Revenue Up 93%
Sydney, Sep 2, 2019 AEST (ABN Newswire) - 99 Wuxian Ltd (
ASX:NNW)(99W:FRA) reported a net profit of RMB1.3 cents per share compared to a net loss of RMB1.1 cents in the first half of FY2018, an improvement of RMB2.4 cents per share. The Company did not propose any dividend distribution or buy back during the period.
Revenue generated in the first half of FY2019 was up by 93% from the previous corresponding period, primarily due to the growth of business partners and enhanced product and service offerings attracting higher commission rates.
a) The expansion of business partners
By the end of the first half of FY2019, the Company had approximately 1,790 business partners. The number of business partners increased by 130%, from 776 partners as of 30 June 2018. The Company secured approximately 390 new business partners during the first six months of 2019. The expansion of business partner base reflects the implementation of M-commerce Marketing Solutions and Cloud Delivered Services strategy that meets business partners' demands, and their customers ' needs.
b) Enhanced product and service offerings attracting higher commission rates
The Company has expended its products and services through M-commerce Marketing Solutions and Cloud Delivered Services that satisfy the market preference and trends. Higher commission rates from enhanced products and services have been achieved.
Profit / (Loss) from Ordinary Operations after Income Tax Expense
The Company successfully turned around the net loss in the first half of FY2018 to a net profit in the first half of FY2019. The Company reported a net profit of RMB15 .6 million in the first half of FY2019, an improvement of RMB27.9 from the net loss of RMB12 .3 million in the first half of FY2018. The increase in net profit resulted primarily from gross profit enhancement and concentration on marketing and distribution functions.
a) Improvement of gross profit benefited from the growth of revenue The Company recorded a gross profit of RMB105.1 million, representing an increase of 99% compared with the previous corresponding period of FY2018.
The improvement in gross profit was mainly due to the growth of revenue and cost control.
b) Operation efficiency improvement and concentration on marketing and distribution functions
The Company constantly makes efforts to improve its operation efficiency, expense control and concentrate on marketing and distribution functions . As a result, the revenue in the first half of FY2019 increased by 93% from the corresponding period of FY2018, while the total amount of selling & distribution expenses and administration expenses in the first half of FY2019 only increased by 42%.
c) Other gains as a result of the change in fair value of financial liability derivate
The Company has obtained a gain of RMB8.4 million in the first half of FY2019, while the gain in the corresponding period of FY2018 was RMB2. 9 million. The gain mainly came from the change in fair value of derivative financial liabilities in the first half of FY2019. The derivative financial liabilities represented unlisted call options granted to lenders according to equity-linked loans.
99 Wuxian is a provider of M-commerce Solutions and Cloud Delivered Services. Relying on its strong professional technology and accumulated M-commerce experiences, the Company offers various products and services to the market. With the development of business, the Company constantly extends the business partners pool. At the same time, more demands and higher requirements from business partners emerge on customer acquisition, marketing, customer activeness and engagement, customer incentives, customer retention and loyalty management and customer lifecycle extension. The Company provides more comprehensive services including 99 Marketplace, Offline to Online Marketing Integration, Business Procurement Tools, Customer Behavior Data Analysis, Loyalty Marketing Program, Employee Benefits, Integrated Marketing and Insurance Service Platform to satisfy business partners' developing demands.
The efforts that 99 Wuxian devotes to offering M-commerce Solutions and Cloud Delivered Services to meet business partners demands is reflected in the growth of the business. The number of business partners experienced a significant increase, which is attributed to the Company's better understanding to business partners and its customers' demands.
99 Wuxian delivers high-value services to business partners, which contributes to the growth of revenue and gross profit. The Company has also adopted further measures to improve operation efficiency and enhance expense control. Compared with the results in the first half of FY2018, the total amount of selling and distribution expenses and the administration expenses in the first half year of FY2019 increased by 42%, however, it brought a revenue growth of 93%, demonstrating a higher productive result.
99 Wuxian will continue research and dialogue with business partners and their customers to ensure strong visibility to key needs and demands, broaden cooperation with both current and new business partners, and enhance services and enrich product portfolio and mix based on the demands analysis. The Company will monitor operational costs to ensure optimal operational efficiency, and ensure best practice technology is available through our core competencies for our business.
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About 99 Wuxian Ltd
99 Wuxian Ltd (ASX:NNW) aggregates over 300 million high quality consumers and 155 leading merchants through a marketplace embedded within the mobile apps of China's leading banks, telecommunications and insurance companies. 99 Wuxian enables increased customer satisfaction, loyalty and retention for its business partners by offering consumers the lifestyle convenience of purchasing virtual and physical goods on a mobile device.
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