Yunji Announces Third Quarter 2021 Unaudited Financial Results


    HANGZHOU, China, Nov. 29, 2021 /PRNewswire/ -- Yunji Inc. ("Yunji" or the "Company") (NASDAQ: YJ), a leading membership-based social e-commerce platform, today announced its unaudited financial results for the third quarter ended September 30, 2021[1].

    Third Quarter 2021 Highlights

    • Total revenues in the third quarter of 2021 were RMB437.9 million (US$68.0 million), compared with RMB1,066.7 million in the same period of 2020, primarily due to the Company's strategy to refine its product selection across all categories and carefully curate products to implement its megahit product pool initiative focusing on the development of private labels and exclusive products. In line with the Company's long-term growth strategy to focus on profitability, the Company optimized its selection of suppliers and merchants during this refinement process, causing near-term decreases in both its marketplace business and merchandise sales.
    • Repeat purchase rate[2] in the twelve months ended September 30, 2021 was 80.6%.

    Mr. Shanglue Xiao, Chairman and Chief Executive Officer of Yunji, said, "In the third quarter, we continued to execute our product curation and supply chain differentiation strategies. Leveraging our differentiated supply chain, we have launched a series of private label products, ranging across a variety of categories including food, cosmetics, supplements, and more. We strive to continually improve our repeat purchase rate and achieve widespread product-market fit for our branded products. We remain optimistic in our differentiated supply chain matrix providing our members with great value."

    "As we continued to successfully execute the initiative to refine our product pool, our gross margin continued to improve. We recorded income from operations of RMB17.6 million (US$2.7 million) in the third quarter of 2021, compared with RMB16.0 million in the second quarter of 2021 and loss from operations of RMB24.4 million in the third quarter of 2020. We also recorded net income of RMB61.4 million (US$9.5 million) in the third quarter of 2021, compared with net income of RMB17.0 million in the second quarter of 2021 and net loss of RMB43.6 in the third quarter of 2020. Going forward, we believe our strategy to continue developing private-label brands will generate lasting value for our shareholders." said Mr. Chengqi Zhang, Yunji's Vice President of Finance.

    Third Quarter 2021 Unaudited Financial Results

    Total revenues were RMB437.9 million (US$68.0 million), compared with RMB1,066.7 million in the same period of 2020. The decrease was primarily due to the Company's decision to upgrade its strategy to carefully curate products starting from the first quarter of 2021. As part of these upgrades, the Company launched its megahit product pool initiative, which focused on introducing more products with strong repurchase potential and developing private labels and exclusive products. In line with the Company's long-term growth strategy to focus on profitability, the Company optimized its selection of suppliers and merchants across its platform, which caused sales decreases in both its marketplace business and merchandise sales.

    • Revenues from sales of merchandise, net decreased by 60.2% to RMB365.5 million (US$56.7 million) from RMB919.0 million in the same period of 2020.
    • Revenues from the membership program were RMB1.7 million, compared with RMB4.9 million in the same period of 2020. From January 2020 until the end of March 2021, the Company allowed all its users to enjoy membership benefits free of charge for one year simply by registering for an account on the Yunji app. The Company discontinued free membership as of April 1, 2021. As a result, revenues from the membership program in the third quarter of 2021 were from paying members who joined the new membership program launched in the second quarter of 2021, while membership revenues in the same period of 2020 were all from the deferred revenue of prior paying members.
    • Revenues from the marketplace business were RMB64.7 million (US$10.0 million), compared with RMB130.4 million in the same period of 2020.
    • Other revenues decreased by 51.1% to RMB6.0 million (US$0.9 million) from RMB12.3 million in the same period of 2020.

    Total cost of revenues decreased by 66.9% to RMB248.6 million (US$38.6 million), or 56.8% of total revenues, from RMB751.7 million, or 70.5% of total revenues, in the same period of 2020. The decrease was mainly attributable to the decline in merchandise sales, for which revenues are recognized on a gross basis. Total cost of revenues was mainly comprised of the costs related to the sales of merchandise in the third quarter of 2021.

    Total operating expenses decreased by 43.6% to RMB193.8 million (US$30.1 million) from RMB343.6 million in the same period of 2020.

    • Fulfillment expenses decreased by 55.2% to RMB40.6 million (US$6.3 million), or 9.3% of total revenues, from RMB90.5 million, or 8.5% of total revenues, in the same period of 2020. The decrease was primarily due to: (i) reduced warehousing and logistics expenses due to lower merchandise sales, (ii) reduced personnel costs due to staffing structure refinements, and (iii) decreased service fees charged by third-party payment settlement platforms.
    • Sales and marketing expenses decreased by 62.3% to RMB59.8 million (US$9.3 million), or 13.7% of total revenues, from RMB158.9 million, or 14.9% of total revenues, in the same period of 2020. The decrease was mainly due to the decreases in member management fees and business promotion expenses.
    • Technology and content expenses decreased by 32.6% to RMB28.5 million (US$4.4 million), or 6.5% of total revenues, from RMB42.3 million, or 4.0% of total revenues, in the same period of 2020. The decrease was mainly due to the reduction in personnel costs as a result of staffing structure refinements and reduced server costs.
    • General and administrative expenses increased by 25.1% to RMB64.8 million (US$10.1 million), or 14.8% of total revenues, from RMB51.8 million, or 4.9% of total revenues, in the same period of 2020, primarily due to an increase in share-based compensation expenses.

    Income from operations was RMB17.6 million (US$2.7 million), compared with loss from operations of RMB24.4 million in the same period of 2020.

    Financial loss, net was RMB30.1 million (US$4.7 million), compared with RMB19.6 million in the same period of 2020, primarily due to decreased fair value of equity securities with readily determinable fair value.

    Other non-operating income, net was RMB110.5 million (US$17.1 million) in the third quarter of 2021 compared with nil in the same period of 2020. The income in the third quarter of 2021 was recognized from the Company's investment in a fast-growing dairy company in China. The investment was initially recorded under equity method and changed to alternative measurement when the Company lost its significant influence. The RMB 110.5 million (US$17.1 million) gain was recognized based on fair value of investment made by a new third-party investor, resulting in dilution of the Company's shareholding interest.

    Net Income was RMB61.4 million (US$9.5 million), compared with net loss of RMB43.6 million in the same period of 2020.

    Adjusted net income (non-GAAP)[3] was RMB76.3 million (US$11.8 million), compared with adjusted net loss of RMB36.4 million in the same period of 2020.

    Basic and diluted net Earnings per share attributable to ordinary shareholders were both RMB0.03, compared with basic and diluted net loss per share attributable to ordinary shareholders of RMB0.02 in the same period of 2020.

    Change in Management

    Mr. Wei Ye has resigned as executive president of the Company due to personal reasons, effective December 1, 2021. Mr. Ye's resignation did not result from any disagreement with the Company.

    Use of Non-GAAP Financial Measures

    In evaluating the business, the Company considers and uses adjusted net income/(loss) as a supplemental measure to review and assess operating performance. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines adjusted net income/(loss) as net income/(loss) excluding share-based compensation.

    The Company presents adjusted net income/(loss) because it is used by management to evaluate operating performance and formulate business plans. Adjusted net income/(loss) enables management to assess operating performance without considering the impact of share-based compensation recorded under ASC 718, "Compensation-Stock Compensation". The Company also believes that the use of this non-GAAP measure facilitates investors' assessment of operating performance.

    This non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. The non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using adjusted net income/(loss) is that it does not reflect all items of income and expense that affect the Company's operations. Share-based compensation has been and may continue to be incurred in Yunji's business and is not reflected in the presentation of adjusted net income/(loss). Further, this non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore its comparability may be limited.

    The Company compensates for these limitations by reconciling the non-GAAP financial measure to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating performance. Yunji encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

    For more information on the non-GAAP financial measures, please see the table captioned "Reconciliation of Non-GAAP Measures to The Most Directly Comparable Financial Measures" set forth at the end of this press release.

    Conference Call

    The Company will host a conference call on Monday, November 29, 2021, at 6:30 AM Eastern Time or 7:30 PM Beijing/Hong Kong Time to discuss its earnings.

    In advance of the conference call, all participants must use the following link to complete the online registration process. Upon registering, each participant will receive important details for this conference including the call date and time, a unique registrant ID, and a set of participant dial-in numbers to join the conference call.

    Conference ID

    100928

    Registration Link

    http://apac.directeventreg.com/registration/event/1009298

    A telephone replay of the call will be available after the conclusion of the conference call for one week.

    Dial-in numbers for the replay are as follows:

    United States Toll Free

    +1-855-452-5696

    International

    +61-2-8199-0299

    Conference ID

    1009298

    Safe Harbor Statements

    This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "confident," "potential," "continue" or other similar expressions. Among other things, the quotations from management in this announcement, as well as Yunji's strategic and operational plans, contain forward-looking statements. Yunji may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Yunji's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Yunji's growth strategies; its future business development, results of operations and financial condition; its ability to understand buyer needs and provide products and services to attract and retain buyers; its ability to maintain and enhance the recognition and reputation of its brand; its ability to rely on merchants and third-party logistics service providers to provide delivery services to buyers; its ability to maintain and improve quality control policies and measures; its ability to establish and maintain relationships with merchants; trends and competition in China's e-commerce market; changes in its revenues and certain cost or expense items; the expected growth of China's e-commerce market; PRC governmental policies and regulations relating to Yunji's industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Yunji's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Yunji undertakes no obligation to update any forward-looking statement, except as required under applicable law.

    About Yunji Inc.

    Yunji Inc. is a leading social e-commerce platform in China that has pioneered a unique, membership-based model to leverage the power of social interactions. The Company's e-commerce platform offers high-quality products at attractive prices across a wide variety of categories catering to the day-to-day needs of Chinese consumers. In addition, the Company uses advanced technologies including big data and artificial intelligence to optimize user experience and incentivize members to promote the platform as well as share products with their social contacts. Through deliberate product curation, centralized merchandise sourcing, and efficient supply chain management, Yunji has established itself as a trustworthy e-commerce platform with high-quality products and exclusive membership benefits, including discounted prices.

    For more information, please visit https://investor.yunjiglobal.com/

    Investor Relations Contact

    Yunji Inc.
    Investor Relations
    Email: Yunji.IR@icrinc.com
    Phone: +1 (646) 224-6957

    ICR, LLC
    Robin Yang
    Email: Yunji.IR@icrinc.com
    Phone: +1 (646) 224-6957

     

     

     

    YUNJI INC.


    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

    (All amounts in thousands, except for share and per share data, unless otherwise noted)






    As of



    December 31,

    2020


    September 30,

    2021



    RMB


    RMB


    US$

    ASSETS







    Current Assets







    Cash and cash equivalents


    1,063,900


    721,883


    112,034

    Restricted cash


    125,844


    166,746


    25,879

    Short-term investments


    134,146


    263,006


    40,818

    Accounts receivable, net (Allowance for
    credit losses of RMB8,603 and
    RMB5,435, respectively)


    164,733


    97,185


    15,083

    Advance to suppliers


    103,836


    67,424


    10,465

    Inventories, net


    135,245


    107,794


    16,729

    Amounts due from related parties


    7,841


    1,073


    166

    Prepaid expenses and other current assets
    (Allowance for credit losses of RMB2,972
    and RMB9,301, respectively)


    410,423


    363,617


    56,433








    Total current assets


    2,145,968


    1,788,728


    277,607








    Non-current assets







    Property and equipment, net


    26,010


    14,602


    2,266

    Long-term investments


    158,931


    301,541


    46,798

    Deferred tax assets


    59,455


    15,663


    2,431

    Operating lease right-of-use assets, net


    11,324


    7,218


    1,120

    Other non-current assets (Allowance for
    credit losses of RMB1,514 and
    RMB2,120, respectively)


    148,793


    193,343


    30,006








    Total non-current assets


    404,513


    532,367


    82,621








    Total assets


    2,550,481


    2,321,095


    360,228








     

     

     

    YUNJI INC.


    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

    (All amounts in thousands, except for share and per share data, unless otherwise noted)






    As of



    December 31,

    2020


    September 30,

    2021



    RMB


    RMB


    US$

    LIABILITIES, MEZZANINE EQUITY AND
    SHAREHOLDERS' (DEFICITS)/EQUITY







    Current Liabilities







    Accounts payable


    501,549


    297,529


    46,176

    Deferred revenue


    50,951


    79,504


    12,339

    Incentive payables to members


    312,170


    269,527


    41,830

    Refund payable to members


    4,398


    1,319


    205

    Member management fees payable


    45,841


    20,524


    3,185

    Other payable and accrued liabilities


    280,586


    202,027


    31,354

    Amounts due to related parties


    22,989


    13,208


    2,050

    Operating lease liabilities - current


    6,988


    6,032


    936








    Total current liabilities


    1,225,472


    889,670


    138,075








    Non-current liabilities







    Operating lease liabilities


    8,309


    5,334


    828

    Deferred tax liabilities


    1,832


    2,998


    465








    Total non-current liabilities


    10,141


    8,332


    1,293








    Total Liabilities


    1,235,613


    898,002


    139,368


     

     

     

    YUNJI INC.

    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

    (All amounts in thousands, except for share and per share data, unless otherwise noted)






    As of



    December 31,
    2020


    September 30,

    2021



    RMB


    RMB


    US$








    Shareholders' equity







    Ordinary shares


    70


    70


    11

    Less: Treasury stock


    (85,202)


    (60,765)


    (9,431)

    Additional paid-in capital


    7,327,148


    7,347,658


    1,140,339

    Statutory reserve


    12,624


    12,624


    1,959

    Accumulated other comprehensive income


    9,452


    857


    133

    Accumulated deficit


    (5,952,085)


    (5,878,011)


    (912,253)

    Total Yunji Inc. shareholders' equity


    1,312,007


    1,422,433


    220,758

    Non-controlling interests


    2,861


    660


    102

    Total shareholders' equity


    1,314,868


    1,423,093


    220,860

    Total liabilities and shareholders' equity


    2,550,481


    2,321,095


    360,228

     

     

     

    YUNJI INC.


    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

     (All amounts in thousands, except for share and per share data, unless otherwise noted)






    For the Three Months Ended


    For the Nine Months Ended



    September 30,

    2020


    September 30,

    2021


    September 30,

    2020


    September 30,

    2021



    RMB


    RMB


    US$


    RMB


    RMB


    US$

    Revenues:













    Sales of merchandise, net


    919,043


    365,467


    56,720


    3,664,225


    1,409,436


    218,741

    Membership program revenue


    4,925


    1,688


    262


    42,392


    3,573


    555

    Marketplace revenue


    130,437


    64,689


    10,039


    448,151


    248,237


    38,526

    Other revenues


    12,305


    6,014


    933


    48,077


    22,731


    3,528

    Total revenues


    1,066,710


    437,858


    67,954


    4,202,845


    1,683,977


    261,350

    Operating cost and expenses:













    Cost of revenues


    (751,701)


    (248,581)


    (38,579)


    (2,953,430)


    (1,058,467)


    (164,272)

    Fulfilment


    (90,543)


    (40,571)


    (6,297)


    (357,632)


    (155,523)


    (24,137)

    Sales and marketing


    (158,905)


    (59,842)


    (9,287)


    (638,917)


    (217,644)


    (33,778)

    Technology and content


    (42,330)


    (28,537)


    (4,429)


    (158,844)


    (98,432)


    (15,276)

    General and administrative


    (51,838)


    (64,840)


    (10,063)


    (197,681)


    (181,796)


    (28,214)

    Total operating cost and expenses


    (1,095,317)


    (442,371)


    (68,655)


    (4,306,504)


    (1,711,862)


    (265,677)

    Other operating income


    4,218


    22,116


    3,432


    27,995


    41,687


    6,470

    (Loss)/income from operations


    (24,389)


    17,603


    2,731


    (75,664)


    13,802


    2,143

    Financial loss, net


    (19,596)


    (30,064)


    (4,666)


    (1,168)


    (1,783)


    (277)

    Foreign exchange (loss)/income, net


    (2,238)


    58


    9


    121


    (1,019)


    (158)

    Other non-operating income, net


    -


    110,484


    17,147


    -


    118,886


    18,451

    (Loss)/income before income tax
    benefit/(expense), and equity in loss
    of affiliates, net of tax


    (46,223)


    98,081


    15,221


    (76,711)


    129,886


    20,159

    Income tax benefit/(expense)


    4,401


    (29,982)


    (4,653)


    4,561


    (40,945)


    (6,355)

    Equity in loss of affiliates, net of tax


    (1,793)


    (6,745)


    (1,047)


    (2,200)


    (14,601)


    (2,266)

    Net (loss)/income


    (43,615)


    61,354


    9,521


    (74,350)


    74,340


    11,538

    Less: net (loss)/income attributable to
    non-controlling interests shareholders


    (1,209)


    511


    79


    (6,885)


    306


    47

    Net (loss)/income attributable to

     YUNJI INC.


    (42,406)


    60,843


    9,442


    (67,465)


    74,034


    11,491

     

     

     

    YUNJI INC.


    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
     (CONTINUED)

     (All amounts in thousands, except for share and per share data, unless otherwise noted)






    For the Three Months Ended


    For the Nine Months Ended



    September 30,

    2020


    September 30,

    2021


    September 30,

    2020


    September 30,

    2021



    RMB


    RMB


    US$


    RMB


    RMB


    US$

    Net (loss)/income attributable to
    ordinary shareholders


    (42,406)


    60,843


    9,442


    (67,465)


    74,034


    11,491

    Net (loss)/income


    (43,615)


    61,354


    9,521


    (74,350)


    74,340


    11,538

    Other comprehensive (loss)/income













     Foreign currency translation
    adjustment


    (46,904)


    4,149


    644


    (29,321)


    (8,595)


    (1,334)

    Total comprehensive (loss)/income


    (90,519)


    65,503


    10,165


    (103,671)


    65,745


    10,204

    Less: total comprehensive
    (loss)/income attributable to non-
    controlling interests shareholders


    (1,209)


    511


    79


    (6,885)


    306


    47

    Total comprehensive (loss)/income
    attributable to YUNJI INC.


    (89,310)


    64,992


    10,086


    (96,786)


    65,439


    10,157

    Net (loss)/income attributable to
    ordinary shareholders


    (42,406)


    60,843


    9,442


    (67,465)


    74,034


    11,491

    Weighted average number of
    ordinary shares used in computing
    net (loss)/earnings per share, basic
    and diluted


    2,125,377,454


    2,141,585,609


    2,141,585,609


    2,124,763,012


    2,139,142,265


    2,139,142,265

    Net (loss)/earnings per share
    attributable to ordinary
    shareholders













    Basic


    (0.02)


    0.03


    -


    (0.03)


    0.03


    0.01

    Diluted


    (0.02)


    0.03


    -


    (0.03)


    0.03


    0.01

     

     

     

    YUNJI INC.


    NOTES TO UNAUDITED FINANCIAL INFORMATION

    (All amounts in thousands, except for share and per share data, unless otherwise noted)






    For the Three Months Ended


    For the Nine Months Ended



    September 30,

    2020


    September 30,

    2021


    September 30,

    2020


    September 30,

    2021



    RMB


    RMB


    US$


    RMB


    RMB


    US$

    Share-based compensation expenses included
    in:













    Technology and content


    346


    1,100


    171


    7,702


    3,781


    587

    General and administrative


    1,006


    12,517


    1,943


    57,736


    37,298


    5,788

    Fulfillment


    1,609


    809


    125


    9,316


    594


    92

    Sales and marketing


    4,262


    482


    75


    9,367


    1,177


    183

    Total


    7,223


    14,908


    2,314


    84,121


    42,850


    6,650

     

     

     

    YUNJI INC.


    RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE
    FINANCIAL MEASURES

    (All amounts in thousands, except for share and per share data, unless otherwise noted)






    For the Three Months Ended


    For the Nine Months Ended



    September 30,

    2020


    September 30,

    2021


    September 30,

    2020


    September 30,

    2021



    RMB


    RMB


    US$


    RMB


    RMB


    US$

    Reconciliation of Net (loss)/income to
    Adjusted Net (loss)/income:













    Net (loss)/income


    (43,615)


    61,354


    9,521


    (74,350)


    74,340


    11,538

    Add: Share-based compensation


    7,223


    14,908


    2,314


    84,121


    42,850


    6,650

    Adjusted net (loss)/income


    (36,392)


    76,262


    11,835


    9,771


    117,190


    18,188

     

     

     

    [1].       This announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at a specified rate solely for the convenience of the reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB6.4434 to US$1.00, the exchange rate in effect as of September 30, 2021 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.

    [2].       "Repeat purchase rate" in a given period is calculated as the number of transacting members who purchased not less than twice divided by the total number of transacting members during such period. "Transacting member" in a given period refers to a member who successfully promotes Yunji's products to generate at least one order or places at least one order on Yunji's platform, regardless of whether any product in such order is ultimately sold or delivered or whether any product in such order is returned.

    [3].       Adjusted net income/(loss) is a non-GAAP financial measure, which is defined as net income/(loss) excluding share-based compensation expense. See "Reconciliation of Non-GAAP Measures to The Most Directly Comparable Financial Measures" set forth at the end of this press release.

     

    Related Links :

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