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Senmiao Technology Ltd (AIHS)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 FY2024 revenue was $2.095M, down 10.6% YoY, but gross margin improved to 27.8% (from 19.6%); net loss was $0.421M and diluted EPS was -$0.05 .
  • Loss from operations narrowed to $0.788M from $1.441M YoY, driven by higher operating lease utilization and lower cost of services from increased NEV usage and SG&A reductions .
  • Segment mix: automobile operating lease revenues increased to $1.056M while online ride-hailing platform services declined to $0.906M amid competition; ~1.7M rides were completed with $5.3M gross fare and ~6,200 average monthly active drivers .
  • No formal guidance was issued; management expressed optimism about market share capture and continued cost control initiatives .
  • Watch regulatory/compliance developments and partner-platform dynamics (e.g., driver licensing/fines, Guangzhou compliance checks) as catalysts for sentiment and near-term stock moves .

What Went Well and What Went Wrong

What Went Well

  • Improved profitability drivers: “We successfully lowered cost of services, and were able to improve gross profit by 26.5% to $0.6 million” via strategic NEV mix and streamlined operations; SG&A down 35.2% YoY .
  • Operating performance: average utilization for operating lease fleet rose from 60.7% to 79.8%, lifting operating lease revenues to $1.056M .
  • Management tone: “We remain optimistic about our ability to capture additional market share as traveling and commuting continue to recover… and will continue to pursue opportunities to expand… through local partnerships” .

What Went Wrong

  • Top-line pressure in platform services: online ride-hailing platform revenue declined to $0.906M due to increased competition; rides/fare mix fell (gross fare ~$5.3M vs ~$5.8M YoY) .
  • Regulatory/compliance headwinds: ~61% of drivers lacked required licenses; fines of ~$19,000 were imposed, partially offset by compensation; continued compliance scrutiny remains a risk .
  • Partner/platform compliance checks (Guangzhou): fewer completed orders and revenue impact noted by partner checks and competitive intensity in a key market .

Financial Results

MetricQ1 2023 (Jun 30, 2022)Q1 2024 (Jun 30, 2023)Q2 2024 (Sep 30, 2023)
Total Revenue ($USD)$2,341,796 $2,094,714 $1,826,951
Net Income (Loss) ($USD)$243,920 $(421,347) $(1,207,452)
Diluted EPS ($USD)$0.05 $(0.05) $(0.12)
Gross Margin (%)19.6% 27.8% 20.5% (calc: $374,111/$1,826,951)
Operating Income (EBIT) ($USD)$(1,440,595) $(788,422) $(1,281,945)
Operating Margin (%)(61.5%) (calc) (37.6%) (calc) (70.2%) (calc)

Segment revenue breakdown:

SegmentQ1 2023Q1 2024
Automobile Transaction & Related Services ($USD)$1,154,276 $1,189,108
Online Ride-Hailing Platform Services ($USD)$1,187,520 $905,606
Total ($USD)$2,341,796 $2,094,714

KPIs (platform and operating metrics):

KPIQ1 2023Q1 2024
Rides Completed (units)~1.7 million ~1.7 million
Gross Fare ($USD)~$5.8M ~$5.3M
Avg Monthly Active Drivers (units)>4,600 ~6,200
Platform Service Fees ($USD)$1,187,520 $905,606
Operating Lease Utilization (%)60.7% 79.8%
Gross Profit - Auto Operating Leasing ($USD)$(261,422) $146,883

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
All metricsFY2024 / Q2-Q4None providedNone providedMaintained (no formal guidance)

Earnings Call Themes & Trends

Note: No Q1 FY2024 earnings call transcript was available. Themes below reflect press releases and 10-Q disclosures.

TopicPrevious Mentions (Q-2: Q2 FY2024)Previous Mentions (Q-1: FY2023 Year-end)Current Period (Q1 FY2024)Trend
Competition & OrdersFewer completed orders in Guangzhou due to partner compliance checks; increased competition Strategic expansion; revenue growth focus; cost-cutting success Platform revenue down; competition cited; optimism about market share Ongoing competitive pressure; stabilizing via cost control
NEV usage/costsMore NEVs reduced maintenance/insurance costs Recovery and growth in leasing and platform; post-COVID improvement NEVs lowered cost of services; improved gross profit Positive cost trajectory
Regulatory/compliancePartner compliance checks in Guangzhou Licenses and operating permissions highlighted; multi-city licenses 61% drivers without licenses; fines ($19k), partial compensation; ongoing risk Heightened compliance focus
Partner platforms & aggregationCollaboration with Gaode & other platforms Aggregation/platform collaborations expanded Continued collaborations; weekly settlements Stable partnerships; execution risk remains
SG&A disciplineSG&A down 27.8% YoY SG&A down 32% YoY in FY2023 SG&A down 35.2% YoY Strengthening cost discipline

Management Commentary

  • “We successfully lowered cost of services, and were able to improve gross profit by 26.5% to $0.6 million… ongoing efforts to streamline our operations resulted in a 35.2% decrease in SG&A expenses” — Xi Wen, CEO .
  • “We remain optimistic about our ability to capture additional market share… and will continue to pursue opportunities to expand our business through local partnerships” — Xi Wen, CEO .
  • “Top line was impacted by decreased revenue contributions from online ride-hailing platform services due to fewer rides… increased competition and compliance checks… in Guangzhou” — Xi Wen, CEO (Q2 FY2024) .

Q&A Highlights

No Q1 FY2024 earnings call transcript was available; therefore, Q&A themes, guidance clarifications, and tone changes cannot be assessed from a call transcript [ListDocuments returned none].

Estimates Context

  • S&P Global consensus EPS and revenue estimates for Q1 FY2024 were unavailable due to access limits; there may be limited or no active sell-side coverage for this micro-cap. Values would be retrieved from S&P Global if available.
  • Without consensus estimates, we cannot determine formal beats/misses versus Wall Street expectations. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Sequential resilience in leasing: operating lease utilization surged to 79.8%, lifting leasing gross profit and offsetting platform softness; continued NEV adoption supports margin durability .
  • Platform revenue headwinds persist due to competition and compliance checks; monitor order volumes in Guangzhou and licensing rates among drivers as leading indicators .
  • Cost discipline is a core lever: SG&A decreased 35.2% YoY, contributing to a smaller operating loss YoY; expect further focus on expenses amid top-line pressure .
  • Regulatory risk is non-trivial: ~61% of drivers lack licenses; fines were imposed; tighter enforcement could impact volume and profitability, necessitating accelerated compliance efforts .
  • Liquidity/going-concern note: management disclosed substantial doubt without additional financing; equity/debt financing and related-party support are contemplated as mitigation .
  • Near-term trading: margin improvement and cost control are positives, but order flow/driver compliance are swing factors; headlines on regulatory actions or partner-platform changes could drive volatility .
  • Medium-term thesis: scaling leasing and improving platform economics via collaborations and compliance normalization could rebuild revenue quality; execution on partner relationships and licensing will be key .

Sources: Q1 FY2024 8-K press release and exhibits ; Q1 FY2024 10-Q financials, MD&A, and notes ; Q2 FY2024 8-K press release ; FY2023 year-end 8-K .