CHENGDU, China, Aug. 20, 2020 /PRNewswire/ — Senmiao Technology Limited (NASDAQ: AIHS) (“Senmiao”), a provider of automobile transaction and related services (the “Auto Business”) targeting the online ride-hailing industry in China, today announced its unaudited financial results for the quarter ended June 30, 2020.

First Quarter of Fiscal 2021 Highlights

• Revenue from operating leases surpassed automobile sales and became the largest proportion of the total revenue
• Total revenues decreased by 77% year-over-year to $1,146,916 from $5,012,563 due to impact of COVID-19 on ride hailing sector in Senmiao’s areas of operation in China
• Net loss of $2,370,184 versus net loss of $505,432 in the same period last year

“During the quarter, we focused on ways to adjust the growth strategy of our Auto Business as ride-hailing drivers continued to be adversely affected in the aftermath of COVID-19,” commented Xi Wen, Chairman, Chief Executive Officer and President of Senmiao. “We shifted our focus during the quarter to a new opportunity, namely the provision of short-term car rentals. We have noticed an increasing trend in demand for short-term rentals since the end of 2019, so we capitalized on this by reallocating resources to better utilize automobiles that are being surrendered by ride-hailing drivers that continue to face financial pressures as a result of COVID-19. Creating this additional revenue stream has also helped to mitigate the drop in online ride-hailing automobile sales in Chengdu and Changsha as we plan for a recovery of our Auto Business in the second half of 2020. So far in the second quarter of this fiscal year (our quarter ending September 30), we have signed a strategic cooperation agreement with one of the largest auto dealer groups in southwest China to increase access to electric vehicles, which we hope will significantly improve our sales channels and enhance our service options. In an effort to further strengthen our balance sheet, we also secured an investment of approximately US$7 million from a fundamental investor and successfully raised net proceeds of US$6 million through an underwritten public offering.  We remain confident that we will emerge from this pandemic in a better position to expand our Auto Business as more cities return to normalcy. We will continue to look for additional strategic ways to accelerate the expansion of our Auto Business as we aim to drive long-term sustainable value for our shareholders.”

Revenues

Total revenue was $1,146,916 for the quarter ended June 30, 2020, a decrease of $3,865,647, or 77% as compared with the quarter ended June 30, 2019, primarily due to the decreased number of facilitated new automobile purchases as a result of COVID-19.

Cost of Revenues

Cost of revenues was $621,241 for the quarter ended June 30, 2020 as compared with $4,022,312 during the same period last year, representing a decrease of $3,401,071, or 85%, primarily due to the decrease in the number of automobiles sold.

Gross Profit

Gross profit was $525,675 for the quarter ended June 30, 2020. Gross profit decreased by $464,576, or 47% as compared with the same period last year, mainly due to the decrease in the number of facilitated new automobile purchases. However, gross profit generated from sales of automobiles increased by $49,755 due to having more favorable purchase price options from automobile dealers. Gross profit generated from operating lease revenues from automobile rentals increased by $119,529 due to the increased number of automobiles delivered under operating lease.

 

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $2,139,440 for the quarter ended June 30, 2020 as compared with $875,433 during the same period last year, representing an increase of $1,264,007, or 144%. The increase was attributable to the increase in amortization of automobiles which were tendered to us but have not been sub-leased or sold, salary and employee benefits and other expenses as a result of the expansion of the Auto Business since our fiscal 2019.

Change in Fair Value of Derivative Liabilities

The change in fair value of derivative liabilities resulted in a loss $282,980, derived from change of the fair values between June 30, 2020 and March 31, 2020 of the warrants issued in Senmiao’s registered direct offering in June 2019.

Net Loss

Total net loss for the quarter ended June 30, 2020 was $2,370,184 as compared to a net loss of $505,432 during the same period last year. Net loss from continuing operations and discontinued operations for the quarter ended June 30, 2020 was $2,284,530 and $85,654 as compared to a net loss of $26,329 and $479,103, respectively, during the same period last year.

Loss per share

Loss per share for continuing operations was $0.07 and $0.00 and loss per share for discontinued operations was $0.00 and $0.02, respectively, for the quarters ended June 30, 2020 and 2019.

Financial Position

As of June 30, 2020, Senmiao had cash and cash equivalents of $516,598 as compared with $833,888 as of March 31, 2020 for its continuing operations. After giving effect to our underwritten offering in August, 2020, our cash and cash equivalents is now approximately $6.7 million and our pro forma stockholders’ equity is approximately $7.1 million.

Impact of COVID-19

The COVID-19 outbreak had materially adversely affected Senmiao’s business operations, financial condition and operating results in the quarter ended June 30, 2020, including but not limited to, decrease in revenues, slower collection of accounts receivable and additional allowance for doubtful accounts. However, as the ride-hailing markets in Chengdu and Changsha are gradually recovering from the impact of COVID-19, Senmiao expects its business to improve during the remainder of its current fiscal year (ending March 31, 2021).

Further information regarding Senmiao’s results of operations for the period ending June 30, 2020 can be found in the Senmiao’s Quarterly Report on Form 10-Q which will be filed with the Securities and Exchange Commission.

About Senmiao

Headquartered in Chengdu, Sichuan Province, Senmiao provides automobile transaction and related services including sales of automobiles, facilitation and services for automobile purchase and financing, management, operating lease, guarantee and other automobile transaction services aimed principally at the growing ride-sharing market in Senmiao’s areas of operation in China.  For more information about Senmiao, please visit: http://www.senmiaotech.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning the development of Senmiao’s Auto Business, the Chinese ride-sharing and automobile financial leasing markets, and Senmiao’s plans, objectives, goals, strategies, and performance, and the impact of COVID-19 on Senmiao’s business, as well as the assumptions such statements and other statements that are not statements of historical facts. When Senmiao uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause actual results to differ materially from Senmiao’s expectations, including, but not limited to, risks and uncertainties relating to the following:  the risk that the anticipated growth of Senmiao’s Auto Business may not be realized; Senmiao’s future business development; product and service demand and acceptance; the risks and impact of any reoccurrence of the COVID-19 pandemic in China; changes in technology; economic conditions; reputation and brand; the impact of competition and pricing; the impact of government regulations; fluctuations in general economic and business conditions in China and other risks expressed in reports filed by Senmiao with the U.S. Securities and Exchange Commission. For these reasons, among others, investors are cautioned not to place undue reliance on any forward-looking statements. Senmiao’s filings with the U.S. Securities and Exchange Commission are available for review at www.sec.gov. Senmiao undertakes no obligation to publicly revise any forward-looking statements to reflect changes in events or circumstances.

For more information, please contact:

At the Company:
Yiye Zhou
Email: edom333@ihongsen.com
Phone: +86 28 6155 4399

Investor Relations:
Rene Vanguestaine
Christensen
Email: rvanguestaine@ChristensenIR.com
Phone: +86 178 1749 0483

Linda Bergkamp
Christensen
Email: lbergkamp@ChristensenIR.com
Phone: +1 480 614 3004

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