Cheche Group Reports Third Quarter 2024 Unaudited Financial Results
BEIJING, Nov. 26, 2024 /PRNewswire/ -- Cheche Group Inc. (NASDAQ: CCG) ("Cheche", the "Company" or "we"), China's leading auto insurance technology platform, today announced its unaudited financial results for the third quarter ended September 30, 2024.
Financial and Operational Highlights
-- Net Revenues for the quarter increased 3.3% year-over-year to RMB850.5
million (US$121.2 million), while net revenues for the first nine months
of 2024 increased 2.3% over the comparable prior year period to RMB2.5
billion (US$354.8 million).
-- Net Income for the quarter was RMB4.1 million (US$0.6 million), compared
to a net loss of RMB55.4 million for the prior-year quarter, while net
loss for the first nine months of 2024 decreased 60.2% to RMB50.8
million (US$7.2 million) over the prior-year period.
-- Adjusted Net Income ((1)) for the quarter was RMB2.6 million (US$0.4
million), compared to an adjusted net loss of RMB0.6 million for the
prior-year quarter, while adjusted net loss for the first nine months of
2024 decreased 23.0% to RMB21.8 million (US$3.1 million), compared to
the prior-year period.
-- Total written premiums placed for the quarter increased 4.0% to RMB5.9
billion (US$0.8 billion) compared to the prior-year period, while total
written premiums placed for the first nine months of 2024 increased 4.1%
over the comparable prior-year period to RMB16.9 billion (US$2.4
billion).
-- Total number of policies issued for the quarter increased 5.0% to 4.2
million from 4.0 million for the prior-year quarter, while the total
number of policies issued over the first nine months of 2024 increased
11.9% over the comparable prior-year period to 12.2 million.
-- Partnerships with New Energy Vehicle (NEV) companies ((2)) numbered 14
in the quarter and led to 292,000 embedded policies with corresponding
written premium of RMB884.2 million (US$126.0 million), representing an
increase of 149.6% and 121.6 % compared to the prior-year quarter,
respectively. Embedded policies and corresponding written premium for
the first nine months of 2024 reached 636,000 and RMB1.9 billion
(US$273.2 million), respectively, representing growth of 144.6 % for
policies embedded and 104.2% for written premium compared to the
prior-year period.
(1) Adjusted Net Loss/Income is a non-GAAP measure. For further information on the non-GAAP financial measures presented above, see the "Non-GAAP Financial Measures" section below.
(2) The rapid growth of the NEV market has created new opportunities for auto insurance offerings and propelled revenue growth of auto insurance providers. Cheche started collaborating with NEV manufacturers in 2022, which yielded considerable results in 2023. Cheche believes that the further development of the NEV market and the introduction of innovative NEV auto insurance solutions will further fuel the revenue contribution of its partnership with
NEV manufacturers. The management of Cheche utilizes the number of partnerships with NEV manufacturers, the number of insurance policies embedded in the new NEV deliveries, and the number of corresponding premiums generated from such embedded policies as the primary operating metrics to evaluate its business. It presents such operating metrics for investors to better understand and assess Cheche's business.
Management Comments
"We are proud to announce that Cheche reported net income profitability for the first time on both a GAAP and adjusted net income basis. This quarter's milestone substantiates the merit of our business model and the growing conviction in our value proposition," said Lei Zhang, Founder, CEO, and Chairman of Cheche Group. "We continue to work with both NEV manufacturers and insurers to leverage advanced data analysis, delivering tools that will reward responsible drivers, reduce fraud, and bring efficiencies to claims processing to support profitability, transparency, and affordability as the transition to automated mobility accelerates.
Mr. Zhang continued, "With China producing 48% more NEVs in September over the prior year, according to China Association of Automobile Manufacturers, and NEV sales again surpassing traditional fuel car sales in the same month, our innovative platform will continue to meet the evolving insurance needs of car owners, manufacturers, and insurers."
Unaudited Third Quarter 2024 Financial Results
Net Revenues were RMB850.5 million (US$121.2 million), representing a 3.3% year-over-year increase from the prior-year quarter. The growth was driven by increased insurance transactions conducted through Cheche's platform by referral and third-party platform partners.
Cost of Revenues increased 3.0% year-over-year to RMB808.1 million (US$115.2 million) from the prior-year quarter, consistent with the growth of business volume and net revenues.
Selling and Marketing Expenses decreased 53.6% to RMB18.1 million (US$2.6 million) from RMB39.0 million in the prior-year quarter, mainly due to the decrease in share-based compensation expenses and staff cost. Excluding share-based compensation expenses, selling and marketing expenses were RMB17.4 million (US$2.5 million), a decrease of 6.5% compared to the prior-year quarter.
General and Administrative Expenses decreased 41.3% to RMB20.4 million (US$2.9 million) from RMB34.8 million for the prior-year quarter, mainly due to the decrease in share-based compensation and professional service fees. Excluding share-based compensation and listing-related professional service fees, general and administrative expenses increased by RMB3.5 million from RMB15.0 million to RMB18.5 million (US$2.6 million), primarily due to the increase of post-listing professional service fees.
Research and Development Expenses decreased 24.5% to RMB10.2 million (US$1.4 million) from RMB13.5 million in the prior-year quarter. The change was mainly due to decreased share-based compensation expenses, partially offset by the increase of staff costs. Excluding share-based compensation expenses, research and development expenses decreased 8.8% to RMB9.8 million (US$1.4 million) from RMB10.8 million in the prior-year quarter.
Total Cost and Operating Expenses decreased by 1.8% to RMB856.8 million (US$122.1 million) from RMB872.0 million in the prior-year quarter, mainly due to the increased cost of revenues and the decrease in share-based compensation expenses. Excluding share-based compensation expenses, amortization of intangible assets related to the acquisition and listing-related professional service fees, total cost and operating expenses increased by 3.0% from the prior-year quarter.
Net Income for the quarter was RMB4.1 million (US$0.6 million), compared to a net loss of RMB55.4 million for the prior-year quarter. Excluding non-GAAP expenses, the Adjusted Net Income ((1)) for the quarter was RMB2.6 million (US$0.4 million), due to the improvement of operating results and the positive impact from foreign exchange rates, compared to an adjusted net loss of RMB0.6 million for the prior-year quarter.
Net Income attributable to Cheche's shareholders was RMB4.1 million (US$0.6 million), compared to a net loss attributable to Cheche's shareholders of RMB707.6 million for the prior-year quarter.
Adjusted Net Income attributable to Cheche's shareholders was RMB2.6 million (US$0.4 million), compared to an adjusted net loss attributable to Cheche's shareholders of RMB652.7 million for the prior-year quarter.
Net Income Per Share, basic and diluted, was RMB0.05 (US$0.01), compared to a net loss per share of RMB17.52, basic and diluted, for the prior-year quarter.
Adjusted Net Income Per Share, basic and diluted, was RMB0.03 (US$0.00), compared to an adjusted net loss per share of RMB16.16, basic and diluted, for the prior-year quarter.
3Q24 and Subsequent Business Highlights
-- On September 3, 2024, Cheche announced a partnership with Shanghai Jidu
Automobile Company Limited ("JI YUE") to further diversify its partner
network with leaders in the NEV industry. Cheche successfully launched a
system for JI YUE, creating channels for online and offline purchasing
of auto and non-auto insurance products. The system is integrated into
Cheche's core platform and is equipped with resources to grow and
strengthen JI YUE's sales channels and enhance account settlement
capabilities, among other functionalities.
-- On September 12, 2024, Cheche announced a partnership with Laoyou
Insurance Brokerage Co., Ltd. ("Laoyou Insurance"), a wholly controlled
subsidiary of Great Wall Motor Company Limited ("GWM"), a top ten
Chinese auto manufacturer. Cheche's insurance solutions and mature
transaction system have been gradually rolled out with GWM's newly
established direct-sales network in more than 20 cities nationwide.
Cheche plans to develop a comprehensive insurance solution tailored for
traditional automakers within one to two years.
-- On October 1, 2024, Cheche announced a strategic partnership with The
Tokio Marine & Nichido Fire Insurance Company (China) Limited ("TMNCH"),
as Cheche continues to broaden its collaborations with insurance
companies in China. Leveraging each other's strengths, the two companies
are working to develop specialized insurance products, services, and
sales strategies. Cheche's agreement with TMNCH is two pronged. This
collaboration will enhance Cheche's insurance service capabilities while
offering increased scale for traditional automotive companies and pave
the way for future partnerships with Japanese automotive companies.
Balance Sheet
As of September 30, 2024, the Company had RMB194.6 million (US$27.7 million) in total cash, cash equivalents and short-term investments.
Business Outlook
Cheche is affirming its full-year 2024 outlook:
-- Net Revenues are expected to range from RMB3.5 billion to RMB3.7
billion, representing an increase of 6.1% to 12.1%, compared to the full
year of 2023.
-- Total written premiums placed are expected to range from RMB24.5 billion
to RMB26.5 billion, representing an increase of 8.4% to 17.3%, compared
to the full year of 2023.
Conference Call
Cheche will host a webcast and conference call to discuss its third quarter 2024 results today at 8:00 a.m. EST. This earnings release and a related investor deck will be available prior to the event in the "Quarterly Results" section under "Financials," while the live webcast will be available in the "Events" section under the "News & Events" header on the investor relations website at ir.chechegroup.com.
The dial-in numbers for the conference call will be as follows:
-- Participant (toll-free): 1-888-346-8982
-- Participant (international): 1-412-902-4272
-- Hong Kong LT: 852-301-84992
-- Hong Kong Toll Free: 800-905945
-- China Toll-Free: 4001-201203
Please dial in 10 to 15 minutes before the scheduled start time and request Cheche's third quarter earnings call.
A webcast replay will be available for one year following the call.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the reader's convenience. Unless otherwise noted, all translations from RMB to U.S. dollars and from U.S. dollars to RMB are made at a rate of RMB7.0176 to US$1.00, the exchange rate on September 30, 2024, set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or U.S. dollar amounts referenced could be converted into U.S. dollars or RMB, as the case may be, at any particular rate or at all.
About Cheche Group Inc.
Established in 2014 and headquartered in Beijing, China, Cheche is a leading auto insurance technology platform with a nationwide network of around 108 branches licensed to distribute insurance policies across 25 provinces, autonomous regions, and municipalities in China. Capitalizing on its leading position in auto insurance transaction services, Cheche has evolved into a comprehensive, data-driven technology platform that offers a full suite of services and products for digital insurance transactions and insurance SaaS solutions in China. Learn more at https://www.chechegroup.com/en.
Cheche Group Inc.:
Crocker Coulson
crocker.coulson@aummedia.org
(646) 652-7185
Non-GAAP Financial Measures
Cheche has provided non-GAAP financial measures in this press release that have not been prepared in accordance with generally accepted accounting principles (GAAP) in the United States.
Cheche uses adjusted cost of revenues, adjusted selling and marketing expenses, adjusted general and administrative expenses, adjusted research and development expenses, adjusted total cost and operating expenses, adjusted net loss/income, and adjusted net loss/income per share, which are non-GAAP financial measures, in evaluating our operating results and for financial and operational decision-making purposes.
Cheche defines adjusted total cost and operating expenses as total cost and operating expenses adjusted for the impact of share-based compensation, amortization of intangible assets related to the acquisition of Cheche Insurance Sales & Services Co., Ltd. (previously named Fanhua Times Sales and Service Co., Ltd), listing-related professional service fees and dispute resolution expenses, representing expenses Cheche incurred in a dispute with a certain security holder. Cheche defines adjusted net loss/income as net loss/income adjusted for the impact of share-based compensation expenses, amortization of intangible assets, and changes in fair value of amounts due to a related party related to the acquisition of Cheche Insurance Sales & Services Co., Ltd. (previously named Fanhua Times Sales and Service Co., Ltd), change in fair value of warrants, listing related professional service fees and dispute resolution expenses. Adjusted net loss/income per share, basic and diluted, is calculated as adjusted net loss/income divided by weighted-average ordinary shares outstanding.
Cheche believes that these non-GAAP financial measures help identify underlying trends in its business that could otherwise be distorted by the impact of share-based compensation expenses, amortization of intangible assets related to acquisition, and change in fair value of amounts due to a related party associated with the acquisition of Cheche Insurance Sales & Services Co., Ltd. (previously named Fanhua Times Sales and Service Co., Ltd), change in fair value of warrants, and listing related professional service fees and dispute resolution expenses. Cheche believes that such non-GAAP financial measures also provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects, and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.
The non-GAAP financial measures are not defined under U.S. GAAP nor presented in accordance with U.S. GAAP. They should not be considered in isolation or construed as alternatives to net loss /income or any other measure of performance or as an indicator of Cheche's operating performance. Further, these non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company's data. Cheche encourages investors and others to review the Company's financial information in its entirety and not rely on a single financial measure. Investors are encouraged to compare the historical non-GAAP financial measures with the most directly comparable GAAP measures. Cheche mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures, all of which should be considered when evaluating its performance.
Safe Harbor Statements
This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "estimate," "plan," "project," "forecast," "intend," "will," "expect," "anticipate," "believe," "seek," "target" or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements also include, but are not limited to, statements regarding projections, estimations, and forecasts of revenue and other financial and performance metrics, projections of market opportunity and expectations, the Company's ability to scale and grow its business, the Company's advantages and expected growth, and its ability to source and retain talent, as applicable. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of the Company's management and are not predictions of actual performance. These statements involve risks, uncertainties, and other factors that may cause the Company's actual results, activity levels, performance, or achievements to materially differ from those expressed or implied by these forward-looking statements. 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. Although the Company believes that it has a reasonable basis for each forward-looking statement contained in this press release, the Company cautions you that these statements are based on a combination of facts and factors currently known and projections of the future, which are inherently uncertain. The forward-looking statements in this press release represent the views of the Company as of the date of this press release. Subsequent events and developments may cause those views to change. Except as may be required by law, the Company does not undertake any duty to update these forward-looking statements.
Unaudited
Condensed Consolidated Balance Sheets (
All
amounts in thousands, except
for
share
and per share
data)
December 31, September 30, September 30,
2023 2024 2024
RMB RMB USD
ASSETS
Current assets:
Cash and cash equivalents 243,392 131,110 18,683
Short-term investments 21,474 63,512 9,050
Accounts receivable, net 466,066 746,873 106,429
Prepayments and other current assets 49,321 41,829 5,961
Total current assets 780,253 983,324 140,123
Non-current assets:
Restricted Cash 5,000 5,000 712
Property, equipment and leasehold improvement, net 1,667 2,205 314
Intangible assets, net 8,050 6,475 923
Right-of-use assets 10,249 8,936 1,273
Goodwill 84,609 84,609 12,057
Other non-current assets 4,149 4,930 703
Total non-current assets 113,724 112,155 15,982
Total assets 893,977 1,095,479 156,105
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 316,868 565,806 80,627
Short-term borrowings 20,000 15,000 2,137
Contract liabilities 4,295 2,524 360
Salary and welfare benefits payable 73,609 78,500 11,186
Tax payable 950 4,547 648
Amounts due to related party 55,251
Accrued expenses and other current liabilities 25,759 17,905 2,552
Short-term lease liabilities 3,951 4,270 608
Warrant 850 1
Total current liabilities 501,533 688,553 98,118
Non-current liabilities:
Amounts due to related party - 44,420 6,330
Deferred tax liabilities 2,013 1,619 231
Long-term lease liabilities 5,398 3,960 564
Deferred revenue 1,432 1,432 204
Warrant 5,419 1,241 177
Total non-current liabilities 14,262 52,672 7,506
Total liabilities 515,795 741,225 105,624
Ordinary shares 5 6 1
Treasury stock (1,025) (1,025) (146)
Additional paid-in capital 2,491,873 2,521,942 359,374
Accumulated deficit (2,113,821) (2,164,642) (308,459)
Accumulated other comprehensive income/(loss) 1,150 (2,027) (289)
Total Cheche's
s
hareholders'
equity 378,182 354,254 50,481
Total liabilities and shareholders' equity 893,977 1,095,479 156,105
Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss)/Income
(All amounts in thousands, except for share and per share data)
For the Three Months Ended For the
Nine
Months Ended
September September September September September September
3 3 3 3 3 3
0 0 0, 0 0 0,
, , , ,
2023 2024 2024 2023 2024 2024
RMB RMB USD RMB RMB USD
Net revenues 823,269 850,517 121,198 2,433,640 2,489,503 354,751
Cost and
Operating expenses:
Cost of revenues (784,782) (808,079) (115,150) (2,336,761) (2,382,364) (339,484)
Selling and marketing expenses (38,991) (18,110) (2,581) (86,747) (59,771) (8,517)
General and administrative expenses (34,809) (20,422) (2,910) (84,503) (82,175) (11,710)
Research and development expenses (13,465) (10,166) (1,449) (44,768) (28,691) (4,088)
Total
cost and
operating expense
s (872,047) (856,777) (122,090) (2,552,779) (2,553,001) (363,799)
O
ther expense
s:
Interest income 1,212 1,753 250 2,695 5,010 714
Interest expense (329) (176) (25) (871) (616) (88)
Foreign exchange gains/(losses) 1,069 3,502 499 (5,265) 2,447 349
Government grants 2,685 243 35 9,925 477 68
Changes in fair value of warrant (10,307) 992 141 (10,434) 4,368 622
Changes in fair value of amounts due (1,086) 3,901 556 (4,922) 615 88
to related party
Others, net (33) 6 1 (2) 186 27
(
Loss
)/income
before income
tax (55,567) 3,961 565 (128,013) (51,011) (7,268)
Income tax credit 128 90 13 386 190 27
Net
(
loss
)/
income (55,439) 4,051 578 (127,627) (50,821) (7,241)
Accretions to preferred shares (652,178) (762,169)
redemption value
Net
(
loss
)/income
attributable to the (707,617) 4,051 578 (889,796) (50,821) (7,241)
Cheche's ordinary shareholders
Net
(
loss
)/
income (55,439) 4,051 578 (127,627) (50,821) (7,241)
Other comprehensive (loss)/income:
Foreign currency translation (1,433) (5,408) (771) 5,977 (3,393) (483)
adjustments, net of nil tax
Fair value changes of amounts due to (104) 470 67 (404) 216 31
related party due to own credit risk
Total
other
comprehensive (1,537) (4,938) (704) 5,573 (3,177) (452)
(
loss
)/
income
Total c
omprehensive loss (56,976) (887) (126) (122,054) (53,998) (7,693)
Net
(
loss
)/income
per
ordinary
shares outstanding
Basic (17.52) 0.05 0.01 (25.21) (0.66) (0.09)
Diluted (17.52) 0.05 0.01 (25.21) (0.66) (0.09)
Weighted average number of
ordinary shares
outstanding
Basic 40,396,693 79,396,465 79,396,465 35,297,133 77,324,958 77,324,958
Diluted 40,396,693 86,508,545 86,508,545 35,297,133 77,324,958 77,324,958
Reconciliation of GAAP Cost and Operating Expenses to Non-GAAP Cost and Operating
Expenses (Unaudited)
(All amounts in thousands)
For the
Three For the
Nine
Months Ended Months Ended
September September September September September September
3 3 3 3 3
0 0 0, 0 0 0,
, , , , 3
2023 2024 2024 2023 2024 2024
RMB RMB USD RMB RMB USD
Cost of revenues (784,782) (808,079) (115,150) (2,336,761) (2,382,364) (339,484)
Add: Share-based compensation 114 3 187 9 1
expenses
Amortization of intangible assets related 525 525 75 1,575 1,575 224
to acquisition
Adjusted Cost of revenues (784,143) (807,551) (115,075) (2,334,999) (2,380,780) (339,259)
Selling and marketing expenses (38,991) (18,110) (2,581) (86,747) (59,771) (8,517)
Add: Share-based compensation 20,381 718 102 30,054 4,350 620
expenses
Adjusted Selling and marketing (18,610) (17,392) (2,479) (56,693) (55,421) (7,897)
expenses
General and administrative expenses (34,809) (20,422) (2,910) (84,503) (82,175) (11,710)
Add: Share-based compensation 10,334 1,898 270 25,689 24,044 3,426
expenses
Listing related professional expenses 9,435 14,972
Dispute resolution expenses (1) - 2,355 336
Adjusted General and administrative (15,040) (18,524) (2,640) (43,842) (55,776) (7,948)
expenses
Research and development expenses (13,465) (10,166) (1,449) (44,768) (28,691) (4,088)
Add: Share-based compensation 2,688 334 48 11,462 1,667 238
expenses
Adjusted Research and development (10,777) (9,832) (1,401) (33,306) (27,024) (3,850)
expenses
Total cost and operating expenses (872,047) (856,777) (122,090) (2,552,779) (2,553,001) (363,799)
Adjusted total cost and operating (828,570) (853,299) (121,595) (2,468,840) (2,519,001) (358,954)
expenses
(
1
) represents expenses incurred by Cheche in connection with settling a dispute with a certain security holder
,
which
are
not directly related to the core operations of
Cheche's
business.
Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
(All amounts in thousands, except for share data and per share data)
For the
Three For the
Nine
Months Ended Months Ended
September September September September September September
3 3 3 3 3 3
0 0 0 0 0 0
, , , , , ,
2023 2024 2024 2023 2024 2024
RMB RMB USD RMB RMB USD
Net
(loss)/income (55,439) 4,051 578 (127,627) (50,821) (7,241)
Add: Share-based compensation expenses 33,517 2,953 420 67,392 30,070 4,285
Amortization of intangible assets related to acquisition 525 525 75 1,575 1,575 224
Listing related professional expenses 9,435 14,972
Changes in fair value of warrant 10,307 (992) (141) 10,434 (4,368) (622)
Changes in fair value of amounts due to related party 1,086 (3,901) (556) 4,922 (615) (88)
Dispute resolution expenses - 2,355 336
Adjusted net
(loss)/income (569) 2,636 376 (28,332) (21,804) (3,106)
Accretions to preferred shares redemption value (652,178) (762,169)
Adjusted net
(loss)/income
attributable to (652,747) 2,636 376 (790,501) (21,804) (3,106)
Cheche's ordinary shareholders
Weighted average number of ordinary shares used
in computing non-GAAP adjusted
net
(loss)/income
per ordinary share
Basic 40,396,693 79,396,465 79,396,465 35,297,133 77,324,958 77,324,958
Diluted 40,396,693 86,508,545 86,508,545 35,297,133 77,324,958 77,324,958
Net
(loss)/income
per ordinary share
Basic (17.52) 0.05 0.01 (25.21) (0.66) (0.09)
Diluted (17.52) 0.05 0.01 (25.21) (0.66) (0.09)
Non-GAAP adjustments to net
(loss)/income
per
ordinary share
Basic 1.36 (0.02) (0.01) 2.81 0.38 0.05
Diluted 1.36 (0.02) (0.01) 2.81 0.38 0.05
Adjusted net
(loss)/income
per ordinary share
Basic (16.16) 0.03 0.00 (22.40) (0.28) (0.04)
Diluted (16.16) 0.03 0.00 (22.40) (0.28) (0.04)
View original content:https://www.prnewswire.com/news-releases/cheche-group-reports-third-quarter-2024-unaudited-financial-results-302316388.html
SOURCE Cheche Group Inc.
