Shares in Dada Nexus Ltd. (Nasdaq: DADA) gained as much as 14% by midday Tuesday after the company posted solid quarterly top-line growth and kicked off a stock buyback plan.
The online delivery and retail platform, operated by JD.com (Nasdaq: JD; HKEX: 09618), said it generated 1.67 billion yuan ($265.92 million) in first-quarter revenue, up 52% year-over-year. In the 12 months through March, it generated a total of 28.1 billion yuan in gross merchandise volume, up 79% from the same period in the previous year.
Also, Dada counted 46.1 million active consumers in the year ending March, up from 27.6 million a year ago.
Another big development in the quarter was new funding from China’s second-largest online retailer.
“Leveraging JD's devoted strategic support, we will better fulfill demands for local on-demand retail and its delivery on JD, covering various scenarios and categories, and expand our omni-channel cooperation with JD,” Philip Kuai, the chairman and chief executive officer of Dada, said.
“Together with JD, we will continue to provide consumers with superior experience, empower retail and brand partners and achieve a win-win cooperation for all.”
One negative for Dada today was its net loss more than doubled to 710.27 million yuan. Dada has yet to show a profit since IPO. The company became publicly traded in June 2020, raising $320 million.
Dada also announced a stock buyback program that will allow the company to repurchase up to $150 million worth of its American depositary shares. The buyback window will be open for 12 months and will be funded by its existing cash balance.
Most importantly, Dada doesn’t expect the strong top-line growth to stop.
For the second quarter, Beck Chen, the chief financial officer of Dada, told analysts on an earnings call that the company expects “total net revenue to be between 1.4 billion and 1.45 billion, representing a pro forma growth rate of 72% to 78%, adjusting Q2 '20 and Q2 '21 Dada Now's last-mile revenue to net basis.”