Release Date: August 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Quhuo Ltd (QH, Financial) achieved a total revenue of RMB1.62 billion in the first half of 2024.
- Gross margin improved to 5.6%, surpassing last year's performance.
- Mobility Services segment revenue increased by 17% year-on-year.
- Revenue from shared-bike maintenance service grew by 6.2% year-on-year, and ride-hailing service revenue increased by 47.5% year-on-year.
- International vehicle export solutions revenue increased by 389% year-on-year, exporting 815 energy vehicles overseas.
Negative Points
- Total revenue decreased by 6.7% from RMB1,736.3 million in the first half of 2023 to RMB1,619.9 million in the first half of 2024.
- Revenue from on-demand delivery solutions decreased by 9.1% year-on-year.
- Revenue from housekeeping and accommodation solutions decreased by 27.8% year-on-year.
- Net loss increased to RMB46.5 million in the first half of 2024 from RMB5.7 million in the first half of 2023.
- Adjusted EBITDA loss was RMB34.8 million compared to adjusted EBITDA of RMB11.1 million in the first half of 2023.
Q & A Highlights
Q: What are the company's plans for Quhuo International in the second half of 2024? And how do you see its growth prospects?
A: (Leslie Yu, Chairman of the Board & CEO) Quhuo International serves as the platform for Quhuo's global expansion. We have entered international markets through the trade of new energy used vehicles, connecting outstanding partners' resources with domestic production capacity. We have successfully achieved our first stage growth with continuous revenue generation and sustained profitability. In the second half of 2024, we will focus on refining and innovating our overseas business model, redefining partner roles, and unifying long-term profit-sharing mechanisms to drive faster growth in both revenue and profit. We will also develop systems to optimize new business processes with our partners, ensuring a successful establishment of a new business ecosystem. We expect this phase to bring scale growth and achieve significant qualitative improvements, further solidifying and expanding our position in the international market.
Q: Can you elaborate on the performance of the Mobility Services segment?
A: (Leslie Yu, Chairman of the Board & CEO) Despite fluctuations in the overall market environment, our Mobility Services segment performed very well, with total revenue increasing by 17% year-on-year. Revenue from shared-bike maintenance service grew by 6.2% year-on-year, while ride-hailing service revenue increased by 47.5% year-on-year. Particularly, our international vehicle export solutions saw revenue increase by 389% year-on-year, successfully exporting 815 energy vehicles overseas in the first half, making it a new growth driver for us.
Q: How did the housekeeping service segment perform in the first half of 2024?
A: (Leslie Yu, Chairman of the Board & CEO) The housekeeping service segment performed very well, with gross profit increasing by 28.5% year-on-year and the gross margin rising from 13.8% last year to 24.6%. This reflects our success in optimizing operational efficiency and enhancing service quality. Our overall service coverage has significantly expanded, now covering 132 cities, a 21.4% increase year-on-year, indicating strong market demand and solidifying our leadership in this field.
Q: What were the main reasons for the decrease in total revenue in the first half of 2024?
A: (Barry Ba, CFO, VP, & Director) Total revenue decreased by 6.7% from RMB1,736.3 million in the first half of 2023 to RMB1,619.9 million in the first half of 2024. This was primarily due to the optimization of our business by disposing of several inferior business districts, leading to a decrease in the revenue scale for on-demand delivery solutions. Additionally, revenue from housekeeping and accommodation solutions decreased by 27.8% due to the transition of our hotel services business model.
Q: How has the company managed to control costs and improve operational efficiency?
A: (Leslie Yu, Chairman of the Board & CEO) Through continuous lean management, we have successfully reduced general and administrative expenses by 13.2% year-on-year in the first half of 2024. This reflects our ongoing efforts to improve operational efficiency. Additionally, our gross margin not only returned to normal levels but also surpassed last year's performance, reaching 5.6%, demonstrating our enhanced resilience and profitability amid market volatility.
Q: What are the company's strategic focuses for the future?
A: (Leslie Yu, Chairman of the Board & CEO) Quhuo focuses on addressing three key issues to deliver continuous commercial and social value: providing valuable job opportunities through our platform, advancing the development of our homestay operations in response to the recovery of the consumption and tourism environments, and exploring a combined short-term and long-term rental model for properties to generate income for property owners and provide quality housing services. We believe these initiatives will bring significant growth and financial benefits to the company.
Q: How is Quhuo leveraging its experience in the new energy vehicle market?
A: (Leslie Yu, Chairman of the Board & CEO) Quhuo has a unique competitive advantage in the field of new energy vehicle exports, with over five years of experience in life-saving operations and more than two decades of experience in vehicle exports. We have established strong partnerships with multiple automotive brands, constructed a nationwide vehicle sourcing network, and built strong vehicle refurbishment resources. Through close cooperation with 58 overseas distributors globally, we have leveraged stable sales channels and broad market expansion opportunities, demonstrating tremendous growth potential.
Q: What are the financial highlights for the first half of 2024?
A: (Barry Ba, CFO, VP, & Director) Total revenue decreased by 6.7% year-on-year to RMB1,619.9 million. Cost of revenue decreased by 4.5% year-on-year, primarily due to a decrease in labor costs and service fees. General and administrative expenses decreased by 13.2% year-on-year, and R&D expenses decreased by 25.7%. We recorded a net loss of RMB46.5 million, compared to a net loss of RMB5.7 million in the first half of 2023. Adjusted EBITDA loss was RMB34.8 million, compared to adjusted EBITDA of RMB11.1 million in the first half of 2023.
Q: How is Quhuo addressing the challenges in the domestic automotive market?
A: (Leslie Yu, Chairman of the Board & CEO) In light of the current challenges in domestic automotive overcapacity and the disposal of second-hand vehicles, Quhuo has successfully opened a new international market through our vehicle export and ride-hailing solutions abroad. We are leveraging our operational and technical capabilities in on-demand delivery and ride-hailing to form strong partnerships with overseas partners, gradually building Quhuo International's overseas business ecosystem and maintaining continuous expansion.
Q: What are the company's plans for technology empowerment projects in overseas markets?
A: (Leslie Yu, Chairman of the Board & CEO) Leveraging our accumulated operational and technical capabilities in on-demand delivery and ride-hailing, Quhuo is forming strong mutually beneficial partnerships with overseas partners through technology and management empowerment. The on-demand delivery and ride-hailing system development in overseas markets are currently being piloted in selected cities abroad. By integrating the export supply chain of new energy vehicles, we are gradually building Quhuo International's overseas business ecosystem, maintaining continuous expansion and consolidating our competitive advantage.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
