 SHENZHEN, China, Aug. 14, 2020 GLOBE NEWSWIRE -- Fangdd Network Group Ltd. NASDAQ: DUO FangDD or the Company, a leading property technology company in China, today announced its unaudited financial results for the second quarter ended June 30, 2020. Second Quarter 2020 Financial Highlights Revenue in the second quarter of 2020 decreased by 22.2 year over year to RMB737.7 million US104.4 million from RMB948.2 million in the same period of 2019. Net loss in the second quarter of 2020 was RMB14.0 million US2.0 million. Non-GAAP net income 1 in the second quarter of 2020 was RMB11.9 million US1.7 million.Second Quarter 2020 Operating Highlights The number of active agents2 in the Companys marketplace in the second quarter of 2020 was 265.9 thousand, representing an increase of 26.9 from 209.5 thousand in the same period of 2019. The number of closed-loop agents3 in the second quarter of 2020 was 18.2 thousand, representing a decrease of 13.7 from 21.1 thousand in the same period of 2019. Total closed-loop GMV4 facilitated on the Companys platform in the second quarter of 2020 decreased by 13.5 to RMB50.0 billion US7.1 billion from RMB57.8 billion in the same period of 2019. New property and resale listings contributed RMB33.6 billion US4.8 billion and RMB16.4 billion US2.3 billion, respectively, to the total closed-loop GMV in the second quarter of 2020.Mr. Yi Duan, Chairman and Co-Chief Executive Officer of FangDD, commented, As the COVID-19 pandemic came under control in China in May, the real estate market started to revive. As a result, the number of active agents on our platform increased by 26.9 to 265.9 thousand during the second quarter of 2020. Although our quarterly closed-loop GMV and net revenue still declined due to the lingering effect of the pandemic, we have already witnessed a strong rebound in real estate demand and are quite optimistic about our ability to resume satisfactory growth in the coming quarters. While we maintain our partnerships with large real estate agencies, we also recognize the rapid rise of small- and medium-sized agencies on our platform. Accordingly, we have launched several new initiatives to assist small- and medium-sized agencies in increasing their transactions and advancing their businesses. We are confident that our competitive advantages in SaaS, supply chain financing, and service innovation will enable us to thrive in the post-pandemic world.Mr. Xi Zeng, Co-Chief Executive Officer of FangDD, stated, Leveraging our extensive expertise in real estate transaction services, we provided sophisticated SaaS solutions to real estate agencies, especially those small- and medium-sized ones, to help them improve their operating efficiencies, increase their customer targeting precision, and digitize their entire transaction process for resale properties. Also, we partnered with multiple banks and other financial services companies to furnish real estate agents with supply chain financing and credit rating solutions. In addition, we expanded our offerings with new value-added services such as parking space transactions, certified real estate transaction centers, and renovated property resale services. Looking ahead, we plan to continuously upgrade our technology platform, improve our user experience, expand our service offerings, increase our market share, and maintain our growth trajectory for the long run.Ms. Jiaorong Pan, Chief Financial Officer of FangDD, added, Despite the persistence of COVID-19 in the second quarter, we faced the challenges head on and worked to refine our cost structures and operating efficiency in order to prepare for the coming growth cycle. As the outbreak continues to be gradually brought under control, our business has also been able to reaccelerate, and we saw total revenue in June increase by 35.9 year over year. While decreases in both the number of transactions and total closed-loop GMV facilitated on our platform constrained our revenue generation capabilities in the second quarter, we have seen that real estate agent activity is picking up, and we expect these metrics to improve as the pandemic abates. Going forward, we intend to maintain a prudent mindset throughout our capital allocation process and focus on those initiatives capable of supporting our long-term growth objectives, such as our SaaS solutions and other service offerings. Such efforts should serve to fortify our leadership in Chinas real estate transaction industry as we enter the post-pandemic period.Second Quarter 2020 Financial ResultsREVENUE Revenue in the second quarter of 2020 decreased by 22.2 to RMB737.7 million US104.4 million from RMB948.2 million in the same period of 2019. The decrease was due to the outbreak of COVID-19 in China and the resulting constraints imposed on real estate agent activity, which negatively impacted the ability of agents to facilitate transactions in the period. Although real estate agent business activity has started to gradually resume since April 2020, the outbreak of COVID-19 and its impact on the real estate market caused both the number of transactions and GMV facilitated through the Companys marketplace to decrease on a year-over-year basis, both of which significantly impacted the Companys revenue generation capabilities in the period. However, as the pandemic has been gradually brought under control in China, the Company has begun to ramp up its business in turn and thus generated revenue of RMB390.0 million US55.2 million for the month ended June 30, 2020, representing an increase of 35.9 year over year.COST OF REVENUECost of revenue in the second quarter of 2020 decreased by 15.1 to RMB616.7 million US87.3 million from RMB726.0 million in the same period of 2019. This decrease was mainly attributable to a decrease in commission fees payable to agents for the services they rendered, which resulted from both the decreased commissions from transactions and the increased costs relating to various initiatives being offered to agents during the period to overcome the negative impact of the COVID-19 pandemic.GROSS PROFITGross profit in the second quarter of 2020 decreased by 45.5 to RMB121.0 million US17.1 million from RMB222.2 million in the same period of 2019. Gross margin in the second quarter of 2020 was 16.4 compared with 23.4 during the same period of 2019.OPERATING EXPENSESOperating expenses in the second quarter of 2020, including share-based compensation expenses of RMB25.9 million US3.7 million, decreased by 1.2 to RMB153.9 million US21.8 million from RMB155.7 million in the same period of 2019. Sales and marketing expenses in the second quarter of 2020 decreased by 86.4 to RMB2.9 million US0.4 million from RMB21.3 million in the same period of 2019. The decrease in sales and marketing expenses was primarily due to the reduction in spending on brand promotion and marketing activities to attract property listings from real estate sellers to the Companys marketplace. Product development expenses in the second quarter of 2020 were RMB70.5 million US10.0 million compared to RMB79.1 million in the same period of 2019. The decrease in product development expenses was mainly attributable to the Companys shifting from expanding the team size to optimizing the operating efficiency of its product development team in response to the outbreak of COVID-19, which led to a decrease in personnel-related expenses in the period. The decrease was partially offset by share-based compensation expenses of RMB16.3 million US2.3 million in the second quarter of 2020. General and administrative expenses in the second quarter of 2020 were RMB80.5 million US11.4 million, compared to RMB55.3 million in the same period of 2019. The increase in general and administrative expenses in the period included share-based compensation expenses of RMB9.6 million US1.4 million. The remaining increase of RMB15.6 million US2.2 million in general and administrative expenses was primarily attributable to 1 an increased headcount and various expenditures to improve the Companys corporate governance and ensure compliance in relation to the Companys status as a U.S.-listed company; and 2 an increase in the account of provisions for doubtful debtors.NET INCOME LOSSNet loss in the second quarter of 2020 was RMB14.0 million US2.0 million compared to a net income of RMB85.5 million in the same period of 2019.Non-GAAP net income in the second quarter of 2020 was RMB11.9 million US1.7 million compared to non-GAAP net income of RMB85.5 million in the same period of 2019.NET INCOME LOSS PER ADSBasic and diluted net loss per American Depositary Share ADS in the second quarter of 2020 were both RMB0.18 US0.03. In comparison, the Companys basic and diluted net income attributable to ordinary shareholders per ADS in the same period of 2019 were both RMB1.00. Each ADS represents 25 of the Companys Class A ordinary shares.Liquidity As of June 30, 2020, the Company had cash and cash equivalents, restricted cash, and short-term investments of RMB950.2 million US134.5 million, short-term bank borrowings of RMB361.9 million US51.2 million, as well as un-utilized bank facilities of RMB297.0 million US42.0 million. For the second quarter of 2020, net cash used in operating activities was RMB62.2 million US8.8 million.Business Outlook For the third quarter of 2020, the Company expects its revenue to be between RMB1,050 million and RMB1,150 million. This forecast only reflects the Companys current and preliminary views on the market and operational conditions, which are subject to change. 