Fangdd Network Group Ltd. (Nasdaq: DUO) posted another quarter of growth in the number of active agents, but its revenues decreased 22% year-over-year, weighed down by the Covid-19 outbreak.
For the three months through June, the property technology company reported revenues of $104.4 million and losses of $2 million, or 3 cents per share. In addition, the company reported Non-GAAP earnings of $1.7 million in the second quarter of 2020.
However, the number of active agents on Fangdd’s tech-oriented and agent-centric real estate marketplace rose 27% to 265,900, according to a company statement released after markets closed Thursday.
Fangdd also reported that its closed-loop GMV (transactions carried out from beginning to end on Fangdd’s platform) was $7.1 billion – a decline of 14% from the same period a year ago.
The chairman and co-CEO of Fangdd, Yi Duan, noted the revival of China’s real estate market in May and expressed optimism in the post-pandemic growth.
Duan said in the statement, “Although our quarterly closed-loop GMV and net revenue still declined due to the lingering effect of the pandemic, we have already witnessed a strong rebound in real estate demand and are quite optimistic about our ability to resume satisfactory growth in the coming quarters.”
Remarkably, while recovery may have started off slow, only in the month of June, revenues in Fangdd increased 36% from June 2019, according to the report.
Duan also noted new initiatives in assisting small- and medium-sized agencies as they also get back on track after constraints posed by the outbreak. Earlier, Fangdd said it offered free SaaS to real estate agents to digitize their operations and boost online transactions during the lockdowns.
Co-CEO Xi Zeng added, “We partnered with multiple banks and other financial services companies to furnish real estate agents with supply chain financing and credit rating solutions. We expanded our offerings with new value-added services such as parking space transactions, certified real estate transaction centers, and renovated property resale services. Looking ahead, we plan to continuously upgrade our technology platform, improve our user experience, expand our service offerings, increase our market share, and maintain our growth trajectory for the long run.”
Further, Fangdd reported a 15% decrease in the costs of revenues and 1% decline in operating expenses for the quarter. The company used $8.8 million in cash in operating activities during the trimester. As of June 30, it had cash and cash equivalents, restricted cash, and short-term investments of $134.5 million.
“Going forward,” Fangdd’s CFO Jiaorong Pan said, “we intend to maintain a prudent mindset throughout our capital allocation process and focus on those initiatives capable of supporting our long-term growth objectives, such as our SaaS solutions and other service offerings.”
The Shenzhen-based company also said it expects to generate revenues of 1.05 billion yuan to 1.15 billion yuan during the third quarter.
The stock in Fangdd ended lower on Thursday as its larger peer, KE Holdings (NYSE: BEKE), lifted off in a New York IPO worth $2.12 billion. While BEKE ended a whopping 87% above issue price of $20 per share, DUO shares shifted 1% lower, to $8.82 per American depositary share.
The financial report was Fangdd’s fourth since it became publicly traded in November 2019, raising $78 million. According to the figures, revenue was growing at an impressive pace until Covid-19 sent China’s businesses into chaos in early 2020. China’s real estate market was particularly hit hard.
Now, property technology companies riding the digitization trend are set to drive new growth to the housing sector. Fangdd seeks to be at the forefront, with its agent-empowerment model.