Leju Holdings Ltd (LEJU) 2021 Q2 法說會逐字稿

Hello and thank you for standing by for Leju's First Half 2021 Earnings Conference Call. (Operator Instructions) Please note, today's conference call is being recorded. If you have any objections, you may disconnect at this time.

您好，感謝您出席樂居2021年上半年收益電話會議。（操作員說明）請注意，今天的電話會議正在錄音。如果您有任何異議，您可以此時斷開連接。

I would now like to turn the meeting over to your host for today's conference, Ms. Michelle Yuan, Leju's Deputy CFO. Please go ahead, ma'am.

現在我想把會議交給今天的會議主持人，樂居副財務長袁女士。請繼續，女士。

Hello everyone, and welcome to Leju's First Half 2021 Earnings Conference Call. Today, we will update you regarding our financial results for the first half year ended June 30, 2021.

大家好，歡迎參加樂居2021年上半年業績電話會議。今天，我們將向您通報截至 2021 年 6 月 30 日的上半年財務業績的最新情況。

If you would like a copy of the earnings press release, or would like to sign up for our e-mail distribution list, please go to our IR website at ir.leju.com. Leading the call today is Mr. Geoffrey He, our CEO, who will review operational highlights for the first half 2021. I will then discuss the financial results in more detail. We will then open the call to questions.

如果您想要一份收益新聞稿，或者想要註冊我們的電子郵件分發列表，請訪問我們的投資者關係網站 ir.leju.com。今天的電話會議由我們的執行長 Geoffrey He 先生主持，他將回顧 2021 年上半年的營運亮點。然後我將更詳細地討論財務表現。然後我們將開始提問。

Before we continue, please allow me to read you Leju's Safe Harbor Statement. Some of the statements during this conference call are forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934 as amended. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to those outlined in our public filings with the SEC. You are encouraged to review the "Forward-looking Statements" section of our annual report filed with the SEC for additional information concerning factors that could cause those differences. Leju does not undertake any obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

在我們繼續之前，請允許我向您宣讀 Leju 的安全港聲明。本次電話會議期間的一些聲明是根據 1934 年《證券交易法》修訂版第 21E 條「安全港」條款做出的前瞻性聲明。前瞻性陳述存在風險和不確定性，可能導致實際結果與我們目前的預期有重大差異。潛在風險和不確定性包括但不限於我們向 SEC 公開提交的文件中概述的風險和不確定性。我們鼓勵您查看我們向美國證券交易委員會提交的年度報告的「前瞻性聲明」部分，以獲取有關可能導致這些差異的因素的更多資​​訊。樂居不承擔任何公開更新任何前瞻性聲明的義務，無論是由於新資訊、未來事件或其他原因，除非適用法律要求。

Our earnings press release and this call include discussions of unaudited GAAP financial information as well as some unaudited non-GAAP financial measures. Our press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. Please note that, unless otherwise stated, all figures mentioned during this conference call are in U.S. dollars. I will now turn the call over to Leju's CEO, Geoffrey He. He zong, please go ahead.

我們的收益新聞稿和本次電話會議包括對未經審計的 GAAP 財務資訊以及一些未經審計的非 GAAP 財務指標的討論。我們的新聞稿包含未經審計的非公認會計準則衡量標準與未經審計的最直接可比較的公認會計準則衡量標準的調節表。請注意，除非另有說明，本次電話會議中提到的所有數字均以美元為單位。我現在將電話轉給樂居執行長何傑弗裡。何總，請繼續。

Thanks everyone for joining us on today's call. In the first half of 2021, amid tightening regulations in China's real estate industry, the pressure on real estate developers' operations and sales continued to increase.

感謝大家參加今天的電話會議。2021年上半年，在中國房地產行業調控趨嚴的背景下，房地產開發商經營和銷售壓力持續增加。

Against this challenging backdrop, our overall business was able to maintain steady growth. However, due to the deterioration of the credit status of one of our real estate developer clients, our bad debt provision for the first half of this year increased by $48.9 million compared to the same period of 2020, resulting in a loss for the first half of this year.

在這種充滿挑戰的背景下，我們的整體業務得以保持穩定成長。然而，由於我們的一位房地產開發商客戶的信用狀況惡化，我們今年上半年的壞帳準備較2020年同期增加了4,890萬美元，導致上半年出現虧損今年的。

With the support of the strategic cooperation between our controlling shareholder E-House (China) Enterprise Holdings Limited and Alibaba Group Holding Limited, we held a series of online promotional events, including 'The 2nd Online Real Estate Fair' and the 'June 18 Top Pick House Festival' on the Leju Housing platform and Leju Flagship Store on Tmall Haofang. Subsequently, we joined hands with Tmall Haofang to create a new smart transaction ecosystem for the real estate sector, and launched the four product services, including our "smart coupon", "smart verification", "smart project opening" and "smart subscription" services, to help real estate enterprises conduct efficient project field services, project opening services and transaction services. The success of these events and the launch of our Leju Flagship Store on Tmall Haofang have greatly improved the operational capabilities of Leju's advertising business and e-commerce business. At the same time, our top-down approach has pioneered a new model based on developer clients' official flagship stores on Tmall Haofang, helping them kick off their digitalization from 0 to 1.

在控股股東易居（中國）企業控股有限公司與阿里巴巴集團控股有限公司戰略合作的支持下，我們舉辦了「第二屆網上房產交易會」、「6月18日頂級房交會」等一系列線上推廣活動。隨後，我們攜手天貓好房打造房地產領域智能交易新生態，推出了「智慧優惠券」、「智慧驗證」、「智慧開盤」、「智慧認購」四大產品服務服務，幫助房地產企業進行高效的專案現場服務、專案開盤服務和交易服務。這些活動的成功舉辦以及樂居天貓好房旗艦店的上線，大大提升了樂居廣告業務和電商業務的營運能力。同時，我們自上而下開創了基於開發者客戶天貓好房官方旗艦店的新模式，幫助他們開啟了從0到1的數位化之路。

In the second half of this year, we will firmly seize the opportunities created by the digitalization of real estate marketing and deepen cooperation with developers as we strive to expand our advertising business and develop new e-commerce business models. At the same time, we will continue to focus on platform construction and content creation and make efforts to improve user growth, optimize user experience and stickiness, and further consolidate Leju's influence among industry media. We will also continue to strengthen our team, further optimize our organizational structure and improve operational efficiency in order to lay a solid foundation for our future development.

今年下半年，我們將緊緊抓住房地產行銷數位化帶來的機遇，深化與開發商的合作，努力拓展廣告業務，開拓電商新業務模式。同時，我們將持續注重平台建置和內容創作，努力提高使用者成長，優化使用者體驗和黏性，進一步鞏固樂居在產業媒體的影響力。我們也將持續壯大團隊，進一步優化組織架構，提高營運效率，為未來的發展打下堅實的基礎。

Now I will turn the call over to our Deputy CFO, Ms. Michelle Yuan, who will review our financial highlights for the first half 2021.

現在我將把電話轉給我們的副財務長 Michelle Yuan 女士，她將回顧我們 2021 年上半年的財務亮點。

Thank you, Geoffrey. For the first half 2021, we recorded total revenues of $301.1 million, an increase of 8% from the same period last year. Our e-commerce revenues increased by 13% to $231.4 million for the first half of 2021, as a result of an increase in the number of discount coupons redeemed, partially offset by a decrease in average price per discount coupon redeemed. E-commerce services contributed 77% of total revenues for the first half 2021.

謝謝你，傑弗裡。2021年上半年，我們的總營收為3.011億美元，比去年同期成長8%。2021 年上半年，我們的電子商務收入成長了 13%，達到 2.314 億美元，原因是兌換的折扣券數量增加，但被兌換的每張折扣券平均價格的下降部分抵消了。2021年上半年，電子商務服務貢獻了總營收的77%。

Our online advertising revenues, contributing 23% of total revenues, decreased by 6% to $69.3 million for the first half 2021, due to a decrease in property developers' demand for online advertising, while our listing revenues increased by 18% to $0.4 million, as a result of an increase in secondary real estate brokers' demand for the first half 2021.

由於房地產開發商對網路廣告的需求減少，我們的線上廣告收入佔總收入的23%，在2021 年上半年下降了6% 至6,930 萬美元，而我們的上市收入則成長了18% 至40 萬美元。

Loss from operations was $49.9 million for the first half 2021, compared to income from operations of $1.2 million for the same period last year, primarily due to bad debt provision, which was increased by $48.9 million compared to the same period of 2020.

2021年上半年的營運虧損為4,990萬美元，而去年同期的營運收入為120萬美元，主要是由於壞帳準備金較2020年同期增加了4,890萬美元。

Net loss attributable to Leju shareholders was $47.8 million for the first half 2021, compared to net income attributable to Leju shareholders of $1.5 million for the same period of 2020.

2021年上半年樂居股東應佔淨虧損為4,780萬美元，而2020年同期樂居股東應佔淨利為150萬美元。

Non-GAAP loss from operations was $43.4 million for the first half 2021, compared to non-GAAP income from operations of $8.3 million for the same period last year. Non-GAAP net loss attributable to Leju shareholders was $42.6 million for the first half 2021, compared to non-GAAP net income attributable to Leju shareholders of $7.2 million for the same period last year.

2021 年上半年，非 GAAP 營運虧損為 4,340 萬美元，而去年同期的非 GAAP 營運收入為 830 萬美元。2021 年上半年，非 GAAP 歸屬於樂居股東的淨虧損為 4,260 萬美元，而去年同期非 GAAP 歸屬於樂居股東的淨利潤為 720 萬美元。

As of June 30, 2021, our cash and cash equivalents balance was $328 million. Our net cash flows generated in operating activities for the first half 2021 were $38.8 million, mainly attributable to provision for allowance for doubtful accounts of $51.7 million and a decrease in accounts receivable of $46.5 million, partially offset by non-GAAP net loss of $41.7 million and an increase in prepaid expenses and other current assets of $15.2 million.

截至 2021 年 6 月 30 日，我們的現金及現金等價物餘額為 3.28 億美元。2021 年上半年，我們的經營活動產生的現金流量淨額為3,880 萬美元，主要歸因於呆帳準備金5,170 萬美元及應收帳款減少4,650 萬美元，部分被非公認會計準則淨虧損4,170 萬美元所抵銷預付費用和其他流動資產增加 1,520 萬美元。

Looking ahead, given the current macroeconomic situation and our prudent operating model, we estimate that our second half of 2021 total revenues will be approximately between $300 million to $310 million, which is relatively flat compared to the first half of 2021. Please note, this forecast reflects our current and preliminary view, which is subject to change.

展望未來，考慮到當前的宏觀經濟狀況和我們審慎的營運模式，我們預計 2021 年下半年的總收入將約為 3 億至 3.1 億美元，與 2021 年上半年相比相對持平。請注意，這一預測反映了我們當前的初步觀點，該觀點可能會發生變化。

This concludes our prepared remarks. We are now ready to take your questions. Operator, please go ahead.

我們準備好的演講到此結束。我們現在準備好回答您的問題。接線員，請繼續。

(Operator Instructions) We have the first question coming from the line of Marco Rodriguez from Stonegate Capital.

（操作員說明）我們的第一個問題來自 Stonegate Capital 的 Marco Rodriguez。

Good morning management, thank you for taking my question. I was wondering if you could talk a little bit more about the bad debt provision that you took in this quarter. If you can just kind of walk us through when that sort of happened or when it became apparent that this was going to be something that you needed to do?

早上好，管理層，謝謝您回答我的問題。我想知道您是否可以多談談您在本季度提列的壞帳撥備。當這種情況發生時，或者當你明顯意識到這將是你需要做的事情時，你能告訴我們嗎？

Okay. As you know, that the overall industry actually were not so good since last year and some certain clients, one of our major clients actually encountered with some deterioration of their credit. So we actually have to take this provision. I can give you some notice that as of June 30, this client, the total account receivables and the note receivables were actually RMB 672 million comprised of RMB 220 million in notes receivables and RMB 152 million in account receivables. The credit rating of notes receivables was higher than accounts receivables. So this quarter, we take bad debt provision was RMB 324 million. Is that okay?

好的。大家知道，去年以來整個產業其實不太好，有些客戶，我們的一個大客戶，信用確實出現了一些惡化。所以我們實際上必須接受這個規定。我可以告訴大家的是，截至6月30日，該客戶的應收帳款和應收票據合計為6.72億元，其中應收票據2.2億元，應收帳款1.52億元。應收票據信用評等高於應收帳款。所以本季我們提列的壞帳準備為人民幣3.24億元。可以嗎？

Got you. Yes. That's very helpful. And in terms of just the overall real estate landscape and these impacts that you saw for this particular client, are there any other customers or clients that you're monitoring closely in terms of their credit quality?

明白你了。是的。這非常有幫助。就整體房地產格局以及您對該特定客戶所看到的影響而言，您是否正在密切監控其他客戶或客戶的信用品質？

So far, excluding this client, our other client base is very diversified and none of them take a significant portion of our revenue source. So from the base side, I think our client base is quite safe. That's the first one. The second one is that we already noticed that some developers projects may have some security problem. So part of them, we will stop cooperation with them. So currently, we checked all the projects we cooperate with and all the clients. Currently, I think all the projects we are currently cooperating with them are very safe.

到目前為止，除了該客戶之外，我們的其他客戶群非常多元化，沒有一個客戶佔據了我們收入來源的很大一部分。所以從基礎方面來看，我認為我們的客戶群是相當安全的。這是第一個。第二個是我們已經注意到一些開發者專案可能存在一些安全問題。所以對於其中一部分，我們將停止與他們的合作。所以目前我們對所有合作的專案、所有的客戶都進行了排查。目前我認為我們目前跟他們合作的所有專案都是非常安全的。

Got it. Very helpful. And in your prepared remarks, you mentioned tightening regulations as it relates to the real estate industry. I was wondering if you could just kind of put some broad strokes on how you see that evolving? And then if you could, there's obviously been a lot of news about the regulatory environment in general in China and changing regulations as it relates to Internet-related operations. I was wondering if you could also please talk a little bit about how you see those trends impacting Leju.

知道了。很有幫助。在您準備好的發言中，您提到了與房地產行業相關的收緊監管。我想知道您是否可以概括一下您如何看待這種演變？如果可以的話，顯然有很多關於中國總體監管環境以及與互聯網相關業務相關的法規變化的新聞。我想知道您是否也可以談談您如何看待這些趨勢對 Leju 的影響。

Okay. First of all, I think that the regulation of the real estate industry will be, if not further tightening, will be consistent in the coming future. So the government, I think, the core of their policy is maintained house price. In the past, maybe half a year, I think you can see in major cities and in their downtown areas, most projects that were developed for sales, the government put limits to price, which caused thousands of buyers, they will want to buy the projects. So this kind of situation actually is getting changed because the government imposed strict policies over the pricing, even on the primary sector and the secondary sector. So I think, in the coming future, the market price will encounter some pressure, which we think is not good for developers, but maybe will create some new opportunities for Leju because we are doing digital marketing for them. If the developers, they don't feel pressure on selling houses, so the opportunity for Leju is small. So I think when the market goes down, that will leave some new opportunities for Leju to promote the digital marketing. That's the second one.

好的。首先，我認為對房地產行業的監管即使不是進一步收緊，在未來的一段時間內也會是持續的。所以我認為政府政策的核心是維持房價。過去大概半年吧，我想你可以看到，在大城市，在市中心，大部分項目都是為了銷售而開發的，政府限價，導致成千上萬的買家，他們會想買。 。所以這種情況其實正在改變，因為政府對價格實行了嚴格的政策，甚至對第一產業和第二產業也是如此。所以我認為，在不久的將來，市場價格會遇到一些壓力，我們認為這對開發商來說不是好事，但也許會給樂居創造一些新的機會，因為我們正在為他們做數位行銷。如果開發商沒有感覺到賣房的壓力，那麼樂居的機會就很小。所以我覺得當市場下行的時候，會為樂居的數位行銷推廣留下一些新的機會。這是第二個。

The third one is that, we think, in the coming future, as you said, the Internet, actually, the government imposed a series of policies over the entertainment side. But for the e-commerce side, I think now most home buyers, they are getting online to get house information. And the stricter industry policy situations also will push the developers to invest more online to find new home buyers, I think it will be a new opportunity for us because we will still be focusing on how to create digital marketing capabilities for these developers. I think this is a new market for us.

第三個就是，我們認為，在未來，就像你說的，互聯網，實際上，政府在娛樂方面施加了一系列的政策。但對於電子商務方面，我認為現在大多數購屋者，他們都在網路上取得房屋資訊。而且更嚴格的行業政策情況也會促使開發商更多地在網上投資尋找新的購房者，我認為這對我們來說將是一個新的機會，因為我們仍然會專注於如何為這些開發商創造數位行銷能力。我認為這對我們來說是一個新市場。

Excellent. Very helpful. And in terms of the online promotional events you've had this last quarter, "The 2nd Online Real Estate Fair" and the "June 18 Top Pick House Festival", can you just talk a little bit about how those performed versus your expectations? And then if you could also talk a little bit about the Leju Flagship Store, how that is also performing?

出色的。很有幫助。至於上季度你們舉辦的線上促銷活動，“第二屆網上房產交易會”和“6月18日精選房節”，您能否簡單談談這些活動與您的預期相比效果如何？那麼如果您還可以談談樂居旗艦店，它的表現也如何？

Okay. Previously, last year we did "The 1st Online House Fair" mainly on the Leju platform. This year, we put this fair on both Leju platform and Tmall Haofang platform. Tmall as one of the leading e-commerce platform in China, their traffic is larger than Leju. This will help developers. When they are joining our online fair, they will get more traffic. That's the first one. The second one is that actually, when we asked developers when they join our online fairs, they need to give some additional discount to the online buyers, which will -- actually will encourage the sales online. So the result actually is quite satisfactory and the joining of the Tmall House will increase our traffic value and also will increase the influence of our online fair.

好的。在此之前，去年我們主要在樂居平台做了「第一屆網路房交會」。今年我們把這個展覽放在了樂居平台和天貓好房平台。天貓作為中國領先的電子商務平台之一，其流量比樂居還要大。這將有助於開發人員。當他們加入我們的線上展會時，他們將獲得更多流量。這是第一個。第二個是，實際上，當我們詢問開發商何時參加我們的線上展會時，他們需要向線上買家提供一些額外的折扣，這實際上會鼓勵線上銷售。所以這個結果其實還是比較滿意的，天貓之家的加入會增加我們的流量價值，也會增加我們線上展會的影響力。

Excellent. And then if you could just maybe discuss what other sort of promotional activities do you have planned for the second half 2021?

出色的。那麼您是否可以討論一下您在 2021 年下半年還計劃開展哪些其他類型的促銷活動？

Actually, the traditional promotion event of Tmall is the November 11 that we call "Double 11". But I think we will catch up this opportunity. And, for the real estate industry, the December is usually the hot season for the home buyers to buy the houses. So we will also do December 12 that we call "Double 12". So we will catch up these 2 points as our online promotion time slots. So during that period, I think we will encourage more developers to put their projects online. And we also will set up new online platform to host these projects, and also we will encourage more developers. Now they are now more willing to give special discounts when doing this promotion events. I think we also will create some innovational tools or it's kind of online games like that so to encourage more buyers to get this online house information and even get more discounts online to encourage them to buy house online. Currently, we are still designing that marketing plan.

其實，天貓的傳統促銷活動是11月11日，也就是我們所說的「雙11」。但我認為我們會抓住這個機會。而對房地產業來說，12月通常是購屋者購屋的旺季。所以我們也會在12月12日舉辦我們稱為「雙12」的活動。所以我們會抓住這兩個點作為我們的線上促銷時段。所以在那段時間裡，我想我們會鼓勵更多的開發者把他們的專案放上網。我們還將建立新的線上平台來託管這些項目，我們也會鼓勵更多的開發者。現在他們在做這種促銷活動時更願意給予特別折扣。我認為我們還會創建一些創新工具或類似的在線遊戲，以鼓勵更多買家獲得在線房屋信息，甚至在網上獲得更多折扣，以鼓勵他們在線購買房屋。目前，我們仍在設計該行銷計劃。

(Operator Instructions) We do not have any further questions at this moment. I would like to hand the conference back to our host. Please take over, ma'am.

（操作員說明） 目前我們沒有任何進一步的問題。我想將會議交還給我們的東道主。請接手吧，女士。

This concludes today's call. If you have any follow-up questions, please contact us at the numbers or e-mails provided on our earnings release and on our website. Thank you.

今天的電話會議到此結束。如果您有任何後續問題，請透過我們的收益發布和網站上提供的電話號碼或電子郵件與我們聯絡。謝謝。

Thank you. That does conclude our conference for today. Thank you all for your participation. You may disconnect now.

謝謝。我們今天的會議到此結束。感謝大家的參與。您現在可以斷開連線。