SHANGHAI, May 25, 2017 /PRNewswire/ -- China Rapid Finance
Limited ("China Rapid Finance" or the "Company") (NYSE: XRF), a
leading online consumer lending marketplace in China, today reported its unaudited financial
results for the quarter ended March 31,
2017. The Company will hold a conference call at
8 a.m. Eastern Time on May 25, 2017, or 8
p.m. China Time on May 25,
2017. Dial-in details are provided at the end of this
release.
First Quarter 2017 Financial Highlights
- Total gross billings on transaction and service
fees[1] in the first quarter of 2017 increased by
13.1% to US$16.8 million from
US$14.8 million in the prior year
period.
- Gross billings from consumption loans increased by
336.8% to US$6.7 million in the first
quarter of 2017 from US$1.5 million
in the prior year period. Gross billings from consumption loans
increased to 39.9% of total gross billings on transaction and
service fees in the first quarter of 2017 from 10.3% in the prior
year period.
- Gross billings from lifestyle loans were US$10.1 million in the first quarter of 2017, as
compared with US$13.3 million in the
prior year period. Gross billings from lifestyle loans were
60.1% of total gross billings on transaction and service fees in
the first quarter of 2017, as compared with 89.7% in the prior year
period.
First Quarter 2017 Operating Highlights
- Number of new borrowers added in the first quarter of
2017 was approximately 545,000. As of March
31, 2017, the Company had reached approximately 2.0 million
unique borrowers on its marketplace since inception, and the total
number of loans facilitated on the Company's platform grew to
approximately 15.0 million.
- Total loan volume facilitated on the Company's
marketplace in the first quarter of 2017 increased to
US$485.0 million, primarily driven by
the rapid expansion of consumption loans, which accounted for
US$405.0 million of the total loan
volume, while lifestyle loans accounted for US$80.0 million.
- Total number of consumption loans facilitated in the
first quarter of 2017 was 4.0 million, while total number of
lifestyle loans facilitated was 6,000.
- Repeat borrower rate[2] on the Company's
marketplace accounted for 73% of the total borrowers as of
March 31, 2017.
"We are excited to report solid growth for our first quarter of
2017 as well as the success of our initial public offering on the
NYSE last month," stated Dr. Zane
Wang, Chairman and Chief Executive Officer of China Rapid
Finance. "In the first quarter of 2017, the number of new borrowers
and loans facilitated on our platform continued to grow
substantially. Enabled by our proprietary data-driven credit
assessment technology, which encompasses our predictive selection
technology, credit scoring technology and automated decisioning
technology, we continued to lower our borrower acquisition cost and
increase our consumption loan borrowers' digital lines of credit on
our platform. Moreover, implementation of effective corporate
governance and adoption of global best practices in China's nascent consumer credit market has
provided us with confidence that we can fully comply with
government regulations as they develop. We will continue to offer
EMMAs (Emerging Middle-class Mobile Active consumers) affordable
access to consumer credit at attractive rates. Looking ahead, in
sticking with our 'low and grow' motto, we are committed to
generating new customer growth, further expanding data and channel
partnerships, leveraging our proprietary data-driven credit
assessment technology, and continuing to diversify our lender base
to fuel our continued growth, and with it, generate shareholder
value going forward."
Mr. Kerry Shen, Chief Financial
Officer of the Company, commented, "We are pleased to report that
our total gross billings on transaction and service fees increased
to US$16.8 million in the first
quarter of 2017. In particular, we have seen a 336.8% increase in
gross billings from consumption loans to US$6.7 million. We also added more than 540,000
new consumption loan borrowers and facilitated over four million
loans in the first quarter. We will continue our strategy of
focusing on short-term consumption borrowers who, through our 'low
and grow' strategy, make repeat borrowings and generate significant
lifetime value. We expect consumption loans to represent a larger
percentage of our total loan volume as we go forward. We believe
that these new, high quality prescreened borrowers of consumption
loans, who we have identified and specifically targeted with our
unique algorithms, will contribute to the growth of our business
over the long term as they build a borrowing and repayment track
record on our marketplace. With approximately 15.0 million
cumulative loans and two million cumulative borrowers since
inception, we believe we are poised to achieve long-term
sustainable growth serving China's
500 million EMMAs' consumer credit needs."
First Quarter 2017 Financial Results
GROSS BILLINGS: Total gross billings on
transaction and service fees is defined as transaction and service
fees billed to customers, inclusive of related value-added taxes,
before deduction of customer acquisition incentives, which are
shown as below. In the first quarter of 2017, total gross billings
on transaction and service fees increased by 13.1% to US$16.8 million from US$14.8 million in the prior year period,
primarily due to the increase in the volume of consumption
loans.
- Gross billings from consumption loans increased by 336.8% to
US$6.7 million from US$1.5 million in the prior year period,
primarily due to the increase in consumption loan volume to
US$405.0 million in the first quarter
of 2017 from US$106.0 million in the
prior year period. Gross billings from consumption loans increased
to 39.9% of total gross billings on transaction and service fees in
the first quarter of 2017 from 10.3% in the prior year period.
- Gross billings from lifestyle loans were US$10.1 million in the first quarter of 2017, as
compared with US$13.3 million in the
prior year period, primarily due to the Company's on-going mix
shift towards consumption loans. The lifestyle loan volume was
US$80.0 million in the first quarter
of 2017, as compared with US$104.5
million in the prior year period. The decrease of the
lifestyle loan volume was due to our increased focus on consumption
loans. Gross billings from lifestyle loans were 60.1% of total
gross billings on transaction and service fees in the first quarter
of 2017, as compared with 89.7% in the prior year period.
Gross Billings
& Customer Acquisition Incentives
|
|
|
For the Three Months
Ended March 31,
2016
|
For the Three Months
Ended March 31,
2017
|
|
|
|
|
US$'000
|
US$'000
|
Gross billings on
transaction and service fees
|
|
|
-- Lifestyle
loans.........................................................................................................................
|
13,309
|
10,092
|
-- Consumption
loans..................................................................................................................
|
1,532
|
6,692
|
|
|
|
Total..........................................................................................................................................
|
14,841
|
16,784
|
|
|
|
Customer acquisition
incentives
|
|
|
-- deducted from
consumption loan
revenue...................................................................................
|
1,394
|
5,317
|
-- recognized in
sales and marketing
expenses.............................................................................
|
-
|
883
|
|
|
|
Total..........................................................................................................................................
|
1,394
|
6,200
|
NET REVENUES: Net revenues for the first quarter
of 2017 were US$10.5 million, as
compared with US$13.1 million in the
prior year period, primarily driven by an acceleration in
consumption loan growth and offset by US$6.2
million customer acquisition incentives paid to investors in
consumption loans to first-time borrowers, of which US$5.3 million was directly deducted from
revenue. [3]
OPERATING EXPENSES: Total operating expenses for
the first quarter of 2017 were US$25.3
million, as compared with US$23.3
million in the prior year period, primarily due to an
increase in sales and marketing and general and administrative
expenses.
- Servicing expenses decreased to US$3.3
million in the first quarter of 2017 from US$4.0 million in the prior year period.
Servicing expenses primarily consist of employee expenses
associated with the Company's data verification centers, which
provide credit assessment and account management services. The
decrease in servicing expenses primarily reflected the Company's
strategy to increase the number of consumption loan borrowers on
its platform and streamline servicing personnel and expenses.
- Sales and marketing expenses were US$10.2 million in the first quarter of 2017, as
compared to US$8.4 million in the
prior year period. Sales and marketing expenses primarily consist
of salaries and benefits, advertising and marketing promotion
expenses, customer acquisition incentive payments in excess of
cumulative revenue generated from customers, and other expenses
incurred by the Company's sales and marketing personnel. The
increase in sales and marketing expenses was primarily due to
customer acquisition incentives in excess of gross billings
amounting to US$0.8 million and
marketing fees to channel partners, both of which were related to
the significant growth in consumption loan borrowers on the
Company's platform.
- General and administrative expenses were US$11.8 million in the first quarter of 2017, as
compared to US$10.9 million in the
prior year period. General and administrative expenses primarily
consist of salaries and benefits (including share-based
compensation) for general management, finance, administrative and
research and development personnel, rental professional services
fees and other expenses. The increase in general and administrative
expenses was partially due to: 1) the expansion of the Company's
research and development personnel, reflecting the Company's strong
commitment to enhance its technology competency and innovation
capabilities; 2) increase in operating costs in relation to the
consumption loans, including gateway payment fees, data analysts
and scientists, which are in line with the significant growth in
consumption loans; and 3) share-based payment in the first quarter
of 2017 amounting to US$0.9 million
versus nil in the same period last year.
NET LOSS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS:
Net loss attributable to the Company's ordinary shareholders for
the first quarter of 2017 was US$16.9
million, as compared to US$11.6
million in the prior year period.
NET LOSS: Net loss for the first quarter of 2017
was US$14.9 million, as compared with
US$10.2 million in the prior year
period.
NET LOSS PER ORDINARY SHARE ATTRIBUTABLE TO ORDINARY
SHAREHOLDERS: Net loss per ordinary share attributable to
the Company's ordinary shareholders for the first quarter of 2017
was $1.01,
as compared to US$0.71 in the prior
year period.
Balance Sheet and Cash Flows:
As of March 31, 2017, the Company
had cash and cash equivalents of US$24.5
million and restricted cash of US$11.3 million. Immediately following the
Company's initial public offering and exercise of the underwriters'
over-allotment option on May 11,
2017, the Company's cash and cash equivalents balance net of
initial public offering fees was US$77.4
million.
Net cash used in operating activities was US$12.4 million for the first quarter of 2017, as
compared to net cash used in operating activities of US$13.2 million in the prior year period.
Shareholding
Information
Immediately following the
Company's initial public offering and exercise of the underwriters'
over-allotment option on May 25,
2017, the Company had a total of 65,087,656 ordinary shares
outstanding.[4] One ADS represents one Class A
ordinary share.
Financial Outlook
Based on the information available as of the date of this press
release, the Company provides the following outlook, which reflects
the Company's current and preliminary view and is subject to
change.
For the full year ending December 31,
2017, the Company expects to add between 2.5 million to 3.0
million new borrowers, representing a year-over-year growth rate of
350% to 400%. The Company also expects total gross billings on
transaction and service fees to be in the range of US$110 million to US$120 million in 2017, as
compared with US$67.9 million in the
prior year.
Conference Call
The Company will hold a conference call on Thursday, May 25, 2017 at 8:00 am U.S. Eastern Time, or 8:00 pm China Time to discuss its financial
results.
Participants may access the call by dialing the following
numbers:
International:
|
+1-412-902-4272
|
United States Toll
Free:
|
+1-888-346-8982
|
China Toll
Free:
|
4001-201203
|
Hong Kong Toll
Free:
|
800-905945
|
Conference
ID:
|
China Rapid Finance
call
|
The replay will be accessible through June 1, 2017 by dialing the following
numbers:
United
States:
|
+1-877-344-7529
|
International:
|
+1-412-317-0088
|
Replay Access
Code:
|
10107730
|
A live and archived webcast of the conference call will be
available through the Company's investor relations website at
http://chinarapidfinance.investorroom.com.
Statement Regarding Unaudited Condensed Financial
Information
The unaudited financial information set forth above is
preliminary and subject to potential adjustments. Adjustments to
the consolidated financial statements may be identified when audit
work has been performed for the Company's year-end audit, which
could result in significant differences from this preliminary
unaudited condensed financial information.
About China Rapid Finance
China Rapid Finance operates one of China's largest consumer lending marketplaces
in terms of total number of loans, having facilitated approximately
15 million loans to approximately 2 million borrowers at
significantly lower borrowing costs than many of its competitors.
According to the People's Bank of China, as of the end of 2015, there are
approximately 500 million individuals with quality employment
records but no credit history. The company refers to these
individuals, who regularly use mobile devices, as EMMAs (Emerging
Middle-class, Mobile Active consumers). China Rapid Finance
believes EMMAs constitute one of the largest untapped consumer
credit market opportunities in the world. The company acquires
quality borrowers through multiple channels, and has been able to
establish a leadership position in China's consumer lending industry because the
company is able to use its proprietary technology to efficiently
identify and select prime and near-prime EMMAs for its platform.
Through its "low and grow" strategy, China Rapid Finance initially
offers smaller, shorter-term loans to these EMMAs and then uses its
proprietary decisioning technology to proactively offer them
larger, longer-term loans as they demonstrate positive credit
behavior, allowing the company to retain high quality EMMAs with
significant lifetime consumer value.
For more information, please visit
http://chinarapidfinance.investorroom.com.
Safe Harbor Statement
This announcement contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements are made under the "safe
harbor" provisions of the U.S. Private Securities Litigation Reform
Act of 1995. These statements can be identified by terminology such
as "may," "will," "expects," "anticipates," "aims," "future,"
"intends," "plans," "believes," "estimates," "likely to" and
similar statements. Among other things, quotations from management
in this announcement, China Rapid Finance's financial outlook as
well as China Rapid Finance's strategic and operational plans
contain forward-looking statements. China Rapid Finance may also
make written or oral forward-looking statements in its reports
filed with, or furnished to, the U.S. Securities and Exchange
Commission, in its annual reports to shareholders, in press
releases and other written materials and in oral statements made by
its officers, directors or employees to third parties. Statements
that are not historical facts, including statements about China
Rapid Finance's beliefs and expectations, are forward-looking
statements. Forward-looking statements involve inherent risks and
uncertainties. A number of factors could cause actual results to
differ materially from those contained in any forward-looking
statement, including but not limited to the following: unexpected
difficulties in China Rapid
Finance's pursuit of its goals and strategies; the unexpected
developments, including slow growth, in the consumer lending
market; reduced demand for, and market acceptance of, China Rapid
Finance's products and services; difficulties keeping and
strengthening relationships with borrowers or investors;
difficulties of expanding data and channel partnerships,
potentially costly servicing activities; competitions in the
consumer lending market; PRC governmental regulations and policies;
and general economic and business conditions in the regions where
China Rapid Finance provides products and services. Further
information regarding these and other risks is included in
China Rapid Finance's reports
filed with, or furnished to, the Securities and Exchange
Commission. All information provided in this press release and in
the attachments is as of the date of this press release, and China
Rapid Finance undertakes no duty to update such information except
as required under applicable law.
Investor Relation Contact:
China Rapid Finance Limited
Sean Zhang
Tel: +1 (646) 308-1635
Email: IR@crfchina.com
ICR, Inc.
Xueli Song
Tel: +1 (646) 308-1635
Email: IR@crfchina.com
[1] Gross
billings on transaction and service fees is defined as transaction
and service fees billed to customers, inclusive of related value
added taxes, before deduction of customer acquisition
incentives.
|
[2] The
repeat borrower rate is defined as the total number of borrowers
who borrowed more than one loan on the marketplace since the
Company's inception divided by the total number of borrowers on the
marketplace since the Company's inception.
|
[3]
Customer acquisition incentives are one-time fees paid to investors
who lend to first-time consumption loan borrowers, and help to
attract higher lifetime value prescreened borrowers to the
Company's marketplace.
|
[4] Includes
outstanding ordinary shares, vested incentive shares and options,
and unvested incentive shares and options that vest within 60 days
of the date thereof.
|
CHINA RAPID
FINANCE LIMITED
|
UNAUDITED INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF
|
COMPREHENSIVE
LOSS
|
(US$ in thousands,
except share data and per share data, or as otherwise
noted)
|
|
|
For the Three Months
Ended March 31,
2016
|
For the Three Months
Ended March 31,
2017
|
|
|
|
|
US$
|
US$
|
Revenue:
|
|
|
Transaction and
service fees (net of customer acquisition
incentive)..........................................................................................
|
13,447
|
10,416
|
Other
revenue......................................................................................................................................................................
|
403
|
39
|
|
13,850
|
10,455
|
Provision for loan
losses.......................................................................................................................................................
|
(12)
|
1
|
Business related taxes
and
surcharges.................................................................................................................................
|
(721)
|
(5)
|
Net
Revenue...............................................................................................................................................................................
|
13,117
|
10,451
|
|
|
|
Operating
expense:
|
|
|
Servicing
expenses.............................................................................................................................................................
|
(3,996)
|
(3,314)
|
Sales and marketing
expenses............................................................................................................................................
|
(8,396)
|
(10,216)
|
General and
administrative
expenses...................................................................................................................................
|
(10,875)
|
(11,751)
|
Total operating
expenses...........................................................................................................................................................
|
(23,267)
|
(25,281)
|
|
|
|
Other
expense:
|
|
|
Other expense,
net...............................................................................................................................................................
|
(66)
|
(23)
|
Loss before income
tax
expense..................................................................................................................................................
|
(10,216)
|
(14,853)
|
Income tax
expense..............................................................................................................................................................
|
-
|
-
|
Net
loss........................................................................................................................................................................................
|
(10,216)
|
(14,853)
|
Accretion on Series A
convertible redeemable preferred shares to redemption
value.................................................................................................................................................................................
|
(72)
|
(72)
|
Accretion on Series B
convertible redeemable preferred shares to redemption
value.................................................................................................................................................................................
|
(405)
|
(405)
|
Accretion on Series C
convertible redeemable preferred shares to redemption
value.................................................................................................................................................................................
|
(902)
|
(1,579)
|
Net loss
attributable to ordinary
shareholders...............................................................................................................................
|
(11,595)
|
(16,909)
|
Net
loss..........................................................................................................................................................................................
|
(10,216)
|
(14,853)
|
Foreign currency
translation adjustment, net of nil
tax...............................................................................................................
|
(35)
|
(50)
|
Comprehensive
loss......................................................................................................................................................................
|
(10,251)
|
(14,903)
|
Weighted average
number of ordinary shares used in computing net loss per
share
|
|
|
Basic....................................................................................................................................................................................
|
16,266,841
|
16,798,776
|
Diluted..................................................................................................................................................................................
|
16,266,841
|
16,798,776
|
Loss per share
attributable to ordinary shareholders
|
|
|
Basic....................................................................................................................................................................................
|
(0.71)
|
(1.01)
|
Diluted..................................................................................................................................................................................
|
(0.71)
|
(1.01)
|
|
|
|
CHINA RAPID
FINANCE LIMITED
|
UNAUDITED INTERIM
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(US$ in thousands,
except share data and per share data, or as otherwise
noted)
|
|
|
|
As of
December 31,
2016
|
As of March 31,
2017
|
|
|
|
|
US$
|
US$
|
Assets
|
|
|
Cash and cash
equivalents...........................................................................................................................................................................
|
18,983
|
24,524
|
Restricted
cash............................................................................................................................................................................................
|
12,685
|
11,321
|
Loans receivable, net
of allowance for loan losses US$112 thousand and US$111
thousand as of
December 31, 2016 and March 31, 2017,
respectively.....................................................................................................................
|
512
|
411
|
Safeguard Program
asset........................................................................................................................................................................
|
6,546
|
5,570
|
Receivables from
issuance of Series C redeemable convertible preferred
shares
|
-
|
1,750
|
Receivables,
prepayments and other
assets.................................................................................................................................................
|
14,428
|
15,529
|
Property equipment and
software,
net..........................................................................................................................................................
|
5,314
|
5,040
|
Total
assets.......................................................................................................................................................................................................
|
58,468
|
64,145
|
|
|
|
LIABILITIES,
MEZZANINE EQUITY AND SHAREHOLDERS' (DEFICIT)/ EQUITY
|
|
|
Liabilities:
|
|
|
Safeguard Program
payable..........................................................................................................................................................................
|
19,511
|
17,248
|
Accrued
liabilities........................................................................................................................................................................................
|
22,426
|
25,270
|
Income tax
payable.....................................................................................................................................................................................
|
1,893
|
1,900
|
Deferred
revenue.........................................................................................................................................................................................
|
630
|
793
|
Total
liabilities.....................................................................................................................................................................................................
|
44,460
|
45,211
|
|
|
|
Commitments and
contingencies
|
|
|
Mezzanine
equity
|
|
|
Series A preferred
shares (US$0.0001par value; 4,912,934 shares issued and
outstanding
as of December 31, 2016 and March 31,
2017)..........................................................................................................................................
|
6,796
|
6,868
|
Series B preferred
shares (US$0.0001 par value; 14,084,239 shares issued and
outstanding as
of December 31, 2016 and March 31,
2017)...........................................................................................................................................
|
35,132
|
35,537
|
Series C preferred
shares (US$0.0001 par value; 2,858,394 and 3,447,959 shares issued
and
outstanding as of December 31, 2016 and March 31,
2017).........................................................................................................................
|
78,290
|
94,816
|
Receivable for
issuance of Series C preferred
shares.....................................................................................................................................
|
(4,000)
|
-
|
Total mezzanine
equity.....................................................................................................................................................................................
|
116,218
|
137,221
|
|
|
|
Shareholders'
(deficit)/equity
|
|
|
Ordinary shares,
US$0.0001 par value, 50,000,000 shares authorized, 16,508,037
and
16,954,453 shares issued and outstanding as of
December 31, 2016 and March 31, 2017,
respectively...............................................................................................................................................................................................
|
2
|
2
|
Additional paid-in
capital...............................................................................................................................................................................
|
-
|
-
|
Accumulated other
comprehensive
loss.........................................................................................................................................................
|
(913)
|
(963)
|
Accumulated
deficit......................................................................................................................................................................................
|
(101,299)
|
(117,326)
|
Total
shareholders'
deficit...................................................................................................................................................................................
|
(102,210)
|
(118,287)
|
Total liabilities,
mezzanine equity and shareholders'
deficit..............................................................................................................................
|
58,468
|
64,145
|
|
|
|
To view the original version on PR Newswire,
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SOURCE China Rapid Finance