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Yirendai Ltd. – ‘6-K’ for 11/16/16 – ‘EX-99.1’

On:  Wednesday, 11/16/16, at 9:45am ET   ·   For:  11/16/16   ·   Accession #:  1144204-16-134855   ·   File #:  1-37657

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

11/16/16  Yirendai Ltd.                     6-K        11/16/16    2:382K                                   Vintage/FA

Report by a Foreign Private Issuer   —   Form 6-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 6-K         Report by a Foreign Private Issuer                  HTML      7K 
 2: EX-99.1     Miscellaneous Exhibit                               HTML    179K 


EX-99.1   —   Miscellaneous Exhibit


This exhibit is an HTML Document rendered as filed.  [ Alternative Formats ]



 

Exhibit 99.1

 

Yirendai Reports Third Quarter 2016 Financial Results

 

BEIJING, November 15, 2016 – Yirendai Ltd. (NYSE: YRD) (“Yirendai” or the “Company”), a leading online consumer finance marketplace in China, today announced its unaudited financial results for the quarter ended September 30, 2016.

 

Starting from the second quarter of 2016, the Company changed its reporting currency from the U.S. dollar (“US$”) to the Renminbi (“RMB”), to reduce the impact of increased volatility of the RMB to US$ exchange rate on the Company’s reported operating results. The aligning of the reporting currency with the underlying operations will better depict the Company’s results of operations for each period. This release contains translations of certain RMB amounts into US$ for convenience[1]. Prior period numbers have been recast into the new reporting currency.

 

In the third quarter of 2016, Yirendai facilitated RMB 5,617.5 million (US$842.4 million) of loans to 92,479 qualified individual borrowers on its online marketplace, representing a 120% year-over-year growth; 59% of the borrowers were acquired from online channels; 40.5% of the loan volume was originated from online channels and 98.3% of the online volume was facilitated through the Yirendai mobile application.

 

In the third quarter of 2016, Yirendai facilitated 171,460 investors with total investment amount of RMB 5,953.5 million (US$892.8 million), 100% of which was facilitated through its online platform and 83.2% of which was facilitated through its mobile application.

 

For the third quarter of 2016, total net revenue was RMB 876.7 million (US$131.5 million), up 137% from the same period in 2015; net income was RMB 344.3 million (US$51.6 million), representing an increase of 308% from the same period in 2015.

 

   For Three Months Ended 
in RMB million 

September 30,

2016

  

June 30,

2016

  

QoQ

Change

  

September 30,

2015

  

YoY

Change

 
Amount of Loans Facilitated   5,617.5    4,538.7    24%   2,551.3    120%
Total Net Revenue   876.7    733.8    19%   370.7    137%
Total Fees Billed (non-GAAP)   1,322.6    1,110.8    19%   587.8    125%
Net Income   344.3    260.6    32%   84.4    308%
Adjusted EBITDA (non-GAAP)*   220.7    265.0    -17%   127.2    73%

 

* The sequential decrease of adjusted EBITDA was primarily due to an expense of RMB 81.3 million (US$12.2 million) related to an organized fraud incident concerning one type of Yirendai’s FastTrack loan products, which was first detected in July 2016.

 

“We are pleased to deliver another quarter of solid business growth as we stayed focused on technology-driven product development and partnership expansion,” commented Ms. Yihan Fang, Chief Executive Officer of Yirendai. “We continued to enhance our credit assessment model during the quarter by adding new data sources, fine-tuning our processing algorithms and introducing more stringent anti-fraud measures. We believe the Interim Measures for the Administration of the Business Activities of Online Lending Information Intermediary Institutions promulgated on August 24th, 2016 by the China Banking Regulatory Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security and the State Internet Information Office is an important milestone for China’s online lending industry. We believe it will drive the healthy development of the industry and benefit both lenders and borrowers. We are well positioned to expand and strengthen our industry-leading position and are confident that we will be able to provide better services to more customers.”

 

 1/10

 

 

“Our strong third quarter results were primarily attributable to continued growth in loan origination and stable asset performance,” said Mr. Dennis Cong, Chief Financial Officer of Yirendai. “We enjoyed a tax credit of RMB 151.7 million in this quarter as our subsidiary, Yi Ren Heng Ye, became qualified as a software enterprise which makes it eligible for a favorable income tax rate. We believe this demonstrates to the market our outstanding financial technological capabilities and proven track record of business operations. We are committed to investing in our future growth and enhancing our market leadership.”

 

Third Quarter 2016 Financial Results

 

Total amount of loans facilitated in the third quarter of 2016 was RMB 5,617.5 million (US$842.4 million), increased by 120% year over year from RMB 2,551.3 million in the same period of 2015, reflecting strong demand for our products and services. As of September 30, 2016, the Yirendai platform had facilitated approximately RMB 25.7 billion (US$3.8 billion) in loan principal since its inception.

 

Total net revenue in the third quarter of 2016 was RMB 876.7 million (US$131.5 million), increased by 137% from RMB 370.7 million in the same period of 2015. The increase of total net revenue was mainly attributable to the growth of loan origination volume.

 

Total fees billed (non-GAAP) in the third quarter of 2016 were RMB 1,322.6 million (US$198.3 million), increased by 125% from RMB 587.8 million in the same period of 2015, driven by the growth of loan origination volume. Upfront fees billed to borrowers in the third quarter of 2016 were RMB 1,192.4 million (US$178.8 million), increased by 109% from RMB 569.2 million in the same period of 2015. Monthly fees billed to borrowers in the third quarter of 2016 were RMB 105.8 million (US$15.9 million), increased by 349% from RMB 23.6 million in the same period of 2015. Service fees billed to investors in the third quarter of 2016 were RMB 110.9 million (US$16.6 million), increased by 318% from RMB 26.6 million in the same period of 2015.

 

Operating costs and expenses in the third quarter of 2016 were RMB 674.4 million (US$101.1 million), compared to RMB 471.2 million in the previous quarter and RMB 244.4 million in the same period of 2015.

 

Sales and marketing expenses in the third quarter of 2016 were RMB 423.0 million (US$63.4 million), compared to RMB 355.2 million in the previous quarter and RMB 182.4 million in the same period of 2015. Sales and marketing expenses in the third quarter of 2016 accounted for 7.5% of amount of loans facilitated in this quarter, decreased from 7.8% in the previous quarter as we continued to benefit from the strong investor demand.

 

Origination and servicing costs in the third quarter of 2016 were RMB 62.4 million (US$9.4 million), compared to RMB 42.7 million in the previous quarter and RMB 27.4 million in the same period of 2015. Origination and servicing costs in the third quarter of 2016 accounted for 1.1% of amount of loans facilitated in the third quarter of 2016, compared to 0.9% in the previous quarter.

 

General and administrative expenses in the third quarter of 2016 were RMB 189.0 million (US$28.3 million), compared to RMB 73.3 million in the previous quarter and RMB 34.6 million in the same period of 2015. General and administrative expenses in the third quarter of 2016 accounted for 21.6% of total net revenue, compared to 10.0% in the previous quarter. The increase in general and administrative expenses was mainly due to an expense of RMB 81.3 million (US$12.2 million) related to an organized fraud incident, the increased salary expenses as we expanded our technology team and the share-based compensation expenses of RMB 15.3 million (US$2.3 million).

 

In the third quarter of 2016, the Company recognized an expense of RMB 81.3 million (US$12.2 million) related to an organized fraud incident concerning one type of our FastTrack loan products, which was first detected in July 2016. After uncovering the fraud incident, the Company suspended the offering of the FastTrack loan product in question and made it available again on its marketplace starting late July with more stringent requirements which aim to prevent similar type of fraud incident.

 

 2/10

 

 

Income tax benefit in the third quarter of 2016 was RMB 132.0 million (US$19.8 million), compared to income tax expense of RMB 43.3 million in the same period of 2015. The income tax benefit was primarily because the Company’s subsidiary Yi Ren Heng Ye Technology Development (Beijing) Co., Ltd. became qualified as a software enterprise which makes it eligible for an exemption of enterprise income tax for 2015 and 2016. Total amount of tax credit in the third quarter of 2016 was RMB 151.7 million (US$22.8 million), including RMB 69.2 million associated with full year 2015 and RMB 82.5 million associated with the first and second quarter of 2016.

 

Adjusted EBITDA (non-GAAP) in the third quarter of 2016 was RMB 220.7 million (US$33.1 million), decreased by 17% from RMB 265.0 million in the previous quarter and increased by 73% from RMB 127.2 million in the same period of 2015. The sequential decrease of adjusted EBITDA was primarily due to an expense of RMB 81.3 million (US$12.2 million) related to the aforementioned fraud incident in July 2016.

 

Net income in the third quarter of 2016 was RMB 344.3 million (US$51.6 million), increased by 308% from RMB 84.4 million in the same period of 2015.

 

Basic income per ADS in the third quarter of 2016 was RMB 5.76 (US$0.86), increased by 29% from RMB 4.46 in the previous quarter and 241% from RMB 1.69 in the same period of 2015.

 

Diluted income per ADS in the third quarter of 2016 was RMB 5.70 (US$0.85), increased by 28% from RMB 4.46 in the previous quarter and 237% from RMB 1.69 in the same period of 2015.

 

Net cash generated from operating activities in the third quarter of 2016 was RMB 268.9 million (US$40.3 million), increased by 37% from RMB 196.1 million in the previous quarter and 172% from RMB 98.8 million in the same period of 2015.

 

As of September 30, 2016, cash and cash equivalents excluding the risk reserve fund balance was RMB 1,106.3 million (US$165.9 million), compared to RMB 1,336.3 million as of June 30, 2016. The decrease of cash and cash equivalents was primarily due to the Company’s increased investment in short-term assets, presented as available-for-sale investments and held-to-maturity investments on balance sheet, to enhance its return from operating cash. As of September 30, 2016, balance of held-to-maturity investments was RMB 172.5 million (US$25.9 million) and balance of available-for-sale investments was RMB 298.0 million (US$44.7 million).

 

Risk Reserve Fund. In the third quarter of 2016, Yirendai set aside in the risk reserve fund an amount of RMB 376.7 million (US$56.5 million), which is equal to 7% of the loans facilitated through its marketplace[2] during the period. In the third quarter of 2016, the Company made payments in a total amount of RMB 201.3 million (US$30.2 million) out of the risk reserve fund to pay out the outstanding principal and accrued interest of default loans. As of September 30, 2016, restricted cash balance associated with the risk reserve fund was RMB 930.7 million (US$139.6 million), compared to RMB 755.2 million as of June 30, 2016. The principal balance of performing loans covered by the risk reserve fund was RMB 16,204.6 million (US$2,430.0 million) as of September 30, 2016, compared to RMB 12,963.6 million as of June 30, 2016.

 

In the third quarter of 2016, Yirendai accrued liabilities from risk reserve fund guarantee of RMB 511.8 million (US$76.8 million), including 81.3 million (US$ 12.2 million) of estimated payouts in excess of its stand ready obligation related to the aforementioned fraud incident that we detected in July 2016. The Company has not adjusted the estimated percentage of expected cash payouts for its ongoing loan facilitation, because the Company believes that the fraud incident does not impact its assessment of the overall default risk for its portfolio given its extent of identification for the fraud incident. The ongoing accrued liability from the risk reserve fund guarantee is equal to 8% of the loans facilitated through its marketplace[2]. During the quarter, the Company released liabilities of RMB 201.3 million (US$30.2 million) to pay out the outstanding principal and accrued interest of default loans. As of September 30, 2016, liabilities from risk reserve fund guarantee was RMB 1,238.7 million (US$185.8 million).

 

 3/10

 

 

Delinquency rates. As of September 30, 2016, the overall delinquency rate for loans that are 15-89 days past due was 1.9%, compared to 1.7% as of June 30, 2016. The slight increase of delinquency rates was in line with the Company’s expected delinquency level of its asset portfolio.

 

Net charge-off rates. As of September 30, 2016, the charge-off rates for Grade A, B, C, and D loans originated in 2015 were 5.1%, 5.9%, 7.5% and 6.1%, respectively, compared to 4.5%, 4.5%, 5.7% and 4.2% as of June 30, 2016. As the 2015 vintage loans continued to mature, the charge off level is within our risk performance expectation.

 

Other Operating Metrics and Business Results

ŸAs of September 30, 2016, Yirendai had facilitated RMB 25.7 billion (US$3.8 billion) of loans on the Yirendai online marketplace since its inception in 2012.
ŸAs of September 30, 2016, remaining principal of performing loans[3] totaled RMB 17.0 billion (US$2.6 billion), increased by 24% from RMB 13.8 billion as of June 30, 2016 and 153% from RMB 6.7 billion as of September 30, 2015.
ŸIn the third quarter of 2016, the Yirendai platform facilitated loans for 92,479 borrowers, 59% of whom were acquired from online channels.
ŸTotal amount of loans facilitated in the third quarter of 2016 was RMB 5,617.5 million (US$842.4 million); 40.5% of the loans was originated from online channel, and 98.3% of the online volume was facilitated through Yirendai’s mobile application.
ŸIn the third quarter of 2016, the Yirendai platform facilitated loans for 171,460 investors, 100% of whom were acquired from online channels, with annual rates of return ranging from 5.00% to 11.25%.
ŸIn the third quarter of 2016, loans made to Grade A, B, C, and D borrowers represented 7.0%, 4.7%, 8.9% and 79.4% of the Company’s product portfolio, respectively.

 

Business Outlook

Based on the information available as of the date of this press release, Yirendai provides the following outlook, which reflects the Company’s current and preliminary view and is subject to change. The following outlook does not take into consideration the impact of stock-based compensation expenses.

 

Full Year 2016

ŸTotal loans facilitated will be in the range of RMB 19,750 million to RMB 20,000 million (US$2,962 million to US$2,999 million), increased from its original business outlook of RMB 19,000 million to RMB 20,000 million
ŸTotal net revenue will be in the range of RMB 3,080 million to RMB 3,120 million (US$462 million to US$468 million), increased from its original business outlook of RMB 3,000 million to RMB 3,100 million
ŸAdjusted EBITDA (non-GAAP) will be in the range of RMB 910 million to RMB 930 million (US$136 million to US$139 million), increased from its original business outlook of RMB 800 million to RMB 850 million

 

Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses several non-GAAP financial measures, such as fees billed and adjusted EBITDA as supplemental measures to review and assess operating performance. We believe that fees billed and adjusted EBITDA provide useful information about our core operating results, enhance the overall understanding of our past performance and prospects and allow for greater visibility with respect to key metrics used by our management in our financial and operational decision-making. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The non-GAAP financial measures have limitations as analytical tools. Other companies, including peer companies in the industry, may calculate these non-GAAP measures differently, which may reduce their usefulness as a comparative measure. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. See “Operating Highlights and Reconciliation of GAAP to Non-GAAP measures” at the end of this press release.

 

 4/10

 

 

Currency Conversion

Effective April 1, 2016, the Company changed its reporting currency from US$ to RMB. The change in reporting currency is to reduce the impact of increased volatility of the RMB to the US$ exchange rate on the Company’s reported operating results. The aligning of the reporting currency with the underlying operations will better depict the Company’s results of operations for each period. Prior to April 1, 2016, the Company reported its annual and quarterly consolidated statement of operations, cash flow data and balance sheet in US$. In this announcement, the unaudited financial results for the quarter ended September 30, 2016 are stated in RMB. The related financial statements prior to April 1, 2016 have been recast to reflect RMB as the reporting currency for comparison to the financial results for the quarter ended September 30, 2016.

 

This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB6.6685 to US$1.00, the effective noon buying rate for September 30, 2016 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

Conference Call

Yirendai will host a conference call to discuss about its third quarter 2016 financial results at 8:00 AM U.S. Eastern Time on November 16, 2016, which corresponds to 9:00 PM Beijing/Hong Kong time on the same day.

 

The dial-in details for the live conference call are as follows:

International: 1-412-902-4272
U.S. Toll Free: 1-888-346-8982
Hong Kong Toll Free: 800-905945
China Toll Free: 4001-201203
Conference ID: Yirendai

 

A replay of the conference call will be available until November 23, 2016 by dialing:

International: 1-412-317-0088
U.S. Toll Free: 1-877-344-7529
Replay Access Code: 10095946

 

A live and archived webcast of the conference call will be available on Yirendai’s website at yirendai.investorroom.com.

 

Safe Harbor Statement

This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. 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,” “target,” “confident” and similar statements. Such statements are based upon management’s current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Yirendai’s control. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited to, uncertainties as to Yirendai’s ability to attract and retain borrowers and investors on its marketplace, its ability to introduce new loan products and platform enhancements, its ability to compete effectively, PRC regulations and policies relating to the peer-to-peer lending service industry in China, general economic conditions in China, and Yirendai’s ability to meet the standards necessary to maintain listing of its ADSs on the NYSE or other stock exchange, including its ability to cure any non-compliance with the NYSE’s continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in Yirendai’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 Yirendai does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

 

 5/10

 

 

About Yirendai

Yirendai Ltd. (NYSE: YRD) is a leading online consumer finance marketplace in China connecting investors and individual borrowers. The Company provides an effective solution to address largely underserved investor and individual borrower demand in China through an online platform that automates key aspects of its operations to efficiently match borrowers with investors and execute loan transactions. Yirendai deploys a proprietary risk management system, which enables the Company to effectively assess the creditworthiness of borrowers, appropriately price the risks associated with borrowers, and offer quality loan investment opportunities to investors. Yirendai’s online marketplace provides borrowers with quick and convenient access to consumer credit at competitive prices and investors with easy and quick access to an alternative asset class with attractive returns. For more information, please visit yirendai.investorroom.com.

 

For investor and media inquiries, please contact:

Yirendai

Hui (Matthew) Li

Director of Investor Relations

Email: matthewli@yirendai.com

 

Christensen IR

In China

Christian Arnell

Phone: +86 (0) 10-59001548

Email: carnell@christensenir.com

 

In U.S.

Linda Bergkamp

Phone: +1 (480) 614-3004
Email: lbergkamp@christensenir.com

 

 6/10

 

 

Unaudited Condensed Consolidated Statements of Operations

 (in thousands, except for share, per share and per ADS data, and percentages)

 

   For the Three Months Ended   For the Nine Months Ended 
   September 30, 2015   June 30, 2016   September 30, 2016   September 30, 2016   September 30, 2015   September 30, 2016   September 30, 2016 
   RMB   RMB   RMB   USD   RMB   RMB   USD 
Net revenue:                                   
Loan facilitation services   362,080    713,383    848,322    127,213    842,389    2,096,793    314,432 
Post-origination services   5,671    17,232    23,487    3,522    14,500    59,115    8,865 
Others   2,909    3,176    4,902    735    5,134    10,973    1,645 
Total net revenue   370,660    733,791    876,711    131,470    862,023    2,166,881    324,942 
Operating costs and expenses:                                   
Sales and marketing   182,350    355,246    423,003    63,433    436,656    1,033,085    154,920 
Origination and servicing   27,415    42,653    62,449    9,364    59,012    141,856    21,273 
General and administrative   34,599    73,330    188,961    28,336    92,305    322,397    48,346 
Total operating costs and expenses   244,364    471,229    674,413    101,133    587,973    1,497,338    224,539 
Interest income   1,435    7,253    9,778    1,466    1,685    22,065    3,309 
Non operating income, net   -    91    259    39    -    350    53 
Income before provision for income taxes   127,731    269,906    212,335    31,842    275,735    691,958    103,765 
Income tax expense/(benefit)   43,287    9,286    (131,946)   (19,786)   83,686    (44,659)   (6,697)
Net income   84,444    260,620    344,281    51,628    192,049    736,617    110,462 
                                    
Weighted average number of ordinary shares used in computing basic net income per share   100,000,000    117,000,000    119,441,029    119,441,029    100,000,000    117,819,616    117,819,616 
Basic income per share   0.8444    2.2275    2.8824    0.4322    1.9205    6.2521    0.9376 
Basic income per ADS   1.6888    4.4550    5.7648    0.8644    3.8410    12.5042    1.8752 
                                    
Weighted average number of ordinary shares used in computing diluted net income per share   100,000,000    117,000,000    120,861,971    120,861,971    100,000,000    118,293,263    118,293,263 
Diluted income per share   0.8444    2.2275    2.8485    0.4272    1.9205    6.2270    0.9338 
Diluted income per ADS   1.6888    4.4550    5.6970    0.8544    3.8410    12.4540    1.8676 
                                    
Unaudited Condensed Consolidated Balance Sheets                                   
Cash and cash equivalents   126,259    1,336,329    1,106,262    165,894    126,259    1,106,262    165,894 
Restricted cash   313,766    792,637    974,345    146,112    313,766    974,345    146,112 
Loans at fair value   -    175,614    367,949    55,177    -    367,949    55,177 
Held-to-maturity investments   80,000    2,500    172,500    25,868    80,000    172,500    25,868 
Available-for-sale investments   -    -    298,000    44,688    -    298,000    44,688 
Other assets   531,385    734,263    1,111,946    166,745    531,385    1,111,946    166,745 
Total assets   1,051,410    3,041,343    4,031,002    604,484    1,051,410    4,031,002    604,484 
Liabilities from risk reserve fund guarantee   376,328    928,166    1,238,689    185,752    376,328    1,238,689    185,752 
Payable to investors at fair value   -    166,193    355,340    53,286    -    355,340    53,286 
Other liabilities   259,822    566,865    695,907    104,358    259,822    695,907    104,358 
Total liabilities   636,150    1,661,224    2,289,936    343,396    636,150    2,289,936    343,396 
Total equity   415,260    1,380,119    1,741,066    261,088    415,260    1,741,066    261,088 
                                    
Unaudited Condensed Consolidated Cash Flow Data                                   
Net cash generated from operating activities   98,832    196,108    268,875    40,320    212,810    787,000    118,018 
Net cash provided by/(used in) investing activities   (82,599)   105,411    (679,486)   (101,894)   (87,671)   (613,919)   (92,063)
Net cash (used in)/provided by financing activities   -    (87,914)   179,221    26,876    -    74,898    11,232 
Effect of foreign exchange rate changes   (180)   12,733    1,323    198    (258)   12,163    1,824 
Net increase/(decrease) in cash and cash equivalents   16,053    226,338    (230,067)   (34,500)   124,881    260,142    39,011 
Cash and cash equivalents, beginning of period   110,206    1,109,991    1,336,329    200,394    1,378    846,120    126,883 
Cash and cash equivalents, end of period   126,259    1,336,329    1,106,262    165,894    126,259    1,106,262    165,894 

 

 7/10

 

 

Operating Highlights and Reconciliation of GAAP to Non-GAAP Measures

(in thousands, except for number of  borrowers, number of investors and percentages)

 

   For the Three Months Ended   For the Nine Months Ended 
   September 30, 2015   June 30, 2016   September 30, 2016   September 30, 2016   September 30, 2015   September 30, 2016   September 30, 2016 
   RMB   RMB   RMB   USD   RMB   RMB   USD 
Operating Highlights:                                   
Amount of loans facilitated   2,551,320    4,538,687    5,617,485    842,391    6,256,065    13,602,688    2,039,842 
Loans generated from online channels   826,703    1,832,078    2,275,473    341,227    2,016,681    5,282,933    792,222 
Loans generated from offline channels   1,724,617    2,706,609    3,342,012    501,164    4,239,384    8,319,755    1,247,620 
Fees billed   587,781    1,110,849    1,322,598    198,335    1,380,518    3,280,861    491,994 
Remaining principal of performing loans   6,720,677    13,771,180    17,028,346    2,553,550    6,720,677    17,028,346    2,553,550 
Remaining principal of performing loans covered by risk reserve fund   5,432,918    12,963,604    16,204,583    2,430,019    5,432,918    16,204,583    2,430,019 
Number of borrowers   36,493    68,882    92,479    92,479    98,546    211,458    211,458 
Borrowers from online channels   18,299    40,033    54,585    54,585    48,645    122,221    122,221 
Borrowers from offline channels   18,194    28,849    37,894    37,894    49,901    89,237    89,237 
Number of investors   144,107    196,059    171,460    171,460    185,704    473,984    473,984 
Investors from online channels   143,607    196,059    171,460    171,460    176,700    473,984    473,984 
Investors from offline channels   500    -    -    -    9,004    -    - 
Adjusted EBITDA   127,240    264,962    220,716    33,099    276,218    692,291    103,815 
Adjusted EBITDA margin   34.3%   36.1%   25.2%   25.2%   32.0%   31.9%   31.9%
                                    
Reconciliation of Net Revenues                                   
Fees billed:                                   
Transaction fees billed to borrowers   592,777    1,095,749    1,298,247    194,683    1,404,031    3,230,892    484,501 
Upfront fees billed to borrowers   569,227    1,016,393    1,192,449    178,818    1,364,213    2,982,135    447,198 
Monthly fees billed to borrowers   23,550    79,356    105,798    15,865    39,818    248,757    37,303 
Service fees billed to investors   26,558    88,068    110,943    16,637    51,880    263,563    39,524 
Others   3,083    3,366    5,196    779    5,436    11,631    1,744 
Value-added tax   (34,637)   (76,334)   (91,788)   (13,764)   (80,829)   (225,225)   (33,775)
Total fees billed   587,781    1,110,849    1,322,598    198,335    1,380,518    3,280,861    491,994 
Stand-ready liabilities associated with risk reserve fund   (178,592)   (363,095)   (430,569)   (64,568)   (437,924)   (1,069,386)   (160,364)
Deferred revenue   (18,471)   (15,857)   (16,553)   (2,482)   (44,410)   (52,776)   (7,914)
Cash incentives   (27,725)   (19,556)   (24,074)   (3,610)   (58,988)   (55,337)   (8,298)
Value-added tax   7,667    21,450    25,309    3,795    22,827    63,519    9,524 
Net revenues   370,660    733,791    876,711    131,470    862,023    2,166,881    324,942 
                                    
Reconciliation of EBITDA                                   
Net income   84,444    260,620    344,281    51,628    192,049    736,617    110,462 
Interest income   (1,435)   (7,253)   (9,778)   (1,466)   (1,685)   (22,065)   (3,309)
Income tax expense   43,287    9,286    (131,946)   (19,786)   83,686    (44,659)   (6,697)
Depreciation and amortization   944    2,309    2,816    422    2,168    7,055    1,058 
Share-based compensation   -    -    15,343    2,301    -    15,343    2,301 
Adjusted EBITDA   127,240    264,962    220,716    33,099    276,218    692,291    103,815 

 

 8/10

 

 

Delinquency Rates
   Delinquent for 
   15-29 days   30-59 days   60-89 days 
All Loans            
December 31, 2013   0.2%   0.4%   0.3%
December 31, 2014   0.3%   0.2%   0.2%
December 31, 2015   0.4%   0.5%   0.4%
March 31, 2016   0.5%   0.8%   0.5%
June 30, 2016   0.5%   0.7%   0.5%
September 30, 2016   0.5%   0.8%   0.6%
                
Online Channels               
December 31, 2013   0.1%   0.9%   0.3%
December 31, 2014   0.4%   0.3%   0.2%
December 31, 2015   0.6%   0.8%   0.6%
March 31, 2016   0.6%   1.2%   0.8%
June 30, 2016   0.6%   0.8%   0.7%
September 30, 2016   0.5%   0.8%   0.8%
                
Offline Channels               
December 31, 2013   0.3%   0.2%   0.2%
December 31, 2014   0.3%   0.2%   0.2%
December 31, 2015   0.3%   0.4%   0.3%
March 31, 2016   0.5%   0.7%   0.4%
June 30, 2016   0.5%   0.6%   0.4%
September 30, 2016   0.5%   0.7%   0.5%

 

 9/10

 

 

Net Charge-Off Rate
Loan issued period  Pricing grade  Amount of loans facilitated during the period   Accumulated M3+ Net Charge-Off as of September 30, 2016   Total Net Charge-Off Rate as of September 30, 2016 
      (in RMB thousands)   (in RMB thousands)     
2013  A   258,322    23,071    8.9%
   B   -    -    - 
   C   -    -    - 
   D   -    -    - 
   Total   258,322    23,071    8.9%
2014  A   1,917,542    107,415    5.6%
   B   303,030    20,787    6.9%
   C   -    -    - 
   D   7,989    515    6.5%
   Total   2,228,561    128,718    5.8%
2015  A   873,995    44,922    5.1%
   B   419,630    24,716    5.9%
   C   557,414    41,913    7.5%
   D   7,706,575    470,091    6.1%
   Total   9,557,613    581,642    6.1%
Q1-Q3 2016  A   826,114    758    0.1%
   B   541,098    1,302    0.2%
   C   1,102,524    5,216    0.5%
   D   11,132,951    57,560    0.5%
   Total   13,602,687    64,835    0.5%

 

_________________________________________

1Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB 6.6685 to US$1.00, the effective noon buying rate for September 30, 2016 as set forth in the H.10 statistical release of the Federal Reserve Board.
2In the third quarter of 2016, the Company facilitated RMB 235.4 million (US$35.3 million) of loans invested in by a trust, which was not covered by the risk reserve fund. The Company transferred cash to the trust in an amount equal to 7% of the loan amount as a security fund to protect the trust from potential losses resulting from defaults of these loans.
3Performing loans refer to loans on which payments of interest and principal are less than 90 days past due.

 

 10/10

 


Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘6-K’ Filing    Date    Other Filings
11/23/16
Filed on / For Period End:11/16/16
11/15/16
9/30/16
6/30/16
4/1/16
3/31/16
12/31/1520-F,  SC 13D
9/30/15
12/31/14
12/31/13
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