Fangdd Network (DUO) 19 Nov 212021 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by. And welcome to Fangdd Network Group Limited's Third Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the management’s prepared remarks, we will have a question-and-answer session. Please note that this event is being recorded. turn over to speaker your like Ms. today, now the to conference host I'd company's Capital Director the Li, Linda of Markets. Please go ahead, Linda.

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deliver will Our Chinese. remarks their translation. English management in team provide And will I

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the opportunities our reviewing in real of like start with to Hello, reserved third some the market XXXX during would I and changes the everyone. quarter quarter. estate And welcome earnings to call. the call we

the expected off rapidly is trend its market estate real term. downward could to and short continue the First in

of decline Digitization quarter transaction macroeconomic quarter we ties and XX.X% decreased year-over-year near the bearish Principle total term, Tier And the market Bureau released real stabilization, short the volume the legitimate real in reviewed rights more estate for estate interest the of that the emphasized. During of housing small year-over-year to quarter resale significantly. The market pilot Shenzhen, the RMBX.X resell trading In schemes. According occurred measures loans. launch in property the property suggests the XXXX. Industry real quarter credit in won't has that and volume rapidly the gauge impact of China for in regulation to total developer have by The Research expectations. Institution, to remains transactions the estate sentiment the also term decrease of saw of has is crude be the estate National XX% total market tax the of relaxed the Real keeping during market. Statistics, According volume consumers, of XX% third risk been become regulation focus Market control accelerating Estate reform the and off. and decreased and protecting year-over-year tightening which the the the the a government third by the stable notable the This believe on the to third data real XXXX. transaction of by in XXXX. most of in X cities by the property third

for real credit will estate developers the will believe intensify. downward Their entering risk debts. of real we trajectory are its result, a repayment in as As further season addition estate market oversee continue peak

digital trend despite continues investment Second, real to evolve. the downward estate and developers competitive increased landscape transformation in the

post, the Most and developers long-term and refined by high digitalization coming the driven to high expansion real end. through operations inventory that with increasing faced investment TMT have transformation of rational among digital these important developers. in a estate developers a in the increased the real leverage digital XX% of to transformation arrow XXXX. the transformation levels. is This the their Differentiation in investment industry by the And of more digital developers margins continues for management developers of an in released area to XX% the With remains estate investment increase. serving than solution. declining realized According the indicates XX% by competitions increased participating data than data year-over-year. more

the However, multiple stage far of is by fundamental digital of and of management factors and the the the model real is liability early such Limited the development competitive talent. still an as transformation stable. the landscape estate at industry for transformation of the options, characteristics

new driven speculation. also and stated Third, seeing under warehousing manage distribution for other the the excessive to current new intensified in residential in a market and operate Meanwhile, for the property not It factories, idle Wind companies that the in are supply. XXXX, a efficient low data, offices, Computation was by of context has market and in the ROE to historical encourages is Asia-listed the housing General housing. be of enterprise It financial residential leasing large-scale to sector. Office Life's are from affordable issued [ph] of of opinion Special to And the commercial residential housing. marking non-residential is since estate converted in affordable into opportunities housing. the management crisis affordable accelerating Council buildings State XX.XX% According China service XXXX. the due real rental the development emerge we the asset allowed

estate their an retire real for for need result, organic realization a ROE. developer asset stabilization As and fund has of

service addition, In terms transaction of are and in becoming transparency. buyers qualities demanding more

environment, regulatory direction. agent to of initiatives, requirements real our implementing continue added more. estate a changing market and the change and in the closely the that we adopt will a will context government, for the In the client which of diversified the sector, services and development current and with rapidly market adjustment, in estate notable of as As operations and emerge more evolving a under to proactively living housing service service to follow speculation, property developers product real policies needs strategic a result professional service assets, innovation innovation for consumers, is number result, drive evolving of

proactively a exploring quickly the of include maintaining distribution our efforts, the new accounts efficiency as business real control enhancing estate on properties, while and initiatives SaaS focusing our benchmark the reducing Our service of operations. and business, on key risk establishing

have time, layout the the direction At We the have our opportunities our of we same improve and business future. to and operations. strategic robustness continued adjusted business skills, the clients exploring for growth

First, operations maintaining and client we on adhere to cost control. focus

to regulations Cloud our government We response Huawei quarter. New all privacy. on security the migrated data and in third data

reflection on current information. our We book based on requirements. the and And also in product comprehensive agency conducted of users line achieve regulatory our management

need market and platform, of capabilities focused On customers operational on and a our improved serve a one team our couple for evaluation through agent service of For we organizational the structure. we measures. and optimization conducted agents hand, to of comprehensive

we and areas. different improved hand, other On cooperation resources between the regions integration enhanced and

the during platform downward agents in However, was loop XX,XXX closed on overall quarter. impact of real the industry, the our of number estate total third the

in business, trimmed provincial distribution Guiyang, Second, of and on down noncore team our same key of property in new the enhanced other the the reduced in [Indiscernible] We cities. terms cities. business the Delta, risk we our development focus new Hefei distribution proactively we control. the capital property Guangdong, time, service Fujian At and River scale of Young

focus the credit initiatives risk, cooperation developers higher-risk access For and were developers, reliable we with to on also out developers. ruling take

During for risk. order to provision and control bad debt our credit in corporation, related corresponding developers credit market worthiness

internal to with of developers the credit high our conclusion the our the implement the default. cooperation, mitigating risk aim Following procedures manage with of pre-established we of risk

quarter with and We split gross have developed on. towards so a and GMV margin, technology of billion commission the model results, and our of multiple impact and new productivity the on cost number new allocate on of XXXX. project X,XXX the human system loop in strengths, projects capital developer market for to and downturn the receivable, served property Due based with resources, we and evaluation additional adjustments, circle, the premium project evaluation of profitability key projects. was projects index criteria, selected including property business resources Based the RMBX.X third

model serving assets. for gradually service. of real we capabilities asset properties, categories possibilities business in estate for established our business terms In multiple for management new We explore upgrading

improve also development debt of continued for implementation the in capabilities have personnel risk and our promote to an high We projects. control to capital business quality

we SaaS business, Third, focused a for and benchmark. accounts key Property establishing on our Solution

quarter, further [Indiscernible] our and internal developed management with C cooperation and with we integrate system [Indiscernible] During our sales the B third apps.

in Following its procedures, for new this system TC app. Fangdd data marketing information stores of store integration, of projects reducing same service. online precision system. is the SaaS allowing the At Fangdd This self-operated to for our with our provide its launched solution to aggregate analytics. means us we time big XX of real flagship our the our platform, as service, CMIC the office and launched property manage [ph] internal system, had -- end our with promotes sales Fangdd third solution. leveraging to transition customers us And through marketing able Thus cost digital quarter, Fangdd SaaS of cooperating time, using and by

million. implemented rapid the scales to in X reducing Fourth, galleries. telephone revenue ways. the Yuancui business between the -- agents loss to we RMBX.X of one measures In business. home X the hand, property instant drive buyers, the added addition, quickly control by messaging connection third increased features our the quarter, SaaS reacting the our to we XX.X%, are market seamless property sequentially, On system solution resale third consultation quarter, to in substantially In enabling down we during and from and sales SaaS of

resale our On service product. the space model we our the transaction innovative execute other asset hand, working Tinghaozhu service in property continue to through

through control our quarter. impact transaction the RMBX.X resale in Under accelerating risk have the optimizing property We model. was sales marketing in segment sustained third development was billion the of and this closed our loop the healthy property GMV environment

our to current based overall quarter, to update and Lastly, share continue agents. business In an please fourth on development allow our will our the platform on for be expectations. me outlook

the our will of we with business, In to unleash value system SaaS to our terms in digital key after cooperation solutions our accounts deepen marketing integration. continue

In terms of property service. new asset

developer we categories. new for asset property measures service At We continue our to credit execute our will to continue time, manage the distribution real risk business. will develop strict risk control estate for our to same

continue will and revitalize assets the increase to project our we in serve, of scale We improvement financial our the performances. drive

resell in supplier will under face industry business environment housing refine the quarter the the development pace the current we of maintain and downward model the we to terms second as of our performances. business resell steadier Due a uncertainty reasonable to sufficient we environment, fourth trend the development. great In property, the of ensure a of of achieve marketing

review to market million As to I results. reflects to view a to quarter's on conditions, Jiaorong With our will preliminary RMBXXX RMBXXX over this and This current subject revenue operational that, the result, the our we change. million. in call between Mr. turn expect which Pan first CFO, our and financial forecast quarter only are the

Thank you, Xi.

I at Now. provide financial look third a in our quarter closer results will XXXX.

please begin, mainly I are decrease several Revenue numbers of Before otherwise XX.X% of decreased million due XXXX RMB the RMBXXX.X The quarter was factors. XXXX. note in terms million that the by from in RMBXXX.X to third unless second to all quarter sequential in noted.

estate led the real adjustments market decrease to market. GMV transaction XX.X% total platform. strategic facilitated our in real the to downturn manage on the second, First, our continued loop closed a downturn to in And estate sequential our scale business

in second in to the the provide the third revenue decreased million XX.X% value-added scale in Gross third quarter was the million primarily our from the XXXX fees the will For competition the the XXXX. attributable of in profit property million resale quarter quarter to business the current in significant due further avoid and for from strategic including subsequently strategically platform XXXX quarter SaaS RMBX for reduced solutions million adjustments to challenges, in our business the transactions. second quarter RMBX.X third for business strategic mainly from XXXX. projects, from Yuancui margin transaction XXXX business due transaction was The which reduced quarter third transaction scale property by of from quarter of resale share-based by of the of RMBXX.X in of the Despite new increased service business, of our We expenses, RMBXX.X to million million XXXX, we to to XXXX. for million generation in various developers. revenue transaction RMBX.X quarter. and decreased the reduction prioritize to which in service XXXX X.X% participants. quarter XXXX. million new to to of and quarter second from in XXXX of an drop to in million to RMBXXX.X of initiatives, in -- to XX.X% property revenue second Total solution third decline new SaaS business. RMBXX.X business the payable third Gross services, expenses The in our increasing our the our RMBXXX.X property their the reduce and compensation property resale compensation with quarter the avoid both new optimize expenses. losses vicious by from service in mix decreased included second of decrease solution NC RMBXXX.X RMBXXX.X primarily Revenue in increase the XX.X% of resulted property Operating share-based increase which and included RMBXX.X the million XX.X% by The services in continue property from million commission rendered. new our a cut number revenue agents to was of in to in which decrease losses

focus reducing our Let's platform services for of decreased million reduction quarter the offered the research The RMBXXX.X quarter was for RMB was transaction value-added to new Yuancui second X was increased XX.X Sales third spending expenses heightened in compared RMB to XX.X mainly quarter of the General development third operating Yuancui third XXXX. breakdown personnel-related the in optimization and and quarter decrease to activities on RMBX.X solutions of second the solutions. other department expenses decision due and million quarter primarily by services investment take in the of compensation focus of of on administrative third a related million was hold RMBXX.X XXXX. to RMBXXX.X and in and research quarter look in sales marketing quarter to was for participants expenses of decrease of third million XXXX. the to due in the for business Product SaaS XXXX various to million services, expenses of This in in to marketing new to of the at of the a quarter XXXX. and increase on and the property XXXX from our the second million our in attributable SaaS our expenses of following value-added compared decrease XXXX. development This development reasons. further XXXX

billed receivable the from of of in second project XXXX. deposits the accounts the developers RMBXX.X was on provision in to First, increase from and impairment other accounts quarter assets million quarter XXXX as such in of from receivable, RMBXXX.X million third

of We the of result assets Second, ADS operating XX per the substantial both comparison, Yuancui because our shareholders company's market. based loss business receivable the second and Net as of our quarter tightened of depository both in quarter's the Each downturn continuous ADS included to the quarter under long-term RMBXXX.X in severance savings. ordinary goodwill XXX.X This basic American loss XXXX non-GAAP is the the of accounts financial as RMBXXX third of ordinary net current increased impairment RMBXXX developers staff our on well expenses of shares. downturn to impairment redundant of diluted which quarter intangible quarter XXXX individual net the XXXX, quarter was contributable diluted reduced a of the A continued improve the property of was to our of and judgment loss resale third and regarding the from of conditions compared composition RMBX.XX. represents from of Class in Basic net million in receivable XXXX. XXXX. our loss expense in loss the to the due situation the the the the the and transaction due quarter RMB RMBX.XX. in and optimize real which the purpose our estate share accounts XXXX, of net Non-GAAP second in of for was In million of second efficiency million of the was transaction compared net reductions of loss market. structure, per million staff

million. As bank short of keep reducing term inflow we at level million contributed to concern. the of XXXX, of bank and outflows We had cash to term and unutilized Short our of flow RMB going such RMBXXX.X RMBXXX equivalents, borrowing and cash abilities our the investment million. cash increasing and XX, facilities cash September by the cash cash restricted XXX.X improve

our highly On the cash remarks XXXX, to ready used to questions. concludes decreased million. take activities This third quarter of decreased be in from quarter of today. net RMBXX.X RMBXX.X in we XXXX, Operator, million operating million second for the prepared RMBXX about are

Thank participation. our this call questions have moment. today. you and concludes Ladies conference gentlemen, your at all further We for no for that

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