Shares of the Lizhi Inc. (LIZI) stock were declining in the current market today on December 27, 2021. LIZI stock price saw a decline of 2.0% to reach $1.71 a share at the time of this writing. The trading volume on the last check was 1,228,108, far higher than the average trading volume. Let’s deep dive to understand the reason behind this decline.
What’s Happening?
The company announced the In-car Audio partnership agreement with Luxury Smart Electric Vehicle Brand HiPhi. The company has already integrated its in-car audio products into the in-car entertainment systems of HiPhi vehicles. In the start of the current market the LIZI stock was bullish but then became bearish.
The management is delighted to partner with HiPhi as it is executing its strategy of a broad range of usage scenarios of its in-car products. This partnership will not only leverage the in-car entertainment experience for HiPhi vehicle owners but also increase the audience for LIZHI’s outstanding podcast content.
Recently LIZHI podcast introduced new functions such as voice search and voice control for in-car use. The company is putting great effort to enhance the interactive audio user experience of its audio products.
Financial View of LIZI stock:
On November 30, 2021, LIZI announced third quarter 2021 financial results according to which
- Net revenues increased by 40% to reach RMB504.8 million in the third quarter of 2021 as compared to the same quarter of last year.
- The company reported RMB353.6 million cost of the revenue in the recently reported quarter. These costs increased by 31% as compared to RMB270.9 million in the same quarter of last year.
- The gross profit of the LIZI stock was RMB151.3 million in the third quarter of 2021. The gross profit was RMB90.6 million in the same tenure as the previous year.
- The gross margin in the recently reported quarter was 30% while it was 25% in the third quarter of 2020. The non-GAAP gross margin was 31% in the third quarter of 2021.
- LIZI spent 3 million in operating expenses in the third quarter of 2021. This represents an increase of 91% in operating expenses from the same tenure of the previous year.
- LIZI stock suffered a net loss of RMB37.1 million in the third quarter of 2021, while this loss was RMB6.1 million in the same quarter of last year.
Wrap Up:
LIZI stock declined despite the announcement of a partnership agreement by the company with HiPhi. The progress in 2021 was not satisfactory as LIZI stock lost almost 57% year to date.
