The stock in Senmiao Technology Ltd. (Nasdaq: AIHS) sank 3.45% in trading Friday, to $1.12 per share, after the company reported a decrease in revenues in business for the fiscal 2021 second quarter.
In a statement on Friday, Senmiao, which facilitates auto transactions, reported $1.39 million in revenue for the three months through September – that’s compared with $5.98 million in the same period last year. Covid-19-related woes contributed to a decline in new automobile purchases. Also, a significant number of ride-hailing drivers exited the ride-hailing business hurting Senmiao's subleasing sales.
Net loss in the quarter increased to $2.61 million, in contrast to an income of $1.86 million in the preceding year. Loss per share from continuing operations was 6 cents, the company said the reason for income to loss mainly due to the decrease in revenue, gross profit and increase in selling, general and administrative expenses.
Previously a peer-to-peer lending platform, Senmiao transitioned to providing services in the auto industry following the acquisition of Ruixi Financial Leasing, an automobile transaction and financing business.
Now, Chengdu-based Senmiao provides services related to vehicle purchases and management, auto financing, and ride-sharing. Senmiao's automobile rental service generated an income of $787,955 for the quarter.
"The impact of Covid-19 on our business model was stark and rapid. We were forced into situations where we needed to ensure the strength of our balance sheet and be adaptable to a new and changing paradigm in the Chinese ride-sharing market. While undertaking these changes was difficult in the short-term, we are now starting to see the benefits of the hard decisions we made.," Senmiao’s chairman, chief executive, and president, Xi Wen, said in a statement.
Wen noted the company aims become a total solution provider for ride-sharing drivers in two core markets: Chengdu and Changsha.