CHENGDU, China, November 14, 2022 -- Senmiao Technology Limited (“Senmiao”) (NASDAQ: AIHS), a financing and servicing company focused on the online ride-hailing industry in China, as well as an operator of its own online ride-hailing platform, today announced financial results for its fiscal 2023 second quarter ended September 30, 2022.
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Please note that the financial figures of Senmiao’s former variable interest entities (“VIEs”) Sichuan Senmiao Ronglian Technology Co., Ltd. (“Sichuan Senmiao”), Sichuan Jinkailong Automobile Leasing Co., Ltd. (”Jinkailong”) and Chengdu Youlu Technology Ltd. (”Youlu”) had no impact on Senmiao’s consolidated interim financial information for the three months ended September 30, 2022, as a result of deconsolidation of these former VIEs effective March 31, 2022. The financial results from these former VIEs were classified as discontinued operations in the comparative period in 2021, which were previously classified under Automobile Transaction and Related Services.
Fiscal 2023 Second Quarter Financial and Operating Highlights
· Total revenues of $2.2 million from continuing operations, compared to $1.1 million in the prior-year period.
· From October 23, 2020, the date Senmiao launched its online ride-hailing platform, to September 30, 2022, approximately 25.1 million rides were completed (including orders completed on the platform operated by Senmiao and orders completed on partner platforms, such as Meituan, Xiehua and Anma) with fares paid by riders totaling $81.7 million.
· Loss from operations of $1.6 million, compared to loss of $2.3 million in the prior-year period, primarily as a result of a $0.7 million increase of gross profit.
· Net loss from continuing operations of $1.2 million, compared to net income of $0.7 million in the prior-year period, primarily as a result of a $3.0 million gain due to the change in fair value of derivative liabilities in the prior-year period.
Xi Wen, Chairman, Chief Executive Officer and President of Senmiao, stated, “We were pleased to have achieved strong top line growth during the second quarter of fiscal 2023 due to increased revenue contributions from our automobile rental and online ride-hailing platform services businesses from the prior-year period. This is particularly impressive given the impact of lockdowns in Chengdu on our business as we continue to navigate the ongoing pandemic environment. During the quarter, we generated a gross profit as the online ride-hailing platform services business has yielded increasing margins as we have gained efficiencies under the new business model where Senmiao incurs much lower expenses related to driver incentives. We are seeing the synergies between our automobile rental and online ride-hailing platform services businesses at work, resulting in tangible growth in both business lines. We believe these two business lines will continue to be our key growth drivers. We remain focused on providing quality online ride-hailing services for customers in our key cities while continuing to support and empower our drivers.”
Mr. Wen continued, “We continued expanding our online ride-hailing business to new cities and building symbiotic partnerships during the quarter ended September 30, 2022. We launched our online ride-hailing platform in the cities of Tianjin and Foshan, increasing Senmiao’s presence to a total of 26 cities. We also initiated cooperative partnerships in vehicle rental and leasing services, new energy vehicle charging services, and vehicle and driver resources in two of our key cities, Chengdu and Guangzhou, to further support our growth. We believe these partnerships present immediate value and potential future opportunities for our drivers. We plan to continue strengthening and expanding our partnership base to enable Senmiao to grow into new regions and improve access to our services.”
Total revenues from continuing operations were $2.2 million for the second quarter ended September 30, 2022, compared to $1.1 million in the prior-year period. The increase was largely due to increased contributions from operating lease revenues from automobile rentals and online ride-hailing platform services.
During the second quarter ended September 30, 2022, the automobile rental business generated operating lease revenues of $0.9 million, compared to $0.4 million in the prior-year period, due to a significant increase in the number of automobiles leased. The online ride-hailing platform services business generated revenues of $1.0 million, compared to $0.6 million in the prior-year period.
Cost of Revenues
Cost of revenues from continuing operations increased to $1.9 million for the second quarter ended September 30, 2022, compared to $1.5 million in the prior-year period, primarily due to a $0.3 million increase in costs of automobiles under operating leases as a result of business expansion and a $0.2 million increase in costs of automobile sold, partially offset by a $0.1 million decrease in direct expense and technical service fees related to online ride-hailing platform services.
Gross Profit (Loss)
Gross profit from continuing operations was $0.3 million for the second quarter ended September 30, 2022, compared to a gross loss of $0.4 million in the prior-year period, primarily due to the increase in gross profit from online ride-hailing platform services.
Selling, General and Administrative Expenses
Selling, general and administrative (“SG&A”) expenses from continuing operations decreased by 16.4% to $1.5 million for the second quarter ended September 30, 2022, compared to $1.8 million in the prior-year period. The decrease was a result of Senmiao’s cost control initiatives during the quarter, mainly attributable to a $0.2 million decrease in salary and employee benefits as the number of our employee decreased from 202 to 190, a $0.1 million decrease in office rental expenditures, as well as decreased professional service fees.
Net Income (Loss) from Continuing Operations
Net loss from continuing operations for the second quarter ended September 30, 2022, was $1.2 million, compared to net income of $0.7 million in the prior-year period, which was primarily as a result of a $3.0 million gain due to the change in fair value of derivative liabilities in the prior-year period.
Earnings (Loss) per Share
Loss per share for continuing operations was approximately $0.15 based on a weighted average number of basic and diluted common stock of 7.0 million, compared to earnings per share of approximately $0.19 based on a weighted average number of basic and diluted common stock of 5.5 million.
As of September 30, 2022, Senmiao had cash and cash equivalents of $2.0 million, compared to $1.2 million as of March 31, 2022, for its continuing operations. Total stockholders’ equity was $6.3 million as of September 30, 2022, compared to $8.1 million as of March 31, 2022.
Further information regarding Senmiao's results of operations for the quarter ended September 30, 2022 can be found in Senmiao's Form 10-Q, which will be filed with the Securities and Exchange Commission today.
About Senmiao Technology Limited
Headquartered in Chengdu, Sichuan Province, Senmiao provides automobile transaction and related services including sales of automobiles, facilitation and services for automobile purchases and financing, management, operating leases, guarantees and other automobile transaction services, as well as operates its own ride-hailing platform aimed principally at the growing online ride-hailing market in Senmiao’s areas of operation in China. For more information about Senmiao, please visit: http://www.senmiaotech.com. Senmiao routinely provides important updates on its website.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements (including those relating to the operation of Senmiao’s ride-hailing platform) are subject to significant risks, uncertainties and assumptions, including those detailed from time to time in the Senmiao’s filings with the SEC, and represent Senmiao’s views only as of the date they are made and should not be relied upon as representing Senmiao’s views as of any subsequent date. Senmiao undertakes no obligation to publicly revise any forward-looking statements to reflect changes in events or circumstances.
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