(Yicai Global) March 26 -- Phoenix Tree Holdings, the operator of Chinese co-living platform Danke Apartment, expects first-quarter revenue to dip from the previous three months because of a decline in the number of occupied rental units due to the coronavirus epidemic.
Revenue will likely come in at between CNY1.9 billion and CNY2 billion (USD268 million and USD282 million) in the period ending this month, the Beijing-based company said yesterday in its first earnings report as a listed business. In the fourth quarter income doubled to CNY2.13 billion.
"The company expects a decrease in the occupancy rate as residents delay their return to work, which will result in an adverse impact on the company's revenues," it said. To offset that, Phoenix Tree has pared inventory and trimmed operating costs by slowing renovation work and by cutting management pay.
Phoenix Tree "currently expects the impacts of the outbreak to be short-term given some early signs of recovery in China, and remains confident in the long-term outlook of its industry and growth prospects," it added.
The company's shares [NYSE:DNK] were unchanged at USD7.65 in New York yesterday after logging a historic low on March 20. In January, Phoenix Tree became just the second Chinese long-term apartment leaser to go public in the US, pricing its shares at USD13.50 each and raising USD130 million.
Phoenix Tree maintained strong growth momentum last year as the company's further expansion in 13 Chinese cities contributed to a significant revenue increase, Chief Executive Gao Jing wrote in the earnings report.
For the year ended Dec. 31, revenue nearly tripled to CNY7.1 billion from a year earlier. Its net loss widened to CNY3.44 billion from CNY1.38 billion in 2018.
Founded in 2015, Danke Apartment targets young professionals with shared lodgings in Chinese cities. By the end of last year, the number of apartments it managed had climbed 85 percent to 438,300.
Editor: Emmi Laine