Yunji to Buy Back USD20 Million in Stock After Poor Performance Harms Share Price
Liao Shumin
DATE:  Aug 29 2019
/ SOURCE:  yicai
Yunji to Buy Back USD20 Million in Stock After Poor Performance Harms Share Price Yunji to Buy Back USD20 Million in Stock After Poor Performance Harms Share Price

(Yicai Global) Aug. 29 -- Chinese social e-commerce platform Yunji plans to buy back some USD20 million worth of company stock over the next sixth months as it looks to revive its share price following a hefty second-quarter loss.

The Hangzhou-based firm's share price [NASDAQ:YJ] shot up as much as 20 percent on the news but simmered to close just under 6.8 percent higher at USD6.46.

Yunji has been on a losing streak since 2016 and in the second quarter of this year lost another CNY85.4 million (USD12.3 million) on CNY3.1 billion (USD446 million) in revenue -- more than its CNY60 million deficit for the whole of 2018 -- according to its interim report published Aug. 22. It lost CNY24.7 million in 2016 and CNY105.7 million in 2017.

The announcement led to investors bailing on the company's stock, and its shares fell from USD10.74 apiece on Aug. 22 to USD6.04 on Aug. 27.

Yunji has been fine tuning operations this year and plans to increase the proportion of third-party merchants on the platform over the coming quarters to improve efficiency, Beijing News citied Chief Financial Officer Chen Chen as saying.

Founded in 2015, the firm has a unique business model that offers cash incentives to encourage users to recommend and share product details via social media. As of the end of the first half, it had nearly 10.8 million paying members, far more than double the amount a year earlier. Yunji listed on May 3 this year, closing its debut 28 percent above its USD11 initial offering price at USD14.15.

Editor: James Boynton

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Keywords:   Yunji,Share Buyback