Ucommune International Ltd. - Successful Asset-Light Business Transformation Amplified By New SaaS Market Opportunities

NEW YORK, April 20, 2021 /PRNewswire/ -- Ucommune (Nasdaq: UK) released its quarterly earnings ended Dec. 31, 2020 on April 15, 2021.

The company's shifting its workspace management strategy from a self-managed approach to an asset-light management approach had resulted in improved financial performance in the fourth quarter. As of Dec. 31, 2020, 54.3% of the Company's total managed area was under the asset-light model. With greater operational efficiency under this business model, Ucommune was able to expand its managed areas/spaces more rapidly while narrowing its financial loss significantly, and has now established itself in the urban development efforts of local municipalities, able to quickly attain management contracts with many metropolitan landmark buildings across the country.

Utilizing the proprietary SaaS technology from its subsidiary Xiyu Information, the Company has built a fixed asset management system ("DOMES") to provide big data and other smart services for office buildings and industrial parks. 

Ucommune management believes that the Company's business roadmap is well aligned with the rising demand for more flexible, scalable, and efficient workspace solutions, triggered by government's restrictions on commercial property development and wind-down urbanization. With operational flexibility supported by asset-light business model and new market opportunities, the management remains confident that the Company is on the path to profitability over the foreseeable future.

Fourth Quarter of 2020 Financial Highlights 

Net revenues were RMB278.7 million in 4Q-2020, representing an increase of 39.4% from the previous quarter and a decrease of 4.8% from a year ago. Among which, revenues from Workspace Membership Services decreased by 44.5% year-over-year due to the closure of spaces during COVID-19 outbreak, revenues from Marketing and Branding Services decreased by 16.2% year-over-year, while Other Services revenues increased by 297.3% year-over-year, mainly driven by increased revenues from its SaaS services.

GAAP EBITDA loss narrowed by 51.0% year-over-year to RMB94.8 million, while adjusted EBITDA loss narrowed by 91.4% year-over-year to RMB9.4 million in the fourth quarter of 2020.

Net loss narrowed by 36.8% year-over-year to RMB149.1 million in the fourth quarter of 2020, while adjusted net income was RMB62.8 million compared to an adjusted net loss of RMB194.6 million in the previous year.

Basic and fully-diluted net loss per share were both RMB2.23 in the fourth quarter of 2020, narrowed by 53.3% from RMB4.78 in 4Q-2019. Basic and fully-diluted adjusted net income per share were both RMB1.02 in the fourth quarter of 2020, compared to RMB3.95 in the fourth quarter of 2019.

Cash, cash equivalents and restricted cash were RMB400.8 million as of December 31, 2020, representing a year-over-year increase of 104.2% from RMB196.3 million as of December 31, 2019, primarily due to the PIPE financing in connection with the Company's business combination, consummated on November 17, 2020.

Fourth Quarter of 2020 Operating Highlights

As of December 31, 2020, Ucommune had committed to 234 office spaces in 54 cities, up from 222 office spaces in 51 cities as of September 30, 2020. Among which, 163 spaces were in operation and provided approximately 647,700 square meters of managed area to 1,044,700 members, up from 158 spaces serving 860,400 members as of the end of third quarter of 2020.

Under Ucommune's asset-light model, the Company's total number of spaces under contract increased by 166% to 125 across 46 cities as of December 31, 2020, up from 47 across 25 cities as of December 31, 2019.  Ucommune's total managed area under contract increased by 105.3% to 351,500 square meters from 171,200 square meters as of December 31, 2019.

Recent Corporate Development

Ucommune concluded its public offering of Class A ordinary shares and warrants on February 2, 2021, with gross proceeds of approximately $20 million.

Ucommune's modern technical solutions for office space management has broadened the Company's business horizon into new market opportunities. Building on the foundation of the Company's asset-light model, Ucommune has expanded its service offerings to include corporate office space brokerage in 1Q-2021. By connecting various stakeholders within the office space brokerage ecosystem, including commercial landlords, enterprise tenants, brokerage firms, and independent brokers, Ucommune has constructed a one-stop platform providing end-to-end services throughout the entire office leasing process.

Recognizing the growing brand influence of Xiyu Information, the Company increased its Xiyu ownership to 53.2% from 51% in January 2021.

Business Outlook

For the first quarter of 2021, management expects the company's revenue to range between RMB180 million to RMB210 million.

The management also expects that revenue contribution from the Company's SaaS services to increase in 2021.  Going forward, Ucommune will continue its asset-light business transformation to enhance operational efficiency, and continue cultivating healthy business expansion through the development of a comprehensive platform offering value-add services to its members and partners.

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