Quhuo Ltd. Q1 FY2021 earnings call

• Leslie Yu mentioned that the company achieved strong growth momentum in Q1 with revenue up 116% year-over-year. - The on-demand food delivery business saw increased demand during the spring festival, with efforts made to stabilize rider teams and recruit additional riders, though there was a loss this quarter due to seasonal labor cost volatility. - Housekeeping and accommodation solutions revenues increased 51x year-over-year after integrating Lailai, serving large international hotel chains and B&Bs. - Mobility businesses, including shared-bike and ride-hailing, had revenues up 455% year-over-year with expansion into more cities. - The multi-scenario deployment initiative saw progress with services provided to 1,066 business across 122 cities, 48 cities offering 2 or more types of services, registered workers reaching nearly 240,000, and cumulative workers engaged in 2 or more jobs at 15,500.

For the first quarter of 2021, total revenues were CNY 846.5 million. Revenues from on-demand food delivery solutions were CNY 815.4 million, an increase from CNY 389.3 million in the first quarter of last year, representing a year-over-year growth. Revenues from mobility service solution were CNY 17.1 million, a significant increase from CNY 3.1 million in the first quarter of 2020. Revenues from housekeeping and accommodation solutions were CNY 13 million, a substantial increase from CNY 0.2 million in the first quarter of 2020. The on-demand food delivery business contributed the largest portion to total revenue.

• Leslie Yu stated that going into Q2, with migrant workers returning and labor shortages easing, cost structure will normalize and profitability improve in Q2 and rest of 2021. - Wenting Ji mentioned both on-demand food delivery, mobility service solution, and housekeeping solution business lines are expected to achieve significant growth for the rest of the year. - Revenue per order for food delivery business is expected to be relatively stable around the first quarter's level of around RMB 7.6 per order.

• There is discussion about social security policies for gig economy workers. However, the central government is developing a new type of social security for gig economy staff, and currently, the company already provides commercial insurance like third-party and labor injury insurance for riders, so short-term impact on margins is not significant.

Q: Can the food delivery business gross margin go back into positive and last for the remainder of the year?

A: Yes, it turned to the positive and Leslie Yu believes it will last for the rest of the year.

Q: About Multi-scenario Deployment, how efficient is the workforce base and what investment is needed?

A: Leslie Yu mentioned the technology platform helps manage multi-scenario deployment by matching workforce skill sets with time and job requirements through online and on-ground training.

Q: Thoughts on capital allocation strategy like buyback?

A: Leslie Yu said the live service market in China is large and Quhuo has a predominant position, and time is needed to further prove to the capital market.

Q: Outlook for on-demand food delivery revenue for the rest of the year and revenue per order?

A: Wenting Ji said both business lines will achieve significant growth, and revenue per order is expected to be relatively stable around RMB 7.6 per order.

Q: Take on social security policy for food delivery workers and impact on margins?

A: Zhen Ba said the central government is developing a new social security for gig economy staff, and the company already provides commercial insurance, so not a big impact on margins in the near future