SHANGHAI, Aug. 4, 2022
/PRNewswire/ -- Lufax Holding Ltd ("Lufax" or the "Company")
(NYSE: LU), a leading technology-empowered personal financial
services platform in China, today
announced its unaudited financial results for the second quarter
ended June 30, 2022.
Second Quarter 2022 & First Half 2022 Financial
Highlights
- Total income increased by 3.1% to RMB15,288 million (US$2,282 million) in the second quarter of 2022
from RMB14,828 million in the same
period of 2021.
- Net profit decreased by 37.9% to RMB2,936 million (US$438
million) in the second quarter of 2022 from RMB4,729 million in the same period of 2021.
(In millions
except percentages,
unaudited)
|
Three Months Ended
June 30,
|
|
|
|
2021
|
|
2022
|
|
YoY
|
|
RMB
|
|
RMB
|
|
USD
|
|
|
Total income
|
14,828
|
|
15,288
|
|
2,282
|
|
3.1 %
|
Total
expenses
|
(8,477)
|
|
(10,935)
|
|
(1,633)
|
|
29.0 %
|
Total expenses
excluding credit
and asset impairment losses, financial
costs and other losses
|
(7,107)
|
|
(6,322)
|
|
(944)
|
|
(11.0 %)
|
Credit and asset
impairment losses,
financial costs and other losses
|
(1,370)
|
|
(4,613)
|
|
(689)
|
|
236.7 %
|
Net profit
|
4,729
|
|
2,936
|
|
438
|
|
(37.9 %)
|
|
|
|
|
|
|
|
|
|
(In millions
except percentages,
unaudited)
|
Six Months Ended
June 30,
|
|
|
|
2021
|
|
2022
|
|
YoY
|
|
RMB
|
|
RMB
|
|
USD
|
|
|
Total income
|
30,079
|
|
32,604
|
|
4,868
|
|
8.4 %
|
Total
expenses
|
(17,007)
|
|
(21,099)
|
|
(3,150)
|
|
24.1 %
|
Total expenses
excluding credit and
asset impairment losses, financial
costs and other losses
|
(14,162)
|
|
(13,569)
|
|
(2,026)
|
|
(4.2 %)
|
Credit and asset
impairment losses,
financial costs and other losses
|
(2,845)
|
|
(7,529)
|
|
(1,124)
|
|
164.6 %
|
Net profit
|
9,697
|
|
8,226
|
|
1,228
|
|
(15.2 %)
|
|
|
|
|
|
|
|
|
|
Second Quarter 2022 & First Half 2022 Operational
Highlights
Retail credit facilitation business:
- Outstanding balance of loans facilitated increased by 9.0% to
RMB661.4 billion as of June 30, 2022 from RMB606.8 billion as of June 30, 2021.
- Cumulative number of borrowers increased by 17.3% to
approximately 18.2 million as of June 30,
2022 from approximately 15.5 million as of June 30, 2021.
- During the second quarter of 2022, excluding the consumer
finance subsidiary, 86.1% of new loans facilitated were disbursed
to small business owners, up from 77.6% in the same period of
2021.
- New loans facilitated decreased by 15.2% to RMB129.5 billion in the second quarter of 2022
from RMB152.7 billion in the same
period of 2021.
- During the second quarter of 2022, excluding the consumer
finance subsidiary, the Company bore risk on 21.7% of its new loans
facilitated, up from 16.0% in the same period of 2021.
- As of June 30, 2022, including
the consumer finance subsidiary, the Company bore risk on 21.2% of
its outstanding balance, up from 11.3% as of June 30, 2021.
- For the second quarter of 2022, the Company's retail credit
facilitation revenue take rate[1] based on loan balance
was 8.6%, as compared to 9.7% for the second quarter of 2021.
- C-M3 flow rate[2] for the total loans the Company
had facilitated was 0.7% in the second quarter of 2022, as compared
to 0.6% in the first quarter of 2022. Flow rates for the general
unsecured loans and secured loans the Company had facilitated were
0.8% and 0.3%, respectively, in the second quarter of 2022, as
compared to 0.7% and 0.2%, respectively, in the first quarter of
2022.
- Days past due ("DPD") 30+ delinquency rate[3] for
the total loans the Company had facilitated was 3.1% as of
June 30, 2022, as compared to 2.6% as
of March 31, 2022. DPD 30+
delinquency rate for general unsecured loans was 3.6% as of
June 30, 2022, as compared to 3.0% as
of March 31, 2022. DPD 30+
delinquency rate for secured loans was 1.4% as of June 30, 2022, as compared to 1.0% as of
March 31, 2022.
- DPD 90+ delinquency rate[4] for the total loans
facilitated was 1.7% as of June 30,
2022, as compared to 1.4% as of March
31, 2022. DPD 90+ delinquency rate for general unsecured
loans was 2.0% as of June 30, 2022,
as compared to 1.6% as of March 31,
2022. DPD 90+ delinquency rate for secured loans was 0.7% as
of June 30, 2022, as compared to 0.5%
as of March 31, 2022.
Wealth management business:
- Total number of registered users grew to 52.3 million as of
June 30, 2022 from 47.1 million as of
June 30, 2021.
- Total number of active investors grew to 15.2 million as of
June 30, 2022 from 14.8 million as of
June 30, 2021.
- Total client assets grew by 2.6% to RMB431.9 billion as of June 30, 2022 from RMB421.1 billion as of June 30, 2021.
- The 12-month investor retention rate was 94.7% as of
June 30, 2022, as compared to 96.0%
as of June 30, 2021.
- Contribution to total client assets from customers with
investments of more than RMB300,000
on the Company's platform increased to 81.6% as of June 30, 2022 from 80.2% as of June 30, 2021.
- During the second quarter of 2022, the annualized take
rate[5] for current products and services on the
Company's wealth management platform was 43.1 bps, down from 53.9
bps during the first quarter of 2022.
Mr. YongSuk Cho, Chairman and Chief Executive Officer of
Lufax, commented, "In the face of COVID-19 resurgence severely
impacting our core client base of small business owners, we remain
prudent in our operations and prioritize asset quality over volume
growth. At the same time, we are witnessing an improvement in the
regulatory environment, as the recently released policy statements
seek to balance incentivizing and regulating the platform economy.
With our key initiatives launched last year starting to bear fruit,
we believe that the most challenging time is now behind us. Our
C-M3 monthly flow rate, which is a leading risk indicator, peaked
in April at 0.83% from 0.53% in December and decreased to 0.61% in June. Going forward, we remain
committed to serving the financial needs of small business owners
in our retail credit facilitation business and helping our
customers in the online fund distribution space to achieve their
financial planning objectives in our wealth management business.
With a re-aligned seasoned executive team and a long proven track
record of making preemptive adjustments to adapt to the changing
environment, we are confident that the strategic initiatives we
have implemented will generate sustainable value for our
shareholders and the real economy at large."
Mr. Gregory Gibb, Co-Chief
Executive Officer of Lufax, commented, "As recent policy
announcements indicate increased recognition of the constructive
role that credit insurance can play in funding availability for
small business owners, we attained positive regulatory feedback on
our guarantee company and its position in data transmission to our
funding partners. In the second quarter,
the average APR for outstanding loan balance wide reached 21.4%,
down from 21.8% in the previous quarter. Credit insurance
provided by our seven insurance partners to customers covered 76%
of our new loans. Meanwhile, our sales channel transformation made
additional progress with increased direct sales contribution and
improved sourcing quality. New business sourced from Ping An channels in the second quarter declined
to 22% from 31% a year ago. Our direct sales made up 53.6% of new
loan sales in the second quarter, up from 49.0% a year ago. As of
June 30, the percentage of high
quality talents[6] in our direct sales force had
increased from the first quarter, as we continue to execute our
channel transformation. In fact, in the second quarter, we
witnessed a 17% year-over-year increase in number of loan
applications per direct sales. In addition, we further improved our
funding costs across our partner network. In the second quarter
overall bank and institutional funding costs decreased by about 10
basis points, while our number of funding partners in the quarter
reached 78. While we are confident that our robust balance sheet
and low leverage ratio should lead to a speedy resumption in our
business growth once the macro environment stabilizes, we are
taking a prudent approach in our financial forecast and full year
guidance. Should we experience more aggressive economic policy
support in 2023 and beyond, we may deliver positive surprises to
the upside."
Mr. David Choy, Chief Financial
Officer of Lufax, commented, "Despite a very challenging macro
environment during the second quarter, we achieved positive
top-line growth of 3.1% quarter over quarter, or 8.4% growth for
the first half of the year. Our total expenses in the second
quarter, excluding credit impairment losses, asset impairment
losses, finance costs and other losses, actually decreased by
11.0%, with sales and marketing expenses decreasing by 19%. With
the balance of our cash at bank increasing to RMB42.9 billion and
liquid assets maturing in 90 days or less amount to RMB42.37 billion, as of June 30, 2022. The leverage ratio of our
guarantee company remaining as low as 2.03x versus the regulatory
allowance of 10x, we are well equipped with operating flexibility
and abundant capital and cash to weather the economic downturn,
whilst maintaining our dividend payout. While market volatility
brought on by COVID resurgence and the uncertain macroeconomic
conditions on the horizon may keep our new business growth stalled
for the short term, we believe that our profit growth will likely
re-accelerate once the channel optimization impact starts to
materialize and credit costs become normalized on an annual
basis."
Second Quarter 2022 & First Half Financial
Results
TOTAL INCOME
Total income increased by 3.1% to RMB15,288 million (US$2,282 million) in the second quarter of
2022 from RMB14,828 million in
the same period of 2021. The Company's revenue mix changed with the
evolution of its business model, as it gradually bore more credit
risk and increased funding from consolidated trust plans that
provided lower funding costs.
|
Three Months Ended June 30,
|
|
|
(In millions
except percentages, unaudited)
|
2021
|
|
2022
|
|
YoY
|
|
RMB
|
|
% of total
income
|
RMB
|
|
% of total
income
|
|
Technology
platform-based income
|
9,601
|
|
64.7 %
|
|
7,380
|
|
48.3 %
|
|
(23.1 %)
|
Retail
credit facilitation service fees
|
9,194
|
|
62.0 %
|
|
6,912
|
|
45.2 %
|
|
(24.8 %)
|
Wealth management transaction and service fees
|
407
|
|
2.7 %
|
|
467
|
|
3.1 %
|
|
14.7 %
|
Net interest
income
|
3,227
|
|
21.8 %
|
|
5,010
|
|
32.8 %
|
|
55.3 %
|
Guarantee
income
|
891
|
|
6.0 %
|
|
1,936
|
|
12.7 %
|
|
117.3 %
|
Other income
|
1,071
|
|
7.2 %
|
|
532
|
|
3.5 %
|
|
(50.3 %)
|
Investment
income
|
37
|
|
0.2 %
|
|
428
|
|
2.8 %
|
|
1056.8 %
|
Share of net profits of
investments accounted for
using the equity method
|
2
|
|
0.0 %
|
|
2
|
|
0.0 %
|
|
0.0 %
|
Total income
|
14,828
|
|
100 %
|
|
15,288
|
|
100 %
|
|
3.1 %
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
(In millions
except percentages, unaudited)
|
2021
|
2022
|
|
YoY
|
|
RMB
|
|
% of total
income
|
|
RMB
|
|
% of total
income
|
|
|
Technology
platform-based income
|
19,891
|
|
66.1 %
|
|
16,672
|
|
51.1 %
|
|
(16.2 %)
|
Retail
credit facilitation service fees
|
18,859
|
|
62.7 %
|
|
15,612
|
|
47.9 %
|
|
(17.2 %)
|
Wealth management transaction and service fees
|
1,032
|
|
3.4 %
|
|
1,060
|
|
3.3 %
|
|
2.7 %
|
Net interest
income
|
6,138
|
|
20.4 %
|
|
9,994
|
|
30.7 %
|
|
62.8 %
|
Guarantee
income
|
1,442
|
|
4.8 %
|
|
3,838
|
|
11.8 %
|
|
166.2 %
|
Other income
|
2,109
|
|
7.0 %
|
|
1,236
|
|
3.8 %
|
|
(41.4 %)
|
Investment
income
|
526
|
|
1.7 %
|
|
863
|
|
2.6 %
|
|
64.1 %
|
Share of net profits of
investments accounted for
using the equity method
|
(28)
|
|
(0.1 %)
|
|
1
|
|
0.0 %
|
|
(103.6 %)
|
Total income
|
30,079
|
|
100 %
|
|
32,604
|
|
100 %
|
|
8.4 %
|
- Technology platform-based income decreased by
23.1% to RMB7,380 million
(US$1,102 million) in the second
quarter of 2022 from RMB9,601 million
in the same period of 2021 due to a decrease in retail credit
facilitation service fees.
- Retail credit facilitation service
fees decreased by 24.8% to RMB6,912 million (US$1,032 million) in the second quarter of
2022 from RMB9,194 million in
the same period of 2021, mainly due to a decrease in new loan
sales, and changes in the Company's business model that
resulted in more income being recognized in net interest income and
guarantee income.
- Wealth management transaction and service
fees increased by 14.7% to RMB467 million
(US$70 million) in the second quarter of 2022 from
RMB407 million in the same period of 2021. The increase was
mainly driven by the increase in fees generated from the Company's
current products and services, partially offset by the run-off of
legacy products.
- Net interest income increased by 55.3% to
RMB5,010 million (US$748 million) in the second quarter of 2022
from RMB3,227 million in the same
period of 2021, mainly as a result of 1) the Company's increased
usage of trust funding channels that were consolidated by the
Company (as of June 30, 2022, the
Company's on-balance sheet loans accounted for 36.0% of its total
loan balance under management, as compared to 27.8% as of
June 30, 2021), and 2) increase in
the consumer finance loans.
- Guarantee income increased by 117% to
RMB1,936 million (US$289 million) in the second quarter of 2022
from RMB891 million in the same
period of 2021, primarily due to the increase in the loans for
which the Company bore credit risk.
- Other income decreased to RMB532 million (US$79
million) in the second quarter of 2022 from RMB1,071 million in the same period of 2021,
mainly due to the change of service scope and fee structure that
the Company provided and charged to its financial institution
partners.
- Investment income increased to RMB428 million (US$64
million) in the second quarter of 2022 from RMB37 million in the same period of 2021, mainly
due to the lower base in the second quarter of 2021 as a result of
fair value losses from investments.
TOTAL EXPENSES
Total expenses increased by 29.0% to RMB10,935 million (US$1,633 million) in the second quarter of
2022 from RMB8,477 million in
the same period of 2021. This increase was mainly driven by credit
impairment losses, since credit impairment losses increased by 152%
to RMB3,513 million (US$524 million) in the second quarter of 2022
from RMB1,394 million in the same
period of 2021. Total expenses excluding credit impairment
losses, asset impairment losses, finance costs and other losses
decreased by 11.0% to RMB6,322 million (US$944 million) in the second quarter of
2022 from RMB7,107 million in
the same period of 2021.
|
Three Months Ended June 30,
|
|
|
(In millions except
percentages, unaudited)
|
2021
|
|
2022
|
|
YoY
|
|
RMB
|
|
% of total
income
|
|
RMB
|
|
% of total
income
|
|
|
Sales and marketing
expenses
|
4,316
|
|
29.1 %
|
|
3,496
|
|
22.9 %
|
|
(19.0 %)
|
General and
administrative expenses
|
798
|
|
5.4 %
|
|
762
|
|
5.0 %
|
|
(4.5 %)
|
Operation and servicing
expenses
|
1,476
|
|
10.0 %
|
|
1,581
|
|
10.3 %
|
|
7.1 %
|
Technology and
analytics expenses
|
517
|
|
3.5 %
|
|
483
|
|
3.2 %
|
|
(6.6 %)
|
Credit impairment
losses
|
1,394
|
|
9.4 %
|
|
3,513
|
|
23.0 %
|
|
152.0 %
|
Asset impairment
losses
|
2
|
|
0.0 %
|
|
352
|
|
2.3 %
|
|
NA
|
Finance
costs
|
276
|
|
1.9 %
|
|
221
|
|
1.4 %
|
|
(19.9 %)
|
Other (gains)/losses -
net
|
(301)
|
|
(2.0 %)
|
|
527
|
|
3.4 %
|
|
(275.1 %)
|
Total
expenses
|
8,477
|
|
57.2 %
|
|
10,935
|
|
71.5 %
|
|
29.0 %
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
(In millions
except percentages, unaudited)
|
2021
|
|
2022
|
|
YoY
|
|
RMB
|
|
% of total
income
|
|
RMB
|
|
% of total
income
|
|
|
Sales and marketing
expenses
|
8,549
|
|
28.4 %
|
|
7,980
|
|
24.5 %
|
|
(6.7 %)
|
General and
administrative expenses
|
1,651
|
|
5.5 %
|
|
1,487
|
|
4.6 %
|
|
(9.9 %)
|
Operation and servicing
expenses
|
2,998
|
|
10.0 %
|
|
3,171
|
|
9.7 %
|
|
5.8 %
|
Technology and
analytics expenses
|
963
|
|
3.2 %
|
|
931
|
|
2.9 %
|
|
(3.3 %)
|
Credit impairment
losses
|
2,447
|
|
8.1 %
|
|
6,336
|
|
19.4 %
|
|
158.9 %
|
|
|
|
|
|
|
|
|
|
|
Asset impairment
losses
|
2
|
|
0.0 %
|
|
352
|
|
1.1 %
|
|
NA
|
Finance
costs
|
560
|
|
1.9 %
|
|
432
|
|
1.3 %
|
|
(22.9 %)
|
Other (gains)/losses -
net
|
(163)
|
|
(0.5 %)
|
|
409
|
|
1.3 %
|
|
(350.9 %)
|
Total
expenses
|
17,007
|
|
56.5 %
|
|
21,099
|
|
64.7 %
|
|
24.1 %
|
- Sales and marketing expenses decreased by 19.0%
to RMB3,496 million (US$522 million) in the second quarter of 2022
from RMB4,316 million in the same
period of 2021.
- Borrower acquisition
expenses decreased by 37.6% to RMB1,648 million (US$246 million) in
the second quarter of 2022 from RMB2,643
million in the same period of 2021. The decrease was mainly
due to decreased new loan sales, increased sales productivity and
continual optimization of commissions.
- Investor acquisition and retention
expenses decreased by 36.7% to RMB107 million
(US$16 million) in the second quarter of 2022 from
RMB169 million in the same period of 2021, mostly due to the
improvement in the Company's investor acquisition efficiency.
- General sales and marketing
expenses increased by 15.8% to RMB1,741 million (US$260
million) in the second quarter of 2022 from RMB1,503 million in the same period of 2021. This
increase was primarily due to the increase in sales cost related to
platform services[7] and the increase in the staff costs
for sales and marketing personnel.
- General and administrative expenses decreased by
4.5% to RMB762 million (US$114 million) in the second quarter of 2022
from RMB798 million in the same
period of 2021 as a result of the Company's expense control
measures.
- Operation and servicing expenses increased by
7.1% to RMB1,581 million
(US$236 million) in the second
quarter of 2022 from RMB1,476 million
in the same period of 2021, primarily due to the increase of trust
plan management expenses, which resulted from the increase in
consolidated trust plans.
- Technology and analytics expenses decreased by
6.6% to RMB483 million (US$72 million) in the second quarter of 2022 from
RMB517 million in the same period of
2021, as a result of the Company's improved efficiency.
- Credit impairment losses increased by 152% to
RMB3,513 million (US$524 million) in the second quarter of 2022
from RMB1,394 million in the same
period of 2021, mainly driven by 1) the increase of provision and
indemnity loss driven by increased risk exposure, and 2) the change
in credit performance due to impact of the COVID-19 outbreak.
- Asset impairment losses increased to RMB352 million (US$53
million) in the second quarter of 2022 from RMB2 million in the same period of 2021, mainly
due to an impairment loss of long-term investment.
- Finance costs decreased by 19.9% to RMB221 million (US$33
million) in the second quarter of 2022 from RMB276 million in the same period of 2021, mainly
due to the increase in interest income resulting from the increase
in deposits.
- Other losses were RMB527
million (US$79 million) in the
second quarter of 2022 compared to other gains of RMB301 million in the same period of 2021, mainly
due to the foreign exchange loss in the second quarter of
2022.
[1] The
take rate of retail credit facilitation business is calculated by
dividing the aggregated amount of retail credit facilitation
service fee, net interest income, guarantee income and the penalty
fees and account management fees by the average outstanding balance
of loans facilitated for each period.
|
[2] Flow rate estimates the
percentage of current loans that will become non-performing at the
end of three months, and is defined as the product of (i) the loan
balance that is overdue from 1 to 29 days as a percentage of the
total current loan balance of the previous month, (ii) the loan
balance that is overdue from 30 to 59 days as a percentage of the
loan balance that was overdue from 1 to 29 days in the previous
month, and (iii) the loan balance that is overdue from 60 to 89
days as a percentage of the loan balance that was overdue from 30
days to 59 days in the previous month. Loans from legacy products
and consumer finance subsidiary are excluded from the flow rate
calculation.
|
[3] DPD
30+ delinquency rate refers to the outstanding balance of loans for
which any payment is 30 to 179 calendar days past due divided by
the outstanding balance of loans. Loans from legacy products and
consumer finance subsidiary are excluded from the
calculation.
|
[4] DPD
90+ delinquency rate refers to the outstanding balance of loans for
which any payment is 90 to 179 calendar days past due divided by
the outstanding balance of loans. Loans from legacy products and
consumer finance subsidiary are excluded from the
calculation.
|
[5] The
take rate for the wealth management business is calculated by
dividing total wealth management transaction and service fees for
current products by average client assets in the Company's current
products. Part of the wealth management transaction and service
fees do not generate client assets.
|
[6] High quality talent refers to
talent who have (i) bachelor degree; (ii) sales experience; and,
(iii) obtained A scoring in interview
|
[7] The
liquid assets consist of Cash at bank, Financial assets at
amortized cost, Financial Assets purchased under reverse repurchase
agreements and Financial assets at fair value through profit or
loss with a maturity of 90 days or less as of June 30,
2022.
|
NET PROFIT
Net profit decreased by 37.9% to RMB2,936 million
(US$438 million) in the second
quarter of 2022 from RMB4,729 million in the same period of 2021,
driven by the aforementioned factors.
EARNINGS PER ADS
Basic and diluted earnings per American Depositary Share ("ADS")
were RMB1.27 (US$0.19) and RMB1.23 (US$0.18),
respectively, in the second quarter of 2022.
BALANCE SHEET
The Company had RMB42,863 million
(US$6,399 million) in cash at
bank as of June 30, 2022, as
compared to RMB34,743 million as of
December 31, 2021. Net assets of the
Company is amounted to RMB97,238
million (US$14,517 million) as
of June 30, 2022, as compared to
RMB94,559 million as of December 31, 2021.
Recent Developments
Change of Annual Dividend Policy to Semi-Annual Dividend
Policy
The Company's board of directors (the "Board") has approved a
semi-annual cash dividend policy to replace its existing annual
dividend policy. Under the semi-annual dividend policy, starting
from the second half of 2022, the Company will declare and
distribute a recurring cash dividend semi-annually, at an amount
equivalent to approximately 20%-40% of the Company's net profit in
the previous six-month period, or as otherwise authorized by the
Board. The determination to make dividend distributions and the
exact amount of such distributions in any particular semi-annual
period will be based upon the Company's operations and earnings,
cash flow, financial condition, and other relevant factors, and
subject to adjustment and determination by the Board.
Semi-Annual Dividend
The Board has approved a cash dividend of US$0.34 per ordinary share for the six-month
period ended June 30, 2022, on the
Company's outstanding shares to shareholders of record as of the
close of trading on the New York Stock Exchange on October 13, 2022. Holders of ADSs, each two ADSs
representing one ordinary share, will accordingly be entitled to a
cash dividend of US$0.17 per ADS,
subject to the payment of applicable depositary fees. The
depositary, Citibank, N.A., will distribute the dividend to holders
of ADSs on or about October 28,
2022.
Changes in Board Composition and Management Team
Mr. Guangheng Ji has tendered his resignation as the Chairman of
the Board and will no longer serve as a member of the Board. Mr.
YongSuk Cho, currently a director
and Co-Chief Executive Officer of the Company, has been appointed
as the Chairman of the Board and Chief Executive Officer of the
Company. Mr. Gregory Dean Gibb will
remain as Co-Chief Executive Officer and a director of the Company.
In addition, Mr. Hanjie Ou has been
appointed as a director of the Company.
Mr. Hanjie Ou currently serves as
Senior Manager of the Corporate Planning Center at Ping An Group,
where he is mainly responsible for the planning and management of
core financial institutions of Ping An Group and key strategic
projects within Ping An Group. Mr. Ou has rich experience in the
financial industry. Prior to joining Ping An Group in 2018, Mr. Ou
has served as Senior Project Manager at Roland Berger Strategy
Consulting in Shanghai from 2015
to 2018. Mr. Ou received a Master's Degree in Operations Research
from London School of Economics and Political
Science in 2008.
Mr. David Siu Kam Choy, currently
the Controller of the Company and the Chief Financial Officer of
Puhui, has been appointed as the Chief Financial Officer of the
Company. Mr. Jian Yang has tendered
his resignation as the Chief Risk Officer of the Company and Ms.
Younjeong Lim has been appointed as the Chief Risk Officer of the
Company. Mr. Dongqi Chen has been
appointed as the General Manager of the Company.
Mr. David Siu Kam Choy has been
the Controller of the Company from August
2020 to August 2022. He has
also been the Chief Financial Officer of Puhui since October
2018. Mr. Choy served in various positions at KPMG Hong Kong
and Ernst & Young Beijing, Guangzhou and Hong
Kong from September 1997 to
September 2005, and served as the
Financial Controller of Shenzhen Development Bank Company Limited
(now known as Ping An Bank Co., Ltd.) from October 2005 to March
2007. Mr. Choy subsequently joined Ping An Insurance
Group where he served as the Deputy
General Manager of Group Finance Department from March 2007 to January
2009, Deputy General Manager of Group Planning Department
from January 2009 to March 2014, and General Manager of Group Treasury
Department from March 2014 to
September 2018. Representing Ping An
Insurance during his service at the group, Mr. Choy also served in
various directorship roles within the Ping An Group, namely,
Chairman of China Ping An Insurance Overseas (Holdings) Limited,
non-executive director of each of Shenzhen Ping An Fintech Company,
Ping An Asset Management (HK) Limited, Ping An Real Estate Company
and Ping An Yiqianbao e-commerce Company. Mr. Choy obtained his
Bachelor's Degree in Business Administration major in finance from
the Hong Kong University of Science &
Technology in 1997 and his Master's Degree in Corporate
Governance and Directorship from the Hong Kong Baptist University in 2014. He also completed the
senior executives program in corporate governance at Stanford University in 2016.
Ms. Younjeong Lim currently serves as Vice President and Chief
Risk Officer of Puhui, where she is responsible for the
comprehensive risk management of retail lending business of the
Company. Ms. Lim has led the transformation of Puhui's risk
management system from a traditional model into a
technology-supported, data-driven online model. Prior to joining
Puhui in 2008, Ms. Lim has served as the Head of Consumer Finance
Risk Management Department of Standard Chartered Bank in Korea from
2006 to 2008 and the Head of Credit Card Business Planning
Department of Citibank in Korea from 1999 to 2005. Ms. Lim received
her Master's Degree in Economics from Ohio
State University in 1996.
Mr. Dongqi Chen currently serves
as Chairman of Ping An Consumer Finance Co., Ltd. and General
Manager of Puhui. Mr. Chen has over 25 years of experience in sales
management and the financial industry. Prior to his current
positions, Mr. Chen has served as Executive Deputy General Manager
of Puhui from 2017 to 2020, Deputy General Manager of Puhui from
2016 to 2017, and Assistant to the General Manager of Puhui from
2015 to 2016. Mr. Chen has served as Chairman and General Manager
of Ping An Insurance Agency Co., Ltd. from 2014 to 2018 and held a
number of positions in Ping An Property & Casualty Insurance
Company of China Ltd. from 1996 to 2014, including as Assistant to
General Manager of the Credit Guarantee Insurance Business Unit
from 2013 to 2014. Mr. Chen received his Bachelor's Degree in
Insurance from Nankai University in 1991.
Business Outlook
For the second half of 2022, the Company expects its new loans
facilitated to decrease by 8% to 17% year over year to the range of
RMB270 billion to RMB296 billion, client assets to decrease by 1%
to 10% year over year to the range of RMB390
billion to RMB430 billion,
total income to decrease by 8% to 13% year over year to the range
of RMB27.7 billion to RMB29.1 billion, and net profit to decrease by
26% to 33% year over year to the range of RMB4.7 billion to RMB5.2
billion.
For the full year of 2022, the Company expects its new loans
facilitated to decrease by 9% to 13% year over year to the range of
RMB563 billion to RMB590 billion, client assets to decrease by 1%
to 10% year over year to the range of RMB390
billion to RMB430 billion,
total income to decrease by 0% to 3% year over year to the range of
RMB60.3 billion to RMB61.7 billion, and net profit to decrease by
20% to 22% year over year to the range of RMB13.0 billion to RMB13.4
billion. If non-cash foreign exchange losses were excluded
from the calculation of net profit, then the Company's expectation
would be for a decrease in net profit for the full year of 2022 of
between 14% and 17%.
These forecasts reflect the Company's current and preliminary
views on the market and operational conditions, which are subject
to change.
Conference Call Information
The Company's management will hold an earnings conference call
at 9:00 P.M. U.S. Eastern Time on
Thursday, August 4, 2022
(9:00 A.M. Beijing Time on
Friday, August 5, 2022) to discuss
the financial results. For participants who wish to join the call,
please complete online registration using the link provided below
in advance of the conference call. Upon registering, each
participant will receive a participant dial-in number, the Direct
Event passcode, and a unique access PIN, which can be used to join
the conference call.
Registration Link:
https://ige.netroadshow.com/registration/q4inc/11391/lufax-holding-ltd-second-quarter-2022-earnings-conference-call/
A replay of the conference call will be accessible through
August 11, 2022 (dial-in numbers: +1
(866) 813-9403 or +1 (226) 828-7578; replay access code: 311080). A
live and archived webcast of the conference call will also be
available at the Company's investor relations website at
https://ir.lufaxholding.com.
About Lufax
Lufax Holding Ltd is a leading technology-empowered personal
financial services platform in China. Lufax Holding Ltd primarily utilizes
its customer-centric product offerings and offline to-online
channels to provide retail credit facilitation services to small
business owners and salaried workers in China as well as tailor-made wealth management
solutions to China's rapidly
growing middle class. The Company has implemented a unique,
capital-light, hub-and-spoke business model combining purpose-built
technology applications, extensive data, and financial services
expertise to effectively facilitate the right products to the right
customers.
Exchange Rate Information
This announcement contains translations of certain RMB amounts
into U.S. dollars at a specified rate solely for the convenience of
the reader. Unless otherwise noted, all translations from RMB to
U.S. dollars are made at a rate of RMB6.6981 to US$1.00, the rate in effect as of June 30, 2022, as certified for customs purposes
by the Federal Reserve Bank of New
York.
Safe Harbor Statement
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the
United States Private Securities Litigation Reform Act of 1995.
These forward-looking statements can be identified by terminology
such as "will," "expects," "anticipates," "future," "intends,"
"plans," "believes," "estimates" and similar statements. Statements
that are not historical facts, including statements about Lufax's
beliefs and expectations, are forward-looking statements. Lufax has
based these forward-looking statements largely on its current
expectations and projections about future events and financial
trends, which involve known or unknown risks, uncertainties and
other factors, all of which are difficult to predict and many of
which are beyond the Company's control. These forward-looking
statements include, but are not limited to, statements about
Lufax's goals and strategies; Lufax's future business development,
financial condition and results of operations; expected changes in
Lufax's income, expenses or expenditures; expected growth of the
retail credit facility and wealth management markets; Lufax's
expectations regarding demand for, and market acceptance of, its
services; Lufax's expectations regarding its relationship with
borrowers, platform investors, funding sources, product providers
and other business partners; general economic and business
conditions; and government policies and regulations relating to the
industry Lufax operates in. Forward-looking statements involve
inherent risks and uncertainties. Further information regarding
these and other risks is included in Lufax's filings with the U.S.
Securities and Exchange Commission. All information provided in
this press release is as of the date of this press release, and
Lufax does not undertake any obligation to update any
forward-looking statement, except as required under applicable
law.
Investor Relations Contact
Lufax Holding Ltd
Email: Investor_Relations@lu.com
ICR, LLC
Robin Yang
Tel: +1 (646) 308-0546
Email: lufax.ir@icrinc
LUFAX HOLDING LTD
|
UNAUDITED INTERIM CONDENSED CONSOLIDATED INCOME
STATEMENTS
|
(All amounts in thousands, except share data,
or otherwise noted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
|
RMB
|
|
RMB
|
|
USD
|
|
RMB
|
|
RMB
|
|
USD
|
Technology
platform-based income
|
|
9,601,195
|
|
7,379,637
|
|
1,101,751
|
|
19,891,314
|
|
16,671,652
|
|
2,489,012
|
Retail
credit facilitation service fees
|
|
9,193,711
|
|
6,912,248
|
|
1,031,971
|
|
18,858,856
|
|
15,612,092
|
|
2,330,824
|
Wealth
management transaction and service fees
|
|
407,484
|
|
467,389
|
|
69,779
|
|
1,032,458
|
|
1,059,560
|
|
158,188
|
Net interest
income
|
|
3,226,887
|
|
5,010,245
|
|
748,010
|
|
6,137,811
|
|
9,993,806
|
|
1,492,036
|
Guarantee
income
|
|
890,589
|
|
1,936,139
|
|
289,058
|
|
1,441,964
|
|
3,838,473
|
|
573,069
|
Other income
|
|
1,070,812
|
|
532,002
|
|
79,426
|
|
2,109,368
|
|
1,235,577
|
|
184,467
|
Investment
income
|
|
36,756
|
|
428,234
|
|
63,934
|
|
526,462
|
|
863,222
|
|
128,876
|
Share of net profits of
investments accounted for
using the equity method
|
|
2,037
|
|
1,754
|
|
262
|
|
(27,846)
|
|
1,377
|
|
206
|
Total income
|
|
14,828,276
|
|
15,288,011
|
|
2,282,440
|
|
30,079,073
|
|
32,604,107
|
|
4,867,665
|
Sales and marketing
expenses
|
|
(4,315,895)
|
|
(3,495,839)
|
|
(521,915)
|
|
(8,549,164)
|
|
(7,979,735)
|
|
(1,191,343)
|
General and
administrative expenses
|
|
(797,573)
|
|
(761,940)
|
|
(113,755)
|
|
(1,651,278)
|
|
(1,487,481)
|
|
(222,075)
|
Operation and servicing
expenses
|
|
(1,476,499)
|
|
(1,581,171)
|
|
(236,063)
|
|
(2,997,686)
|
|
(3,170,998)
|
|
(473,418)
|
Technology and
analytics expenses
|
|
(516,828)
|
|
(483,385)
|
|
(72,167)
|
|
(963,421)
|
|
(931,268)
|
|
(139,035)
|
Credit impairment
losses
|
|
(1,393,534)
|
|
(3,512,913)
|
|
(524,464)
|
|
(2,446,784)
|
|
(6,336,429)
|
|
(946,004)
|
Asset impairment
losses
|
|
(2,049)
|
|
(351,956)
|
|
(52,546)
|
|
(2,049)
|
|
(351,956)
|
|
(52,546)
|
Finance
costs
|
|
(275,974)
|
|
(221,279)
|
|
(33,036)
|
|
(560,066)
|
|
(432,071)
|
|
(64,507)
|
Other gains/(losses) -
net
|
|
301,417
|
|
(526,718)
|
|
(78,637)
|
|
163,451
|
|
(408,691)
|
|
(61,016)
|
Total
expenses
|
|
(8,476,935)
|
|
(10,935,201)
|
|
(1,632,583)
|
|
(17,006,997)
|
|
(21,098,629)
|
|
(3,149,942)
|
Profit before income
tax expenses
|
|
6,351,341
|
|
4,352,810
|
|
649,857
|
|
13,072,076
|
|
11,505,478
|
|
1,717,723
|
Income tax
expenses
|
|
(1,622,650)
|
|
(1,416,356)
|
|
(211,456)
|
|
(3,374,756)
|
|
(3,279,143)
|
|
(489,563)
|
Net profit for the
period
|
|
4,728,691
|
|
2,936,454
|
|
438,401
|
|
9,697,320
|
|
8,226,335
|
|
1,228,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit/(loss)
attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the
Group
|
|
4,773,635
|
|
2,908,962
|
|
434,297
|
|
9,768,993
|
|
8,187,904
|
|
1,222,422
|
Non-controlling
interests
|
|
(44,944)
|
|
27,492
|
|
4,104
|
|
(71,673)
|
|
38,431
|
|
5,738
|
Net profit for the
period
|
|
4,728,691
|
|
2,936,454
|
|
438,401
|
|
9,697,320
|
|
8,226,335
|
|
1,228,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
-Basic earnings per
share
|
|
4.00
|
|
2.54
|
|
0.38
|
|
8.17
|
|
7.16
|
|
1.07
|
-Diluted earnings per
share
|
|
3.72
|
|
2.46
|
|
0.37
|
|
7.59
|
|
6.73
|
|
1.00
|
-Basic earnings per
ADS
|
|
2.00
|
|
1.27
|
|
0.19
|
|
4.09
|
|
3.58
|
|
0.53
|
-Diluted earnings per
ADS
|
|
1.86
|
|
1.23
|
|
0.18
|
|
3.80
|
|
3.37
|
|
0.50
|
LUFAX HOLDING LTD
|
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE
SHEETS
|
(All amounts in thousands, except share data,
or otherwise noted)
|
|
|
|
|
|
As of December
31,
|
|
As of June
30,
|
|
2021
|
|
2022
|
|
RMB
|
|
RMB
|
|
USD
|
Assets
|
|
|
|
|
|
Cash at bank
|
34,743,188
|
|
42,862,660
|
|
6,399,227
|
Restricted
cash
|
30,453,539
|
|
25,333,802
|
|
3,782,237
|
Financial assets at
fair value through profit or loss
|
31,023,211
|
|
21,433,047
|
|
3,199,870
|
Financial assets at
amortized cost
|
3,784,613
|
|
5,485,415
|
|
818,951
|
Financial assets
purchased under reverse repurchase agreements
|
5,527,177
|
|
1,509,259
|
|
225,326
|
Accounts and other
receivables and contract assets
|
22,344,773
|
|
19,706,801
|
|
2,942,148
|
Loans to
customers
|
214,972,110
|
|
236,591,969
|
|
35,322,251
|
Deferred tax
assets
|
4,873,370
|
|
4,335,306
|
|
647,244
|
Property and
equipment
|
380,081
|
|
332,665
|
|
49,666
|
Investments accounted
for using the equity method
|
459,496
|
|
108,918
|
|
16,261
|
Intangible
assets
|
899,406
|
|
894,951
|
|
133,613
|
Right-of-use
assets
|
804,990
|
|
798,421
|
|
119,201
|
Goodwill
|
8,918,108
|
|
8,918,108
|
|
1,331,438
|
Other assets
|
1,249,424
|
|
2,348,549
|
|
350,629
|
Total
assets
|
360,433,486
|
|
370,659,871
|
|
55,338,062
|
Liabilities
|
|
|
|
|
|
Payable to platform
users
|
2,747,891
|
|
2,440,464
|
|
364,352
|
Borrowings
|
25,927,417
|
|
32,033,601
|
|
4,782,491
|
Current income tax
liabilities
|
8,222,684
|
|
1,984,602
|
|
296,293
|
Accounts and other
payables and contract liabilities
|
8,814,255
|
|
9,098,003
|
|
1,358,296
|
Payable to investors of
consolidated structured entities
|
195,446,140
|
|
199,974,869
|
|
29,855,462
|
Financial guarantee
liabilities
|
2,697,109
|
|
3,964,959
|
|
591,953
|
Deferred tax
liabilities
|
833,694
|
|
1,013,871
|
|
151,367
|
Lease
liabilities
|
794,544
|
|
809,298
|
|
120,825
|
Convertible promissory
note payable
|
10,669,498
|
|
11,688,577
|
|
1,745,059
|
Optionally convertible
promissory notes
|
7,405,103
|
|
8,051,587
|
|
1,202,070
|
Other
liabilities
|
2,315,948
|
|
2,361,683
|
|
352,590
|
Total
liabilities
|
265,874,283
|
|
273,421,514
|
|
40,820,757
|
Equity
|
|
|
|
|
|
Share
capital
|
75
|
|
75
|
|
11
|
Share
premium
|
33,365,786
|
|
28,533,060
|
|
4,259,874
|
Treasury
shares
|
(5,560,104)
|
|
(5,642,769)
|
|
(842,443)
|
Other
reserves
|
9,304,995
|
|
8,657,715
|
|
1,292,563
|
Retained
earnings
|
55,942,943
|
|
64,130,847
|
|
9,574,483
|
Total equity
attributable to owners of the Company
|
93,053,695
|
|
95,678,928
|
|
14,284,488
|
Non-controlling
interests
|
1,505,508
|
|
1,559,429
|
|
232,817
|
Total
equity
|
94,559,203
|
|
97,238,357
|
|
14,517,304
|
Total liabilities
and equity
|
360,433,486
|
|
370,659,871
|
|
55,338,062
|
|
|
|
|
|
|
LUFAX HOLDING
LTD
|
UNAUDITED INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(All amounts
in thousands, except share data, or otherwise noted)
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
RMB
|
|
RMB
|
|
USD
|
|
RMB
|
|
RMB
|
|
USD
|
Net cash generated
from/(used in) operating
activities
|
2,119,461
|
|
(1,034,772)
|
|
(154,487)
|
|
3,903,849
|
|
(2,736,994)
|
|
(408,622)
|
Net cash generated
from/(used in) investing activities
|
(1,358,421)
|
|
6,048,599
|
|
903,032
|
|
(5,198,665)
|
|
12,943,660
|
|
1,932,438
|
Net cash generated
from/(used in) financing activities
|
363,769
|
|
(6,577,441)
|
|
(981,986)
|
|
2,286,217
|
|
(7,302,588)
|
|
(1,090,248)
|
Effects of exchange
rate changes on cash and
cash
equivalents
|
(85,377)
|
|
24,535
|
|
3,663
|
|
(61,670)
|
|
2,358
|
|
352
|
Net increase/(decrease)
in cash and cash
equivalents
|
1,039,432
|
|
(1,539,079)
|
|
(229,778)
|
|
929,731
|
|
2,906,436
|
|
433,919
|
Cash and cash
equivalents at the beginning of
the
period
|
23,675,950
|
|
30,941,825
|
|
4,619,493
|
|
23,785,651
|
|
26,496,310
|
|
3,955,795
|
Cash and cash
equivalents at the end of the
period
|
24,715,382
|
|
29,402,746
|
|
4,389,714
|
|
24,715,382
|
|
29,402,746
|
|
4,389,714
|
View original
content:https://www.prnewswire.com/news-releases/lufax-reports-second-quarter-2022-financial-results-301600155.html
SOURCE Lufax Holding Ltd