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Hello. And thank you for standing by for Leju’s First Half 2021 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. Please note that today’s conference call is being recorded. [Operator Instructions]
I would now like to turn the meeting over to your host for today’s conference, Ms. Michelle Yuan, Leju Deputy CFO. Please go ahead, ma’am.
Hello, everyone. And welcome to Leju’s first half 2021 earnings conference call. Today we will update you regarding our financial results for the first half year ended June 30, 2021. If you would like a copy of the earnings press release or would like to sign up for our e-mail distribution list, please go to our IR website at ir.leju.com.
Leading the call today is Mr. Geoffrey He, our CEO, who will review operational highlights for the first half 2021. I will then discuss the financial results in more detail. We will then open the call to questions.
Before we continue, please allow me to read you Leju’s Safe Harbor statement. Some of the statements during this conference call are forward-looking statements made under Safe Harbor provisions of Section 21E of the Securities Exchange Act of 1934 as amended.
Forward-looking statements are subject to risks and uncertainties that 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.
You are encouraged to review the forward-looking statements section of our annual report filed with the SEC for additional information concerning factors that could cause those differences.
Leju does not undertake any obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise except as required by applicable law.
Our earnings press release and this call include discussions of unaudited GAAP financial information, as well as some unaudited non-GAAP financial measures. Our press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. Please note that, unless otherwise stated all figures mentioned during this conference call are in U.S. dollars.
I will now turn the call over to Leju’s CEO, Geoffrey He. He, please go ahead.
Thanks everyone for joining us on today’s call. In the first half of 2021 with the tightening regulations in China’s real estate industry. The pressure on real estate developers operations and sales continue to increase.
Against this challenging backdrop, our overall business was able to maintain steady growth. However, due to the deterioration of the credit status of one of our real estate developer clients, our bad debt provision for the first half of this year increased by US$48.9 million compared to the same period of 2020, resulting in a loss for the first half of this year.
With the support of the strategic cooperation between our controlling shareholder E-House (China) Enterprise Holdings Limited and Alibaba Group Holding Limited, we held a series of online promotional events including The 2nd Online Real Estate Fair and June 18 Top Pick House Festival on the Leju Housing platform and Leju Flagship Store on Tmall Haofang.
Subsequently, we jointly -- we join hands with Tmall Haofang to create a new smart transaction ecosystem for the real estate sector and launched the four product series, including our smart coupons, smart verification, smart project opening and the smart subscription services to help real estate enterprises conduct efficient project field service, project opening services and transactional services. The success of these events and the launch of our Leju Flagship Store on Tmall Haofang have greatly improved the operational capabilities of Leju’s advertising and e-commerce businesses.
At the same time, our top down approach has pioneered a new model based on develop clients official flagship stores on Tmall Haofang, helping them kick off their digitalization from zero to 1.
In the second half of the year, we will firmly seize the opportunities created by the digitalization of the real estate marketing and deepen cooperation with developers as we strive to expand our advertising business and develop new e-commerce business models.
At the same time, we will continue to focus on platform construction and content creation and make efforts to improve user growth, optimize user experience and stickiness and further consolidate Leju’s influence among industry media. We will also continue to strengthen our team, further optimize our organizational structure and improve operational efficiency in order to lay a solid foundation for our future development
Now, I will turn the call over to our Deputy CFO, Ms. Michelle Yuan, who will reveal our financial highlights for the first half of 2021.
Thank you, Geoffrey. For the first half 2021 we reported total revenue of $301.1 million, an increase of 8% from same period last year. Our e-commerce revenue increased by 13% to $231.4 million for the first half 2021 as a result of the increase in the number of discount coupons redeemed, partially offset by a decrease in the average price per discount coupon redeemed. E-commerce services contributed 77% of total revenues for the first half 2021.
Our online advertising revenues contributing 23% of total revenues decreased by 6% to $69.3 million for the first half 2021 due to a decrease in property developers demand for online advertising, while our listing revenues increased by 18% to $0.4 million as a result of an increase in secondary real estate brokers demand for the first half of 2021.
Loss from operations was $49.9 million for the first half 2021, compared to income from operations of $1.2 million for the second quarter of last year, primarily due to bad debt provision, which was increased by $48.9 million compared to the same period of 2020.
Net loss attributable to Leju shareholders was $47.8 million for the first half 2021, compared to net income attributable to Leju shareholders of $1.5 million for the same period of 2020.
Non-GAAP loss from operations was $43.4 million for the first half 2021, compared to non-GAAP income from operations of $8.3 million for the same period last year. Non-GAAP net loss attributable to Leju shareholders was $42.6 million for the first half 2021, compared to non-GAAP net income attributable to Leju shareholders of $7.2 million for the same period last year.
As of June 30, 2021, our cash and cash equivalents balance was $328 million. Our net cash flows generated in operating activities with -- for the first half 2021 were $38.8 million, mainly attributable to provision for allowance for doubtful accounts of $51.7 million and a decrease in accounts receivable of $46.5 million, partially offset by non-GAAP net loss of $41.7 million and increase in prepaid expenses and other current assets of $15.2 million.
Looking ahead, given the current macroeconomic situation and our prudent operating model, we estimate that our second half of 2021 total revenues will be approximately between $300 million and $310 million, which relatively flat compared to the first half of 2021. Please note, this forecast reflects our current and preliminary view, which is subject to change.
This concludes our prepared remarks. We’re now ready to take your questions. Operator, please go ahead.
[Operator Instructions] We have a first question coming from the line of Marco Rodriguez from Stonegate Capital. Please go ahead.
Good morning, everybody. Thank you -- or good evening. Thank you for taking my questions. I was wondering…
Please go ahead.
…if you can talk a little bit more -- yes. Hi. I was wondering if you could talk a little bit more about the bad debt provision that you took in this quarter, if you can just kind of walk us through when that sort of happened or when it became apparent that this was going to be something that you needed to do?
Okay. Let me -- as you know that the overall industry actually was not so good from -- things last year and some certain clients, one of our major clients actually encountered some deterioration of their credit. So we actually have to take this provision.
I can give you some notice that that as of June 13th, this client has the total account receivables and the note receivables were actually RMB$672 million, compared comprised of RMB220 million in note receivables and RMB152 million I account receivables. The credit rating of note receivables was higher than account receivables. So this quarter we take bad debt provision was RMB324 million. Is that okay?
Got you. Yes. That’s very helpful. And in terms of just the overall real estate landscape and the -- these impacts that you saw for this particular client, are there any other customers or clients that that you’re monitoring closely in terms of their credit quality?
So far we actually -- that we -- our clients -- excluding this client, our other clients base are very diversified and none of them take a significant portion of our revenue source. So from the base side, I think, our clients base is quite safe. That’s the first one.
The second one is that, we already noticed that some clients, some developers and may have even and -- or their -- some of their products may have some security problem. So, probably, we will stop cooperation with them. So, currently, our -- we checked all the projects we cooperate with all the clients and currently I think we -- all the projects we are currently cooperating with them very safe.
Got it. Very helpful. And in your prepared remarks, you mentioned, tightening regulations as it relates to the real estate industry. I was wondering if you could just kind of put some broad strokes on how you see that evolving. And then if you could, there’s obviously been a lot of news about the regulatory environment in general in China and changing regulations as it relates to internet-related operations. I was wondering, if you could also, please talk a little bit about how you see those trends impacting Leju?
Okay. First of all, I think that the revelation of the real estate industry will be, if not further tightening, will be consistent in the coming future. So the government, I think, the policy, the core of their policy is maintained house price.
In the past or maybe half a year, I think, you have seen in major cities and in their downtown areas, most projects that put rapid sells the government put limits price, which caused thousands of buyers, they want to buy the product. So the -- this kind of situation actually is getting changed because the government imposed the strict policies over the pricing, even on the primary sector and the secondary sector.
So, I think, in the coming future, the market price will encounter some pressure and which we think is not good for developers, but maybe will create some new opportunities for Leju because we are doing digital marketing for them. If the developers they don’t feel pressure on selling houses, so the opportunity for Leju is small. So I think when the market goes down, they will leave some new opportunities for Leju to promote the digital marketing. That’s the second one.
The third one is that we think in the coming future, as you said, internet, actually the government imposed a series of policies over the entertainment side. But for the e-commerce side, I think, most -- actually now most home buyers, they are getting on us to get house informations and the stricter industry policies situations also will push the developers to invest more online to find new home buyers. So which I think will be a new opportunity for us, because we were still focusing on how to create the digital marketing capabilities for these developers, which is, I think, it’s a new market for us.
Excellent. Very helpful. And in terms of the online promotional events, you had this last quarter, The 2nd Online Real Estate Fair and the June Top Pick House Festival, can you just talk a little bit about how those performed versus your expectations? And then if you could also talk a little bit about the Leju flagship store, how that is also performing?
Okay. Previously, actually, well, last year, we actually did the first online house fair, mainly on the Leju platform. This year, actually, we put this fair on both Leju platform and Tmall platform. As -- Tmall has one of the leading e-commerce platform in China, their traffic is much -- is larger than the Leju. This will help developers when they joining our online fair, so we’ll get more traffic. This is the first one.
The second one is that actually, when we asked developers, when they join our online fairs, they may give some additional discount to the online buyers, which will -- actually will encourage the sales online. So the result actually is quite satisfactory and the joining of the Tmall house will increase our traffic value and also will increase the influence of our online fair.
Excellent. And then if you could just maybe discuss what other sort of promotional activities do you have planned for the second half 2021?
Actually, we -- that traditional promotion event of Tmall is November 11th that we got a sponsor Yi [ph]. But I think we will catch up this opportunity and also we -- for the real estate industry, the December is usually the hot season for the home buyer to buy the houses. So we will also do -- December 12th. So we’ve got a sponsor. So we will catch up these two points as our online promotion time slot.
So during that period, I’d say, we both with -- it’s kind of we will encourage more developers to put their projects online and we also will set up a new online platform to host these projects and also we will encourage more developers now -- they are now more willing to give special discounts when doing this promotion events.
I think we will be very -- we also will create some innovational set pools [ph]. It’s kind of online games like that, so to encourage more buyers to get this online house information and even get more discounts from online to encourage them to buy our house onlines. We are -- currently…
Thank you very much.
…we are still…
And I appreciate.
I think our marketing plan. Yeah.
Okay. Thank you for your time. I appreciate it.
Okay. Thank you.
[Operator Instructions] We do not have any further questions at this moment. I would like to hand the conference back to our host. Please take over, ma’am.
This concludes today’s call. If you have any follow up questions, please contact us at the numbers or e-mails provided on our earnings release and on our website. Thank you.
Thank you. That does conclude our conference for today. Thank you all for your participation. You may disconnect now.