Yunji (YJ) Q1 2024 earnings summary

Executive summary

• Q1 2024 revenue declined to RMB127.9 million (CNY 128 million), mainly due to soft consumer confidence and strategic product selection refinement.

• Net income reached RMB3.9 million (CNY 4 million), reversing a net loss of RMB22.9 million a year ago; adjusted net income was RMB3.0 million (CNY 3 million) versus an adjusted net loss of RMB27.2 million.

• Gross margin remained strong at 49.4% despite lower sales, supported by private label loyalty and effective product strategy; repeat purchase rate for the twelve months ended March 31, 2024, was 74.4%.

• New initiatives included expanding into holistic health solutions, wellness spaces, and employment opportunities through retail services.

• Emphasis on content creation, short video, and live streaming to drive growth, especially in apparel and beauty categories; incubation program for video channel leaders piloted in Q1.

Financial highlights

• Merchandise sales revenue was RMB102.0 million, down from RMB143.0 million year-over-year; marketplace revenue was RMB24.1 million, down from RMB32.9 million.

• Total cost of revenues decreased 30.7% to RMB64.7 million, or 50.6% of total revenues.

• Operating expenses decreased to RMB75.9 million from RMB85 million year-over-year.

• Financial income, net, was RMB14.7 million, compared to a financial loss of RMB22.2 million in Q1 2023, mainly due to fair value changes in equity investments.

• Basic and diluted net income per share was CNY 0.01, compared to a net loss per share of CNY -0.01 last year; both nil in RMB terms.

Outlook and guidance

• Focus remains on enhancing efficiency, strengthening resilience, and adaptability to address future challenges and opportunities in e-commerce.

• Management is focused on cultivating growth in beauty and healthcare sectors and continuing operational refinements.

• Plans to construct a new headquarters in Hangzhou, with total investment (land and building) expected at RMB600 million, funded by cash and bank financing.