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spk02: Ladies and gentlemen, thank you for standing by, and welcome to the QHO first half year of 2023's earnings conference call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference call is being recorded. If you have any objection, you may disconnect at this time. I would now like to turn the call over to Ms. Qishu Wang Please go ahead, Kishu.
spk03: Thank you, operator. Hello, everyone. Welcome to Trueforce's first half year of 2023's Earnings Conference Call. The company's results were released earlier today and are available on our IR website. On the call today are Leslie Yu, Chairman and CEO, CFO Barry Ba. Leslie will review business operations and company highlights, followed by Barry, who will discuss financials and guidance. They will be available for answers your questions in the Q&A session that follows. Before we begin, I would like to remind you that this call may contain forward-looking statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and the current market and operating conditions and relate to the 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, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties and factors is included in the company's filings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statement as a result of a new information, future events, or otherwise, except as required under the law. With that, I will now turn the call over to our chairman and CEO, Mr. Leslie Yu. Please go ahead.
spk05: Thank you, Qishu. Thank you all for joining our first half of the 2023 earnings conference call. Following the increasing value first and the improving profitability later, actually in 2022, Chihuahua continued to enhance profitability and optimize costs in the first half year of 2023. Meanwhile, based on our mobility service solutions, we have embarked on the creation of a second growth trajectory for our business, which has yielded significant achievements. Of its current domestic income condition, Chihuahua achieved a massive improvement in its financial results during the first half of 2023. Generally speaking, in the first half of 2023, Chihuahua achieved a 78.6% year-on-year decrease in net losses and an 87.0% decrease in adjusted net losses. Adjusted EBITDA also increased by 2.8%, reaching RMB 11.1 million. First, the mobility service solutions and housekeeping services have delivered satisfactory results. Furthermore, we made progress in cost and expense control through technology optimization. In the first half of 2023, overall operating costs decreased by 5.7% year-on-year. Generally, administrative expenses decreased by 18% to RMB $80.1 million, and research and development expenses decreased by 7.2% to RMB $6.6 million. Considering the current economic conditions in the domestic market, we also managed to asset liability allocation, resulting in an increase in interest income from RMB 191,000 in the first half of 2022 to RMB 742,000 Interest expenses also decreased by 38.6 from RMB 3.8 million in the first half of 2002 to RMB 2.3 million in the first half of 2023. As you may know, our kinds of demand delivery solutions and mobility service solutions are mainly well-known. consumer service platforms such as Meituan, Yale, ECD, and major chain restaurants like KFC, McDonald's, and Latin Coffee. Through platform fulfillment services, Qiho offers clients streamlined management operations and standardized service products, while charging service fees for auto fulfillment. In the first half of 2023, the service revenue from on-demand delivery and mobility solutions, excluding vehicle export solutions, amounted to RMB $1.7 billion. Our housekeeping and accommodation services are provided on the SAS Plus service model. The SAS Plus service model primarily offer a comprehensive solution for housekeeping and accommodation and other community service providers. encompassing services such as online traffic, orders, payment, and customer support. Additionally, we provide very added services like human resource management, financial management, and data analysis, helping service providers enhance management efficiency and decision-making capabilities, thereby improving service quality and user satisfaction, leading to increased revenue. Meanwhile, the primary source of revenue for SaaS Plus service product is the commission collected from partners based on the GMV charges through our platform. In the first half of 2023, the revenue from housekeeping and accommodation solutions and other services amounted to under $28.2 million. In the first half of 2023, we actively expanded the second growth curve. In February, Chifco officially launched an international business under Chifco International. After preparation in March and April, we officially launched the vehicle export solutions in May. As of now, the results have been significant. With cooperation intentions reached for over 3,000 units, the contracts of 1,720 units had been signed. and more than 200 units delivered. In May alone, the service generated revenue of 11.98 million RMB and achieved profitability. The remaining service contracts that have been signed but are not yet fulfilled are expected to continue bringing financial returns to the company in the second half of the year. Chihuahua International will continue to increase investment in this business, gradually building a network of automotive dealerships in 58 countries and regions around the world, including Jordan and the United Arab Emirates. According to the media report, the total volume of China's used cars in 2021 was approximately 15,000 vehicles. Within just one month of Qigong's vehicle export solutions going live, the volume of signed contracts already accounted for 20% of the total export for the entire year of 2021. The report indicates that China's used car exports are expected to exceed 100,000 vehicles in 2023, with a predominant focus on electronic vehicle exports. This is said to provide for internationalization efforts with an even greater room for expensive development. We believe that the achievements Qi Huo has made in the vehicle export solutions are partly attributed to China's domestic vehicle scrappage policies and the rapid growth of the electric industry. However, even more crucial is Qi Huo's extensive data and operational experience in the ride-hailing services. The business team of Chihuahua Mobility Service Solutions has been deeply rooted in the ride-hailing service for over five years and possesses more than two decades of experience and resources in the automotive export field. Currently, Chihuahua has become one of the key partners of China's largest ride-hailing platform, DDE. All above allow our business team of QHOS Mobility Service Solutions to connect with various large and medium-sized automotive manufacturers, dealerships, and the second-hand car market, allowing us to swiftly access information on vehicles for sale and establish close relationships with relevant entities. Our close collaboration with overseas dealers has led to robust communication and cooperation ties. This formidable network of partnerships has laid a strong foundation for Chihuahua's international expansion, enabling us to see their early presence in the overseas market. Leveraging our material ride-hailing business line, operational experience, accumulated bus data, and diversified vehicle resources, we achieved profitability within just one month of launching this service. In future, Shibuya will leverage its second-hand car retail capabilities for streamlined operations. Currently, the overseas expansion of used cars is our first track of development. Electric vehicles are the main source driving China's used car export, accounting for about 70%. In addition to serving ride-hailing drivers and providing leads on used car sales, Qiho presents robust repair capabilities. While offering ride-hailing solutions, the company has accumulated significant resources for vehicle maintenance and repair, creating a unique network of vehicle repair resources. Relying on Chihuahua International's longstanding network of overseas dealerships and the increasing volume of used car domestics, Chihuahua will continue to build its core advantage in optimizing used car repair. By establishing and collaborating our repair centers nationwide, Chihuahua aims to enhance efficiency through standardized process, create international used car certification standards, and optimize environment for international used car transactions. For instance, setting up refurbishment centers at vehicle source locations, completing used car repairs and condition upgrading, and ensure vehicles are shipped on same day when they reach the port to reduce logistic costs. Through innovative transaction models of domestic operations plus international export, Chihuahua International will become a company's second growth wave and explore entirely new realms of development, which will boost the company's revenue and profitability, providing a broader scope for growth. Moreover, it will offer various industrial stakeholders more business opportunities and avenues for collaboration. It will not only foster the development of international automotive trade and bring forth opportunities arising from the booming electric vehicle industries to overseas countries and regions, but also actively assume a positive corporate social responsibility in global energy conservation and emissions reduction. We are confident that the Chihuahua International is offering a more diversified range of products and services to our clients, catering to the varied needs of different regions and markets. This will create additional revenue streams for us, prepare overall company growth, and unlock substantial business opportunities and growth potential. This concludes my statement. I will now turn the call over to our safe owner, who will discuss our financial results for the first half of 2022.
spk01: Thanks, Leslie. Hello, everyone. Welcome to CHIEF's first half year of 2022 conference call. Please be reminded, all amounts held here will be RMD and not stated otherwise. The first year of 2023, total revenue is RMB $1,736.3 million, compared with total revenue of RMB $1,863.8 million in the first year of 2022. A further breakdown. Revenue from on-demand delivery solutions were RMB $1,649.6 million, representing a decrease of 6.5% from RMB $1,763.3 million in the first half year of 2022, primarily because we enjoyed more preferential policy during the first year of 2022. amid the COVID-19 pandemic, which was significantly reduced in the six months ended June 30, 2020, following the relief of the pandemic. Revenue from mobility service solutions consisting of shared back maintenance, rehearing, five service solutions, and the newly launched vehicle export solutions, or RMV, 58.5 million, representing an increase of 3.6 from RMB 56.5 million in the six months ended of June 30, 2022. Primarily due to two major points. One is the commencement of vehicle export solutions, which generated revenue of RMB 12 million. And second, our enlarged customer base and the service scope for run-hailing solution service. Revenue for housekeeping and accommodation solutions and other service are RMB 28.2 million, representing a decrease of 35.2% of RMB 43.5 million in the first six months ended June 30 of 2022, primarily due to the intersection of the business model in hotel and accommodation service. Overall, to realize a number of financial data improvements amidst the current economic conditions in domestic market. Cost of revenue was on the 1,669.5 million, representing a decrease of 5.7% year-over-year. primarily to attribute to the decrease of our labor cost, decreasing our labor cost and the hiring expenses. Our GIA extends our RMB at 1.6 million, representing a decrease of 18% from RMB 99.5 million in the six months extended June 30 of 2022. Probably due to the decrease in three major point one to the share based compensation expense, decreased from $12.5 million in the first year of 2022 down to $3.9 million in the first year of 2023. And the second, the welfare and business development expense and office expense has decreased from $29.5 million in the first year of 2022 down to RMB $17.3 million in the first year of 2023. Our R&D expense, our R&D 6.6 million, we have seen a decrease of 7.2% from 7.2 million in the six months ended of June 30, 2022. Primarily due to the decrease in average compensation level for our R&D personnel has restructured as a restructured result of our R&D team. Other income was RMB 6 million compared to the losses of RMB 8.3 million in the first half of 2022, primarily due to increase in our file value, change of investment in the mutual fund. The income tax benefit was RMB 2.4 million as compared to income tax expense of RMB 6.7 million in the first year of 2022. primarily due to the increase in our deferred tax asset benefit. Net loss attributed to Chihuahua Limited was only 9.6 million as compared to only 25 million in the first year of 2022. Adjusted net loss was only 1.8 million as compared to adjusted net loss of RMB 14.1 million in the first year of 2022. And our adjusted EBITDA is the earning of RMB 11.1 million as compared to adjusted EBITDA of RMB earning 10.8 million in the first year of 2022. In terms of the balance sheet as June 30, 2023, The company has cash sheltered investment and the restricted cash of RMB 178.2 million and sheltered debt of RMB 95.7 million. This concludes my prepared remarks. Thank you for your attention. We are now pleased to answer questions. Operator, please go ahead.
spk02: Thank you. If you wish to ask a question, please press star then 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, you will need to press star then 2. If you are on a speakerphone, please pick up the handset to ask your question. Once again, that was star then 1 on your telephone. And our first question comes from Jiayu of Tiger. Please go ahead.
spk04: Hi. This is Jiayu from Tiger. I have a question. Q4 always focuses on localized community life services. Is there some relation between the newly launched vehicle export solution and the companies of regional business? And can it establish a complementary relationship with the existing business
spk05: Thank you for the question and this is Leslie. I would like to explain the relationship between second hand car export and what we are focusing on localized community service. Firstly, our vehicle export solution has a very strong connection with our existing business. The vehicle export solution actually derived from our mobility sector as an asset management initiative. This portion of our business will leverage the vehicle information and the maintenance resources we have accumulated in the mobility business to provide the vehicle value management services for our mobility clients. thereby extending and expanding our offerings within the local community service sector. On the other hand, as we progress with the vehicle export business, it allows us to expand into the global market, broadening our service reach to more diverse regions and opening up a greater market potential. So in summary, while vehicle export solutions operate in different domains, it's a derivative and extension of our core business. Through the organic fusion of technology, data, and operational experience, it forms a beneficial relationship with our original business, offering fresh moments and opportunities for our company's growth. Thank you.
spk02: Once again, if you would like to ask a question, please press star then 1 on your telephone. There are no further questions at this time. I'll now hand the call back to management for closing remarks.
spk03: Okay. Thank you, everyone, for listening. Thank you.
spk02: That concludes today's conference. Thank you for attending, and you may now disconnect.
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