SHANGHAI, Aug. 25, 2020 /PRNewswire/ -- FinVolution Group
("FinVolution," or the "Company") (NYSE: FINV), a leading fintech
platform in China, today announced
its unaudited financial results for the second quarter ended
June 30, 2020.
Second Quarter 2020 Financial and Operational
Highlights
- Net revenue increased by 10.3% to RMB1,810.5 million (US$256.3 million) for the second quarter of 2020,
from RMB1,641.9 million in the same
period of 2019.
- Operating profit was RMB567.2
million (US$80.3 million) for
the second quarter of 2020, representing a decrease of 26.1% from
RMB767.6 million in the same period
of 2019.
- Non-GAAP adjusted operating profit[1], which
excludes share-based compensation expenses before tax, was
RMB575.9 million (US$81.5 million) for the second quarter of 2020,
representing a decrease of 26.1% from RMB779.4 million in the same period of 2019.
- Cumulative registered users[2] reached
approximately 110.4 million as of June 30,
2020.
- Cumulative number of borrowers[3] was
approximately 18.4 million as of June 30,
2020.
- Number of unique borrowers[4] was
approximately 1.6 million for the second quarter of 2020,
representing a decrease of 55.1% compared to 3.5 million in the
same period of 2019.
- Loan origination volume[5] was approximately
RMB13.1 billion for the second
quarter of 2020, representing a decrease of 39.2% compared to 21.6
billion in the same period of 2019.
- Repeat borrowing rate[6] was 92.4% for the
second quarter of 2020, representing an increase of 20.3% compared
to 76.8% in the same period of 2019.
- Average loan size[7] was RMB 3,867 for the second quarter of 2020,
representing an increase of 27.7% compared to RMB 3,029 in the same period of 2019.
- Average loan tenure[8] was 8.3 months for the
second quarter of 2020.
Mr. Feng Zhang, the Chief
Executive Officer of FinVolution, commented, "We are pleased to
report healthy and solid results for the second quarter of 2020,
thanks to the timely measures we adopted in response to the
pandemic outbreak, the subsequent gradual economic recovery in
China since the beginning of the
second quarter, and our unwavering focus on comprehensive credit
risk controls.
Encouragingly, our constant efforts in strengthening risk
management have led to improvements in delinquency rates across the
platform for newly facilitated loans. Coupled with our strategic
efforts to serve better quality borrowers, our continuous
investment in risk assessment technology like our Magic Mirror, the
delinquency rates of our recent vintages are expected to be
significantly lower than those in the past few years.
Our institutional funding partners have been supportive. Funding
on our platform remains ample and funding cost continues to
demonstrate gradual ongoing improvement. Going forward, we expect
further decline in funding cost as we continue to focus on
improving profitability.
As part of our strategy to leverage our technology capabilities
to enable new businesses in the financial services industry, we
recently launched LY Fortune, our new wealth management initiative.
LY Fortune will leverage our technology, our growing relationships
with financial institutions and our extensive experience and
know-how in serving retail investors. We see tremendous
opportunities in the technology-enabled wealth management market in
China.
"With over a decade of proven operational track record in
applying technology and innovation into financial solutions, and
managing risk prudently, FinVolution is well positioned to navigate
challenges and unlock the vast potential in China's enormous consumer finance and fintech
markets," concluded Mr. Zhang.
Mr. Simon Ho, the Chief Financial
Officer of FinVolution, commented, "In the second quarter, despite
the continued challenging operating environment brought upon by the
COVID-19, we delivered non-GAAP operating profit[9] of
RMB575.9 million representing an
increase of 24.2% quarter-on-quarter, further demonstrating the
sustained profitability of our core business model. Our balance
sheet and liquidity remain strong with RMB3.4 billion of cash and short-term liquidity.
Harnessing our strong technology, we are actively exploring and
grasping new opportunities with further expanded and deepened
relationships with business partners."
[1] Please refer to "UNAUDITED
Reconciliation of GAAP And Non-GAAP Results" for reconciliation
between GAAP and Non-GAAP adjusted
operating profit.
|
[2] On a cumulative basis, number of
users registered on our platform in Mainland China as of June 30,
2020.
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[3] On a cumulative basis, number of
borrowers whose loans were funded in Mainland China on or prior to
June 30, 2020.
|
[4]
Represents the total number of borrowers in Mainland China whose
loans on our platform were facilitated during the period
presented.
|
[5] Represents the loan origination
volume facilitated in Mainland China during the period
presented.
|
[6] Represents the percentage of loan
volume generated by repeat borrowers in Mainland China who have
successfully borrowed on our platform
before.
|
[7] Represents the average loan size
on our platform in Mainland China during the period
presented.
|
[8] Represents the average loan
tenure period on our platform in Mainland China during the period
presented.
[9] Please refer to
"UNAUDITED Reconciliation of GAAP and Non-GAAP Results" for
reconciliation between GAAP and Non-GAAP adjusted
operating profit.
|
Second Quarter 2020 Financial Results
Net revenue for the second quarter of 2020 increased by
10.3% to RMB1,810.5 million
(US$256.3 million) from RMB1,641.9 million in the same period of 2019,
primarily due to the adoption of ASC 326. Before the adoption
of ASC 326, gains or losses related to quality assurance
commitments were recorded in one combined financial statement line
item within other income. After the adoption of ASC 326, the
guarantee income (i.e. the guarantee liability) was recorded as a
separate financial statement line item within revenue and the
credit losses for quality assurance were recorded within
expenses.
Loan facilitation service fees decreased by 56.9% to
RMB404.7 million (US$57.3 million) for the second quarter of 2020
from RMB939.8 million in the same
period of 2019, primarily due to the decline in loan
origination volume and the decrease in the average rate of
transaction fees.
Post-facilitation service fees decreased by 51.5% to
RMB153.2 million (US$21.7 million) for the second quarter of 2020
from RMB315.8 million in the same
period of 2019, primarily due to the decline in outstanding loans
serviced by the Company and the rolling impact of deferred
transaction fees.
Guarantee income was RMB821.2 million (US$116.2 million) for the second quarter of
2020 due to the adoption of ASC 326. After the adoption of ASC 326,
the guarantee liabilities of quality assurance commitment are
released as a revenue systematically over the term of the loans
subject to quality assurance commitment.
Net interest income was RMB333.2
million (US$47.2 million) for
the second quarter of 2020, compared to RMB274.4 million in the same period of 2019,
primarily due to increased interest income from the expansion in
the outstanding loan balances of consolidated trusts.
Other revenue decreased by 12.3% to RMB98.2 million (US$13.9
million) for the second quarter of 2020 from RMB112.0 million in the same period of 2019,
primarily due to a decrease in management fees from investment
programs that invest in loans protected by the quality assurance
fund. This was attributable to the winding down of the Company's
investment programs since the fourth quarter of 2019 as a result of
the Company's decision to discontinue offering online information
intermediary service to individual investors.
Origination and servicing expenses decreased by 11.3% to
RMB272.3 million (US$38.5 million) for the second quarter of 2020
from RMB307.0 million in the same
period of 2019, primarily due to (i) a decrease in salaries and
benefits as a result of a decrease in headcount, and (ii) a
decrease in referral fees paid to third parties for successful loan
originations as the volume of loans facilitated by the Company
declined.
Sales and marketing expenses decreased by 69.0% to
RMB66.7 million (US$9.4 million) for the second quarter of 2020
from RMB215.2 million in the same
period of 2019, primarily due to the decrease in online customer
acquisition expenses as a result of the decline in newly registered
users on the Company's platform.
Research and development expenses decreased by 17.9% at
RMB83.4 million (US$11.8 million) for the second quarter of 2020,
compared to RMB101.6 million in the
same period of 2019, due to a more streamlined team in technology
related departments.
General and administrative expenses remained relatively
stable at RMB102.0 million
(US$14.4 million) for the second
quarter of 2020 compared to RMB102.6
million in the same period of 2019.
Provision for accounts receivables was RMB23.2 million (US$3.3
million) for the second quarter of 2020, compared with
RMB68.3 million in the same period of
2019 as a result of the decline in loan origination volume.
Provision for loans receivables was RMB119.8 million (US$17.0
million) for the second quarter of 2020, compared with
RMB79.6 million in the same period of
2019, primarily due to the adoption of ASC 326, which requires the
Company to recognize the life time credit losses upon initial
recognition and the increased number of consolidated trusts in the
quarter.
Credit losses for quality assurance commitment were
RMB575.8 million (US$81.5 million) for the second quarter of
2020 due to the adoption of ASC 326. After the adoption of ASC 326,
the expected credit losses of quality assurance commitment will be
accounted for in addition to and separately from the guarantee
liabilities accounted for under ASC 460.
Operating profit decreased by 26.1% to RMB567.2 million (US$80.3
million) for the second quarter of 2020 from RMB767.6 million in the same period of 2019.
Non-GAAP adjusted operating profit, which excludes
share-based compensation expenses before tax, was RMB575.9 million (US$81.5
million) for the second quarter of 2020, representing a
decrease of 26.1% from RMB779.4
million in the same period of 2019.
Other income increased by 23.8% to RMB34.3 million (US$4.9
million) for the second quarter of 2020, from RMB27.7 million in the same period of 2019. For
the second quarter of 2020, other income primarily consisted of
government grants.
Income tax expenses were RMB147.5 million
(US$20.9 million) for the second
quarter of 2020, compared with RMB152.9
million in the same period of 2019, due to lower operating
profit for the quarter and change in effective tax rate due to
change in expected profits for the year among different
subsidiaries with different tax rates.
Net profit was RMB454.0
million (US$64.3 million) for
the second quarter of 2020, compared with RMB660.5 million in the same period of 2019.
Net profit attributable to ordinary shareholders of the
Company was RMB456.7 million
(US$64.6 million) for the second
quarter of 2020, compared with RMB660.5
million in the same period of 2019.
As of June 30, 2020, the Company
had cash and cash equivalents of RMB1,756.9
million (US$248.7 million) and
short-term investments mainly in wealth management products of
RMB1,625.4 million (US$230.1 million).
The following table provides the delinquency rates for all
outstanding loans on the Company's platform in Mainland China as of
the respective dates indicated.
As
of
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15-29
days
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30-59
days
|
60-89
days
|
90-119
days
|
120-149
days
|
150-179
days
|
March 31,
2017
|
0.57%
|
0.95%
|
0.79%
|
0.59%
|
0.54%
|
0.51%
|
June 30,
2017
|
0.86%
|
1.11%
|
0.79%
|
0.51%
|
0.55%
|
0.52%
|
September 30,
2017
|
0.89%
|
1.40%
|
1.15%
|
1.02%
|
0.79%
|
0.60%
|
December 31,
2017
|
2.27%
|
2.21%
|
1.72%
|
1.63%
|
1.36%
|
1.20%
|
March 31,
2018
|
0.87%
|
2.11%
|
2.43%
|
3.83%
|
2.29%
|
1.89%
|
June 30,
2018
|
0.83%
|
1.21%
|
1.05%
|
0.98%
|
1.60%
|
2.03%
|
September 30,
2018
|
1.03%
|
1.77%
|
1.49%
|
1.29%
|
1.06%
|
1.02%
|
December 31,
2018
|
0.92%
|
1.63%
|
1.41%
|
1.45%
|
1.44%
|
1.34%
|
March 31,
2019
|
0.80%
|
1.61%
|
1.45%
|
1.29%
|
1.31%
|
1.20%
|
June 30,
2019
|
0.86%
|
1.42%
|
1.37%
|
1.19%
|
1.26%
|
1.21%
|
September 30,
2019
|
0.90%
|
1.50%
|
1.35%
|
1.31%
|
1.17%
|
1.20%
|
December 31,
2019
|
1.34%
|
2.40%
|
1.86%
|
1.76%
|
1.62%
|
1.53%
|
March 31,
2020
|
1.34%
|
3.03%
|
2.33%
|
2.44%
|
2.64%
|
2.17%
|
June 30,
2020
|
0.71%
|
1.36%
|
1.70%
|
2.00%
|
2.75%
|
2.38%
|
The following chart and table display the historical cumulative
30-day plus as of June 30, 2020
represent past due delinquency rates by loan origination vintage in
Mainland China for all loan products facilitated through the
Company's online marketplace:
Click here to view the chart.
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Month on
Book
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Vintage
|
2nd
|
3rd
|
4th
|
5th
|
6th
|
7th
|
8th
|
9th
|
10th
|
11th
|
12th
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
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|
|
|
|
2017Q1
|
1.51%
|
2.09%
|
2.71%
|
3.33%
|
3.87%
|
4.33%
|
4.68%
|
4.98%
|
5.33%
|
5.61%
|
5.80%
|
2017Q2
|
2.19%
|
3.01%
|
3.86%
|
4.56%
|
5.13%
|
5.78%
|
6.32%
|
6.79%
|
7.05%
|
7.19%
|
7.24%
|
2017Q3
|
2.22%
|
3.05%
|
4.13%
|
5.18%
|
6.13%
|
6.64%
|
6.88%
|
7.04%
|
7.16%
|
7.22%
|
7.26%
|
2017Q4
|
2.86%
|
4.24%
|
5.19%
|
5.69%
|
5.98%
|
6.19%
|
6.29%
|
6.39%
|
6.47%
|
6.49%
|
6.50%
|
2018Q1
|
1.37%
|
2.20%
|
2.99%
|
3.67%
|
4.32%
|
4.86%
|
5.23%
|
5.50%
|
5.66%
|
5.74%
|
5.77%
|
2018Q2
|
1.87%
|
3.12%
|
4.39%
|
5.46%
|
6.33%
|
6.99%
|
7.47%
|
7.80%
|
7.99%
|
8.08%
|
8.13%
|
2018Q3
|
1.45%
|
2.51%
|
3.53%
|
4.39%
|
5.09%
|
5.59%
|
5.97%
|
6.28%
|
6.50%
|
6.64%
|
6.72%
|
2018Q4
|
1.43%
|
2.49%
|
3.55%
|
4.42%
|
5.18%
|
5.76%
|
6.20%
|
6.54%
|
6.81%
|
7.01%
|
7.16%
|
2019Q1
|
1.34%
|
2.38%
|
3.45%
|
4.36%
|
5.13%
|
5.75%
|
6.22%
|
6.65%
|
6.99%
|
7.25%
|
7.43%
|
2019Q2
|
1.33%
|
2.34%
|
3.31%
|
4.18%
|
5.05%
|
5.82%
|
6.44%
|
6.98%
|
7.34%
|
7.50%
|
7.52%
|
2019Q3
|
1.02%
|
2.16%
|
3.42%
|
4.55%
|
5.64%
|
6.45%
|
6.92%
|
7.13%
|
|
|
|
2019Q4
|
0.83%
|
2.07%
|
3.37%
|
4.45%
|
5.12%
|
|
2020Q1
|
0.81%
|
1.73%
|
|
|
|
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Changes in Board of Directors
The Board of Directors of the Company (the "Board") has approved
the resignation of Mr. Ronald Cao, a
member of the Board effective August 24,
2020. Mr. Ron Cao's
resignation was due to personal reasons.
Company's Share Repurchase Update
The Company has repurchased approximately 15.1 million American
depositary shares ("ADSs") between May
2020 and August 24, 2020. As
of August 24 2020, the Company has
cumulatively deployed approximately US$111.0
million to repurchase its ADSs under the Company's share
repurchase program with a total authorized amount of up to
US$120 million.
FinVolution Group's Chairman Share Purchase Update
Mr. Shaofeng Gu, the Chairman and
Chief Innovation Officer of the Company, has informed the Company
on August 11, 2020 that he had
continued to purchase in his personal capacity 1.46 million of the
Company's ADSs in the second quarter of 2020. The purchases were
made during an open window period and in full compliance with all
company and legal guidelines. As of June 30,
2020, Mr. Shaofeng Gu
beneficially owned 412,257,375 ordinary shares, representing
approximately 27.7% of beneficial ownership in the Company.
Business Outlook
As China gradually recovers
from the aftermath of the COVID-19 outbreak, the Company has
continued to experience improvements in delinquency trends for
newly facilitated loans. The Company will continue to closely
monitor the global development of the pandemic and remain agile in
its business operations. The Company holds a cautiously optimistic
view on its operations and expects its loan origination volume in
the third quarter of 2020 to be in the range of RMB15 billion to RMB16
billion.
The above outlook is based on current market conditions and
reflects the Company's preliminary expectations as to market
conditions, its regulatory and operating environment, as well as
customer and institutional investor demand, all of which are
subject to change.
Regulations Update
On August 20, 2020, the Supreme
People's Court of China
promulgated the Decisions of the Supreme People's Court to Amend
the Provisions on Several Issues concerning the Application of Law
in the Trial of Private Lending Cases[10], or the
Decisions, as effective on the same date, pursuant to which (i) the
upper limit of interest rate for one-year private loan would be
capped at four times that of the loan prime rate ("LPR"). Based on
the latest LPR, the ceiling would be lowered to 15.4% from a range
of 24% to 36% under a previous judicial interpretation in 2015.
(ii) in the context of lending activities between individuals,
entities or other organizations that are not licensed financial
institutions, if the interest rate of a loan exceeds 15.4% per
annum, the exceeding part will not be supported and enforceable in
the PRC judicial system. (iii) and it does not apply to the
disputes arising out of loans funded by financial institutions or
its branches which are licensed by financial regulatory
authorities. However, according to the Notice on Regulating and
Rectifying "Cash Loan" Business promulgated by the Internet Finance
Rectification Office and the Online Lending Rectification Office in
December 2017, financial institutions
cooperating with third parties to engage in lending businesses
should comply with the judicial interpretations by the Supreme
People's Court of China regarding
the upper limit of interest rates in private loans when calculating
the annual borrowing cost charged to a
borrower.
Substantially all of the institutional partners that the Company
currently cooperates with on the platform for funding new loans
origination are financial institutions licensed by financial
regulatory authorities. Since the promulgation of the Decisions,
the Company has made adjustments to cap the annualized total
borrowing costs of newly originated loans charged to its borrowers
on the platform within the permitted upper limit pursuant to the
Decisions. As this will result in a general decline in the
borrowing costs to borrowers on the platform, our business, results
of operations and future growth may be subject to uncertainty.
[10] For the complete text of the
Decisions, please refer to
http://www.court.gov.cn/fabu-xiangqing-249031.html.
|
Conference Call
The Company's management will host an earnings conference call
at 8:00 AM U.S. Eastern Time on
August 25, 2020 (8:00 PM Beijing/Hong
Kong time on August 25,
2020).
Dial-in details for the earnings conference call are as
follows:
United States (toll
free):
|
1-888-346-8982
|
International:
|
1-412-902-4272
|
Hong Kong, China
(toll free):
|
800-905-945
|
Hong Kong,
China:
|
852-3018-4992
|
Mainland
China:
|
400-120-1203
|
Participants should dial-in at least 5 minutes before the
scheduled start time and ask to be connected to the call for
"FinVolution Group."
Additionally, a live and archived webcast of the conference call
will be available on the Company's investor relations website at
https://ir.finvgroup.com.
A replay of the conference call will be accessible approximately
one hour after the conclusion of the live call until September 1, 2020, by dialing the following
telephone numbers:
United States (toll
free):
|
1-877-344-7529
|
International:
|
1-412-317-0088
|
Replay Access
Code:
|
10147268
|
About FinVolution Group
FinVolution Group is a leading fintech platform in China connecting underserved individual
borrowers with financial institutions. Established in 2007, the
Company is a pioneer in China's
online consumer finance industry and has developed innovative
technologies and has accumulated in-depth experience in the core
areas of credit risk assessment, fraud detection, big data and
artificial intelligence. The Company's platform, empowered by
proprietary cutting-edge technologies, features a highly automated
loan transaction process, which enables a superior user experience.
As of June 30, 2020, the Company had
over 110.4 million cumulative registered users.
For more information, please visit
https://ir.finvgroup.com
Use of Non-GAAP Financial Measures
We use Non-GAAP operating profit, a Non-GAAP financial measure,
in evaluating our operating results and for financial and
operational decision-making purposes. We believe that adjusted
operating profit help identify underlying trends in our business by
excluding the impact of share-based compensation expenses and
expected discretionary measures. We believe that adjusted operating
profit provide useful information about our operating results,
enhance the overall understanding of our past performance and
future prospects and allow for greater visibility with respect to
key metrics used by our management in its financial and operational
decision-making.
Non-GAAP adjusted operating profit is not defined under U.S.
GAAP and is not presented in accordance with U.S. GAAP. This
Non-GAAP financial measure has limitations as analytical tool, and
when assessing our operating performance, cash flows or our
liquidity, investors should not consider it in isolation, or as a
substitute for net (loss)/income, cash flows provided by operating
activities or other consolidated statements of operation and cash
flow data prepared in accordance with U.S. GAAP. The Company
encourages investors and others to review our financial information
in its entirety and not rely on a single financial measure.
For more information on this Non-GAAP financial measure, please
see the table captioned "Reconciliations of GAAP and Non-GAAP
results" set forth at the end of this press release.
Exchange Rate Information
This announcement contains translations of certain RMB amounts
into U.S. dollars at a specified rate solely for the convenience of
the reader. Unless otherwise noted, all translations from RMB
to U.S. dollars are made at a rate of RMB7.0651 to US$1.00, the rate in effect as of June 30, 2020 as certified for customs purposes
by the Federal Reserve Bank of New
York.
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 the Company'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
the Company's ability to attract and retain borrowers and investors
on its marketplace, its ability to increase volume of loans
facilitated through the Company's marketplace, its ability to
introduce new loan products and platform enhancements, its ability
to compete effectively, laws, regulations and governmental policies
relating to the online consumer 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 NYSE, 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 the
Company'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 FinVolution 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.
For investor and media inquiries, please contact:
In China:
FinVolution Group
Head of Investor Relations
Jimmy Tan
Tel: +86 (21) 8030 3200- Ext 8601
E-mail: ir@xinye.com
The Piacente Group, Inc.
Jenny Cai
Tel: +86 (10) 6508-0677
E-mail: finv@tpg-ir.com
In the United States:
The Piacente Group, Inc.
Brandi Piacente
Tel: +1-212-481-2050
E-mail: finv@tpg-ir.com
FinVolution
Group
|
UNAUDITED INTERIM
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(All amounts in
thousands, except share data, or otherwise noted)
|
|
|
As of December
31,
|
As of
June 30,
|
|
2019
|
2020
|
|
RMB
|
RMB
|
USD
|
Assets
|
|
|
|
Cash and cash
equivalents
|
2,324,542
|
1,756,946
|
248,680
|
Restricted
cash
|
3,686,203
|
3,281,190
|
464,422
|
Short-term
investments
|
114,560
|
1,625,442
|
230,066
|
Investments
|
952,833
|
953,951
|
135,023
|
Quality
assurance receivable, net of credit loss allowance
for
quality assurance receivable of RMB809,503 and
RMB523,175
as of December 31, 2019 and June 30, 2020,
respectively
|
3,649,642
|
1,263,824
|
178,883
|
Intangible
assets
|
64,280
|
96,780
|
13,698
|
Property, equipment
and software, net
|
134,324
|
117,178
|
16,585
|
Loans receivable, net
of credit loss allowance for loans receivable
of RMB316,124 and RMB737,557 as of December 31, 2019
and
June 30, 2020, respectively
|
4,808,252
|
3,567,038
|
504,881
|
Accounts
receivable, net of credit loss allowance for
accounts
receivable of RMB145,699 and RMB325,975 as of December
31, 2019 and June 30, 2020, respectively
|
882,305
|
665,331
|
94,171
|
Deferred tax
assets
|
129,740
|
420,263
|
59,484
|
Contract
assets
|
20,555
|
-
|
-
|
Right of use
assets
|
95,786
|
72,608
|
10,277
|
Prepaid expenses and
other assets
|
1,391,023
|
1,098,386
|
155,468
|
Goodwill
|
50,411
|
50,411
|
7,135
|
Total
assets
|
18,304,456
|
14,969,348
|
2,118,773
|
Liabilities and
Shareholders' Equity
|
|
Payable to platform
customers
|
684,630
|
175,808
|
24,884
|
Quality assurance
payable[1]
|
4,776,153
|
-
|
-
|
Deferred guarantee
income[1]
|
-
|
1,202,741
|
170,237
|
Expected credit losses
for quality assurance commitment[1]
|
-
|
2,110,438
|
298,713
|
Payroll and welfare
payable
|
176,685
|
118,042
|
16,708
|
Taxes
payable
|
128,298
|
127,703
|
18,075
|
Short-term
borrowings
|
235,000
|
150,000
|
21,231
|
Funds payable to
investors of consolidated trusts
|
3,660,483
|
2,853,244
|
403,850
|
Contract
liability
|
55,728
|
10,188
|
1,442
|
Deferred tax
liabilities
|
198,922
|
206,801
|
29,271
|
Accrued expenses and
other liabilities
|
291,934
|
326,999
|
46,284
|
Leasing
liabilities
|
85,143
|
62,203
|
8,804
|
Total
liabilities
|
10,292,976
|
7,344,167
|
1,039,499
|
Commitments and
contingencies
|
|
|
|
FinVolution Group
Shareholders' equity
|
|
|
|
Ordinary
shares
|
103
|
103
|
15
|
Additional paid-in
capital
|
5,640,898
|
5,646,651
|
799,232
|
Treasury
stock
|
(47,174)
|
(169,328)
|
(23,967)
|
Statutory
reserves
|
317,198
|
317,198
|
44,896
|
Accumulated other
comprehensive income
|
70,320
|
72,582
|
10,273
|
Retained
Earnings
|
1,966,611
|
1,696,174
|
240,078
|
Total FinVolution
Group shareholders' equity
|
7,947,956
|
7,563,380
|
1,070,527
|
Non-controlling
interest
|
63,524
|
61,801
|
8,747
|
Total
shareholders' equity
|
8,011,480
|
7,625,181
|
1,079,274
|
Total liabilities
and shareholders' equity
|
18,304,456
|
14,969,348
|
2,118,773
|
|
[1] Upon
adoption of ASC 326 on January 1, 2020, quality assurance payable
is separated into deferred guarantee income (i.e. the unamortized
ASC 460 component of guarantee) and expected credit losses for
quality assurance commitment (i.e. CECL
liability).
|
FinVolution
Group
|
UNAUDITED INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
|
(All amounts in
thousands, except share data, or otherwise noted)
|
|
|
For the Three
Months Ended June 30,
|
For the Six Months
Ended June 30,
|
|
2019
|
2020
|
2019
|
2020
|
|
RMB
|
RMB
|
USD
|
RMB
|
RMB
|
USD
|
|
|
|
|
|
|
|
Operating
revenue:
|
|
|
|
|
|
|
Loan facilitation
service fees
|
939,754
|
404,742
|
57,288
|
1,878,365
|
779,274
|
110,299
|
Post-facilitation
service fees
|
315,793
|
153,155
|
21,678
|
623,871
|
335,860
|
47,538
|
Guarantee
income[1]
|
-
|
821,175
|
116,230
|
-
|
1,971,455
|
279,041
|
Net
interest income
|
274,371
|
333,157
|
47,155
|
444,908
|
648,115
|
91,735
|
Other
Revenue
|
111,972
|
98,223
|
13,903
|
190,313
|
182,058
|
25,769
|
Net
revenue
|
1,641,890
|
1,810,452
|
256,254
|
3,137,457
|
3,916,762
|
554,382
|
Operating
expenses:
|
|
|
|
|
|
|
Origination and
servicing expenses
|
(306,963)
|
(272,315)
|
(38,544)
|
(570,975)
|
(521,810)
|
(73,857)
|
Sales and marketing
expenses
|
(215,213)
|
(66,743)
|
(9,447)
|
(359,395)
|
(157,949)
|
(22,356)
|
Research and
development expenses
|
(101,562)
|
(83,394)
|
(11,804)
|
(189,283)
|
(170,953)
|
(24,197)
|
General and
administrative expenses
|
(102,610)
|
(102,025)
|
(14,441)
|
(209,824)
|
(198,380)
|
(28,079)
|
Provision for accounts
receivable
|
(68,349)
|
(23,248)
|
(3,291)
|
(128,710)
|
(56,396)
|
(7,982)
|
Provision for loans
receivable
|
(79,624)
|
(119,776)
|
(16,953)
|
(116,854)
|
(415,712)
|
(58,840)
|
Credit losses for
quality assurance commitment[1]
|
-
|
(575,782)
|
(81,497)
|
-
|
(1,372,621)
|
(194,282)
|
Total operating
expenses
|
(874,321)
|
(1,243,283)
|
(175,977)
|
(1,575,041)
|
(2,893,821)
|
(409,593)
|
Operating
profit
|
767,569
|
567,169
|
80,277
|
1,562,416
|
1,022,941
|
144,789
|
Other income
(expenses)
|
|
|
|
|
|
|
Gain from quality
assurance fund[1]
|
22,883
|
-
|
-
|
57,010
|
-
|
-
|
Realized gain (loss)
from financial guarantee
derivatives
|
2,582
|
-
|
-
|
(7,540)
|
-
|
-
|
Fair value change of
financial guarantee derivatives
|
(7,424)
|
-
|
-
|
(8,207)
|
-
|
-
|
Other income,
net
|
27,704
|
34,321
|
4,858
|
54,053
|
88,079
|
12,467
|
Profit before
income tax expense
|
813,314
|
601,490
|
85,135
|
1,657,732
|
1,111,020
|
157,256
|
Income tax
expenses
|
(152,852)
|
(147,479)
|
(20,874)
|
(294,152)
|
(236,647)
|
(33,495)
|
Net
profit
|
660,462
|
454,011
|
64,261
|
1,363,580
|
874,373
|
123,761
|
Net profit (loss)
attributable to non-controlling, interest
shareholders
|
(49)
|
(2,696)
|
(382)
|
(111)
|
(1,723)
|
(244)
|
Net profit
attributable to FinVolution Group
|
660,511
|
456,707
|
64,643
|
1,363,691
|
876,096
|
124,005
|
Foreign currency
translation adjustment, net of nil tax
|
13,812
|
(1,580)
|
(224)
|
(269)
|
2,262
|
320
|
Total comprehensive
income attributable to
FinVolution Group
|
674,323
|
455,127
|
64,419
|
1,363,422
|
878,358
|
124,325
|
Weighted average
number of ordinary shares used in
computing net income per share
|
|
|
|
|
|
|
Basic
|
1,533,957,777
|
1,513,856,060
|
1,513,856,060
|
1,513,972,147
|
1,518,587,011
|
1,518,587,011
|
Diluted
|
1,567,527,588
|
1,521,505,807
|
1,521,505,807
|
1,563,446,663
|
1,530,774,525
|
1,529,887,665
|
Income per share
-Basic
|
0.43
|
0.30
|
0.04
|
0.90
|
0.58
|
0.08
|
Income per
ADS-Basic
|
2.15
|
1.51
|
0.21
|
4.50
|
2.88
|
0.41
|
Income per share
-Diluted
|
0.42
|
0.30
|
0.04
|
0.87
|
0.57
|
0.08
|
Income per
ADS-Diluted
|
2.11
|
1.50
|
0.21
|
4.36
|
2.86
|
0.41
|
|
[1] Before the
adoption of ASC 326 on January 1, 2020, gain or losses related to
quality assurance commitments were recorded in one combined
financial statement line item within other income. After the
adoption of
ASC 326, the guarantee income (i.e. the release of ASC 460
component of guarantee liability) was recorded as a separate
financial statement line item within revenue and the credit losses
for quality assurance
commitments (i.e. the recognition of CECL losses) was recorded
within expenses.
|
FinVolution
Group
|
UNAUDITED INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(All amounts in
thousands, except share data, or otherwise noted)
|
|
|
Three Months Ended
June 30
|
|
Six Months Ended
June 30,
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
RMB
|
|
RMB
|
|
USD
|
|
RMB
|
|
RMB
|
|
USD
|
|
Net cash provided by
operating
activities
|
618,444
|
|
1,250,622
|
|
177,014
|
|
1,093,494
|
|
667,210
|
|
94,437
|
|
Net cash provided
by/(used in)
investing activities
|
(853,418)
|
|
46,622
|
|
6,599
|
|
(1,123,365)
|
|
(213,853)
|
|
(30,269)
|
|
Net cash provided
by/(used in)
financing activities
|
67,432
|
|
(1,002,044)
|
|
(141,830)
|
|
652,025
|
|
(1,432,830)
|
|
(202,805)
|
|
Effect of exchange
rate changes
on cash and cash equivalents
|
16,338
|
|
3,792
|
|
537
|
|
977
|
|
6,864
|
|
973
|
|
Net
increase/(decrease) in cash,
cash equivalent and restricted
cash
|
(151,204)
|
|
298,992
|
|
42,320
|
|
623,131
|
|
(972,609)
|
|
(137,664)
|
|
Cash, cash equivalent
and
restricted cash at beginning of
period
|
6,068,056
|
|
4,739,144
|
|
670,782
|
|
5,293,721
|
|
6,010,745
|
|
850,766
|
|
Cash, cash equivalent
and
restricted cash at end of period
|
5,916,852
|
|
5,038,136
|
|
713,102
|
|
5,916,852
|
|
5,038,136
|
|
713,102
|
|
FinVolution
Group
|
UNAUDITED
Reconciliation of GAAP and Non-GAAP Results
|
(All amounts in
thousands, except share data, or otherwise noted)
|
|
|
For the Three Months
Ended June 30,
|
For the Six Months
Ended June 30,
|
|
2019
|
2020
|
2019
|
2020
|
|
RMB
|
RMB
|
USD
|
RMB
|
RMB
|
USD
|
|
|
|
|
|
|
|
Net
Revenues
|
1,641,890
|
1,810,452
|
256,254
|
3,137,457
|
3,916,762
|
554,382
|
Less: total operating
expenses
|
(874,321)
|
(1,243,283)
|
(175,977)
|
(1,575,041)
|
(2,893,821)
|
(409,593)
|
Operating
Profit
|
767,569
|
567,169
|
80,277
|
1,562,416
|
1,022,941
|
144,789
|
Add: share-based
compensation expenses
|
11,815
|
8,708
|
1,233
|
23,937
|
16,729
|
2,368
|
Non-GAAP adjusted
operating profit
|
779,384
|
575,877
|
81,510
|
1,586,353
|
1,039,670
|
147,157
|
|
|
|
|
|
|
|
Operating
Margin
|
46.7%
|
31.3%
|
31.3%
|
49.8%
|
26.1%
|
26.1%
|
Non-GAAP operating
margin
|
47.5%
|
31.8%
|
31.8%
|
50.6%
|
26.5%
|
26.5%
|
View original
content:http://www.prnewswire.com/news-releases/finvolution-group-reports-second-quarter-2020-unaudited-financial-results-301117601.html
SOURCE FinVolution Group