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SHANGRAO, China, Aug. 30, 2024 /PRNewswire/ -- JinkoSolar Holding Co., Ltd. ("JinkoSolar" or the "Company") (NYSE: JKS), one of the largest and most innovative solar module manufacturers in the world, today announced its unaudited financial results for the second quarter ended June 30, 2024. Second Quarter 2024 Business Highlights Leveraging our advantages of N-type TOPCon technology, competitive products, global marketing, and manufacturing footprint, module shipments grew by 34.1% year-over-year to 23.8 GW in the second quarter, ranking first in the industry. At the end of the second quarter, we became the first module manufacturer in the world to have delivered a total of 260 GW solar modules, covering nearly 200 countries and regions. Our N-type TOPCon based perovskite tandem solar cell set a new record with conversion efficiency of 33.24%, a significant leap beyond our previous record of 32.33% for the same type of tandem cells. The mass production efficiency of N-type TOPCon cells exceeds 26.1%. Recently, we were recognized as a Tier 1 energy storage provider and a Tier 1 PV module manufacturer by Bloomberg New Energy Finance. We recently entered into a strategic partnership with Renewable Energy Localization Company and Vision Industries Company to form a joint venture in Saudi Arabia for the production of 10 GW of high-efficiency solar cells and solar modules. Second Quarter 2024 Operational and Financial Highlights Quarterly shipments were 25,318 MW (23,822 MW for solar modules, and 1,496 MW for cells and wafers), up 15.6% sequentially, and up 36.0% year-over-year. Total revenues were RMB24.05 billion (US$3.31 billion), up 4.4% sequentially and down 21.6% year-over-year. Gross profit was RMB2.68 billion (US$368.3 million), down 2.1% sequentially and down 44.0% year-over-year. Gross margin was 11.1%, compared with 11.9% in Q1 2024 and 15.6% in Q2 2023. Net loss attributable to JinkoSolar Holding Co., Ltd.'s ordinary shareholders was RMB 100.7 million (US$13.9 million), compared with net income attributable to JinkoSolar Holding Co., Ltd.'s ordinary shareholders of RMB609.4 million in Q1 2024 and RMB1.31 billion in Q2 2023. Adjusted net income attributable to JinkoSolar Holding Co., Ltd.'s ordinary shareholders, which excludes the impact from (i) a change in fair value of the convertible senior notes, (ii) a change in fair value of long-term investment, (iii) share based compensation expenses, and (iv) the net loss resulted from a fire accident at one of our production bases in Shanxi Province (the "Fire Accident"), was RMB378.5 million (US$52.1 million), compared with adjusted net income attributable to JinkoSolar Holding Co., Ltd.'s ordinary shareholders of RMB470.3 million in Q1 2024 and RMB1.43 billion in Q2 2023. Basic and diluted loss per ordinary share were RMB0.48 (US$0.07) and RMB0.53 (US$ 0.07), respectively. This translates into basic and diluted loss per ADS of RMB 1.94 (US$0.27) and RMB2.12 (US$0.29), respectively. Mr. Xiande Li, JinkoSolar's Chairman and Chief Executive Officer, commented, "We are pleased to announce that our module shipments grew by 34.1% year-over-year to 23.8 GW in the second quarter, ranking first in the industry. By the end of the second quarter, we became the first solar company in the world to have reached accumulative module shipments of 260 GW, covering nearly 200 countries and regions. This again demonstrated the strength of our globalization strategy. Prices in several segments of the industry chain declined slightly on a sequential basis leading us to adjust our production scheduling strategy and utilization rates for different processes. We also optimized our supply chain strategy to control costs. Gross margin was 11.1% in this quarter, relatively flat sequentially. Adjusted net income was $52.1 million, a slight decrease sequentially. Overall, global demand showed fast growth momentum in the first half of 2024. The newly added installations in China totaled 102.4 GW, up 30.7% year-over-year while total solar module exports increased by around 20% year-over-year. Thanks to our global footprint and competitive products, by the end of the second quarter, the visibility of our orderbook for 2024 exceeds 80%, enabling us to maintain an industry-leading utilization rate, particularly nearly 100% for N-type cells. Oversupply and increasingly irrational low prices along the supply chain that have plagued our industry for some time have started to be addressed by market forces as well as government and industry control policies. Additionally, financial institutions have become more selective, favoring companies with proven technological innovation, healthy financial conditions, and strong brand recognition. As a result, some manufacturers have been forced to cut or suspend production while others have delayed, suspended or even canceled capacity expansion projects. We believe that all these measures will further accelerate the elimination of outdated capacity as well as industry consolidation, paving the way for companies with robust sustainable operations to reinforce their industry leadership. We made good progress on several fronts. The mass-produced efficiency of our 182 mm TOPCon cells has exceeded 26.1%, and the lab efficiency of our N-type TOPCon-based perovskite tandem solar cell has reached 33.24%. We firmly believe that TOPCon technology still delivers the best economic performance in terms of cost, mass production yield, intellectual property protection, and customer acceptance, with further room for cost reduction and efficiency increase. In addition, we reached another milestone in our global manufacturing strategy with the recently announced strategic partnership with Renewable Energy Localization Company and Vision Industries Company to form a joint venture in Saudi Arabia for the production of 10 GW of high-efficiency solar cells and solar modules. Despite the challenges in our industry, the strength of our N-type TOPCon technology, the competitiveness of our products, and our extensive global sales and manufacturing network have placed us in a strong position in the industry as the industry continues to address excess capacity. We will continue to implement our globalization strategy to actively seize market opportunities and mitigate market risks. We reiterate our guidance for module shipments to be between 100.0 GW and 110.0 GW for full year 2024. We expect module shipments to be between 23.0 GW and 25.0 GW for the third quarter of 2024. By the end of 2024, we expect our mass-produced N-type cell efficiency to reach 26.5%. We will continue to optimize our asset and liability structure, as well as cash flow levels, to strengthen our resistance to risks." Second Quarter 2024 Financial Results Total Revenues Total revenues in the second quarter of 2024 were RMB24.05 billion (US$3.31 billion), an increase of 4.4% from RMB23.04 billion in the first quarter of 2024 and a decrease of 21.6% from RMB30.69 billion in the second quarter of 2023. The sequential increase was mainly due to the increase in module shipments. The year-over-year decrease was mainly due to a decrease in the average selling price of solar modules. Gross Profit and Gross Margin Gross profit in the second quarter of 2024 was RMB2.68 billion (US$368.3 million), compared with RMB2.74 billion in the first quarter of 2024 and RMB4.78 billion in the second quarter of 2023. Gross margin was 11.1% in the second quarter of 2024, compared with 11.9% in the first quarter of 2024 and 15.6% in the second quarter of 2023. The year-over-year decrease was mainly due to the decrease in the average selling price of solar modules. Loss/Income from Operations and Operating Margin Loss from operations in the second quarter of 2024 was RMB1.14 billion (US$156.6 million), compared with loss from operations of RMB339.6 million in the first quarter of 2024 and income from operations of RMB1.54 billion in the second quarter of 2023. The sequential increase in loss from operations was mainly due to the increase in our operating expenses in the second quarter of 2024.The change from income from operations in the second quarter of 2023 to loss from operations in the second quarter of 2024 was primarily attributable to the decreases in our revenues and gross margin in the second quarter of 2024. Operating loss margin was 4.7% in the second quarter of 2024, compared with operating loss margin of 1.5% in the first quarter of 2024 and operating profit margin of 5.0% in the second quarter of 2023. Total operating expenses in the second quarter of 2024 were RMB3.81 billion (US$524.9 million), an increase of 24.1% from RMB3.07 billion in the first quarter of 2024 and an increase of 17.6% from RMB3.24 billion in the second quarter of 2023. The sequential and year-over-year increases were mainly due to the write-off of the net book value of the equipment resulted from the Fire Accident in Shanxi Province, which was partially offset by the estimated insurance proceeds from the Fire Accident in the second quarter of 2024. Total operating expenses accounted for 15.9% of total revenues in the second quarter of 2024, compared to 13.3% in the first quarter of 2024 and 10.6% in the second quarter of 2023. Interest Expenses, Net Net interest expenses consist of interest expenses of RMB212.9 million (US$29.3 million) and interest income of RMB107.7 million (US$14.8 million) in the second quarter of 2024. Net interest expenses in the second quarter of 2024 was RMB105.2 million (US$14.5 million), a decrease of 43.7% from RMB186.8 million in the first quarter of 2024 and a decrease of 49.6% from RMB208.5 million in the second quarter of 2023. The sequential and year-over-year decreases were due to the decrease in interest-bearing debts with high interest rate. Subsidy Income Subsidy income in the second quarter of 2024 was RMB885.0 million (US$121.8 million), compared with RMB231.8 million in the first quarter of 2024 and RMB292.4 million in the second quarter of 2023. The sequential and year-over-year changes were mainly attributable to the changes in the cash receipt of incentives to the Company's business operations. Exchange Gain/Loss and Change in Fair Value of Foreign Exchange Derivatives The Company recorded a net exchange gain (including change in fair value of foreign exchange derivatives) of RMB305.0 million (US$42.0 million) in the second quarter of 2024, compared to a net exchange gain of RMB139.7 million in the first quarter of 2024 and a net exchange gain of RMB916.4 million in the second quarter of 2023. The sequential and year-over-year changes were mainly attributable to the exchange rate fluctuation of US dollars against RMB in the second quarter of 2024. Change in Fair Value of Convertible Senior Notes The Company issued US$85.0 million of 4.5% convertible senior notes (the "Notes") due 2024 in May 2019 and has elected to measure the Notes at fair value derived by valuation model, i.e. Binomial Model. As of June 30, 2024, all the Notes with the principle amount of US$85.0 million have been converted to the ordinary shares of the Company. The Company recognized a gain from a change in fair value of the convertible senior notes of RMB12.8 million (US$1.8 million) in the second quarter of 2024, compared to a gain of RMB310.7 million in the first quarter of 2024 and a gain of RMB89.7 million in the second quarter of 2023. The sequential and year-over-year changes were primarily due to the changes in the Company's stock price in the second quarter of 2024. Change in Fair Value of Long-term Investment The Company invested in certain equity interests in several solar technology companies engaged in the photovoltaic industry chain, which are recorded as long-term investment and reported at fair value with changes in fair value recognized in earnings. As of June 30, 2024, the Company had RMB849.7 million (US$116.9 million) in long-term investment, compared with RMB967.0 million as of March 31, 2024. The Company recognized a loss from change in fair value of RMB144.2 million (US$19.8 million) in the second quarter of 2024, compared with a loss of RMB55.3 million in the first quarter of 2024 and a gain of RMB2.3 million in the second quarter of 2023. The sequential and year-over-year changes were primarily due to the changes in the valuation of several solar technology companies we invested in. Other income, net Net other income in the second quarter of 2024 was RMB157.6 million (US$21.7 million), compared with net other income of RMB1.32 billion in the first quarter of 2024 and net other income of RMB59.0 million in the second quarter of 2023. The sequential decrease was mainly due to income generated from the disposal of a wholly-owned subsidiary in the first quarter of 2024. The year-over-year increase was mainly due to gains from the changes in the fair value of the financial instruments in the second quarter of 2024. Equity in Earnings of Affiliated Companies The Company indirectly holds a 20% equity interest in Sweihan PV Power Company P.J.S.C, a developer and operator of solar power projects in Dubai, and a 9% equity interest in Xinte Ltd, a domestic silicon material supplier, and both are accounted for using the equity method. The Company recorded equity in loss of affiliated companies of RMB67.6 million (US$9.3 million) in the second quarter of 2024, compared with equity in gain of RMB13.2 million in the first quarter of 2024 and RMB63.3 million in the second quarter of 2023. The fluctuations in equity in earnings of affiliated companies primarily arose from the net gain or loss incurred by the affiliate companies. Income Tax Expense The Company recorded an income tax expense of RMB24.8 million (US$3.4 million) in the second quarter of 2024, compared with RMB476.7 million in the first quarter of 2024 and RMB341.1 million in the second quarter of 2023. Net Loss/Income attributable to Non-Controlling Interests Net loss attributable to non-controlling interests amounted to RMB18.8 million (US$2.6 million) in the second quarter of 2024, compared with net income of RMB351.0 million in the first quarter of 2024 and net income of RMB1.11 billion in the second quarter of 2023. The sequential and year-over-year changes were mainly attributable to the changes in net income of the Company's majority-owned principal operating subsidiary, Jinko Solar Co., Ltd. Net Loss/Income and Earnings per Share Net loss attributable to the JinkoSolar Holding Co., Ltd.'s ordinary shareholders was RMB100.7 million (US$13.9 million) in the second quarter of 2024, compared with net income of RMB609.4 million in the first quarter of 2024 and net income of RMB1.31 billion in the second quarter of 2023. Excluding the impact from (i) a change in fair value of the convertible senior notes, (ii) a change in fair value of the long-term investment, (iii) share based compensation expenses, and (iv) the net loss resulted from the Fire Accident, adjusted net income attributable to the JinkoSolar Holding Co., Ltd.'s ordinary shareholders was RMB378.5 million (US$52.1 million), compared with RMB470.3 million in the first quarter of 2024 and RMB1.43 billion in the second quarter of 2023. Basic and diluted loss per ordinary share were RMB0.48 (US$0.07) and RMB0.53 (US$0.07), respectively, in the second quarter of 2024, compared to basic and diluted earnings per ordinary share of RMB2.82 and RMB1.34, respectively, in the first quarter of 2024, and basic and diluted earnings per ordinary share of RMB6.39 and RMB5.55, respectively, in the second quarter of 2023. As each ADS represents four ordinary shares, this translates into basic and diluted loss per ADS of RMB1.94 (US$0.27) and RMB2.12 (US$0.29), respectively in the second quarter of 2024; basic and diluted earnings per ADS of RMB11.28 and RMB5.36, respectively, in the first quarter of 2024; and basic and diluted earnings per ADS of RMB25.54 and RMB22.20, respectively, in the second quarter of 2023. Financial Position As of June 30, 2024, the Company had RMB13.87 billion (US$1.91 billion) in cash, cash equivalents, and restricted cash, compared with RMB17.63 billion as of March 31, 2024. As of June 30, 2024, the Company's accounts receivables were RMB18.39 billion (US$2.53 billion), compared with RMB19.82 billion as of March 31, 2024. As of June 30, 2024, the Company's inventories were RMB19.49 billion (US$2.68 billion), compared with RMB20.13 billion as of March 31, 2024. As of June 30, 2024, the Company's total interest-bearing debts were RMB28.06 billion (US$3.86 billion), compared with RMB26.46 billion as of March 31, 2024. Second Quarter 2024 Operational Highlights Solar Module, Cell and Wafer Shipments Total shipments were 25,318 MW in the second quarter of 2024, including 23,822 MW for solar module shipments and 1,496 MW for cell and wafer shipments. Operations and Business Outlook Highlights Third Quarter and Full Year 2024 Guidance The Company's business outlook is based on management's current views and estimates with respect to market conditions, production capacity, the Company's order book and the global economic environment. This outlook is subject to uncertainty on final customer demand and sale schedules. Management's views and estimates are subject to change without notice. For the third quarter of 2024, the Company expects its module shipments to be in the range of 23.0 GW to 25.0 GW. For full year 2024, the Company estimates its module shipments to be in the range of 100.0 GW to 110.0 GW. Solar Products Production Capacity The Company expects its annual production capacity for mono wafer, solar cell and solar module to reach 120.0 GW, 95.0 GW and 130.0 GW, respectively, by the end of 2024. Recent Business Developments In May 2024, JinkoSolar delivered Tiger Neo modules to a Solar Power Plant in Lobstädt, Germany (The Witznitz Solar Park). In May 2024, JinkoSolar's 2000-Volt EAGLE® Modules became the first in the world to be qualified as UL listed products for UL61730-1 and UL61730-2, and UL classified products for IEC 61215-1, IEC 61215-2 and IEC 61215-1-1. In June 2024, JinkoSolar was recognized as a Top Performer across all reliability categories in the 2024 PV Module Reliability Scorecard published by Kiwa PVEL. In June 2024, JinkoSolar announced that tested by TÜV SÜD, the conversion efficiency for 2 m2 above large-size N-type TOPCon solar modules has reached 25.42%, setting a new record again. In June 2024, JinkoSolar announced that its subsidiary Jinko Solar Denmark has supplied high voltage residential storage solutions to SolarToday for use in the DACH and Benelux regions starting from June 2024. In June 2024, JinkoSolar entered into a Heads of Terms with kIEFER to supply its large scale battery storage, SunTera to Athens International Airport (AIA), supporting its commitment to achieve Net Zero Carbon Emissions by 2025. In July 2024, JinkoSolar topped the PV Tech 2024 Q2 ModuleTech Bankability Report with "AAA" rating. As of the date of this press release, JinkoSolar has repurchased a total of 5,596,739 ADSs in an aggregate amount of approximately US$134.5 million in the open market under its share repurchase program announced in July 2022 and the extended share repurchase program announced in December 2023. As of the same date, approximately US$65.5 million of the Company's ordinary shares represented by the ADSs under the extended share repurchase program had not been utilized. Conference Call Information JinkoSolar's management will host an earnings conference call on Friday, August 30, 2024 at 8:30 a.m. U.S. Eastern Time (8:30 p.m. Beijing / Hong Kong the same day). Please register in advance of the conference using the link provided below. Upon registering, you will be provided with participant dial-in numbers, passcode and unique access PIN by a calendar invite. Participant Online Registration: https://s1.c-conf.com/diamondpass/10041536-ai8fg3.html It will automatically direct you to the registration page of "JinkoSolar Second Quarter 2024 Earnings Conference Call", where you may fill in your details for RSVP. In the 10 minutes prior to the call start time, you may use the conference access information (including dial-in number(s), passcode and unique access PIN) provided in the calendar invite that you have received following your pre-registration. A telephone replay of the call will be available 2 hours after the conclusion of the conference call through 23:59 U.S. Eastern Time, September 6, 2024. The dial-in details for the replay are as follows: International: +61 7 3107 6325 U.S.: +1 855 883 1031 Passcode: 10041536 Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of JinkoSolar's website at http://www.jinkosolar.com. About JinkoSolar Holding Co., Ltd. JinkoSolar (NYSE: JKS) is one of the largest and most innovative solar module manufacturers in the world. JinkoSolar distributes its solar products and sells its solutions and services to a diversified international utility, commercial and residential customer base in China, the United States, Japan, Germany, the United Kingdom, Chile, South Africa, India, Mexico, Brazil, the United Arab Emirates, Italy, Spain, France, Belgium, Netherlands, Poland, Austria, Switzerland, Greece and other countries and regions. JinkoSolar had over 10 productions facilities globally, over 20 overseas subsidiaries in Japan, South Korea, Vietnam, India, Turkey, Germany, Italy, Switzerland, the United States, Mexico, Brazil, Chile, Australia, Canada, Malaysia, the United Arab Emirates, Denmark, Indonesia, Nigeria and Saudi Arabia, and a global sales network with sales teams in China, the United States, Canada, Brazil, Chile, Mexico, Italy, Germany, Turkey, Spain, Japan, the United Arab Emirates, Netherlands, Vietnam and India, as of June 30, 2024. To find out more, please see: www.jinkosolar.com Currency Convenience Translation The conversion of Renminbi into U.S. dollars in this release, made solely for the convenience of the readers, is based on the noon buying rate in the city of New York for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York as of June 28, 2024, which was RMB7.2672 to US$1.00. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized, or settled into U.S. dollars at that rate or any other rate. The percentages stated in this press release are calculated based on Renminbi. Safe Harbor Statement This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the quotations from management in this press release and the Company's operations and business outlook, contain forward-looking statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks is included in JinkoSolar's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. Except as required by law, the Company does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. For investor and media inquiries, please contact: In China:Ms. Stella WangJinkoSolar Holding Co., Ltd.Tel: +86 21-5180-8777 ext.7806Email: ir@jinkosolar.com Mr. Rene VanguestaineChristensenTel: +86 178 1749 0483Email: rene.vanguestaine@christensencomms.com In the U.S.:Ms. Linda BergkampChristensen, Scottsdale, ArizonaTel: +1-480-614-3004Email: linda.bergkamp@christensencomms.com JINKOSOLAR HOLDING CO., LTD. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except ADS and Share data) For the quarter ended For the year ended Jun 30, 2023 Mar 31, 2024 Jun 30, 2024 Jun 30, 2023 Jun 30, 2024 RMB'000 RMB'000 RMB'000 USD'000 RMB'000 RMB'000 USD'000 Revenues 30,685,099 23,044,280 24,053,049 3,309,810 54,014,161 47,097,329 6,480,809 Cost of revenues (25,902,426) (20,309,195) (21,376,366) (2,941,486) (45,190,471) (41,685,562) (5,736,124) Gross profit 4,782,673 2,735,085 2,676,683 368,324 8,823,690 5,411,767 744,685 Operating expenses: Selling and marketing (1,665,996) (1,466,397) (1,797,061) (247,284) (3,222,296) (3,263,458) (449,067) General and administrative (800,148) (1,367,868) (1,141,307) (157,049) (1,884,556) (2,509,174) (345,274) Research and development (225,574) (240,428) (215,394) (29,639) (414,130) (455,822) (62,723) Impairment of long-lived assets (552,751) - (660,964) (90,952) (552,751) (660,964) (90,952) Total operating expenses (3,244,469) (3,074,693) (3,814,726) (524,924) (6,073,733) (6,889,418) (948,016) (Loss)/income from operations 1,538,204 (339,608) (1,138,043) (156,600) 2,749,957 (1,477,651) (203,331) Interest expenses (332,374) (281,733) (212,897) (29,296) (623,108) (494,630) (68,063) Interest income 123,921 94,900 107,740 14,826 359,263 202,640 27,884 Subsidy income 292,376 231,844 885,024 121,783 556,418 1,116,868 153,686 Exchange gain,net 1,358,867 126,010 247,726 34,088 1,229,820 373,736 51,428 Change in fair value of foreign exchange derivatives (442,492) 13,714 57,250 7,878 (387,154) 70,964 9,765 Change in fair value of Long-term Investment 2,278 (55,328) (144,222) (19,846) 442,702 (199,550) (27,459) Change in fair value of convertible senior notes 89,747 310,683 12,791 1,760 (171,688) 323,474 44,512 Other income, net 58,971 1,323,478 157,574 21,683 62,095 1,481,051 203,800 Income/(loss) before income taxes 2,689,498 1,423,960 (27,057) (3,724) 4,218,305 1,396,902 192,222 Income tax expenses (341,144) (476,718) (24,799) (3,412) (656,148) (501,518) (69,011) Equity in (loss)/income of affiliated companies 63,281 13,181 (67,644) (9,308) 243,236 (54,463) (7,494) Net income 2,411,635 960,423 (119,500) (16,444) 3,805,393 840,921 115,717 Less: Net (income)/loss attributable to non-controlling interests (1,105,533) (351,025) 18,847 2,593 (1,710,640) (332,178) (45,709) Net income/(loss) attributable to JinkoSolar Holding Co., Ltd.'s ordinary shareholders 1,306,102 609,398 (100,653) (13,851) 2,094,753 508,743 70,008 Net income/(loss) attributable to JinkoSolar Holding Co., Ltd.'s ordinary shareholders per share: Basic 6.39 2.82 (0.48) (0.07) 10.31 2.40 0.33 Diluted 5.55 1.34 (0.53) (0.07) 9.90 0.87 0.12 Net income/(loss) attributable to JinkoSolar Holding Co., Ltd.'s ordinary shareholders per ADS: Basic 25.54 11.28 (1.94) (0.27) 41.22 9.62 1.32 Diluted 22.20 5.36 (2.12) (0.29) 39.61 3.48 0.48 Weighted average ordinary shares outstanding: Basic 204,566,514 216,001,414 208,076,672 208,076,672 203,250,441 211,662,944 211,662,944 Diluted 223,654,851 223,646,269 209,869,918 209,869,918 211,556,947 219,563,068 219,563,068 Weighted average ADS outstanding: Basic 51,141,628 54,000,353 52,019,168 52,019,168 50,812,610 52,915,736 52,915,736 Diluted 55,913,713 55,911,567 52,467,479 52,467,479 52,889,237 54,890,767 54,890,767 UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Net income/(loss) 2,411,635 960,423 (119,500) (16,444) 3,805,393 840,921 115,717 Other comprehensive income/(loss): -Unrealized loss on available-for-sale securities 58 - (973) - -Foreign currency translation adjustments 282,017 (177,267) 9,874 1,360 224,045 (167,393) (23,034) -Change in the instrument-specific credit risk 20,227 421 - - 65,445 421 58 Comprehensive income/(loss) 2,713,937 783,577 (109,626) (15,084) 4,093,910 673,949 92,740 Less: Comprehensive (income)/loss attributable to non-controlling interests (1,168,875) (348,517) 9,056 1,246 (1,755,098) (339,461) (46,711) Comprehensive income/(loss) attributable to JinkoSolar Co., Ltd.'s ordinary shareholders 1,545,062 435,060 (100,570) (13,838) 2,338,812 334,488 46,029 JINKOSOLAR HOLDING CO., LTD. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) Dec 31, 2023 Jun 30, 2024 RMB'000 RMB'000 USD'000 ASSETS Current assets: Cash,cash equivalents, and restricted cash 19,069,107 13,869,567 1,908,516 Restricted short-term investments and short-term investments 8,509,257 6,458,580 888,730 Accounts receivable, net 22,958,693 18,386,843 2,530,114 Notes receivable, net 4,090,085 4,283,889 589,483 Advances to suppliers, net 4,565,779 3,774,159 519,341 Inventories, net 18,215,537 19,489,767 2,681,881 Foreign exchange forward contract receivables 103,100 122,268 16,825 Prepayments and other current assets, net 3,430,224 6,031,154 829,914 Held-for-sale assets 2,003,417 189,077 26,018 Total current assets 82,945,199 72,605,304 9,990,822 Non-current assets: Restricted long-term investments 1,536,198 1,918,126 263,943 Long-term investments 2,117,628 1,738,566 239,234 Property, plant and equipment, net 41,267,187 45,615,154 6,276,854 Land use rights, net 1,821,012 1,852,866 254,963 Intangible assets, net 569,088 361,480 49,741 Right-of-use assets, net 742,431 567,137 78,041 Deferred tax assets 1,290,004 1,613,419 222,014 Advances to suppliers to be utilised beyond one year 648,377 671,645 92,421 Other assets, net 2,790,567 1,571,391 216,231 Available-for-sale securities-non-current 104,134 131,134 18,045 Total non-current assets 52,886,626 56,040,918 7,711,487 Total assets 135,831,825 128,646,222 17,702,309 LIABILITIES Current liabilities: Accounts payable 15,475,166 13,952,517 1,919,930 Notes payable 25,690,532 19,528,035 2,687,147 Accrued payroll and welfare expenses 2,798,964 2,592,942 356,801 Advances from customers 6,965,298 7,551,735 1,039,154 Income tax payables 1,016,039 491,952 67,695 Other payables and accruals 13,448,501 16,387,720 2,255,022 Foreign exchange forward derivatives payables 26,466 16,038 2,207 Convertible senior notes 782,969 - - Lease liabilities - current 155,931 118,382 16,290 Short-term borrowings, including current portion of long-term borrowings, and failed sale-leaseback financing 13,583,774 6,830,467 939,904 Held-for-sale liabilities 1,117,005 - - Total current liabilities 81,060,645 67,469,788 9,284,150 Non-current liabilities: Long-term borrowings 11,238,806 13,434,364 1,848,630 Convertible notes 4,785,480 7,203,086 991,178 Accrued warranty costs - non current 2,145,426 2,205,949 303,549 Lease liabilities-noncurrent 557,136 475,932 65,490 Deferred tax liability 131,506 138,971 19,123 Long-term Payables 2,378,684 4,257,201 585,810 Total non-current liabilities 21,237,038 27,715,503 3,813,780 Total liabilities 102,297,683 95,185,291 13,097,930 SHAREHOLDERS' EQUITY Total JinkoSolar Holding Co., Ltd. shareholders' equity 20,156,434 20,620,188 2,837,434 Non-controlling interests 13,377,708 12,840,743 1,766,945 Total shareholders' equity 33,534,142 33,460,931 4,604,379 Total liabilities, non-controlling interest and shareholders' equity 135,831,825 128,646,222 17,702,3093
GUANGZHOU, China, Aug. 30, 2024 /PRNewswire/ -- MINISO Group Holding Limited (NYSE: MNSO; HKEX: 9896) ("MINISO", "MINISO Group" or the "Company"), a global value retailer offering a variety of trendy lifestyle products featuring IP design, today announced its unaudited financial results for the quarter ended June 30, 2024 (the "June Quarter") and the six months ended June 30, 2024 (the "First Half of 2024"). Financial Highlights for the June Quarter Revenue increased 24.1% year over year to RMB4,035.2 million (US$555.3 million), surpassing RMB4 billion for the first time. Gross profit increased 36.9% year over year to RMB1,773.3 million (US$244.0 million). Gross margin was 43.9%, a record high for the Company, compared to 39.8% in the same period of 2023. Operating profit increased 8.9% year over year to RMB751.5 million (US$103.4 million). Profit for the period increased 8.1% year over year to RMB591.4 million (US$81.4 million). Adjusted net profit(1) increased 9.4% year over year to RMB625.0 million (US$86.0 million). Adjusted net profit included a net foreign exchange loss of RMB4.2 million (US$0.6 million) in the June Quarter, compared to a net foreign exchange gain of RMB66.1 million in the same period of last year. Excluding net foreign exchange loss and gain, adjusted net profit would have increased 24.6% year over year. Adjusted net margin(1) was 15.5%, compared to 17.6% in the same period of 2023. Excluding net foreign exchange loss and gain, adjusted net profit margin for the June Quarter would have been 15.6%, compared to 15.5% in the same period of 2023. Adjusted EBITDA(1) increased 17.1% year over year to RMB1,002.0 million (US$137.9 million). Adjusted EBITDA margin(1) was 24.8%, compared to 26.3% in the same period of 2023. Adjusted basic and diluted earnings per ADS(1) both increased 11.1% year over year to RMB2.00 (US$0.28). Financial Highlights for the First Half of 2024 Revenue increased 25.0% year over year to RMB7,758.7 million (US$1,067.6 million). Gross profit increased 37.9% year over year to RMB3,389.8 million (US$466.5 million). Gross margin was 43.7%, compared to 39.6% in the same period last year. Operating profit increased 18.1% year over year to RMB1,494.8 million (US$205.7 million). Profit for the period increased 15.7% year over year to RMB1,177.4 million (US$162.0 million). Adjusted net profit(1) increased 17.8% year over year to RMB1,241.9 million (US$170.9 million). Adjusted net profit included a net foreign exchange loss of RMB12.4 million (US$1.7 million) in the First Half of 2024, compared to a net foreign exchange gain of RMB54.9 million in the same period of last year. Excluding net foreign exchange loss and gain, adjusted net profit would have increased 25.5% year over year. Adjusted net margin(1) was 16.0%, compared to 17.0% in the same period of 2023. Excluding net foreign exchange loss and gain, adjusted net profit margin for the First Half of 2024 would have been 16.2%, compared to 16.1% in the same period of 2023. Adjusted EBITDA(1) increased 26.0% year over year to RMB1,967.4 million (US$270.7 million). Adjusted EBITDA margin(1) was 25.4%, compared to 25.2% in the same period of 2023. Adjusted basic and diluted earnings per ADS(1) were both RMB3.96 (US$0.54), representing increases of 17.9% and 19.3% year over year, respectively. Net cash from operating activities increased 4.9% year over year to RMB1,293.8 million (US$178.0 million). Capital expenditure was RMB302.8 million (US$41.7 million) and free cash flow was RMB991.0 million (US$136.4 million) for the First Half of 2024. Operational Highlights Number of MINISO stores was 6,868 as of June 30, 2024, with an opening of 455 net new stores in the First Half of 2024. Number of MINISO stores in mainland China was 4,115 as of June 30, 2024, with an opening of 189 net new stores in the First Half of 2024. Number of MINISO stores in overseas markets was 2,753 as of June 30, 2024, with a record opening of 266 net new stores in the First Half of 2024, compared to 72 in the same period of 2023. Number of TOP TOY stores was 195 as of June 30, 2024, with a record opening of 47 net new stores in the First Half of 2024. Note: (1) See the sections titled "Non-IFRS Financial Measures" and "Reconciliation of Non-IFRS Financial Measures" in this press release for more information. The following table provides a breakdown of the Company's store network and its growth. The Company nearly doubled its directly operated stores compared to a year ago. In the First Half of 2024, the Company had a net increase of 115 directly operated stores, 105 of which located in overseas markets, demonstrating the Company's development strategy. As of June 30, 2023 December 31, 2023 June 30, 2024 YoY YTD(3) Number of MINISO stores(1) 5,791 6,413 6,868 1,077 455 Mainland China 3,604 3,926 4,115 511 189 —Directly operated stores 15 26 29 14 3 —Third-party stores 3,589 3,900 4,086 497 186 Overseas 2,187 2,487 2,753 566 266 —Directly operated stores 176 238 343 167 105 —Third-party stores 2,011 2,249 2,410 399 161 Number of TOP TOY stores(2) 118 148 195 77 47 —Directly operated stores 9 14 21 12 7 —Third-party stores 109 134 174 65 40 Notes: (1) "MINISO stores" refers to the offline stores operated under the "MINISO" brand, including those directly operated by the Company, and those operated by third parties under the MINISO Retail Partner model and the distributor model. (2) "TOP TOY stores" refers to the offline stores operated under the "TOP TOY" brand, including those directly operated by the Company, and those operated by third parties under the MINISO Retail Partner model. (3) "Year-to-date" or "YTD" refers to the period starting from January 1, 2024 to June 30, 2024. Mr. Guofu Ye, Founder, Chairman, and CEO of MINISO, commented, "The year of 2024 marks the first year of our five-year strategic plan. I am pleased to see that in the past six months, all of our businesses have made firm progress in accordance with the five-year strategic plan and our performance has met the expectations at the beginning of the year. During the reporting period, our footprints in overseas markets continued to expand. Meanwhile, we achieved the milestone of 7,000 stores globally, and it has been less than one year since we achieved the milestone of 6,000 stores. In the First Half of 2024, we had 502 net new stores at the group level, including 266 net new MINISO stores in overseas markets and 47 net new TOP TOY stores, both marking the fastest store opening paces during the first half of a year. MINISO in overseas markets and TOP TOY also maintained a double-digit same-store sales growth, acting as growth engines of the Company. We had 189 net new MINISO stores in mainland China in the First Half of 2024, and same-store sales of MINISO in mainland China recovered to 98.3% of the prior year's level, representing MINISO's industrial leading position and robust growth. As a result, revenue increased by 25% to RMB7.76 billion for the First Half of 2024, including a 7% same-store sales growth and a 19% average store count expansion." "Despite short-term headwind and uncertainties brought by the macro environment, MINISO Group will still steadfastly focus on our long-term strategy, adhering to "Affordability", "Globalization" and "Product Innovation (IP design)". We will always uphold our "Happy Philosophy" and target to become the world's No.1 IP design retail group, maintaining strategic focus and moving toward our five-year strategic goals. Meanwhile, we are committed to providing competitive career development opportunities for employees and bringing long-term and sustainable return to shareholders." Mr. Ye continued. Mr. Eason Zhang, CFO of MINISO, commented, "Thanks to our ongoing brand upgrade and increasing overseas revenue contribution, gross margin for the First Half of 2024 reached 43.7%, with a 4.1 percentage point increase year over year. Even though we are still at an investment stage in overseas markets, we have managed to maintain profitability at a healthy level under our effective cost control measures. This is evidenced by an 18% year-over-year increase in adjusted net profit and a 26% year-over-year increase in adjusted EBITDA. Excluding foreign exchange impacts, adjusted net margin would have been 16.2% for the First Half of 2024, compared with 16.1% for the same period of last year, implying our good profitability under scalable growth. Our financial strategy will continue to remain disciplined in terms of budgeting, cost controls and allocation of capital as we commit to delivering stable profit and healthy cash flows. Our targets for the year of 2024 remain unchanged from our expectations at the beginning of the year, revenue is expected to increase 20% to 30% on year-over-year basis, and adjusted net profit target is RMB2.8 billion or higher." "Our capital allocation strategy will also continue to balance fast growth and our commitment to bring stable and foreseeable returns to shareholders. The Board of the Company has approved an interim cash dividend for the First Half of 2024, with a total amount of approximately RMB621 million. Upon the payment of the interim dividend, the Company will have returned RMB1.4 billion in cash to shareholders through dividends and share repurchases from year to date. Since 2020, we will have returned RMB3.6 billion to shareholders upon the payment of the interim dividend, accounting for 62% of adjusted net profit accumulated from 2020 until the First half of 2024. We are confident in accomplishing our full-year business plan and five-year strategy and believe that our share price has been trading below its intrinsic value. Accordingly, the Board of the Company has approved a share repurchase program to make the best of the general mandate granted at its annual general meeting held in June 2024, under which the Company may repurchase its shares and/or ADSs in the next 12 months not exceeding 10% of the total outstanding shares and execute share repurchases in the open market subject to market conditions. We believe that the share repurchase program is in the best interests of the Company and its shareholders as a whole and creates value for shareholders." Mr. Zhang concluded. Interim Dividend Declaration On August 30, 2024, the Company's board of directors approved the distribution of an interim cash dividend in the amount of US$0.2744 per American Depositary Share ("ADS") or US$0.0686 per ordinary share, to holders of ADSs and ordinary shares of record as of the close of business on September 13, 2024, New York Time and Beijing/Hong Kong Time, respectively. The ex-dividend date will be September 12, 2024. The payment date is expected to be September 23, 2024 for holders of ordinary shares and September 27, 2024 for holders of ADSs. The aggregate amount of cash dividend to be paid is approximately US$85.5 million (RMB621.3 million at an exchange rate of RMB7.2672 to US$1.0000), which is approximately 50% of the Company's adjusted net profit for the First Half of 2024 and will be distributed from additional paid-in capital and settled by a cash distribution. For holders of ordinary shares, in order to qualify for the interim cash dividend, all valid documents for the transfer of ordinary shares accompanied by the relevant share certificates must be lodged for registration with the Company's Hong Kong share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong no later than 4:30 P.M. on September 13, 2024 (Beijing/Hong Kong Time). Unaudited Financial Results for the June Quarter 2024 Revenue was RMB4,035.2 million (US$555.3 million), representing an increase of 24.1% year over year. Revenue from mainland China increased by 18.1% year over year, accelerated from the March quarter, including (i) an increase of 17.4% in revenue from MINISO's offline stores in mainland China, and (ii) an increase of 24.3% in revenue from TOP TOY. Revenue from overseas markets increased 35.5% to RMB1,510.1 million (US$207.8 million), breaking its previous record set in December quarter of 2023, which was usually a peak season in overseas markets. For more information on the composition and year-over-year change of revenue, please refer to the "Unaudited Additional Information" in this press release. Cost of sales was RMB2,261.9 million (US$311.2 million), representing an increase of 15.6% year over year. Gross profit was RMB1,773.3 million (US$244.0 million), representing an increase of 36.9% year over year. Gross margin was 43.9%, representing a record high with an increase of 4.1 percentage points year over year. Selling and distribution expenses were RMB826.1 million (US$113.7 million), representing an increase of 72.5% year over year. Excluding share-based compensation expenses, selling and distribution expenses were RMB808.6 million (US$111.3 million), representing an increase of 76.4% year over year. The year-over-year increase was mainly attributable to the Company's investments into directly operated stores both in mainland China and overseas markets to pursue the future success of the Company's business, especially in strategic overseas markets such as the U.S. market. As of June 30, 2024, total number of directly operated stores in overseas markets was 343, nearly doubling such figure compared to a year ago. In the June Quarter, revenue from directly operated stores increased 109.3%, while related expenses including rental and related expenses, depreciation and amortization expenses, and payroll excluding share-based compensation expenses increased 85.8%. General and administrative expenses were RMB227.2 million (US$31.3 million), representing an increase of 38.1% year over year. Excluding share-based compensation expenses, general and administrative expenses were RMB211.1 million (US$29.1 million), representing an increase of 31.2% year over year. The year-over-year increase was primarily due to the increase of personnel-related expenses in relation to the growth of the Company's business. Other net income was RMB26.9 million (US$3.7 million), compared to RMB38.0 million in the same period of 2023. The year-over-year decrease was mainly due to a net exchange loss of RMB4.2 million (US$0.6 million) in the June Quarter, compared to a net exchange gain of RMB66.1 million in the same period of last year. Profit for the period was RMB591.4 million (US$81.4 million), representing an increase of 8.1% year over year. Adjusted net profit, which represents profit for the period excluding equity-settled share-based payment expenses, was RMB625.0 million (US$86.0 million), representing an increase of 9.4% year over year. Adjusted net profit included a net foreign exchange loss of RMB4.2 million (US$0.6 million) in the June Quarter, compared to a net foreign exchange gain of RMB66.1 million in the same period of last year. Excluding net foreign exchange loss and gain, adjusted net profit would have increased 24.6% year over year. Adjusted net margin was 15.5%, compared to 17.6% in the same period of 2023. Excluding net foreign exchange loss and gain, adjusted net margin would have been 15.6%, compared to 15.5% in the same period of 2023. Adjusted EBITDA was RMB1,002.0 million (US$137.9 million), representing an increase of 17.1% year over year. Adjusted EBITDA margin was 24.8%, compared to 26.3% in the same period of 2023. Basic and diluted earnings per ADS were both RMB1.88 (US$0.26) in the June Quarter, representing an increase of 9.3% year over year from RMB1.72 in the same period of 2023. Each ADS represents four of the Company's ordinary shares. Adjusted basic and diluted earnings per ADS were both RMB2.00 (US$0.28) in the June Quarter, representing an increase of 11.1% year over year from RMB1.80 in the same period of 2023. Unaudited Financial Results for the First Half of 2024 Revenue was RMB7,758.7 million (US$1,067.6 million), representing an increase of 25.0% year over year, primarily driven by an 18.8% year-over-year increase in average store count, and an around 7% same-store sales growth on group level. Revenue from mainland China increased by 17.2% to RMB5,026.7 million (US$691.7 million), including (i) an increase of 16.5% in revenue from MINISO's offline stores in mainland China, which was primarily due to a 16.0% year-over-year growth in average store count, while same-store sales were 98.3% of the prior year's level, and (ii) an increase of 37.9% in revenue from TOP TOY, which was primarily powered by a strong same-store sales growth of 13.6% and a rapid growth in average store count. Revenue from overseas markets increased 42.6% to RMB2,732.0 million (US$375.9 million). The year-over-year increase was primarily due to an increase of 21.8% in average store count, coupled with a strong same-store sales growth of 16.3%. Revenue from overseas markets contributed 35.2% of the Company's total revenue for the First Half of 2024, compared to 30.9% for the same period in 2023. For more information on the composition and year-over-year change of revenue, please refer to the "Unaudited Additional Information" in this press release. Cost of sales was RMB4,369.0 million (US$601.2 million), representing an increase of 16.5% year over year. Gross profit was RMB3,389.8 million (US$466.5 million), representing an increase of 37.9% year over year. Gross margin was 43.7%, representing an increase of 4.1 percentage points. The year-over-year increase in gross margin was primarily due to (i) higher revenue contribution from directly operated markets which accounted for 55.7% of revenue from overseas markets, compared to 45.7% in the same period of 2023, (ii) higher gross margin in mainland China contributed by newly launched products in relation to the Company's execution of IP strategy and strategic brand upgrade of MINISO, and (iii) higher gross margin of TOP TOY due to a shift in product mix towards more profitable products. Other income was RMB12.7 million (US$1.7 million), compared to RMB3.6 million in the same period of 2023. The increase was primarily due to an increase in income from depositary bank. Selling and distribution expenses were RMB1,522.1 million (US$209.4 million), increased by 65.8% year over year. Excluding share-based compensation expenses, selling and distribution expenses were RMB1,480.6 million (US$203.7million), increased by 66.4% year over year. The year-over-year increase was mainly attributable to the Company's investments into directly operated stores both in mainland China and overseas markets to pursue the future success of the Company's business, especially in strategic overseas markets such as the U.S. market. As of June 30, 2024, total number of directly operated stores in overseas markets was 343, nearly doubling such figure compared to a year ago. In the First Half of 2024, revenue from directly operated stores increased 111.4%, while related expenses including rental and related expenses, depreciation and amortization expenses and payroll excluding share-based compensation expenses increased 82.7%. These new stores are expected to contribute more substantial sales in the second half of 2024. Promotion and advertising expenses increased 46.5% in the First Half of 2024, as a percentage of revenue stabilizing at around 3% in both comparative periods. Licensing expenses increased 24.2%, consistent with revenue growth. Logistics expenses increased 54.3%, reflecting the rising freight costs caused by the tension in international shipping during the First Half of 2024. General and administrative expenses were RMB418.6 million (US$57.6 million), increased by 30.9% year over year. Excluding share-based compensation expenses, general and administrative expenses were RMB395.6 million (US$54.4 million), increased by 26.9% year over year. The year-over-year increase was primarily due to the increase of personnel-related expenses in relation to the growth of the Company's business. Other net income was RMB41.7 million (US$5.7 million), compared to RMB41.3 million in the same period of 2023. Operating profit was RMB1,494.8 million (US$205.7 million), representing an increase of 18.1% year over year. Net finance income was RMB34.0 million (US$4.7 million), compared to RMB62.3 million in the same period of 2023. The year-over-year decrease was mainly due to a decrease in interest income as a result of decreased principal in bank deposits, and an increase in finance cost due to increased interest on lease liabilities. Profit for the period was RMB1,177.4 million (US$162.0 million), compared to RMB1,017.9 million in the same period of 2023, representing an increase of 15.7% year over year. Adjusted net profit, which represents profit for the period excluding equity-settled share-based payment expenses, was RMB1,241.9 million (US$170.9 million), representing an increase of 17.8% year over year. Adjusted net profit included a net foreign exchange loss of RMB12.4 million (US$1.7 million) in the First Half of 2024, compared to a net foreign exchange gain of RMB54.9 million in the same period of last year. Excluding net foreign exchange loss and gain, adjusted net profit would have increased 25.5% year over year. Adjusted net margin was 16.0%, compared to 17.0% in the same period of 2023. Excluding net foreign exchange loss and gain, adjusted net margin would have been 16.2%, compared to 16.1% in the same period of 2023. Adjusted EBITDA increased 26.0% year over year to RMB1,967.4 million (US$270.7 million). Adjusted EBITDA margin was 25.4%, compared to 25.2% in the same period of 2023. Basic earnings per ADS increased 16.0% year over year to RMB3.76 (US$0.52), compared to RMB3.24 in the same period of 2023. Diluted earnings per ADS increased 17.5% year over year to RMB3.76 (US$0.52), compared to RMB3.20 in the same period of 2023. Adjusted basic earnings per ADS increased 17.9% year over year to RMB3.96 (US$0.54), compared to RMB3.36 in the same period of 2023. Adjusted diluted earnings per ADS increased 19.3% year over year to RMB3.96 (US$0.54), compared to RMB3.32 in the same period of 2023. Net cash from operating activities increased 4.9% year over year to RMB1,293.8 million (US$178.0 million) for the First Half of 2024. Capital expenditure was RMB302.8 million (US$41.7 million) and free cash flow was RMB991.0 million (US$136.4 million) for the First Half of 2024. Conference Call The Company's management will hold an earnings conference call at 5:00 A.M. Eastern Time on Friday, August 30, 2024 (5:00 P.M. Beijing Time on the same day) to discuss the financial results. The conference call can be accessed by the following Zoom link or dialing the following numbers: Access 1 Join Zoom meeting. Zoom link: https://zoom.us/j/95898852484?pwd=tBbbJPUtyGu20f1OCy4sxYDNBAGy72.1 Meeting Number: 958 9885 2484 Meeting Passcode:9896 Access 2 Listeners may access the call by dialing the following numbers with the same meeting number and passcode with access 1. United States: +1 689 278 1000 (or +1 719 359 4580) Hong Kong, China: +852 5803 3730 (or +852 5803 3731) United Kingdom: +44 203 481 5237 (or +44 131 460 1196) France: +33 1 7037 9729 (or +33 1 7037 2246) Singapore: +65 3158 7288 (or +65 3165 1065) Canada: +1 438 809 7799 (or +1 204 272 7920) Access 3 Listeners can also access the meeting through the Company's investor relations website at https://ir.miniso.com/. The replay will be available approximately two hours after the conclusion of the live event at the Company's investor relations website at https://ir.miniso.com/. About MINISO Group MINISO Group is a global value retailer offering a variety of trendy lifestyle products featuring IP design. The Company serves consumers primarily through its large network of MINISO stores, and promotes a relaxing, treasure-hunting and engaging shopping experience full of delightful surprises that appeals to all demographics. Aesthetically pleasing design, quality and affordability are at the core of every product in MINISO's wide product portfolio, and the Company continually and frequently rolls out products with these qualities. Since the opening of its first store in China in 2013, the Company has built its flagship brand "MINISO" as a globally recognized retail brand and established a massive store network worldwide. For more information, please visit https://ir.miniso.com/. Exchange Rate The U.S. dollar (US$) amounts disclosed in this press release, except for those transaction amounts that were actually settled in U.S. dollars, are presented solely for the convenience of the readers. The conversion of Renminbi (RMB) into US$ in this press release is based on the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of June 28, 2024, which was RMB7.2672 to US$1.0000. The percentages stated in this press release are calculated based on the RMB amounts. Non-IFRS Financial Measures In evaluating the business, MINISO considers and uses adjusted net profit, adjusted net margin, adjusted EBITDA, adjusted EBITDA margin, adjusted basic and diluted net earnings per share and adjusted basic and diluted net earnings per ADS as supplemental measures to review and assess its operating performance. The presentation of these non-IFRS financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS. MINISO defines adjusted net profit as profit for the period excluding equity-settled share-based payment expenses. MINISO calculates adjusted net margin by dividing adjusted net profit by revenue for the same period. MINISO defines adjusted EBITDA as adjusted net profit plus depreciation and amortization, finance costs and income tax expense. Adjusted EBITDA margin is computed by dividing adjusted EBITDA by revenue for the period. MINISO computes adjusted basic and diluted net earnings per ADS by dividing adjusted net profit attributable to the equity shareholders of the Company by the number of ADSs represented by the number of ordinary shares used in the basic and diluted earnings per share calculation on an IFRS basis. MINISO computes adjusted basic and diluted net earnings per share in the same way as it calculates adjusted basic and diluted net earnings per ADS, except that it uses the number of ordinary shares used in the basic and diluted earnings per share calculation on an IFRS basis as the denominator instead of the number of ADSs represented by these ordinary shares. MINISO presents these non-IFRS financial measures because they are used by the management to evaluate its operating performance and formulate business plans. These non-IFRS financial measures enable the management to assess its operating results without considering the impacts of the aforementioned non-cash and other adjustment items that MINISO does not consider to be indicative of its operating performance in the future. Accordingly, MINISO believes that the use of these non-IFRS financial measures provides useful information to investors and others in understanding and evaluating its operating results in the same manner as the management and board of directors. These non-IFRS financial measures are not defined under IFRS and are not presented in accordance with IFRS. These non-IFRS financial measures have limitations as analytical tools. One of the key limitations of using these non-IFRS financial measures is that they do not reflect all items of income and expense that affect MINISO's operations. Further, these non-IFRS financial measures may differ from the non-IFRS information used by other companies, including peer companies, and therefore their comparability may be limited. These non-IFRS financial measures should not be considered in isolation or construed as alternatives to profit, net profit margin, basic and diluted earnings per share and basic and diluted earnings per ADS, as applicable, or any other measures of performance or as indicators of MINISO's operating performance. Investors are encouraged to review MINISO's historical non-IFRS financial measures in light of the most directly comparable IFRS measures, as shown below. The non-IFRS financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting the usefulness of such measures when analyzing MINISO's data comparatively. MINISO encourages you to review its financial information in its entirety and not rely on a single financial measure. For more information on the non-IFRS financial measures, please see the table captioned "Reconciliation of Non-IFRS Financial Measures" set forth at the end of this press release. Safe Harbor Statement 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 words or phrases such as "may", "will", "expect", "anticipate", "aim", "estimate", "intend", "plan", "believe", "is/are likely to", "potential", "continue" or other similar expressions. Among other things, the quotations from management in this announcement, as well as MINISO's strategic and operational plans, contain forward-looking statements. MINISO may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC") and The Stock Exchange of Hong Kong Limited (the "HKEX"), 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 statements about MINISO'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: MINISO's mission, goals and strategies; future business development, financial conditions and results of operations; the expected growth of the retail market and the market of branded variety retail of lifestyle products in China and globally; expectations regarding demand for and market acceptance of MINISO's products; expectations regarding MINISO's relationships with consumers, suppliers, MINISO Retail Partners, local distributors, and other business partners; competition in the industry; proposed use of proceeds; and relevant government policies and regulations relating to MINISO's business and the industry. Further information regarding these and other risks is included in MINISO's filings with the SEC and the HKEX. All information provided in this press release and in the attachments is as of the date of this press release, and MINISO undertakes no obligation to update any forward-looking statement, except as required under applicable law. Investor Relations Contacts: Raine Hu MINISO Group Holding LimitedEmail: ir@miniso.com Phone: +86 (20) 36228788 Ext.8039 MINISO GROUP HOLDING LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in thousands) As at As at December 31, 2023 June 30, 2024 (Audited) (Unaudited) RMB'000 RMB'000 US$'000 ASSETS Non-current assets Property, plant and equipment 769,306 1,047,687 144,167 Right-of-use assets 2,900,860 3,684,817 507,048 Intangible assets 19,554 12,333 1,697 Goodwill 21,643 21,247 2,924 Deferred tax assets 104,130 116,577 16,042 Other investments 90,603 106,102 14,600 Trade and other receivables 135,796 173,136 23,823 Term deposits 100,000 103,308 14,216 Interests in equity-accountedinvestees 15,783 14,814 2,038 4,157,675 5,280,021 726,555 Current assets Other investments 252,866 350,913 48,287 Inventories 1,922,241 1,949,849 268,308 Trade and other receivables 1,518,357 1,614,148 222,114 Cash and cash equivalents 6,415,441 6,233,089 857,702 Restricted cash 7,970 1,965 270 Term deposits 210,759 283,007 38,943 10,327,634 10,432,971 1,435,624 Total assets 14,485,309 15,712,992 2,162,179 MINISO GROUP HOLDING LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (CONTINUED) (Expressed in thousands) As at As at December 31, 2023 June30, 2024 (Audited) (Unaudited) RMB'000 RMB'000 US$'000 EQUITY Share capital 95 95 13 Additional paid-in capital 6,331,375 5,543,845 762,858 Other reserves 1,114,568 1,260,576 173,461 Retained earnings 1,722,157 2,892,259 397,988 Equity attributable to equity shareholders of the Company 9,168,195 9,696,775 1,334,320 Non-controlling interests 23,022 28,006 3,854 Total equity 9,191,217 9,724,781 1,338,174 LIABILITIES Non-current liabilities Contract liabilities 40,954 39,299 5,408 Loans and borrowings 6,533 6,414 883 Other payables 12,411 32,786 4,512 Lease liabilities 797,986 1,481,836 203,907 Deferred income 29,229 37,480 5,157 887,113 1,597,815 219,867 Current liabilities Contract liabilities 324,028 344,422 47,394 Loans and borrowings 726 713 98 Trade and other payables 3,389,826 3,328,888 458,070 Lease liabilities 447,319 455,453 62,672 Deferred income 6,644 6,685 920 Current taxation 238,436 254,235 34,984 4,406,979 4,390,396 604,138 Total liabilities 5,294,092 5,988,211 824,005 Total equity and liabilities 14,485,309 15,712,992 2,162,179 MINISO GROUP HOLDING LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (Expressed in thousands, except for per ordinary share and per ADS data) Three months ended June 30, Six months ended June 30, 2023 2024 2023 2024 (Unaudited) (Unaudited) (Unaudited) (Unaudited) RMB'000 RMB'000 US$ '000 RMB'000 RMB'000 US$ '000 Revenue 3,252,182 4,035,212 555,264 6,206,330 7,758,743 1,067,639 Cost of sales (1,956,535) (2,261,884) (311,246) (3,748,938) (4,368,957) (601,188) Gross profit 1,295,647 1,773,328 244,018 2,457,392 3,389,786 466,451 Other income 2,842 9,053 1,246 3,624 12,698 1,747 Selling and distribution expenses (478,948) (826,061) (113,670) (917,966) (1,522,088) (209,446) General and administrative expenses (164,499) (227,232) (31,268) (319,705) (418,573) (57,598) Other net income 37,966 26,867 3,697 41,256 41,696 5,738 Reversal/(Credit loss) of credit loss ontrade and other receivables 460 (2,939) (404) 4,788 (3,606) (496) Impairment loss on non-current assets (3,448) (1,492) (205) (3,448) (5,104) (702) Operating profit 690,020 751,524 103,414 1,265,941 1,494,809 205,694 Finance income 46,814 33,716 4,639 80,541 74,606 10,266 Finance costs (9,631) (24,686) (3,397) (18,277) (40,595) (5,586) Net finance income 37,183 9,030 1,242 62,264 34,011 4,680 Share of profit of an equity-accountedinvestees, net of tax - 181 25 - 301 41 Profit before taxation 727,203 760,735 104,681 1,328,205 1,529,121 210,415 Income tax expense (180,212) (169,310) (23,298) (310,287) (351,742) (48,401) Profit for the period 546,991 591,425 81,383 1,017,918 1,177,379 162,014 Attributable to: Equity shareholders of the Company 539,331 587,630 80,861 1,004,836 1,170,102 161,013 Non-controlling interests 7,660 3,795 522 13,082 7,277 1,001 Earnings per share for ordinary shares -Basic 0.43 0.47 0.06 0.81 0.94 0.13 -Diluted 0.43 0.47 0.06 0.80 0.94 0.13 Earnings per ADS (Each ADS represents 4 ordinary shares) -Basic 1.72 1.88 0.26 3.24 3.76 0.52 -Diluted 1.72 1.88 0.26 3.20 3.76 0.52 MINISO GROUP HOLDING LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONTINUED) (Expressed in thousands) Three months ended June 30, Six months ended June 30, 2023 2024 2023 2024 (Unaudited) (Unaudited) (Unaudited) (Unaudited) RMB'000 RMB'000 US$ '000 RMB'000 RMB'000 US$ '000 Profit for the period 546,991 591,425 81,383 1,017,918 1,177,379 162,014 Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of financial statements of foreign operations 62,799 2,990 411 54,832 6,845 941 Other comprehensive income for the period 62,799 2,990 411 54,832 6,845 941 Total comprehensive income for the period 609,790 594,415 81,794 1,072,750 1,184,224 162,955 Attributable to: Equity shareholders of the Company 601,200 591,877 81,445 1,057,099 1,178,043 162,104 Non-controlling interests 8,590 2,538 349 15,651 6,181 851 MINISO GROUP HOLDING LIMITED RECONCILIATION OF NON-IFRS FINANCIAL MEASURES (Expressed in thousands, except for per share, per ADS data and percentages) Three months ended June 30, Six months ended June 30, 2023 2024 2023 2024 (Unaudited) (Unaudited) (Unaudited) (Unaudited) RMB'000 RMB'000 US$'000 RMB'000 RMB'000 US$'000 Reconciliation of profit for the period to adjusted net profit: Profit for the period 546,991 591,425 81,383 1,017,918 1,177,379 162,014 Add back: Equity-settled share-based payment expenses 24,212 33,570 4,619 36,302 64,507 8,876 Adjusted net profit 571,203 624,995 86,002 1,054,220 1,241,886 170,890 Adjusted net margin 17.6 % 15.5 % 15.5 % 17.0 % 16.0 % 16.0 % Attributable to: Equity shareholders of the Company 563,543 621,021 85,455 1,041,138 1,234,430 169,864 Non-controlling interests 7,660 3,974 547 13,082 7,456 1,026 Adjusted net earnings per share(1) -Basic 0.45 0.50 0.07 0.84 0.99 0.14 -Diluted 0.45 0.50 0.07 0.83 0.99 0.14 Adjusted net earnings per ADS (Each ADS represents 4 ordinary shares) -Basic 1.80 2.00 0.28 3.36 3.96 0.54 -Diluted 1.80 2.00 0.28 3.32 3.96 0.54 Reconciliation of adjusted net profit for the period to adjusted EBITDA: Adjusted net profit 571,203 624,995 86,002 1,054,220 1,241,886 170,890 Add back: Depreciation and amortization 94,379 183,029 25,186 179,004 333,131 45,840 Finance costs 9,631 24,686 3,397 18,277 40,595 5,586 Income tax expense 180,212 169,310 23,298 310,287 351,742 48,401 Adjusted EBITDA 855,425 1,002,020 137,883 1,561,788 1,967,354 270,717 Adjusted EBITDA margin 26.3 % 24.8 % 24.8 % 25.2 % 25.4 % 25.4 % Note: (1) Adjusted basic and diluted net earnings per share are computed by dividing adjusted net profit attributable to the equity shareholders of the Company by the number of ordinary shares used in the basic and diluted earnings per share calculation on an IFRS basis. MINISO GROUP HOLDING LIMITED UNAUDITED ADDITIONAL INFORMATION (Expressed in thousands, except for percentages) Three months ended June 30, Six months ended June 30, 2023 2024 YoY 2023 2024 YoY RMB'000 RMB'000 US$'000 RMB'000 RMB'000 US$'000 Revenue Mainland China 2,137,422 2,525,064 347,460 18.1 % 4,290,654 5,026,729 691,701 17.2 % -MINISO Brand(1) 1,951,592 2,308,008 317,592 18.3 % 3,952,460 4,592,798 631,990 16.2 % -TOP TOY Brand 172,965 214,952 29,578 24.3 % 310,867 428,772 59,001 37.9 % -Others(2) 12,865 2,104 290 (83.6) % 27,327 5,159 710 (81.1) % Overseas 1,114,760 1,510,148 207,804 35.5 % 1,915,676 2,732,014 375,938 42.6 % 3,252,182 4,035,212 555,264 24.1 % 6,206,330 7,758,743 1,067,639 25.0 % Note: (1) "MINISO Brand" refers to the revenue generated from MINISO brand including revenue from offline stores, e-commerce and others in mainland China. (2) "Others" refers to revenue generated from other operating segments such as "WonderLife", which was a secondary brand targeting on lower-tier cities in mainland China, aggregated and presented as "others". As the MINISO brand increasingly penetrated into lower-tier cities in mainland China, "WonderLife" has become marginalized. MINISO GROUP HOLDING LIMITED UNAUDITED ADDITIONAL INFORMATION NUMBER OF MINISO STORES IN MAINLAND CHINA As of June 30, 2023 December 31, 2023 June 30, 2024 YoY YTD(1) By City Tiers First-tier cities 474 522 541 67 19 Second-tier cities 1,496 1,617 1,705 209 88 Third- or lower-tier cities 1,634 1,787 1,869 235 82 Total 3,604 3,926 4,115 511 189 Note: (1) "YTD" refers to the period starting from January 1, 2024 to June 30, 2024. MINISO GROUP HOLDING LIMITED UNAUDITED ADDITIONAL INFORMATION NUMBER OF MINISO STORES IN OVERSEAS MARKETS As of June 30,2023 December 31, 2023 June 30,2024 YoY YTD(1) By Regions Asia excluding China 1,206 1,333 1,484 278 151 North America 123 172 234 111 62 Latin America 492 552 584 92 32 Europe 198 231 244 46 13 Others 168 199 207 39 8 Total 2,187 2,487 2,753 566 266 Note: (1) "YTD" refers to the period starting from January 1, 2024 to June 30, 2024.
SHANGHAI, Aug. 30, 2024 /PRNewswire/ -- Cango Inc. (NYSE: CANG) ("Cango" or the "Company"), a leading automotive transaction service platform in China, today announced its unaudited financial results for the second quarter of 2024. Second Quarter 2024 Financial and Operational Highlights Total revenues were RMB45.1 million (US$6.2 million), compared with RMB675.4 million in the same period of 2023. Income from operations was RMB47.0 million (US$6.5 million) for the three months ended June 30, 2024, compared with a loss of RMB8.9 million in the same period last year. Net income was RMB86.0 million (US$11.8 million) for the three months ended June 30, 2024, an increase of 137.5% from RMB36.2 million in the same period last year. The total outstanding balance of financing transactions the Company facilitated was RMB6.2 billion (US$850.0 million) as of June 30, 2024. Our credit risk exposure has decreased to a lower level, of which only RMB2.7 billion (US$ 375.0 million) of outstanding balance of loans where the Company bears credit risks have not been provided with full bad debt allowance or full risk assurance liabilities. M1+ and M3+ overdue ratios for all financing transactions that remained outstanding and were facilitated by the Company were 2.93% and 1.57%, respectively, as of June 30, 2024, compared with 2.87% and 1.51%, respectively, as of March 31, 2024. Total balance of cash and cash equivalents and short-term investments increased by RMB207.1 million (US$28.5 million) compared with that as of March 31, 2024. Mr. Jiayuan Lin, Chief Executive Officer of Cango, commented, "China's automotive market remained sluggish in the second quarter, presenting significant challenges for the industry. In response to these challenges, we reinforced our financial stability through disciplined expense management and cost-efficiency measures while seizing the used car market's immense potential and opportunities. Over the past quarter, we focused on enhancing the competitiveness of 'Cango U-car' by ensuring a consistent supply of high-quality vehicles, optimizing dealer experiences and supply chain management, and improving the convenience and security of cross-regional deliveries." "Beyond 'Cango U-car,' we made significant strides in cross-border used car transactions during the quarter. Since its launch in March 2024, our international used car website, Autocango.com, has quickly gained traction among global audiences. We significantly expanded its market coverage as well as its range of product and service offerings in the second quarter. To date, its premium services and vast offering of over 85,000 high-quality used car SKUs have attracted over 180,000 visits with more than 20,000 registered users across 207 countries and regions worldwide. Furthermore, our streamlined, asset-light, and traffic-focused approach enables us to control operating costs while creating value. Ultimately, we aim to position Autocango.com as the premier gateway for exporting Chinese used cars. Moving forward, Cango will continue to deepen its partnership with overseas markets, further optimizing our trading functionality and services to better serve car buyers both in and outside China," concluded Mr. Lin. Mr. Yongyi Zhang, Chief Financial Officer of Cango, stated, "Despite market challenges, we maintained robust financial stability through disciplined expense management and cost-efficiency measures. Our net income for the quarter surged by 137.5% compared to the same period last year, and our cash position remains strong. As we enter the second half of the year, we will continue to enforce stringent cost control and risk management strategies, while actively exploring new initiatives leveraging Cango's extensive industry expertise." Second Quarter 2024 Financial Results REVENUES Total revenues in the second quarter of 2024 were RMB45.1 million (US$6.2 million) compared with RMB675.4 million in the same period of 2023. Guarantee income, which represented the fee income earned on the non-contingent aspect of a guarantee, was RMB20.9 million (US$2.9 million) in the second quarter of 2024. This was presented separately from the contingent aspect of a guarantee pursuant to the adoption of ASC 326 since January 1, 2023. OPERATING COST AND EXPENSES Cost of revenue in the second quarter of 2024 decreased to RMB26.5 million (US$3.7 million) from RMB615.8 million in the same period of 2023. As a percentage of total revenues, cost of revenue in the second quarter of 2024 was 58.8% compared with 91.2% in the same period of 2023. Sales and marketing expenses in the second quarter of 2024 decreased to RMB4.0 million (US$0.5 million) from RMB12.2 million in the same period of 2023. General and administrative expenses in the second quarter of 2024 were RMB39.2 million (US$5.4 million) compared with RMB36.8 million in the same period of 2023. Research and development expenses in the second quarter of 2024 decreased to RMB1.7 million (US$0.2 million) from RMB7.7 million in the same period of 2023. Net gain on contingent risk assurance liabilities in the second quarter of 2024 was RMB10.3 million (US$1.4 million) compared with a net loss of RMB1.6 million in the same period of 2023. Net recovery on provision for credit losses in the second quarter of 2024 was RMB63.0 million (US$8.7 million) compared with a net loss of RMB10.2 million in the same period of 2023. INCOME FROM OPERATIONS Income from operations in the second quarter of 2024 was RMB47.0 million (US$6.5 million), compared with a loss of RMB8.9 million in the same period of 2023. NET INCOME Net income in the second quarter of 2024 was RMB86.0 million (US$11.8 million). Non-GAAP adjusted net income in the second quarter of 2024 was RMB90.7 million (US$12.5 million). Non-GAAP adjusted net income excludes the impact of share-based compensation expenses. For further information, see "Use of Non-GAAP Financial Measure." NET INCOME PER ADS Basic and diluted net income per American Depositary Share (the "ADS") in the second quarter of 2024 were RMB0.83 (US$0.11) and RMB0.76 (US$0.10), respectively. Non-GAAP adjusted basic and diluted net income per ADS in the second quarter of 2024 were RMB0.87 (US$0.12) and RMB0.80 (US$0.11), respectively. Each ADS represents two Class A ordinary shares of the Company. BALANCE SHEET As of June 30, 2024, the Company had cash and cash equivalents of RMB949.5 million (US$130.6 million), compared with RMB1.2 billion as of March 31, 2024. As of June 30, 2024, the Company had short-term investments of RMB2.7 billion (US$376.5 million), compared with RMB2.3 billion as of March 31, 2024. Business Outlook For the third quarter of 2024, the Company expects total revenues to be between RMB20 million and RMB25 million. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change. Share Repurchase Program Pursuant to the share repurchase program announced on April 23, 2024 (the "New Share Repurchase Program"), the Company had repurchased 840,838 ADSs with cash in the aggregate amount of approximately US$1.5 million up to August 16, 2024. Conference Call Information The Company's management will hold a conference call on Thursday, August 29, 2024, at 9:00 P.M. Eastern Time or Friday, August 30, 2024, at 9:00 A.M. Beijing Time to discuss the financial results. Listeners may access the call by dialing the following numbers: International: +1-412-902-4272 United States Toll Free: +1-888-346-8982 Mainland China Toll Free: 4001-201-203 Hong Kong, China Toll Free: 800-905-945 Conference ID: Cango Inc. The replay will be accessible through September 5, 2024 by dialing the following numbers: International: +1-412-317-0088 United States Toll Free: +1-877-344-7529 Access Code: 2443056 A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.cangoonline.com/. About Cango Inc. Cango Inc. (NYSE: CANG) is a leading automotive transaction service platform in China, connecting car buyers, dealers, financial institutions, and other industry participants. Founded in 2010 by a group of pioneers in China's automotive finance industry, the Company is headquartered in Shanghai and has a nationwide network. Leveraging its competitive advantages in technological innovation and big data, Cango has established an automotive supply chain ecosystem, and developed a matrix of products centering on customer needs for auto transactions, auto financing and after-market services. By working with platform participants, Cango endeavors to make car purchases simple and enjoyable, and make itself customers' car purchase service platform of choice. For more information, please visit: www.cangoonline.com. Definition of Overdue Ratios The Company defines "M1+ overdue ratio" as (i) exposure at risk relating to financing transactions for which any installment payment is 30 to 179 calendar days past due as of a specified date, divided by (ii) exposure at risk relating to all financing transactions which remain outstanding as of such date, excluding amounts of outstanding principal that are 180 calendar days or more past due. The Company defines "M3+ overdue ratio" as (i) exposure at risk relating to financing transactions for which any installment payment is 90 to 179 calendar days past due as of a specified date, divided by (ii) exposure at risk relating to all financing transactions which remain outstanding as of such date, excluding amounts of outstanding principal that are 180 calendar days or more past due. Use of Non-GAAP Financial Measure In evaluating the business, the Company considers and uses Non-GAAP adjusted net income (loss), a Non-GAAP measure, as a supplemental measure to review and assess its operating performance. The presentation of the 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 Non-GAAP adjusted net income (loss) as net income (loss) excluding share-based compensation expenses. The Company presents the Non-GAAP financial measure because it is used by the management to evaluate the operating performance and formulate business plans. Non-GAAP adjusted net income (loss) enables the management to assess the Company's operating results without considering the impact of share-based compensation expenses, which are non-cash charges. The Company also believes that the use of the Non-GAAP measure facilitates investors' assessment of its operating performance. Non-GAAP adjusted net income (loss) is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. This Non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using Non-GAAP adjusted net income (loss) is that it does not reflect all items of expense that affect the Company's operations. Share-based compensation expenses have been and may continue to be incurred in the business and are not reflected in the presentation of Non-GAAP adjusted net income (loss). Further, the Non-GAAP measure may differ from the Non-GAAP information used by other companies, including peer companies, and therefore their 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 the Company's performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial measure. Reconciliations of Cango's Non-GAAP financial measure to the most comparable U.S. GAAP measure are included at the end of this press release. Exchange Rate Information This announcement contains translations of certain RMB amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB7.2672 to US$1.00, the noon buying rate in effect on June 28, 2024, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the "Business Outlook" section and quotations from management in this announcement, contain forward-looking statements. Cango may also make written or oral forward-looking statements in its periodic reports to 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 statements about Cango'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: Cango's goal and strategies; Cango's expansion plans; Cango's future business development, financial condition and results of operations; Cango's expectations regarding demand for, and market acceptance of, its solutions and services; Cango's expectations regarding keeping and strengthening its relationships with dealers, financial institutions, car buyers and other platform participants; general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Cango'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 Cango does not undertake any obligation to update any forward-looking statement, except as required under applicable law. Investor Relations Contact Yihe LiuCango Inc.Tel: +86 21 3183 5088 ext.5581Email: ir@cangoonline.com Twitter: https://twitter.com/Cango_Group Helen WuPiacente Financial CommunicationsTel: +86 10 6508 0677Email: ir@cangoonline.com CANGO INC.UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEET(Amounts in Renminbi ("RMB") and US dollar ("US$"), except for number of shares and per share data） As of December 31,2023 As of June 30, 2024 RMB RMB US$ ASSETS: Current assets: Cash and cash equivalents 1,020,604,191 949,450,190 130,648,694 Restricted cash - current - bank deposits held for short-term investments 1,670,006,785 - - Restricted cash - current 14,334,937 13,672,966 1,881,463 Short-term investments 635,070,394 2,735,968,872 376,481,846 Accounts receivable, net 64,791,709 40,068,078 5,513,551 Finance lease receivables - current, net 200,459,435 78,607,773 10,816,790 Financing receivables, net 29,522,035 14,629,276 2,013,055 Short-term contract asset 170,623,200 65,299,784 8,985,549 Prepayments and other current assets 78,606,808 62,519,984 8,603,036 Total current assets 3,884,019,494 3,960,216,923 544,943,984 Non-current assets: Restricted cash - non-current 583,380,417 489,818,652 67,401,290 Property and equipment, net 8,239,037 7,061,030 971,630 Intangible assets 48,373,192 47,865,203 6,586,471 Long-term contract asset 36,310,769 498,307 68,569 Finance lease receivables - non-current, net 36,426,617 9,937,420 1,367,435 Operating lease right-of-use assets 47,154,944 45,082,195 6,203,516 Other non-current assets 4,705,544 4,056,835 558,239 Total non-current assets 764,590,520 604,319,642 83,157,150 TOTAL ASSETS 4,648,610,014 4,564,536,565 628,101,134 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term debts 39,071,500 - - Long-term debts—current 926,237 715,342 98,434 Accrued expenses and other current liabilities 206,877,626 154,492,866 21,258,925 Deferred guarantee income 86,218,888 35,052,488 4,823,383 Contingent risk assurance liabilities 125,140,991 51,974,769 7,151,966 Income tax payable 311,904,279 314,347,710 43,255,684 Short-term lease liabilities 7,603,380 7,536,210 1,037,017 Total current liabilities 777,742,901 564,119,385 77,625,409 Non-current liabilities: Long-term debts 712,023 650,253 89,478 Deferred tax liability 10,724,133 10,724,133 1,475,690 Long-term operating lease liabilities 42,228,435 41,861,689 5,760,360 Other non-current liabilities 226,035 142,603 19,623 Total non-current liabilities 53,890,626 53,378,678 7,345,151 Total liabilities 831,633,527 617,498,063 84,970,560 Shareholders' equity Ordinary shares 204,260 204,260 28,107 Treasury shares (773,130,748) (780,064,771) (107,340,485) Additional paid-in capital 4,813,679,585 4,745,898,255 653,057,334 Accumulated other comprehensive income 111,849,166 140,576,911 19,344,027 Retained earnings (335,625,776) (159,576,153) (21,958,409) Total Cango Inc.'s equity 3,816,976,487 3,947,038,502 543,130,574 Total shareholders' equity 3,816,976,487 3,947,038,502 543,130,574 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 4,648,610,014 4,564,536,565 628,101,134 CANGO INC.UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OFCOMPREHENSIVE INCOME(Amounts in Renminbi ("RMB") and US dollar ("US$"), except for number of shares and per share data) Three months ended June 30 Six months ended June 30 2023 2024 2023 2024 RMB RMB US$ RMB RMB US$ Revenues 675,430,076 45,079,736 6,203,178 1,218,043,439 109,502,230 15,068,008 Loan facilitation income and other related income 13,957,481 1,669,748 229,765 16,272,881 15,490,770 2,131,601 Guarantee income 55,875,460 20,906,819 2,876,874 120,004,206 51,166,400 7,040,731 Leasing income 16,645,952 3,341,561 459,814 38,859,633 8,281,273 1,139,541 After-market services income 10,529,314 16,517,025 2,272,818 27,248,790 28,154,813 3,874,231 Automobile trading income 562,758,493 1,469,154 202,162 992,608,136 4,914,194 676,216 Others 15,663,376 1,175,429 161,744 23,049,793 1,494,780 205,688 Operating cost and expenses: Cost of revenue 615,829,103 26,525,482 3,650,028 1,096,347,083 55,584,350 7,648,661 Sales and marketing 12,153,129 3,985,488 548,421 24,691,691 7,533,761 1,036,680 General and administrative 36,834,735 39,170,818 5,390,084 76,637,265 77,094,349 10,608,535 Research and development 7,748,158 1,670,526 229,872 15,850,521 2,768,631 380,976 Net loss (gain) on contingent risk assurance liabilities 1,556,164 (10,257,113) (1,411,426) (66,392) (25,275,359) (3,478,005) Provision (net recovery on provision) for credit losses 10,238,843 (62,990,492) (8,667,780) (38,315,257) (129,329,576) (17,796,342) Total operation cost and expense 684,360,132 (1,895,291) (260,801) 1,175,144,911 (11,623,844) (1,599,495) (Loss) income from operations (8,930,056) 46,975,027 6,463,979 42,898,528 121,126,074 16,667,503 Interest income 20,718,511 33,754,595 4,644,787 39,499,391 50,258,560 6,915,808 Net gain (loss) on equity securities 4,668,993 (6,004,598) (826,260) 8,401,348 4,979,926 685,261 Interest expense (1,652,610) - - (3,946,695) - - Foreign exchange gain, net 3,820,047 361,803 49,786 2,835,740 493,492 67,907 Other income 3,138,715 4,585,054 630,924 7,598,612 5,417,605 745,487 Other expenses (96,249) (1,300,073) (178,896) (227,134) (1,835,463) (252,568) Net income before income taxes 21,667,351 78,371,808 10,784,320 97,059,790 180,440,194 24,829,398 Income tax expenses (benefits) 14,559,258 7,651,029 1,052,817 17,931,896 (4,390,571) (604,163) Net income 36,226,609 86,022,837 11,837,137 114,991,686 176,049,623 24,225,235 Net income attributable to Cango Inc.'s shareholders 36,226,609 86,022,837 11,837,137 114,991,686 176,049,623 24,225,235 Earnings per ADS attributable to ordinary shareholders: Basic 0.27 0.83 0.11 0.86 1.68 0.23 Diluted 0.26 0.76 0.10 0.82 1.56 0.21 Weighted average ADS used to compute earnings per ADS attributable to ordinary shareholders: Basic 133,052,781 104,041,560 104,041,560 133,906,218 104,781,289 104,781,289 Diluted 138,366,712 113,656,131 113,656,131 139,610,743 112,790,662 112,790,662 Other comprehensive income, net of tax Foreign currency translation adjustment 78,051,511 7,832,817 1,077,831 72,030,932 28,727,745 3,953,069 Total comprehensive income 114,278,120 93,855,654 12,914,968 187,022,618 204,777,368 28,178,304 Total comprehensive income attributable to Cango Inc.'s shareholders 114,278,120 93,855,654 12,914,968 187,022,618 204,777,368 28,178,304 CANGO INC.RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS(Amounts in Renminbi ("RMB") and US dollar ("US$"), except for number of shares and per share data Three months ended June 30 Six months ended June 30 2023 2024 2023 2024 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) RMB RMB US$ RMB RMB US$ Net income 36,226,609 86,022,837 11,837,137 114,991,686 176,049,623 24,225,235 Add: Share-based compensation expenses 11,980,577 4,688,971 645,224 26,039,675 10,406,393 1,431,967 Cost of revenue 728,462 212,617 29,257 1,475,878 467,008 64,262 Sales and marketing 2,345,570 868,477 119,506 5,138,966 1,915,136 263,531 General and administrative 8,376,396 3,382,804 465,490 18,283,664 7,799,176 1,073,203 Research and development 530,149 225,073 30,971 1,141,167 225,073 30,971 Non-GAAP adjusted net income 48,207,186 90,711,808 12,482,361 141,031,361 186,456,016 25,657,202 Net income attributable to Cango Inc.'s shareholders 48,207,186 90,711,808 12,482,361 141,031,361 186,456,016 25,657,202 Non-GAAP adjusted net income per ADS-basic 0.36 0.87 0.12 1.05 1.78 0.24 Non-GAAP adjusted net income per ADS-diluted 0.35 0.80 0.11 1.01 1.65 0.23 Weighted average ADS outstanding—basic 133,052,781 104,041,560 104,041,560 133,906,218 104,781,289 104,781,289 Weighted average ADS outstanding—diluted 138,366,712 113,656,131 113,656,131 139,610,743 112,790,662 112,790,662
Maintained Operational Profitability for the Second Consecutive Quarter Operating Expenses as a Percentage of Revenues Decreased 120 Basis Points YoY Held Positive Operating Cash Flow for Two Consecutive Quarters SHANGHAI, Aug. 29, 2024 /PRNewswire/ -- 111, Inc. ("111" or the "Company") (NASDAQ: YI), a leading tech-enabled healthcare platform company committed to reshaping the value chain of healthcare industry by digitally empowering the upstream and downstream in China, today announced its unaudited financial results for the second quarter ended June 30, 2024. Second Quarter 2024 Highlights Net revenues were RMB3.4 billion (US$471.2 million) and gross segment profit (1) was RMB 207.6 million (US$ 28.6 million), remaining relatively flat compared to the same quarter last year. Total operating expenses were RMB204.3 million (US$28.1 million), an improvement of 18.1% compared to RMB249.3 million in the same quarter of last year. As a percentage of net revenues, total operating expenses decreased by 120 basis points to 6.0% from 7.2% in the same quarter of last year, demonstrating continuous improvement in the Company's operation efficiency. Income from operations was RMB3.3 million (US$0.5 million), compared to loss from operations of RMB41.4 million in the same quarter of last year. 111 maintained operational profitability for the second consecutive quarter. Non-GAAP income from operations (2) was RMB8.5 million (US$1.2 million), compared to Non-GAAP loss from operations of RMB17.2 million in the same quarter of last year. Net cash from operating activities was RMB93.3 million (US$12.8 million), compared to negative RMB164.1 million in the same quarter of last year. The company realized positive operating cash flow for two consecutive quarters. (1) Gross segment profit represents net revenues less cost of goods sold. (2) Non-GAAP income from operations represents income from operations excluding share-based compensation expenses. Mr. Junling Liu, Co-Founder, Chairman, and Chief Executive Officer of 111, commented, "Despite a challenging macroeconomic landscape, we successfully achieved operational profitability for the second consecutive quarter, underscoring the resilience of our business model and the effectiveness of our strategic initiatives as a top digital healthcare platform for empowering the whole industry chain. Our continued focus on operational efficiency has driven a significant turnaround, with income from operations hitting RMB3.3 million during quarter—an impressive recovery from an operational loss of RMB41.4 million a year earlier. Mr. Liu added, "We've significantly improved operational efficiency through prudent expense control, strategic investments in infrastructure, and optimal staffing efforts. Operating expenses as a percentage of net revenues decreased by 120 basis points to 6%, while non-GAAP operating expenses fell by 70 basis points to 5.8%. Our goal is to set the standard for efficiency in pharmaceutical e-commerce and strengthen our competitive edge through superior operational effectiveness. As we expand and refine our operations, we expect further cost reductions and enhanced efficiency. These savings will be reinvested into strategic areas such as innovation, market expansion, and customer engagement, all of which are crucial for driving revenue and profitability growth." "Our commitment to advancing digital capabilities and leveraging cutting-edge technologies has significantly improved our operational performance across various facets, making our business more adaptable, efficient, and customer-focused. This positions us for higher future returns in the evolving healthcare e-commerce sector and reinforces our leading role to drive the pharmaceutical digital transformation. Our achievements in technology are highlighted by the acquisition of four new patents. Additionally, we've strengthened supply chain with our effective transshipment model, the expansion of fulfillment centers, and the deepening of our partnership." "The drug sales and prescription shift towards retail pharmacies is a robust growth avenue, along with continued digital reform of the healthcare value chain. In order to grasp these enormous opportunities, we will focus on offering seamless, convenient shopping experiences for customers with the most comprehensive and cost-effective product portfolio. Strengthening partnerships with pharmaceutical companies, lifting operational efficiency, driving digitalization and AI applications, and accelerating new growth engines such as private label business and JBP platform are also key to our continued growth and success. We believe these concerted efforts will enable us to garner a larger market share and achieve higher revenue and profit levels while generating long-term value for our shareholders, customers, and stakeholders." Second Quarter 2024 Financial Results Net revenues were RMB3.4 billion (US$471.2 million), representing a decrease of 1.5% from RMB3.5 billion in the same quarter of last year. (In thousands RMB) For the three months ended June 30, 2023 2024 YoY B2B Net Revenue Product 3,367,732 3,328,249 -1.2 % Service 20,974 25,270 20.5 % Sub-Total 3,388,706 3,353,519 -1.0 % Cost of Products Sold(3) 3,200,156 3,162,928 -1.2 % Segment Profit 188,550 190,591 1.1 % Segment Profit % 5.6 % 5.7 % (In thousands RMB) For the three months ended June 30, 2023 2024 YoY B2C Net Revenue Product 83,251 65,480 -21.3 % Service 5,540 5,371 -3.1 % Sub-Total 88,791 70,851 -20.2 % Cost of Products Sold 69,454 53,844 -22.5 % Segment Profit 19,337 17,007 -12.0 % Segment Profit % 21.8 % 24.0 % (3) For segment reporting purposes, purchase rebates are allocated to the B2B segment and B2C segments primarily based on the amount of cost of products sold for each segment. Cost of products sold does not include other direct costs related to cost of product sales such as shipping and handling expense, payroll and benefits of logistic staff, logistic centers rental expenses and depreciation expenses, which are recorded in the fulfillment expenses. Cost of service revenue is recorded in the operating expense. Operating costs and expenses were RMB3.4 billion (US$470.7 million), representing a decrease of 2.8% from RMB3.5 billion in the same quarter of last year. Cost of products sold was RMB3.2 billion (US$442.6 million), representing a decrease of 1.6% from RMB3.3 billion in the same quarter of last year. Fulfillment expenses were RMB88.1 million (US$12.1 million), representing a decrease of 7.3% from RMB95.0 million in the same quarter of last year. Fulfillment expenses accounted for 2.6% of net revenues this quarter as compared to 2.7% in the same quarter of last year. Selling and marketing expenses were RMB80.4 million (US$11.1 million), representing a decrease of 10.8% from RMB90.1 million in the same quarter of last year. Excluding the share-based compensation expenses of RMB1.7 million for the quarter and RMB4.4 million for the same quarter last year, respectively, selling and marketing expenses as a percentage of net revenues, accounted for 2.3% in the quarter as compared to 2.5% in the same quarter of last year. General and administrative expenses were RMB17.3 million (US$2.4 million), representing a decrease of 55.7% from RMB39.1 million in the same quarter of last year. Excluding the share-based compensation expenses of RMB2.5 million for the quarter and RMB15.7 million for the same quarter last year, respectively, general and administrative expenses as a percentage of net revenues, accounted for 0.4% in the quarter as compared to 0.7% in the same quarter of last year. Technology expenses were RMB18.4 million (US$2.5 million), representing a decrease of 25.2% from RMB24.5 million in the same quarter of last year. Excluding the share-based compensation expenses of RMB1.0 million for the quarter and RMB4.2 million for the same quarter last year, respectively, Technology expenses as a percentage of net revenues, accounted for 0.5% in the quarter as compared to 0.6% in the same quarter of last year. Income from operations was RMB3.3 million (US$0.5 million), compared to loss from operations of RMB41.4 million in the same quarter of last year. Non-GAAP income from operations was RMB8.5 million (US$1.2 million), compared to Non-GAAP loss from operations of RMB17.2 million in the same quarter of last year. Net loss was RMB2.1 million (US$0.3 million), representing an improvement of 95% from RMB45.4 million in the same quarter of last year. As a percentage of net revenues, net loss decreased to 0.1% in the quarter from 1.3% in same quarter of last year. Non-GAAP net income (4) was RMB3.1 million (US$0.4 million), compared to Non-GAAP net loss of RMB21.2 million in the same quarter of last year. Net loss attributable to ordinary shareholders was RMB14.0 million (US$1.9 million), representing an improvement of 76% from RMB57.2 million in the same quarter of last year. As a percentage of net revenues, net loss attributable to ordinary shareholders decreased to 0.4% in the quarter from 1.6% in same quarter of last year. Non-GAAP net loss attributable to ordinary shareholders (5) was RMB8.8 million (US$1.2 million), representing an improvement of 73% from RMB33.0 million in the same quarter of last year. As a percentage of net revenues, non-GAAP net loss attributable to ordinary shareholders decreased to 0.3% in the quarter from 0.9% in same quarter of last year. (4) Non-GAAP net income represents net income excluding share-based compensation expenses, net of tax. Considering the impact of accretion of redeemable non-controlling interest for the second quarter 2024, non-GAAP net income is used as a more meaningful measurement of the operation performance of the Company. (5) Non-GAAP net loss attributable to ordinary shareholders represents net loss attributable to ordinary shareholders excluding share-based compensation expenses, net of tax. As of June 30, 2024, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB615.5 million (US$84.7 million), compared to RMB673.7 million as of December 31, 2023. To this date, the Company has a total outstanding amount of RMB1.1 billion, which has been included in the balances of redeemable non-controlling interests and accrued expenses and other current liabilities, owed to a group of investors of 1 Pharmacy Technology pursuant to their equity investments made in 2020 as previously disclosed. 111 has received redemption requests from certain of such investors for a total redemption amount of RMB0.2 billion in accordance with the terms of their initial investments in 1 Pharmacy Technology. Furthermore, the Company has entered into written agreements and/or commitment letters with investors representing the majority of the total carrying amounts. For more information about the terms of 111's arrangements with these investors, see "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources" in the Company's annual report for the fiscal year ended December 31, 2023. Conference Call 111's management team will host an earnings conference call at 7:30 AM U.S. Eastern Time on Thursday, August 29, 2024 (7:30 PM Beijing Time on the same day). Details for the conference call are as follows: Event Title: 111, Inc. Second Quarter 2024 Unaudited Financial Results Registration Link: https://s1.c-conf.com/diamondpass/10040837-g09iyj.html All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers, the Direct Event passcode, and a unique Registration ID, which can be used to join the conference call. Please dial in 15 minutes before the call is scheduled to begin and provide the Direct Event passcode and unique Registration ID you have received upon registering to join the call. A telephone replay of the call will be available after the conclusion of the conference call until September 5, 2024 on: China: 4001 209 216United States: +1 855 883 1031International: +61 7 3107 6325Conference ID: 10040837 A live and archived webcast of the conference call will be available on the website at https://edge.media-server.com/mmc/p/a2w3gscg. Use of Non-GAAP Financial Measures In evaluating the business, the Company considers and uses non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS, as supplemental measures to review and assess its operating performance. The Company defines non-GAAP income (loss) from operations as income (loss) from operations excluding share-based compensation expenses. The Company defines non-GAAP net income (loss) as net loss excluding share-based compensation expenses, net of tax. The Company defines non-GAAP net loss attributable to ordinary shareholders as net loss attributable to ordinary shareholders excluding share-based compensation expenses, net of tax. The Company defines non-GAAP loss per ADS as net loss attributable to ordinary shareholders per ADS excluding share-based compensation expenses, net of tax per ADS. The presentation of these non-GAAP financial measures 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 believes that non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that it includes in income (loss) from operations and net loss. Share-based compensation expenses is a non-cash expense that varies from period to period. As a result, management excludes the items from its internal operating forecasts and models. Management believes that the adjustments for share-based compensation expenses provide investors with a reasonable basis to measure the company's core operating performance, in a more meaningful comparison with the performance of other companies. The Company believes that non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS provide useful information about its operating results, enhances the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by the management in their financial and operational decision-making. The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net loss attributable to ordinary shareholders, or non-GAAP loss per ADS is that it does not reflect all items of income and expense that affect the Company's operations. Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP measures, all of which should be considered when evaluating the Company's performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial measure. Reconciliation of the non-GAAP financial measures to the most comparable U.S. GAAP measures is included at the end of this press release. Exchange Rate Information Statement This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.2672 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of June 30, 2024. Forward-Looking Statements This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "confident" and similar statements. Among other things, the Business Outlook and quotations from management in this announcement, as well as 111's strategic and operational plans, contain forward-looking statements. 111 may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, 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. Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control. Forward-looking statements involve inherent risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited to, uncertainties as to the Company's ability comply with extensive and evolving regulatory requirements, its ability to compete effectively in the evolving PRC general health and wellness market, its ability to manage the growth of its business and expansion plans, its ability to achieve or maintain profitability in the future, its ability to control the risks associated with its pharmaceutical retail and wholesale businesses, and the Company's ability to meet the standards necessary to maintain listing of its ADSs on the Nasdaq Global Market, including its ability to cure any non-compliance with Nasdaq's continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and 111 does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law. About 111, Inc. 111, Inc. (NASDAQ: YI) ("111" or the "Company") is a leading tech-enabled healthcare platform company committed to reshaping the value chain of healthcare industry by digitally empowering the upstream and downstream in China. The Company provides consumers with better access to pharmaceutical products and healthcare services directly through its online retail pharmacy, 1 Pharmacy, and indirectly through its offline virtual pharmacy network. The Company also offers online healthcare services through its internet hospital, 1 Clinic, which provides consumers with cost-effective and convenient online consultation, electronic prescription service, and patient management service. In addition, the Company's online platform, 1 Medicine, serves as a one-stop shop for pharmacies to source a vast selection of pharmaceutical products. With the largest virtual pharmacy network in China, 111 enables offline pharmacies to better serve their customers with cloud-based services. 111 also provides an omni-channel drug commercialization platform to its strategic partners, which includes services such as digital marketing, patient education, data analytics, and pricing monitoring. For more information on 111, please visit: http://ir.111.com.cn/. 111, Inc. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except for share and per share data) As of As of December 31, 2023 June 30, 2024 RMB RMB US$ ASSETS Current Assets: Cash and cash equivalents 603,523 495,454 68,177 Restricted cash 20,025 20,070 2,762 Short-term investments 50,143 100,000 13,760 Accounts receivable, net 536,823 411,303 56,597 Notes Receivable 77,598 72,875 10,028 Inventories 1,419,396 1,367,173 188,129 Prepayments and other current assets 225,823 189,204 26,036 Total current assets 2,933,331 2,656,079 365,489 Property and equipment, net 34,340 27,511 3,786 Intangible assets, net 2,256 1,847 254 Long-term investments 2,000 2,000 275 Other non-current assets 13,310 13,424 1,847 Operating lease right-of-use asset 103,799 88,369 12,160 Total Assets 3,089,036 2,789,230 383,811 LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' DEFICIT Current Liabilities: Short-term borrowings 338,075 189,366 26,058 Accounts payable 1,588,693 1,597,892 219,877 Accrued expense and other current liabilities 818,295 691,445 95,146 Total Current liabilities 2,745,063 2,478,703 341,081 Long-term operating lease liabilities 62,624 56,171 7,729 Other non-current liabilities 5,245 7,623 1,049 Total Liabilities 2,812,932 2,542,497 349,859 MEZZANINE EQUITY Redeemable non-controlling interests 870,825 869,845 119,695 SHAREHOLDERS' DEFICIT Ordinary shares Class A 32 33 5 Ordinary shares Class B 25 25 3 Treasury shares (5,887) (5,887) (810) Additional paid-in capital 3,169,114 3,163,032 435,248 Accumulated deficit (3,819,249) (3,847,044) (529,371) Accumulated other comprehensive income 72,514 73,786 10,153 Total shareholders' deficit (583,451) (616,055) (84,772) Non-controlling interest (11,270) (7,057) (971) Total Deficit (594,721) (623,112) (85,743) Total liabilities, mezzanine equity and deficit 3,089,036 2,789,230 383,811 111, Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands, except for share and per share data) For the three months ended June 30, For the six months ended June 30, 2023 2024 2023 2024 RMB RMB US$ RMB RMB US$ Net Revenues 3,477,497 3,424,370 471,209 7,174,258 6,952,799 956,737 Operating Costs and expenses: Cost of products sold (3,269,610) (3,216,772) (442,643) (6,730,158) (6,536,668) (899,475) Fulfillment expenses (94,950) (88,059) (12,117) (197,600) (176,582) (24,298) Selling and marketing expenses (90,117) (80,410) (11,065) (179,357) (160,770) (22,123) General and administrative expenses (39,079) (17,306) (2,381) (80,396) (36,380) (5,006) Technology expenses (24,541) (18,367) (2,527) (49,857) (36,676) (5,047) Other operating income, net (605) (118) (16) (27) 1,339 184 Total Operating costs and expenses (3,518,902) (3,421,032) (470,749) (7,237,395) (6,945,737) (955,765) (Loss) Income from operations (41,405) 3,338 460 (63,137) 7,062 972 Interest income 2,206 2,075 286 4,155 4,041 556 Interest expense (4,820) (7,275) (1,001) (9,092) (15,257) (2,099) Foreign exchange loss (2,808) (383) (53) (1,174) (602) (83) Other Income, net 1,450 200 28 4,514 77 11 Loss before income taxes (45,377) (2,045) (280) (64,734) (4,679) (643) Income tax expense - (37) (5) - (88) (12) Net Loss (45,377) (2,082) (285) (64,734) (4,767) (655) Net Loss attributable to non-controlling interest 2,122 (1,106) (152) 3,522 (1,279) (176) Net Loss attributable to redeemable non-controlling interest 3,728 441 61 5,276 730 100 Adjustment attributable to redeemable non-controlling interest (17,712) (11,273) (1,551) (33,090) (22,479) (3,093) Net Loss attributable to ordinary shareholders (57,239) (14,020) (1,927) (89,026) (27,795) (3,824) Other comprehensive loss Unrealized gains of available-for-sale securities, 788 (312) (43) 2,923 (346) (48) Realized gains of available-for-sale debt securities (815) 312 43 (2,717) 489 67 Foreign currency translation adjustments 9,037 509 70 5,924 1,129 155 Comprehensive loss (48,229) (13,511) (1,857) (82,896) (26,523) (3,650) Loss per ADS: Basic and diluted (0.68) (0.16) (0.02) (1.06) (0.32) (0.04) Weighted average number of shares used in computation of loss per share Basic and diluted 168,102,392 171,414,144 171,414,144 167,718,135 171,317,558 171,317,558 111, Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the three months ended June 30, For the six months ended June 30, 2023 2024 2023 2024 RMB RMB US$ RMB RMB US$ Net cash (used in) provided by operating activities (164,111) 93,260 12,834 (285,439) 201,698 27,755 Net cash provided by (used in) investing activities 139,938 (79,728) (10,971) 86,750 (49,986) (6,878) Net cash provided by (used in) financing activities 15,281 (104,472) (14,376) 93,778 (259,943) (35,769) Effect of exchange rate changes on cash and cash equivalents, and restricted cash 2,385 (865) (119) 894 207 28 Net decrease in cash and cash equivalents, and restricted cash (6,507) (91,805) (12,632) (104,017) (108,024) (14,864) Cash and cash equivalents, and restricted cash at the beginning of the period 619,281 607,329 83,571 716,791 623,548 85,803 Cash and cash equivalents, and restricted cash at the end of the period 612,774 515,524 70,939 612,774 515,524 70,939 111, Inc. Unaudited Reconciliation of GAAP and Non-GAAP Results (In thousands, except for share and per share data) For the three months ended June 30, For the six months ended June 30, 2023 2024 2023 2024 RMB RMB US$ RMB RMB US$ (Loss) Income from operations (41,405) 3,338 460 (63,137) 7,062 972 Add: Share-based compensation expenses 24,208 5,195 715 48,416 10,366 1,426 Non-GAAP (loss) income from operations (17,197) 8,533 1,175 (14,721) 17,428 2,398 Net Loss (45,377) (2,082) (285) (64,734) (4,767) (655) Add: Share-based compensation expenses, net of tax 24,208 5,195 715 48,416 10,366 1,426 Non-GAAP net (Loss) Income (21,169) 3,113 430 (16,318) 5,599 771 Net Loss attributable to ordinary shareholders (57,239) (14,020) (1,927) (89,026) (27,795) (3,824) Add: Share-based compensation expenses, net of tax 24,208 5,195 715 48,416 10,366 1,426 Non-GAAP net Loss attributable to ordinary shareholders (33,031) (8,825) (1,212) (40,610) (17,429) (2,398) Loss per ADS(6): Basic and diluted (0.68) (0.16) (0.02) (1.06) (0.32) (0.04) Add: Share-based compensation expenses per ADS(6), net of tax 0.30 0.06 0.00 0.58 0.12 0.02 Non-GAAP Loss per ADS(6) (0.38) (0.10) (0.02) (0.48) (0.20) (0.02) (6) Every one ADSs represent two Class A ordinary shares.
SHANGHAI, Aug. 29, 2024 /PRNewswire/ -- Noah Holdings Limited ("Noah" or the "Company") (NYSE: NOAH and HKEX: 6686), a leading and pioneer wealth management service provider offering comprehensive one-stop advisory services on global investment and asset allocation primarily for Mandarin-speaking high-net-worth investors, today announced its unaudited financial results for the second quarter of 2024. SECOND QUARTER 2024 FINANCIAL HIGHLIGHTS Net revenues for the second quarter of 2024 were RMB615.8 million (US$84.7 million), a 34.6% decrease from the corresponding period in 2023, and a 5.2% decrease from the first quarter of 2024，primarily due to a decrease in distribution of insurance products. Net revenues from mainland China for the second quarter of 2024 were RMB337.2 million (US$46.4 million), a 38.5% decrease from the corresponding period in 2023, mainly due to a decrease in distribution of insurance products as well as private secondary products. Net revenues from overseas for the second quarter of 2024 were RMB278.6 million (US$38.3 million), a 29.2% decrease from the corresponding period of 2023, mainly due to a decrease in one-time commissions from insurance products. Net Revenues by segment is as follows: (RMB millions, except percentages) Q2 2023 Q2 2024 YoY Change Wealth management 745.3 415.6 (44.2 %) Asset management 183.4 192.3 4.9 % Other businesses 13.1 7.9 (39.7 %) Total net revenues 941.8 615.8 (34.6 %) Net Revenues by geography is as follows: (RMB millions, except percentages) Q2 2023 Q2 2024 YoY Change Mainland China 548.3 337.2 (38.5 %) Overseas 393.5 278.6 (29.2 %) Total net revenues 941.8 615.8 (34.6 %) Income from operations for the second quarter of 2024 was RMB134.0 million (US$18.4 million), a 61.6% decrease from the corresponding period in 2023, mainly due to the 34.6% decrease in net revenues. Income from operations increased 10.3% sequentially, mainly due to the effective cost control measures implemented in the second quarter of 2024. Income from operations by segment is as follows: (RMB millions, except percentages) Q2 2023 Q2 2024 YoY Change Wealth management 300.2 65.5 (78.2 %) Asset management 80.9 86.5 6.9 % Other businesses (31.7) (18.0) (43.2 %) Total income from operations 349.4 134.0 (61.6 %) Net income attributable to Noah shareholders for the second quarter of 2024 was RMB99.8 million (US$13.7 million), a 68.4% decrease from the corresponding period in 2023, mainly due to the 61.6% decrease in income from operations and a loss from equity in affiliates recorded in the second quarter of 2024. Non-GAAP[1] net income attributable to Noah shareholders for the second quarter of 2024 was RMB106.1 million (US$14.6 million), a 66.1% decrease from the corresponding period in 2023. SECOND QUARTER 2024 OPERATIONAL UPDATES Wealth Management Business Noah offers global investment products and provides value-added services to global Mandarin-speaking high-net-worth investors in its wealth management business. Noah primarily distributes private equity, private secondary, mutual funds and other products denominated in RMB, USD and other currencies. Total number of registered clients as of June 30, 2024, was 459,072, a 2.8% increase from June 30, 2023, and a 0.3% increase from March 31, 2024. Among registered clients as of June 30, 2024, the number of overseas registered clients was 16,786, a 6.7% increase from March 31, 2024, and a 23.0% increase from June 30, 2023. Total number of active clients[2] for the second quarter of 2024 was 8,634, a decrease of 25.2% from the second quarter of 2023 and 16.9% from the first quarter of 2024. Among active clients during the second quarter of 2024, the number of overseas active clients was 3,244, a 62.8% increase from the second quarter of 2023, and an 18.2% increase from the first quarter of 2024. Aggregate value of investment products distributed during the second quarter of 2024 was RMB14.4 billion (US$2.0 billion), a 21.7% decrease from the second quarter of 2023, mainly due to a 29.3% decrease in distribution of mutual fund products. The aggregate value of investment products distributed decreased by 23.7% from the first quarter of 2024, mainly due to the decrease in distribution of mutual fund products. Among the investment products distributed during the second quarter of 2024, Noah distributed RMB7.9 billion (US$1.1 billion) of overseas investment products, a 40.8% increase from the second quarter of 2023, primarily due to an 80.9% increase in distribution of overseas mutual fund products. The aggregate value of investment products distributed, categorized by product type, is as follows: Product type Three months ended June 30, 2023 2024 (RMB in billions, except percentages) Mutual fund products 12.0 65.4 % 8.5 59.0 % Private secondary products 4.3 23.3 % 4.1 28.7 % Private equity products 0.6 3.3 % 1.1 7.7 % Other products[3] 1.5 8.0 % 0.7 4.6 % All products 18.4 100.0 % 14.4 100.0 % The aggregate value of investment products distributed, categorized by geography, is as follows： Type of products in Mainland China Three months ended June 30, 2023 2024 (RMB in billions, except percentages) Mutual fund products 10.1 79.1 % 5.0 77.1 % Private secondary products 1.9 15.2 % 1.2 18.9 % Private equity products 0.1 1.1 % - 0.0 % Other products 0.6 4.6 % 0.3 4.0 % All products in Mainland China 12.8 100.0 % 6.5 100.00 % Type of overseas products Three months ended June 30, 2023 2024 (RMB in billions, except percentages) Mutual fund products 1.9 34.4 % 3.5 44.2 % Private secondary products 2.4 41.7 % 2.9 36.7 % Private equity products 0.8 13.5 % 1.1 13.9 % Other products 0.6 10.4 % 0.4 5.2 % All Overseas products 5.6 100.00 % 7.9 100.00 % Coverage network in mainland China included 15 cities as of June 30, 2024, compared with 63 cities as of June 30, 2023, and 18 cities as of March 31, 2024, as the Company continued to streamline its coverage across mainland China. Aggregate number of overseas relationship managers was 113 as of June 30, 2024, a 24.2% increase from March 31, 2024. Since the Company's relationship managers in mainland China are divided into different teams, each focusing on an independent business unit dedicated to offering clients mutual fund and private secondary products, insurance products, or private equity products, the Company no longer considers it meaningful to disclose an aggregate number of relationship managers in mainland China. Asset Management Business Noah's asset management business is conducted through Gopher Asset Management Co., Ltd. ("Gopher Asset Management"), a leading multi-asset manager in China with global investment capabilities and overseas offices in Hong Kong and the United States. Gopher Asset Management develops and manages assets ranging from private equity, real estate, public securities to multi-strategy investments denominated in RMB, USD and other currencies. Total assets under management as of June 30, 2024, remained relatively stable at RMB154.0 billion (US$21.2 billion), compared with RMB156.9 billion as of June 30, 2023, and RMB153.3 billion as of March 31, 2024. Mainland China assets under management as of June 30, 2024, were RMB114.9 billion (US$15.8billion), compared with RMB122.7 billion as of June 30, 2023, and RMB116.1 billion as of March 31, 2024. Overseas assets under management as of June 30, 2024, were RMB39.1 billion (US$5.4 billion), compared with RM34.2 billion as of June 30, 2023, and RMB37.2 billion as of March 31, 2024. Total assets under management, categorized by investment type, are as follows: Investment type As of March 31, 2024 Growth Allocation/Redemption As ofJune 30, 2024 (RMB billions, except percentages) Private equity 131.8 85.9 % 0.7 (0.5) [4] 133.0 86.4 % Public securities[5] 10.9 7.1 % 2.5 3.0 10.4 6.7 % Real estate 5.7 3.7 % 0.2 0.1 5.8 3.8 % Multi-strategies 4.3 2.9 % - 0.1 4.2 2.7 % Others 0.6 0.4 % - - 0.6 0.4 % All Investments 153.3 100.0 % 3.4 2.7 154.0 100.0 % Total assets under management, categorized by geography, are as follows: Mainland China Investment type As of March 31, 2024 Growth Allocation/ Redemption As ofJune 30, 2024 (RMB billions, except percentages) Private equity 103.5 89.2 % - 0.1 103.4 90.1 % Public securities 6.9 6.0 % - 0.9 6.0 5.2 % Real estate 2.5 2.2 % - 0.1 2.4 2.1 % Multi-strategies 2.6 2.2 % - 0.1 2.5 2.1 % Others 0.6 0.4 % - - 0.6 0.5 % All Investments 116.1 100.0 % - 1.2 114.9 100.0 % Overseas Investment type As of March 31, 2024 Growth Allocation/ Redemption As ofJune 30, 2024 (RMB billions, except percentages) Private equity 28.3 75.7 % 0.7 (0.6) 29.6 75.5 % Public securities 4.0 10.8 % 2.5 2.1 4.4 11.2 % Real estate 3.2 8.6 % 0.2 - 3.4 8.7 % Multi-strategies 1.7 4.9 % - - 1.7 4.6 % All Investments 37.2 100.0 % 3.4 1.5 39.1 100.0 % [1] Noah's Non-GAAP financial measures are its corresponding GAAP financial measures excluding the effects of all forms of share-based compensation, non-cash settlement expenses and net of relevant tax impact, if any. See "Reconciliation of GAAP to Non-GAAP Results" at the end of this press release. [2] "Active clients" for a given period refers to registered clients who purchase investment products distributed or receive services provided by the Company during that given period. [3] "Other products" refers to other investment products, which includes insurance products, multi-strategies products and others. [4] The asset allocation/redemption of overseas investment products includes the fluctuation result of foreign currencies exchange rate. [5] The asset allocation/redemption of public securities also includes market appreciation or depreciation. Other Businesses Noah's other businesses mainly include providing clients with additional comprehensive services and investment products. Operating results for other businesses also include headquarter rental income, depreciation and amortization, as well as operating expenses. Ms. Jingbo Wang, co-founder and chairwoman of Noah, commented, "The pace of our overseas expansion is gaining momentum as client demand for global asset allocation strengthens, with overseas revenue contribution increasing to 46.3% in the first half of 2024. While sluggish domestic markets continued to impact our business during the quarter, our investments in expanding our global product portfolio and distribution networks are starting to yield results, with overseas assets under management increasing 14.3% year-over-year. We have also raised US$338 million for overseas private equity, private credit, and other primary market funds year-to-date, a significant 40.2% year-over-year increase. Additionally, our team of overseas relationship managers directly supporting this expansion grew 101.8% year-over-year and 24.2% sequentially. While we are still in the relatively early stages of our overseas expansion, these results reflect the direction we are headed in going forward." "Domestically, we are focused on stabilizing operations by streamlining our branch network to reduce overhead costs and adjusting our client service model to comply with evolving regulatory requirements by separating relationship and business development managers into different independent business units. While these initiatives may temporarily impact business activity over the next few quarters, they will ensure our ability to effectively and compliantly serve clients with a comprehensive portfolio of products in the long term." "In the interim, we are rewarding shareholders with enhanced capital returns for their long-term support with a US$50 million share repurchase program. This share repurchase program, along with the full year 2023 final and special dividend payout we just completed earlier this month, reflects our unwavering commitment to prioritizing shareholder interests and delivering sustained returns. While China's wealth management industry is navigating a challenging period and undergoing a transition, we remain confident in our unique advantages stemming from our deep understanding of Mandarin-speaking high-net-worth individuals' (HNWI) needs and our ability to deliver products and services to this still-growing client base. We are one of a few independent firms that maintains access, through years of investor education, to a large group of qualified individual investors who continue to seek professional services. As such, we believe that our stock is deeply undervalued and does not reflect our growth prospects, robust balance sheet and cash reserves, or the special bond we have formed with Mandarin-speaking HNWIs globally. We value both our long-term and new shareholders and are committed to sharing our success with them through more proactive capital allocation policies moving forward." SECOND QUARTER 2024 FINANCIAL RESULTS Net Revenues Net revenues for the second quarter of 2024 were RMB615.8 million (US$84.7 million), a 34.6% decrease from the corresponding period in 2023, primarily due to a decrease in distribution of insurance products. Wealth Management Business Net revenues from one-time commissions for the second quarter of 2024 were RMB136.4 million (US$18.8 million), a 66.2% decrease from the corresponding period in 2023, primarily due to a decrease in distribution of insurance products. Net revenues from recurring service fees for the second quarter of 2024 were RMB235.5 million (US$32.4 million), a 12.5% decrease from the corresponding period in 2023, primarily due to a decrease in recurring service fees from private secondary products associated with the decrease in assets under management in Mainland China. Net revenues from performance-based income for the second quarter of 2024 were RMB4.5 million (US$0.6 million), a 79.0% decrease from the corresponding period of 2023, primarily due to a decrease in performance-based income from offshore private equity products. Net revenues from other service fees for the second quarter of 2024 were RMB39.2 million (US$5.4 million), a 22.7% decrease from the corresponding period in 2023, primarily due to a decrease in the value-added services Noah offers to its high-net-worth clients. Asset Management Business Net revenues from recurring service fees for the second quarter of 2024 were RMB168.9 million (US$23.2 million), a 4.5% decrease from the corresponding period in 2023, primarily due to a decrease in recurring service fees generated from RMB private equity products. Net revenues from performance-based income for the second quarter of 2024 were RMB23.4 million (US$3.2 million), compared with RMB6.5 million in the corresponding period of 2023. The increase was primarily due to an increase in performance-based income realized from private equity products. Other Businesses Net revenues for the second quarter of 2024 were RMB7.9 million (US$1.1 million), compared with RMB13.1 million for the corresponding period in 2023. Operating Costs and Expenses Operating costs and expenses for the second quarter of 2024 were RMB481.8 million (US$66.3 million), an 18.7% decrease from the corresponding period in 2023. Operating costs and expenses primarily consisted of 1) compensation and benefits of RMB297.0 million (US$40.9 million); 2) selling expenses of RMB61.9 million (US$8.5 million); 3) general and administrative expenses of RMB79.9 million (US$11.0 million); 4) reversal of credit losses of RMB0.3 million; and 5) other operating expenses of RMB46.0 million (US$6.3 million). Operating costs and expenses for the wealth management business for the second quarter of 2024 were RMB350.1 million (US$48.2 million), a 21.3% decrease from the corresponding period in 2023, primarily due to decreases of 22.6% in compensation and benefits and 49.0% in selling expenses. Operating costs and expenses for the asset management business for the second quarter of 2024 were RMB105.8 million (US$14.6 million), a 3.2% increase from the corresponding period in 2023, primarily due to an increase in other operating expenses which was partially offset by a decrease in compensation and benefits and selling expenses. Operating costs and expenses for other businesses for the second quarter of 2024 were RMB25.9 million (US$3.6 million), compared with RMB44.8 million from the corresponding period in 2023. Operating Margin Operating margin for the second quarter of 2024 was 21.8%, a decrease from 37.1% in the corresponding period of 2023. Operating margin for the wealth management business for the second quarter of 2024 was 15.8%, compared with 40.3% for the corresponding period in 2023. Operating margin for the asset management business for the second quarter of 2024 was 45.0%, compared with 44.1% for the corresponding period in 2023. Loss from operation for other businesses for the second quarter of 2024 was RMB18.0 million (US$2.5 million), compared with an operating loss of RMB31.7 million for the corresponding period in 2023. Interest Income Interest income for the second quarter of 2024 was RMB42.6 million (US$5.9 million), a 7.3% increase from the corresponding period in 2023, mainly due to an increase in US dollar cash balances. Investment Income Investment income for the second quarter of 2024 was RMB10.4 million (US$1.4 million), compared with investment loss RMB4.0 million for the corresponding period in 2023. Income Tax Expenses Income tax expenses for the second quarter of 2024 were RMB40.3 million (US$5.5 million), a 55.4% decrease from the corresponding period in 2023, primarily due to less taxable income compared with the second quarter of 2023. Net Income Net Income Net income for the second quarter of 2024 was RMB103.7 million (US$14.3 million), a 66.8% decrease from the corresponding period in 2023. Net margin for the second quarter of 2024 was 16.8%, a decrease from 33.2% in the corresponding period of 2023. Net income attributable to Noah shareholders for the second quarter of 2024 was RMB99.8 million (US$13.7 million), a 68.4% decrease from the corresponding period in 2023. Net margin attributable to Noah shareholders for the second quarter of 2024 was 16.2%, a decrease from 33.5% in the corresponding period of 2023. Net income attributable to Noah shareholders per basic and diluted ADS for the second quarter of 2024 was RMB1.42 (US$0.20) and RMB1.42 (US$0.20), respectively, a decrease from RMB4.54 and RMB4.54 respectively, for the corresponding period in 2023. Non-GAAP Net Income Attributable to Noah Shareholders Non-GAAP net income attributable to Noah shareholders for the second quarter of 2024 was RMB106.1 million (US$14.6 million), a 66.1% decrease from the corresponding period in 2023. Non-GAAP net margin attributable to Noah shareholders for the second quarter of 2024 was 17.2%, compared with 33.2% for the corresponding period in 2023. Non-GAAP net income attributable to Noah shareholders per diluted ADS for the second quarter of 2024 was RMB1.51 (US$0.21), down from RMB4.51 for the corresponding period in 2023. Balance Sheet and Cash Flow As of June 30, 2024, the Company had RMB4,604.9 million (US$633.7 million) in cash and cash equivalents, compared with RMB 5,129.4 million as of March 31, 2024. Net cash inflow from the Company's operating activities during the second quarter of 2024 was RMB49.6 million (US$6.8 million), mainly due to cash inflow generated from net income from operations. Net cash outflow from the Company's investing activities during the second quarter of 2024 was RMB548.2 million (US$75.4 million), mainly due to cash used for short-term investments. Net cash outflow from the Company's financing activities was RMB44.6 million (US$6.1 million) in the second quarter of 2024, compared to net cash inflow of RMB87.0 million in the corresponding period in 2023. SHARE REPURCHASE PROGRAM As announced earlier today, as part of its commitment to enhancing shareholder returns, the board of directors of the Company ("the Board") authorized a share repurchase program under which the Company may repurchase up to US$50 million of its American depositary shares or ordinary shares, effective immediately. The authorized term for carrying out this share repurchase program is two years. The Company announced in November 2023 that a new capital management and shareholder return policy (the "Policy") had been adopted, pursuant to which up to 50% the Company's non-GAAP net income attributable to shareholders of the preceding financial year will be allocated to a Corporate Actions Budget which will serve various purposes, including dividend distribution and share repurchases. The share repurchase program announced today does not form a part of the Corporate Actions Budget under the Policy. The Corporate Actions Budget based on the Company's financial performance in 2024 is expected to be determined and announced alongside the Company's earnings results for the fourth quarter and full year ending on December 31, 2024. The share repurchases under the repurchase program announced today will be carried out from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades or through other legally permissible means, depending on market conditions and will be implemented in accordance with applicable rules and regulations. The Board will review the share repurchase program periodically and may authorize adjustments of its terms and size. The Company expects to fund repurchases made under this program from its existing cash balance and cash generated from operations. CONFERENCE CALL Senior management will host a combined English and Chinese language conference call to discuss its unaudited financial results and recent business activities for the second quarter and six months ended June 30, 2024. The conference call may be accessed with the following details: Dial-in details: Conference Title: Noah Second Quarter and Half Year 2024 Earnings Conference Call Date/Time: Wednesday, August 28, 2024, at 8:00 p.m., U.S. Eastern Time Thursday, August 29, 2024, at 8:00 a.m., Hong Kong Time Dial in: - Hong Kong Toll Free 800-963-976 - United States Toll Free +1-888-317-6003 - Mainland China Toll Free 4001-206-115 - International +1-412-317-6061 Participant Password: 3101709 A telephone replay will be available starting approximately one hour after the end of the conference until September 4, 2024 at 1-877-344-7529 (US Toll Free) and 1-412-317-0088 (International Toll) with the access code 3826921. A live and archived webcast of the conference call will be available at the Company's investor relations website under the "News & Events" section at http://ir.noahgroup.com. DISCUSSION OF NON-GAAP MEASURES In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company's earnings release contains non-GAAP financial measures excluding the effects of all forms of share-based compensation, non-cash settlement expenses and net of tax impact, if any. See "Reconciliation of GAAP to Non-GAAP Results" at the end of this press release. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for financial measures prepared in accordance with U.S. GAAP. The financial results reported in accordance with U.S. GAAP and reconciliation of GAAP to non-GAAP results should be carefully evaluated. The non-GAAP financial measures used by the Company may be prepared differently from and, therefore, may not be comparable to similarly titled measures used by other companies. When evaluating the Company's operating performance in the periods presented, management reviewed the foregoing non-GAAP net income attributable to Noah shareholders and per diluted ADS and non-GAAP net margin attributable to Noah shareholders to supplement U.S. GAAP financial data. As such, the Company's management believes that the presentation of the non-GAAP financial measures provides important supplemental information to investors regarding financial and business trends relating to its results of operations in a manner consistent with that used by management. ABOUT NOAH HOLDINGS LIMITED Noah Holdings Limited (NYSE: NOAH and HKEX: 6686) is a leading and pioneer wealth management service provider offering comprehensive one-stop advisory services on global investment and asset allocation primarily for mandarin-speaking high-net-worth investors. Noah's American depositary shares, or ADSs, are listed on the New York Stock Exchange under the symbol "NOAH", and its shares are listed on the main board of the Hong Kong Stock Exchange under the stock code "6686." One ADS represents five ordinary shares, par value $0.00005 per share. In the first half of 2024, Noah distributed RMB33.3 billion (US$4.6 billion) of investment products. As of June 30, 2024, through Gopher Asset Management, Noah managed assets totaling RMB154.0 billion (US$21.2 billion). Noah's wealth management business primarily distributes private equity, public securities and insurance products denominated in RMB and other currencies. Noah's network covers major cities in mainland China, as well as Hong Kong (China), New York, Silicon Valley, Singapore, and Los Angeles. The Company's wealth management business had 459,072 registered clients as of June 30, 2024. Through Gopher Asset Management, Noah manages private equity, public securities, real estate, multi-strategy and other investments denominated in RMB and other currencies. Noah also operates other businesses. For more information, please visit Noah at ir.noahgroup.com. FOREIGN CURRENCY TRANSLATION In this announcement, the unaudited financial results for the second quarter of 2024 ended June 30, 2024 are stated in RMB. This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB7.2672 to US$1.00, the effective noon buying rate for June 28, 2024 as set forth in the H.10 statistical release of the Federal Reserve Board. SAFE HARBOR STATEMENT 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," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Noah may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in announcements, circulars or other publications made on the website of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"), 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 statements about Noah's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. These statements include, but are not limited to, estimates regarding the sufficiency of Noah's cash and cash equivalents and liquidity risk. A number of factors could cause Noah's actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: its goals and strategies; its future business development, financial condition and results of operations; the expected growth of the wealth management and asset management market in China and internationally; its expectations regarding demand for and market acceptance of the products it distributes; investment risks associated with investment products distributed to Noah's investors, including the risk of default by counterparties or loss of value due to market or business conditions or misconduct by counterparties; its expectations regarding keeping and strengthening its relationships with key clients; relevant government policies and regulations relating to its industries; its ability to attract and retain qualified employees; its ability to stay abreast of market trends and technological advances; its plans to invest in research and development to enhance its product choices and service offerings; competition in its industries in China and internationally; general economic and business conditions in China; and its ability to effectively protect its intellectual property rights and not to infringe on the intellectual property rights of others. Further information regarding these and other risks is included in Noah's filings with the U.S. Securities and Exchange Commission and the Hong Kong Stock Exchange. All information provided in this press release and in the attachments is as of the date of this press release, and Noah does not undertake any obligation to update any such information, including forward-looking statements, as a result of new information, future events or otherwise, except as required under the applicable law. -- FINANCIAL AND OPERATIONAL TABLES FOLLOW -- Noah Holdings Limited Condensed Consolidated Balance Sheets (unaudited) As of March 31, June 30, June 30, 2024 2024 2024 RMB'000 RMB'000 USD'000 Assets Current assets: Cash and cash equivalents 5,129,437 4,604,946 633,662 Restricted cash 2,276 4,574 629 Short-term investments 747,084 1,287,400 177,152 Accounts receivable, net 435,114 429,417 59,090 Amounts due from related parties 508,236 444,937 61,225 Loans receivable, net 222,516 207,122 28,501 Other current assets 178,644 226,332 31,145 Total current assets 7,223,307 7,204,728 991,404 Long-term investments, net 803,598 742,322 102,147 Investment in affiliates 1,522,996 1,445,356 198,888 Property and equipment, net 2,450,271 2,416,072 332,462 Operating lease right-of-use assets, net 125,475 102,301 14,077 Deferred tax assets 427,680 400,401 55,097 Other non-current assets 189,794 155,825 21,442 Total Assets 12,743,121 12,467,005 1,715,517 Liabilities and Equity Current liabilities: Accrued payroll and welfare expenses 585,886 346,543 47,686 Income tax payable 98,998 76,318 10,502 Deferred revenues 88,182 73,857 10,163 Dividend payable - 1,018,000 140,082 Contingent liabilities 490,989 475,777 65,469 Other current liabilities 490,529 420,527 57,866 Total current liabilities 1,754,584 2,411,022 331,768 Deferred tax liabilities 260,976 245,609 33,797 Operating lease liabilities, non-current 70,335 55,043 7,574 Other non-current liabilities 25,564 24,980 3,437 Total Liabilities 2,111,459 2,736,654 376,576 Equity 10,631,662 9,730,351 1,338,941 Total Liabilities and Equity 12,743,121 12,467,005 1,715,517 Noah Holdings Limited Condensed Consolidated Income Statements (In RMB'000, except for ADS data, per ADS data and percentages) (unaudited) Three months ended June 30, June 30, June 30, Change 2023 2024 2024 Revenues: RMB'000 RMB'000 USD'000 Revenues from others: One-time commissions 399,521 127,894 17,599 (68.0 %) Recurring service fees 176,355 151,469 20,843 (14.1 %) Performance-based income 4,328 4,515 621 4.3 % Other service fees 64,114 49,950 6,873 (22.1 %) Total revenues from others 644,318 333,828 45,936 (48.2 %) Revenues from funds Gopher manages: One-time commissions 5,982 9,129 1,256 52.6 % Recurring service fees 271,033 254,205 34,980 (6.2 %) Performance-based income 23,635 23,413 3,222 (0.9 %) Total revenues from funds Gopher manages 300,650 286,747 39,458 (4.6 %) Total revenues 944,968 620,575 85,394 (34.3 %) Less: VAT related surcharges (3,211) (4,721) (650) 47.0 % Net revenues 941,757 615,854 84,744 (34.6 %) Operating costs and expenses: Compensation and benefits Relationship managers (180,304) (131,505) (18,096) (27.1 %) Others (204,798) (165,505) (22,775) (19.2 %) Total compensation and benefits (385,102) (297,010) (40,871) (22.9 %) Selling expenses (112,003) (61,890) (8,516) (44.7 %) General and administrative expenses (63,983) (79,902) (10,995) 24.9 % (Provision for) reversal of credit losses (220) 331 46 N.A. Other operating expenses (37,078) (46,007) (6,331) 24.1 % Government subsidies 6,048 2,639 363 (56.4 %) Total operating costs and expenses (592,338) (481,839) (66,304) (18.7 %) Income from operations 349,419 134,015 18,440 (61.6 %) Other income: Interest income 39,684 42,587 5,860 7.3 % Investment (loss) income (3,976) 10,400 1,431 N.A. Settlement reversal - 11,476 1,579 N.A. Other income (expenses) 15,821 (2,828) (389) N.A. Total other income 51,529 61,635 8,481 19.6 % Income before taxes and income fromequity in affiliates 400,948 195,650 26,921 (51.2 %) Income tax expense (90,213) (40,257) (5,540) (55.4 %) Income (loss) from equity in affiliates 1,561 (51,700) (7,114) N.A. Net income 312,296 103,693 14,267 (66.8 %) Less: net (loss) income attributable to non-controlling interests (3,132) 3,906 537 N.A. Net income attributable to Noahshareholders 315,428 99,787 13,730 (68.4 %) Income per ADS, basic 4.54 1.42 0.20 (68.7 %) Income per ADS, diluted 4.54 1.42 0.20 (68.7 %) Margin analysis: Operating margin 37.1 % 21.8 % 21.8 % Net margin 33.2 % 16.8 % 16.8 % Weighted average ADS equivalent[1]: Basic 69,469,110 70,229,503 70,229,503 Diluted 69,492,786 70,429,388 70,429,388 ADS equivalent outstanding at end of period 63,137,912 65,806,082 65,806,082 [1] Assumes all outstanding ordinary shares are represented by ADSs. Five ordinary share represents one ADSs. Noah Holdings Limited Condensed Consolidated Income Statements (In RMB'000, except for USD data, per ADS data and percentages) (unaudited) Six months ended June 30, June 30, June 30, Change 2023 2024 2024 Revenues: RMB'000 RMB'000 USD'000 Revenues from others: One-time commissions 570,092 313,149 43,091 (45.1 %) Recurring service fees 369,063 306,634 42,194 (16.9 %) Performance-based income 7,758 10,043 1,382 29.5 % Other service fees 136,980 84,910 11,684 (38.0 %) Total revenues from others 1,083,893 714,736 98,351 (34.1 %) Revenues from funds Gopher manages: One-time commissions 11,878 10,956 1,508 (7.8 %) Recurring service fees 554,505 516,894 71,127 (6.8 %) Performance-based income 103,960 32,257 4,439 (69.0 %) Total revenues from funds Gopher manages 670,343 560,107 77,074 (16.4 %) Total revenues 1,754,236 1,274,843 175,425 (27.3 %) Less: VAT related surcharges (9,006) (9,454) (1,301) 5.0 % Net revenues 1,745,230 1,265,389 174,124 (27.5 %) Operating costs and expenses: Compensation and benefits Relationship managers (329,039) (275,800) (37,951) (16.2 %) Others (426,169) (409,995) (56,417) (3.8 %) Total compensation and benefits (755,208) (685,795) (94,368) (9.2 %) Selling expenses (208,672) (124,222) (17,094) (40.5 %) General and administrative expenses (109,683) (151,018) (20,781) 37.7 % Reversal of credit losses 5,478 428 59 (92.2 %) Other operating expenses (67,875) (63,153) (8,690) (7.0 %) Government subsidies 19,032 13,872 1,909 (27.1 %) Total operating costs and expenses (1,116,928) (1,009,888) (138,965) (9.6 %) Income from operations 628,302 255,501 35,159 (59.3 %) Other income: Interest income 74,072 88,772 12,215 19.8 % Investment (loss) income (17,559) 15,585 2,145 N.A. Settlement reversal - 11,476 1,579 N.A. Other income 25,379 1,107 152 (95.6 %) Total other income 81,892 116,940 16,091 42.8 % Income before taxes andincome from equity in affiliates 710,194 372,441 51,250 (47.6 %) Income tax expense (159,793) (82,943) (11,413) (48.1 %) Income (loss) from equity in affiliates 5,230 (53,942) (7,423) N.A. Net income 555,631 235,556 32,414 (57.6 %) Less: net (loss) income attributable to non-controllinginterests (4,007) 4,278 589 N.A. Net income attributable to Noah shareholders 559,638 231,278 31,825 (58.7 %) Income per ADS, basic 8.06 3.30 0.45 (59.1 %) Income per ADS, diluted 8.05 3.30 0.45 (59.0 %) Margin analysis: Operating margin 36.0 % 20.2 % 20.2 % Net margin 31.8 % 18.6 % 18.6 % Weighted average ADS equivalent[1]: Basic 69,468,036 70,036,724 70,036,724 Diluted 69,498,956 70,163,305 70,163,305 ADS equivalent outstanding atend of period 63,137,912 65,806,082 65,806,082 [1] Assumes all outstanding ordinary shares are represented by ADSs. Five ordinary share represents one ADSs. Noah Holdings Limited Condensed Comprehensive Income Statements (unaudited) Three months ended June 30, June 30, June 30, Change 2023 2024 2024 RMB'000 RMB'000 USD'000 Net income 312,296 103,693 14,267 (66.8 %) Other comprehensive income, net of tax: Foreign currency translation adjustments 140,753 29,283 4,029 (79.2 %) Comprehensive income 453,049 132,976 18,296 (70.6 %) Less: Comprehensive (loss) income attributable to non-controlling interests (3,269) 3,510 483 N.A. Comprehensive income attributable to Noah shareholders 456,318 129,466 17,813 (71.6 %) Noah Holdings Limited Condensed Comprehensive Income Statements (unaudited) Six months ended June 30, June 30, June 30, Change 2023 2024 2024 RMB'000 RMB'000 USD'000 Net income 555,631 235,556 32,414 (57.6 %) Other comprehensive income, net of tax: Foreign currency translation adjustments 123,918 82,683 11,378 (33.3%). Comprehensive income 679,549 318,239 43,792 (53.2 %) Less: Comprehensive (loss) incomeattributable to non-controlling interests (4,189) 3,018 415 N.A. Comprehensive income attributable toNoah shareholders 683,738 315,221 43,377 (53.9 %) Noah Holdings Limited Supplemental Information (unaudited) As of June 30, 2023 June 30, 2024 Change Number of registered clients 446,557 459,072 2.8 % Three months ended June 30, 2023 June 30, 2024 Change (in millions of RMB, except number of active clients and percentages) Number of active clients 11,548 8,634 (25.2 %) Transaction value: Private equity products 618 1,103 78.5 % Private secondary products 4,293 4,137 (3.6 %) Mutual fund products 12,031 8,501 (29.3 %) Other products 1,465 676 (53.9 %) Total transaction value 18,407 14,417 (21.7 %) Noah Holdings Limited Segment Condensed Income Statements (unaudited) Three months ended June 30, 2024 Wealth ManagementBusiness Asset ManagementBusiness Other Businesses Total RMB'000 RMB'000 RMB'000 RMB'000 Revenues: Revenues from others One-time commissions 127,894 - - 127,894 Recurring service fees 151,469 - - 151,469 Performance-based income 4,515 - - 4,515 Other service fees 39,382 - 10,568 49,950 Total revenues from others 323,260 - 10,568 333,828 Revenues from funds Gopher manages One-time commissions 9,119 10 - 9,129 Recurring service fees 85,165 169,040 - 254,205 Performance-based income - 23,413 - 23,413 Total revenues from funds Gopher manages 94,284 192,463 - 286,747 Total revenues 417,544 192,463 10,568 620,575 Less: VAT related surcharges (1,918) (162) (2,641) (4,721) Net revenues 415,626 192,301 7,927 615,854 Operating costs and expenses: Compensation and benefits Relationship managers (124,857) (6,648) - (131,505) Others (114,162) (48,285) (3,058) (165,505) Total compensation and benefits (239,019) (54,933) (3,058) (297,010) Selling expenses (43,303) (12,411) (6,176) (61,890) General and administrative expenses (53,575) (16,356) (9,971) (79,902) Reversal of credit losses 60 78 193 331 Other operating expenses (16,517) (22,487) (7,003) (46,007) Government subsidies 2,221 343 75 2,639 Total operating costs and expenses (350,133) (105,766) (25,940) (481,839) Income (loss) from operations 65,493 86,535 (18,013) 134,015 Noah Holdings Limited Segment Condensed Income Statements (unaudited) Three months ended June 30, 2023 Wealth ManagementBusiness Asset ManagementBusiness Other Businesses Total RMB'000 RMB'000 RMB'000 RMB'000 Revenues: Revenues from others One-time commissions 399,521 - - 399,521 Recurring service fees 176,355 - - 176,355 Performance-based income 4,328 - - 4,328 Other service fees 50,878 - 13,236 64,114 Total revenues from others 631,082 - 13,236 644,318 Revenues from funds Gopher manages One-time commissions 5,920 62 - 5,982 Recurring service fees 93,914 177,119 - 271,033 Performance-based income 17,115 6,520 - 23,635 Total revenues from funds Gopher manages 116,949 183,701 - 300,650 Total revenues 748,031 183,701 13,236 944,968 Less: VAT related surcharges (2,755) (312) (144) (3,211) Net revenues 745,276 183,389 13,092 941,757 Operating costs and expenses: Compensation and benefits Relationship managers (175,446) (4,858) - (180,304) Others (133,409) (63,949) (7,440) (204,798) Total compensation and benefits (308,855) (68,807) (7,440) (385,102) Selling expenses (84,883) (20,839) (6,281) (112,003) General and administrative expenses (47,431) (11,721) (4,831) (63,983) (Provision for) reversal of credit losses (294) 74 - (220) Other operating expenses (9,637) (1,230) (26,211) (37,078) Government subsidies 6,002 46 - 6,048 Total operating costs and expenses (445,098) (102,477) (44,763) (592,338) Income (loss) from operations 300,178 80,912 (31,671) 349,419 Noah Holdings Limited Supplement Revenue Information by Geography (unaudited) Three months ended June 30, 2024 Wealth ManagementBusiness Asset ManagementBusiness Other Businesses Total RMB'000 RMB'000 RMB'000 RMB'000 Revenues: Mainland China 218,785 112,596 10,568 341,949 Overseas 198,759 79,867 - 278,626 Total revenues 417,544 192,463 10,568 620,575 Three months ended June 30, 2023 Wealth ManagementBusiness Asset ManagementBusiness Other Businesses Total RMB'000 RMB'000 RMB'000 RMB'000 Revenues: Mainland China 419,220 118,972 13,236 551,428 Overseas 328,811 64,729 - 393,540 Total revenues 748,031 183,701 13,236 944,968 Noah Holdings Limited Supplement Revenue Information by Product Types (unaudited) Three months ended June 30, 2023 June 30, 2024 Change (in thousands of RMB, except percentages) Mainland China: Public securities products [1] 148,702 117,740 (20.8 %) Private equity products 209,505 198,208 (5.4 %) Insurance products 171,543 11,753 (93.1 %) Others 21,678 14,248 (34.3 %) Subtotal 551,428 341,949 (38.0 %) Overseas: Investment products [2] 136,381 136,519 0.1 % Insurance products 212,226 100,582 (52.6 %) Online business [3] 2,251 7,246 221.9 % Others 42,682 34,279 (19.7 %) Subtotal 393,540 278,626 (29.2 %) Total revenue 944,968 620,575 (34.3 %) [1] Includes mutual funds and private secondary products. [2] Includes non-money market mutual fund products, discretionary products, private secondary products, private equity products, real estate products and private credit products. [3] Includes money market mutual fund products, securities brokerage business. Noah Holdings Limited Supplement Information of Overseas Business (unaudited) Three months ended June 30, 2023 June 30, 2024 Change Net Revenues from Overseas (RMB, million) 393.5 278.6 (29.2 %) Number of Overseas Registered Clients 13,650 16,786 23.0 % Number of Overseas Active Clients 1,993 3,244 62.8 % Transaction Value of Overseas Investment Products (RMB, billion) 5.6 7.9 40.8 % Number of Overseas Relationship Managers 56 113 101.8 % Overseas Assets Under Management (RMB, billion) 34.2 39.1 14.3 % Noah Holdings Limited Reconciliation of GAAP to Non-GAAP Results (In RMB, except for per ADS data and percentages) (unaudited) Three months ended June 30, June 30, Change 2023 2024 RMB'000 RMB'000 Net income attributable to Noah shareholders 315,428 99,787 (68.4 %) Adjustment for share-based compensation (3,055) 21,880 N.A. Add: settlement reversal - (11,476) N.A. Less: tax effect of adjustments (740) 4,139 N.A. Adjusted net income attributable to Noah shareholders (non-GAAP) 313,113 106,052 (66.1 %) Net margin attributable to Noah shareholders 33.5 % 16.2 % Non-GAAP net margin attributable to Noah shareholders 33.2 % 17.2 % Net income attributable to Noah shareholders per ADS, diluted 4.54 1.42 (68.7 %) Non-GAAP net income attributable to Noah shareholders per ADS, diluted 4.51 1.51 (66.5 %) Noah Holdings Limited Reconciliation of GAAP to Non-GAAP Results (In RMB, except for per ADS data and percentages) (unaudited) Six months ended June 30, June 30, Change 2023 2024 RMB'000 RMB'000 Net income attributable to Noah shareholders 559,638 231,278 (58.7 %) Adjustment for share-based compensation (9,244) 58,479 N.A. Add: settlement reversal - (11,476) N.A. Less: tax effect of adjustments (2,239) 11,061 N.A. Adjusted net income attributable to Noah shareholders (non-GAAP) 552,633 267,220 (51.6 %) Net margin attributable to Noah shareholders 32.1 % 18.3 % Non-GAAP net margin attributable to Noah shareholders 31.7 % 21.1 % Net income attributable to Noah shareholders per ADS, diluted 8.05 3.30 (59.0 %) Non-GAAP net income attributable to Noah shareholders per ADS, diluted 7.95 3.81 (52.1 %)
SHANGHAI, Aug. 28, 2024 /PRNewswire/ -- Everest Medicines (HKEX 1952.HK, "Everest", or the "Company"), a biopharmaceutical company focused on the development, manufacturing and commercialization of innovative medicines and vaccines, today announced its interim results for the first half of 2024 along with a corporate update. "Our total revenue for the first half of 2024 reached RMB 301.5 million, a significant growth of 158% compared to the second half of 2023, while operating expenses as a percentage of revenue[1] declined by 249%, reflecting significant improvement on operating efficiency," commented Rogers Yongqing Luo, CEO of Everest Medicines. "Notably, our non-IFRS loss narrowed by 35%, and our gross margin excluding non-cash items was 83%. For the first time in Company history, we have achieved commercial level profitability[2]. Our cash balance of RMB1.93 billion remains strong and provides significant flexibility to fund the continued growth of our business. In the first half of 2024, we accomplished multiple commercialization milestones. NEFECON®, our lead product in the renal portfolio and the first-in-disease treatment for adults with primary IgAN, was commercially launched in mainland China and Singapore, and approved in Hong Kong. XERAVA®, our first commercialized product in China and a first-in-class fluorocycline antibiotic, continues to show robust sales growth. In the autoimmune disease space, our lead product etrasimod was approved in Macau." "We will continue to drive revenue growth through our dual-engine strategy. First, we seek to license in products that can leverage the current commercial platform to maximize synergies, and continuously boost revenue, operational efficiency and profits through our efficient and focused commercialization model. We believe this will lead to stable and healthy revenue growth. Second, we look to unlock partnering and value creation opportunities with our mRNA discovery pipeline and our products with global rights . We recently announced the launch of the first-in-human Investigator-Initiated Clinical Trial (IIT) for EVM16, a personalized mRNA cancer vaccine program. We also anticipate submitting investigational new drug applications in the United States and China in 2025 for EVM14, a Tumor-Associated Antigens (TAA) cancer vaccine program. In the second half of 2024, we intend to continue to expand our market presence, revenue base and operational efficiency, by continuing to carry out our efficient and focused commercialization model, with "improvement, integration, and transformation" as our motto. We will continue to grow NEFECON® sales and actively engage in China's National Reimbursement Drug List (NRDL) negotiations to enhance affordability and accessibility. By deepening penetration at our core hospitals and ramping up CSO collaborations, we aim to boost XERAVA® sales. Finally, we expect to launch etrasimod in Macau and access patients in China through preferential policies in the Greater Bay Area, and therefore we expect to have three commercialized products by the end of 2024. We maintain our revenue guidance of RMB 700 million for this year and remain confident in achieving our goal of cash flow breakeven by the end of 2025," Mr. Luo concluded. Recent Key Product Highlights and Anticipated Milestones RENAL PRODUCTS PORTFOLIO NEFECON® - In March 2024, Singapore Health Sciences Authority approved NEFEGAN® for the treatment of primary IgAN in adults at risk of disease progression. NEFEGAN®, known in other Everest's territories as NEFECON®, was the first ever treatment for IgAN fully approved by the U.S. Food and Drug Administration, and Singapore marks the third region in Everest's territories that received New Drug Application ("NDA") approval after Macau and mainland China. The product has been launched in Singapore following its approval. - In March 2024, our partner Calliditas Therapeutics AB ("Calliditas") announced that the FDA has granted an orphan drug exclusivity period of seven years for TARPEYO® (the U.S. trade name for NEFECON®), expiring in December 2030 based on when the company obtained full approval with a new indication for this drug product. - In April 2024, our partner Calliditas announced additional data analyses from the 2-year Phase 3 NeflgArd trial evaluating NEFECON® in patients with IgAN were presented at the ISN World Congress of Nephrology. The data showed the treatment effect of NEFECON® on the risk of kidney function decline was consistent regardless of baseline UPCR and there were no meaningful differences in any quality of life ("QoL") domains between NEFECON® and placebo groups after 9 months of treatment. - In April 2024, our partner Calliditas announced positive results of the global Open Label Extension ("OLE") study to the Phase 3 NefIgArd study. The OLE study was designed to provide 9 months of treatment with NEFECON® for all patients who completed the NefIgArd study and who at that time had > 1g/g of proteinuria over 24h and>30 ml/min of estimated glomerular filtration rate ("eGFR"). Topline data from the OLE study showed that the treatment response was consistent with the NefIgArd study's findings regarding the endpoints of UPCR and eGFR at 9 months across all patients, irrespective of whether they had previously been treated with NEFECON® or with placebo. The safety data after 9 months of treatment or retreatment with NEFECON® in patients who completed the NefIgArd study were consistent with previously reported safety data. - In April 2024, the Hong Kong Department of Health approved NEFECON® for the treatment of primary IgAN in adults at risk of disease progression. Hong Kong marks the fourth region in Everest territories that NEFECON® received NDA approval after Singapore, Macau and mainland China. - In May 2024, NEFECON® was successfully launched in mainland China. The official launch of NEFECON® marks the inception of better patient care in mainland China, heralding a new era in the treatment of IgAN. The first prescription of NEFECON® was issued through an internet hospital, enhancing speed and convenience of delivering medication to patients and improving their accessibility. As part of the pre-launch preparation, Everest had initiated an early access program in the Hainan Boao pilot zone in 2023. Approximately 700 patients registered for this program. Following the NDA approval of NEFECON® in Macau in December 2023, a few hundred patients from mainland China received prescription of the medication in Macau. In addition, over 23,000 Chinese patients have registered in an IgAN patient program. These initiatives highlight the urgent and unmet medical needs for NEFECON® in IgAN patients, and provide a foundation for the rapid adoption in mainland China. - In May 2024, our partner Calliditas disclosed Asahi Kasei Corporation's ("Asahi Kasei") public cash offer to acquire all shares in Calliditas for SEK 208 in cash per Share (the "Offer"). The Offer will also include a concurrent offer by Asahi Kasei to acquire all American Depositary Shares ("ADS"), each representing two Shares in Calliditas, for SEK 416 in cash per ADS, which will be conducted pursuant to the securities rules of the United States. The total value of the Offer corresponds to SEK 11,164 million. - In June 2024, our partner Calliditas announced an analysis of the treatment benefits of of NEFECON® compared with sparsentan in IgAN at the 61st European Renal Association Congress (ERA 2024). The presented analysis showed that treatment with NEFECON® 16 mg/day for 9 months was associated with eGFR benefit compared with continuous treatment with sparsentan 400 mg/day over 2 years. Post-Reporting Period achievements and expected milestones: - In July 2024, China's National Medical Products Administration accepted the submission of a supplemental New Drug Application (sNDA) seeking full approval of NEFECON® based on the complete clinical data from the global Phase 3 NeflgArd study. NEFECON® is expected to become the first-in-disease IgA nephropathy (IgAN) treatment to receive full approval by the NMPA. - In July 2024, our partner Calliditas announced that the European Commission has granted a full marketing authorization for Kinpeygo (the European trade name for NEFECON®) for the treatment of adults with primary IgAN. - We expect to report topline results from our open label study of NEFECON® in China in the second half of 2024. - We expect to receive NEFECON® NDA approval in South Korea in the second half of 2024. - We expect to commercially launch NEFECON® in Hong Kong in the second half of 2024. - We expect inclusion of NEFECON® in the Kidney Disease: Improving Global Outcomes ("KDIGO") 2024 guidelines as well as in the first Chinese guideline for IgAN in the second half of 2024. Zetomipzomib is a novel, first-in-class, selective immunoproteasome inhibitor currently being evaluated for a range of immune-mediated disorders, including lupus nephritis ("LN"). It was licensed from Kezar Life Sciences ("Kezar") in September 2023 for development and commercialization in Greater China, South Korea and Southeast Asia. - In February 2024, the Center for Drug Evaluation (CDE) of NMPA approved Kezar's IND application of zetomipzomib for initiation of the Phase 2b PALIZADE trial in China in patients with active LN. LN is the most common secondary immune-mediated glomerular disease, which may gradually lead to kidney failure. There are an estimated 400,000-600,000 LN patients in China. - In July 2024, the first Chinese patient has been dosed in the global Phase 2b PALIZADE trial for the treatment of active LN. Leveraging the company's strengths in clinical development, regulatory filing, and commercialization, we will accelerate the development of zetomipzomib to benefit patients in China as soon as possible. EVER001 (previously known as XNW1011), is the next-generation covalent reversible Bruton's tyrosine kinase (BTK) inhibitor in development globally for the treatment of renal diseases. - We expect to report topline results from EVER001 Phase 1b study in membranous nephropathy in the second half of 2024. INFECTIOUS DISEASE PORTFOLIO XERAVA® (eravacycline) - In January 2024, eravacycline's clinical breakpoint was officially approved by Expert Committee of the National Health Commission on Antimicrobial Susceptibility Testing and Standard Research (ChinaCAST), so that the drug can be used more accurately in clinical practice in China. - In August 2024, the Expert Committee on Clinical Application and Resistance Evaluation of Antimicrobial Drugs of the National Health Commission published positive interim results from the "Comprehensive Evaluation Project on the Clinical Application of Eravacycline". The results showed that the overall efficacy rate of eravacycline was 89.0% at the end of treatment, and incidence of adverse effect was only 2.9%. Taniborbactam is a beta-lactamase inhibitor ("BLI") that, in combination with cefepime, may offer a potential treatment option for patients with serious bacterial infections caused by difficult-to-treat resistant gram-negative bacteria, most notably carbapenem- resistant Enterobacterales ("CRE") and carbapenem-resistant Pseudomonas aeruginosa ("CRPA"). - In February 2024, our partner Venatorx Pharmaceuticals announced that The New England Journal of Medicine (NEJM) published the results of the CERTAIN-1 Phase 3 clinical study of cefepime-taniborbactam for the treatment of adult patients with complicated urinary tract infections ("cUTI"), including acute pyelonephritis. The results showed that cefepime-taniborbactam was superior to meropenem for the treatment of cUTI that included acute pyelonephritis, with a similar safety profile to meropenem. - We expect to submit NDA of cefepime-taniborbactam for the cUTI indication in mainland Chinain 2025. AUTOIMMUNE DISEASE PORTFOLIO VELSIPITY® (etrasimod) - In Feb. 2024, partner Pfizer Inc. announced that the European Commission has granted marketing authorization for VELSIPITY® (etrasimod) in the European Union to treat patients 16 years of age and older with moderately to severely active ulcerative colitis (UC) who have had an inadequate response, lost response, or were intolerant to either conventional therapy, or a biological agent. - In March 2024, Pharmaceutical Administration Bureau of the Macau Special Administrative Region, China, accepted Everest's NDA for VELSIPITY® (etrasimod) for the treatment of moderately to severely active ulcerative colitis. - In April2024, Pharmaceutical Administration Bureau of the Macau Special Administrative Region, China approved the NDA for VELSIPITY® (etrasimod) for the treatment of adult patients with moderately to severely active UC. It marks the first approval of VELSIPITY® in Everest territories. The number of UC patients in China is projected to double from 2019 to 2030 to approximately one million by 2030, highlighting the urgent need for novel treatments. Leveraging the preferential policies in the Greater Bay Area in China, we're poised to accelerate drug accessibility for mainland China following the Macau approval. - In May 2024, Singapore Health Sciences Authority approved VELSIPITY™ (etrasimod) for adults with moderately to severely active ulcerative colitis (UC). Post-Reporting Period achievements and expected milestones: - In July 2024, Everest announced positive topline data results of the maintenance period from a multi-center Phase 3 clinical trial of etrasimod in Asia for the treatment of subjects with moderately-to-severely active UC. This is the largest Phase 3 trial of moderately-to-severely active UC in Asia completed to date, with 340 eligible subjects randomized to treatment with etrasimod or placebo. The data of maintenance period confirmed that, after 40 weeks of treatment, etrasimod demonstrated significant clinical and statistical improvements over placebo in the primary and all key secondary endpoints (p<0.0001), and other secondary endpoints (including mucosal healing and endoscopic normalization, both p<0.0001). The safety profile of etrasimod was consistent with previous studies, with no new safety signals observed. - We expect to commercially launch VELSIPITY® (etrasimod) in Macau and take advantage of the preferential policies in the Greater Bay Area of China to accelerate drug accessibility to patients in China in the second half of 2024. - We expect to submit NDA for VELSIPITY® (etrasimod) to China's NMPA for approval in the second half of 2024. - We expect to submit NDA for VELSIPITY® (etrasimod) in Hong Kong in the second half of 2024. mRNA PLATFORM The clinically-validated mRNA platform is a core part of our discovery efforts and the Company made an important strategic transformation in 2024 by terminating the collaboration and license agreement with Providence Therapeutics Holdings Inc. Everest has shifted our focus to mRNA cancer therapeutic vaccine, to which we have full intellectual property rights and global rights. We currently have four mRNA cancer therapeutic vaccine programs under development for various solid tumor indications. We have deprioritized the development of the COVID19 vaccines due to declining economic and social benefits. We believe our therapeutic cancer vaccines under development hold great potential to address significant unmet medical needs globally. - In Feb. 2024, Everest announced the termination of the collaboration and license agreements with Providence Therapeutics Holdings Inc. Everest continues to develop its own therapeutic vaccine products utilizing the mRNA platform. - In August 2024, Everest announced the launch of an Investigator-Initiated Clinical Trial (IIT) for a personalized mRNA cancer vaccine, EVM16, under the study EVM16CX01, at the Peking University Cancer Hospital and Fudan University's Cancer Hospital. This trial is designed to assess the safety, tolerability, immunogenicity, and preliminary efficacy of EVM16 injection as a monotherapy and in combination with PD-1 antibody for patients with advanced or recurrent solid tumors. EVM16CX01 is the first-in-human (FIH) trial for EVM16. - We expect to submit investigational new drug applications for the Tumor-Associated Antigens (TAA) cancer vaccine in 2025. Commercialization We have made significant commercial progress and meaningfully advanced both of our marketed products in the first half of 2024. For NEFECON®, the leading drug in our renal portfolio, we have successfully launched the product utilizing a combination oftraditional hospitals detailing and innovative online prescribing, to meet the urgent and significant unmet needs of an estimated 5 million IgAN patients. So far this year, we have completed the build-out of the NEFECON® sales force to more than 100 representatives. This team will cover400-600 core hospitals which represent more than 60% of the addressable IgAN population. Additionally, over 23,000 patients have registered pre-product launch in an IgAN patient program, which underscores the significant unmet needs for this first-in-disease medicine. Earlier this year, we also started working with partners to establish an innovative ecosystem for kidney disease diagnostics and treatment, with the aim to provide IgAN patients a tool to enhance disease diagnosis and track disease progression without biopsy. XERAVA® (eravacycline), our first commercialized product in China and a first-in-class fluorocycline antibiotic, is in its first full year of sales and growth remains robust. To further increase the availability of XERAVA® and expand our reach to more patients in need, we have started partnering with Contract Sales Organizations ("CSO") to benefit patients outside of our 300 covered core hospitals. This will contribute to product revenue growth, but the vast majority of our product revenue will still be generated by our in-house commercial team. Eravacycline's clinical breakpoint was officially approved by the Expert Committee of the National Health Commission on Antimicrobial Susceptibility Testing and Standard Research (ChinaCAST) for clinical use in China. With the new breakpoint, eravacycline can be recognized by more physicians and patients as the preferred treatment in clinical practice across the country and over 100 hospitals in China have already adopted the new breakpoint. In addition, inclusion of eravacycline in the Catalogue of Hierarchical Management of Clinical Application of Antimicrobial Drugs in Shanghai, Beijing and Guangdong underscores recognition of the drug's clinical benefits by China's key opinion leaders. This year, eravacycline was newly included into The Surgical Infection Society Guidelines on the Management of Intra-Abdominal Infection: 2024 Update and China's Clinical Diagnosis and Treatment Guidelines for Multidrug-resistant Bacterial Infections in Renal Transplantation, and was published in the following medical publications: Title Publication Name Publication Date Clinical Analysis of Eracycline in the Treatment of Neurologically Critically Immunosuppressed Patients with Carbapenem-resistant Acinetobacter Baumannii Pneumonia Chinese Journal of Critical Care & Intensive Care Medicine(Electronic Edition) 2024/3/18 Comparison of Efficacy and Safety of Eracycline and Ertapenem in the Treatment of Complicated Intra-abdominal Infections in ChineseAdults Chinese Journal of Infection and Chemotherapy 2024/5/20 Establishment of epidemiological cut-off values for eravacycline, against Escherichia coli, Klebsiella pneumoniae, Enterobacter cloacae, Acinetobacter baumannii and Staphylococcus aureus J Antimicrob Chemother 2024/06/14 Research progress of a new antibacterial drug eravacycline Chinese Journal of New Drugs and Clinical Remedies 2024/07/01 Dynamic evolution of ceftazidime-avibactam resistance from a single patient through the IncX3_NDM-5 plasmid transfer and blaKPC mutation International Journal of Antimicrobial Agents 2024/08/01 We will continue to grow and strengthen our commercial portfolio in the second half of 2024 through persistent efforts and innovative approaches. We maintain full year sales guidance of RMB700 million from the combined sales of NEFECON® and XERAVA®. Multiple initiatives are expected to accelerate growth of NEFECON® sales. First, we anticipate inclusion of NEFECON® in the 2024 revised Kidney Disease Improving Global Outcomes (KDIGO) guidelines as well as the first Chinese guideline for IgAN as a first-line treatment for IgAN patients with risk of disease progression. We also plan to actively participate in China's National Reimbursement Drug List (NDRL) negotiations in the second half of 2024, to make the drug more affordable in order to achieve wide penetration of the large IgAN population of approximately 5 million patients in China. Those initiatives are expected to drive higher sales volumes along with the expansion of sales force to around 150 representatives. In parallel, we are working to enhance physician and patient education on the benefits of early treatment with NEFECON® to further improve kidney function protection. Our team is also launching several real-world studies on NEFECON® usage to provide physicians with additional clinical use guidance. Furthermore, later in 2024 we intend to expand availability of this first-in-disease medication to more IgAN patients in Asian regions including Singapore and Hong Kong. We will continue to grow the sales of XERAVA® through deeper penetration of our covered core hospitals such as expanding usage scenarios. With over a year of XERAVA® clinical experience in China, we expect to publish real world data on eravacycline usage in different types of patients in the second half of this year. We expect this will help guide hospitals and physicians on potentially wider treatment scope. We also anticipate XERAVA® to be included in additional treatment guidelines for anti-infectives and further strengthen its position as a foundational empirical treatment of multidrug-resistant infections. We will have three commercialized products in the second half of this year with the expected commercial launch of etrasimod in Macau. We will also take advantage of the preferential policies in the Greater Bay area of China to accelerate drug accessibility to patients in mainland China this year. Discovery Internal discovery is a key growth driver for the company's value creation. In about three years, Everest has successfully localized a clinically validated mRNA platform and built end-to-end capabilities in house to develop and manufacture mRNA therapeutics. Our internal discovery team in Shanghai consists of over 30 scientists developing multiple mRNA cancer therapeutics based on our fully integrated and clinically validated platform. We continue to innovate the platform by developing next generation delivery system and improving our mRNA sequence algorism. Everest also established a Good Manufacturing Practices (GMP) compliant manufacturing facility capable of producing clinical and commercial scale mRNA products In February 2024, the Company agreed to terminate the collaboration and license agreements with Providence and will continue to develop our own mRNA products with full intellectual property and global commercial rights Therapeutic cancer vaccines is currently the core focus area of Everest's discovery efforts as this area holds great potential to address unmet medical needs globally. An Investigator-Initiated Clinical Trial (IIT) for a personalized mRNA cancer vaccine, EVM16, was launched in August 2024. EVM16 is the first therapeutic vaccine independently developed by Everest utilizing the mRNA platform. In the pipeline are various other cancer vaccine programs including a Tumor-Associated Antigens (TAA) cancer vaccine and an immune-modulatory cancer vaccine. In addition, we are also working on mRNA-based in vivo CAR-Tprograms which can be used for cancer and autoimmune diseases. Business Development In 2024 our business development strategy remains focused on first-in-class or best-in-class assets in less crowded, high value therapeutic areas such as renal diseases, autoimmune disorders, and anti-infective categories. Given our established strong commercial presence, we are increasing our attention on commercial-stage assets where we can leverage our experienced and effective sales organization to create operational synergies and build scale. We believe that we can continue to solidify our leadership position across these therapeutic categories through effective pipeline buildup to drive growth of commercial cash flows for the Company and advance our profitability targets.On outward partnerships, ourcutting-edge cancer vaccine programs based on our mRNA technology platform with full intellectual property rights could potentially bring global partnership opportunities starting at early stage and expand value creation for our shareholders. Key Corporate Developments We are working with partners to establish an innovative ecosystem for kidney disease diagnostics and treatment, with the aim to provide IgAN patients with a tool to enhance disease diagnosis and track disease progression without biopsy. Financial Highlights IFRS Numbers: Revenue increased by RMB 292.6 million from RMB 8.9 million for the six months ended 30 June 2023 to RMB 301.5 million for the six months ended 30 June 2024, primarily due to the combined effect of continued expansion of XERAVA® sales in mainland China and Hong Kong, the launch of NEFECON® in mainland China and Singapore, and NEFECON® sales in other territories under our license. Gross profit margin increased from 62.7% for the six months ended 30 June 2023 to 76.6% for the six months ended 30 June 2024, and gross profit margin excluding intangible assets amortization increased from 62.7% for the six months ended 30 June 2023 to 83.0% for the six months ended 30 June 2024, primarily due to the launch of new products. Research and development ("R&D") expenses decreased by RMB 35.3 million from RMB 288.5 million for the six months ended 30 June 2023 to RMB 253.2 million for the six months ended 30 June 2024, primarily due to (i) lower expenditure on clinical trials; and (ii) continued investment in new products from our discovery platform which remained stable. General and administrative expenses were mostly stable at RMB 87.0 million for the six months ended 30 June 2024 in comparison to the six months ended 30 June 2023. Distribution and selling expenses increased by RMB 136.3 million from RMB 64.1 million for the six months ended 30 June 2023 to RMB 200.4 million for the six months ended 30 June 2024, primarily due to the expansion of the commercial team and increased commercial activities to support the launch of new products and the growth of existing product sales. Commercialization expense-to-sales ratio decreased as we continue to build a more efficient and focused commercialization model. Net loss for the period increased by RMB 208.8 million from RMB 423.6 million for the six months ended 30 June 2023 to RMB 632.4 million for the six months ended 30 June 2024, primarily attributable to the one-time, non-recurring impairment loss from an intangible asset related to mRNA COVID-19 Vaccines.Net loss excluding impairment loss of an intangible asset for the period decreased by RMB 95.5 million from RMB 371.6 million for the six months ended 30 June 2023 to RMB 276.1 million for the six months ended 30 June 2024. Cash and cash equivalents and bank deposits amounted to RMB 1,925.5 million as of 30 June 2024. Non-IFRS Measure: Adjusted loss for the period decreased by RMB 114.3 million from RMB 326.9 million for the six months ended 30 June 2023 to RMB 212.6 million for the six months ended 30 June 2024, primarily adjusting for expenses of share-based compensation, loss on impairment of an intangible asset and amortization of intangible assets. Conference Call Information The English session of the conference call will be held at 9:00 AM on August 28, 2024 Beijing Time (9:00 PM U.S. Eastern Time on August 27, 2024), and the Mandarin session of the conference call will be held at 10:30 AM Beijing Time on the same day (10:30 PM U.S. Eastern Time on August 27, 2024). The conference calls can be accessed by the following links: For English Session: Time: 9:00 AM Beijing Time, Wednesday, August 28, 2024 (9:00 PM U.S. Eastern Time, Tuesday, August 27, 2024) Pre-Registration Link: https://www.acecamptech.com/eventDetail/60508616 Webcast Link: https://www.acecamptech.com/meeting_live/70510585/750453?event_id=60508616 Alternatively, participants may dial in to the conference call using below dial-in information: United States: +1-646-2543594 (EN) Chinese Mainland: +86-10-58084166 (EN) +86-10-58084199 (CN) Hong Kong, China: +852-30051313 (EN) +852-30051355 (CN) United Kingdom: International: +44-20-76600166 (EN) +1-866-6363243 (EN) Password: 833889 For Mandarin Session: Time: 10:30 AM Beijing Time, Wednesday, August 28, 2024 (10:30 PM U.S. Eastern Time, Tuesday, August 27, 2024) Webcast Link: https://s.comein.cn/AHczP Alternatively, participants may dial into the conference call using below dial-in information: United States: +1-202-5524791 Chinese Mainland: +86-400-188-8938 Hong Kong, China: Taiwan, China: +852-57006920 +886-277031747 Singapore: +65-31586120 United Kingdom: +44-2034816288 International: +86-10-53827720 Password: 313729 The replay of English session will be available shortly after the call and can be accessed by visiting the Company's website at http://www.everestmedicines.com. About Everest Medicines Everest Medicines is a biopharmaceutical company focused on discovering, developing, manufacturing and commercializing transformative pharmaceutical products and vaccines that address critical unmet medical needs for patients in Asian markets. The management team of Everest Medicines has deep expertise and an extensive track record from both leading global pharmaceutical companies and local Chinese pharmaceutical companies in high-quality discovery, clinical development, regulatory affairs, CMC, business development and operations. Everest Medicines has built a portfolio of potentially global first-in-class or best-in-class molecules in the company's core therapeutic areas of renal diseases, infectious diseases and autoimmune disorders. For more information, please visit its website at www.everestmedicines.com. Forward-Looking Statements: This news release may make statements that constitute forward-looking statements, including descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the business operations and financial condition of the Company, which can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, or other factors, some of which are beyond the control of the Company and are unforeseeable. Therefore, the actual results may differ from those in the forward-looking statements as a result of various factors and assumptions, such as future changes and developments in our business, competitive environment, political, economic, legal and social conditions. The Company or any of its affiliates, directors, officers, advisors or representatives has no obligation and does not undertake to revise forward-looking statements to reflect new information, future events or circumstances after the date of this news release, except as required by law. [1] Operating expenses as a percentage of revenue = (general and administrative expenses + research and development expenses + distribution and selling expenses)/revenue. [2] Commercial profit = Gross margin – distribution and selling expenses
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