Exhibit 99.1

Danke Announces Unaudited First Quarter of 2020

Financial Results

BEIJING, China, June 10, 2020 /PR Newswire/ — Phoenix Tree Holdings Limited (“Danke” or the “Company”) (NYSE: DNK), one of the largest co-living platforms in China with the fastest growth, today announced its unaudited financial results for the first quarter ended March 31, 2020.

FINANCIAL AND OPERATING HIGHLIGHTS

All comparisons are made on a year-over-year (“yoy”) basis.

For the Quarter Ended March 31, 2020

· Revenues increased 62.5% to RMB1,939.6 million (US$273.9 million) from RMB1,193.8 million.

· Net loss was RMB1,234.4 million (US$174.3 million) compared to RMB816.2 million. Net margin improved by 4.8 percentage points.

· Adjusted net loss (1) was RMB978.9 million (US$138.2 million) compared to RMB799.1 million. Adjusted net margin improved by 16.4 percentage points.

· Adjusted EBITDA (2) was negative RMB578.3 million (US$81.7 million) compared to negative RMB549.6 million. Adjusted EBITDA margin improved by 16.2 percentage points.

· The number of apartment units operated increased 46.8% to 419,030 units as of March 31, 2020, from 285,349 units as of March 31, 2019.

FINANCIAL RESULTS

For the Quarter Ended March 31, 2020

Revenues were RMB1,939.6 million (US$273.9 million) in the first quarter of 2020, representing an increase of 62.5% yoy from RMB1,193.8 million in the first quarter of 2019. The revenue growth was primarily due to an increase in opened apartment units through organic growth and, to a lesser extent, an increase in opened apartment units through the acquisition of Aishangzu (3) in March 2019. The Company had 415,459 opened apartment units as of March 31, 2020, and 270,337 opened apartment units as of March 31, 2019.

(1) Adjusted net loss represents net loss before share-based compensation, incentives for apartment sourcing, and impairment of long-lived assets. Adjusted net loss is a non-GAAP financial measure. See the sections entitled “Use of Non-GAAP Financial Measures” and “Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures” for more information about the non-GAAP measures referred to in this results announcement.

(2) Adjusted EBITDA represents EBITDA before share-based compensation, incentives for apartment sourcing, and impairment of long-lived assets. EBITDA represents net loss before depreciation and amortization, interest expenses, interest income, and income tax benefit (expense). Both adjusted EBITDA and EBITDA are non-GAAP financial measures. See the sections entitled “Use of Non-GAAP Financial Measures” and “Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures” for more information about the non-GAAP measures referred to in this results announcement.

(3) Hangzhou Aishang Danke Technology Co., Ltd (“Aishangzu”), a residential rental apartment operator that primarily operated in Hangzhou.

Operating expenses were RMB3,101.6 million (US$438.0 million) in the first quarter of 2020, representing an increase of 58.5% yoy from RMB1,957.0 million in the first quarter of 2019.

· Rental cost increased 67.5% yoy to RMB1,955.7 million (US$276.2 million) from RMB1,167.6 million primarily due to an increase in the number of opened apartment units.

· Depreciation and amortization increased 67.0% yoy to RMB328.3 million (US$46.4 million) from RMB196.5 million primarily due to an increase in the number of apartment units renovated and opened.

· Other operating expenses increased 105.6% yoy to RMB250.6 million (US$35.4 million) from RMB121.9 million. The increase was primarily attributable to (i) a loss on early termination of rental agreements due to the early termination of certain leases with property owners, which was primarily due to the adverse impact of the COVID-19 pandemic and resulted in a loss for the related leasehold improvements and deposits to the property owners for the first quarter of 2020, (ii) an increase in cost of services as the Company operated more apartment units, and (iii) an increase in incentives for apartment sourcing as the Company had more opened apartment units and recorded more amortized commissions and lead generation fees for sourcing such apartments in the first quarter of 2020. The following table sets forth a breakdown of other operating expenses, expressed as an absolute amount and as a percentage of revenues, for the periods indicated:

	Three Months Ended March 31,
	2019		2020
	RMB	%	RMB	US$	%
	(in thousands, except for percentages)
Other operating expenses:
Cost of services	56,603	4.7	76,070	10,743	3.9
Payroll cost	36,877	3.1	41,514	5,863	2.1
Incentives for apartment sourcing	15,628	1.3	30,008	4,238	1.5
Other expenses	12,776	1.1	32,315	4,563	1.8
Loss on early termination of rental agreements	—	—	70,671	9,981	3.6
Total	121,884	10.2	250,578	35,388	12.9

· Pre-opening expense decreased 89.0% yoy to RMB9.2 million (US$1.3 million) from RMB83.3 million primarily due to a significantly lower number of pre-opening apartment units during the quarter compared to the prior year period. During the first quarter of 2020, in response to the COVID-19 outbreak, the Company significantly slowed down the rate of sourcing new apartments.

· Sales and marketing expenses decreased 9.7% yoy to RMB204.0 million (US$28.8 million) from RMB225.9 million. The decrease was primarily attributable to a decrease in advertising expenses due to the Company’s proactive actions to control costs and expenses. The result was partially offset by: (i) an increase in incentives for apartment renting, and (ii) an increase in payroll cost for sales and related support teams as a result of the recognition of the share-based compensation (“SBC”) expenses upon the completion of the Company’s initial public offering (“IPO”) in January 2020. The following table sets forth a breakdown of sales and marketing expenses, expressed as an absolute amount and as a percentage of revenues, for the periods indicated:

	Three Months Ended March 31,
	2019		2020
	RMB	%	RMB	US$	%
	(in thousands, except for percentages)
Sales and marketing expenses:
Advertising expenses	120,264	10.1	73,176	10,334	3.8
Payroll cost	58,665	4.9	67,697	9,561	3.5
Incentives for apartment renting	37,434	3.1	56,032	7,913	2.9
Other expenses	9,557	0.8	7,057	997	0.3
Total	225,920	18.9	203,962	28,805	10.5

· General and administrative expenses increased 142.0% yoy to RMB273.7 million (US$38.7 million) from RMB113.1 million primarily due to the recognition of a substantial amount of SBC expenses upon the completion of the Company’s IPO in January 2020 and a majority of which was allocated to general and administrative expenses.

· Technology and product development expenses increased 25.6% yoy to RMB61.0 million (US$8.6 million) from RMB48.6 million as a result of SBC expenses but partially offset by the Company’s proactive cost and expense controls.

· Impairment of long-lived assets were RMB19.1 million (US$2.7 million) in the first quarter of 2020 compared to nil in the prior year period. The recognition of the impairment was due to the underperformance of certain apartment units relative to their projected operating results during the Company’s impairment test in the first quarter of 2020. The underperformance of these apartment units was primarily caused by the impact of COVID-19 pandemic.

· SBC expenses included in the operating expenses items above were RMB206.3 million (US$29.1 million) in the first quarter of 2020 compared to RMB1.5 million in the prior year period. Because the exercisability of the share options granted by the Company was conditional upon the completion of its IPO, the Company did not recognize any SBC expenses related to the share options granted beforehand. Upon the completion of its IPO, the Company immediately recognized a substantial amount of SBC expenses associated with vested option awards in the first quarter of 2020. The following table sets forth a breakdown of SBC expenses, expressed as an absolute amount and as a percentage of revenues, for the periods indicated:

	Three Months Ended March 31,
	2019		2020
	RMB	%	RMB	US$	%
	(in thousands, except for percentages)
SBC expenses included in:
Other operating expenses	—	—	14,320	2,022	0.7
Sales and marketing expenses	—	—	18,771	2,651	1.0
General and administrative expenses	1,481	0.1	140,943	19,905	7.2
Technology and product development expenses	—	—	32,267	4,557	1.7
Total	1,481	0.1	206,301	29,135	10.6

As a result of the above, operating loss was RMB1,162.1 million (US$164.1 million) in the first quarter of 2020 compared to RMB763.2 million in the first quarter of 2019.

Interest expenses were RMB84.7 million (US$12.0 million) in the first quarter of 2020, representing an increase of 15.2% yoy from RMB73.5 million in the first quarter of 2019. The increase was attributable to an increase in interest expenses related to rent financing and additional bank loans. The following table sets forth a breakdown of interest expenses, expressed as an absolute amount and as a percentage of revenues, for the periods indicated:

	Three Months Ended March 31,
	2019		2020
	RMB	%	RMB	US$	%
	(in thousands, except for percentages)
Interest expenses
Interest expenses related to rent financing	50,066	4.2	56,151	7,930	2.9
Other interest expenses	23,454	2.0	28,578	4,036	1.5
Total	73,520	6.2	84,729	11,966	4.4

Net loss was RMB1,234.4 million (US$174.3 million) in the first quarter of 2020 compared to RMB816.2 million in the first quarter of 2019. Net margin improved by 4.8 percentage points to negative 63.6% from negative 68.4%. Adjusted net loss was RMB978.9 million (US$138.2 million) in the first quarter of 2020 compared to RMB799.1 million in the prior year period. Adjusted net margin improved by 16.4 percentage points to negative 50.5% from negative 66.9%.

Net loss per basic and diluted share was RMB0.87 (US$0.12) compared to RMB3.95 in the prior year period. Adjusted net loss per basic and diluted share (4) was RMB0.69 (US$0.10) compared to RMB3.88 in the prior year period.

EBITDA was negative RMB833.8 million (US$117.8 million) in the first quarter of 2020 compared to negative RMB566.7 million in the prior year period. EBITDA margin improved by 4.5 percentage points to negative 43.0% from negative 47.5%. Adjusted EBITDA was negative RMB578.3 million (US$81.7 million) in the first quarter of 2020 compared to negative RMB549.6 million in the prior year period. Adjusted EBITDA margin improved by 16.2 percentage points to negative 29.8% from negative 46.0%.

Cash and restricted cash were RMB4,226.4 million (US$596.9 million) as of March 31, 2020.

KEY OPERATING METRICS

	As of
	March 31,	June 30,	September 30,	December 31,	March 31,
	2019	2019	2019	2019	2020
Number of cities in which the Company operated	9	10	13	13	13
Number of apartment units the Company operated (by status):
Pre-opening apartment units (1)	15,012	5,160	14,835	7,081	3,571
Opened apartment units (2)	270,337	341,213	391,911	431,228	415,459
Total	285,349	346,373	406,746	438,309	419,030
Number of apartment units the Company operated (by city):
Beijing, Shanghai and Shenzhen	176,746	192,268	213,866	223,753	207,046
Other cities	108,603	154,105	192,880	214,556	211,984
Total	285,349	346,373	406,746	438,309	419,030

(4) Adjusted net loss per basic and diluted share is a non-GAAP financial measure. See the sections entitled “Use of Non-GAAP Financial Measures” and “Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures” for more information about the non-GAAP measures referred to in this results announcement.

(1) Represent apartment units that are within the pre-opening period (i.e., the period between the effective date of the lease with the property owners and the date when the relevant apartment units achieve ready-to-move-in status).

(2) Represent apartment units that achieve ready-to-move-in status, including those rented out and to be rented out.

	Three Months Ended
	March 31,
	2019	2020
	RMB	RMB	US$
Average revenues per rented-out unit per month (1)	2,225	2,015	285
Average leasing cost per unit per month (2)	1,599	1,498	212

(1) Represents the revenues recognized in the period presented divided by rented-out unit days (i.e., the simple sum of the number of days the Company rented out each apartment unit during a particular period) in such period multiplied by the average number of days per month (assuming 30 days per month).

(2) Represents leasing cost (i.e., the sum of rental cost and pre-opening expense) recorded in the period presented divided by total unit days (i.e., the simple sum of the number of days the Company operated each apartment unit during a particular period) in such period multiplied by the average number of days per month (assuming 30 days per month).

	As of
	March 31,		June 30,		September 30,		December 31,		March 31,
	2019		2019		2019		2019		2020
Occupancy rate (1)	77.8	%	89.0	%	86.9	%	76.7	%	75.6	%

(1) Represents the aggregate number of rented-out apartment units as a percentage of the number of opened apartment units as of a given date.

USE OF NON-GAAP FINANCIAL MEASURES

The Company uses EBITDA, adjusted EBITDA, adjusted net loss, and adjusted net loss per basic and dilute share, each a non-GAAP financial measure, in evaluating its operating results and for financial and operational decision-making purposes. The Company believes that these measures help the management identify underlying trends in the Company’s business that could otherwise be distorted by the effect of certain expenses and income that the Company includes in net loss. The Company believes that these measures provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects, and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.

EBITDA represents net loss before depreciation and amortization, interest expenses, interest income, and income tax benefit (expense). Adjusted EBITDA represents EBITDA before share-based compensation, incentives for apartment sourcing, and impairment of long-lived assets. Adjusted net loss represents net loss before share-based compensation, incentives for apartment sourcing, and impairment of long-lived assets. Share-based compensation represents compensation expenses in connection with the restricted shares granted to the Company’s co-founders and other share options granted to the Company’s employees. Incentives for apartment sourcing consist of commissions and lead generation fees related to apartment sourcing. The Company pays commissions and lead generation fees upfront when the relevant apartment is sourced and amortize such cost on a straight-line basis over the term of the lease with the property owner, which is generally four to six years. Impairment of long-lived assets represents the impairment loss of leasehold improvement, furniture and appliances due to the underperformance of certain apartment units.

The presentation of the non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company presents the non-GAAP financial measures because they are used by its management to evaluate operating performance and formulate business plans. The Company believes that the non-GAAP financial measures help identify underlying trends in its business, provide further information about its results of operations, and enhance the overall understanding of its past performance and future prospects.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. The Company’s non-GAAP financial measures do not reflect all items of income and expense that affect its operations and do not represent the residual cash flow available for discretionary expenditures. Further, the non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, both of which should be considered when evaluating performance. For more information on these non-GAAP financial measures, please see the table captioned “RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES” set forth at the end of this press release. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

EXCHANGE RATE INFORMATION

This announcement contains translations between Renminbi and U.S. dollars solely for the convenience of the reader. The translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi in this announcement were made at a rate of RMB7.0808 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on March 31, 2020. The Company makes no representation that the Renminbi or U.S. dollar amounts referred to in this announcement could have been or could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all.

PHOENIX TREE HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(All amounts in thousands, except for share and per share data)

	Three Months Ended March 31,
	2019		2020
	RMB		RMB		US$
Revenues	1,193,770		1,939,589		273,922
Operating expenses:
Rental cost	(1,167,613	)	(1,955,717	)	(276,200	)
Depreciation and amortization	(196,513	)	(328,264	)	(46,360	)
Other operating expenses	(121,884	)	(250,578	)	(35,388	)
Pre-opening expense	(83,321	)	(9,198	)	(1,299	)
Sales and marketing expenses	(225,920	)	(203,962	)	(28,805	)
General and administrative expenses	(113,109	)	(273,749	)	(38,660	)
Technology and product development expenses	(48,608	)	(61,037	)	(8,620	)
Impairment of long-lived assets	—		(19,144	)	(2,704	)
Operating loss	(763,198	)	(1,162,060	)	(164,114	)
Interest expenses	(73,520	)	(84,729	)	(11,966	)
Interest income	20,477		10,251		1,448
Loss before income taxes	(816,241	)	(1,236,538	)	(174,632	)
Income tax benefit	—		2,167		306
Net loss	(816,241	)	(1,234,371	)	(174,326	)
Income/(loss) attributable to non-controlling interest	59		(4,431	)	(626	)
Net loss attributable to Phoenix Tree Holdings Limited	(816,300	)	(1,229,940	)	(173,700	)
Accretion and modification of redeemable convertible preferred shares	(79,168	)	(28,692	)	(4,052	)
Net loss attributable to ordinary shareholders of Phoenix Tree Holdings Limited	(895,468	)	(1,258,632	)	(177,752	)

Net loss	(816,241	)	(1,234,371	)	(174,326	)
Other comprehensive loss:
Foreign currency translation adjustment	7,853		140,976		19,910
Comprehensive loss	(808,388	)	(1,093,395	)	(154,416	)
Comprehensive income/(loss) attributable to non-controlling interest	59		(4,431	)	(626	)
Comprehensive loss attributable to ordinary shareholders of Phoenix Tree Holdings Limited	(808,447	)	(1,088,964	)	(153,790	)
Net loss per share
—Basic and diluted	(3.95	)	(0.87	)	(0.12	)
Weighted average number of shares outstanding used in computing net loss per share
—Basic and diluted	226,458,958		1,453,806,974		1,453,806,974

PHOENIX TREE HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except for share and per share data)

	As of December 31,		As of March 31,
	2019		2020
	RMB		RMB		US$
ASSETS
Current assets:
Cash	685,277		826,396		116,709
Restricted cash	1,417,245		1,384,255		195,494
Accounts receivable, net	2,837		2,984		421
Advance to landlords	223,146		130,147		18,380
Prepayments and other current assets	636,618		625,712		88,369
Total current assets	2,965,123		2,969,494		419,373
Non-current assets:
Restricted cash	1,353,376		2,015,704		284,672
Property and equipment, net	3,167,537		2,881,057		406,883
Intangible asset, net	152,846		138,128		19,507
Goodwill	347,455		347,455		49,070
Deposits to landlords	608,475		577,093		81,501
Other non-current assets	410,703		371,436		52,457
Total non-current assets	6,040,392		6,330,873		894,090
Total assets	9,005,515		9,300,367		1,313,463
LIABILITIES
Current liabilities:
Short-term borrowings and current portion of long-term borrowings	4,554,362		4,654,298		657,312
Accounts payable	726,455		651,639		92,029
Rental payable	553,410		978,020		138,123
Advance from residents	976,348		906,061		127,960
Amount due to related parties	11,343		46,060		6,505
Deposits from residents	605,356		569,772		80,467
Accrued expenses and other current liabilities	495,484		544,820		76,944
Total current liabilities	7,922,758		8,350,670		1,179,340
Non-current liabilities:
Long-term borrowings, excluding current portion	669,250		665,250		93,951
Deferred income tax liabilities	7,042		4,875		688
Other non-current liabilities	27,419		6,074		859
Total non-current liabilities	703,711		676,199		95,498
Total liabilities	8,626,469		9,026,869		1,274,838
MEZZANINE EQUITY
Total mezzanine equity	6,106,203		—		—
SHAREHOLDERS’ (DEFICIT)/EQUITY
Ordinary Shares	35		248		35
Additional paid-in capital	—		7,122,529		1,005,893
Accumulated other comprehensive (loss)/income	(57,852	)	83,124		11,740
Accumulated deficit	(5,663,670	)	(6,922,302	)	(977,616	)
Total shareholders’ (deficit)/equity attributable to ordinary shareholders	(5,721,487	)	283,599		40,052
Non-controlling interest	(5,670	)	(10,101	)	(1,427	)
Total shareholders’ (deficit)/equity	(5,727,157	)	273,498		38,625
Total liabilities, mezzanine equity and shareholders’ (deficit)/equity	9,005,515		9,300,367		1,313,463

PHOENIX TREE HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(All amounts in thousands, except for share and per share data)

	Three Months Ended March 31,
	2019		2020
	RMB		RMB		US$
Net cash used in operating activities	(633,130	)	(121,440	)	(17,151	)
Net cash used in investing activities	(641,692	)	(178,196	)	(25,166	)
Net cash provided by financing activities	2,475,836		1,017,506		143,699
Effect of foreign currency exchange rate changes on cash and restricted cash	(71,886	)	52,587		7,427
Net increase in cash and restricted cash	1,129,128		770,457		108,809
Cash and restricted cash at the beginning of the period	2,465,534		3,455,898		488,066
Cash and restricted cash at the end of the period	3,594,662		4,226,355		596,875

PHOENIX TREE HOLDINGS LIMITED

RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES

(All amounts in thousands, except for share and per share data)

The table below sets forth a reconciliation of the Company’s net loss to EBITDA and adjusted EBITDA for the periods indicated:

	Three Months Ended March 31,
	2019		2020
	RMB		RMB		US$
Net Loss	(816,241	)	(1,234,371	)	(174,326	)
Add:
Depreciation and amortization	196,513		328,264		46,360
Interest expenses	73,520		84,729		11,966
Income tax benefit	—		(2,167	)	(306	)
Subtract:
Interest income	20,477		10,251		1,448
EBITDA	(566,685	)	(833,796	)	(117,754	)
Add:
Incentives for apartment sourcing	15,628		30,008		4,238
Share-based compensation	1,481		206,301		29,135
Impairment of long-lived assets	—		19,144		2,704
Adjusted EBITDA	(549,576	)	(578,343	)	(81,677	)

The table below sets forth a reconciliation of the Company’s net loss to adjusted net loss for the periods indicated:

	Three Months Ended March 31,
	2019		2020
	RMB		RMB		US$
Net Loss	(816,241	)	(1,234,371	)	(174,326	)
Add:
Incentives for apartment sourcing	15,628		30,008		4,238
Share-based compensation	1,481		206,301		29,135
Impairment of long-lived assets	—		19,144		2,704
Adjusted Net Loss	(799,132	)	(978,918	)	(138,249	)

The table below sets forth a reconciliation of the Company’s net loss per basic and diluted share to adjusted net loss per basic and diluted share for the periods indicated:

	Three Months Ended March 31,
	2019		2020
	RMB		RMB		US$
Net loss attributable to ordinary shareholders of Phoenix Tree Holdings Limited	(895,468	)	(1,258,632	)	(177,752	)
Add:
Incentives for apartment sourcing	15,628		30,008		4,238
Share-based compensation	1,481		206,301		29,135
Impairment of long-lived assets	—		19,144		2,704
Adjusted net loss attributable to ordinary shareholders of Phoenix Tree Holdings Limited	(878,359	)	(1,003,179	)	(141,675	)
Adjusted net loss per share
—Basic and diluted	(3.88	)	(0.69	)	(0.10	)
Weighted average number of shares outstanding used in computing adjusted net loss per share
—Basic and diluted	226,458,958		1,453,806,974		1,453,806,974

	PHOENIX TREE HOLDINGS LIMITED

	By:	/s/ Jason Zheng Zhang
	Name:	Jason Zheng Zhang
	Title:	Chief Financial Officer

Date: June 11, 2020

Exhibit		Description

99.1		Press Release: Danke Announces Unaudited First Quarter of 2020 Financial Results