BEIJING, Sept. 01, 2016 (GLOBE NEWSWIRE) -- Qunar Cayman Islands Limited (NASDAQ:QUNR) (“Qunar” or the “Company”), China’s leading mobile and online travel platform, today announced its unaudited financial results for the second quarter ended June 30, 2016.
Highlights for the Second Quarter of 2016
- Total revenues for the second quarter of 2016 were RMB1,030.8 million (US$155.1 million), an increase of 17.0% year-on-year.
- Gross profit for the second quarter of 2016 was RMB765.4 million (US$115.2 million), an increase of 20.7% year-on-year.
- Mobile revenues for the second quarter of 2016 were RMB774.0 million (US$116.5 million), an increase of 29.0% year-on-year, representing 75.1% of total revenues, compared to 68.1% in the corresponding period of 2015.
Second Quarter 2016 Financial Results
Total revenues for the second quarter of 2016 were RMB1,030.8 million (US$155.1 million), an increase of 17.0% year-on-year.
Mobile revenues for the second quarter of 2016 were RMB774.0 million (US$116.5 million), an increase of 29.0% year-on-year, representing 75.1% of total revenues.
Flight and flight related revenues for the second quarter of 2016 were RMB478.3 million (US$72.0 million), a decrease of 7.5% year-on-year and a decrease of 14.3% quarter-on-quarter. The year-on-year flight and flight related revenue decrease was primarily due to a decrease in Total Estimated Flight Ticket volume (TEFT) and slightly offset by an increase in revenue per ticket. The quarter-on-quarter flight and flight related revenue decrease was primarily due to decreases in TEFT.
Accommodation reservation revenues were RMB392.3 million (US$59.0 million), an increase of 51.6% year-on-year and an increase of 30.9% quarter-on-quarter. The year-on-year and quarter-on-quarter accommodation reservation revenue growth were primarily due to increases in revenue per room night and in Total Estimated Hotel Room-night volume (TEHR).
Gross profit for the second quarter of 2016 was RMB765.4 million (US$115.2 million), an increase of 20.7% year-on-year. Gross margin for the second quarter of 2016 was 74.2%, compared to 72.0% for the corresponding period of 2015 and 75.2% for the first quarter of 2016. The year-on-year increase in profit margin was driven by operational efficiencies. The year-on-year increase in gross profit was primarily due to increase in total revenues and the change in gross profit margin.
Product development expenses for the second quarter of 2016 were RMB516.6 million (US$77.7 million), an increase of 47.3% year-on-year, primarily due to a significant increase in non-cash share-based compensation expenses resulting from new options granted under our new 2015 share incentive plan (the “2015 Incentive Program”) in the fourth quarter of 2015, which have higher fair values compared with the outstanding options under our past incentive programs. The increase was partially offset by decreases in salary and welfare expenses associated with headcount decreases. Excluding share-based compensation expenses, product development expenses were RMB309.6 million (US$46.6 million), a decrease of 6.3% year-on-year, and accounted for 30.0% of total revenues, compared to 37.5% for the corresponding period in 2015 and 28.5% for the first quarter of 2016.
Product sourcing expenses for the second quarter of 2016 were RMB118.2 million (US$17.8 million), a decrease of 12.2% year-on-year, primarily due to decreases in salary, welfare and other expenses associated with headcount decreases, which were partially offset by a significant increase in share-based compensation expenses resulting from new options granted under our 2015 Incentive Program. Excluding share-based compensation expenses, product sourcing expenses were RMB105.7 million (US$15.9 million), a decrease of 20.1% year-on-year, and accounted for 10.3% of total revenues, compared to 15.0% for the corresponding period in 2015 and 12.3% for the first quarter of 2016.
Sales and marketing expenses for the second quarter of 2016 were RMB580.6 million (US$87.4 million), a decrease of 17.4% year-on-year, primarily due to a decrease in online marketing expenses as a result of controlled expenditure and improvement in operational efficiencies, which was partially offset by an increase in salary and welfare expenses as a result of increased headcount and, to a lesser degree, by an increase in share-based compensation expenses resulting from new options granted under our 2015 Incentive Program. Excluding share-based compensation expenses, sales and marketing expenses were RMB534.0 million (US$80.4 million), a decrease of 23.1% year-on-year, and accounted for 51.8% of total revenues, compared to 78.9% for the corresponding period in 2015 and 51.0% for the first quarter of 2016.
General and administrative expenses for the second quarter of 2016 were RMB149.1 million (US$22.4 million), an increase of 10.9% year-on-year. Excluding share-based compensation expenses, general and administrative expenses were RMB89.1 million (US$13.4 million), an increase of 1.2% year-on-year, and accounted for 8.6% of total revenues, compared to 10.0% for the corresponding period in 2015 and 7.3% for the first quarter of 2016.
Operating loss for the second quarter of 2016 was RMB599.0 million (US$90.1 million), compared to RMB695.2 million for the corresponding period in 2015 and RMB1,039.4 million for the first quarter of 2016.
Operating loss on a non-GAAP basis, which excludes share-based compensation expenses of RMB326.0 million (US$49.1 million), was RMB273.0 million (US$41.1 million) for the second quarter of 2016, compared to RMB611.5 million for the corresponding period in 2015 and RMB237.0 million for the first quarter of 2016.
Operating margin (non-GAAP) for the second quarter of 2016 was negative 26.5%, compared to negative 69.4% for the corresponding period in 2015 and negative 23.9% for the first quarter of 2016. The year-on-year decrease in operating loss was primarily due to strong revenue and controlled operating expenditures.
Net loss attributable to Qunar’s shareholders for the second quarter of 2016 was RMB698.8 million (US$105.1 million), compared to RMB815.7 million for the corresponding period in 2015 and RMB1,076.5 million for the first quarter of 2016. The quarter-on-quarter decrease in net loss was primarily due to a decrease in one-time charges of share-based compensation expenses resulting from our previously announced employee share exchange program that became effective starting on December 14, 2015 (“Employee Share Exchange Program”). Basic and diluted net loss per ADS for the second quarter of 2016 was RMB4.80 (US$0.72).
Adjusted net loss (non-GAAP), defined as net loss excluding share-based compensation expenses of RMB326.0 million (US$49.1 million), was RMB373.3 million (US$56.2 million) for the second quarter of 2016, compared to adjusted net loss of RMB623.8 million for the corresponding period in 2015 and adjusted net loss of RMB274.5 million for the first quarter of 2016.
Adjusted EBITDA (non-GAAP), defined as net loss before income tax expense, depreciation and amortization, interest expense, further adjusted to exclude share-based compensation expenses of RMB326.0 million (US$49.1 million), was negative RMB279.3 million (US$42.0 million) for the second quarter of 2016, compared to negative RMB575.3 million for the corresponding period in 2015 and negative RMB174.8 million for the first quarter of 2016.
As of June 30, 2016, Qunar had total cash and cash equivalents, restricted cash and funds receivable of RMB4,554.1 million (US$685.3 million). The restricted cash decreased by RMB1,037.4 million from December 31, 2015 since a portion of the restricted cash was no longer considered as restricted.
As of June 30, 2016, Qunar had 6 Class A ordinary shares and 437,150,861 Class B ordinary shares outstanding.
Recent Developments
On June 23, 2016, the Company announced that its board of directors (the “Board”) had received a preliminary non-binding "going-private" proposal (the “Proposal”) from Ocean Management Limited (“Ocean”).
On June 23, 2016, the Company's board of directors formed a special committee (the “Special Committee”) comprised of three independent, disinterested directors, Mr. Jimmy Lai, Mr. Jianmin Zhu and Ms. Ying Shi, to consider the Proposal, with Mr. Jimmy Lai as the special committee chair. The special committee has retained Duff & Phelps (Duff & Phelps Securities, LLC and Duff & Phelps, LLC) as its financial advisor and Kirkland & Ellis as its U.S. legal counsel in connection with its review and evaluation of the Proposal.
The Board cautions the Company's shareholders and others considering trading the Company's securities that the Special Committee is continuing its evaluation of the Proposal and that, at this time, no decisions have been made by the Special Committee with respect to the Company's response to the Proposal. There can be no assurance that any definitive offer will be made by Ocean, that any agreement will be executed with Ocean or that the Proposal or any comparable transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to the Proposal or any other transaction, except as required under applicable law.
Forward-looking Statements
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, quotations from management in this press release, as well as Qunar's strategic and operational plans, contain forward-looking statements. Qunar may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Qunar's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's goals and strategies; its future business development, financial condition and results of operations; the expected growth of the online travel markets in China; the Company's expectations regarding demand for and market acceptance of its products and services; its expectations regarding relationships with users and travel service providers; its plans to invest in the technology platform; competition in the industry; fluctuations in general economic and business conditions in China; and relevant government policies and regulations relating to the industry. Further information regarding these and other risks is included in the documents filed with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the press release, and Qunar undertakes no duty to update such information, except as required under applicable law.
About Non-GAAP Financial Measures
To supplement Qunar's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Qunar also uses adjusted net income (loss), adjusted EBITDA and adjusted operating income (loss) as additional non-GAAP financial measures. These non-GAAP financial measures enable management to assess the Company's operating results without considering the impact of noncash charges, including share-based compensation expenses, depreciation and amortization, online marketing expenses from Zhixin Cooperation Agreement, fair value change in warrant liability and impairment loss of the long-term investments. Furthermore, these non-GAAP financial measures eliminate the impact of items that Qunar does not consider indicative of the performance of its business.
Qunar presents these non-GAAP financial measures because they are used by management to evaluate its operating performance, formulate business plans, and make strategic decisions on capital allocation. Qunar also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating its operating performance and consolidated results of operations in the same manner as management and in comparing financial results across accounting periods and to those of its peer companies. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. A limitation of using these non-GAAP financial measures is that these non-GAAP measures do not include all items that impact the Company's results of operations for the period. The table captioned "Reconciliations of GAAP and non-GAAP Measures" has more details on the reconciliations between GAAP financial measures that are most directly comparable to the non-GAAP financial measures.
Currency Convenience Translation
The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. The conversion of Renminbi (RMB) into U.S. dollars is based on the exchange rate set forth in the H.10 statistical release of the Federal Reserve Bank of New York on June 30, 2016, which was RMB6.6459 to US$1.00. The Company makes no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, or at all. The percentages stated are calculated based on the RMB amounts.
About Qunar
Qunar is China’s leading mobile and online travel platform. With a commitment to building a travel ecosystem serving the entire travel industry value chain, Qunar is evolving the way people travel in a world increasingly enabled by technology. Qunar addresses the needs of Chinese travelers and travel service providers by efficiently matching industry supply and demand through its proprietary technologies. By providing technology infrastructure for travel service providers on mobile and online platforms, Qunar integrates and offers the most comprehensive selection of travel products and the most convenient means to complete desired transactions for Chinese travelers.
Qunar means “where to go” in Mandarin Chinese.
For more information, please visit http://ir.qunar.com.
| Qunar Cayman Islands Limited | ||||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||||
| December 31, | June 30, | June 30, | ||||||||||
| 2015 | 2016 | 2016 | ||||||||||
| (In thousands except for number of shares and per share data) | RMB | RMB | USD | |||||||||
| Audited | Unaudited | Unaudited | ||||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | 4,115,650 | 3,323,497 | 500,082 | |||||||||
| Restricted cash | 1,747,603 | 710,156 | 106,856 | |||||||||
| Funds receivable | 715,365 | 520,482 | 78,316 | |||||||||
| Short-term investments | 351,189 | - | - | |||||||||
| Accounts receivable, net | 278,382 | 256,700 | 38,625 | |||||||||
| Due from related parties | 813,123 | 548,525 | 82,536 | |||||||||
| Prepayments and other current assets | 1,320,492 | 647,809 | 97,476 | |||||||||
| Total current assets | 9,341,804 | 6,007,169 | 903,891 | |||||||||
| Non-current assets: | ||||||||||||
| Due from related parties, non-current | - | 2,357,142 | 354,676 | |||||||||
| Property and equipment, net | 232,085 | 242,566 | 36,499 | |||||||||
| Intangible assets,net | 12,689 | 12,132 | 1,825 | |||||||||
| Goodwill | 10,755 | 10,755 | 1,618 | |||||||||
| Long-term investments,net | 712,967 | 758,614 | 114,148 | |||||||||
| Deferred tax assets, non-current(*) | 80,624 | 87,430 | 13,155 | |||||||||
| Other non-current assets | 114,621 | 125,731 | 18,919 | |||||||||
| Total non-current assets | 1,163,741 | 3,594,370 | 540,840 | |||||||||
| Total assets | 10,505,545 | 9,601,539 | 1,444,731 | |||||||||
| LIABILITIES AND EQUITY | ||||||||||||
| Current liabilities: | ||||||||||||
| Short-term loans | 643,500 | 643,500 | 96,827 | |||||||||
| Customer advances and deposits | 280,962 | 288,494 | 43,409 | |||||||||
| Due to related parties | 1,961,500 | 607,861 | 91,464 | |||||||||
| Accounts payable | 31,720 | 38,777 | 5,835 | |||||||||
| Salaries and welfare payable | 418,431 | 169,715 | 25,537 | |||||||||
| Income tax payable | 79,736 | 75,760 | 11,400 | |||||||||
| Accrued expenses and other current liabilities | 3,134,951 | 2,044,152 | 307,580 | |||||||||
| Total current liabilities | 6,550,800 | 3,868,259 | 582,052 | |||||||||
| Non-current liabilities: | ||||||||||||
| Due to related parties, non-current | - | 4,793,615 | 721,289 | |||||||||
| Deferred tax liability, non-current(*) | 1,318 | 1,228 | 185 | |||||||||
| Long-term Debt | 2,658,357 | - | - | |||||||||
| Non-current liabilities | 91,702 | 97,787 | 14,714 | |||||||||
| Total non-current liabilities | 2,751,377 | 4,892,630 | 736,188 | |||||||||
| Total liabilities | 9,302,177 | 8,760,889 | 1,318,240 | |||||||||
| Equity: | ||||||||||||
| Class A ordinary shares | 87 | - | - | |||||||||
| Class B ordinary shares | 2,638 | 2,754 | 414 | |||||||||
| Additional paid-in capital | 10,647,579 | 12,001,501 | 1,805,850 | |||||||||
| Accumulated other comprehensive income | 136,810 | 199,595 | 30,033 | |||||||||
| Statutory reserves | 3,011 | 3,011 | 453 | |||||||||
| Accumulated deficit | (9,592,039 | ) | (11,367,256 | ) | (1,710,416 | ) | ||||||
| Total Qunar Cayman Islands Limited's shareholders' equity | 1,198,086 | 839,605 | 126,334 | |||||||||
| Noncontrolling Interests | 5,282 | 1,045 | 157 | |||||||||
| Total equity | 1,203,368 | 840,650 | 126,491 | |||||||||
| Total liabilities and equity | 10,505,545 | 9,601,539 | 1,444,731 | |||||||||
| *On November 20, 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. This accounting standard requires deferred tax assets and liabilities, along with related valuation allowances, to be classified as noncurrent on the balance sheet. As a result, each tax jurisdiction will now only have one net noncurrent deferred tax asset or liability. This guidance has been adopted from 2016 and applied retrospectively by the Company to the prior period presented herein. | ||||||||||||
| Qunar Cayman Islands Limited | ||||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||||
| Three Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | |||||||||||||||
| 2015 | 2016 | 2016 | 2016 | |||||||||||||||
| (In thousands except for number of shares and per share(ADS) data) | RMB | RMB | RMB | USD | ||||||||||||||
| Unaudited | Unaudited | Unaudited | Unaudited | |||||||||||||||
| Revenues | ||||||||||||||||||
| Flight and flight related | 516,974 | 558,217 | 478,292 | 71,968 | ||||||||||||||
| Accommodation reservation | 258,865 | 299,715 | 392,330 | 59,033 | ||||||||||||||
| Display advertising services | 25,931 | 24,045 | 21,377 | 3,217 | ||||||||||||||
| Other services | 79,192 | 111,143 | 138,841 | 20,891 | ||||||||||||||
| Total revenues | 880,962 | 993,120 | 1,030,840 | 155,109 | ||||||||||||||
| Cost of Revenues | (246,909 | ) | (245,831 | ) | (265,462 | ) | (39,944 | ) | ||||||||||
| Gross profit | 634,053 | 747,289 | 765,378 | 115,165 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Product developments (Note 1) | (350,790 | ) | (812,185 | ) | (516,557 | ) | (77,726 | ) | ||||||||||
| Product sourcing (Note 1) | (134,527 | ) | (172,198 | ) | (118,167 | ) | (17,780 | ) | ||||||||||
| Sales and marketing (Note 1) | (702,675 | ) | (620,900 | ) | (580,639 | ) | (87,368 | ) | ||||||||||
| General and administrative (Note 1) | (134,391 | ) | (181,388 | ) | (149,051 | ) | (22,428 | ) | ||||||||||
| Online marketing expense for Baidu Zhixin Cooperation | (6,883 | ) | - | - | - | |||||||||||||
| Operating loss | (695,213 | ) | (1,039,382 | ) | (599,036 | ) | (90,137 | ) | ||||||||||
| Interest expenses, net | (11,948 | ) | (49,465 | ) | (52,481 | ) | (7,897 | ) | ||||||||||
| Foreign exchange (loss) gain, net | (1,289 | ) | 20,724 | (57,554 | ) | (8,660 | ) | |||||||||||
| Other income, net | 4,895 | 2,052 | 3,684 | 554 | ||||||||||||||
| Fair value change in warrant liability | (109,761 | ) | - | - | - | |||||||||||||
| Loss before income taxes | (813,316 | ) | (1,066,071 | ) | (705,387 | ) | (106,140 | ) | ||||||||||
| Income tax (expense) benefit | (3,194 | ) | (7,774 | ) | 5,754 | 866 | ||||||||||||
| Equity in loss (income) of affiliated companies,net of tax | (693 | ) | (3,018 | ) | 331 | 50 | ||||||||||||
| Net loss | (817,203 | ) | (1,076,863 | ) | (699,302 | ) | (105,224 | ) | ||||||||||
| Net loss attributable to noncontrolling interests | 1,516 | 400 | 548 | 82 | ||||||||||||||
| Net loss attributable to Qunar Cayman Islands Limited | (815,687 | ) | (1,076,463 | ) | (698,754 | ) | (105,142 | ) | ||||||||||
| Loss per share for ordinary shares： | ||||||||||||||||||
| Net loss per ordinary share—basic | (2.22 | ) | (2.48 | ) | (1.60 | ) | (0.24 | ) | ||||||||||
| Net loss per ordinary share—diluted | (2.22 | ) | (2.48 | ) | (1.60 | ) | (0.24 | ) | ||||||||||
| Loss per ADS(each ADS represents three class B ordinary shares): | ||||||||||||||||||
| Net loss per ADS—basic | (6.66 | ) | (7.44 | ) | (4.80 | ) | (0.72 | ) | ||||||||||
| Net loss per ADS—diluted | (6.66 | ) | (7.44 | ) | (4.80 | ) | (0.72 | ) | ||||||||||
| Weighted average number of ordinary shares： | ||||||||||||||||||
| Class A ordinary shares | ||||||||||||||||||
| Basic | 224,299,179 | 8,159,782 | 7,280,854 | 7,280,854 | ||||||||||||||
| Diluted | 224,299,179 | 8,159,782 | 7,280,854 | 7,280,854 | ||||||||||||||
| Class B ordinary shares | ||||||||||||||||||
| Basic | 143,459,651 | 425,742,428 | 428,256,657 | 428,256,657 | ||||||||||||||
| Diluted | 367,758,830 | 433,902,210 | 435,537,511 | 435,537,511 | ||||||||||||||
| Note 1: Includes share-based compensation expenses as follows: | ||||||||||||||||||
| Product developments | 20,339 | 528,974 | 206,967 | 31,143 | ||||||||||||||
| Product sourcing | 2,128 | 49,861 | 12,437 | 1,871 | ||||||||||||||
| Sales and marketing | 7,974 | 114,647 | 46,637 | 7,017 | ||||||||||||||
| General and administrative | 46,363 | 108,853 | 59,968 | 9,023 | ||||||||||||||
| Total share-based compensation expenses | 76,804 | 802,335 | 326,009 | 49,054 | ||||||||||||||
| Reconciliations of GAAP and non-GAAP measures (in thousands) | |||||||||||||||||
| Three Months Ended | |||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | ||||||||||||||
| 2015 | 2016 | 2016 | 2016 | ||||||||||||||
| RMB | RMB | RMB | USD | ||||||||||||||
| Unaudited | Unaudited | Unaudited | Unaudited | ||||||||||||||
| Net loss | (817,203 | ) | (1,076,863 | ) | (699,302 | ) | (105,224 | ) | |||||||||
| Add: | |||||||||||||||||
| Share-based compensation expenses | 76,804 | 802,335 | 326,009 | 49,054 | |||||||||||||
| Online marketing expense for Baidu Zhixin Cooperation | 6,883 | - | - | - | |||||||||||||
| Fair Value change in warrant liability | 109,761 | - | - | - | |||||||||||||
| Adjusted net loss (non-GAAP)(*) | (623,755 | ) | (274,528 | ) | (373,293 | ) | (56,170 | ) | |||||||||
| Add: | |||||||||||||||||
| Income tax expense (benefit) | 3,194 | 7,774 | (5,754 | ) | (866 | ) | |||||||||||
| Depreciation and amortization | 28,336 | 32,329 | 34,455 | 5,184 | |||||||||||||
| Interest expenses | 16,888 | 59,660 | 65,312 | 9,827 | |||||||||||||
| Adjusted EBITDA (non-GAAP) (**) | (575,337 | ) | (174,765 | ) | (279,280 | ) | (42,025 | ) | |||||||||
| Operating loss | (695,213 | ) | (1,039,382 | ) | (599,036 | ) | (90,137 | ) | |||||||||
| Add: | |||||||||||||||||
| Share-based compensation expenses | 76,804 | 802,335 | 326,009 | 49,054 | |||||||||||||
| Online marketing expense for Baidu Zhixin Cooperation | 6,883 | - | - | - | |||||||||||||
| Adjusted operating loss(non-GAAP)(***) | (611,526 | ) | (237,047 | ) | (273,027 | ) | (41,083 | ) | |||||||||
| *Adjusted net loss (non-GAAP), defined as net loss excluding share-based compensation expenses, online marketing expenses for Baidu Zhixin Cooperation and fair value change in warrant liability. | |||||||||||||||||
| ** Adjusted EBITDA (non-GAAP), defined as net loss before income taxes, interest expenses, depreciation and amortization, further adjusted to exclude share-based compensation expenses, online marketing expenses for Baidu Zhixin Cooperation and fair value change in warrant liability. | |||||||||||||||||
| *** Adjusted operating loss(non-GAAP), defined as operating loss excluding share-based compensation expenses and online marketing expenses for Baidu Zhixin Cooperation . | |||||||||||||||||