China E-Commence Platform Cogobuy Reveals Third Quarter Unaudited Operation Results

On Thursday, Cogobuy Group (stock code: 400.HK), an e-commerce platform that serves the electronics manufacturing industry in China, announce its unaudited operating results for the three months ending on September 30th. 

CogobuyDuring the quarter, the Cogobuy’s three major businesses achieved robust growth. The total GMV of the Company’s operations grew toRMB3,743.6 million, an increase of 68.3% YoY; with 66.1% derived from direct sales, 22.6% from online marketplace platforms, and 11.3% from the supply chain financing business. In total, 45.5% of GMV came from blue chip customers, while 54.5% came from small and medium enterprise (“SME”) customers.

Cogobuy believes that the third quarter was driven by increasing numbers of new customers, mainly from SMEs. INGDAN.com’s strong marketing and increasing brand influence drove much of the new growth. The number of customers conducting online transactions reached 8,513 as at September 30, 2015, of which approximately 1.7% were blue chip customers and 98.3% were SME customers. This represents an increase of 101.8% over the 4,219 customers as at September 30, 2014. Just one year later, the number of registered customers reached 45,858, compared to 28,107

Cogobuy also recorded a total revenue of RMB2,489.3 million, representing an increase of 38.1% YoY. Net profit attributable to equity shareholders of the Company grew significantly to approximately RMB88.3 million, representing an increase of 49.3% YoY. Gross margin was 8.1%. Non-GAAP profit attributable to equity shareholders of the Company was approximatelyRMB104.6 million, representing an increase of 43.7% YoY. Non-GAAP operating expenses were RMB73.3 million. Non-GAAP operating margin was 5.2%. The effective tax rate of the Group was 14.0%.

The platform further generated positive operating cash flow of approximately RMB48.3 million. Cash and cash equivalents and pledged deposits amounted to RMB1,798.2 million as at September 30, 2015. Inventory turnover days and account receivables turnover days were 34.1 days and 35.3 days, respectively.

Jeffrey Kang, CEO of Cogobuy Group, added:

Jeffrey Kang“During the Period, each of our direct sales, online marketplace platforms, and supply-chain financing businesses experienced rapid growth. The Group performed remarkably despite a slowdown in the Chinese economy and challenges in certain electronic sectors. The successful marketing efforts of INGDAN.com won us a large number of new customers and lowered our customer acquisition costs. During times of economic uncertainty, our expanding customer base is an important cornerstone that enables our business to continue to grow. The economic downturn has caused traditional electronic manufacturing companies to expand their business through the Internet. Cogobuy is well positioned to capture these opportunities, further expand GMV through our online marketplace, help traditional manufacturers conduct their business online, and create valuable big data opportunity through the process. As an e-commerce service platform for enterprise procurement, we serve more than 8,500 customers and provide clients with diversified services, which enable us to have very low customer and product concentration risks.

 

“In the past year, INGDAN.com has been growing its global presence to serve intelligent hardware entrepreneurs worldwide. In addition to China market, we have also expanded into Hong Kong, Korea and other Asia-Pacific markets. Recently, INGDAN.com made its first appearance at Maker Faire 3rd European Edition in Rome, Italy, where it showcased its Chinese intelligent hardware platform and products to makers, investors, and tech enthusiasts from overseas markets. At the Faire, INGDAN.com also offered innovative startups supply chain support from its base of Chinese manufacturers, largely headquartered in Shenzhen. So far the event has attracted the attention of hundreds of European companies, which INGDAN.com will be prepared to serve. Through its newly established local teams in Italy and the United States, as well as a Hong Kong team for the Southeast Asia region, INGDAN’s global network will help link startups in China with overseas markets, and overseas startups with Chinese market.

 

“Additionally, INGDAN.com will be upgrading from a platform for business development and hardware supply chain services, to an integrated platform covering both software technology output and cloud services. Dr. Shipeng Li, former Vice President of Microsoft Research Asia (MSRA), has joined Cogobuy and INGDAN.com as Chief Technology Officer (“CTO”). As CTO, he is responsible for building business relationships with China’s startups and innovators, and top research teams around the world. The future of IoT will be driven by new hardware combined with software and cloud services. The addition of a world-class scientist to our team will help us drive the optimization and completion of INGDAN.com’s IoT platform, and provide more value-added services to startups and innovators.

 

third quarter“Looking ahead, we are highly confident in the Company’s growth prospects and we expect this momentum to continue in the fourth quarter of 2015 and in 2016. Our growth targets for our direct sales, online marketplace platforms, and supply-chain financing business remain unchanged. Our top priorities now are to continue to improve our business model and increase customer conversion rate. During the Period, Cogobuy had 45,858 registered customers, but only 8,513 customers conducted online transactions. Converting registered customers to transacting customers is key to increasing GMV and profitability. Meanwhile, INGDAN.com will increasingly devote its efforts to building its international network and positioning itself to become the world’s largest intelligent hardware enterprise service platform.”

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