Co-living Platform Phoenix Tree Reports Doubled Revenues
The company lowered its first-quarter revenue guidance due to China’s lockdowns, however.
Chinese co-living space rental platform Phoenix Tree Holdings Ltd. (NYSE: DNK), known as Danke, reported rapid growth fueled by acquisitions on Wednesday.
The Beijing-based company said in a statement that revenues in the fourth quarter reached $305.9 million, up 113% year-over-year. Net loss in the three months through December hit $132.3 million, or $2.11 per share, an increase of 65% from the previous year.
Danke added 200,000 apartments in 2019, totaling 438,309 units as the company expanded its business in Suzhou, Wuxi, Xi'an, and Chongqing.
"We expanded our presence to Suzhou, Wuxi, Xi'an, and Chongqing, for a total footprint of 13 cities, which further demonstrated our ability to duplicate our success across cities," Jing Gao, the chief executive officer of Danke, said in the statement.
For business expansion, Danke acquired Hangzhou-based rental apartment operator Aishang Danke Technology Co., Ltd in March 2019.
Danke reported $1,024 million in revenues in 2019, up 167% year-over-year; interest expenses soared 116%.
The company raised $190 million in a Series D funding round in October 2019/. In its initial public offering in January, the company sold 9.6 million American depositary shares at $13.50 apiece.
The outbreak of coronavirus is expected to freeze the real estate market in China, adversly impacting Danke's business. The company said it will cut the number of apartment units in the first quarter.
Sales in Fevruary plunged due to China's lockdown amid the coronavirus outbreak. The National Bureau of Statistics reported that the average price of new homes in 70 Chinese cities jumped 5.8% in February from the previous year, the lowest growth rate since July 2018.
The company expects first quarter revenues to be between 1,900 million yuan($271 million) and 2,000 million yuan($286 million), falling 11% quarter-over-quarter.
Shares in Danke were trading at $7.71 per American depositary share midday Wednesday, up 1%. The company has lost 43% of its stock price since its IPO in January.