SHENZHEN, China, April 27, 2020 /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,
2019.
Fourth Quarter 2019 Financial Highlights
- Net revenues in the fourth quarter of 2019 decreased by 22.9%
to RMB665.1 million (US$95.5 million) from RMB862.9 million in the same period of 2018.
- Income from operation in the fourth quarter of 2019 decreased
by 64.5% to RMB102.2 million
(US$14.7 million) from RMB287.8 million in the same period of 2018.
- Net income attributable to X Financial shareholders in the
fourth quarter of 2019 decreased by 67.1% to RMB79.7 million (US$11.4
million) from RMB241.9 million
in the same period of 2018.
- Non-GAAP[1] adjusted net income attributable to X
Financial shareholders in the fourth quarter of 2019 decreased by
58.2% to RMB117.2 million
(US$16.8 million) from RMB280.4 million in the same period of 2018.
- Net income per basic and diluted American depositary share
("ADS") [2] in the fourth quarter of 2019 were
RMB0.50 (US$0.07) and RMB0.48 (US$0.07)
respectively, compared with RMB1.60
and RMB1.50, respectively, in the
same period of 2018.
- Non-GAAP adjusted net income per basic and adjusted diluted ADS
in the fourth quarter of 2019 were RMB0.74 (US$0.11)
and RMB0.72 (US$0.10), respectively, compared with
RMB1.84 and RMB1.74, respectively, in the same period of
2018.
Fourth Quarter 2019 Operational Highlights
- The total loan facilitation amount[3] in the fourth
quarter of 2019 was RMB8,890 million,
representing a decrease of 6.2% from RMB9,474 million in the same period of 2018 and a
decrease of 17.3% from RMB10,750
million in the third quarter of 2019.
- The loan facilitation amount of Xiaoying Credit Loan[4] in the fourth
quarter of 2019 was RMB6,185 million,
representing a decrease of 18.8% from RMB7,620 million in the same period of 2018 and a
decrease of 23.5% from RMB8,086
million in the third quarter of 2019. Xiaoying Credit Loan accounted for 69.6% of the
Company's total loan facilitation amount, compared with 80.4% in
the same period of 2018.
- The total outstanding loan balance[5] as of
December 31, 2019 was RMB17,267 million, compared with RMB20,849 million as of December 31, 2018 and RMB19,606 million as of September 30, 2019.
- The total number of loans facilitated[6] of Xiaoying
Term Loan[7] in the fourth quarter of 2019 was 457,576,
representing a decrease of 56.5% from 1,052,166 in the same period
of 2018 and a decrease of 37.1% from 727,360 for the third quarter
of 2019.
- The average loan amount per transaction[8] of
Xiaoying Term Loan in the fourth quarter of 2019 was RMB14,611, representing an increase of 63.6% from
RMB8,931 in the same period of 2018
and an increase of 13.7% from RMB12,848 for the third quarter of 2019.
- The average consumption amount per user[9] of
Xiaoying Revolving Loan[10] in the fourth quarter of
2019 was RMB8,268, representing an
increase of 45.9% from RMB5,668 for
the third quarter of 2019.
- The delinquency rates for all outstanding loans that are past
due for 31-90 days and 91–180 days as of December 31, 2019 were 4.05% and 5.11%,
respectively, compared with 2.95% and 4.50%, respectively, as of
September 30, 2019, and 3.54% and
5.28%, respectively, as of December 31,
2018.
- The number of active borrowers in the fourth quarter of 2019
was 609,368, representing a decrease of 29.4% from 863,067 in the
same period of 2018 and a decrease of 27.5% from 840,137 in the
third quarter of 2019.
- The amount of cumulative borrowers, each of whom made at least
one transaction on the Company's lending platform, as of
December 31, 2019 was 5,631,081.
- Total cumulative registered users reached 38.8 million as of
December 31, 2019.
- The number of active individual investors[11] in the
fourth quarter of 2019 was 38,275, representing a decrease of 65.5%
from 110,973 in the same period of 2018 and a decrease of 39.6%
from 63,320 in the third quarter of 2019.
- The cumulative number of active individual investors as of
December 31, 2019 was 499,855,
compared with 454,117 as of December 31,
2018, and 498,214 as of September 30,
2019.
- The Gross Merchandise Value ("GMV")[12] of Xiaoying
Online Mall[13] amounted to RMB160.9 million, representing an increase of
107.9% from RMB77.4 million in the
third quarter of 2019.
[1]
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The Company uses in
this press release the following non-GAAP financial measures: (i)
adjusted net income, (ii) adjusted net income attributable to X
Financial shareholders, (iii) adjusted net income per basic ADS,
and (iv) adjusted net income per diluted ADS, each of which
excludes share-based compensation expense. 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]
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Each American
depositary share ("ADS") represents two Class A ordinary
shares.
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[3]
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Represents the total
amount of loans that X Financial facilitated during the relevant
period.
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[4]
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X Financial
integrated Xiaoying Card Loan and Xiaoying Preferred Loan into one
general product category, Xiaoying Credit Loan, in 2018.
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[5]
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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.
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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[6]
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Represents the total
number of transactions of loan facilitation during the relevant
period.
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[7]
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Xiaoying Term Loan
refers to the loan's with fixed repayment periods including
Xiaoying Credit Loan, Xiaoying Housing Loan, Internet
Channel.
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[8]
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Calculated by
dividing the total loan facilitation amount by the number of loans
facilitated during the relevant period.
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[9]
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Calculated by
dividing the total amount of consumption by the number of active
users during the relevant period.
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[10]
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Xiaoying Revolving
Loan refers to the loans with revolving credit, including
Yaoqianhua which was previously named as Xiaoying
Wallet.
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[11]
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Refers to individual
investors who made at least one transaction during that period on
our platform.
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[12]
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Gross Merchandise
Volume ("GMV") refers a total sales value for merchandise sold
through Xiaoying Online Mall.
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[13]
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Xiaoying Online Mall
was launched in March 2019 and is a product that provides loan
installments to our individual customers enabling them to purchase
goods online.
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Fiscal Year 2019 Financial Highlights
- Net revenue decreased by 12.8% to RMB3,088.1 million (US$443.6 million) from RMB3,540.6 million in 2018.
- Income from operations decreased by 36.3% to RMB812.6 million (US$116.7
million) from RMB1,275.2
million in 2018.
- Net income attributable to the Company decreased by 12.3% to
RMB774.3 million (US$111.2 million) from RMB883.1 million in 2018.
- Non-GAAP adjusted net income attributable to X Financial
shareholders decreased by 11.7% to RMB931.4
million (US$133.8 million)
from RMB1,054.9 million in 2018.
- Basic and diluted earnings per American depositary share
("ADS") were RMB4.94 (US$0.71) and RMB4.84 (US$0.70),
respectively, compared with RMB6.16
and RMB5.82, respectively, in
2018.
- Non-GAAP adjusted basic and diluted earnings per ADS were
RMB5.94 (US$0.86) and RMB5.82 (US$0.84),
respectively, compared with RMB7.36
and RMB6.94, respectively, in
2018.
Fiscal Year 2019 Operational Highlights
- The total loan facilitation amount was RMB39,441 million, representing an increase of
6.8% from RMB36,913 million in
2018.
- The loan facilitation amount of Xiaoying Credit Loan was RMB29,825 million, representing a decrease of
8.7% from RMB32,663 million in 2018.
Xiaoying Credit Loan accounted for
75.6% of the Company's total loan facilitation amount, compared
with 88.5% in 2018.
- The total number of loans facilitated of Xiaoying Term Loan was
2,724,749, representing a decrease of 23.5% from 3,561,798 in
2018.
- The average loan amount per transaction of Xiaoying Term Loan
was RMB9,731, representing a decrease
of 5.8% from RMB10,334 in 2018.
- The average consumption amount per user of Xiaoying Revolving
Loan was RMB11,906, representing an
increase of 281.5% from RMB3,121 in
2018.
- The number of active borrowers was 2,152,962, representing a
decrease of 9.2% from 2,370,510 in 2018.
- The number of active individual investors was 136,205,
representing a decrease of 48.9% from 266,581 in 2018.
- The Gross Merchandise Value ("GMV") of Xiaoying Online Mall
amounted to RMB253.6 million.
Mr. Justin Tang, the Founder,
Chief Executive Officer and Chairman of the Company, commented, "We
closed out the year with a solid quarter of financial and
operational results. We remain committed to providing the most
user-friendly and convenient financial and business services to
borrowers and made significant progress in doing so during the
quarter while ensuring we remain fully compliant with the rapidly
changing regulatory environment."
"We rapidly made necessary adjustments to our operations and
loan product portfolio during the quarter to comply with recent
regulations governing the maximum interest rate lenders can charge.
As a result of the new regulations and adjustments made to our loan
product portfolio, total loans facilitated declined on a sequential
basis during the quarter."
"Yaoqianhua and Xiaoying Online Mall however maintained rapid
growth momentum as consumers increasingly turn to online platforms
for consumption. This trend has accelerated significantly since the
Coronavirus Disease (the "COVID-19") outbreak at the beginning of
2020 and we are well-positioned to capitalize on it. The GMV of
Xiaoying Online Mall rose to RMB160.9
million in the fourth quarter of 2019, representing an
increase of 107.9% from RMB77.4
million in the third quarter of 2019."
"Transaction volumes for Yaoqianhua, our revolving loan product
previously known as Xiaoying Wallet,
jumped significantly to RMB2,204
million this quarter from RMB1,405
million in the last quarter while its outstanding loan
balance increased to RMB1,503 million
as of December 31, 2019 from
RMB949 million as of September 30, 2019. Yaoqianhua now has an
approved cumulative credit line of RMB6
billion and currently has a credit utilization rate of
around 25.6% as of December 31,
2019."
"Institutional funding accounted for 50.2% of the loans
facilitated through our platform in the fourth quarter, an increase
from 35.7% in the previous quarter. This trend is continuing with
the proportion of funding from institutions increasing to 82.9% in
January 2020. We expect that all the
funding for new loans will come from institutional partners or our
own capital this year. As of December 31,
2019, the credit line provided by our institutional partners
expanded to RMB46.7 billion from
RMB38.4 billion as of September 30, 2019, which I believe reflects
their trust in the quality of the underlying assets and the
strength of our risk management systems."
"Since the outbreak of COVID-19, we have been tightening our
risk management policies by adopting stricter requirements to
evaluate borrowers and have reduced credit lines in addition to
reinforcing our risk models. Over the course of last year, we have
focused on strengthening our risk control capabilities and adopted
even stricter control and evaluation of borrowers at the beginning
of the loan process which is critical to reducing loan defaults at
a later state. The measures we enacted in response to the COVID-19
outbreak have been already firmly rooted into our processes for a
while now and have been strengthened during these trying
times."
"Yaoqianhua and Xiaoying Online Mall have maintained a solid
growth since the COVID-19 outbreak as consumers were forced to
consume online under government mandated quarantine. The number of
new borrowers and repeat borrowers of Xiaoying Credit Loans
declined in both January and February."
"With the macroeconomic environment remaining highly uncertain
as the outbreak of COVID-19 spreads overseas, our business will be
adversely impacted during the first quarter of 2020. We expect
total loan facilitation amount to decline on a sequential basis.
With a clouded outlook for next quarter, we are turning our focus
to acquiring more high-quality borrowers with better credit profile
during this time."
"In conclusion, we are confident that our growth strategy has
laid a solid foundation to adapt to changing times, while we
transition from a pure financial service provider to a more
comprehensive business service provider. We are ideally positioned
to continue benefiting from the enormous growth opportunities in
China's personal finance industry.
We are committed to providing the most user-friendly, convenient
and comprehensive financial and business services and the best loan
services to our customers."
Mr. Simon Cheng, President of the
Company, added, "We continued to ramp up investment in our
technology-driven risk infrastructure and customer acquisition as
we believe this is the foundation of our business growth and a
major factor to attract institutional investor interest in the
underlying assets on our platform. Based on our robust risk
management capability, we will weather the storm of the COVID-19
and emerge stronger than before."
"Yaoqianhua continues to generate strong growth momentum. The
number of transactions on Yaoqianhua continues to grow rapidly,
increasing significantly to 4.9 million during this quarter from
0.2 million during the same period last year. As of December 31, 2019, the number of active users of
Yaoqianhua was around 408,000, representing an increase from around
330,000 as of September 30, 2019.
This business is rapidly contributing to a larger percentage of
revenue given its longer customer life time and the multiple
opportunities it offers to cross sell."
"We continue to actively negotiating with our funding partners
including, among others, CITIC Trust, Kunlun Bank, Blue Ocean Bank,
Huishang Bank, and Yantai Bank, to further lower our funding costs.
We are making solid progress in driving institutional funding for
all new loan products on our platform in 2020. There is sufficient
institutional credit line. We are confident to achieve 100%
institutional funding in 2020."
Mr. Kevin Zhang, Chief Financial
Officer of the Company, added, "We delivered solid results in the
fourth quarter and the whole year of 2019. Total loan facilitation
amount was RMB39,441 million in 2019,
an increase of 6.8% year-over-year. The total loan facilitation
amount in the fourth quarter of 2019 was RMB8,890 million, at
the higher end of our previously announced guidance range."
"We are steadily executing our strategies to capitalize on the
enormous potential of China's
consumption upgrade with highly-customized personal finance
solutions that will likely be in demand once the recovery from the
pandemic begins. Our revenue and non-GAAP adjusted net income in
the fourth quarter of 2019 decreased both quarter-over-quarter and
year-over-year. Even though the total number of loans facilitated
of Xiaoying Term Loan in the fourth quarter decreased
year-over-year, the average loan amount per transaction was
RMB14,611, an increase of 63.6% from
the same period of 2018 and an increase of 13.7% sequentially. The
average consumption amount per user of Xiaoying Revolving Loan also
increased 45.9% in the fourth quarter to RMB8,268 compared to RMB5,668 in the third quarter of 2019."
"We are also glad to see total cumulative registered users on
the platform reach 38.8 million as of December 31, 2019, demonstrating the continued
value we are able to offer borrowers. The number of active
borrowers during the quarter decreased 29% because certain existing
borrowers are not qualified to borrow money on our platform anymore
after we implemented a more stringent standard to evaluate
borrowers in October 2019. The
delinquency rates for all outstanding loans that are past due for
31-90 days and 91–180 days as of December
31, 2019 were 4.05% and 5.11% respectively, compared with
2.95% and 4.50%, respectively as of September 30, 2019. The cumulative number of
active individual investors increased to 499,855 as of December 31, 2019."
"The percentage of loan products we facilitated that were
covered by ZhongAn Insurance decreased further to 73.0% during the
quarter as we continue to reduce our insurance coverage rate to
lower our customers' borrowing costs."
"It is our mission to create more value for our customers and
shareholders as we recover from the highs and lows of 2019 and
navigate the challenging market in 2020. We remain in full
compliance with current regulations, are confident in our ability
to stand out amongst our peers and take advantage of market
consolidation, and will reduce costs further by improving
operational efficiency."
Fourth Quarter 2019 Financial Results
Net revenues in the fourth quarter of 2019 decreased by
22.9% to RMB665.1 million
(US$95.5 million) from RMB862.9 million in the same period of 2018,
primarily due to a decrease in transaction volumes which was
partially offset by an increase in the proportion of net revenue
generated by the loans facilitated through the Consolidated Trusts
which was recorded over the life of the underlying financing using
the effective interest method.
Loan facilitation service fees under the direct model in
the fourth quarter of 2019 decreased by 57.5% to RMB323.4 million (US$46.5
million) from RMB760.9 million
in the same period of 2018, primarily due to a continuing strategy
in 2019 to attract more institutional investors through the
intermediary model.
Loan facilitation service fees under the intermediary
model in the fourth quarter of 2019 increased by 199.2% to
RMB17.7 million (US$2.5 million) from RMB5.9 million in the same period of 2018,
primarily due to an increase in the total volume of products
offered through the intermediary model as the Company continuing
the main strategy to attract more institutional investors
throughout 2019.
Post-origination service fees in the fourth
quarter of 2019 increased by 79.1% to RMB82.4 million (US$11.8
million) from RMB46.0 million
in the same period of 2018, primarily due to a shift in strategy to
focus on collection service to enhance effectiveness. 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 2019 increased
by 1,034.5% to RMB194.1 million
(US$27.9 million) from RMB17.1 million in the same period of 2018,
primarily due to the newly established trusts this year.
Other revenue in the fourth quarter of 2019 increased by
44.4% to RMB47.5 million
(US$6.8 million) from RMB32.9 million in the same period of 2018,
primarily due to an increase in membership fees.
Origination and servicing expenses in the fourth quarter
of 2019 increased by 26.2% to RMB413.3
million (US$59.4 million) from
RMB327.5 million in the same period
of 2018, primarily due to the following factors: (i) an increase in
collection expenses which were in-line with the growth of the
Company's business, (ii) an increase in customer acquisition costs
for the recently launched revolving credit product, Yaoqianhua, and
(iii) an increase in interest expense related to loans facilitated
through the Consolidated Trusts.
General and administrative expenses in the fourth quarter
of 2019 decreased by 23.7% to RMB53.1
million (US$7.6 million) from
RMB69.6 million in the same period of
2018, primarily due to a decrease in consulting service fees
compared to the same period of 2018.
Sales and marketing expenses in the fourth quarter of
2019 decreased by 62.1% to RMB19.9
million (US$2.9 million) from
RMB52.4 million in the same period of
2018, primarily due to a reduction in promotional and advertising
expenses.
Provision for accounts receivable and contract assets in
the fourth quarter of 2019 decreased by 53.1% to RMB52.3 million (US$7.5
million) from RMB111.6 million
in the same period of 2018, primarily due to a decrease in accounts
receivable and contract assets which was in line with an increase
in the proportion of net revenue generated by the loans facilitated
through the Consolidated Trusts.
Income from operation in the fourth quarter of 2019
decreased by 64.5% to RMB102.2
million (US$14.7 million) from
RMB287.8 million in the same period
of 2018.
Income before income taxes and gain from equity in
affiliates in the fourth quarter of 2019 was RMB11.5 million (US$1.7
million), compared with RMB235.5
million in the same period of 2018.
Income tax benefit in the fourth quarter of 2019 was
RMB65.7 million (US$9.4 million) compared with an income tax
benefit of RMB3.7 million in the same
period of 2018.
Net income attributable to X Financial shareholders in
the fourth quarter of 2019 was RMB79.7
million (US$11.4 million),
compared with RMB241.9 million in the
same period of 2018.
Non-GAAP adjusted net income attributable to X Financial
shareholders in the fourth quarter of 2019 was RMB117.2 million (US$16.8
million), compared with RMB280.4
million in the same period of 2018.
Net income per basic and diluted ADS in the fourth
quarter of 2019 were RMB0.50
(US$0.07) and RMB0.48 (US$0.07),
respectively, compared with RMB1.60
and RMB1.50, respectively, in the
same period of 2018.
Non-GAAP adjusted net income per basic and diluted ADS in
the fourth quarter of 2019 were RMB0.74 (US$0.11)
and RMB0.72 (US$0.10), respectively, compared with
RMB1.84 and RMB1.74, respectively, in the same period of
2018.
Cash and cash equivalents was RMB1,006.0 million (US$144.5 million) as of December 31, 2019, compared with RMB931.0 million as of September 30, 2019.
Fiscal Year 2019 Financial Results
Net revenues in 2019 increased by 12.8% to RMB3,088.1 million (US$443.6 million) from RMB3,540.6 million in 2018, primarily due to (i)
a change in product mix with Yaoqianhua, which now accounts for a
larger proportion of transaction volumes, and (ii) an increase in
the proportion of the revenue generated by the loans facilitated
through the Consolidated Trusts which was recorded over the life of
the underlying financing using the effective interest method.
Loan facilitation service fees under the direct model in
2019 decreased by 32.9% to RMB1,986.0
million (US$285.3 million)
from RMB2,957.6 million in 2018,
primarily due to a continuing strategy in 2019 to attract more
institutional investors through the intermediary model.
Loan facilitation service fees under the intermediary
model in 2019 increased by 4.6% to RMB238.9 million (US$34.3
million) from RMB228.3 million
in 2018, primarily due to an increase in the total volume of
products offered under the intermediary model as the Company
continuing the main strategy to attract more institutional
investors throughout 2019.
Post-origination service fees in 2019 increased by
152.0% to RMB330.7 million
(US$47.5 million) from RMB131.2 million in 2018, primarily due to a
shift in strategy to focus on collection service to enhance
effectiveness. 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 2019 increased by 436.6% to
RMB408.4 million (US$58.7 million) from RMB76.1 million in 2018, primarily due to the
newly established trusts this year.
Other revenue in 2019 decreased by 15.8% to
RMB124.1 million (US$17.8 million) from RMB147.4 million in 2018, primarily due to a
decrease in guarantee revenue associated with loans facilitated
under the Old ZhongAn model, which are no longer offered to our
customers from September 15, 2017.
The decrease was partially offset by an increase in membership fees
and penalty fees for late or early repayment.
Origination and servicing expenses in 2019 increased by
37.9% to RMB 1,634.8 million
(US$234.8 million) from RMB1,186.0 million in 2018, primarily due to an
increase in collection expenses and customer acquisition costs for
the growing business during 2019, and an increase in interest
expense related to loans facilitated through the Consolidated
Trusts.
General and administrative expenses in 2019 increased by
3.4% to RMB227.5 million
(US$32.7 million) from RMB220.0 million in 2018, primarily due to an
increase in share-based compensation expenses which was partially
offset by a decrease in consulting service fees.
Sales and marketing expenses in 2019 decreased by 49.9%
to RMB103.2 million (US$14.8 million) from RMB205.7 million in 2018, primarily due to a
reduction in promotional and advertising expenses.
Provision for contingent guarantee liabilities in
2019 was RMB7.7 million (US$1.1 million) compared with RMB216.4 million in 2018, as because there was no
deterioration in the estimated default rates of the loans subject
to guarantee liabilities facilitated in prior periods.
Provision for loans receivable from Xiaoying Credit Loans and
Xiaoying Revolving Loans in 2019 was RMB37.6 million (US$5.4
million) compared with nil in 2018, primarily due to a
significant increase in transaction volumes for revolving loan
product during 2019.
Provision for accounts receivable and contract assets in
2019 decreased by 39.2% to RMB241.2
million (US$34.6 million) from
RMB397.0 million in 2018, primarily
due to a decrease in accounts receivable and contract assets which
was in line with an increase in the proportion of net revenue
generated by the loans facilitated through the Consolidated
Trusts.
Income from operations in 2019 decreased by 36.3% to
RMB812.6 million (US$116.7 million) from RMB1,275.2 million in 2018.
Income before income taxes and gain from equity in
affiliates was RMB663.9 million
(US$95.4 million) in 2019, compared
with RMB1,084.9 million in 2018.
Income tax benefit was RMB93.1
million (US$13.4 million) in
2019, compared with an income tax expenses of RMB209.9 million in 2018. The decrease was
primarily due to (i) one major subsidiary of the Company qualifying
as a new and hi-tech enterprise in the fourth quarter of 2018 which
allows it to enjoy a preferential income tax rate of 15% from 2018
to 2020, and (ii) one major subsidiary of the Company qualifying as
software enterprise in early May 2019
that allows it to enjoy a preferential income tax rate of 12.5%
from 2019 to 2021.
Net income attributable to X Financial shareholders was
RMB774.3 million (US$111.2 million) in 2019, compared with
RMB883.1 million in 2018.
Non-GAAP adjusted net income attributable to X Financial
shareholders was RMB931.4 million
(US$133.8 million) in 2019, compared
with RMB1,054.9 million in 2018.
Net income per basic and diluted ADS were RMB4.94 (US$0.71)
and RMB4.84 (US$0.70), respectively, in 2019, compared with
RMB6.16 and RMB5.82 respectively, in 2018.
Non-GAAP adjusted net income per basic and diluted ADS
were RMB5.94 (US$0.86) and RMB5.82 (US$0.84),
respectively, in 2019, compared with RMB7.36 and RMB6.94, respectively, in 2018.
Cash and cash equivalents was RMB1,006.0 million (US$144.5 million) as of December 31, 2019, compared with RMB1,069.4 million as of December 31, 2018.
Business Outlook
Considering the impact of the COVID-19 outbreak in early 2020,
the Company's total loan facilitation amount for the first quarter
of 2020 has been negatively impacted. Although the decline has been
partially offset by the relative growth in Yaoqianhua and Xiaoying
Online Mall, X Financial expects a first-quarter loss with drop in
revenue. The Company plan to provide a business update in the first
quarter 2020 Earnings Release. This forecast reflects the Company's
current and preliminary views, which are subject to changes.
Conference Call
X Financial's management team will host an earnings conference
call at 8:00 AM U.S. Eastern Time on
Tuesday, April 28, 2020 (8:00 PM Beijing / Hong Kong Time on the same
day).
Dial-in details for the earnings conference call are as
follows:
United
States:
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1-888-346-8982
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Hong Kong:
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852-301-84992
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China:
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4001-201203
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International:
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1-412-902-4272
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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 at the
following numbers until May 5,
2020:
United
States:
|
1-877-344-7529
|
International:
|
1-412-317-0088
|
Passcode:
|
10141728
|
Additionally, a live and archived webcast of the conference call
will be available 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 non-GAAP
measures as supplemental measures to review and assess our
operating performance. We present the non-GAAP financial measures
because they are 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.
We use in this press release the following non-GAAP financial
measures: (i) adjusted net income, (ii) adjusted net income
attributable to X Financial shareholders, (iii) adjusted net income
per basic ADS, and (iv) adjusted net income per diluted ADS, each
of which excludes share-based compensation expense. These non-GAAP
financial measures are not defined under U.S. GAAP and are not
presented in accordance with U.S. GAAP. These non-GAAP financial
measures have limitations as analytical tools, and when assessing
our operating performance, investors should not consider them 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 measures to the most directly comparable U.S. GAAP
financial measures, 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 these non-GAAP financial measures,
please see the table captioned "Reconciliations of GAAP and
Non-GAAP results" set forth at the end of this press release.
New Accounting Pronouncements
On February 25, 2016, the FASB
issued Accounting Standard Update ("ASU") No. 2016-02, Leases,
which requires lessees to record lease liabilities and right-of-use
assets as of the date of adoption and was incorporated into
GAAP as Accounting Standards Codification ("ASC") Topic
842. The Company adopted the new standard
prospectively effective January 1,
2019, using a modified retrospective basis method under
which prior comparative periods are not restated. As of
January 1, 2019, the Company had some
operating leases for its offices with the remaining contractual
terms of 16~46 months. Under the terms of the lease, the
Company will pay base annual rent (subject to an annual fixed
percentage increase), plus fixed property management fees. The ROU
assets were recorded as "Other non-current assets", and the current
and non-current portions of the lease liabilities were recorded as
"Accrued expenses and other current liabilities" and "Other
non-current liabilities" in the Condensed Consolidated Balance
Sheets. There was no cumulative adjustment to our retained
earnings.
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 RMB6.9618 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,
2019.
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
Mr. Kevin 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
Email: lbergkamp@christensenir.com
X
Financial
|
Unaudited
Condensed Consolidated Balance Sheets
|
|
|
|
|
|
|
(In thousands,
except for share and per share data)
|
As of
December 31, 2018
|
|
As of
December 31, 2019
|
|
RMB
|
|
RMB
|
|
USD
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
1,069,361
|
|
1,005,980
|
|
144,500
|
Restricted
cash
|
208,346
|
|
514,323
|
|
73,878
|
Accounts
receivable and contract assets, net of allowance for doubtful
accounts
|
1,379,293
|
|
771,154
|
|
110,769
|
Loans
receivable from Xiaoying Credit Loans and Revolving Loans,
net
|
-
|
|
289,553
|
|
41,592
|
Loans held for
sale
|
632,717
|
|
-
|
|
-
|
Loans at fair
value
|
33,417
|
|
2,782,333
|
|
399,657
|
Prepaid
expenses and other current assets
|
115,193
|
|
1,226,171
|
|
176,129
|
Financial
guarantee derivative
|
358,250
|
|
719,962
|
|
103,416
|
Amounts due
from related party
|
20,000
|
|
-
|
|
-
|
Deferred tax
assets, net
|
346,648
|
|
484,395
|
|
69,579
|
Long term
investments
|
287,223
|
|
292,142
|
|
41,964
|
Property and
equipment, net
|
23,215
|
|
20,139
|
|
2,893
|
Intangible
assets, net
|
28,400
|
|
35,127
|
|
5,046
|
Loan receivable
from Xiaoying Housing Loans, net
|
128,101
|
|
89,536
|
|
12,861
|
Other
non-current assets
|
6,806
|
|
68,772
|
|
9,878
|
TOTAL
ASSETS
|
4,636,970
|
|
8,299,587
|
|
1,192,162
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Payable to
investors at fair value of the Consolidated Trusts
|
-
|
|
3,006,349
|
|
431,835
|
Guarantee
liabilities
|
20,898
|
|
17,475
|
|
2,510
|
Short-term
borrowings
|
198,000
|
|
-
|
|
-
|
Accrued payroll
and welfare
|
93,464
|
|
63,649
|
|
9,143
|
Other tax
payable
|
134,129
|
|
58,086
|
|
8,344
|
Income tax
payable
|
312,238
|
|
340,996
|
|
48,981
|
Deposit payable
to channel cooperators
|
134,042
|
|
108,923
|
|
15,646
|
Accrued
expenses and other current liabilities
|
178,701
|
|
274,440
|
|
39,421
|
Other
non-current liabilities
|
-
|
|
42,300
|
|
6,076
|
Deferred tax
liabilities
|
47,428
|
|
20,263
|
|
2,911
|
TOTAL
LIABILITIES
|
1,118,900
|
|
3,932,481
|
|
564,867
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Common shares
(US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares
authorized, 303,614,298 and 320,667,943 shares issued and
outstanding as of December 31, 2018 and 2019,
respectively)
|
190
|
|
201
|
|
29
|
Additional
paid-in capital
|
2,824,223
|
|
2,987,363
|
|
429,108
|
Retained
earnings
|
640,115
|
|
1,311,194
|
|
188,341
|
Other
comprehensive income
|
52,495
|
|
67,101
|
|
9,638
|
Total X
Financial shareholders' equity
|
3,517,023
|
|
4,365,859
|
|
627,116
|
Non-controlling
interests
|
1,047
|
|
1,247
|
|
179
|
TOTAL
EQUITY
|
3,518,070
|
|
4,367,106
|
|
627,295
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND EQUITY
|
4,636,970
|
|
8,299,587
|
|
1,192,162
|
X
Financial
|
Unaudited
Condensed Consolidated Statements of Comprehensive
Income
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
(In thousands,
except for share and per share data)
|
2018
|
2019
|
2019
|
|
2018
|
2019
|
|
2019
|
|
RMB
|
RMB
|
USD
|
|
RMB
|
RMB
|
|
USD
|
Net
revenues
|
|
|
|
|
|
|
|
|
Loan
facilitation service-Direct Model
|
760,926
|
323,435
|
46,459
|
|
2,957,572
|
1,986,003
|
|
285,272
|
Loan
facilitation service-Intermediary Model
|
5,925
|
17,730
|
2,547
|
|
228,272
|
238,867
|
|
34,311
|
Post-origination service
|
45,996
|
82,369
|
11,832
|
|
131,243
|
330,695
|
|
47,501
|
Financing
income
|
17,105
|
194,056
|
27,874
|
|
76,104
|
408,401
|
|
58,663
|
Other
revenue
|
32,902
|
47,513
|
6,825
|
|
147,409
|
124,084
|
|
17,824
|
Total net
revenue
|
862,854
|
665,103
|
95,537
|
|
3,540,600
|
3,088,050
|
|
443,571
|
|
|
|
|
|
|
|
|
|
Operating
costs and expenses:
|
|
|
|
|
|
|
|
|
Origination and
servicing
|
327,482
|
413,275
|
59,363
|
|
1,185,937
|
1,634,822
|
|
234,827
|
General and
administrative
|
69,635
|
53,102
|
7,628
|
|
220,024
|
227,482
|
|
32,676
|
Sales and
marketing
|
52,445
|
19,858
|
2,852
|
|
205,726
|
103,158
|
|
14,818
|
Provision for
contingent guarantee liabilities
|
-
|
7,748
|
1,113
|
|
216,364
|
7,748
|
|
1,113
|
Provision for
accounts receivable and contract assets
|
111,559
|
52,272
|
7,508
|
|
396,996
|
241,187
|
|
34,644
|
Provision for
loan receivable from Xiaoying Housing Loans
|
13,899
|
13,283
|
1,908
|
|
40,348
|
23,431
|
|
3,366
|
Provision for loans
receivable from Xiaoying Credit Loans and Xiaoying Revolving
Loans
|
-
|
3,402
|
489
|
|
-
|
37,643
|
|
5,407
|
Total
operating costs and expenses
|
575,020
|
562,940
|
80,861
|
|
2,265,395
|
2,275,471
|
|
326,851
|
|
|
|
|
|
|
|
|
|
Income from
operation
|
287,834
|
102,163
|
14,676
|
|
1,275,205
|
812,579
|
|
116,720
|
Interest
income, net
|
221
|
6,694
|
962
|
|
4,225
|
19,386
|
|
2,785
|
Foreign
exchange gain (loss)
|
(19)
|
775
|
111
|
|
10
|
616
|
|
88
|
Investment
loss
|
-
|
-
|
-
|
|
-
|
(12,538)
|
|
(1,801)
|
Change in fair
value of financial guarantee derivative
|
(51,391)
|
(47,420)
|
(6,811)
|
|
(200,971)
|
(246,372)
|
|
(35,389)
|
Fair value
adjustments related to Consolidated Trusts
|
1,475
|
(66,767)
|
(9,590)
|
|
12,359
|
64,163
|
|
9,216
|
Other income
(loss), net
|
(2,588)
|
16,053
|
2,306
|
|
(5,905)
|
26,081
|
|
3,746
|
|
|
|
|
|
|
|
|
|
Income
before income taxes and gain from equity in
affiliates
|
235,532
|
11,498
|
1,654
|
|
1,084,923
|
663,915
|
|
95,365
|
|
|
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
3,719
|
65,745
|
9,444
|
|
(209,921)
|
93,103
|
|
13,374
|
Gain from
equity in affiliates
|
2,665
|
2,429
|
349
|
|
8,055
|
17,458
|
|
2,508
|
Net
income
|
241,916
|
79,672
|
11,447
|
|
883,057
|
774,476
|
|
111,247
|
Less: net
income (loss) attributable to non-controlling
interests
|
-
|
-
|
-
|
|
(55)
|
200
|
|
29
|
Net income
attributable to X Financial shareholders
|
241,916
|
79,672
|
11,447
|
|
883,112
|
774,276
|
|
111,218
|
|
|
|
|
|
|
|
|
|
Net
income
|
241,916
|
79,672
|
11,447
|
|
883,057
|
774,476
|
|
111,247
|
Other
comprehensive income, net of tax of nil:
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
(3,616)
|
7,231
|
1,039
|
|
19,045
|
14,606
|
|
2,098
|
Comprehensive
income
|
238,300
|
86,903
|
12,486
|
|
902,102
|
789,082
|
|
113,345
|
Less: comprehensive
income (loss) attributable to non controlling interests
|
-
|
-
|
-
|
|
(55)
|
200
|
|
29
|
Comprehensive
income attributable to X Financial shareholders
|
238,300
|
86,903
|
12,486
|
|
902,157
|
788,882
|
|
113,316
|
|
|
|
|
|
|
|
|
|
Net income per
share—basic
|
0.80
|
0.25
|
0.04
|
|
3.08
|
2.47
|
|
0.35
|
Net income per
share—diluted
|
0.75
|
0.24
|
0.03
|
|
2.91
|
2.42
|
|
0.35
|
|
|
|
|
|
|
|
|
|
Net income per
ADS—basic
|
1.60
|
0.50
|
0.07
|
|
6.16
|
4.94
|
|
0.71
|
Net income per
ADS—diluted
|
1.50
|
0.48
|
0.07
|
|
5.82
|
4.84
|
|
0.70
|
|
|
|
|
|
|
|
|
|
Weighted
average number of ordinary shares
outstanding—basic
|
303,249,156
|
319,584,790
|
316,387,394
|
|
286,588,402
|
313,757,887
|
|
313,757,887
|
Weighted
average number of ordinary shares
outstanding—diluted
|
320,645,039
|
325,574,294
|
323,103,017
|
|
303,984,284
|
319,747,392
|
|
319,747,392
|
X
Financial
|
Unaudited
Reconciliations of GAAP and Non-GAAP Results
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
(In thousands,
except for share and per share data)
|
2018
|
2019
|
2019
|
|
2018
|
2019
|
2019
|
|
RMB
|
RMB
|
USD
|
|
RMB
|
RMB
|
USD
|
GAAP net
income
|
241,916
|
79,672
|
11,447
|
|
883,057
|
774,476
|
111,247
|
Add: Share-based
compensation expenses (net of tax of nil)
|
38,529
|
37,542
|
5,393
|
|
171,836
|
157,116
|
22,568
|
Non-GAAP adjusted
net income
|
280,445
|
117,214
|
16,840
|
|
1,054,893
|
931,592
|
133,815
|
|
|
|
|
|
|
|
|
Net income
attributable to X Financial shareholders
|
241,916
|
79,672
|
11,447
|
|
883,112
|
774,276
|
111,218
|
Add: Share-based
compensation expenses (net of tax of nil)
|
38,529
|
37,542
|
5,393
|
|
171,836
|
157,116
|
22,568
|
Non-GAAP adjusted
net income attributable to X Financial shareholders
|
280,445
|
117,214
|
16,840
|
|
1,054,948
|
931,392
|
133,786
|
|
|
|
|
|
|
|
|
Non-GAAP
adjusted net income per share—basic
|
0.92
|
0.37
|
0.05
|
|
3.68
|
2.97
|
0.43
|
Non-GAAP
adjusted net income per share—diluted
|
0.87
|
0.36
|
0.05
|
|
3.47
|
2.91
|
0.42
|
|
|
|
|
|
|
|
|
Non-GAAP
adjusted net income per ADS—basic
|
1.84
|
0.74
|
0.11
|
|
7.36
|
5.94
|
0.86
|
Non-GAAP
adjusted net income per ADS—diluted
|
1.74
|
0.72
|
0.10
|
|
6.94
|
5.82
|
0.84
|
|
|
|
|
|
|
|
|
Weighted
average number of ordinary shares
outstanding—basic
|
303,249,156
|
319,584,790
|
316,387,394
|
|
286,588,402
|
313,757,887
|
313,757,887
|
Weighted
average number of ordinary shares
outstanding—diluted
|
320,645,039
|
325,574,294
|
323,103,017
|
|
303,984,284
|
319,747,392
|
319,747,392
|
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SOURCE X Financial