Jiayin Group Inc. (“Jiayin” or the “Company”) (NASDAQ: JFIN), a leading fintech platform in China, today announced its unaudited financial results for the second quarter ended June 30, 2020.

Second Quarter 2020 Operational and Financial Highlights :

  • Loan origination volume1 was RMB2,238 million (US$316.8 million), representing a decrease of 54.3% from the same period of 2019, and a decrease of 22.7% sequentially.
  • Average borrowing amount per borrower was RMB6,981 (US$988.1), representing a decrease of 2.0% from the same period of 2019.
  • Repeat borrowing rate2 was 72.0%, compared with repeat borrowing rate of 50.8% from the same period of 2019.
  • Institutional funding accounted for 98.6% of the total loans facilitated, compared with nil from the same period of 2019.
  • Net revenue was RMB245.0 million (US$34.7 million), representing a decrease of 61.5% from the same period of 2019, and a decrease of 21.9% sequentially.
  • Operating income was RMB48.0 million (US$6.8 million), representing a decrease of 74.1% from the same period of 2019, and a decrease of 6.1% sequentially.
  • Net income was RMB41.1 million (US$5.8 million), representing a decrease of 75.6% from the same period of 2019, and an increase of 4.1% sequentially.

Mr. Yan Dinggui, the Founder, Director and Chief Executive Officer, commented: “We made significant progress in completing our transition to institutional funding sources and sustained decent profitability, despite regulatory uncertainties and economic challenges due to COVID-19.  In the second quarter, the loan origination volume funded by institutions reached 98.6%.  This was quite an accomplishment, considering that institutions funded only 26.9% in the first quarter and none at all a year ago! We are proud of our rapid expansion of funding sources towards institutions. Completing this funding transition while delivering solid financial results creates a solid foundation for us to resume growth in the near future.”

Second Quarter 2020 Financial Results

Net revenue was RMB245.0 million (US$34.7 million), representing a decrease of 61.5% from the same period of 2019.

Revenue from loan facilitation services was RMB163.2 million (US$23.1 million), representing a decrease of 65.8% from the same period of 2019. The decrease was primarily due to reduced loan origination volume. The loan facilitation service fees from loans funded by institutional funding partners were RMB159.6 million (US$22.6 million), which represented 97.8% of our total revenue from loan facilitation services, compared with nil in the same period of 2019.

Revenue from post-origination services was RMB39.8 million (US$5.6 million), representing a decrease of 53.6% from the same period of 2019. The decrease was due to the lower outstanding loan balance as well as the disposal of Shanghai Caiyin Asset Management Co. Ltd. (“Shanghai Caiyin”), which previously provided certain post-origination loan services.

Origination and servicing expense were RMB50.9 million (US$7.2 million), representing a decrease of 60.1% from the same period of 2019, primarily due to the lower volume of loans facilitated by the Company.

Allowance for uncollectible receivables and contract assets was RMB10.7 million (US$1.5 million), representing a decrease of 84.9% from the same period of 2019, primarily due to reduced loan origination, and the greater effort in credit assessment that improved the Company’s loan performance.

Sales and marketing expense were RMB64.6 million (US$9.1 million), representing a decrease of 56.9% from the same period of 2019, primarily due to lower customer acquisition expenses and reduced advertisement spending for promotional activities.  

General and administrative expense were RMB36.6 million (US$5.2 million), representing a decrease of 28.9% from the same period of 2019, primarily due to the decrease in share-based compensation expense and reduced travel and other business-related expenses.

Research and development expense were RMB34.1 million (US$4.8 million), representing a decrease of 32.5% from the same period of 2019, primarily due to the decrease in share-based compensation expense and a more streamlined team in technology and development department due to the business transition.

Income from operations was RMB48.0 million (US$6.8 million), representing a decrease of 74.1% from the same period of 2019, and a decrease of 6.1% sequentially.

Net income was RMB41.1 million (US$5.8 million), representing a decrease of 75.6% from the same period of 2019, and an increase of 4.1% sequentially.

Cash and cash equivalents were RMB69.9 million (US$9.9 million) as of June 30, 2020, compared with RMB66.8 million as of March 31, 2020.

Conference Call

The Company will host a conference call to discuss its financial results on Wednesday, September 2, 2020 at 8:00 a.m. US. Eastern Time (8:00 PM Beijing/Hong Kong Time).

Please register in advance to join the conference using the link provided below and dial in 10 minutes before the call is scheduled to begin. Conference access information will be provided upon registration.

Participant Online Registration: http://apac.directeventreg.com/registration/event/4177177

A replay of the conference call may be accessed by phone at the following numbers until September 10, 2020. To access the replay, please reference the conference ID 4177177.

  Phone Number Toll-Free Number
United States +1 (646) 254-3697 +1 (855) 452-5696
Hong Kong +852 30512780 +852 800963117
Mainland China   +86 4006322162+86 8008700205

A live and archived webcast of the conference call will be available on the company’s investors relations website at  http://ir.jiayin-fintech.com/.

About Jiayin Group Inc.

Jiayin Group Inc. is a leading fintech platform in China committed to facilitating effective, transparent, secure and fast connections between investors and borrowers, whose needs are underserved by traditional financial institutions. The origin of the business of the Company can be traced back to 2011. The Company operates a highly secure and open platform with a comprehensive risk management system and a proprietary and effective risk assessment model which employs advanced big data analytics and sophisticated algorithms to accurately assess the risk profiles of potential borrowers.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars (“US$”) at a 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 RMB7.0651 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of June 30, 2020. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.Safe Harbor / Forward-Looking Statements

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. The Company may also make written or oral forward-looking statements in its periodic reports to 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. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the Company and the industry. Potential risks and uncertainties include, but are not limited to, those relating to the Company’s ability to retain existing investors and borrowers and attract new investors and borrowers in an effective and cost-efficient way, the Company’s ability to increase the investment volume and loan origination of loans volume facilitated through its marketplace, effectiveness of the Company’s credit assessment model and risk management system, PRC laws and regulations relating to the online individual finance industry in China, general economic conditions in China, and the Company’s ability to meet the standards necessary to maintain listing of its ADSs on the Nasdaq Stock Market or other stock exchange, including its ability to cure any non-compliance with the continued listing criteria of the Nasdaq Stock Market. All information provided in this press release is as of the date hereof, and the Company undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by the Company is included in the Company’s filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F.

For more information, please contact:

In China:

Jiayin GroupMs. Shelley BaiEmail: ir@jiayinfintech.cn

or

The Blueshirt GroupMs. Susie WangEmail: susie@blueshirtgroup.com

In the U.S.:

Ms. Julia QianEmail: julia@blueshirtgroup.com

JIAYIN GROUP INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except for share and per share data)

    As ofDecember 31,     As of June 30,  
    2019     2020  
    RMB     RMB     US$  
ASSETS                        
Cash and cash equivalents     122,149       69,864       9,889  
Restricted cash           2,000       283  
Amounts due from related parties3     130,722       143,296       20,282  
Accounts receivable, net3     139,164       78,178        11,065  
Loan receivables, net3           5,938       840  
Short-term investment3     69,618       70,651       10,000  
Prepaid expenses and other current assets     91,002       81,128       11,483  
Deferred tax assets     68,292       68,292       9,666  
Property and equipment     39,084       29,079       4,116  
Right-of-use assets     37,215       15,162       2,146  
Long-term investment     3,826       7,206       1,021  
TOTAL ASSETS     701,072       570,794       80,791  
LIABILITIES AND EQUITY                        
Payroll and welfare payable     48,524       41,602       5,888  
Amounts due to related parties     872       12,992       1,839  
Refund liabilities     180,104       113,238       16,028  
Tax payables     179,421       216,898       30,700  
Accrued expenses and other current liabilities     158,705       128,797       18,230  
Other Payable related to the disposal of Shanghai Caiyin     839,830       684,011       96,815  
Lease liabilities     35,215       13,297       1,883  
TOTAL LIABILITIES     1,442,671       1,210,835       171,383  
SHAREHOLDERS' DEFICIT                        
Class A ordinary shares (US$ 0.000000005 par value;   100,100,000 shares issued and outstanding as of   December 31, 2019 and June 30, 2020)4     0       0       0  
Class B ordinary shares (US$ 0.000000005 par value;   116,000,000 shares issued and outstanding as of   December 31, 2019 and June 30, 2020)4     0       0         0  
Additional paid-in capital     777,408       794,332       112,431  
Accumulated deficit     (1,519,731 )     (1,438,613 )     (203,623 )
Other comprehensive income     469       4,006       567  
Total Jiayin Group shareholder's deficit     (741,854 )     (640,275 )     (90,625 )
Non-controlling interests     255       (234 )     (33 )
TOTAL SHAREHOLDERS' DEFICIT     (741,599 )     (640,041 )     (90,592 )
TOTAL LIABILITIES AND DEFICIT     701,072       570,794       80,791  
                         

JIAYIN GROUP INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(Amounts in thousands, except for share and per share data)

    For the Three Months EndedJune 30,     For the Six Months EndedJune 30,  
    2019     2020     2019     2020  
    RMB     RMB     US$     RMB     RMB     US$  
Net revenue (including revenue from related parties   of nil and RMB 5,517 for 2019Q2 and 2020Q2, nil   and RMB 6,635 for 2019H1 and 2020H1, respectively)     635,616       244,989       34,676       1,366,947       558,515       79,053  
Operating cost and expenses:                                                
Origination and servicing     (127,670 )     (50,926 )     (7,208 )     (246,104 )     (114,862 )     (16,258 )
Allowance for uncollectible accounts receivable   and contract assets     (70,751 )     (10,721 )     (1,518 )     (114,545 )     (41,126 )     (5,821 )
Sales and marketing     (149,818 )     (64,647 )     (9,150 )     (321,251 )     (158,084 )     (22,375 )
General and administrative     (51,460 )     (36,561 )     (5,174 )     (100,751 )     (74,825 )     (10,591 )
Research and development     (50,497 )     (34,108 )     (4,828 )     (104,219 )     (70,475 )     (9,975 )
Total operating cost and expenses     (450,196 )     (196,963 )     (27,878 )     (886,870 )     (459,372 )     (65,020 )
Income from operation     185,420       48,026       6,798       480,077       99,143       14,033  
Interest income (expense)     308       3,257       461       (174 )     5,239       741  
Other income, net     9,963       3,134       443       13,482       4,151       588  
Income before income taxes and income (loss) from   investment in affiliates     195,691       54,417       7,702       493,385       108,533       15,362  
Income tax expense     (27,045 )     (14,006 )     (1,982 )     (70,523 )     (27,943 )     (3,955 )
Income (loss) from investment in affiliates           702       99             (27 )     (4 )
Net income     168,646       41,113       5,819       422,862       80,563       11,403  
Less: net income (loss) attributable to non-controlling   interest shareholders     (227 )     471       66       (227 )     (555 )     (78 )
Net income attributable to Jiayin Group Inc.     168,873       40,642       5,753       423,089       81,118       11,481  
Weighted average shares used in calculating   net income per share:                                                
- Basic and diluted     209,123,333       216,100,000       216,100,000       204,561,667       216,100,000       216,100,000  
Net income per share:                                                
- Basic and diluted     0.81       0.19       0.03       2.07       0.38       0.05  
Other comprehensive income, net of tax of nil:                                                
Foreign currency translation adjustments     7       (396 )     (56 )     7       3,572       506  
Comprehensive income     168,653       40,717       5,763       422,869       84,135       11,909  
Comprehensive income (loss) attributable to   non-controlling interest     (227 )     474       67       (227 )     (520 )     (73 )
Total comprehensive income attributable to   Jiayin Group Inc.     168,880       40,243       5,696       423,096       84,655       11,982  
                                                 

_________________________________________

1 “Loan origination volume” refers to the total amount of loans facilitated in Mainland China during the period presented.

2 “Repeat borrowing rate” refers to the repeat borrowers as a percentage of all of our borrowers in Mainland China.

3 The Company has adopted “ASC 326, Financial Instruments — Credit Losses” beginning January 1, 2020 . As of now, the adoption of the new guidance did not have material impacts on the Company’s results of operations, financial condition or liquidity.4 The total shares authorized for both Class A and Class B are 10,000,000,000,000.

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