses decreased
Total Cost and Operating Expenses increased
Net Loss decreased
Net Loss attributable to Cheche's shareholders decreased
Adjusted Net Loss attributable to Cheche's shareholders decreased
Net Loss Per Share, basic and diluted, was
Adjusted Net Loss Per Share, basic and diluted, was
2Q24 and Subsequent Business Highlights
- On May 13, 2024, Cheche announced its partnership with Volkswagen (
Anhui ) Digital Sales and Services Co., Ltd., the exclusive service provider of NEV insurance business for Volkswagen (Anhui ) Automotive Company Limited ("Volkswagen Anhui"). Cheche aims to support Volkswagen Anhui's branded insurance needs and enhance the attractiveness of Volkswagen Anhui's branded insurance products, boosting its penetration rate. - On June 20, 2024, Cheche announced its partnership with NIO Insurance Broker Co., Ltd. ("NIO Insurance Broker") to provide its accessible digital platform powered by industry-leading technology, simplifying the process of securing auto insurance for NIO's customers, while reducing front-end insurance delivery costs and enabling NIO to digitally manage its insurance business. Cheche is committed to creating value for its partners throughout the product lifecycle.
- On June 27, 2024, Cheche announced a strategic partnership with Beijing Anpeng Insurance Broker Co., Ltd. ("Beijing Anpeng"), a subsidiary of Beijing Automotive Group Co., Ltd. ("BAIC Group"). BAIC Group is one of the largest auto manufacturers in
China , producing and selling vehicles through its own brands as well as foreign-branded joint-ventures, with Beijing Anpeng handling the insurance business for the brands, which encompass ARCFOX, Beijing Automotive, Beijing Hyundai, Beijing Benz, and Beijing Off-road, among others. The partnership names Cheche as the core partner of BAIC Group, providing digital insurance solutions for brands. The opportunity is already off to a strong start with ARCFOX's service system being launched as a direct-sales channel, the system for Beijing Automotive, expected to cover 200 dealerships by the end of the year, in the process of being rolled out, and Beijing Hyundai's planned service system expected to cover 100 dealerships at year end. - On August 15, 2024, Cheche announced a strategic partnership with Dongfeng Motor Group Company Limited's ("Dongfeng Motor Group") insurance provider, Wuhan Dongfeng Insurance Broker Co., Ltd. ("Dongfeng Insurance"). Dongfeng Insurance designated Cheche as an approved provider for Dongfeng Motor Group's NEV brands, such as VOYAH, a luxury EV brand that recently engaged the services of Cheche's digital insurance solutions platform.
- On August 19, 2024, Cheche Group announced its latest progress with BAIC Group's NEV brand ARCFOX. Cheche has successfully launched a full-service insurance platform for ARCFOX that provides its car owners with a comprehensive insurance application system. The collaboration with ARCFOX allows Cheche to gradually introduce high-margin insurance products, while continuing to grow its NEV insurance presence, thereby diversifying Cheche's revenue mix and boosting the Company's reputation among automotive enterprises.
Balance Sheet
As of June 30, 2024, the Company had
Business Outlook
Cheche affirms its full year 2024 outlook, anticipating:
- Net revenues to range from
RMB3.5 billion toRMB3.7 billion , representing an increase of6.1% to12.1% , compared to the full year of 2023. - Total written premiums placed to range from
RMB24.5 billion toRMB26.5 billion , representing an increase of8.4% to17.3% , compared to the full year of 2023.
Conference Call
Cheche will host a webcast and conference call to discuss its second quarter 2024 results today at 8:00 a.m. EDT. This earnings release and a related investor deck will be available prior to the event in the "Quarterly Results" section under "Financials", while. the live webcast will be available in the "Events" section under the "News & Events" header on the investor relations website at ir.chechegroup.com.
The dial-in numbers for the conference call are as follows:
- Participant (toll-free): 1-888-346-8982
- Participant (international): 1-412-902-4272
- Hong Kong LT: 852-301-84992
- Hong Kong Toll Free: 800-905945
- China Toll-Free: 4001-201203
Please dial in 10 to 15 minutes before the scheduled start time and request Cheche's second quarter earnings call.
A webcast replay will be available for one year following the call.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into
About Cheche Group Inc.
Established in 2014 and headquartered in
Non-GAAP Financial Measures
Cheche has provided non-GAAP financial measures in this press release that have not been prepared in accordance with generally accepted accounting principles (GAAP) in
Cheche uses adjusted cost of revenues, adjusted selling and marketing expenses, adjusted general and administrative expenses, adjusted research and development expenses, adjusted total cost and operating expenses, adjusted net loss, and adjusted net loss per share, which are non-GAAP financial measures, in evaluating our operating results and for financial and operational decision-making purposes.
Cheche defines adjusted total cost and operating expenses as total cost and operating expenses adjusted for the impact of share-based compensation, listing-related professional service fees and dispute resolution expenses, which represents expenses incurred by Cheche in connection with settling a dispute with a certain security holder. Cheche defines adjusted net loss as net loss adjusted for the impact of share-based compensation expenses, amortization of intangible assets, and changes in fair value of amounts due to a related party related to the acquisition of Cheche Insurance Sales & Services Co., Ltd. (previously named Fanhua Times Sales and Service Co., Ltd), change in fair value of warrants, listing related professional service fees and dispute resolution expenses. Adjusted net loss per share, basic and diluted, is calculated as adjusted net loss divided by weighted-average ordinary shares outstanding.
Cheche believes that these non-GAAP financial measures help identify underlying trends in its business that could otherwise be distorted by the impact of share-based compensation expenses, amortization of intangible assets related to acquisition, and change in fair value of amounts due to a related party related to the acquisition of Cheche Insurance Sales & Services Co., Ltd. (previously named Fanhua Times Sales and Service Co., Ltd), change in fair value of warrants, and listing related professional service fees and dispute resolution expenses. Cheche believes that such non-GAAP financial measures also provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects, and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.
The non-GAAP financial measures are not defined under
Safe Harbor Statements
This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "estimate," "plan," "project," "forecast," "intend," "will," "expect," "anticipate," "believe," "seek," "target" or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements also include, but are not limited to, statements regarding projections, estimations, and forecasts of revenue and other financial and performance metrics, projections of market opportunity and expectations, the Company's ability to scale and grow its business, the Company's advantages and expected growth, and its ability to source and retain talent, as applicable. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of the Company's management and are not predictions of actual performance. These statements involve risks, uncertainties, and other factors that may cause the Company's actual results, levels of activity, performance, or achievements to materially differ from those expressed or implied by these forward-looking statements. Further information regarding these and other risks, uncertainties, or factors is included in the Company's filings with the
Unaudited Condensed Consolidated Balance Sheets (All amounts in thousands, except for share and per share data) | |||||
December 31, | June 30, | June 30, | |||
2023 | 2024 | 2024 | |||
RMB | RMB | USD | |||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | 243,392 | 133,117 | 18,318 | ||
Short-term investments | 21,474 | 71,494 | 9,838 | ||
Accounts receivable, net | 466,066 | 639,233 | 87,961 | ||
Prepayments and other current assets | 49,321 | 52,912 | 7,281 | ||
Total current assets | 780,253 | 896,756 | 123,398 | ||
Non-current assets: | |||||
Restricted Cash | 5,000 | 5,000 | 688 | ||
Property, equipment and leasehold improvement, net | 1,667 | 2,479 | 341 | ||
Intangible assets, net | 8,050 | 7,000 | 963 | ||
Right-of-use assets | 10,249 | 10,021 | 1,379 | ||
Goodwill | 84,609 | 84,609 | 11,643 | ||
Other non-current assets | 4,149 | 3,908 | 538 | ||
Total non-current assets | 113,724 | 113,017 | 15,552 | ||
Total assets | 893,977 | 1,009,773 | 138,950 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
Current liabilities: | |||||
Accounts payable | 316,868 | 467,552 | 64,337 | ||
Short-term borrowings | 20,000 | 15,000 | 2,064 | ||
Contract liabilities | 4,295 | 3,274 | 451 | ||
Salary and welfare benefits payable | 73,609 | 73,313 | 10,088 | ||
Tax payable | 950 | 875 | 120 | ||
Amounts due to related party | 55,251 | 58,801 | 8,091 | ||
Accrued expenses and other current liabilities | 25,759 | 23,452 | 3,228 | ||
Short-term lease liabilities | 3,951 | 4,730 | 651 | ||
Warrant | 850 | 1 | - | ||
Total current liabilities | 501,533 | 646,998 | 89,030 | ||
Non-current liabilities: | |||||
Deferred tax liabilities | 2,013 | 1,750 | 241 | ||
Long-term lease liabilities | 5,398 | 4,485 | 617 | ||
Deferred revenue | 1,432 | 1,432 | 197 | ||
Warrant | 5,419 | 2,921 | 402 | ||
Total non-current liabilities | 14,262 | 10,588 | 1,457 | ||
Total liabilities | 515,795 | 657,586 | 90,487 | ||
Ordinary shares | 5 | 5 | 1 | ||
Treasury stock | (1,025) | (1,025) | (141) | ||
Additional paid-in capital | 2,491,873 | 2,518,989 | 346,624 | ||
Accumulated deficit | (2,113,821) | (2,168,693) | (298,422) | ||
Accumulated other comprehensive income | 1,150 | 2,911 | 401 | ||
Total Cheche's shareholders' equity | 378,182 | 352,187 | 48,463 | ||
Total liabilities and shareholders' equity | 893,977 | 1,009,773 | 138,950 | ||
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss (All amounts in thousands, except for share and per share data) | |||||||
For the Three Months Ended | For the Six Months Ended | ||||||
June 30, | June 30, | June 30, | June 30, | June 30, | June 30, | ||
2023 | 2024 | 2024 | 2023 | 2024 | 2024 | ||
RMB | RMB | USD | RMB | RMB | USD | ||
Net revenues | 830,721 | 851,842 | 117,217 | 1,610,371 | 1,638,986 | 225,532 | |
Cost and Operating expenses: | |||||||
Cost of revenues | (806,036) | (820,913) | (112,961) | (1,551,979) | (1,574,285) | (216,629) | |
Selling and marketing expenses | (16,943) | (19,342) | (2,662) | (47,755) | (41,661) | (5,733) | |
General and administrative expenses | (19,567) | (27,745) | (3,818) | (49,694) | (61,753) | (8,497) | |
Research and development expenses | (11,569) | (9,128) | (1,256) | (31,303) | (18,525) | (2,549) | |
Total cost and operating expenses | (854,115) | (877,128) | (120,697) | (1,680,731) | (1,696,224) | (233,408) | |
Other expenses: | |||||||
Interest income | 1,108 | 1,282 | 176 | 1,483 | 3,257 | 448 | |
Interest expense | (320) | (206) | (28) | (541) | (440) | (61) | |
Foreign exchange losses | (7,781) | (803) | (110) | (6,334) | (1,055) | (145) | |
Government grants | 4,193 | - | - | 7,240 | 234 | 32 | |
Changes in fair value of warrant | (104) | 2,908 | 400 | (127) | 3,376 | 465 | |
Changes in fair value of amounts due to related party | (2,075) | (1,555) | (214) | (3,836) | (3,286) | (452) | |
Others, net | 2 | (33) | (5) | 29 | 180 | 25 | |
Loss before income tax | (28,371) | (23,693) | (3,261) | (72,446) | (54,972) | (7,564) | |
Income tax credit | 130 | 92 | 13 | 258 | 100 | 14 | |
Net loss | (28,241) | (23,601) | (3,248) | (72,188) | (54,872) | (7,550) | |
Accretions to preferred shares redemption value | (89,452) | - | - | (109,991) | - | - | |
Net loss attributable to the Cheche's ordinary shareholders | (117,693) | (23,601) | (3,248) | (182,179) | (54,872) | (7,550) | |
Net loss | |||||||
Other comprehensive income/(loss): | |||||||
Foreign currency translation adjustments, net of nil tax | 10,138 | 1,442 | 198 | 7,410 | 2,016 | 277 | |
Fair value changes of amounts due to related party due to own credit risk | 47 | (245) | (34) | (300) | (254) | (35) | |
Total other comprehensive income | 10,185 | 1,197 | 164 | 7,110 | 1,762 | 242 | |
Total comprehensive loss | (18,056) | (22,404) | (3,084) | (65,078) | (53,110) | (7,308) | |
Net loss per ordinary shares outstanding | |||||||
Basic | (3.56) | (0.31) | (0.04) | (5.57) | (0.72) | (0.10) | |
Diluted | (3.56) | (0.31) | (0.04) | (5.57) | (0.72) | (0.10) | |
Weighted average number of ordinary shares outstanding | |||||||
Basic | 33,098,269 | 77,045,425 | 77,045,425 | 32,705,091 | 76,264,603 | 76,264,603 | |
Diluted | 33,098,269 | 77,045,425 | 77,045,425 | 32,705,091 | 76,264,603 | 76,264,603 | |
Reconciliation of GAAP Cost and Operating Expenses to Non-GAAP Cost and Operating Expenses (Unaudited) (All amounts in thousands) | ||||||
For the Three Months Ended | For the Six Months Ended | |||||
June 30, | June 30, | June 30, | June 30, | June 30, | June 30, | |
2023 | 2024 | 2024 | 2023 | 2024 | 2024 | |
RMB | RMB | USD | RMB | RMB | USD | |
Cost of revenues | (806,036) | (820,913) | (112,961) | (1,551,979) | (1,574,285) | (216,629) |
Add: Share-based compensation expenses | 2 | 3 | - | 72 | 6 | 1 |
Amortization of intangible assets related to acquisition | 525 | 525 | 72 | 1,050 | 1,050 | 144 |
Adjusted Cost of revenues | (805,509) | (820,385) | (112,889) | (1,550,857) | (1,573,229) | (216,484) |
Selling and marketing expenses | (16,943) | (19,342) | (2,662) | (47,755) | (41,661) | (5,733) |
Add: Share-based compensation expenses | 614 | 1,025 | 141 | 9,673 | 3,632 | 500 |
Adjusted Selling and marketing expenses | (16,329) | (18,317) | (2,521) | (38,082) | (38,029) | (5,233) |
General and administrative expenses | (19,567) | (27,745) | (3,818) | (49,694) | (61,753) | (8,497) |
Add: Share-based compensation expenses | 1,654 | 8,325 | 1,146 | 15,355 | 22,146 | 3,047 |
Listing related professional expenses | 3,176 | - | - | 5,537 | - | - |
Dispute resolution expenses (3) | - | 2,355 | 324 | - | 2,355 | 324 |
Adjusted General and administrative expenses | (14,737) | (17,065) | (2,348) | (28,802) | (37,252) | (5,126) |
Research and development expenses | (11,569) | (9,128) | (1,256) | (31,303) | (18,525) | (2,549) |
Add: Share-based compensation expenses | 110 | 496 | 68 | 8,775 | 1,333 | 183 |
Adjusted Research and development expenses | (11,459) | (8,632) | (1,188) | (22,528) | (17,192) | (2,366) |
Total cost and operating expenses | (854,115) | (877,128) | (120,697) | (1,680,731) | (1,696,224) | (233,408) |
Adjusted total cost and operating expenses | (848,034) | (864,399) | (118,946) | (1,640,269) | (1,665,702) | (229,209) |
(3) represents expenses incurred by Cheche in connection with settling a dispute with a certain security holder, which are not directly related to the core operations of Cheche's business. | ||||||
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (All amounts in thousands, except for share data and per share data) | ||||||
For the Three Months Ended | For the Six Months Ended | |||||
June 30, | June 30, | June 30, | June 30, | June 30, | June 30, | |
2023 | 2024 | 2024 | 2023 | 2024 | 2024 | |
RMB | RMB | USD | RMB | RMB | USD | |
Net loss | (28,241) | (23,601) | (3,248) | (72,188) | (54,872) | (7,550) |
Add: Share-based compensation expenses | 2,380 | 9,849 | 1,355 | 33,875 | 27,117 | 3,731 |
Amortization of intangible assets related to acquisition | 525 | 525 | 72 | 1,050 | 1,050 | 144 |
Listing related professional expenses | 3,176 | - | - | 5,537 | - | - |
Change in fair value of warrant | 104 | (2,908) | (400) | 127 | (3,376) | (465) |
Changes in fair value of amounts due to related party | 2,075 | 1,555 | 214 | 3,836 | 3,286 | 452 |
Dispute resolution expenses | - | 2,355 | 324 | - | 2,355 | 324 |
Adjusted net loss | (19,981) | (12,225) | (1,683) | (27,763) | (24,440) | (3,364) |
Accretions to preferred shares redemption value | (89,452) | - | - | (109,991) | - | - |
Adjusted net loss attributable to Cheche's ordinary shareholders | (109,433) | (12,225) | (1,683) | (137,754) | (24,440) | (3,364) |
Weighted average number of ordinary shares used in computing non-GAAP adjusted net loss per ordinary share | ||||||
Basic | 33,098,269 | 77,045,425 | 77,045,425 | 32,705,091 | 76,264,603 | 76,264,603 |
Diluted | 33,098,269 | 77,045,425 | 77,045,425 | 32,705,091 | 76,264,603 | 76,264,603 |
Net loss per ordinary share | ||||||
Basic | (3.56) | (0.31) | (0.04) | (5.57) | (0.72) | (0.10) |
Diluted | (3.56) | (0.31) | (0.04) | (5.57) | (0.72) | (0.10) |
Non-GAAP adjustments to net loss per ordinary share | ||||||
Basic | 0.25 | 0.15 | 0.02 | 1.36 | 0.40 | 0.06 |
Diluted | 0.25 | 0.15 | 0.02 | 1.36 | 0.40 | 0.06 |
Adjusted net loss per ordinary share | ||||||
Basic | (3.31) | (0.16) | (0.02) | (4.21) | (0.32) | (0.04) |
Diluted | (3.31) | (0.16) | (0.02) | (4.21) | (0.32) | (0.04) |
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SOURCE Cheche Group Inc.