Stock Update: June 15, 2023

In today’s blog post, we’ll be taking a closer look at the recent financial results of five companies I own stocks in. Read on to find out how Aurora Mobile Limited, 17 Education & Technology Group Inc., Kaival Brands, SeaChange, and NIO Inc. performed in the first and second quarter of fiscal year 2023

Aurora Mobile Limited Announces Q1 2023 Financial Results

Aurora Mobile Limited, a leading provider of customer engagement and marketing technology services in China, announced its unaudited financial results for Q1 2023. The company reported a decrease in revenues, cost of revenues, gross profit, and total operating expenses. Revenues were RMB65.4 million (US$9.5 million), a decrease of 23% year-over-year, and the net loss was RMB15.2 million (US$2.2 million) compared to a net loss of RMB30.9 million for the same quarter last year.

Despite the challenging macro environment, Mr. Weidong Luo, Chairman and CEO of Aurora Mobile, highlighted that the company has seen good momentum in revenue growth, especially from Developer Services, in Q2 2023. They successfully carried on with their strict cost management strategy and cautious hirings, flattened their management structure, resulting in reduced overall expenditures.

My personal thoughts on the financial results of Aurora Mobile are optimistic. The company is adapting to the new market conditions brought about by the pandemic by implementing cost-cutting strategies and agile operations. I believe that Aurora Mobile’s Developer Services has the potential for growth in the long term, especially with the increasing demand for digital engagement and marketing services.

Considering that Aurora Mobile’s Q2 2023 results have shown momentum in revenue growth and their cost management strategies are working well, I would recommend buying the stock. The market may have overreacted to their Q1 2023 financial results, and this could be an opportunity for investors to buy shares at a discounted price.

Investing in 17EdTech: Should You Buy or Sell?

17 Education & Technology Group Inc. (NASDAQ: YQ), a leading education technology company in China, has announced unaudited financial results for the first quarter of 2023. The company recorded a year-over-year decrease in net revenues by 96.0% from RMB233.4 million to RMB9.3 million and a net loss of RMB92.5 million in Q1 2023 compared to a net loss of RMB24.8 million in Q1 2022. Adjusted net loss (non-GAAP) was RMB64.0 million (US$9.3 million), compared to adjusted net income (non-GAAP) of RMB9.9 million in the first quarter of 2022. However, the CEO of the company, Andy Liu, said that despite the COVID-19 outbreak causing delays in their projects, their in-school SaaS business is advancing. The company’s teaching and learning SaaS business has won multiple projects, indicating competitiveness. Based on the negative news and increasing losses, it is recommended to sell the stock.

Kaival Brands Poised for Growth with New Agreements and Core BIDI® Stick Distribution Business

Kaival Brands Innovations Group, Inc. (NASDAQ: KAVL) recently announced new broker and distribution agreements that are expected to help increase the reach of its core BIDI® Stick distribution business. The BIDI® Stick is an electronic nicotine delivery system (ENDS) manufactured by Bidi Vapor, LLC, which contracts the exclusive distribution rights to Kaival Brands. Kaival Brands is optimistic about its potential for growth due to these agreements, as larger retail accounts will lead to more orders for BIDI® Stick.

In addition, the company believes that the US Food and Drug Administration’s (FDA) enforcement efforts against non-compliant ENDS products create opportunities for BIDI® Stick as a compliant alternative. The company’s belief is that this strategy is expected to help secure new orders for BIDI® Stick.

Kaival Brands is also looking to the future, with the recent acquisition of transformative intellectual property that promises new opportunities. The company also added independent board members who are expected to bring value to the company.

Overall, I recommend buying the stock for investors looking for potential growth opportunities. The recent agreements and FDA enforcement efforts create opportunities for Kaival Brands, and the transformative intellectual property acquisition promises even more potential for the future.

SeaChange Reports Q1 2024 Results: Revenue Up 4%, Margin Expansion, and Profitable Outlook

SeaChange International, Inc. reported its financial and operational results for fiscal Q1 ended April 30, 2023. SeaChange is a leading provider of video delivery, advertising, streaming platforms, and emerging Free Ad-Supported Streaming TV services (“FAST”) development. The company generated $7 million in total revenue, marking a 4% increase YoY, driven by a 40% increase in recurring service revenue. The company also achieved significant margin expansion and cost controls, resulting in lower net income losses YoY.

During Q1, SeaChange secured two major customer renewals, generating seven-figure service level agreements. The company also launched two new StreamVid customers, including a premium subscription service for a major content owner in the Middle East and an event-based streaming service for a sports event organizer in the U.S. Additionally, SeaChange partnered with Source Digital and Fox Sports Mexico by initiating Source Digital’s interactive metaverse experience and launching Fox Sports Mexico onto the Roku platform.

SeaChange expanded its partnerships for the VIDAA Free platform and made product enhancements, including personalization options for FAST channels, improved ad targeting, cost optimizations for FAST bouquet customers, and ongoing software upgrades for streamlined support. Gross margin expanded to 59%, up from 48% in the fiscal Q1 2023, and adjusted EBITDA loss decreased more than $1 million, representing an 83% improvement from the year-ago period.

Considering the positive outlook and the company’s achievements, I recommend buying SeaChange’s stock. The Q1 results show that SeaChange is making significant progress in expanding its partnerships and revenue streams. The company’s efforts towards innovation and cost optimization provide a strong foundation for profitability in the coming years. SeaChange has a promising future and is a solid investment option for growth-oriented investors.

NIO Inc. Announces Q1 2023 Financial Results

NIO Inc., a leading company in the premium smart electric vehicle market, has released its unaudited financial results for Q1 2023. The company had quarterly revenues equaling RMB10,676.5 million (US$1,554.6 million) and delivered 31,041 units during the period.

The first quarter of 2023 saw a 20.5% increase in vehicle deliveries compared to the same period last year. However, the vehicle sales saw a decrease of 0.2% compared to Q1 2022 and a decrease of 37.5% compared to Q4 2022. The gross margin also saw a significant decline from 14.6% in Q1 2022 to 1.5% in Q1 2023, resulting in a decrease of gross profit by 88.8% YoY.

In contrast to the decrease in sales, total revenues for Q1 2023 increased by 7.7% compared to the same period last year despite a decrease of 33.5% compared to Q4 2022. The loss from operations increased by 133.6% from the first quarter of 2022 to RMB5,111.8 million (US$744.3 million) in Q1 2023.

In my opinion, NIO Inc.’s Q1 2023 financial results are not very positive, as the company’s vehicle sales have decreased and its gross margin and profit have also declined significantly. Given the challenging circumstances of electric vehicle production and supply chain issues, this result is not unexpected. However, the positive growth in total revenues is an encouraging sign and could indicate NIO’s recovery in the near future.

Based on the financial results of Q1 2023, I would recommend holding the stock rather than recommending buying or selling as NIO Inc. has shown a mix of both positive and negative results. The company has a promising future, and I believe it will overcome these obstacles with its continued innovation in the smart electric vehicle market.