Fangdd Network Group Ltd. Q3 FY2021 earnings call

Industry Trends - Real estate market rapidly cooled off in Q3 2021, with total real estate transactions down 14.1% y-o-y and resell property in Tier 1 cities down 32% y-o-y. - Real estate developers increased investment in digital transformation, over 90% of developers increased investment in 2021. - New market opportunities emerged in real estate asset management service. ### Business Adjustments - Migrated all data to Huawei Cloud in Q3 to comply with data security regulations. - Proactively reduced new property distribution scale, focused on key provincial capital cities, and trimmed noncore city service teams. - Focused on key accounts for SaaS solution business, integrated systems and launched Fangdd office flagship stores, with 30 property projects using SaaS digital marketing service. - Implemented loss control in resale property Yuancui business and continued innovative asset service model with Tinghaozhu product.

In the third quarter of 2021, revenue decreased by 57.8% to RMB169.2 million from RMB401.4 million in the second quarter. Gross profit decreased by 90.4% to RMB6 million from RMB52.5 million in the second quarter. For the SaaS solution business, revenue increased by 38.8% sequentially to RMB3.2 million. The cost loop GMV of new property was RMB9.3 billion with 1,815 new property projects served. The closed loop resale property transaction GMV was RMB5.9 billion.

- Expected revenue in Q4 to be between RMB138 million and RMB150 million. - Faced great uncertainty in Q4 performances due to the downward trend of the industry environment.

- Real estate market continues to decline, impacting business. - Developer credit risk intensifies as they enter peak repayment season. - Digital transformation in real estate industry is at early stage with unstable competition landscape. - Regulatory changes in real estate market could affect operations.

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