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Bitauto Holdings Limited (NYSE:BITA) Q1 2019 Earnings Conference Call May 30, 2019 8:00 AM ET
Bitauto Holdings Limited（纽约证券交易所股票代码：[BITA]）2019年第一季度收益电话会议2019年5月30日美国东部时间上午8:00
Andy Zhang - Chief Executive Officer and Director
Ming Xu - Chief Financial Officer
Catherine Liu - Chief Financial Officer of Yixin
- 张安迪 - 首席执行官兼董事
- 徐明 - 首席财务官
- Catherine Liu - 宜信首席财务官
Hillman Chan - Citi
Miranda Zhuang - Bank of America Merrill Lynch
Liping Zhao - CICC
- 希尔曼陈 - 花旗
- 米兰达庄 - 美国银行美林
- 赵丽萍 - 中金公司
Hello and thank you for standing by for Bitauto’s First Quarter 2019 Earnings Conference Call. At this time, all participants are in listen-only mode. After management’s prepared remarks, there will be a question-and-answer session. Today’s conference is being recorded. If you have any objections, you may disconnect at this time.
I would like to turn the meeting over to your host for today’s conference.
您好，感谢您支持Bitauto 2019年第一季度收益电话会议。 此时，所有参与者都处于只听模式。 在管理层准备好的评论之后，将会有一个问答环节。 今天的会议正在录制中。 如果您有任何异议，您可以在此时断开连接。
Thank you. Welcome to Bitauto’s first quarter 2019 earnings conference call. Speakers from the company today are Mr. Andy Zhang, CEO; Mr. Xiaoke Liu, COO and Mr. Ming Xu, CFO. After management’s prepared remarks, Andy, Xiaoke and Ming will be available to answer your questions. In addition, Catherine Liu, CFO of Yixin, will be available to answer your questions related to Yixin.
Before we proceed, please note that discussions today will contain forward-looking statements made under the Safe Harbor provisions of the US Private Securities and Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties, which may cause actual results to differ materially from our current expectations.
Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC, including registration statement on Form F-1. Bitauto does not undertake any obligations to update any forward-looking statement, except as required under applicable law.
This call will include discussions of certain unaudited non-GAAP financial measures. Please refer to our earnings release, which was issued earlier today for reconciliations of these unaudited non-GAAP measures to the most directly comparable unaudited GAAP measures.
As a reminder, this conference is being recorded. In addition, a live and archived webcast of the conference will be available on our website.
I will now turn the call over to Andy Zhang, CEO of Bitauto.
Hello everyone and thank you for joining us for our first quarter 2019 earnings conference call. Despite a challenging auto industry environment, we were pleased to deliver a set of solid results for the first quarter of the year, with total revenue growing by 26% year-over-year to RMB2.73 billion. Our advertising and subscription business continued to grow steadily, with revenue reaching RMB897 million, representing a 13.9% year-over year increase. Our transaction services business also continued to expand rapidly with revenue of reaching RMB1.65 billion, representing a 40.7% year-over-year growth.
For our advertising and subscription business, as we emphasized over the past few quarters Bitauto has been devoted to consistently, to constantly enhance our content and improving user experience on our upgraded apps to drive traffic for our media business. And that we are beginning to see positive results from our efforts.
In the first quarter, we saw substantial increases in traffic, user time spent, and number of sales leads generated. According to Questmobile, in April 2019, DAU on the Bitauto media app increased by 197% since October 2018 when we rolled out a major upgrade for media app. The combined DAU on both our Bitauto media app and Auto Pricing app rose by approximately 50% over the same period in 2018. In the first quarter, our total number of sales leads grew by approximately 15% year-over-year as quality of our sales lead improved thanks to greater contribution from organic leads.
As a result of the strong momentum in the quantity and quality of sales leads, more dealer customers are willing to sign up for our premium and recently launched deluxe premium service packages. Further driving ARPU in our subscription business upwards. We also further build out our network of independent dealers to over 26,000 through which we served more than 42,500 sales persons during the first quarter of 2019. As of the end of this May, we had developed over 2,300 paying customers among these independent second tier dealers.
In our transaction services business, Yixin continued to grow faster than the industry, strengthening its market leading position, and enhancing its competitive advantages. Yixin facilitated approximately 147,000 financed automobile transactions in the first quarter, a year-over-year increase of approximately 30%. Yixin's loan facilitation services contributed 66% of its total financed automobile transactions, with transaction volume up line up nearly 10x compared to the same period last year.
Also during the quarter, Yixin's financed new automobile transactions increased by approximately 23% year-over-year, while China's new passenger vehicles sales dropped by 14% year-over-year, according to China Association of Automobile Manufacturers. Moreover, Yixin's financed used automobile transactions increased by approximately 39% year-over-year during the quarter, while China's used car passenger vehicle sales increased only by 2% year-over-year, according to China Automobile Dealers Association.
中国汽车工业协会（China Association of Automobile Manufacturers）的数据显示，在本季度，益新的新车交易额同比增长约23％，而中国新乘用车销量同比下降14％。此外，根据中国汽车经销商协会的数据，益新的二手汽车交易在本季度同比增长约39％，而中国二手车乘用车销量同比仅增长2％。
Looking forward, we will remain dedicated to executing on our core business strategies to build Bitauto into China's top online automobile media and the transaction services platform. First, we will continue to improve content and user experience on the upgraded Bitauto media app, with more engaging and user centric content and functions. Covering user need across the entire automobile consumption cycle. We have seen robust improvement in DAU, retention rate, as well as content generation and the consumption on our Bitaudio media app. And we believe this will greatly increase our ability to bring higher quality sales leads to our automaker and dealer customers, helping enhance their sales conversion rates, and demonstrating our value proposition amid the current soft market environment for automobile sales.
Second, we will drive incremental revenue growth in our advertising business through the launch of our data products, which provide automakers with integrated results-driven marketing solutions. Including highly targeted advertisement, content and the marketing campaigns, leveraging Bitauto AIs and the big data analytic capabilities. Our data products enable automakers to analyze real-time consumer behavior, including browsing, research and purchasing, to further improve automakers' conversion rates. We plan to gradually ramp up our data products throughout the course of this year.
Third, we will further develop our subscription business this year, as we enhance ARPU from 4S dealer customers through increasing penetration of premium and deluxe premium service packages, and expand our services to cover more independent dealers while gradually increasing monetization among this vast and under-tapped market segment.
Fourth, Yixin will remain focused on rapidly expanding its financed automobile transactions, growing its loan facilitation business, and developing its technology capabilities to better understand, connect, and serve consumers, financial institution partners, and automobile dealers. We believe that Yixin is well-positioned to gain market share in the automobile finance industry.
With that I'll turn the call over to Ming to go over the financials.
Thank you, Andy. Good evening, everyone. Despite soft sales in the automobile industry, our results for the first quarter of 2019 maintained a steady growth trajectory, with strong performances from both our advertising and subscription business and transaction services business. We also increased profitability in the first quarter, mainly due to improved profitability at Yixin, and effective control on sales and marketing expenses. With rising traffic and enhanced user experience, our upgraded Bitauto media app should continue to strengthen Bitauto's value proposition, which we believe will be increasingly recognized by our OEM and dealer customers as they focus more on the effectiveness of their advertising spending. We remain confident that the growth of our user base and brand value will further solidify our industry leading position, reduce our customer acquisition costs and enhance our margins.
We are also optimistic about Yixin's margin outlook for the full year as it further grows its financed transaction volume.
Now let's look at our Q1, 2019 financial highlights before moving to Q&A. Please note that our reference mainly to financial figures in RMB in the following discussion.
Bitauto reported revenue of RMB2.73 billion for the first quarter of 2019, representing a 26% increase from the corresponding period in 2018. The increase in revenue was attributable to the growth of the Company's transaction services business and advertising and subscription business.
Revenue from the advertising and subscription business for the first quarter of 2019 was RMB897 million, representing a 13.9% increase from RMB7.88 million in the corresponding period in 2018. Revenue from the transaction services business for the first quarter of 2019 was RMB1.65 billion, representing a 40.7% increases from RMB1.17 billion in the corresponding period in 2018, mainly attributable to the revenue growth of the Company's loan facilitation services and self-operated financing business.
Revenue from the digital marketing solutions business for the first quarter of 2019 was RMB188 million, compared to RMB211 million in the corresponding period in 2018.
Cost of revenue for the first quarter of 2019 was RMB1.07 billion, representing an increase of 29.8% from the corresponding period in 2018. The increase was primarily due to increased commissions associated with loan facilitation services and increased costs associated with higher sales of automobiles. Cost of revenue as a percentage of revenue in the first quarter of 2019 was 39%, compared to 37.8% in the corresponding period in 2018.
Gross profit for the first quarter of 2019 was RMB1.67 billion, representing a 23.6% increase from the corresponding period in 2018.
Selling and administrative expenses were RMB1.50 billion for the first quarter of 2019, representing a 0.5% decrease from the corresponding period in 2018.
Product development expenses were RMB160.4 million for the first quarter of 2019, largely the same as such figure in the corresponding period in 2018.
Share-based compensation, which was allocated to the related line items of operating expenses, was RMB144 million in the first quarter of 2019, compared to RMB150 million in the corresponding period in 2018.
Non-GAAP income from operations in the first quarter of 2019 was RMB375.8 million (as per press release RMB365.8 million), representing a significant increase from RMB8 million in the corresponding period in 2018. Non-GAAP operating margin for the first quarter of 2019 was 13.4%, compared to 0.4% in the corresponding period in 2018.
Net income in the first quarter of 2019 was RMB92.8 million, compared to a net loss of RMB288 million in the corresponding period in 2018.
Net income attributable to Bitauto in the first quarter of 2019 was RMB32.5 million, compared to a net loss attributable to Bitauto of RMB168 million in the corresponding period in 2018.
Non-GAAP net income in the first quarter of 2019 was RMB285 million, representing a significant increase from RMB37 million in the corresponding period in 2018.
Non-GAAP net income attributable to Bitauto in the first quarter of 2019 was RMB152.1 million, a 122.3% (as per press release 126.3%) increase from the corresponding period in 2018.
Basic and diluted net income per ADS, each representing one ordinary share, in the first quarter of 2019 amounted to RMB0.43, US$0.06 and RMB0.29, US$0.04 respectively.
Non-GAAP basic and diluted net income per ADS in the first quarter of 2019 amounted to RMB2.12, US$0.32 and RMB1.68, US$0.25, respectively.
As of March 31, 2019, the Company had cash and cash equivalents, time deposits and restricted cash of RMB9.69 billion. Cash provided by operating activities, cash provided by investing activities, and cash used in financing activities in the first quarter of 2019 were RMB294 million, RMB1.86 billion, and RMB2.11 billion respectively.
The number of employees totaled 8,570 as of March 31, 2019, including employees of entities in which Bitauto has acquired and holds controlling interests as of such date. This represented a 4.4% year-over-year decrease, primarily due to the decreased headcount in Yixin, following its strategic de-emphasis of used car automobile transaction facilitation services.
In addition, given Yixin scale and significance to Bitauto, I would also like to share with you some of Yixin's operating and financial highlights for Q1 of 2019.
In the first quarter of 2019, Yixin facilitated approximately 147,000 financed automobile transactions, an increase of approximately 30% from the corresponding period in 2018. The total aggregate automobile financing amount facilitated through its loan facilitation services and self-operated financing business was approximately RMB11.30 billion.
In the quarter, through its loan facilitation services for financing partners, Yixin facilitated approximately 97,000 financed automobile transactions, representing a year-over-year increase of nearly 10x and approximately 66% of Yixin's total financed automobile transactions.
In the first quarter of 2019, under U.S. GAAP, Yixin's total revenues reached RMB1.66 billion, representing a 35.3% increase from the corresponding period in 2018; gross profit reached RMB843 million, representing a 40.8% increase from the corresponding period in 2018; net income was RMB104.5 million, compared to a net loss of RMB221.4 million in the corresponding period in 2018; and Non-GAAP net income was RMB233.4 million, compared to a Non-GAAP net loss of RMB62.3 million in the corresponding period in 2018.
In the first quarter of 2019, Yixin's Non-GAAP net income is calculated as net income excluding share-based compensation of RMB85.3 million, amortization of intangible assets resulting from asset and business acquisitions of RMB43.6 million, and offset by tax effect of RMB0.04 million. In the first quarter of 2019, Yixin entered into certain transactions with other subsidiaries of Bitauto, which have been eliminated upon Bitauto's consolidation of Yixin. The cost of revenue and expenses that Yixin recorded for the services purchased from those subsidiaries of Bitauto amounted to RMB7 million.
As of March 31, 2019, Yixin had cash and cash equivalents and restricted cash of RMB5.63 billion, total finance receivables of RMB34.64 billion, and total borrowings, including bank borrowings and asset-backed securitization debt of RMB28.17 billion.
As of March 31, 2019, 90 plus days, past due ratio, including 180 plus days and 180 plus days past due ratio for all financed transactions including the third-party loan facilitations were 0.9% and 0.43%, respectively; 90 days plus including 180 days plus past due ratio and 180 days plus past due ratio for Yixin's self-operated financing business were 1.17% and 0.58%, respectively.
Under U.S. GAAP, Yixin's provision for credit losses of finance receivables for the first quarter of 2019 was RMB81.1 million. The balance of finance for credit losses of finance receivables was RMB361.5 million as of March 31, 2019.
Before we turn to guidance for the second quarter, I'd like to provide you with a quick update on the early redemption of our convertible notes.
In May 2019, Bitauto has reached an agreement with PAG and its affiliates to repurchase the outstanding US$125.5 million aggregate principal amount of the 2% Convertible Notes due 2021 issued by the Company on August 2, 2016 prior to the scheduled maturity date. The total purchase price of US$126.8 million including the principal of, and the interest on, the Notes was paid and settled as of May 22, 2019. The Bitauto has cancelled all the Notes outstanding post this early redemption and there are no Note outstanding as of now.
With that I'll turn to guidance for the second quarter of 2019. For the second quarter of 2019, Bitauto currently expects to generate revenue in the range of RMB2.70 billion, US$402.3 million to RMB2.80 billion, US$417.2 million in the second quarter of 2019, representing a 5.3% to 9.2% increase from the corresponding period in 2018.
This forecast takes into consideration of seasonality factors in Bitauto's business, and excludes any impact of foreign currency fluctuation. It reflects the management's current and preliminary view, which is subject to change.
Let’s now start the Q&A session. Andy, myself, Xiaoke and Yixin's CFO, Catherine Liu are available to take your questions. Operator, please go ahead.
我们现在开始问答环节。 Andy，我，Xiaoke和Yixin的首席财务官Catherine Liu可以回答你的问题。 接线员，请继续。
Your first question comes from the line of Hillman Chan from Citi. Pleas ask your question.
你的第一个问题来自花旗的Hillman Chan。 请问你的问题。
Good evening, management, and thank you for taking my question. Firstly, could you share your thoughts on the OEM advertising outlook in the context of recent trade war and also softer macro outlook? And would that change our view on the OEM advertising budget for the rest of the year, please? And how are we seeing the ad budget trend allocation among different online and offline channel for auto OEMs.
And my other question would be that in your prepared remarks you mentioned the solid growth in our DAU and also the sales leads for the year. Could you share more on the drivers behind and how we should think about the strategy growing the DAUs and the sales leads volume going forward? Thank you very much.
晚上好，管理层，谢谢你接受我的提问。 首先，您能否在近期贸易战的背景下分享您对OEM广告前景的看法，以及更为温和的宏观前景？ 这会改变我们对今年余下时间的OEM广告预算的看法吗？ 我们如何看待汽车原始设备制造商在不同线上和线下渠道中的广告预算趋势分配。
我的另一个问题是，在你准备好的评论中，你提到了DAU的稳健增长以及今年的销售线索。 您能否分享更多关于背后的驱动因素以及我们应该如何考虑增加DAU的战略以及未来的销售线索数量？ 非常感谢你。
So thank you for your question. I'll first address your first question about the advertising market. So, firstly as you may have observed the car market so far this year has been very weak. And we expect the market to remain weak for the remainder of the year without any -- if the government does not issue anything a policy support. So for the first quarter of this year we observed that overall speaking the advertising market has been declining year-over-year.
And the automakers are cutting their advertising budget. So in this market environment we think the OEM advertisers even though -- even for their branding advertising they have been focusing more and more on sales leads and on the effectiveness of their spending.
Therefore for the first quarter of this year we have been seeing that the verticals and the social media that both of them have more effective ads and fewer branding ads, pure branding media, these two types are still having some growth in the first quarter.
And we think this vertical in the social media type we believe that the budget are skewing -- concentrating to the top tier media. And at the same time the smaller, lower tier media were gradually being squeezed out of the market.
And even for our own business we --from our interaction with the automaker's we think that the automaker customers are spending more on their -- on the sales leads driven, effectiveness driven advertising and cutting their budget on the pure branding ad. And we believe this will be the trend going forward. And so far --the -- our proposition on the advertising market trend, so let me now address your second question about DAU growth.
So our -- since we launched the new upgraded Yiche app in November of 2019 last year and started our campaign to grow our user base. And so far it maintained a very strong growth. I think so far our growth can be seen in two stages. From November of last year to March of this year, the growth we have been focused on in getting more incremental new user and also optimizing the channels where we get the new users. And from March of this year till May till, now our focus more is --while we maintain the strong growth in incremental new users, we also focus more on the quality of the user base. We focus more on like improving our retention rate and also time spent on our app.
So we focus more on the lower tier cities. We find that -- so since our campaign start we get more incremental new users from the tier 3 to 5 cities because more users are coming from the lower tier cities we also find that more of them are first time buyer actually among our incremental new users 70% of them are first-time users. This compares with the overall market where only like roughly 50% are first-time buyers. But because we have more first-time buyers they also contribute more sales leads to our business.
So in terms of content strategy, because more of our new users are first time buyers, and they are -- more of them are in new models. So we actually focus in terms of content we focus on getting more, creating more content and providing more content about this new model to this type of users and we try to maintain a leading position in the competition in terms of this new models.
我们认为社交媒体类型的这种垂直方向我们认为预算正在倾斜 - 专注于顶级媒体。与此同时，规模较小，层次较低的媒体逐渐被挤出市场。
即使对于我们自己的业务，我们 - 从与汽车制造商的互动中，我们认为汽车制造商客户在销售线索驱动，效果驱动的广告上花费更多 - 并在纯品牌广告上削减预算。我们相信这将是未来的趋势。到目前为止 - 我们关于广告市场趋势的主张，现在让我谈谈你关于DAU增长的第二个问题。
所以我们 - 自去年2019年11月推出新的升级Yiche应用程序以来，我们开始了扩大用户群的活动。到目前为止，它保持了非常强劲的增长。我认为到目前为止，我们的增长可分为两个阶段。从去年11月到今年3月，我们一直致力于增加新增用户，并优化我们获得新用户的渠道。从今年3月到5月，现在我们更关注的是 - 虽然我们保持增量新用户的强劲增长，但我们也更关注用户群的质量。我们更专注于提高我们的保留率以及在我们的应用上花费的时间。
所以我们更关注低线城市。我们发现 - 因此，自从我们的广告系列开始以来，我们从3至5个城市获得了更多增量新用户，因为更多用户来自较低级别的城市，我们也发现其中更多用户实际上是我们增量新用户中的第一次购买者其中70％是首次使用者。与整体市场相比，只有大约50％的人是首次购买者。但是因为我们有更多的首次购买者，他们也为我们的业务贡献了更多的销售线索。
所以在内容策略方面，因为我们的新用户中有更多是第一次购买，而且他们更多 - 他们更多是新模式。因此，我们实际上专注于内容方面，我们专注于获得更多内容，创建更多内容并为此类用户提供有关此新模型的更多内容，并且我们尝试在这些新模型方面保持竞争中的领先地位。
Specifically in the recent months we've been putting more resources and the focus on the UGC user generated content. For example, for the new -- for these new models we focus on content like a review, user review, and buyer review and also Q&A content for these model, and in this type of UGC content, we try to lead in the competition. Also two things, one is I just -- we just -- I just talked about the UGC content. Also we -- on the PGC content, on the KOL side, we also upgrade our partnership with the key opinion leaders and try to leverage more of their content. And the second thing is that we from a technology point of view we improved our recommendation engine to make our content more tailor-made for the users.
And this also improved the user stickiness to a platform. In some way in the past over six months we believe we have established a sustainable methodology about how to improve our product, how to optimize our channel and also how to improve the operation of our community of our product. And we believe this methodology will continue to work and drive continued strong growth of our user base. Thank you. Next question please.
特别是在最近几个月，我们一直在投入更多资源，并专注于UGC用户生成的内容。例如，对于新版本 - 对于这些新模型，我们专注于内容，如评论，用户评论和买家评论，以及这些模型的问答内容，在这种类型的UGC内容中，我们试图在竞争中领先。还有两件事，一件是我 - 我们只是 - 我刚才谈到了UGC的内容。此外，我们 - 在PGC内容上，在KOL方面，我们还升级了与关键意见领袖的合作关系，并尝试利用更多内容。第二件事是我们从技术的角度来看，我们改进了我们的推荐引擎，使我们的内容更为用户量身定制。
Your next question comes from the line Miranda Zhuang from Merrill Lynch. Please ask your question.
您的下一个问题来自Merrill Lynch的Miranda Zhuang。 请问你的问题。
Thank you for taking my question and congratulations on solid results. So the management has shared the color about drivers behind the traffic and this volume growth. So can you share more color about organic traffic and organic leads, the mix of them and then the growth trend for them separately? And my second question is about the listing business. So can management share with us the --like number of paying dealers for first quarter and the trend that you are seeing for up to now and then what's your outlook for the full year? Thank you.
感谢您提出我的问题并祝贺取得了可靠的成果。 因此，管理层已经分享了有关交通背后的驱动因素以及这一数量增长的颜色。 那么你能分享更多关于有机交通和有机线索的颜色，它们的组合以及它们的增长趋势吗？ 我的第二个问题是关于上市业务。 因此，管理层可以与我们分享第一季度的付费交易商数量以及您目前所看到的趋势，然后您对全年的展望是什么？ 谢谢。
Thank you, Miranda. So for our first question about the contribution from our organic traffic and leads, we have --because we -- our user organic user base have been growing very strongly. We also see the lead also, the contribution from organic traffic and lead and also improving. So right now the organic traffic contributed to around half our DAU and on the southeast side is about the same similar percentage about half of them are coming from organic sources. This improved a lot from the same period of last year.
And as for the trend, well, because we would believe that the traffic of Yiche app will continue to grow. So we believe the total contribution from Yiche app and also the types of quote app will continue to improve and at the same time importantly as the contribution from organic traffic and lead improves, the quality of our total sales will be blended sales lead is also improving a lot and we believe that has been gradually recognized by our OEM and dealer customers.
And I would believe this internal well leads to a higher growth of our --on the revenue side. And secondly on the paying dealer, on the subscription business, so firstly for the paying customers by the end of Q1 we have roughly around 20,000 paying dealers for business. It's only refers to the west dealer business not including the independent dealer business. For the independent dealer business as we just mentioning in the script, in the prepare remark we have around by the end of part -- by the end of May we have around 2,200 -2,300 of among independent dealers.
For the 4S dealer business, clearly, it declined a bit from last year's level and also from last quarter's level. I think this is more because of the industry downturn. A lot of dealers are running into difficulties, their high inventory level and very low profitability. We don't think that our gap with our competitors is in margin, we believe we are facing the same problem. So starting from Q2, we also trying to, we have been trying to find ways to find, trying to solutions for this problem. We have been trying to launch some new product to increase our paying dealer numbers.
So for example starting from April, we have been trying to launch a what we call a entry-level package which has a relatively lower output. It's more affordable for those dealers and also we are trying some like CPL products et cetera. With this we hope to a further increase the number of paying dealers and at the same time for the independent dealer business, we continue to progress on that part.
So, first of all, as we mentioned the number of --the number of dealers any kind of dealer on our platform is now around 26,000 and from those 26,000 dealers more than 40,000 people are using our platform. And also for key part of the business we-- our-- for the -- one key function for the business which is facilitating the car transaction between used cars, between this independent dealers and 4S dealers, we have a so far on our platform for more than 400,000 listings on our platform.
谢谢你，米兰达。因此，对于我们关于有机流量和潜在客户贡献的第一个问题，我们有 - 因为我们 - 我们的用户有机用户群一直在增长非常强劲。我们也看到了领先，有机交通和领先的贡献也在改善。因此，现在有机交通占我们DAU的一半左右，而东南方也是相同的百分比，其中一半来自有机资源。这比去年同期有了很大改善。
而且我相信这个内部因素会导致我们的收入增长更快。其次是付费经销商，关于订阅业务，所以首先对于付费客户，在第一季度末我们有大约20,000个付费经销商用于业务。它仅指西方经销商业务，不包括独立经销商业务。对于我们刚刚在剧本中提到的独立经销商业务，在准备评论中我们到处都有 - 到5月底我们有大约2,200 -2,300个独立经销商。
所以，首先，正如我们所提到的那样 - 经销商数量在我们平台上的任何类型的经销商现在大约26,000个，而在这26,000个经销商中，超过40,000个人正在使用我们的平台。此外，对于业务的关键部分 - 我们 - 用于促进二手车之间的汽车交易的业务的一个关键功能，在这个独立的经销商和4S经销商之间，我们到目前为止在我们的平台上在我们的平台上超过400,000个列表。
And in the first four months we have closed the more around the 50,000 transactions between the independent dealers and the 4S dealers. And we believe we are now in a very strong position in this competition in the independent dealer business.
Your next question comes from the line of Liping Zhao from CICC. Please ask your question.
Good evening, management. Thanks for taking my questions. I have three questions here and the first question is related to your advertising and subscription business. I noticed you continue to invest in branding such as the promotion of data media application. So how much is the investment or should we expect for this year? That is to say the impact on your bottom line this year. And how much revenue growth will the investment bring to your advertisement and subscription business?
My second question is related to Yixin. So I'm curious how much did the funding cost of Yixin in first quarter and what's the trend of transaction volume, funding cost and past due ratio in coming quarters? And my last question is about your cash position. And you said you paid back the convertible note ahead of the due date. So what's the impact on your liquidity and do you have any share buyback in the future? Thank you.
晚上好，管理层。 谢谢你回答我的问题。 我在这里有三个问题，第一个问题与您的广告和订阅业务有关。 我注意到你继续投资品牌推广，例如推广数据媒体应用程序。 那么今年的投资或我们应该预期多少？ 也就是说今年对你的底线产生了影响。 投资会为您的广告和订阅业务带来多少收入增长？
我的第二个问题与益心有关。 所以我很好奇第一季义信的融资成本是多少，以及未来几个季度交易量，融资成本和过期比例的趋势是什么？ 我的最后一个问题是你的现金状况。 而且你说你在截止日期之前偿还了可兑换票据。 那么对您的流动性有什么影响，您将来有没有股票回购？ 谢谢。
Thank you, Liping. So I will answer the first and third question and Catherine will answer the second question. So Catherine why don't you go ahead first.
谢谢黎平。 所以我将回答第一个和第三个问题，凯瑟琳将回答第二个问题。 所以凯瑟琳为什么不先行。
Sure. From Yixin side, in 2019 the self-operated business funding cost is decreasing compared to 2018 for the new capital that we -- for the new total borrowings. So but since our total funding cost is a mix of the new borrowings and then the old borrowing so the funding cost is gradually decreasing as the time goes by. So I think in the rest of the year we probably see the funding cost probably well still gradually decreasing if the macroeconomics environment and then the central government's policies keeps a similarly.
For the past due ratio as you can see for our self operated financing business and that the loan facilitation business, our past due ratio has been kept pretty stable and slightly decreasing for the past five, I would say five quarters. So for the self operated financing business the past due ratio slightly increases mainly because the balance of the finance receivable has been decreasing since our loan facilitation percentage went up. So that's --but if you look at the total asset that's a more like apple-to-apple comparison. It is stable and slightly decreasing. Okay, Ming?
当然。从益新方面来看，2019年的自营业务融资成本与2018年的新资本相比有所下降 - 我们 - 新的借款总额。因此，由于我们的总融资成本是新借款和旧借款的混合所以随着时间的推移，融资成本逐渐减少。因此，我认为在今年剩余时间里，如果宏观经济环境和中央政府的政策保持相似，那么融资成本可能会逐渐下降。
对于我们的自营融资业务和贷款便利化业务的过去应有的比率，我们的过期比率保持相当稳定并且在过去五年略有下降，我会说五个季度。因此，自营融资业务的过期比率略有上升，主要是因为我们的贷款便利化率上升后，应收账款余额一直在下降。那就是 - 但是如果你看看总资产更像是苹果与苹果的比较。它稳定并略有下降。好的，明？
Okay. Thank you, Catherine. I'll answer your first and third question I think. So on the first one for the investment in our media. So we have been very satisfied with the progress so far in the user growth trend and also the help they bring to our overall business. And we are -- it gives us more confidence in to continue our investment in this area. I think our overall, in the long-term speaking this as I mentioned in the prepared remark, when our user base grows larger and our brand value becomes a more substantial to a significant this will help us to decrease the traffic acquisition cost and the reliance on external traffic.
But in immediate term, we believe that although this -- the traffic growth this year or the growth of sales leads this year can help us to spend less on external sales leads and the same time to getting these new users and to invest in the content and it also will consume some money. So I think in the immediate term we believe there's actually a mismatch between -- I'm only talking about media business not including the Yixin business. For the media business, we believe this year there's somewhat a mismatch between revenue growth and in our spending. On the hand we need to spend to grow our traffic, grow our content grow our organic sales leads.
While these efforts has been gradually paying out and has been gradually recognized by our dealer and advertised power, by OEM and dealer customers, but we believe because for the existing-- in our business as you know the pricing negotiation happens at the end of every year. So the pricing for this year are largely set by the end of last year and earlier this year when our traffic -- when our organic traffic unfortunately it was still relatively low. So as a result the traffic growth I think will be more recognized by our customers going into the second half and more it go into 2020. So as a result in 2019 the revenue growth will still only reflect the organic traffic that we had in last year.
But at the same time, we need to spend more to grow the organic traffic. So this year we believe there will be a certain deleverage in our immediate business. Fortunately the Yixin business will as Catherine mentioned will have a very strong growth this year as evidenced in the first quarter. So this will offset the pressure, margin pressure on our media business. But long-term speaking, we believe this -- our investment on content will help actually as I mentioned the growth in traffic sales leads have already been gradually recognized by our OEM and dealer customers.
And also as we mentioned in the preparing remark, the AI marketing, data to marketing solution that we offered through the OEMs are largely driven by -- not supported by our growth in organic traffic because it's part of that solution is to increase, improve the sales leads for those OEM advertisers.
And we believe that this will be going to second quarter or second half and the last next year this will be more recognized by the -- more reflected on the monetization side. And your third question about our liquidity and capital allocation. So, firstly, on the CB, we have a very friendly negotiation with the PAG on the CB and because we have imported liquidity, both onshore and offshore, we decided to early redeem a convertible bond to lock-in some of the uncertainties. And also lower the potential dilution by the CB buyer actually by redeeming this CB we decrease the potential dilution by around 7%, considering our fully diluted share base.
好的。谢谢你，凯瑟琳。我会回答你的第一个和第三个问题。所以在第一个投资我们的媒体。因此，我们对用户增长趋势迄今取得的进展以及它们为我们的整体业务带来的帮助非常满意。而且我们 - 它让我们更有信心继续在这个领域的投资。我认为我们总体而言，正如我在准备好的评论中提到的那样，当我们的用户群变得更大并且我们的品牌价值变得更加重要时，这将有助于我们降低流量获取成本和依赖性关于外部流量。
但就目前而言，我们认为尽管如此 - 今年的流量增长或今年销售增长带来的增长可以帮助我们减少对外部销售线索的投入，同时也可以帮助我们获得这些新用户并投资内容它也会消耗一些钱。所以我认为在短期内我们认为实际上存在不匹配 - 我只谈论媒体业务，不包括益新业务。对于媒体业务，我们认为今年收入增长与支出之间存在一定程度的不匹配。在手上我们需要花费来增加我们的流量，增加我们的内容增长我们的有机销售线索。
虽然这些努力已经逐渐付出，并且已经被OEM和经销商客户逐渐认可我们的经销商和广告宣传，但我们相信，因为对于现有的 - 在我们的业务中，如您所知，价格谈判发生在每一个结束时年。所以今年的定价很大程度上取决于去年年底和今年早些时候我们的流量 - 当时我们的有机交通仍然相对较低。因此，我认为流量增长将更加得到我们的客户进入下半年的认可，更多的进入2020年。因此，2019年的收入增长仍将只反映我们去年的有机流量。
但与此同时，我们需要花更多钱来增加有机流量。所以今年我们认为我们的直接业务会有一定的去杠杆化。幸运的是，正如凯瑟琳所提到的，今年的益新业务将在第一季度取得非常强劲的增长。因此，这将抵消我们媒体业务的压力和利润压力。但从长远来看，我们相信这一点 - 我们对内容的投资实际上会有所帮助，因为我提到交通销售线索的增长已经逐渐被我们的OEM和经销商客户所认可。
而且正如我们在准备评论中提到的那样，人工智能营销，我们通过OEM提供的营销解决方案数据在很大程度上受到驱动 - 不受我们有机流量增长的支持，因为该解决方案的一部分是增加，改善这些OEM广告商的销售线索。
而且我们认为这将会在第二季度或下半年以及明年的最后一年得到更多人的认可 - 更多地反映在货币化方面。关于我们的流动性和资本配置的第三个问题。因此，首先，在认证机构上，我们与认证机构的PAG进行了非常友好的谈判，并且由于我们已经在境内和境外进口流动性，我们决定提前赎回可转换债券以锁定一些不确定因素。而且，考虑到我们的全面摊薄股票基数，通过赎回该CB实际上降低了CB买方的潜在稀释，我们将潜在的稀释率降低了约7％。
But even after paying back this CB, we still have ample liquidity both onshore and offshore and this early redemption certainly have no impact on our operation whatsoever. And on the buyback question, firstly, we believe, we certainly believe our share price has been -- is being undervalued. And we are looking at various ways to solve this issue but unfortunately the previous buyback -- the previous buyback expired by already, it has one year authorization. So we are looking at ways to get a new authorization on the board. But at the same time considering the overall liquidity, sorry the overall sentiment and risk premium, risk appetite in the overall market, we believe we also need --and also the weak macro environment in China, we think that we also need to balance the use of cash to optimize the use of cash.
So the simple answer is we are looking at different ways to evaluate the optimal capital allocation or the optimal use of cash.
End of Q&A
但即使在偿还了这个认证机构之后，我们仍然拥有充足的在岸和离岸流动性，这种提前赎回肯定对我们的运营没有任何影响。 在回购问题上，首先，我们相信，我们当然相信我们的股价已经被低估了。 我们正在寻找解决这个问题的各种方法，但不幸的是之前的回购 - 之前的回购已经过期，它有一年的授权。 因此，我们正在寻找获得董事会新授权的方法。 但同时考虑到整体流动性，对不起整体市场的整体情绪和风险溢价，风险偏好，我们认为我们也需要 - 而且中国的宏观环境也很弱，我们认为我们还需要平衡 使用现金优化现金使用。
Thank you. We are now approaching the end of the conference call. I will now turn the call over to Bitauto CFO, Ming Xu for closing remarks.
谢谢。 我们现在即将结束电话会议。 我现在将把这个电话转给Bitauto首席财务官，Ming Xu致闭幕词。
Once again thank you for joining us today. Please don't hesitate to contact us if you have any further questions. Thank you for continued support. And we look forward to talking with you in the coming month.
再次感谢您今天加入我们。 如果您有任何其他问题，请随时与我们联系。 感谢您的继续支持。 我们期待在接下来的一个月与您交谈。
Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.
感谢您参加今天的会议。 演讲到此结束。 您现在可以断开连接。 美好的一天。
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