Cogobuy Announces 2015 Third Quarter Unaudited Operation Results

HONG KONG, Nov. 11, 2015 /PRNewswire/ --

Highlights for the three months ended September 30, 2015:

• The Group's Gross Merchandise Value ("GMV") was RMB3,743.6 million, an increase of 68.3% year-on-year ("YoY")
• Online transaction customers[1] as at September 30, 2015 reached 8,513, up 101.8% YoY
• Non-GAAP profit attributable to equity shareholders[2] of the Company was approximately RMB104.6 million, up 43.7% YoY
• GMV from the provision of loans under the supply chain financing business grew to RMB425.2 million, which was approximately 11.3% of total GMV
• The number of IoT project entries on INGDAN.com's platform doubled from approximately 4,000 last quarter to over 8,500. The platform has also expanded internationally, adding local teams in Hong Kong, Europe, and the United States 

Cogobuy Group ("Cogobuy" or the "Company", stock code: 400.HK; with its subsidiaries (the ''Group'')), the largest e-commerce platform serving the electronics manufacturing industry in China, is pleased to announce its unaudited operating results for the three months ended September 30, 2015 (the "Period").

During the Period, the Company's three major businesses achieved robust growth. The total GMV of the Company's operations grew to RMB3,743.6 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.

The Company's robust growth during the Period was largely 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. As at September 30, 2015, the number of registered customers reached 45,858, compared to 28,107 as at September 30, 2014.

During the Period, the Company 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[2] of the Company was approximately RMB104.6 million, representing an increase of 43.7% YoY. Non-GAAP operating expenses[3] were RMB73.3 million. Non-GAAP operating margin[4] was 5.2%. The effective tax rate of the Group was 14.0%.

During the Period, the Group 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[5] and account receivables turnover days[6] were 34.1 days and 35.3 days, respectively.

Business Highlights

• Cogobuy became one of the first corporates to partner with Baidu's Internet of Things ("IoT") business. With the combined industry strengths of both companies, Cogobuy and Baidu will jointly explore prospects for the development of the vertical IoT industry and promote solutions development and commercialization. Moreover, both parties will collaborate on the research and development and marketing for IoT OS, providing IoT cloud services, promoting industry cooperation within the IoT hardware supply chain, and helping small and medium IoT startups flourish under the framework of the IoT industry alliance.
• Cogobuy officially launched its strategic initiative "Xinhuo +", a program through which Cogobuy and INGDAN.com will help traditional manufacturing companies take their businesses online. Cogobuy also hosted its first "Xinhuo +" Supplier Conference in partnership with JD.com's JD Crowdfunding Platform. The conference facilitated intelligent hardware companies' collaboration on improving the quality of supply chain resources, lowering production costs, enhancing product manufacturing capacity, and building an intelligent hardware supply chain ecosystem with INGDAN.com. The conference helped generate an estimated RMB50 million GMV.
• In the past three months, INGDAN.com's platform has attracted extensive market attention, doubling the number of IoT project entries to over 8,500 from approximately 4,000 at the end of last quarter. In October 2015, the Group officially launched a second IngDan Experience Center in Beijing's Zhongguancun Science Park ("Zhongguancun"). Through the new IngDan Experience Center, INGDAN.com will help intelligent hardware startups in Zhongguancun grow their business.
• INGDAN.com expanded its overseas market penetration and has already established local teams in Hong Kong, Europe, and the United States. INGDAN.com brought intelligent hardware to Hong Kong's Startup Launchpad, and joined this year's 3^rd Maker Faire European Edition in Rome, Italy. In the future, INGDAN.com will increasingly devote its efforts to growing into overseas markets, particularly in global technology innovation centers such as Europe, the United States, Japan, and Israel.

Outlook

Mr. Jeffrey Kang, CEO of Cogobuy Group, said, "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 3^rd 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.

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."

Caution Statement

The information contained in this document has not been independently verified. No representation, warranty or undertaking, express or implied, is made by the Company or any of its affiliates, advisers or representatives as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions presented or contained herein. The information contained in this document should be considered in the context of the circumstances prevailing at the time, is subject to change without notice and the Company makes no undertaking to update the information in this document to reflect any developments that occur after the date of the presentation. It is not the Company's intention to provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of the Company, or its financial or trading position or prospects. Neither of the Company nor any of its affiliates, advisers or representatives accept any responsibility or have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document.

This document may contain statements that reflect the Company's current intent, beliefs and expectations about the future as of the respective dates indicated herein. These forward-looking statements are not guarantees of future performance and are based on a number of assumptions about the Company's operations and factors beyond the Company's control and are subject to significant risks and uncertainties, and accordingly, actual results may differ materially from those described in these forward-looking statements. Neither the Company nor any of its affiliates, advisers or representatives has any obligation, nor do they undertake, to update these forward-looking statements for any events or developments including the occurrence of unanticipated events that occur subsequent to such dates.

About Cogobuy Group

Cogobuy Group is the largest e-commerce service platform serving the electronics manufacturing industry in China. Through the e-commerce platform, which includes a direct sales platform, an online marketplace, and a dedicated team of technical consultants and professional sales representatives, the Company provides customers with comprehensive online and offline services across pre-sale, sale, and post-sale stages. The Company serves mainly SME electronics manufacturers.

For further information, please refer to the Company's website at http://www.cogobuy.com/

About INGDAN.com

INGDAN.com is a platform dedicated to connecting global intelligent hardware entrepreneurs and China-based supply chain resources. The platform provides information on hardware innovation, supply chain data, and supply chain demand docking for global IoT innovators and entrepreneurs. It is a one-stop hardware innovation business platform with its core being the "supply chain."

For further information, please refer to the Company's website at http://www.ingdan.com/

SOURCE Cogobuy Group

Related Links

http://www.ingdan.com