Dada Group (DADA), a number one platform for native on-demand supply and retail in China, has introduced its monetary outcomes for the fourth quarter and financial 12 months of 2023. Regardless of dealing with challenges associated to an impartial evaluation that recognized potential overstatement in revenues and prices, the corporate reported a 3% enhance in complete web revenues for This fall, reaching CNY 2.75 billion, and a 12% enhance for the complete 12 months, totaling CNY 10.5 billion.
The corporate additionally revealed a share repurchase program of as much as $40 million of American depository shares and underscored their dedication to high-quality progress and working effectivity transferring into 2024.
Key Takeaways
- Dada Group’s This fall complete web revenues elevated by 3% year-over-year to CNY 2.75 billion.
- Full-year revenues rose by 12%, with JDDJ and Dada Now contributing CNY 6.5 billion and CNY 4 billion, respectively.
- The corporate reported a non-GAAP web lack of CNY 159 million for This fall and CNY 342 million for the complete 12 months, marking an 11 share level enchancment year-over-year.
- A share repurchase program for as much as $40 million of American depository shares was introduced.
- Dada Group has taken steps to boost company governance following an impartial evaluation on overstated revenues and prices.
Firm Outlook
- Dada Group intends to concentrate on high-quality progress and bettering working effectivity in 2024.
- The corporate is about on attaining sustainable enterprise progress and profitability.
- JDDJ’s KA enterprise confirmed robust progress in orders and income, significantly from the beverage chain enterprise.
- Dada Now’s anticipated to proceed its constructive momentum with environment friendly success and customised providers.
Bearish Highlights
- An impartial evaluation discovered potential overstatements in revenues and prices for the primary three quarters of 2023.
- To deal with the problem, Dada Group has applied measures to bolster company governance.
Bullish Highlights
- Dada Now’s revenues elevated by 36% to CNY 1.2 billion in This fall, pushed by an increase so as quantity for intra-city supply providers.
- The corporate’s adjusted web margin improved by 1 share level year-over-year in This fall.
- Dada Group ended the 12 months with CNY 4 billion in money, money equivalents, restricted money, and short-term investments.
Misses
- Internet revenues from JDDJ decreased in This fall on account of a decline in internet marketing and advertising and marketing providers income.
Q&A highlights
- The corporate mentioned JDDJ’s outlook for 2024, with expectations of continued robust progress in orders and income.
- Dada Group expressed confidence in delivering sustainable high-quality progress in the long term.
In conclusion, Dada Group is navigating by way of its current challenges with a strategic concentrate on sustainable progress and effectivity. The corporate’s monetary efficiency within the fourth quarter exhibits resilience, and the launch of a share repurchase program alerts confidence sooner or later. As Dada Group heads into 2024, it goals to solidify its place within the on-demand supply market and obtain its profitability targets.
InvestingPro Insights
Dada Group’s current monetary disclosures and strategic initiatives have caught the eye of traders and market analysts alike. Listed here are some key metrics and insights from InvestingPro that shed additional mild on the corporate’s present monetary well being and market efficiency:
InvestingPro Knowledge:
- The corporate’s Market Cap stands at a average $555.46M, reflecting a market valuation that will have room for progress given the corporate’s strategic initiatives.
- With a Income Progress of 12.16% within the final twelve months as of This fall 2023, Dada Group has demonstrated its means to extend its gross sales amid difficult market circumstances.
- Nevertheless, the corporate’s Value / E book ratio as of This fall 2023 is 0.72, which may recommend that the inventory is undervalued relative to its property, a focal point for worth traders.
InvestingPro Ideas:
- Dada Group is famous for holding additional cash than debt on its steadiness sheet, which may present monetary flexibility and resilience in unsure financial occasions.
- Analysts have identified that the inventory has skilled vital value volatility, with a 1 Week Value Whole Return as of Y2024.D87 at -13.82%, indicating current market pressures.
For traders searching for extra in-depth evaluation, there are further InvestingPro Ideas out there, together with insights on the corporate’s profitability and inventory efficiency over varied time frames. To discover these additional, take a look at InvestingPro’s complete suite of instruments and studies at https://www.investing.com/professional/DADA. Keep in mind to make use of the coupon code PRONEWS24 for a further 10% off a yearly or biyearly Professional and Professional+ subscription, and uncover much more beneficial insights to tell your funding selections.
Full transcript – Dada Nexus Ltd (NASDAQ:) This fall 2023:
Operator: Good morning, girls and gents. Thanks for standing by for Dada’s Fourth Quarter and Fiscal Yr 2023 Earnings Convention Name. Presently all individuals are in a pay attention solely mode. After the administration’s ready remarks, there will probably be a question-and-answer session. As a reminder, in the present day’s convention name is being recorded. I might now like to show the assembly over to your host for in the present day’s name, Ms. Caroline Dong, Head of Investor Relations for Dada. Please proceed.
Caroline Dong: Thanks, operator. Hey, everybody, and thanks for becoming a member of our fourth quarter and financial 12 months 2023 earnings convention name. On the decision in the present day from Dada, we’ve Mr. Bing Fu, Interim President; and Mr. Henry Jun Mao, CFO. Mr. Fu will discuss our operations and firm highlights, then Mr. Mao will focus on the financials. They’ll each be out there to reply your questions throughout the Q&A session. Please observe that Mr. Fu will give his remarks and reply questions in Chinese language and the consecutive translation will probably be supplied. In case of any discrepancy between the unique remarks and the translated model, statements within the authentic remarks ought to prevail. Earlier than we start, I might wish to remind you that this convention name incorporates forward-looking statements. Please confer with our newest secure harbor assertion within the earnings press launch on our IR web site which applies to this name. Additionally throughout this name, we’ll focus on sure non-GAAP monetary measures. Please confer with our earnings press launch which incorporates a reconciliation of non-GAAP measures to the comparable GAAP measures. Lastly, please observe that except in any other case said, all figures talked about throughout this convention name are in RMB. It’s now my pleasure to introduce our Interim President, Mr. Fu. Mr. Fu, please go forward.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Thanks, Caroline, and thanks all for becoming a member of us.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Earlier than we get into the highlights from the quarter, I wish to deal with the current impartial evaluation outcomes launched by the corporate on March 5, 2024. Again in January, we disclosed that in a routine inner audit, the corporate recognized potential overstatement in revenues and prices associated to internet marketing and advertising and marketing providers for the primary 3 quarters of 2023. The corporate took this matter severely, and the Audit Committee of the Board instantly initiated an impartial evaluation with the help of a third-party impartial skilled advisers consisting of a number one worldwide regulation agency and forensic accounting consultants from a world consulting agency that isn’t the corporate’s auditor. Upon the substantial completion of the evaluation, we introduced the findings and remedial measures on March 5, together with correction of sure data within the related previous monetary statements as obligatory and acceptable. As you’ll have seen, the corrected line gadgets of the monetary statements for the primary 3 quarters of 2023 are offered in our earnings launch. And it is essential to notice that neither web revenue or loss nor money steadiness was impacted by the correction within the corresponding interval.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: As a part of our dedication to reinforcing company governance, we have enhanced the corporate’s inner insurance policies, programs and controls in recordkeeping and applied rigorous inner audits with enhanced monitoring and oversight mechanisms going ahead to strengthen transparency, accountability and integrity in any respect ranges of the corporate.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Now let’s undergo our monetary and enterprise efficiency. In the course of the fourth quarter of 2023, nonetheless confronted with challenges, Dada Group made regular progress in bettering each high line and working effectivity. Our complete web revenues elevated by 3% and adjusted web margin improved by 1 share level year-over-year.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Earlier than I get into the operational highlights from our 2 platforms, a short replace on our cooperation with JD (NASDAQ:).com. With respect to JDDJ, we proceed to succeed in extra JD customers and optimize their person expertise. Within the fourth quarter, variety of month-to-month common Xiaoshigou transacting customers elevated by 50% year-on-year. To interrupt down by entry level, the stand-alone Xiaoshigou tab noticed its DAU greater than double year-on-year pushed by elevated click-through fee on the every day homepage. In the meantime, order conversion fee throughout the Xiaoshigou tab elevated by greater than 1 share level year-on-year. Consequently, GMV generated by on-line site visitors on the Xiaoshigou tab greater than tripled year-on-year. For search outcome publicity, one other main entry level on JD, we’re glad to see that GMV generated by customers who actively filter out non-Xiaoshigou merchandise amongst search outcomes enhance by 30% year-on-year within the fourth quarter, demonstrating rising on-demand thoughts share amongst JD customers.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: In the meantime, Dada Now’s cooperation with JD.com additional strengthened. Within the fourth quarter, Dada Now continued to offer devoted help to JD’s on-demand supply wants, with orders fulfilled practically doubling year-on-year.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Now let’s undergo the detailed fourth quarter operational highlights for JDDJ, the main native on-demand retail platform in China. Within the fourth quarter, we continued to deepen cooperation with giant chains and empower extra SMEs. As of the top of 2023, JDDJ had onboarded over 500,000 retail shops, greater than doubling from the top of 2022.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Within the grocery store class, we collaborated carefully with over 90 out of the highest 100 grocery store chains in addition to regional champions to offer our customers with industry-leading high-quality provides.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: On the identical time, we deepened the cooperation with main comfort retailer chains, similar to JD Comfort Retailer, the off-line retailer codecs empowered by JD.com; Meiyijia, the biggest comfort retailer operator in China by way of retailer rely; and Lawson, the fifth largest by the identical metric. Whole GMV generated by comfort shops within the fourth quarter elevated by greater than 4x year-on-year.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Transferring on to client electronics. Within the smartphone class, the GMV of Oppo and Samsung (KS:) cellphones greater than doubled year-on-year in This fall. Within the pc and equipment class, digital merchandise maintained a speedy GMV progress of greater than 50% year-on-year, and we additionally made vital progress in important equipment similar to chargers.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Turning to the house equipment and residential furnishing class. In the course of the quarter, we established new partnerships with main equipment manufacturers similar to Panasonic (OTC:) and Robam, one among China’s high kitchen equipment manufacturers. In the meantime, we labored extra carefully with main sensible locks producers, similar to Kaadas. Collectively, we newly onboarded over 10,000 residence equipment and residential furnishing shops onto our platform. Consequently, within the fourth quarter, GMV of residence equipment retailers elevated by greater than 50% year-on-year, whereas GMV of residence furnishing retailers practically doubled year-on-year.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Within the liquor class, GMV within the fourth quarter elevated by greater than 3x year-on-year pushed by regional retailer growth.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Within the attire class, GMV surged greater than threefold pushed by our continued growth within the sports activities and out of doors section and differentiation of product choices.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Technological empowerment is a crucial focus in our partnership with retailers. Haibo, our omnichannel audio working system, has been deployed in additional than 13,000 shops as of year-end 2023, a rise of over 40% from the top of 2022. In 2023, Haibo’s buyer retention fee remained at round 90% regardless of a considerably enlarged buyer base. This underscores the popularity amongst retailers of Haibo’s means to boost their operational effectivity. We proceed so as to add extra options to Haibo and enhance its present performance, assist retailers deal with ache factors and enhance operations. For instance, within the fourth quarter, Haibo added a brand new function to intelligently determine fraudulent orders and supply real-time monitoring and thus enhancing retailers’ danger management capabilities and operational safety.
Bing Fu: [Foreign Language]
Caroline Dong: Let’s transfer on to Dada Now, the main native on-demand supply platform in China. As of the top of 2023, our intra-city supply and last-mile companies coated over 2,500 and over 2,600 cities and counties, respectively, penetrating into extra low-tier cities. In 2023, we had greater than 1.2 million annual lively riders on the Dada Now platform, a rise of greater than 20% year-on-year, additional increasing versatile employment alternatives for a variety of staff.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: For our KA chain service provider enterprise, within the fourth quarter, KA enterprise delivered high-quality progress with orders fulfilled growing by greater than 20% year-on-year, common gross revenue per order constantly bettering year-on-year and success fee at above 95%. The standard and value effectiveness of our success providers stay properly acknowledged by retailers. Notably, the entire high 50 income contributors amongst our KA purchasers in 2022 continued to depend on our providers in 2023.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Within the beverage KA class, order fulfilled elevated by greater than 60% year-on-year within the fourth quarter. In October, we obtained the Finest Strategic Accomplice award from Luckin Espresso (OTC:), the biggest espresso chain in China by retailer rely. As well as, we additionally obtained a recognition from Thai Tea, a preferred new fashion tea chain in China, having fulfilled a quickly rising quantity of orders with high-quality service because the institution of our strategic partnership in early 2023. Within the restaurant KA class, orders fulfilled for newly partnered manufacturers similar to Tastien, Chinese language fashion burger chain, additionally ramped up rapidly.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Transferring on to our SME and C2C enterprise. The variety of SME and C2C orders fulfilled within the fourth quarter elevated by greater than 20% year-on-year from the excessive base within the prior 12 months interval pushed by pricing optimization, growth into new verticals and elevated penetration into lower-tier cities.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: This concludes the overview of our enterprise efficiency. To wrap up, it was a sturdy near the 12 months. And heading into 2024, we’ll proceed to position wholesome progress on the coronary heart of our total technique for creating shareholder worth. I’ll now go the decision over to Henry to undergo our financials for the fourth quarter and financial 12 months 2023.
Henry Jun Mao: Thanks, Mr. Fu. I am happy to be on my first earnings name as CFO of Dada Group to debate our monetary efficiency with our valued analysts and traders. Only a few housekeeping gadgets earlier than we go over the numbers. We consider year-over-year comparisons are probably the most helpful strategy to consider our efficiency. Subsequently, all percentages I will give will probably be on a year-over-year foundation and all figures are in RMB, except in any other case famous. As well as, figures for full 12 months 2023 have mirrored the traction of previous monetary statements, particulars of that are specified by annex to our earnings launch. Whole web revenues within the fourth quarter elevated by 3% to CNY 2.75 billion. Internet revenues from JDDJ reached CNY 1.55 billion, primarily as a result of lower in internet marketing and advertising and marketing providers income. Internet revenues from Dada Now elevated by 36% to CNY 1.2 billion, primarily pushed by the will increase so as quantity of intra-city supply providers to chain retailers. Transferring over to value and expense facet. Operations and help prices have been CNY 1.9 billion. The rise was primarily on account of a rise in rider value because of growing order quantity for intra-city supply providers supplied to varied chain retailers. Promoting and advertising and marketing bills decreased to CNY 1 billion, primarily on account of a lower in promotional actions performed on JDDJ platform and a lower in promoting and advertising and marketing bills. Common and administrative bills decreased to CNY 89 million because of decreased amortization of intangibles associated with the acquisition of JDDJ in 2016 and diminished share-based compensation bills. Analysis and improvement bills decreased to CNY 91 million, primarily on account of decrease R&D personnel prices. Impairment lack of goodwill was CNY 958 million for the fourth quarter of 2023. Non-GAAP web loss was CNY 159 million, an enchancment in contrast with a lack of CNY 179 million within the fourth quarter of 2022. Non-GAAP web loss margin was 5.8%, bettering by 1 share level year-over-year. As of December 31, 2023, we had CNY 4 billion in money, money equivalents, restricted money and short-term investments. I’ll now rapidly run by way of just a few key full 12 months 2023 monetary outcomes. Additional particulars could be present in our earnings launch. Whole revenues in 2023 elevated by 12% to CNY 10.5 billion, with income from JDDJ rising by 5% to CNY 6.5 billion and the income from Dada Now rising by 27% to CNY 4 billion. Operations and help prices have been CNY 6.5 billion in contrast with CNY 5.7 billion in 2022. Promoting and advertising and marketing bills have been CNY 4.5 billion in contrast with CNY 4.7 billion final 12 months. Common and administrative bills have been CNY 253 million in contrast with CNY 409 million in 2022. Analysis and improvement bills have been CNY 416 million in contrast with CNY 631 million in 2022. Our non-GAAP web loss was CNY 342 million in contrast with CNY 1.3 billion in ’22. Non-GAAP web loss margin was 3.3%, bettering by 11 share factors year-over-year. As well as, we’ve introduced that the Board of Administrators have approved a share repurchase program of as much as USD 40 million of American depository shares funded by our present money steadiness for a 2-year interval by way of March 2026. Our determination to repurchase shares is a part of our broader technique to create long-term worth for our shareholders. We are going to keep dedicated to prioritizing shareholder curiosity and enhancing shareholder returns. This concludes our ready remarks. Operator, we are actually prepared to start the Q&A session. Thanks.
Operator: [Operator Instructions] Your first final query comes from Lei Zhang with Financial institution of America.
Lei Zhang: [Foreign Language] Two questions right here. First, are you able to share extra coloration with us by way of the macro and consumption downgrades that affect to our enterprise. Secondly, questioning your total 2024 outlook, together with the subsidy plan of JDDJ enterprise?
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Thanks to your query. I’ll reply the primary one.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Because the economic system and society normalized, the consumption market regularly recovered. Nonetheless, there was nonetheless room for customers’ spending energy and confidence to enhance. Heading into 2024, with the economic system poised to additional rebound and enhance in addition to the introduction of a collection of macro stimulus and pro-consumption insurance policies, the restoration and growth of consumption will probably be additional strengthened.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Final 12 months, service consumption similar to catering, tourism and leisure boomed, due to the return of off-line consumption situations in addition to the unleashing of pent-up demand, which took off some steam from the restoration of bodily items consumption. Consumption information for the primary 2 months of the 12 months point out continued power in service consumption, similar to catering and tourism, and a steady restoration in bodily items consumption. Wanting forward, we count on a extra balanced pockets share of providers versus bodily items this 12 months.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: The on-demand retail sector continues to be within the early days of improvement. Given the sting of on-demand retail in each comfort and product choice, we stay assured that its penetration amongst retail gross sales can additional development up in the long term.
Henry Jun Mao: Thanks, Lei, and I’ll take your second query. So relating to the general technique, I believe with respect to JDDJ, I believe it positively will proceed to complement its provide to fulfill the rising client demand for the web demand buying, enhancing our person expertise and thoughts share. In the meantime, I believe we’ll concentrate on the well being of JDDJ’s enterprise and enhance the working effectivity. When it comes to the promotion actions and client incentives, I believe we’ll constantly spend money on a focused method to drive the expansion whereas making certain the well being of the enterprise by evaluating the ROI throughout totally different channels, person demographics and classes to optimize our subsidy effectivity. And in addition with respect to Dada Now, I believe everyone knows that Dada Now has its personal nationwide rider community. So Dada Now will constantly concentrate on its KA enterprise with sustained efforts to boost its providers and applied sciences. Going ahead, I believe Dada Now will work extra carefully with present clients whereas proactively buying new purchasers to journey on the increase of on-demand supply, to hunt enterprise progress together with effectivity positive aspects. I hope that solutions your query.
Operator: Your subsequent query comes from Thomas Chong with Jefferies.
Thomas Chong: [Foreign Language] I’ve two questions. First, for Dada Now, how do you see the KA order and the income momentum this 12 months? And my second query is about JDDJ. May you please present any coloration about JDDJ’s outlook in 2024?
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Thanks. I will take the primary query.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: Within the fourth quarter of 2023, our KA enterprise delivered high-quality progress, with the variety of orders fulfilled growing by greater than 20% year-on-year in addition to speedy income progress year-on-year. The wholesome momentum primarily resulted from sturdy progress of our beverage chain enterprise in addition to our deepened cooperation with them. And we’re happy to see that these traits stay ongoing, and we count on that to proceed into 2024.
Bing Fu: [Foreign Language]
Unidentified Firm Consultant: We predict these traits are prone to maintain, due to Dada Now’s nationwide rider community’s steady and environment friendly success, means to cater to high manufacturers’ want for custom-made providers, in addition to our aggressive edge in value effectivity. We’re assured in attracting extra service provider companions in all verticals and deepening partnerships with our present clients. In the long term, we count on to additional acquire market share within the third-party on-demand supply {industry} and preserve above-industry progress.
Henry Jun Mao: I’ll take the second query. As I discussed earlier, I believe relating to JDDJ, so in 2024, we will probably be laser targeted on the high-quality progress of the enterprise and tapping to the market alternatives of on-demand retail along with JD.com to additional enhance the buying expertise for the purchasers and to unleash extra synergies with JD.com. And in the long term, we’re very assured in delivering sustainable, wholesome progress given our dedication to the implementation of our on-demand retail technique, together with our efforts to complement the product choices and to boost the person expertise.
Operator: Your subsequent query comes from Wei Xiong with UBS.
Wei Xiong: [Foreign Language] May administration share your strategic concentrate on JDDJ improvement? Are we extra specializing in person progress and frequency enchancment? Or are we persevering with to do extra value effectivity enchancment and bettering unit economics in 2024? May you give us extra coloration round balancing the highest line progress and profitability enchancment?
Henry Jun Mao: Thanks to your query. I believe, sure, we’ve mentioned this rather a lot. I believe on one hand, we’ve all the time been targeted on high-quality person progress and high-quality enchancment in repeat buy fee and buying frequency. With customers on the coronary heart of our technique, we’ll constantly optimize our merchandise choices, interface design and enterprise operations. Additionally, we’ll proceed to unleash extra synergies with JD.com to effectively serve customers’ diversified on-demand buying wants. I believe in doing so, we intention to enhance the general person expertise and to boost person thoughts share. I believe for this 12 months, JDDJ will concentrate on the well being of its enterprise progress and adapt a extra ROI-driven strategy to attain high-quality progress and working effectivity enchancment. Our total aim is to attain high-quality, wholesome and sustainable enterprise progress, together with the regular enchancment in profitability. I imply, in the long term, we’re very assured in delivering the sustainable high-quality progress.
Operator: There aren’t any additional questions presently. I will now hand again to Ms. Caroline Dong for closing remarks.
Caroline Dong: Thanks, operator. In closing, on behalf of Dada’s administration crew, we would wish to thanks to your participation in in the present day’s name. For those who require any additional data, please be at liberty to succeed in out to us straight. Thanks for becoming a member of us in the present day. This concludes the decision.
Operator: That does conclude our convention for in the present day. Thanks for taking part. You might now disconnect.
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