TD Holdings, Inc. Reports Second Quarter 2021 Financial Results

SHENZHEN, China, Aug. 18, 2021 /PRNewswire/ -- TD Holdings, Inc. (Nasdaq: GLG) (the "Company"), a commodities trading service provider in China, today announced its financial results for the second quarter ended June 30, 2021.

Affected by the ongoing outbreak of the COVID-19, the Company expected its used luxurious car leasing business to be subject to continuous losses due to the closure of stores. As a result, the Company sold the used luxurious car leasing business in August 2020 and focused on the commodities trading and its complementary businesses.

Ms. Renmei Ouyang, the Chief Executive Officer of the Company, stated, "We are pleased to report our financial results for the second quarter of fiscal year 2021. Despite the setbacks caused by the COVID-19 outbreak and having just started our commodities trading business in late 2019, our revenue increased by 2981% to $59.84 million for the second quarter of fiscal year 2021 as compared to the second quarter of fiscal year 2020. The growth figure demonstrates that we are optimally situated to capture the opportunities in the market. We remain focused on driving momentum in our business, and we recently announced that we plan to commence our commodity trading business in Yangpu Economic Development Zone and launch a blockchain payment and settlement platform for online commodity trading in Yangzhou Economic & Technological Development Zone in China. Looking forward, we will strengthen the Company's competitive position over the long-term, including developing our global commodity e-commerce platform, building our own digital cloud warehouse, improving our trading settlement and payment system, creating a supply chain financial ecosystem as well as acquiring large-scale overseas minerals. With the visibility and validation afforded as a Nasdaq listed company, we can now confidently focus on building profitable revenue growth and creating value for our shareholders."

Financial Highlights

In the quarter ended June 30, 2021

• Total revenue was $59.84 million, consisting of $59.51 million from sales of commodities products, and $0.33 million from supply chain management services for the quarter ended June 30, 2021, an increase of 2981% from $1.94 million for the same quarter ended June 30, 2020.
  
  
• Net income from continuing operation was $0.36 million, as compared with net loss from continuing operations of $5.17 million for the same quarter ended June 30, 2020. Net income was $0.36 million, as compared with net loss of $5.46 million for the same quarter ended June 30, 2020.
  
  
• Basic and diluted earnings per share from continuing operations was nil, compared with basic and diluted loss per share from continuing operations of $0.11 for the same quarter ended June 30, 2020.

In the six months ended June 30, 2021

• Total revenue was $89.42 million, consisting of $88.95 million from sales of commodities products, and $0.47 million from supply chain management services for the six months ended June 30, 2021, an increase of 2740% from $3.15 million for the same period ended June 30, 2020.
  
  
• Net loss from continuing operation was $1.18 million, as compared with net loss from continuing operations of $5.26 million for the same period ended June 30, 2020. Net loss was $1.18 million, as compared with net loss of $5.82 million for the same period ended June 30, 2020.
  
  
• Basic and diluted loss per share from continuing operations was $0.01, compared with basic and diluted loss per share from continuing operations of $0.17 for the same period ended June 30, 2020.

Financial Results

In the three months ended June 30, 2021

Revenues

For the three months ended June 30, 2021, the Company sold non-ferrous metals to two customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $59.51 million from sales of commodity products for the three months ended June 30, 2021, among which, $1.52 million generated from the related party, compared with $1.56 million from sales of commodity products for the three months ended June 30, 2020.

For the three months ended June 30, 2021, the Company earned commodity distribution commission fees of $0.33 million from eight third party customers, compared with $0.35 million from two third party customers and $0.03 million from one related party customer for the three months ended June 30, 2020.

Cost of revenue

Cost of revenue primarily consists of purchase costs of non-ferrous metal products. For the three months ended June 30, 2021, the Company purchased non-ferrous metal products of $57.93 million from fifteen third party vendors and $1.53 million from five related party vendors, compared with $1.37 million from one third party vendor and $0.20 million from one related party vendor for the three months ended June 30, 2020.

Selling, general, and administrative expenses

Selling, general and administrative expenses increased by $1.61 million or 368%, to $2.05 million for the three months ended June 30, 2021, from $0.44 million for the three months ended June 30, 2020. Selling, general and administrative expenses primarily consisted of salary and employee benefits, office rental expense, amortizations of intangible assets and convertible notes, professional service fees and finance offering related fees. The increase was mainly attributable to 1) amortization of intangible assets of $1.01 million and, 2) amortization of convertible notes of $0.12 million for the three months ended June 30, 2021 while no such issuance for the three months ended June 30, 2020. 

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $1.14 million or 63%, to $2.94 million for the three months ended June 30, 2021, from $1.80 million for the three months ended June 30, 2020. The increase was primarily due to loans made to Shenzhen Xinsuniao for the three months ended June 30, 2020 to $59.50 million made to additional 13 vendor customers, among which, $2.01 million was attributed to relate party and $0.94 million was generated from third party vendors.

Amortization of relative fair value of warrants relating to service provider  

For the three months ended June 30, 2020, the item represented the full amortization of beneficial conversion feature of $3.4 million and amortization of relative fair value of warrants of $3.06 million relating to the convertible notes which was exercised in May 2020.

For the three months ended June 30, 2021, no such expenses incurred.

Net income from continuing operations

Net income was $0.36 million for the three months ended June 30, 2021, compared with net loss of $5.17 million for the three months ended June 30, 2020.

Net loss from discontinued operations

During the three months ended June 30, 2020, net loss from discontinued operations was $0.29 million from discontinued operations of used luxurious car leasing business.

In the six months ended June 30, 2021

Revenues

For the six months ended June 30, 2021, the Company sold non-ferrous metals to two related party customers at fixed prices, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $88.95 million from sales of commodity products for the six months ended June 30, 2021, compared with $2.62 million for the six months ended June 30, 2020.

For the six months ended June 30, 2021, the Company earned commodity distribution commission fees of $0.47 million from third party vendors, compared with commission fees of $0.46 million from three third party customers and distribution service fees of $0.07 million from one related party customer for the six months ended June 30, 2020.

Cost of revenue

Cost of revenue primarily consists of purchase costs of non-ferrous metal products. For the six months ended June 30, 2021, the Company purchased non-ferrous metal products of $67.68 million from fifteen third party vendors and $21.20 million from five related party vendors, compared with $1.36 million from on third party vendor and $1.26 million from one related party vendor for the six months ended June 30, 2020.

Selling, general, and administrative expenses

Selling, general and administrative expenses increased by $2.88 million or 389%, to $3.62 million for the six months ended June 30, 2021, from $0.74 million for the six months ended June 30, 2020. Selling, general and administrative expenses primarily consisted of salary and employee benefits, office rental expense, amortizations of intangible assets and convertible notes, professional service fees and finance offering related fees. The increase was mainly attributable to 1) amortization of intangible assets of $1.89 million and, 2) amortization of convertible notes of $0.16 million for the six months ended June 30, 2021 while no such issuance for the three months ended June 30, 2020, 3) professional fee increased from $0.51 million to $0.77 million. 

Interest income

Interest income was primarily generated from loans made to third parties and related parties. Interest income increased by $3.16 million or 168%, to $5.04 million for the six months ended June 30, 2021, from $1.88 million for the six months ended June 30, 2020. The increase was primarily due to loans made to Shenzhen Xinsuniao for the three months ended June 30, 2020 to $59.50 million made to additional 13 vendor customers, among which, $3.62 million was attributed to relate party and $1.42 million was generated from third party vendors.

Share-based payment for service

On March 4, 2021, the Company issued 750,000 fully-vested warrants with an exercise price of $0.01, with a five-year life, to an agent who was engaged to complete the warrant waiver and exercise agreements. The Company applied Black-Scholes model and determined the fair value of the warrants to be $ $1,695,042. Significant estimates and assumptions used included stock price on March 4, 2021 of $2.27 per share, risk-free interest rate of one year of 0.08%, life of 5 years, and volatility of 71.57% for the six months ended June 30, 2021.

For the six months ended June 30, 2020, no such expenses incurred.

Amortization of beneficial conversion feature and relative fair value of warrants relating to issuance of convertible notes  

For the six months ended June 30, 2020, the item represented the full amortization of beneficial conversion feature of $3.4 million and amortization of relative fair value of warrants of $3.06 million relating to the convertible notes which was exercised in May 2020.

For the six months ended June 30, 2021, no such expenses incurred.

Net loss from continuing operations

Net loss was $1.18 million for the six months ended June 30, 2021, compared with net loss of $5.26 million for the six months ended June 30, 2020.

Net loss from discontinued operations

During the six months ended June 30, 2020, net loss from discontinued operations was $0.55 million from discontinued operations of used luxurious car leasing business.

Six Months Ended June 30, 2021 Cash Flows

As of June 30, 2021, the Company had cash and cash equivalents of $6.90 million, as compared with $2.70 million as of December 31, 2020.

Net cash used in operating activities from continuing operations was $3.79 million for the six months ended June 30, 2021, compared with $2.74 million for the six months ended June 30, 2020. Net cash used in operating activities was $3.79 million for the six months ended June 30, 2021, compared with $2.72 million for the six months ended June 30, 2020.

Net cash used in investing activities was $15.81 million for the six months ended June 30, 2021, 2020, compared with $78.86 million for the six months ended June 30, 2020.

Net cash provided by financing activities was $23.10 million for the six months ended June 30, 2021, compared with $80.24 million the six months ended June 30, 2020.

About TD Holdings, Inc.

TD Holdings, Inc. is a service provider currently engaging in commodity trading business and supply chain service business in China. Its commodities trading business primarily involves purchasing non-ferrous metal product from upstream metal and mineral suppliers and then selling to downstream customers. Its supply chain service business primarily has served as a one-stop commodity supply chain service and digital intelligence supply chain platform integrating upstream and downstream enterprises, warehouses, logistics, information, and futures trading. For more information, please visit http://ir.tdglg.com.

Safe Harbor Statement

This press release may contain certain "forward-looking statements" relating to the business of TD Holdings, Inc. and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. The following factors, among others, could cause actual results to differ materially from those described in these forward-looking statements: there is uncertainty about the spread of the COVID-19 virus and the impact it will have on the Company's operations, the demand for the Company's products and services, global supply chains and economic activity in general. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

For more information, please contact:

Ascent Investor Relations LLC
Ms. Tina Xiao
Email:tina.xiao@ascent-ir.com 
Tel: +1 917 609 0333

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