Hot stock to watch: Bitauto Hldg Ltd (ADR) (NYSE: BITA)

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Bitauto Hldg Ltd (ADR) (NYSE: BITA) stock rose over 9.3% on June 13th, 2018 (as of 10:59 AM GMT-4; Source: Google finance) after the company reported better than expected results for the first quarter 2018. The company has posted loss from operations in the first quarter of 2018 of RMB313.3 million (US$50.0 million), compared to a loss from operations of RMB10.9 million (US$1.7 million) in the corresponding period in 2017. The increased loss was mainly due to the increased expenses relating to the company’s marketing efforts and provision for credit losses of finance receivables. Overall, first quarter of 2018 BITA has reported the net loss of RMB288.3 million (US$46.0 million), compared to a net loss of RMB50.1 million (US$8.0 million) in the corresponding period in 2017.

Bitauto in the first quarter of FY 18 has reported the adjusted earnings per share of $0.14, beating the analysts’ estimates for the adjusted loss per share of $0.08. The company had reported the adjusted revenue growth of 52.3 percent to $346.1 million in the first quarter of FY 18, beating the analysts’ estimates for revenue of $308.48 million.

Moreover, in the first quarter 2018, the cost of revenue increased by 95.6% to RMB821.4 million (US$130.9 million) due to increased funding costs related to the growth of transaction services.

Additionally, as of March 31, 2018, BITA had cash and cash equivalents and restricted cash of RMB10.21 billion (US$1.63 billion). Cash provided by operating activities, cash used in investing activities, and cash provided by financing activities in the first quarter of 2018 were RMB181.8 million (US$29.0 million), RMB4.17 billion (US$664.3 million), and RMB3.35 billion (US$534.5 million), respectively.

Meanwhile, in the first quarter 2018, BITA made encouraging progress across all the areas, including synergies between Bitauto and Yixin, integration of content and user communities, and technology and big data enabled enhancements. This is to strengthen BITA as China’s top online auto media and transaction services ecosystem.

On the other hand, BITA has appointed Mr. Ming Xu as the chief financial officer of the company (the CFO), succeeding Ms. Cynthia. He will remain with the company in the coming weeks to ensure a smooth transition.

For the second quarter 2018, BITA expects to generate revenue in the range of RMB2.47 billion (US$393.8 million) to RMB2.52 billion (US$401.7 million), representing a 23.8% to 26.3% increase from the corresponding period in 2017.

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