58.com Inc (ADR) (NYSE: WUBA) stock fell over 8.2% on Mat 24th, 2018 (as 11:04 AM GMT-4; Source: google finance) after the company in the first quarter of FY 18. In addition, in the first quarter of 2018, the housing category remains resilient despite low overall transaction volumes in China’s housing market. Two of the newest early-stage businesses, Zhuan Zhuan, the C2C used goods transaction platform, and 58 Town, a version of 58 specifically designed for rural areas, both continue to grow rapidly. The company posted the gross margin fell to 89.6%, as compared to 90.0% during the same quarter of 2017.
The group has reported the 24.3% growth in the total revenue to RMB2,471.2 million (US$393.0 million). Membership revenues grew 17.1% to RMB928.9 million (US$147.7 million), primarily driven due to an increase in the number of subscription-based paying membership accounts. The total number of subscription-based paying membership accounts on the Company’s platforms, which include 58.com, Ganji.com and Anjuke.com, was approximately 2,665,000 during the first quarter of 2018, which is a 20.5% increase from approximately 2,212,000 in the same quarter of 2017. The Online marketing services revenues grew 31.2% to RMB1,492.0 million (US$237.3 million) due to the increasing adoption and effectiveness of the company’s various online marketing services such as real time bidding, priority listing and various other online marketing services.
Moreover, the gross profit grew 23.7% to RMB2,213.2 million (US$352.0 million) in the first quarter of 2018, from RMB1,788.7 million during the same quarter of 2017. The company in the first quarter of 2018, has posted Non-GAAP income from operations of RMB411.6 million (US$65.4 million), compared with RMB217.2 million in the same quarter of 2017. Non-GAAP operating margin, was 16.6% in the first quarter of 2018, compared with 10.9% in the same quarter of 2017. Net cash provided by operating activities was RMB710.0 million (US$112.9 million) in the first quarter of 2018, compared with net cash provided by operating activities of RMB428.6 million in the same quarter of 2017. As of March 31, 2018, the company had cash and cash equivalents, restricted cash and short-term investments of RMB6,500.0 million (US$1,033.7 million). In addition, the company has posted the Non-GAAP basic and diluted earnings per ADS attributable to ordinary shareholders in the first quarter of 2018 were RMB2.08 (US$0.33) and RMB2.05 (US$0.33), respectively, compared with RMB0.73 and RMB0.72, respectively, in the same quarter of 2017.
For the second quarter of 2018, the total revenues for the second quarter of 2018 are expected to be between RMB3,100 million and RMB3,200 million. This represents a year-over-year increase of 19.6% to 23.4% in Renminbi amounts.