Fangdd Network Group Ltd. Q1 FY2020 earnings call

• Impact of COVID-19: The epidemic severely disrupted the real estate industry, with offline operations for real estate agents severely affected, leading to reduced property viewings, transactions, and overall transaction volume.
• Strategic responses: The company promptly adjusted strategies, focusing on upgrading SaaS solutions. SaaS products were made free for agents to help them move business online. They enhanced online agency management tools, launched an online sales office, a preferred agent alliance network, and upgraded secondary property SaaS modules. They also increased investment in R&D for SaaS solutions, especially for the secondary property segment.
• Growth metrics: Active agents grew by 43% year-over-year to 218,000 during the quarter. The number of active agencies in March reached an all-time high of 159,000. The number of new primary housing property projects in the first quarter increased by 54.8% year-over-year to 2,400 projects.

In the first quarter of 2020, Fangdd Network Group Ltd faced significant challenges due to the COVID-19 outbreak. Registered agents on the platform grew by 35.4% to approximately 1.32 million from ~0.97 million as of March 31, 2019. Active agents in the first quarter grew by 42.8% year-over-year to 218,400. However, the number of agents who completed transactions decreased by 50.1% year-over-year to 6,700. Total closed-loop transaction GMV decreased by 46.5% year-over-year to RMB 17.9 billion. Revenue in the first quarter decreased by 58.5% year-over-year to RMB 270 million. The decrease in revenue was largely attributable to the reduced offline working hours of real estate agents due to the pandemic.

• The company expects revenue in the second quarter of 2020 to be between RMB 660 million and RMB 720 million.
• Anticipates steady recovery in real estate transactions in the coming months.
• Plans to continue investing in optimizing SaaS infrastructure, refining SaaS product matrix, enhancing operation services, and introducing innovative business initiatives to empower agencies and develop the secondary property segment.

• Continued impact of COVID-19 on real estate transactions and market recovery.
• Uncertainty regarding the pace of economic recovery and its effect on real estate transactions.
• Increased provision for doubtful debtors by RMB 32 million due to slowdown in settlements with developers as a result of the COVID-19 outbreak.

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