SHENZHEN, China, March 18, 2019 /PRNewswire/ -- X Financial (NYSE:
XYF) (the "Company" or "we"), a leading technology-driven personal
finance company in China, today
announced its unaudited financial results for the fourth quarter
and fiscal year ended December 31,
2018.
Fourth Quarter 2018 Financial Highlights
- Net revenue in the fourth quarter of 2018 increased by 18.3% to
RMB862.9 million (US$125.5 million) from RMB729.2 million in the same period of
2017.
- Income from operations in the fourth quarter of 2018 increased
by 20.9% to RMB287.8 million
(US$41.9 million) from RMB238.1 million in the same period of 2017.
- Net income attributable to the Company in the fourth quarter of
2018 increased by 52.7% to RMB241.9
million (US$35.2 million) from
RMB158.5 million in the same period
of 2017.
- Non-GAAP net income[1] in the fourth quarter of
2018 increased by 45.1% to RMB280.4
million (US$40.8 million) from
RMB193.3 million in the same period
of 2017.
- Basic and diluted earnings per American depositary share
("ADS")[2] in the fourth quarter of 2018 were
RMB1.60 (US$0.24) and RMB1.50 (US$0.22),
respectively, compared with RMB1.14
and RMB1.06, respectively, in the
same period of 2017.
- Non-GAAP basic and diluted earnings per ADS in the fourth
quarter of 2018 were RMB1.84
(US$0.26) and RMB1.74 (US$0.26),
respectively, compared with RMB1.38
and RMB1.30, respectively, in the
same period of 2017.
Fourth Quarter 2018 Operational Highlights
- Total loan facilitation amount[3] in the fourth
quarter of 2018 was RMB9,474 million,
representing an increase of 4.2% from RMB9,088 million in the same period of 2017, and
an increase of 25.3% from RMB7,560
million in the third quarter of 2018.
- The loan facilitation of Xiaoying Card
Loan in the fourth quarter of 2018 was RMB6,457 million, representing an increase of
23.1% from RMB5,245 million in the
same period of 2017, and an increase of 12.9% from RMB5,720 million in the third quarter of 2018.
Xiaoying Card Loan accounted for
68.2% of the Company's overall total loan facilitation, compared
with 57.7% in the same period of 2017.
- Total outstanding loan balance[4] as of December 31, 2018 was RMB20,849 million, compared with RMB18,279 million as of December 31, 2017 and RMB20,789 million as of September 30, 2018.
- Total number of loans facilitated[5] in the
fourth quarter of 2018 was 1,295,541, representing an increase of
12.8% from 1,148,363 in the same period of 2017, and an increase of
60.8% from 805,841 for the third quarter of 2018.
- Average loan amount per transaction[6] in the
fourth quarter of 2018 was RMB7,312,
representing a decrease of 7.6% from RMB7,914 in the same period of 2017, and a
decrease of 22.1% from RMB9,382 for
the third quarter of 2018.
- The delinquency rates for all outstanding loans that are past
due for 31-90 days and 91–180 days as of December 31, 2018 were 3.54% and 5.28%,
respectively, compared with 3.51% and 3.36%, respectively, as of
September 30, 2018, and 1.47% and
1.35%, respectively, as of December 31,
2017.
- Number of active individual investors[7] in the
fourth quarter of 2018 was 110,973, representing a decrease of 5.5%
from 117,429 in the same period of 2017, and a decrease of 8.9%
from 121,757 in the third quarter of 2018.
- The cumulative number of active individual investors as of
December 31, 2018 was 454,117,
compared with 273,343 as of December 31,
2017, and 424,616, as of September
30, 2018.
Fiscal Year 2018 Financial Highlights
- Net revenue increased by 98.1% to RMB3,540.6 million (US$515.0 million) from RMB1,786.9 million in 2017.
- Income from operations increased by 154.2% to RMB1,275.2 million (US$185.5 million) from RMB501.7 million in 2017.
- Net income attributable to the Company increased by 159.5% to
RMB883.1 million (US$128.4 million) from RMB340.3 million in 2017.
- Non-GAAP net income increased by 155.1% to RMB1,054.9 million (US$153.4 million) from RMB413.5 million in 2017.
- Basic and diluted earnings per American depositary share
("ADS") were RMB6.16
(US$0.90) and RMB5.82 (US$0.84),
respectively, compared with RMB2.60
and RMB2.44, respectively, in
2017.
- Non-GAAP basic and diluted earnings per ADS were RMB7.36 (US$1.08)
and RMB6.94 (US$1.00), respectively, compared with
RMB3.18 and RMB2.96, respectively, in 2017.
Fiscal Year 2018 Operational Highlights
- Total loan facilitation amount was RMB36,913 million, representing an increase of
7.3% from RMB34,400 million in
2017.
- The total loan facilitation of Xiaoying
Card Loan was RMB26,011
million, representing an increase of 105.9% from
RMB12,634 million in 2017, accounted
for 70.5% of the Company's overall total loan facilitation for
fiscal year 2018 compared with 36.7% in 2017.
- Total number of loans facilitated was 3,835,163,
representing a decrease of 0.4% from 3,851,979 in 2017.
- Average loan amount per transaction was RMB9,625, representing an increase of 7.8% from
RMB8,930 in 2017.
- Number of active individual investors was 266,581, representing
an increase of 34.6% from 198,029 in 2017.
[1] Non-GAAP net income is
a non-GAAP financial measure. It represents net income before
share-based compensation expenses. For more information on non-GAAP
financial measure, please see the section of "Use of Non-GAAP
Financial Measures Statement" and the table captioned
"Reconciliations of GAAP and Non-GAAP Results" set forth at the end
of this press release.
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[2] Each American depositary
share ("ADS"), represents two Class A ordinary
shares.
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[3] Represents the total amount
of loans X Financial facilitated during the relevant
period.
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[4] Represents the total amount
of loans outstanding for loans X Financial facilitated at the end
of the relevant period. Loans that are delinquent for more than 180
days are charged-off and are excluded in the calculation of
delinquency rate by balance, except for Xiaoying Housing Loan. As
Xiaoying Housing Loan is a secured loan product and the Company is
entitled to payment by exercising its rights to the collateral. X
Financial does not charge off the loans delinquent for more 180
days and such loans are included in the calculation of delinquency
rate by balance.
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[5] Represents the total number
of transactions of loan facilitation during the relevant
period.
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[6] Calculated by dividing the
total loan facilitation amount by the number of loans facilitated
during the relevant period.
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[7] Refers to individual
investors who made at least one transaction during that period on
our platform.
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Mr. Justin Tang, the Founder,
Chief Executive Officer and Chairman of the Company, commented, "We
are pleased to report our financial and operational results for
2018. Despite a volatile market environment, we facilitated
RMB36,913 million in loans in 2018
while generating RMB3,540.6 million
in revenue, representing an increase of 98.1% from the prior
year.
Since the second half of 2018, the industry has been under
strict government oversight with many small and illegal lending
platforms gradually being weeded out of the market. We are
confident that a well-regulated industry will provide significant
future growth opportunities and generate strong borrower demand for
our personal finance products. We strongly support the government's
new regulations and believe that they will help us to improve our
overall risk controls and management capabilities, identify prime
customers, and provide best-in-class personal financing
solutions.
Over the past year, we have been diversifying our funding
sources and strengthening our cooperation with financial
institutions. For example, we partnered with CITIC Trust, Kunlun
Bank and China Foreign Economy and Trade Trust Co., Ltd. and are
also in discussions with other nationally renowned financial
institutions and trusts. Given that the majority of our products
are covered by ZhongAn Insurance, financial institutions have been
eager to cooperate with us. Looking ahead to 2019, we expect to
have a significant portion of our new funding coming from
institutional sources.
On the operating side, we made several big improvements over the
past few months.
First, we were one of the few P2P platforms to begin sharing
credit information with Baihang Credit, which will integrate, save
and process data collected from us and multiple other partner
companies. This will strengthen our credit assessment system and
allow us to quickly and accurately assess the creditworthiness of
borrowers, target a broader user base for financial services, and
reduce the cost of risk management.
Second, we were thrilled to engage Citic AIBank Corp. ("AIBank")
as our custodian bank to independently manage all borrowers' and
investors' funds. AIBank is a highly respected institution that has
developed cutting-edge technology and algorithms that will further
strengthen trust and security in our online lending platform,
improve our overall competitiveness, and ensure that we are
compliant with the new regulations.
Third, we launched our new revolving credit product,
Xiaoying Wallet, after significant
investment in its R&D and testing. We believe that this product
demonstrates our leading technology capabilities and swift
strategic execution, and it should have enormous growth potential
to better meet the needs of our customers. We will continue to
leverage our technological expertise and understanding of financial
products to improve our business performance and achieve
sustainable and healthy development.
Overall, we are pleased with the significant progress we have
made and strongly believe that we are ideally positioned to
continue benefiting from the enormous growth opportunities in
China's personal finance industry.
We will continue to invest in our technology to strengthen our risk
management capabilities and develop partnerships with corporate and
institutional investors to further diversify our funding sources
and generate long-term sustainable growth.
Lastly, I am pleased to announce that the Board of Directors has
declared a cash dividend of US$0.10
per ADS for full year 2018 as part of our new annual dividend
policy. We believe the dividend scheme demonstrates the strong
growth potential of our business and future business prospects."Mr.
Simon Cheng, President, said: "We
continue to deliver solid growth during difficult macro-economic
environment while maintaining healthy credit quality in Q4. We have
also made investment in our risk infrastructure and customer
acquisition and service capabilities during past quarter which will
benefit our future growth.
Adopting fin-tech technologies to promote micro SME lending and
consumer lending is clearly stated by Chinese regulator. X
Financial's capability to generate high quality asset from on line
micro lending is well recognized and welcomed in retail investment
community and institutional investors in China. X Financial is well positioned to work
with our partners in this growing area as a leading fin-tech player
in China."
Mr. Kevin Zhang, Chief Financial
Officer, added, "We delivered solid results during the fourth
quarter and the whole year of 2018. We are happy to see our
business begin to recover starting in the fourth quarter following
the lows of the third quarter in 2018.
Our total loan facilitation amount, revenue and non-GAAP net
income in the fourth quarter increased significantly both
quarter-over-quarter and year-over-year. The total loan
facilitation amount in the fourth quarter of 2018 was RMB9, 474 million, exceeding our previously
announced guidance of RMB8,
000 - RMB8, 500 million, which
demonstrates strong market demand and our industry leading
position.
Going forward, we will continue to strengthen risk controls
across our platform leveraging our strong big data analytics,
financial modeling, and credit assessment and fraud detection
capabilities, to deliver solid business development and reward our
shareholders over the long-term."
Fourth Quarter 2018 Financial Results
Net revenues in the fourth quarter of 2018 increased by
18.3% to RMB862.9 million
(US$125.5 million) from RMB729.2 million in the same period of 2017,
primarily due to a change in product mix resulting from a
significant increase in the proportion of revenue generated by
Xiaoying Card Loan, which carries a
higher service fee rate compared with the Company's other
products.
Loan facilitation service fees under the direct model in
the fourth quarter of 2018 increased by 31.9% to RMB760.9 million (US$110.7
million) from RMB576.9 million
in the same period of 2017, primarily due to a change in product
mix and a shift in strategy to focus on loan facilitation
services through the direct model following the cessation of the
online intermediary model in April
2017 and a portion of the offline intermediary model with
funding from financial institutions in February 2018 to comply with recent regulatory
requirements.
Loan facilitation service fees under the intermediary
model in the fourth quarter of 2018 decreased by 90.9% to
RMB5.9 million (US$0.9 million) from RMB65.4 million in the same period of 2017,
primarily due to a decrease in the total volume of products offered
under the intermediary model as the Company shifted its strategy to
focus on loan facilitation services through the direct
model.
Post-origination service fees in the fourth
quarter of 2018 increased by 189.1% to RMB46.0 million (US$6.7
million) from RMB15.9 million
in the same period of 2017, primarily due to a significant increase
in transaction volumes of Xiaoying Card Loan in 2018 for
loans with weighted average contractual
terms of 10~11 months. Revenues from post-origination
services are recognized on a straight-line basis over the term of
the underlying loans as the services are being provided.
Financing income in the fourth quarter of 2018
decreased by 49.7% to RMB17.1 million
(US$2.5 million) from RMB34.0 million in the same period of 2017,
primarily due to the termination of a portion of the consolidated
trusts administered by unrelated third-party trust companies that
were offered to investors through the Company's consolidated trust
business.
Other revenue in the fourth quarter of 2018 decreased by
11.0% to RMB32.9 million
(US$4.8 million) from RMB37.0 million in the same period of 2017,
primarily due to a decrease in guarantee revenue associated with
loans facilitated under the Old ZhongAn model[8], which
have substantially expired before the end of third quarter of
2018.
[8] Refers to the arrangement
with ZhongAn prior to September 2017, under which ZhongAn initially
reimbursed the loan principal and interest to the investor upon the
borrower's default, where we at our own discretion compensated
ZhongAn for substantially all the loan principal and interest
default but have not been subsequently
collected.
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Origination and servicing expenses in the fourth quarter
of 2018 increased by 27.4% to RMB327.5
million (US$47.6 million) from
RMB257.0 million in the same period
of 2017, primarily due to an increase in commission fees, and an
increase in collection expenses resulting from the increase in loan
transactions during the first three quarters of 2018.
General and administrative expenses in the fourth quarter
of 2018 increased by 63.3% to RMB69.6
million (US$10.1 million) from
RMB42.6 million in the same period of
2017, primarily due to an increase in share-based compensation
expenses and professional service fees.
Sales and marketing expenses in the fourth quarter of
2018 increased by 89.6% to RMB52.4
million (US$7.6 million) from
RMB27.7 million in the same period of
2017, primarily due to an increase in advertising campaigns aimed
at strengthening the Company's image.
Provision for contingent guarantee liabilities in
the fourth quarter of 2018 was nil, compared with RMB109.1 million in the same period of 2017,
primarily because the loans subject to guarantee liabilities have
substantially matured and the related guarantee liabilities have
been substantially settled before the end of the third quarter of
2018.
Provision for Accounts Receivable and Contract
Assets in the fourth quarter of 2018 increased by 103.6%
to RMB111.6 million (US$16.2 million) from RMB54.8 million in the same period of 2017,
primarily due to the increase in revenue this quarter compared with
same period of 2017 and a change in estimated default rates.
Income from operations in the fourth quarter of 2018
increased by 20.9% to RMB287.8
million (US$41.9 million)
from RMB238.1 million in the same period of 2017.
Income before income taxes and gain (loss) from equity in
affiliates in the fourth quarter of 2018 was RMB235.5 million (US$34.3
million), compared with RMB220.7
million in the same period of 2017.
Income tax benefit in the fourth quarter of 2018 was
RMB3.7 million (US$0.5 million), compared with an income tax
expense of RMB61.4 million in the
same period of 2017. The change was primarily because the corporate
income tax rate applicable to three major subsidiaries of the
Company was being adjusted down to 15% in 2018 as the Company
qualified as a high tech enterprise.
Net income attributable to the Company in the fourth
quarter of 2018 was RMB241.9 million
(US$35.2 million), compared with
RMB158.5 million in the same period
of 2017.
Non-GAAP net income in the fourth quarter of 2018 was
RMB280.4 million (US$40.8 million), compared with RMB193.3 million in the same period of 2017.
Basic and diluted earnings per ADS in the fourth quarter
of 2018 were RMB1.60 (US$0.24) and RMB1.50 (US$0.22),
respectively, compared with RMB1.14
and RMB1.06, respectively, in the
same period of 2017.
Non-GAAP basic and diluted earnings per ADS in the fourth
quarter of 2018 were RMB1.84
(US$0.26) and RMB1.74 (US$0.26),
respectively, compared with RMB1.38
and RMB1.30, respectively, in the
same period of 2017.
Cash and cash equivalents was RMB860.0million (US$125.1
million) as of December 31,
2018, compared with RMB1,464.2
million as of September 30,
2018.
Fiscal Year 2018 Financial Results
Net revenues in 2018 increased by 98.1% to
RMB3,540.6 million (US$515.0 million) from RMB1,786.9 million in 2017, primarily due to a
change in product mix resulting from a significant increase in the
proportion of the revenue generated by Xiaoying Card Loan, which carries a higher
service fee rate compared with the Company's other products.
Loan facilitation service fees under the direct model in
2018 increased by 140.2% to RMB2,957.6
million (US$430.2 million)
from RMB1,231.1 million in 2017,
primarily due to a change in product mix and a shift in
strategy to focus on loan facilitation services through the direct
model.
Loan facilitation service fees under the intermediary
model in 2018 decreased by 24.6% to RMB228.3 million (US$33.2
million) from RMB302.6 million
in 2017, primarily due to a decrease in the total volume of
products offered under the intermediary model as the Company shifts
its strategy to focus on loan facilitation services through the
direct model.
Post-origination service fees in 2018
increased by 160.8% to RMB131.2
million (US$19.1 million) from
RMB50.3 million in 2017, primarily
due to the cumulative effect of increased volume of loans
facilitated in the past year.
Financing income in 2018 decreased by 41.8% to
RMB76.1 million (US$11.1 million) from RMB130.7 million in 2017, primarily due to the
termination of a portion of the consolidated trusts administered by
unrelated third-party trust companies that were offered to
investors through the Company's consolidated trust business.
Other revenue in 2018 increased by 104.2% to
RMB147.4 million (US$21.4 million) from RMB72.2 million in 2017, primarily due to an
increase in penalty fees for late or early repayment.
Origination and servicing expenses in 2018 increased by
56.0% to RMB1,186.0 million
(US$172.5 million) from RMB760.1 million in 2017, primarily due to an
increase in commission fees and collection expenses resulting from
the increase in loan transactions during 2018.
General and administrative expenses in 2018 increased by
124.0% to RMB220.0 million
(US$32.0 million) from RMB98.2 million in 2017, primarily due to an
increase in share-based compensation expenses, professional
consulting fees, and higher rental fees associated with the
Company's new offices.
Sales and marketing expenses in 2018 increased by 168.6%
to RMB205.7 million (US$29.9 million) from RMB76.6 million in 2017, primarily due to an
increase in advertising campaigns aimed at strengthening the
Company's image.
Provision for contingent guarantee
liabilities in 2018 increased by 18.5% to
RMB216.4 million (US$31.5 million) from RMB182.6 in 2017, primarily due to the
challenging operating environment, credit contraction and reduced
liquidity for small and middle-size enterprises, and the adverse
impact on Xiaoying Preferred Loan by the market condition across
the industry during 2018.
Provision for accounts receivable and contract
assets in 2018 increased by 136.7% to RMB397.0 million (US$57.7
million) from RMB167.7 million
in 2017, primarily due to the significant increase in revenue in
2018 compared with last year.
Income from operations in 2018 increased by 154.2%
to RMB1,275.2 million (US$185.5 million) from RMB501.7 million in
2017.
Income before income taxes and gain (loss) from equity in
affiliates was RMB1,084.9 million
(US$157.8 million) in 2018, compared
with RMB478.6 million in 2017.
Income tax expense was RMB209.9
million (US$30.5 million) in
2018, compared with RMB138.2 million
in 2017. The increase was primarily due to an increase in taxable
income and partially offset by a decrease in corporate income tax
rate to 15% for three major subsidiaries of the Company, and a
pre-tax deduction for research and development expenses.
Net income attributable to the Company was
RMB883.1 million (US$128.4 million) in 2018, compared with
RMB340.3 million in 2017.
Non-GAAP net income was RMB1,054.9
million (US$153.4 million) in
2018, compared with RMB413.5 million
in 2017.
Basic and diluted earnings per ADS were RMB6.16 (US$0.90)
and RMB5.82 (US$0.84), respectively, in 2018, compared with
RMB2.60 and RMB2.44 respectively, in 2017.
Non-GAAP basic and diluted earnings per ADS were
RMB7.36 (US$1.08) and RMB6.94 (US$1.00),
respectively, in 2018, compared with RMB3.18 and RMB2.96, respectively, in 2017.
Cash and cash equivalents was RMB860.0 million (US$125.1
million) as of December 31,
2018, compared with RMB671.4
million as of December 31,
2017.
Business Outlook
X Financial currently expects the total loan facilitation for
the first quarter of 2019 to be approximately RMB9,000 million. This forecast reflects the
Company's current and preliminary views, which are subject to
changes.
Conference Call
X Financials' management team will host an earnings conference
call at 8:00 AM U.S. Eastern Time on
Tuesday, March 19, 2019 (8:00 PM Beijing Time on Tuesday, March 19, 2019).
Dial-in numbers for the live conference call are as follows:
International:
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1-412-902-4272
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U.S.:
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1-888-346-8982
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Mainland
China:
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4001-201203
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Hong Kong:
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852-301-84992
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Passcode:
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X
Financial
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Please dial in ten minutes before the call is scheduled to begin
and provide the passcode to join the call.
A replay of the conference call may be accessed by phone one
hour after the end of the conference call until March 26, 2019 at the following numbers:
United
States:
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1-877-344-7529
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International:
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1-412-317-0088
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Passcode:
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10129237
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Additionally, a live and archived webcast of the conference call
will be available on the Investor Relations section of the
Company's website at http://ir.xiaoyinggroup.com.
About X Financial
X Financial (NYSE: XYF) (the "Company") is a leading
technology-driven personal finance company
in China focused on meeting the huge demand for credit
from individuals and small-to-medium-sized enterprise owners. The
Company's proprietary big data-driven risk control system, WinSAFE,
builds risk profiles of prospective borrowers using a
variety data-driven credit assessment methodology to
accurately evaluate a borrower's value, payment capability, payment
attitude and overall creditworthiness. X Financial has established
a strategic partnership with ZhongAn Online P&C Insurance Co.,
Ltd. in multiple areas of its business operations to directly
complement its cutting-edge risk management and credit assessment
capabilities. ZhongAn Online P&C Insurance Co., Ltd. provides
credit insurance on X Financial's investment products
which significantly enhances investor confidence and allows the
Company to attract a diversified and low-cost funding base from
individuals, enterprises and financial institutions to support its
growth. X Financial leverages financial technology to provide
convenient, efficient, and secure investment services to a wide
range of high-quality borrowers and mass affluent investors which
complements traditional financial institutions and helps to promote
the development of inclusive finance in China.
For more information, please visit:
http://ir.xiaoyinggroup.com.
Use of Non-GAAP Financial Measures Statement
In evaluating our business, we consider and use adjusted net
income, a non-GAAP measure, as supplemental measure to review and
assess our operating performance. We present the non-GAAP financial
measure because it is used by our management to evaluate our
operating performance and formulate business plans. We also believe
that the use of the non-GAAP financial measures facilitates
investors' assessment of our operating performance.
This non-GAAP financial measure is not defined under U.S.
GAAP and is not presented in accordance with U.S. GAAP. This
Non-GAAP financial measure has limitations as analytical tools, and
when assessing our operating performance, investors should not
consider it in isolation, or as a substitute for the financial
information prepared and presented in accordance with U.S.
GAAP.
We mitigate these limitations by reconciling the non-GAAP
financial measure to the most directly comparable U.S. GAAP
financial measure, which should be considered when evaluating our
performance. We encourage you to review our financial information
in its entirety and not rely on a single financial measure.
For more information on this Non-GAAP financial measure, please
see the table captioned "Reconciliations of GAAP and Non-GAAP
results" set forth at the end of this press release.
Exchange Rate Information
This announcement contains translations of certain RMB amounts
into U.S. dollars at specified rates solely for the convenience of
the reader. Unless otherwise noted, all translations from RMB to
U.S. dollars are made at a rate of RMB6.8755 to US$1.00, the exchange rate set forth in the H.10
statistical release of the Board of Governors of the Federal
Reserve System as of December 31,
2018.
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 "will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates," "potential," "continue," "ongoing,"
"targets," "guidance" and similar statements. The Company may also
make written or oral forward-looking statements in its periodic
reports to the U.S. Securities and Exchange Commission (the "SEC"),
in its annual report to shareholders, in press releases and other
written materials and in oral statements made by its officers,
directors or employees to third parties. Any statements that are
not historical facts, including statements about the Company's
beliefs and expectations, are forward-looking statements that
involve factors, risks and uncertainties that could cause actual
results to differ materially from those in the forward-looking
statements. Such factors and risks include, but not limited to the
following: the Company's goals and strategies; its future business
development, financial condition and results of operations; the
expected growth of the credit industry, and marketplace lending in
particular, in China; the demand
for and market acceptance of its marketplace's products and
services; its ability to attract and retain borrowers and investors
on its marketplace; its relationships with its strategic
cooperation partners; competition in its industry; and relevant
government policies and regulations relating to the corporate
structure, business and industry. Further information regarding
these and other risks, uncertainties or factors is included in the
Company's filings with the SEC. All information provided in this
announcement is current as of the date of this announcement, and
the Company does not undertake any obligation to update such
information, except as required under applicable law.
For more information, please contact:
X Financial
Ms. Jennifer Zhang
E-mail: ir@xiaoying.com
Christensen
In China
Mr. Christian Arnell
Phone: +86-10-5900-1548
E-mail: carnell@christensenir.com
In US
Ms. Linda Bergkamp
Phone: +1-480-614-3004
E-mail: lbergkamp@christensenir.com
X
Financial
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Unaudited
Condensed Consolidated Balance Sheets
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(In thousands,
except for share and per share data)
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As of December 31,
2017
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As of December 31,
2018
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RMB
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RMB
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USD
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ASSETS
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Cash and cash
equivalents
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671,361
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860,034
|
125,087
|
Restricted
cash
|
12,615
|
|
417,673
|
60,748
|
Accounts
receivable and contract assets, net
of allowance for doubtful
accounts
|
1,110,948
|
|
1,379,293
|
200,610
|
Loans held for
sale
|
768,638
|
|
632,717
|
92,025
|
Loans at fair
value
|
667,839
|
|
33,417
|
4,860
|
Prepaid
expenses and other current assets
|
82,100
|
|
115,193
|
16,754
|
Financial
guarantee derivative
|
-
|
|
358,250
|
52,105
|
Amount due from
related party
|
-
|
|
20,000
|
2,909
|
Defferred tax
assets, net
|
296,058
|
|
346,648
|
50,418
|
Long term
investments
|
54,168
|
|
287,223
|
41,775
|
Property and
equipment, net
|
21,005
|
|
23,215
|
3,376
|
Intangible
assets, net
|
1,616
|
|
28,400
|
4,131
|
Loan receivable
from Xiaoying Housing Loans, net
|
197,596
|
|
128,101
|
18,632
|
Other
non-current assets
|
3,752
|
|
6,806
|
990
|
TOTAL
ASSETS
|
3,887,696
|
|
4,636,970
|
674,420
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Payable to
investors at fair value of the Consolidated Trusts
|
667,081
|
|
-
|
-
|
Guarantee
liabilities
|
545,169
|
|
20,898
|
3,039
|
Financial
guarantee derivative
|
53,261
|
|
-
|
-
|
Short-term
borrowings
|
-
|
|
198,000
|
28,798
|
Accrued payroll
and welfare
|
77,772
|
|
93,464
|
13,594
|
Other tax
payable
|
105,948
|
|
134,129
|
19,508
|
Income tax
payable
|
401,332
|
|
358,657
|
52,164
|
Deposit payable
to channel cooperators
|
134,262
|
|
134,042
|
19,496
|
Accrued
expenses and other current liabilities
|
137,330
|
|
178,702
|
25,991
|
Defferred tax
liabilities
|
-
|
|
1,008
|
148
|
TOTAL
LIABILITIES
|
2,122,155
|
|
1,118,900
|
162,738
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
Equity:
|
|
|
|
|
Common shares (US$0.0001 par value; 1000,000,000
shares authorized, 280,087,342 and
303,614,298
shares issued and outstanding as of December 31,
2017 and December 31, 2018
respectively)
|
173
|
|
190
|
28
|
Additional
paid-in capital
|
1,971,702
|
|
2,824,223
|
410,766
|
Retained
earnings (Accumulated deficits)
|
(242,997)
|
|
640,115
|
93,101
|
Other
comprehensive income
|
33,450
|
|
52,495
|
7,635
|
Total X
financial shareholders' equity
|
1,762,328
|
|
3,517,023
|
511,530
|
Non-controlling
interests
|
3,213
|
|
1,047
|
152
|
TOTAL
EQUITY
|
1,765,541
|
|
3,518,070
|
511,682
|
|
|
|
|
|
TOTAL
LIABILITIES AND EQUITY
|
3,887,696
|
|
4,636,970
|
674,420
|
X
Financial
|
|
|
|
|
|
|
|
Unaudited
Condensed Consolidated Statements of Comprehensive
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
(In thousands,
except for share and per share data)
|
2017
|
2018
|
2018
|
|
2017
|
2018
|
2018
|
|
RMB
|
RMB
|
USD
|
|
RMB
|
RMB
|
USD
|
Net
revenues
|
|
|
|
|
|
|
|
Loan
facilitation service-Direct Model
|
576,947
|
760,926
|
110,672
|
|
1,231,055
|
2,957,572
|
430,161
|
Loan
facilitation service- Intermediary Model
|
65,424
|
5,925
|
862
|
|
302,614
|
228,272
|
33,201
|
Post
origination service
|
15,908
|
45,996
|
6,690
|
|
50,327
|
131,243
|
19,089
|
Financing
income
|
33,996
|
17,105
|
2,488
|
|
130,740
|
76,104
|
11,069
|
Other
revenue
|
36,966
|
32,902
|
4,785
|
|
72,199
|
147,409
|
21,440
|
Total net
revenue
|
729,241
|
862,854
|
125,497
|
|
1,786,935
|
3,540,600
|
514,960
|
|
|
|
|
|
|
|
|
Operating
costs and expenses:
|
|
|
|
|
|
|
|
Origination and
servicing
|
256,974
|
327,482
|
47,630
|
|
760,143
|
1,185,937
|
172,487
|
General and
administrative
|
42,630
|
69,635
|
10,128
|
|
98,236
|
220,024
|
32,001
|
Sales and
marketing
|
27,666
|
52,445
|
7,628
|
|
76,584
|
205,726
|
29,922
|
Provision for
contingent guarantee liabilities
|
109,087
|
-
|
-
|
|
182,579
|
216,364
|
31,469
|
Provision for
accounts receivable and contract assets
|
54,788
|
111,559
|
16,226
|
|
167,700
|
396,996
|
57,741
|
Provision for
loan receivable from Xiaoying Housing
Loans
|
-
|
13,899
|
2,022
|
|
-
|
40,348
|
5,868
|
Total
operating costs and expenses
|
491,145
|
575,020
|
83,634
|
|
1,285,242
|
2,265,395
|
329,488
|
|
|
|
|
|
|
|
|
Income from
operation
|
238,096
|
287,834
|
41,863
|
|
501,693
|
1,275,205
|
185,472
|
Interest
income
|
1,779
|
221
|
32
|
|
3,633
|
4,225
|
615
|
Foreign
exchange gain (loss)
|
(94)
|
(19)
|
(3)
|
|
(479)
|
10
|
1
|
Gain on
disposal of investment
|
-
|
-
|
-
|
|
1,500
|
-
|
-
|
Change in fair
value of financial guarantee derivative
|
(15,423)
|
(51,391)
|
(7,475)
|
|
(18,111)
|
(200,971)
|
(29,230)
|
Fair value
adjustments related to Consolidated Trusts
|
(3,385)
|
1,475
|
215
|
|
(9,751)
|
12,359
|
1,798
|
Fair value
adjustments related to Loans held for sale
|
-
|
(3,416)
|
(497)
|
|
-
|
(3,416)
|
(497)
|
Other income
(expense), net
|
(227)
|
828
|
120
|
|
90
|
(2,489)
|
(362)
|
|
|
|
|
|
|
|
|
Income
before income taxes and gain (loss) from
equity in
affiliates
|
220,746
|
235,532
|
34,255
|
|
478,575
|
1,084,923
|
157,797
|
|
|
|
|
|
|
|
|
Income tax
expense (benefit)
|
61,394
|
(3,719)
|
(541)
|
|
138,248
|
209,921
|
30,532
|
Gain (loss)
from equity in affiliates
|
(599)
|
2,665
|
388
|
|
(832)
|
8,055
|
1,172
|
Net
income
|
158,753
|
241,916
|
35,184
|
|
339,495
|
883,057
|
128,437
|
Less: net loss
attributable to non-controlling interests
|
292
|
-
|
-
|
|
(780)
|
(55)
|
(8)
|
Net income
attributable to X Financial
|
158,461
|
241,916
|
35,184
|
|
340,275
|
883,112
|
128,445
|
|
|
|
|
|
|
|
|
Net
income
|
158,753
|
241,916
|
35,184
|
|
339,495
|
883,057
|
128,437
|
Other
comprehensive income, net of tax of nil:
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
(6,174)
|
(3,616)
|
(526)
|
|
(24,464)
|
19,045
|
2,770
|
Comprehensive
income
|
152,579
|
238,300
|
34,658
|
|
315,031
|
902,102
|
131,207
|
Less: comprehensive
loss attributable to non controlling
interests
|
292
|
-
|
-
|
|
(780)
|
(55)
|
(8)
|
Comprehensive
income attributable to X Financial
|
152,287
|
238,300
|
34,658
|
|
315,811
|
902,157
|
131,215
|
|
|
|
|
|
|
|
|
Net income per
share - basic
|
0.57
|
0.80
|
0.12
|
|
1.30
|
3.08
|
0.45
|
Weighted
average number of ordinary shares outstanding -
basic
|
280,087,342
|
303,249,156
|
303,249,156
|
|
261,219,657
|
286,588,402
|
286,588,402
|
Net income per
share - diluted
|
0.53
|
0.75
|
0.11
|
|
1.22
|
2.91
|
0.42
|
Weighted
average number of ordinary shares outstanding -
diluted
|
298,578,489
|
320,645,039
|
320,645,039
|
|
279,710,804
|
303,984,284
|
303,984,284
|
X
Financial
|
|
|
|
|
|
|
|
Unaudited
Reconciliations of GAAP and Non-GAAP Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
(In thousands,
except for share and per share data)
|
2017
|
2018
|
2018
|
|
2017
|
2018
|
2018
|
|
RMB
|
RMB
|
USD
|
|
RMB
|
RMB
|
USD
|
Reconciliation of
Adjusted Net Income to Net Income
|
|
|
|
|
|
|
|
Net income
|
158,753
|
241,916
|
35,184
|
|
339,495
|
883,057
|
128,437
|
Add: Share-based
compensation expenses (net of tax of nil)
|
34,558
|
38,529
|
5,604
|
|
74,010
|
171,836
|
24,993
|
Adjusted net
income (Non-GAAP)
|
193,311
|
280,445
|
40,788
|
|
413,505
|
1,054,893
|
153,430
|
View original
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SOURCE X Financial