Qeeka Home 2020 First Half Revenues reached 310 million Helping IDC Industry Through Difficult Times

On 26 August, Qeeka Home (1739.HK, subject of operation: Jia.com, “the Company”), the first shares of IDC vertical platform in China, released its interim results for 2020, which showed that Qeeka Home total revenue for the first half of 2020 was RMB 310 million, of which RMB 207 million was from platform business, and adjusted net profit attributable to equity holders of the Company was RMB 6.871 million. The Company remains profitable; having cash and cash equivalents of $655 million and term deposits of $235 million as of June 30, 2020.

Steady performance in the face of the epidemic

The first half of 2020 was particularly difficult for the IDC industry, as on the one hand, the industry chill has not yet faded, and on the other hand, the epidemic has cut off the revenue streams of many home improvement companies. Qeeka Home business suffered downward pressure in the first quarter of 2020 due to the operating conditions of merchants. According to Qeeka Home interim results report for 2020, during the outbreak of the new crown epidemic, due to the vast majority of provinces and cities in China closed their communities and closed the major transportation routes between cities as a precautionary measure, IDC service providers were unable to enter the construction site and material suppliers had poor logistics, resulting in a sharp decline in orders from IDC service providers and material suppliers, which reduced the Company revenue and caused a certain degree of decline in each block of business year-on-year, but it was under control.

Nonetheless, there were still many highlights in Qeeka Home 2020 interim results, in addition to maintaining a profitable state, in terms of users, the MUV of the Company maintained growth, up 9.1% year-on-year to 60.1 million, and the number of recommended users increased by 14.1% over the same period last year to 257,801; in terms of merchants, Qeeka Home also attracted a large number of IDC service providers during the epidemic, and the number of IDC service providers rose 23.4% to 13,624 from 11,042 in the same period last year.

In addition, thanks to a series of measures such as strict operating cost control and improvement of platform capabilities and enrichment of products and services, Qeeka Home maintained sufficient operating cash flow in the first half of 2020, moving from a net expense of RMB12.38 million to a net inflow of RMB49.16 million in the same period of 2020, and had cash and cash equivalents of RMB655 million as of June 30, 2020 and term deposits amounted to RMB235 million.

After the first quarter, as the domestic epidemic slowed down, the head effect of Qeeka Home network and digital advantages in the whole process of marketing, orders, design, supply chain management, site management attracted a large number of consumers, the number of users and orders in the second quarter rapid growth in demand, performance recovery is obvious, further hedging the decline in the first quarter, so that the overall performance in the first half of the year to maintain a more stable level of development.

Helping the home improvement industry through the tough times

It was disclosed that after the outbreak of the epidemic, Qeeka Home quickly introduced systematic measures to help the industry tide over the difficulties of the epidemic. In addition, it is also a good place to start, as it is a good place to get a good deal on the products and services you need. A package of measures, such as training, will help platform merchants alleviate operational pressure and avoid capital chain breaks, while obtaining free traffic and orders from the platform to ensure the normal operation of enterprises, and with the empowerment of the Company PaaS platform.

It is reported that supporting the IDC service providers to digital transformation and upgrading is the development strategy that Qeeka Home began to promote in 2019, after the outbreak of the epidemic, home improvement offline service channels were blocked, the need for transformation and upgrading of decoration companies is more urgent, Qeeka Home increase the efforts of empowerment, through the PaaS platform to decoration merchants output online acquiring training services, operating software and operational analysis services, free online design software, online live marketing and other services, to help decoration companies deep operation, improve the ability to convert orders.

On the material supply chain side, Qeeka Home also helps merchants solve the problems of diverting customers, getting orders, inventory management, etc. through the digital integration system, online the traditional business, improve sales, reduce costs, accelerate the flow of funds, and use VR technology to help material suppliers and renovation merchants supporting sales by exporting design solutions and other non-contact class methods. Supported by a series of initiatives, the supply chain order volume gradually picked up in the second quarter, and is in line with expectations.

For consumer users, during the epidemic, Qeeka Home launched an exclusive user survey and adjusted platform services and merchant enablement initiatives accordingly to further optimize the consumer experience. According to reports, in the first half of 2020, Qeeka Home added home improvement content sharing in the form of streaming media on the PC and App side to enhance users' stickiness to the platform with quality content, and provided users with contactless services such as live selling, online order signing, live video sample room display, real-time video monitoring of site progress, etc., which won praise from users, and as a result, growth was achieved.