China Bat Group Reports First Profit in 5 Years
China Bat Group's net income reached $7.65 million for 2018, but its shares dropped more than 5 percent today.
China Bat Group Inc. (Nasdaq: GLG), a used luxury car rental service provider, announced today it had income of $7.65 million, or 33 cents per American depositary share, for 2018 in contrast to a loss of $10.7 million, or 60 cents per ADS, the year before. It was the first time the company reported a profit in the past five years.
The company said the improvement from its years of losses came primarily because of a gain in income of $490,000 from its leasing operations. China Bat began its leasing services of used luxury cars in May 2018.
The Beijing-based company also said its results were helped by a 37 percent decrease in operating expenses to $2.82 million in 2018 compared with $4.5 million in 2017. The company did not report revenue figures for the year.
"Over the past year we have worked hard to lay the groundwork to capitalize on the luxury car rental market in China as we improved our internal processes and focused on our operations," Jiaxi Gao, the company's chief executive officer, said. "In 2018, the company, as the first luxurious car rental company listed on Nasdaq as far as we know, quickly gained brand awareness. Through the combination of online promotion search channels and our peer companies' resources, we maintained rapid growth in quarterly revenue."
Shares of China Bat were down more than 5 percent to $2.20 in late-day trading in New York.
For 2019, Gao said, "We plan to continue to increase our inventory and variety of luxurious cars and to expand our operations into other cities such as Chengdu, Shenzhen, Sanya, and Xiamen. We look forward to exploring the high growth opportunities in the car rental market and becoming the market leader of high-end car rental in China."