Day: November 25, 2024

BEIJING, Nov. 25, 2024 /PRNewswire/ — Uxin Limited (“Uxin” or the “Company”) UXIN, China’s leading used car retailer, today announced its unaudited financial results for the quarter ended September 30, 2024.

Highlights for the Quarter Ended September 30, 2024

• Transaction volume was 7,046 units for the three months ended September 30, 2024, an increase of 25.7% from 5,605 units in the last quarter and an increase of 81.4% from 3,884 units in the same period last year.
• Retail transaction volume was 6,005 units, an increase of 46.8% from 4,090 units in the last quarter and an increase of 162.6% from 2,287 units in the same period last year.
• Total revenues were RMB497.2 million (US$70.9 million) for the three months ended September 30, 2024, an increase of 23.9% from RMB401.2 million in the last quarter and an increase of 39.6% from RMB356.1 million in the same period last year.
• Gross margin was 7.0% for the three months ended September 30, 2024, compared with 6.4% in the last quarter and 6.2% in the same period last year.
• Loss from operations was RMB38.6 million (US$5.5 million) for the three months ended September 30, 2024, compared with RMB62.5 million in the last quarter and RMB66.4 million in the same period last year.
• Non-GAAP adjusted EBITDA^[1] was a loss of RMB9.2million (US$1.3 million), compared with a loss of RMB33.9 million in the last quarter and a loss of RMB45.9 million in the same period last year.

Mr. Kun Dai, Founder, Chairman and Chief Executive Officer of Uxin, commented, “We are excited to report another record-breaking quarter. From July to September 2024, our retail transaction volume reached 6,005 units, marking a 47% sequential increase and a 163% year-over-year growth. Our superstore model has proven to be successful, showcasing strong competitiveness and significant growth potential. Customer satisfaction, measured by NPS, has risen to 66, maintaining the highest level in the industry for 11 consecutive quarters. Looking ahead, we will continue to enhance our inventory levels, expand value-added services, and optimize our service network. We anticipate retail transaction volume to be within the range of 7,800 units to 8,100 units from October to December, representing over a 150% year-over-year increase.”

Mr. Dai continued, “Additionally, our expansion into new regions is progressing smoothly. Following our partnership agreement with the Zhengzhou Airport Economic Zone, we are pleased to announce a new collaboration with the Wuhan Municipal Government. Both Zhengzhou and Wuhan are provincial capital cities with about 5 million vehicles each, offering excellent conditions for operating used car superstores. The new superstores in these two cities will continuously drive sales growth and enhance our performance in the coming years.”

Mr. Feng Lin, Chief Financial Officer of Uxin, said: “To better align with customary practices and to synchronize the financial reporting cycles of our parent company and Chinese subsidiary, we have adjusted our fiscal year. After this change, our fiscal year will coincide with the calendar year, running from January 1 to December 31, instead of the previous period from April 1 to March 31. This change aims to make our financial disclosures more accessible and understandable for our investors. Building on this alignment, we delivered robust financial results in the quarter. Total revenues were RMB497 million, with retail vehicle sales revenue reaching RMB444 million, a year-over-year increase of 79%. Our gross margin further improved to 7% compared to the previous quarter. Adjusted EBITDA loss narrowed to RMB 9.2 million, representing an 80% reduction year-over-year. Looking ahead, we are on track to achieve our first positive quarterly EBITDA in the upcoming quarter, a significant milestone in our financial performance. With these strong results, the company is now firmly positioned for sustainable, long-term growth.” 

Financial Results for the Quarter Ended September 30, 2024

Total revenues were RMB497.2 million (US$70.9 million) for the three months ended September 30, 2024, an increase of 23.9% from RMB401.2 million in the last quarter and an increase of 39.6% from RMB356.1 million in the same period last year. The increases were mainly due to the increase of retail vehicle sales revenue. 

Retail vehicle sales revenue was RMB444.4 million (US$63.3 million) for the three months ended September 30, 2024, representing an increase of 36.8% from RMB325.0 million in the last quarter and an increase of 78.5% from RMB248.9 million in the same period last year. For the three months ended September 30, 2024, retail transaction volume was 6,005 units, an increase of 46.8% from 4,090 units in the last quarter and an increase of 162.6% from 2,287 units in the same period last year. The increases in retail vehicle sales revenue were mainly due to the increase of retail transaction volume. By offering superior products and services, the Company’s superstores have built strong customer trust and established Uxin as the leading brand in regional markets, leading to a high in-store customer conversion rate. Additionally, as the overall used car market began to recover starting from mid-year, the Company proactively expanded the inventory size while maintained an inventory turnover rate much faster than the industry average.

Wholesale vehicle sales revenue was RMB37.8 million (US$5.4 million) for the three months ended September 30, 2024, a decrease of 40.8% from RMB63.9 million in the last quarter and a decrease of 61.9% from RMB99.3 million in the same period last year. For the three months ended September 30, 2024, wholesale transaction volume was 1,041 units, representing a decrease of 31.3% from 1,515 units in the last quarter and a decrease of 34.8% from 1,597 units in the same period last year. Wholesale vehicle sales refer to vehicles purchased by the Company from individuals that do not meet the Company’s retail standards and are subsequently sold through online and offline channels. The decreases were mainly due to improved inventory capacity and reconditioning capabilities, and an increased number of acquired vehicles were reconditioned to meet the Company’s retail standards, rather than being sold through wholesale channels.

Other revenue was RMB15.0 million (US$2.1 million) for the three months ended September 30, 2024, compared with RMB12.3 million in the last quarter and RMB7.9 million in the same period last year.

Cost of revenues was RMB462.4 million (US$65.9 million) for the three months ended September 30, 2024, compared with RMB375.6 million in the last quarter and RMB334.0 million in the same period last year. 

Gross margin was 7.0% for the three months ended September 30, 2024, compared with 6.4% in the last quarter and 6.2% in the same period last year. Firstly, the Company is increasing the proportion of vehicles acquired directly from individual car owners intending to sell their existing cars, which on average are more profitable compared to other vehicle supply channels. Secondly, the Company is focusing on enhancing the penetration of high-margin value-added services, which will further improve its gross profit margin.

Total operating expenses were RMB84.3 million (US$12.0 million) for the three months ended September 30, 2024. 

• Sales and marketing expenses were RMB56.1 million (US$8.0 million) for the three months ended September 30, 2024, a decrease of 5.5% from RMB59.4 million in the last quarter and an increase of 15.7% from RMB48.4 million in the same period last year. Compared with the same period last year, in addition to the increased salaries for the sales teams, the year-over-year increase was also attributed to the increase in right-of-use assets depreciation expenses as a result of relocation to the Company’s Hefei Superstore in September 2023.
• General and administrative expenses were RMB26.1 million (US$3.7 million) for the three months ended September 30, 2024, representing a decrease of 7.3% from RMB28.1 million in the last quarter and a decrease of 25.7% from RMB35.1 million in the same period last year. Due to the execution of multiple rounds of cost-saving and efficiency-enhancing initiatives, salaries and benefits expenses for personnel performing general and administrative functions decreased accordingly.
• Research and development expenses were RMB2.4 million (US$0.3 million) for the three months ended September 30, 2024, representing a decrease of 30.1% from RMB3.4 million in the last quarter and a decrease of 74.4% from RMB9.2 million in the same period last year. The decreases mainly resulted from less IT service acquired by the Company’s research and development functions and decrease in salaries and benefits expenses of employees engaged in these functions.

Other operating income, net was RMB10.8 million (US$1.5 million) for the three months ended September 30, 2024, compared with RMB2.8 million for the last quarter and RMB3.2 million in the same period last year. The increases were mainly due to proceeds from government award.

Loss from operations was RMB38.6 million (US$5.5 million) in the three months ended September 30, 2024, compared with RMB62.5 million for the last quarter and RMB66.4 million in the same period last year.

Interest expenses were RMB24.1 million (US$3.4 million) for the three months ended September 30, 2024, representing an increase of 5.4% from RMB22.9 million in the last quarter and an increase of 212.5% from RMB7.7 million in the same period last year. The year-over-year increase was mainly due to the increase of interest expenses on finance lease liabilities relating to the lease of Changfeng Superstore in September, 2023.

Net loss from operations was RMB59.2 million (US$8.4 million) for the three months ended September 30, 2024, compared with a net loss of RMB49.8 million for the last quarter and net loss of RMB57.1 million for the same period last year. 

Non-GAAP adjusted EBITDA was a loss of RMB9.2 million (US$1.3 million) for the three months ended September 30, 2024, compared with a loss of RMB33.9 million in the last quarter and a loss of RMB45.9 million in the same period last year.

Liquidity

As of September 30, 2024, the Company had cash and cash equivalents of RMB29.1 million, compared to RMB23.3 million as of March 31, 2024.

The Company has incurred accumulated and recurring losses from operations, and cash outflows from operating activities. In addition, the Company’s current liabilities exceeded its current assets by approximately RMB403.6 million as of September 30, 2024.

The Company’s ability to continue as a going concern is dependent on management’s ability to increase sales, achieve higher gross profit margin and control operating costs and expenses to reduce the cash that will be used in operating cash flows, and to enter into financing arrangements, including but not limited to renewal of the existing borrowings and obtaining new debt and equity financings. There is uncertainty regarding the implementation of these business and financing plans, which raises substantial doubt about the Company’s ability to continue as a going concern. The accompanying unaudited financial information does not include any adjustment that is reflective of these uncertainties.     

Recent Development

Equity Investment Agreement with Wuhan Junshan Urban Asset Operation Co., Ltd.

On October 16, 2024, the Company, through its wholly-owned subsidiary Uxin (Anhui) Industrial Investment Co., Ltd. (“Uxin Anhui”), entered into an equity investment agreement with Wuhan Junshan Urban Asset Operation Co., Ltd. (“Wuhan Junshan”), a company indirectly controlled by Wuhan City Economic & Technological Development Zone, to establish a subsidiary of the Company. Uxin Anhui will contribute RMB66.7 million and Wuhan Junshan will contribute RMB33.3 million, representing approximately 66.7% and 33.3% of the subsidiary’s total registered capital, respectively.

Share Subscription Agreement with Lightwind Global Limited

On November 4, 2024, Uxin announced that, in connection with the memorandum of understanding previously announced on September 13, 2024, the Company has entered into a share subscription agreement (“Share Subscription Agreement”) with Lightwind Global Limited (the “Investor”), an indirect wholly-owned subsidiary of Dida Inc. (HKEX: 2559).

Pursuant to the Share Subscription Agreement, the Company agreed to issue and sell, and the Investor agreed to subscribe for 1,543,845,204 Class A ordinary shares of the Company for an aggregate subscription amount of US$7.5 million, based on a subscription price of US$0.004858 per share. The completion of transaction is subject to the closing conditions set forth in the Share Subscription Agreement.

Change in Fiscal Year

On November 22, 2024, the Company’s Board of Directors has approved a change in the Company’s fiscal year end from March 31 to December 31. The primary purpose of this change is to streamline the Company’s financial reporting with global standards and align with industry practices, enhancing comparability with peers. This adjustment also allows the Company to better synchronize operational planning and reporting cycles with market trends and customer demands, ensuring more effective communication with stakeholders and investors.

The Company will file a transition report on Form 20-F to cover the transition period from April 1, 2024 to December 31, 2024 in due course as required under applicable regulations.

Business Outlook

For the three months ending December 31, 2024, the Company expects its retail transaction volume to be within the range of 7,800 units to 8,100 units. The Company estimates that its total revenues including retail vehicle sales revenue, wholesale vehicle sales revenue and other revenue to be within the range of RMB560 million to RMB580 million. The Company expects its Non-GAAP adjusted EBITDA to be positive. These forecasts reflect the Company’s current and preliminary views on the market and operational conditions, which are subject to changes.

Conference Call

Uxin’s management team will host a conference call on Monday, November 25, 2024, at 8:00 A.M. U.S. Eastern Time (9:00 P.M. Beijing/Hong Kong time on the same day) to discuss the financial results. In advance of the conference call, all participants must use the following link to complete the online registration process. Upon registering, each participant will receive access details for this conference including an event passcode, a unique access PIN, dial-in numbers, and an e-mail with detailed instructions to join the conference call. 

Conference Call Preregistration: https://dpregister.com/sreg/10194615/fe03e343b8 

A telephone replay of the call will be available after the conclusion of the conference call until December 2, 2024. The dial-in details for the replay are as follows:

A live webcast and archive of the conference call will be available on the Investor Relations section of Uxin’s website at http://ir.xin.com.

About Uxin

Uxin is China’s leading used car retailer, pioneering industry transformation with advanced production, new retail experiences, and digital empowerment. We offer high-quality and value-for-money vehicles as well as superior after-sales services through a reliable, one-stop, and hassle-free transaction experience. Under our omni-channel strategy, we are able to leverage our pioneering online platform to serve customers nationwide and establish market leadership in selected regions through offline inspection and reconditioning centers. Leveraging our extensive industry data and continuous technology innovation throughout more than ten years of operation, we have established strong used car management and operation capabilities. We are committed to upholding our customer-centric approach and driving the healthy development of the used car industry.

Use of Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses certain non-GAAP measures, including Adjusted EBITDA and adjusted net loss from operations per share – basic and diluted, as supplemental measures to review and assess its operating performance. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines Adjusted EBITDA as EBITDA excluding share-based compensation, fair value impact of the issuance of senior convertible preferred shares, foreign exchange (losses)/gains, other income/(expenses), equity in income of affiliates and dividend from long-term investment, net gain from extinguishment of debt. The Company defines adjusted net loss attributable to ordinary shareholders per share – basic and diluted as net loss attributable to ordinary shareholders per share excluding impact of share-based compensation, fair value impact of the issuance of senior convertible preferred shares, deemed dividend to preferred shareholders due to triggering of a down round feature and accretion on redeemable non-controlling interests. The Company presents the non-GAAP financial measures because they are used by the management to evaluate the operating performance and formulate business plans. The Company also believes that the use of the non-GAAP measures facilitates investors’ assessment of its operating performance as this measure excludes certain finance or non-cash items that the Company does not believe directly reflect its core operations. The Company believes that excluding these items enables us to evaluate our performance period-over-period more effectively and relative to our competitors.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using Adjusted EBITDA is that it does not reflect all items of income and expenses that affect the Company’s operations. Share-based compensation, foreign exchange (losses)/gains and other income/(expenses) have been and may continue to be incurred in the business. Further, the non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.

The Company compensates for these limitations by reconciling the non-GAAP financial measure to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the Company’s performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial measure.

Reconciliations of Uxin’s non-GAAP financial measures to the most comparable U.S. GAAP measure are included at the end of this press release.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the reader, except for those transaction amounts that were actually settled in U.S. dollars. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB7.0176 to US$1.00, representing the index rate as of September 30, 2024 set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the United States 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” and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as Uxin’s strategic and operational plans, contain forward-looking statements. Uxin may also make written or oral forward-looking statements in its periodic reports to the SEC, 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 Uxin’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: impact of the COVID-19 pandemic, Uxin’s goal and strategies; its expansion plans; its future business development, financial condition and results of operations; Uxin’s expectations regarding demand for, and market acceptance of, its services; its ability to provide differentiated and superior customer experience, maintain and enhance customer trust in its platform, and assess and mitigate various risks, including credit; its expectations regarding maintaining and expanding its relationships with business partners, including financing partners; trends and competition in China’s used car e-commerce industry; the laws and regulations relating to Uxin’s industry; the general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Uxin’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Uxin does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor and media enquiries, please contact:

Uxin Limited Investor Relations
Uxin Limited
Email: ir@xin.com 

The Blueshirt Group
Mr. Jack Wang
Phone: +86 166-0115-0429
Email: Jack@blueshirtgroup.co

 

 

 

 

 

 

 

 

 

 

 

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SOURCE Uxin Limited

Net revenues from Events Production Increased by 376.5% YoY
Total operating expenses reduced by 49% YoY, narrowing net loss by 59%
Leveraging core competencies to create an expansive digital entertainment ecosystem with diverse revenue streams.

WUHAN, China, Nov. 25, 2024 (GLOBE NEWSWIRE) — NIP Group Inc. (“NIPG” or the “Company”) NIPG, a leading digital entertainment company, today announced its unaudited financial results for the first half of 2024, demonstrating year-over-year topline growth and narrowing losses as the Company balances growth and profitability by investing in high-growth areas while optimizing costs.

First Six Months of 2024 Financial and Operational Highlights

• Total net revenues for the first half of 2024 were US$39.3 million, compared with US$38.6 million in the same period of 2023.
• Gross profit for the first half of 2024 was US$2.4 million, compared with US$2.3 million in the same period of 2023.
• Net loss for the first half of 2024 was US$4.7 million, compared with US$11.3 million in the same period of 2023.
• Adjusted EBITDA for the first half of 2024 was negative US$2.6 million, compared with negative US$2.7 million in the same period of 2023.

Business Updates

• Completed initial public offering on NASDAQ raising over $20 million of capital in July 2024.
• Launched esports-themed hospitality service through a strategic partnership with Homeinns Hotels Group in August 2024.
• Entered into the game publishing market to create a fully integrated digital entertainment ecosystem in September 2024.
• Acquired Young Will, a leader in teen culture-themed short video content which boasts a following of over 115 million fans across major Chinese social media platforms, to strengthen the Company’s position in talent management in October 2024.
• Facilitating the entry into a term sheet with the Abu Dhabi Investment Office (“ADIO”), marking the Company’s expansion into the Middle East region.

Mario Ho, Chairman and Co-CEO of NIP Group, commented, “The first half of 2024 marked a pivotal phase in our company’s evolution from an esports-focused enterprise to a comprehensive gaming company. We have successfully laid the groundwork for our revenue diversification through strategic initiatives in game publishing, talent management upgrades, and sports-themed hospitality services, while expanding our operations to encompass the Middle East market. Our event production business has demonstrated remarkable growth, achieving a 376.5% revenue increase year-over-year. In talent management, we made the strategic decision to shift away from low-margin platforms, focusing instead on high-performance opportunities that better serve our long-term objectives. These moves reflect our commitment to building a more well-rounded and robust organization. Meanwhile, our recent public listing provides us with enhanced access to capital markets, potentially accelerating our future growth initiatives. Through these strategic shifts, we are maintaining our revenue growth trajectory while expediting our path to profitability.”

Hicham Chahine, Co-CEO of NIP Group, commented, “Looking ahead, we plan on executing several key strategic initiatives through the remainder of the year and through 2025 that will position us for sustainable growth and improved profitability. We are front-loading our staffing and marketing investments in our event production segment, and we expect to realize significant benefits from these economies of scale in 2025 and beyond. Our game publishing division is set to contribute meaningful revenue starting in 2025, and its established profitability will enhance our overall margins. In addition, our recent term sheet with the Abu Dhabi Investment Office will provide crucial subsidies enabling us to not only achieve EBITDA breakeven much earlier than planned, but also accelerate our organic growth and attain the economy of scale for maintaining profitability even after the subsidy expires. We are optimistic about the potential of our new initiatives and are thrilled to see what the future will bring.”

Ben Li, CFO of NIP Group, added, “Our financial results for the first half of 2024 reflect the ongoing strategic transformation of our business. Net revenues maintained stability despite a challenging macro backdrop, primarily driven by significant expansion in our event production segment. This performance demonstrates the initial impact of our business transition initiatives. Notably, we have substantially improved our bottom line, with net losses narrowing from US$11.3 million in the first half of 2023 to US$4.7 million in the first half of 2024. Our balance sheet remains solid, providing us with the financial flexibility to execute our growth strategy while maintaining operational stability. These results underscore the effectiveness of our strategic initiatives and our commitment to balancing topline growth with lasting profitability.”

First Six Months of 2024 Financial Results

Total net revenues 
Total net revenues were US$39.3 million for the first half of 2024, compared to US$38.6 million in the same period of 2023.

The following table sets forth a breakdown of the Company’s net revenues by business segments for the period indicated.

		For the Six Months Ended June 30,
		2023			2024
		US$	%		US$	%
		(US$ in thousands, except for %)
Net revenues:
Esports teams operation		9,849	25.5		8,782	22.3
Talent management service		26,896	69.8		21,901	55.7
Event production		1,818	4.7		8,662	22.0
Total		38,563	100.0		39,345	100.0

Total net revenues for the first half of 2024 increased by 2.0% to US$39.3 million, compared with US$38.6 million in the same period of 2023.

• Esports teams operation. Net revenues from esports teams operation during the first half of 2024 were US$8.8 million, representing a change of 10.8% from US$9.8 million in the same period of 2023, reflecting the transitory impact of the Company’s shift from IP licensing revenue related to PC and Console games to league revenue share from mobile games. 
• Talent management service. Net revenues from talent management services were US$21.9 million during the first half of 2024, representing a change of 18.6% from US$26.9 million in the same period of 2023, reflecting the transitory impact of the Company’s migration from low-performance to high-performance online entertainment platforms.
• Event production. Net revenues from events production increased by 376.5% to US$8.7 million in the first half of 2024, from US$1.8 million in the same period of 2023. The increase was primarily driven by the Company hosting a higher number of events in 2024, due to improved integration of internal and external resources during the period.
• Foreign exchange impact. During the first half of 2024, the Company’s total net revenues were negatively impacted by unfavorable exchange rate movements. The appreciation of the US dollar compared to the RMB has had a negative impact on operations. The functional currency of the company’s PRC subsidiaries is RMB. The company lost approximately 4 percent of the value when sales amount in RMB for the six months ended June 30, 2024, translated into the US dollar.

Cost of revenues 
Cost of revenues for the first half of 2024 was US$37.0 million, compared to US$36.3 million in the same period of 2023.

The following table sets forth a breakdown of the Company’s cost of revenues by business segments for the periods indicated.

		For the Six Months Ended June 30,
		2023			2024
		US$	%		US$	%
		(US$ in thousands, except for %)
Cost of revenues:
Esports teams operation		7,332	20.2		6,019	16.3
Talent management service		27,388	75.5		23,204	62.7
Event production		1,550	4.3		7,757	21.0
Total		36,270	100.0		36,980	100.0

• Esports teams operation. Cost of revenues from esports teams operation for the first half of 2024 decreased by 17.9% to US$6.0 million, from US$7.3 million in the same period of 2023. The decline was primarily driven by a decrease in IP licensing fees paid to athletes under Ninjas in Pyjamas.
• Talent management service. Cost of revenues from talent management service for the first half of 2024 decreased by 15.3% to US$23.2 million, from US$27.4 million in the same period of 2023. The decrease was mainly due to the decline in livestreaming service fees paid to online entertainers.
• Event production. Cost of revenues from event production for the first half of 2024 increased by 400.5% to US$7.8 million from US$1.6 million in the same period of 2023. The increase was in line with the increase in revenues recognized from the Company’s event production business.

Gross profit 

Gross profit for the first half of 2024 was US$2.4 million, compared with US$2.3 million in the same period of 2023. Gross margin for the first half of 2024 was 6.0%, compared with 5.9% in the same period of 2023. The slight increase in gross profit margin was mainly attributable to the increase in event production revenues, which was partially offset by the decline in talent management service revenues.

• Esports teams operation. Esports teams operation gross profit increased to US$2.8 million in the first half of 2024, from US$2.5 million in the same period of 2023. Gross margin increased to 31.5% from 25.6% in the first half of 2023, primarily due to increased revenue from league revenue sharing and athlete transfer and rental fees, which have a higher margin.
• Talent management service. Gross loss from talent management service changed from US$0.5 million in the first half of 2023 to US$1.3 million in the same period of 2024. Gross loss margin expanding from 1.8% in the first half of 2023 to 5.9% in the same period of 2024, primarily due to declining economies of scale.
• Event production. Gross profit from event production increased to US$0.9 million in the first half of 2024, from US$0.3 million in the same period of 2023. Gross profit margin declined from 14.7% in the first half of 2023 to 10.5% in the same period of 2024, mainly due to new large-scale esports events with lower average margins that the Company hosted in the first half of 2024 as well as the Company frontloading staffing and marketing expenses to accelerate the pace towards economy of scale.

Selling and Marketing Expenses
Selling and marketing expenses for the first half of 2024 were US$2.8 million, representing a decrease of 26.7% from US$3.8 million in the same period of 2023. This was mainly attributable to a decrease in marketing and promotion expenses for talent management service, and the decrease in business costs. Selling and marketing expenses as a percentage of net revenues decreased from 9.9% in the first half of 2023 to 7.1% in the same period of 2024, mainly due to improvements in operating efficiency.

General and Administrative Expenses
General and administrative expenses for the first half of 2024 decreased by 56.6% to US$4.7 million, from US$10.8 million in the same period of 2023. The decrease was primarily due to a decline in share-based compensation expenses, as the shares under the Company’s share incentive plans were fully vested in the first half of 2023. General and administrative expenses excluding share-based compensation for management and administrative employees as a percentage of net revenues increased slightly from 11.8% in the first half of 2023 to 11.9% in the same period of 2024.

Other loss for the first half of 2024 was US$0.5 million, compared with other income of US$0.2 million in the same period of 2023. The change was primarily due to a decline in government grant income.

Net loss for the first half of 2024 was US$4.7 million, compared with US$11.3 million in the same period of 2023. 

Adjusted EBITDA, which is calculated as net loss excluding interest expense, net, income tax (benefit) expense, depreciation and amortization, and share-based compensation expenses, was negative US$2.6 million for the first half of 2024, compared with negative US$2.7 million in the same period of 2023.

Cash and cash equivalents

As of June 30, 2024, the Company had cash and cash equivalents of US$6.8 million, compared with US$7.6 million as of December 31, 2023.

Use of Non-GAAP Financial Measures

Adjusted EBITDA is calculated as net loss excluding interest expense, net, income tax (benefit) expense, depreciation and amortization and share-based compensation expense. The non-GAAP financial measure is presented to enhance investors’ overall understanding of financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measure to the most directly comparable GAAP financial measure. As non-GAAP financial measure has material limitations as an analytical metric and may not be calculated in the same manner by all companies, it may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measure as a substitute for, or superior to, such metrics prepared in accordance with GAAP.

The following table sets forth a breakdown of non-GAAP financial measures of the company for the periods indicated.

		For the Six Months Ended June 30,
		2023			2024
		US$			US$
		(US$ in thousands, except for %)
Net loss		(11,271	)		(4,666	)
Add:
Interest expense, net		218			340
Income tax benefits		(818	)		(931	)
Depreciation and amortization(1)		2,866			2,698
Share-based compensation expense		6,257			–
Adjusted EBITDA		(2,748	)		(2,559	)
Adjusted EBITDA margin(2)		(7.1	)		(6.5	)

 Notes:
(1) Primarily consists of depreciation related to property and equipment, as well as amortization related to intangible assets
(2) Adjusted EBITDA as a percentage of revenues.

Exchange Rate Information

The functional currency of the company’s PRC subsidiaries is RMB, which is the local currency used by the subsidiaries to determine financial position and operation result. The functional currency of Ninjas in Pyjamas is SEK, which is the local currency used by the subsidiary to determine financial position and operation result. The Group’s financial statements are reported using U.S. Dollars (“$”). The results of operations and the consolidated statements of cash flows denominated in functional currency is translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in functional currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income (loss) included in consolidated statements of changes in equity (deficit). Gains or losses from foreign currency transactions are included in the results of operations.

The following table outlines the currency exchange rates published by the Federal Reserve Board were used in unaudited condensed consolidated financial statements: 

		As of
		December 31, 2023		June 30, 2024
Balance sheet items, except for equity accounts
RMB against $		7.0999		7.2672
SEK against $		10.0506		10.5996

		For the Six Months Ended June 30,
		2023		2024
Items in the statements of operation and comprehensive loss, and statements of cash flows
RMB against $		6.9283		7.2150
SEK against $		10.4862		10.5473

Recent Developments

• On July 26, 2024, NIPG announced the pricing of its initial public offering of 2,250,000 American depositary shares (“ADSs”), at US$9.00 per ADS, for a total offering size of US$20.25 million. The ADSs began trading on the Nasdaq Global Market on July 26, 2024, under the ticker “NIPG”.
• On August 21, 2024, NIPG announced it had entered a strategic partnership with Homeinns Hotels Group, a leading hospitality company in China. This collaboration will establish a joint venture focused on the development and operation of esports-themed hotels, with NIPG taking the controlling stake to oversee investment, operations, and management.
• On September 9, 2024, NIPG announced it had entered the game publishing market, underscoring the Company’s strategic ambition to create a fully integrated digital entertainment ecosystem. NIPG’s game publishing strategy will be multifaceted, focusing on esports-oriented titles, as well as exploring opportunities in various game categories.
• On October 15, 2024, NIPG announced it had signed a definitive agreement to acquire Young Will, a leader in teen culture-themed short video content which boasts a following of over 115 million fans across major Chinese social media platforms. The strategic acquisition strengthened the Company’s position in talent management and served to expand its digital entertainment ecosystem.

About NIP Group

NIP Group NIPG is a digital entertainment company created for a growing global audience of gaming and esports fans. The business was formed in 2023 through a merger between legendary esports organization Ninjas in Pyjamas and digital sports group ESV5, which includes eStar Gaming, a world-leader in mobile esports. Building on the success of its competitive teams with an innovative mix of business ventures, including talent management, event production, hospitality and game publishing, NIP Group is developing transformational experiences that entertain, inspire and connect fans worldwide, to expand its global footprint and engage digital-first gamers where they are. NIP Group currently has operations in Sweden, China, Abu Dhabi and Brazil, and its esports rosters participate across multiple game titles at the biggest events around the world.

Safe Harbor Statements

This press release contains statements that constitute “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,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “likely to” or other similar expressions. Among other things, the business outlook and quotations from management in this press release, as well as NIP Group’s strategic and operational plans, contain forward-looking statements. NIP Group may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), 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 but not limited to statements about NIP Group’s beliefs, plans 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: NIP Group’s growth strategies; its future business development, results of operations and financial condition; its ability to maintain and enhance the recognition and reputation of its brand; developments in the relevant governmental laws, regulations, policies toward NIP Group’s industry; and general economic and business conditions globally and in the countries or regions where NIP Group has operations; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in NIP Group’s filings with the SEC. All information provided in this press release is as of the date of this press release, and NIP Group undertakes no obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact:
NIP Group Inc.
Investor Relations
Tel: +46 8133700
Email: IR@nipgroup.gg
NIP GROUP INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS (In U.S. dollars, except for share and per share data, or otherwise noted)
		As of
		December 31, 2023			June 30, 2024
ASSETS
Current assets:
Cash and cash equivalents		$	7,594,601		$	6,762,378
Accounts receivable, net			18,995,477			20,708,803
Amounts due from related parties			269,817			227,278
Prepaid expenses and other current assets, net			2,494,395			5,683,742
Total current assets			29,354,290			33,382,201
Non-current assets:
Property and equipment, net			2,917,525			2,606,199
Intangible assets, net			133,969,114			126,471,993
Right-of-use assets			2,124,481			1,807,015
Goodwill			141,402,327			134,912,191
Deferred tax assets			550,794			1,065,535
Other non-current assets			3,521,024			5,100,847
Total non-current assets			284,485,265			271,963,780
Total assets		$	313,839,555		$	305,345,981
LIABILITIES
Current liabilities:
Short-term borrowings		$	5,324,019		$	10,870,762
Long-term borrowing, current portion			281,694			275,209
Accounts payable			12,728,929			12,632,333
Payable related to league tournaments rights, current			1,921,518			1,906,028
Accrued expenses and other liabilities			6,106,258			10,169,603
Deferred revenue			500,785			333,972
Operating lease liabilities, current			644,858			688,065
Amount due to related parties, current			1,270,663			920,445
Total current liabilities			28,778,724			37,796,417
Non-current liabilities:
Long-term borrowing, non-current			3,713,180			3,509,566
Amount due to related party, non-current			131,017			131,017
Payable related to league tournaments rights, non-current			2,342,940			2,365,306
Operating lease liabilities, non-current			1,475,374			1,171,644
Deferred tax liabilities			24,659,215			23,254,194
Total non-current liabilities:			32,321,726			30,431,727
Total liabilities		$	61,100,450		$	68,228,144

NIP GROUP INC. UNAUDITED CONSOLIDATED BALANCE SHEETS (In U.S. dollars, except for share and per share data, or otherwise noted)
		As of
		December 31, 2023				June 30, 2024
Commitments and contingencies
MEZZANINE EQUITY
Class A redeemable preferred shares		$	114,893,066			$	123,547,635
Class B redeemable preferred shares			16,766,736				16,976,181
Class B-1 redeemable preferred shares			190,882,461				215,222,620
Total mezzanine equity		$	322,542,263			$	355,746,436
DEFICIT:
Ordinary shares		$	3,716			$	3,716
Subscription receivable			(3,716	)			(3,716	)
Additional paid-in capital			–				–
Statutory reserve			72,420				72,420
Accumulated deficit			(80,300,893	)			(120,878,503	)
Accumulated other comprehensive income (loss)			5,425,370				(2,803,671	)
Total deficit attributable to the shareholders of NIP Group Inc.			(74,803,103	)			(123,609,754	)
Non-controlling interests			4,999,945				4,981,155
Total deficit			(69,803,158	)			(118,628,599	)
Total liabilities, mezzanine equity and deficit		$	313,839,555			$	305,345,981

NIP GROUP INC. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In U.S. dollars, except for share and per share data, or otherwise noted)
		For the Six Months Ended June 30,
		2023				2024
Net revenue – third parties		$	38,006,519			$	38,892,846
Net revenue – related parties			556,917				451,626
Total net revenue			38,563,436				39,344,472
Cost of revenue – third parties			(36,043,173	)			(36,816,220	)
Cost of revenue – related parties			(226,751	)			(164,238	)
Total cost of revenue			(36,269,924	)			(36,980,458	)
Gross profit			2,293,512				2,364,014
Operating expenses:
Selling and marketing expenses			(3,806,023	)			(2,790,316	)
General and administrative expenses			(10,795,277	)			(4,684,201	)
Total operating expenses			(14,601,300	)			(7,474,517	)
Operating loss			(12,307,788	)			(5,110,503	)
Other income (expense):
Other income (expense), net			436,674				(145,598	)
Interest expense, net			(218,425	)			(340,486	)
Total other income (expense), net			218,249				(486,084	)
Loss before income tax expenses			(12,089,539	)			(5,596,587	)
Income tax benefits			818,215				931,032
Net loss			(11,271,324	)			(4,665,555	)
Net loss attributable to non-controlling interest			(117,584	)			(18,925	)
Net loss attributable to NIP Group Inc.			(11,153,740	)			(4,646,630	)
Preferred shares redemption value accretion			(12,830,373	)			(35,930,980	)
Net loss attributable to NIP Group Inc.’s shareholders			(23,984,113	)			(40,577,610	)
Other comprehensive income (loss):
Foreign currency translation income attributable to non-controlling interest, net of nil tax			5,237				135
Foreign currency translation income (loss) attributable to ordinary shareholders, net of nil tax			1,288,471				(8,229,041	)
Total comprehensive loss		$	(9,977,616	)		$	(12,894,461	)
Total comprehensive loss attributable to non-controlling interest			(112,347	)			(18,790	)
Total comprehensive loss attributable to NIP Group Inc.			(9,865,269	)			(12,875,671	)
Net loss per ordinary share
Basic and Diluted			(0.71	)			(1.04	)
Weighted average number of ordinary shares outstanding
Basic and Diluted			33,770,051				38,888,512

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Reflects continued growth and high profitability while maintaining financial stability

TEL AVIV, Israel, Nov. 25, 2024 /PRNewswire/ — First International Bank of Israel FIBI one of Israel’s major banking groups, today announced its results for the third quarter and nine-month period ended September 30, 2024.

Financial Highlights

Financial Highlights for the Third Quarter of 2024

• Net income of NIS 620 million and a return on equity of 19.4% in the third quarter of 2024;
• Net income of NIS 1,798 million and a return on equity of 19.4% for the first nine months of the year;
• Credit to the public grew by 6% compared to the end of 2023 and by 3.5% compared to the second quarter of the year;
• Deposits by the public grew by 11.4% compared to the end of 2023, and by 4.3% compared to the second quarter of the year;
• The portfolio of customers’ assets grew by 19% compared to the end of 2023, and reached NIS 800 billion;
• Equity attributed to the Bank’s shareholders was NIS 13 billion, an increase of 8.2% compared to the end of 2023;
• The tier 1 capital ratio was 11.41%;
• The Bank’s Board of Directors decided to distribute a dividend in the amount of NIS 248 million, representing 40% of the net income.

Financial Results of the Third Quarter 2024

Net profit for the First International Bank Group was NIS 620 million in the third quarter of 2024, an increase of 36.3 % compared to the comparative quarter in the previous year. Return on equity was 19.4%.

The net profit for the first nine months of the year was NIS 1,798 million, an increase of 7.5% compared to the comparative period in the previous year. The return on equity was 19.4%.

Expense for credit losses was NIS 22 million in the third quarter, amounting to 0.07% of the average balance of credit to the public. Income for credit losses amounted to NIS 51 million in the first nine months of the year, primarily from debt recovery. In the corresponding period of last year, expenses of NIS 336 million were recorded which was due to an increase in collective provisions because of concerns over macroeconomic impacts, amid uncertainty.

High-quality credit portfolio: the NPL (non-performing loan) ratio remained stable and reached 0.57% at the end of the third quarter. This reflects the quality of the credit portfolio, (the balance of debts not accruing or overdue by 90 days or more out of the total credit to the public). The total coverage ratio (the ratio of the total credit loss provisions to the total credit to the public) stood at 1.41%, compared to 1.37% in the comparative period last year.

The operating and other expenses were NIS 2,240 million in the first nine months of the year, an increase of 2% compared to the comparative period in the previous year, mainly due to an increase in other expenses: IT-related, donations, telecommunications and advertising. The efficiency ratio stood at 44.5%.

Credit to the public amounted to NIS 126.4 billion, an increase of 6% compared to the end of 2023. There was an increase in the credit of 3.5% in the third quarter, compared to the second quarter of the year.

Deposits by the public amounted to NIS 213 billion, an increase of 11.4% compared to the end of 2023, and 4.3% compared to the second quarter.

The total customers’ assets portfolio increased by 26% year-over-year and by 19% compared to the end of 2023, to approximately 800 billion.

Equity attributed to shareholders in the Bank increased to NIS 13 billion, an increase of 8.2% compared to the end of 2023. The tier 1 capital ratio reached 11.41%, approximately -2.2% above the regulatory requirement, reflecting the highest capital surplus in the Israeli banking system. The liquidity coverage ratio is high and stands at 171%.

Considering the requests of the Banking Supervisor regarding capital planning and profits distribution policies, the Bank’s Board of Directors decided to approve the distribution of a cash dividend to the shareholders for NIS 248 million representing 40% of the net income. The Bank’s Board of Directors will continue to review the implementation of the Bank’s dividend distribution policy in light of ongoing developments and their impact on the Israeli economy and on the Bank.

Management Comment

Eli Cohen, CEO of First International Bank, commented: ,”The Bank’s reports reflect a growth trend both on the passive side, including deposits and securities of the public, which reached a record NIS 800 billion, and also on the active side, with a considerable increase in the credit portfolio, which has been achieved while maintaining the quality of the underwriting and portfolio diversification.

“Amid economic uncertainty and the ongoing multi-front war in Israel, the First International Bank maintained high capital and liquidity cushions, ensuring resilience and our ability to continue supporting our customers. The Bank is continuing to provide benefits and relief measures for customers to help them navigate the current challenging period.

“I am proud to say that the First International Bank’s customers are the most satisfied among bank customers in Israel, reporting high satisfaction with the Bank, the professionalism of its services and their willingness to recommend the bank to their friends. This is evidenced via customer surveys, including the recent Marketest survey. This reflects the high quality service and competitiveness of the First International Bank, as well as the professionalism and the dedication of our Group’s employees, all of whom have contributed to the achievement.

“We recently announced a number of management changes at the Bank: Vered Golan was appointed to the position of Head of the Corporate Division, Dr. Moriah Hoftman-Doron was appointed to the position of Chief Legal Counsel, and Liora Shechter was appointed CEO of Mataf. I wish considerable success to the new members of our management team.”

 

 

 

 

 

 

Contact:
Dafna Zucker
First International Bank of Israel
Zucker.d@fibi.co.il
+972-3-519-6224

 

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SOURCE First International Bank of Israel