Duiba Group Announces 2020 Interim Results

HONG KONG, Aug 28, 2020 - (JCN Newswire) - Duiba Group Limited. ("Duiba Group"or the "the Group", Stock Code: 1753.HK) is pleased to announce the unconsolidated interim results of the Group for the six months ended 30 June 2020 (the "Reporting Period").

Financial Highlights
For the 6 months ending 30 June 2020, the Group recorded:
- A total revenue of RMB 468.4 million.
- The revenue from interactive advertising business was RMB 440.0 million.
- The revenue from user management SaaS increased 166% or RMB 28.4 million from the same period of last year.
- Offline SaaS Business: The total number and the total value of the Group's newly signed contracts (including renewed contracts) with banking customers in 1H2020 was 97 (1H2019: 18) and RMB14.8 million (1H2019: RMB1.7 million), respectively.
- The total value of newly signed contracts (including renewed contracts) of the Group's charged user management SaaS service in 1H2020 was approximately RMB39.6 million (1H2019: RMB15.3 million) and the average charge per signed contract was approximately RMB 115,000.

For the six months ended 30 June 2020, the Group recorded a total revenue of RMB 468.4 million. During the Reporting Period, the Group further facilitated the monetization of user management SaaS business as this segment contributed rapid growth and high gross margin. The revenue generated from the Group's user management SaaS platform business recorded an increase of 166% to RMB28.4 million during the six months ended 30 June 2020 as compared to 1H2019 mainly due to the increased number of newly contracted and renewed customers and the increased unit price. The revenue from interactive advertising business was RMB 440.0 million.

During the Reporting Period, the Group recorded gross profit of RMB67.4 million (1H2019: RMB244.3 million). The decline in gross profit was mainly due to the dramatic beating of the macro environment and advertising industry by the COVID-19 outbreak. Firstly, as the economy drag caused by COVID-19 outbreak has left the advertisers with uncertain demand and budget, the Group adjusted the incentive strategy for the core advertisers. Secondly, the health crisis has come to a staging standstill to the advertising platform's offline traffic which contributed a higher conversion efficiency in 2019. Finally, for improving advertisement performance continuously, on the one hand, the Group increased the procurement of premium quality traffic from the core content distribution channels and optimize the revenue sharing ratio;on the other hand, the Group adjusted the incentive strategy for the core advertisers. Most of the advertisers especially the e-commerce industry has increased advertisement budgets gradually, and the advertising platform's offline traffic recovery quickly since May 2020, the Group expects a strong revenue recovery with decent profitability after the COVID-19 outbreak.

The interactive advertising model of the Group attracts users with rich and interesting high-engagement activities, and provides users with entertainment and leisure. At the same time, the advertisements are presented in the form of discounts and benefits on the landing pages, which meets and stimulates user demand. As at 30 June 2020, the Group had designed more than 17,000 advertising campaigns, most of which were the first-of-their-kind on the market. During the six months ended 30 June 2020, the Group insisted diversified traffic strategy regarding the interactive advertising business, and built a total of 4,909 content distribution channels, achieving industry-wide coverage. Meanwhile, the Group continued to increase investment in advertising data algorithms, expanded the team of high-quality data algorithms, and increased research and development expenses by 11.6% compared with the same period last year. The average CTR (click-through rate) of the interactive advertising business reached 26.7% (1H2019: 26.5%) for the Group had continuously upgraded the products and technology.

Having initially launched the Group's user management SaaS platform on a free-of-charge model in order to expand the Group's customer base, the Group began charging for the user management SaaS solutions on a pilot basis in April 2018. Meanwhile, Duiba have been extending user management SaaS solutions to serve offline enterprises. As at 30 June 2020, 727 paying customers (1H2019: 568) including 159 customers from financial industry (1H2019:19) and 568 customers from other industries (1H2019: 549)had used the Group's charged services. For the six months ended 30 June 2020, the number of newly signed contracts (including renewed contracts) for the Group's user management SaaS business reached 345 (1H2019: 263). The total value of the Group's newly signed contracts (including renewed contracts) in 1H2020 was approximately RMB39.6 million (1H2019: RMB15.3 million) and the average charge per signed contract was approximately RMB 115,000. Revenue from the Group's user management SaaS business increased significantly by 166% to RMB28.4 million (1H2019: RMB10.7 million).

The sales and marketing strategy of the Group's user management SaaS business for offline businesses is to actively explore cooperation opportunities with top brands in several sectors including retailing, catering, banking and new media. In 1H2020, Duiba continuously made breakthroughs in expanding the Group's banking customer base. The total number and the total value of the Group's newly signed contracts (including renewed contracts) with banking customers in 1H2020 was 97 (1H2019: 18) and RMB14.8 million (1H2019: RMB1.7 million), respectively.

In 1H2020, the outbreak of COVID-19 has caused the live broadcast events to enter the era of public awareness and use. The majority of businesses are doing live streaming for e-commerce. Duiba started to provide a complete set of Professionally Generated live content planning and supporting live products for customers in these industries since April 2020. Before the live broadcast, sufficient potential users will be formed through the training and incentive mechanism for the company's salespersons. During the live broadcast process, the product interaction design will cooperate with the professional host to increase user engagement. For the six months ended 30 June 2020, Duiba have three paying customers which used the Group's live broadcast SaaS service.

Looking forward to the future, Mr. Cheng Xiaoliang, chairman of the Group said "The COVID-19 outbreak has a far-reaching impact on the future economy. Enterprises are further increasing their investment in digital transformation and upgrade, especially in industries where the main business still relies mainly on offline scenarios and channels, typically represented by the banking industry. During the COVID-19 outbreak, offline outlets are unable to carry out operations, and account managers cannot visit customers, thus greatly affecting the normal development of their business. Online user management and the creation of online new user scenarios become an extremely urgent need of major banks for their business upgrade. The Group will be deeply engaged in user management SaaS business in vertical industries, and continuously upgrade and innovate our products and services, so as to create greater long-term value for banking, retail and other industries."

Mr. Cheng added that, "The COVID-19 outbreak has a significant impact on the interactive advertising business of the Group, with the phased stagnation of the traffic for the offline consumption scenario due to the outbreak, and the budget pressures on advertisers in the industry. However, with the recovery of the domestic economy, the two negative effects have been gradually eliminated, with a significant improvement in the market environment for the continuous growth of the interactive advertising business. Looking forward to the second half of the year, the Group will adhere to the diversified traffic structure strategy of online and offline, omni-channel and full-scenario coverage for advertising traffic. In addition to the offline consumption scenario, it will further expand the traffic from WeChat mini program, digital TV traffic, and various access to traffic in the Internet of Things era after the full coverage of 5G in the future. It is the long-term relentless mission of Duiba, a young team, to help enterprises improve their efficiency!"

About Duiba Group Limited (1753.HK)
Duiba Group Limited ("the Group") is a leading user management SaaS service provider and the interactive advertising operator in China. It provides full-cycle operation services in user acquisition,
activity retention and monetization for tens of thousands of customers in financial, Internet and other industries. This unique business model together with strong synergies between user management SaaS and interactive advertising platform laid a solid foundation for the Group to achieve rapid and sustainable growth. The Group's user management SaaS platform offers various fun and engaging user management tools including reward points system operation, membership marketing operation, gamification operation and live broadcast SaaS service. Interactive Advertising Business including media monetization service and advertisement serving.





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