As of June 30, 2013, the Company had a total of 42,140,890 ordinary shares, with 23,405,809 ADSs issued and outstanding. Each ADS represents one ordinary share of the Company. Basic and diluted per ADS figures for the second quarter of 2013 were calculated using a weighted average of 39,489,454 and 41,343,556 ADSs, respectively.
Second quarter 2013 Results
Bitauto reported revenue of RMB338.0 million (US$55.1 million) for the second quarter of 2013, representing a 36.5% increase from the corresponding period in 2012. The increase in revenue was primarily attributable to the growth of the bitauto.com advertising business and the EP platform business.
Cost of revenue for the second quarter of 2013 was RMB82.8 million (US$13.5 million), representing a year-over-year increase of 15.7% from RMB71.6 million (US$11.7 million). Cost of revenue as a percentage of revenue in the second quarter of 2013 was 24.5%, compared to 28.9% in the corresponding period in 2012. The increase in cost of revenue was mainly due to an increase in higher-direct-cost services, an increase in content distribution costs and an increase in personnel expenses of employees directly engaged in revenue-generating activities.
Gross profit for the second quarter of 2013 was RMB255.2 million (US$41.6 million), representing a 44.9% increase from the corresponding period in 2012.
Selling and administrative expenses were RMB182.2 million (US$29.7 million) for the second quarter of 2013, representing an increase of 37.6% from the corresponding period in 2012. This increase was primarily attributable to an increase in expenses relating to the Company's search engine and auto show marketing efforts, as well as an increase in selling and administrative headcount, and an increase in employee salaries and benefits.
Product development expenses were RMB22.2 million (US$3.6 million) for the second quarter of 2013, a 74.8% increase from the corresponding period in 2012. The increase was primarily due to an increase in product development headcount and an increase in personnel-related expenses.
Share-based payment expenses, which were allocated to related operating expense line items, were RMB3.2 million (US$0.5 million) in the second quarter of 2013, compared to RMB2.5 million (US$0.4 million) in the corresponding period in 2012. The increase was mainly due to the issuance of new options granted in August 2012.
Operating profit in the second quarter of 2013 was RMB50.8 million (US$8.3 million), representing a 64.3% increase from the corresponding period in 2012. The increase was mainly due to business scalability and an increase in operation efficiency.
Income tax expense in the second quarter of 2013 was RMB2.2 million (US$0.4 million), compared to an income tax expense of RMB1.7 million (US$0.3 million) in the corresponding period in 2012.
IFRS profit in the second quarter of 2013 was RMB55.8 million (US$9.1 million), a 113.2% increase from the corresponding period in 2012. Basic and diluted profit per ADS, each representing one ordinary share, in the second quarter of 2013 amounted to RMB1.41 (US$0.23) and RMB1.35 (US$0.22), respectively.
Non-GAAP profit in the second quarter of 2013 was RMB59.1 million (US$9.6 million), a 105.8% increase from the corresponding period in 2012. Non-GAAP basic and diluted profit per ADS in the second quarter of 2013 amounted to RMB1.50 (US$0.24) and RMB1.43 (US$0.23), respectively.
Business Segment Results
Revenue from the bitauto.com advertising business for the second quarter of 2013 was RMB176.5 million (US$28.8 million), representing a 45.7% increase from the corresponding period in 2012. The increase was attributable to better brand recognition of the bitauto.com website.
Cost of revenue for the bitauto.com advertising business for the second quarter of 2013 was RMB27.2 million (US$4.4 million), representing a year-over-year increase of 45.8% from RMB18.7 million (US$3.0 million). The increase was primarily due to an increase in content distribution costs, an increase in higher-direct-cost services and an increase in personnel expenses of employees directly engaged in revenue-generating activities. Cost of revenue as a percentage of revenue in the second quarter of 2013 was 15.4%, the same as that in the corresponding period in 2012.
Gross profit from the bitauto.com advertising business for the second quarter of 2013 was RMB149.3 million (US$24.3 million), representing a 45.7% increase from the corresponding period in 2012.
Operating profit from the bitauto.com advertising business for the second quarter of 2013 was RMB51.2 million (US$8.3 million), representing a 49.4% increase from the corresponding period in 2012. The increase was mainly due to enhanced sales efficiency and scalability of the bitauto.com advertising business.
Revenue from the EP platform business for the second quarter of 2013 was RMB105.5 million (US$17.2 million), representing a 45.2% increase from the corresponding period in 2012. The increase was attributable to an increase in both the number of paid subscribers and months of paid subscription from the corresponding period in 2012. The Company recorded 27,866 months of paid subscription for the period.
Cost of revenue for the EP platform business for the second quarter of 2013 was RMB20.8 million (US$3.4 million), representing a year-over-year increase of 66.7% from RMB12.5 million (US$2.0 million). This was mainly due to an increase in personnel expenses of employees directly engaged in revenue-generating activities, as well as an increase in fees paid to partner websites to distribute dealer customers' automobile pricing and promotional information. Cost of revenue as a percentage of revenue in the second quarter of 2013 was 19.7%, compared to 17.2% in the corresponding period in 2012.
Gross profit from the EP platform business for the second quarter of 2013 was RMB84.6 million (US$13.8 million), representing a 40.8% increase from the corresponding period in 2012.
Operating profit from the EP platform business for the second quarter of 2013 was RMB21.0 million (US$3.4 million), representing a 54.6% increase from the corresponding period in 2012. The increase was in line with the revenue growth.
Revenue from the taoche.com business for the second quarter of 2013 was RMB5.9 million (US$1.0 million), representing a 15.4% decrease from the corresponding period in 2012. This decrease was the result of a sales policy adjustment.
Cost of revenue for the taoche.com business for the second quarter of 2013 was RMB9.3 million (US$1.5 million), representing a year-over-year decrease of 31.2% from RMB13.6 million (US$2.2 million).
Gross loss from the taoche.com business for the second quarter of 2013 was RMB3.4 million (US$0.6 million), compared to a gross loss of RMB6.6 million (US$1.1 million) in the corresponding period in 2012.
Operating loss from the taoche.com business for the second quarter of 2013 was RMB18.7 million (US$3.0 million), compared to an operating loss of RMB10.7 million (US$1.7 million) in the corresponding period in 2012. This was mainly due to continued investments in marketing the taoche.com business.
Revenue from the digital marketing solutions business for the second quarter of 2013 was RMB50.2 million (US$8.2 million), representing a 6.9% increase from the corresponding period in 2012.
Cost of revenue for the digital marketing solutions business for the second quarter of 2013 was RMB25.5 million (US$4.2 million), representing a year-over-year decrease of 5.3% from RMB26.9 million (US$4.4 million) in the corresponding period in 2012. The decrease was due to the majority of revenues for the digital marketing solutions business being subject to value-added tax, which is an output tax and not recognized as cost of revenues (previously, such revenues were subject to business tax, which was recorded directly as cost of revenues) and to a decrease in headcount compared with the corresponding period in 2012.
Gross profit from the digital marketing solutions business for the second quarter of 2013 was RMB24.7 million (US$4.0 million), representing a 23.1% increase from the corresponding period in 2012.
Operating loss from the digital marketing solutions business for the second quarter of 2013 was RMB2.7 million (US$0.4 million), compared to an operating loss of RMB6.2 million (US$1.0 million) in the corresponding period in 2012.
As of June 30, 2013, the Company had cash and cash equivalents of RMB523.8 million (US$85.4 million). Cash used in operating activities, cash used in investing activitiessuch as capital expenditures, and cash from financing activities in the second quarter of 2013 were RMB5.8 million (US$0.9 million), RMB10.5 million (US$1.7 million) and RMB2.0 million (US$0.3 million), respectively.
Gross billings[2] in the second quarter of 2013 was RMB493.0 million (US$80.3 million), compared to RMB399.0 million (US$65.0 million) in the corresponding period in 2012.
Bills receivables, representing short-term notes receivable issued by financial institutions that entitle the Company to receive the full face amount from the financial institutions at maturity, which generally range from three to six months from the date of issuance, was RMB32.1 million (US$5.2 million) as of June 30, 2013, compared to RMB68.8 million (US$11.2 million) as of December 31, 2012.
Trade receivables was RMB713.8 million (US$116.3 million) as of June 30, 2013, compared to RMB472.1 million (US$76.9 million) as of December 31, 2012. This increase was due to an increase in gross billings.
The number of employees totaled 2,080 as of June 30, 2013, representing a 9.4% increase from the same period in 2012. The increase in headcount was primarily due to the year-over-year expansion of the Company's sales network from 117 to 140 locations.