The American depositary shares (ADS) of Dada Nexus (DADA -1.93%) zoomed higher on a busy Tuesday for the Chinese company. A combination of factors powered those ADS nearly 14% higher on the day.
The first, and clearly most influential, factor in Dada's Tuesday triumph was earnings. The food delivery company published its first-quarter figures after market close on Monday, revealing that it grew revenue 52% year over year to 1.67 billion yuan ($261 million). That was on the back of gross merchandise volume (GMV) that rose 79% to just over 28 billion yuan ($4.4 billion).
Due to higher expenses, Dada's non-GAAP (adjusted) net loss deepened to just over 618 million yuan ($97 million) -- 0.65 yuan ($0.10) per share -- from the nearly 194 million yuan ($30 million) shortfall of the year-ago quarter.
Dada is expecting higher revenue growth in its current quarter (Q2) of 72% to 78%. This was likely a major impetus behind the bull run on the stock Tuesday. The company did not provide a profitability forecast.
Another factor in Dada's popularity on the day is undoubtedly the share buyback program it's launching. The company will repurchase up to $150 million worth of its ADS over the next 12 months to be funded with cash on hand.
Dada's revenue growth momentum is very encouraging, and the company operates in a massive, underserved country. While investors should keep an eye on that still very red bottom line, Dada's prospects are nevertheless very bright.