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Senmiao Technology Ltd (AIHS)·Q3 2023 Earnings Summary

Executive Summary

  • Fiscal Q2 2024 (calendar Q3 2023) revenue was $1.83M, down 18.5% YoY and down 12.8% QoQ, as online ride-hailing platform services declined on increased competition and compliance checks by partner Gaode in Guangzhou; loss from operations narrowed YoY to $1.28M; diluted EPS was $(0.12) .
  • Gross profit increased 21.1% YoY to $0.37M on NEV adoption and cost reductions; SG&A declined 27.8% YoY, supporting improved operating efficiency .
  • No formal forward guidance or earnings call transcript was provided; management is “actively evaluating potential opportunities to grow” the business and highlighted cost control and a shift to leasing as strategic priorities .
  • Key potential stock narrative drivers from disclosures: resolution of partner compliance checks in Guangzhou, continued NEV-led cost savings, and expansion from 26 to 27 cities quarter-over-quarter .

What Went Well and What Went Wrong

What Went Well

  • Gross profit rose 21.1% YoY to $0.37M, reflecting improved mix and cost controls, including greater use of NEVs in the rental fleet .
  • SG&A fell 27.8% YoY to $1.10M on streamlined operations (lower salaries/benefits, amortization, office rent and insurance), narrowing operating loss YoY .
  • Management reiterated a strategic shift from automobile sales to operating leases and cost discipline: “we increased gross profit by 21.1% thanks to our ongoing shift… to leasing services… and decreased SG&A… which enabled us to narrow loss from operations” (Xi Wen) .

What Went Wrong

  • Total revenues declined to $1.83M vs. $2.24M YoY and $2.09M QoQ, driven by online ride-hailing platform services falling to $0.60M amid increased competition and compliance checks by Gaode in Guangzhou .
  • Net loss was $1.21M vs. $1.18M YoY, despite improved gross profit; other income items partially offset operating losses .
  • Cash and equivalents decreased versus fiscal year-end and remain constrained ($1.31M at September 30, 2023), while stockholders’ equity fell to $2.54M, limiting financial flexibility .

Financial Results

MetricQ2 FY2023 (Sep 30, 2022)Q1 FY2024 (Jun 30, 2023)Q2 FY2024 (Sep 30, 2023)
Total Revenues ($USD Millions)$2.24 $2.09 $1.83
Gross Profit ($USD Millions)$0.31 $0.58 $0.37
Gross Profit Margin (%)13.8% (=$0.31/$2.24) 27.8% (=$0.58/$2.09) 20.5% (=$0.37/$1.83)
SG&A ($USD Millions)$1.53 $1.24 $1.10
Loss from Operations ($USD Millions)$1.59 $0.79 $1.28
Net Loss ($USD Millions)$1.18 $0.42 $1.21
Diluted EPS ($USD)$(0.15) $(0.05) $(0.12)

Segment revenue breakdown:

Segment Revenue ($USD Millions)Q2 FY2023 (Sep 30, 2022)Q1 FY2024 (Jun 30, 2023)Q2 FY2024 (Sep 30, 2023)
Operating Lease (Automobile Rentals)$0.90 $1.10 $1.00
Online Ride-Hailing Platform Services$1.00 $0.90 $0.60

Financial position snapshot:

Metric ($USD Millions)Q1 FY2024 (Jun 30, 2023)Q2 FY2024 (Sep 30, 2023)
Cash and Cash Equivalents$1.17 $1.31
Stockholders’ Equity$3.50 $2.54

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
None providedN/AN/AN/ANo formal guidance disclosed

Earnings Call Themes & Trends

No earnings call transcript was available for Q3 2023 (fiscal Q2 2024), so themes reflect management’s press release commentary.

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q2 FY2024)Trend
Market competition in ride-hailingQ1 FY2024: “increased competition” pressured platform services revenue . FY2023 YE: strong top-line growth but emphasis on cost cuts and efficiency .Competition intensified; fewer completed orders due to partner compliance checks in Guangzhou .Worsening
NEV adoption and cost efficiencyQ1 FY2024: NEVs lowered cost of services; gross profit +26.5% YoY .Continued NEV usage contributed to lower maintenance/insurance and improved gross profit .Improving
Cost control/SG&A disciplineFY2023 YE: SG&A down 32.0% YoY; positive operating cash flow . Q1 FY2024: SG&A down 35.2% YoY .SG&A down 27.8% YoY .Improving
Geographic footprintFY2023 YE/early FY2024: operating in 26 cities .Expanded to 27 cities including Chengdu, Changsha, Guangzhou .Expanding
Partner platform dynamicsNot highlighted in FY2023 YE; Q1 noted competition broadly .Compliance checks by Gaode impacted order completion in Guangzhou .Emerging headwind

Management Commentary

  • “Our fiscal 2024 second quarter results were supported by stable revenue growth from our automobile leasing business, but our top line was impacted by decreased revenue contributions from online ride-hailing platform services… we increased gross profit by 21.1%… and decreased SG&A expenses by more than 27% year over year… We are actively evaluating potential opportunities to grow Senmiao’s business” — Xi Wen, Chairman, CEO and President .
  • Prior quarter framing: “As a result of our strategic decision to utilize more NEVs, we successfully lowered cost of services, and were able to improve gross profit by 26.5%… We remain optimistic about our ability to capture additional market share as travelling and commuting continue to recover” — Xi Wen .

Q&A Highlights

  • No earnings call transcript was available for Q3 2023 (fiscal Q2 2024); no Q&A highlights to report [ListDocuments result showed none].

Estimates Context

  • Wall Street consensus (S&P Global) for Q2 FY2024 could not be retrieved at the time of analysis due to a data access limit; as a result, beat/miss vs. estimates cannot be assessed here [GetEstimates error].

Key Takeaways for Investors

  • Revenue mix continues shifting toward leasing: Operating lease revenue held at $1.00M despite platform services decline to $0.60M, partially stabilizing top line .
  • Cost discipline and NEV adoption are demonstrably improving unit economics: gross profit +21.1% YoY and SG&A −27.8% YoY, narrowing operating loss vs. prior-year .
  • Online ride-hailing platform revenue remains pressured by external factors (partner compliance checks in Guangzhou) and intensified competition, a key headwind to monitor .
  • Liquidity remains tight but stable QoQ: cash increased to $1.31M from $1.17M; equity declined to $2.54M, highlighting constrained financial flexibility .
  • Operations expanded from 26 to 27 cities QoQ, providing a potential volume lever once partner compliance issues normalize .
  • Without formal guidance or an earnings call, near-term narrative hinges on execution in leasing, resolution of Guangzhou platform issues, and continued cost control .
  • Watch for any updates in subsequent filings on partner platform dynamics, rides volume recovery, and NEV fleet utilization metrics as catalysts.

Appendix: KPIs

KPIQ1 FY2024 (as of Aug 14, 2023)Q2 FY2024 (as of Nov 14, 2023)
Cumulative rides since launch~31.9M ~33.8M
Cumulative fares since launch ($USD)$103.1M $109.1M
Operating cities26 27
Avg. rented auto utilization (%)79.8% (Q1 FY2024) N/A (not disclosed)

Notes:

  • Fiscal Q2 2024 corresponds to calendar Q3 2023 (quarter ended September 30, 2023) as reported in the 8-K and Exhibit 99.1 press release .
  • All quantitative and qualitative disclosures are sourced from company filings and press releases as cited.