BlueCity Holdings Limited (BLCT) on Q1 2021 Results - Earnings Call Transcript
Operator: Good day, ladies and gentlemen. Thank you for standing by and welcome to BlueCity's first quarter 2021 earnings conference call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now, I will turn the call over to Lingling Kong, Head of Investor Relations for the company. Ms. Kong, please proceed.
Lingling Kong: Thank you Operator and hello everyone. Welcome to BlueCity's first quarter 2021 earnings conference call. Joining us today are Mr. Baoli Ma, Chief Executive Officer and Mr. Junchen Sun, Acting Chief Financial Officer.
Baoli Ma: Thank you Lingling and hello everyone. Thank you for joining our earnings conference call today. We kicked off 2021 with a great performance in strategy and operations. This quarter we achieved a total revenue growth of 30.7% year-over-year to RMB271.1 million. All app MAUs reached 8.3 million, up 37.5% year-over-year. And total paying users increased 47.8% year-over-year to 640,000. This quarter's efforts in diversifying our revenue streams also proved to be very rewarding with He Health achieving a 297.7% growth year-over-year to RMB12 million and membership services bringing in 75.9% growth year-over-year to RMB26.4 million. We are pleased to see strong growth in all our business lines which clearly illustrates our strategic execution on product innovation and improving user experience in seeing solid topline growth and user engagement. In addition to our strong organic growth this quarter, as we announced earlier in April, the officially obtained an internet hospital license for He Health in Mainland China laying a good foundation for us to build a comprehensive diagnosis and treatment platform for men's health. This marks yet another significant milestone for the company as it presents a great opportunity to seize in the new and rapidly growing health and wellness industry.
Junchen Sun: Thank you Mr. Ma. And thank you everyone for joining our call today. As Mr. MA just mentioned, 2020 is off to a great start for BlueCity. We delivered another strong quarter with encouraging business development and solid financial growth. Now, let me go through our financial highlights for the quarter. Before I go into details, please note that all numbers presented are in renminbi and are for the first quarter of 2021, unless stated otherwise. All percentage changes are on a year-over-year basis, unless otherwise specified. Detailed analysis is contained in our earnings press release, which is available on our IR website. Total revenues increased by 30.7% to RMB271.1 million, driven by better monetization of over diverse services offering and our favorable revenue mix. Revenue from overseas contributing 10.7% of total revenue, slightly increased from 9.9% in the same period last year. Total paying users of BlueCity's portfolio apps increased by 47.8% to 640,000.
Operator: . Our first question comes from Laura Champine from Loop Capital. Please go ahead.
Laura Champine: Thank you for taking my question. Can you break out the acquired businesses and give us the revenues, preferably by segment for acquired businesses and the loss in renminbi from those two businesses aggregated in the quarter?
Lingling Kong: Hi Laura. This is Lingling. Let me translate the question first, okay. Hi Laura. This is Lingling and I will answer your question directly. Actually, this quarter, in total acquired business, LESDO and Finka together contribute around 8% of our total revenue, okay. So if we look into further details, cast majority of the acquired acquisition is come from Finka's revenue. And for Finka, like we discussed earlier, they have much healthier revenue structure with less than 60% of revenue came from live streaming, around 30% from membership services and the remaining part from advertising services. And actually for last two, the revenue contribution is quite small and we are not interested to disclose the revenue contribution from each segment.
Laura Champine: Got it. Can you provide a renminbi loss from Finka and LEDO in the quarter?
Lingling Kong: Hi Laura. It's like that we haven't officially disclosed each business lines' profit and loss for each business lines. But you know that as we, when we acquire Finka's like that, where Finka is on a breakeven kind of situation, right, they are profitable but it's like single digit net margins. And with Finka this quarter actually, we actually invested more in technology development as well as less streaming cost side. So that's all we can provide at the moment.
Laura Champine: Okay. Thank you.
Lingling Kong: Thank you.
Operator: Thank you. Our next question comes from Bo Pei from Oppenheimer. Please go head.
Bo Pei: Hi management. Thanks for taking my questions. So I will translate for myself. So I have three questions here. First question is about MAU growth. It seems that MAU growth in 1Q was robust. So can you talk about our overseas and domestic MAU growth? And the second question is, it seems our live streaming revenue-sharing ratio is still relatively high compared with last year same period. So you mentioned you expect the revenue-sharing ratio to decrease from here. But can you talk about the magnitude and when that is going to happen? And the third question is about operating expenses. It seems our operating expenses ratio, they increased quite a bit this quarter. I know that's because the investment plan. So can you talk about this trend for the last couple of quarters? That's all my questions. Thank you.
Lingling Kong: Hi. Thank you Pei Bo. This is Lingling. I will answer your question directly, okay. In terms of the MAU from overseas, it is around 44% out of our total revenue MAUs from overseas because this quarter, we integrated MAUs from our acquired businesses which is LESDO and Finka. Of course, Finka contributes the majority of MAUs. That's the first question. Secondly, regarding in terms of MAU growth, it's like that. Overseas MAUs grow like about 30% year-over-year basis, okay. And domestically, we still maintain the growth above 20%. And in terms of the revenue-sharing in live streaming, it said that, okay, on a year-over-year basis, we do see a slight increase in percentage of revenue-sharing. But you can se that as we mentioned that during the last conference call, it's like we are doing some adjustments in the live streaming structure, especially the supply side of the live streaming. And that means that we are investing more on the cost side. So you can see actually a rebound in last quarter revenue percentage sharing. It's like we are slightly down from last Q4. And you can see the trend and we expect that that trend will continue into further quarters. And if we are talking about on a yearly basis, we are still looking for a slight decrease in the percentage of revenue-sharing. Let me give you some more color about this because as we disclosed before, it's like we are looking forward to see some dramatic decrease in share percentage of live streaming. But actually, for Finka, as we just mentioned, we are investing more in Finka's live streaming business and especially on the supply side because Finka, as we said, is like their user profile is more trendy, more fashionable. So we need to compare, we need to compete with TikTok, Xiaokaxiu, things like this, we need to attract like high quality live streamers to go to into our platform. So currently, the sharing percentage of Finka is actually relatively much higher than our original platform which is Blued, okay. So in this way, it's kind of take all things into consideration, the blended actually sharing percentage will be slightly lower compared to last year, okay. Regarding the third question regarding OpEx, the increase in OpEx actually this quarter can be separated in two parts. One is that on a year-over-year basis. as we integrate Finka and LESDO, there are additional headcounts from Finka and LESDO, okay, that's over 100 already. So this actually contributes most of our headcount increase in the first quarter as well as Blued also added headcount as well. And the second thing is for the staff cost is actually last year during the pandemic we actually see some savings in the social insurance part. It's like throughout the whole year last year, we see some savings in staff cost because government is kind of waiving a certain percentage of social insurance for all of our employees. So in this way, we can see like additional two to three percentage points of total revenue sales that is related to the savings in social insurance. That's the second one. So in addition to the increase in staff cost, as we disclosed earlier, that we are putting more effort in sales and marketing, so therefore you can see that sales and marketing expense is like about 20% of our total revenue. And we expect this rate will maintain relatively the same level throughout the year. And regarding the G&A, it's actually like, recall that the same period last year, last year Q1, we were not a public company. So it's like majority of G&A increase is actually professional fees. It's like professional fees related to being a public company. So that's why you can see a surge in G&A. It's around 8% of our total revenue. And we think the percentage will remain kind of flattish throughout the year. I hope that answers all your questions.
Bo Pei: Yes. This was helpful. Thank you.
Lingling Kong: Thank you.
Operator: . All right. Thank you. So seeing no more questions in the queue, let me turn the call back to Mr. Sun for closing remarks.
Junchen Sun: Thank you operator and thank you all for participating on today's call and for your support. We appreciate your interest and look forward to reporting to you again next quarter on our progress. Operator?
Operator: All right. Thank you. So ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect.
