Dada Nexus Ltd – ADR (NASDAQ: DADA) stock rose over 3.6% in the pre-market session of November 20th, 2020 (Source: Google finance) after the company posted strong revenue growth with significant improvement of operating margin.
DADA in the third quarter of FY 20 has reported 85% rose in the total net revenues RMB1,301.5 million, an increase from RMB701.6 million in the same quarter of 2019. The company’s Non-GAAP net loss got narrowed to RMB324.0 million, compared to RMB411.3 million in the same period of 2019. The company reported Non-GAAP net loss attributable to ordinary shareholders of Dada Group to RMB324.0 million, compared with RMB621.2 million in the same quarter of 2019. The company generated Non-GAAP loss from operations of RMB338.7 million, compared to RMB434.9 million in the same quarter of 2019. As a result, the Non-GAAP operating margin was of -26.0% for the period compared to -62.0% in the same quarter of 2019. At the end of September, 2020, the Company had RMB3,700.4 million in cash, cash equivalents, restricted cash and short-term investments, which represents an increase from RMB2,113.5 million as of December 31, 2019.
Meanwhile, the company maintains as the largest open on-demand delivery platform in China with 24% market share in the first nine months of 2020, up from 19% market share in 2019. Number of orders delivered of Dada Now for the year ended September 30, 2020 was 1.0 billion, compared to 635.5 million in the same period of 2019. Total Gross Merchandise Volume of JDDJ for the year ended September 30, 2020 grew 102.9% to RMB21.3 billion.
Moreover, the net revenues from Dada Now grew by 81.3% to RMB719.0 million, mainly on the back of the increases in order volume of last-mile delivery service to logistics companies and intra-city delivery service to chain merchants. Net revenues from JDDJ grew by 91.0% to RMB582.5 million, mainly due a 90.7% increase in GMV from the same quarter last year, which was on the back of increases in average order size and the number of active consumers. The increase in online marketing services revenue as a result of the increasing promotional activities launched by brand owners also constituted to an increment of the net revenues generated form JDDJ.
For the fourth quarter of 2020, Dada expects total revenue to be in the range of RMB2.0 billion and RMB2.1 billion. The company is confident that JDDJ revenue to grow by 100% year over year in the second half of 2020 due to strong growth momentum.