360 Finance, Inc. (QFIN) (“360 Finance” or the “Company”), a
leading digital consumer finance platform, today announced its
unaudited financial results for the first quarter ended March 31,
2020.
First Quarter Operational
Highlights
- Total loan origination volume*1 was
RMB51,770 million, representing an increase of 25.6% from RMB41,202
million in the same period of 2019. Loan origination volume for
Credit Driven Services was RMB40,866 million, including RMB31,941
million for off-balance-sheet loans and RMB8,925 million for
on-balance-sheet loans, compared to RMB40,862 million, RMB38,789
million and RMB2,073 million in the same period of 2019,
respectively. Loan origination volume under capital-light model
within Platform Services was RMB10,904 million, an increase of
3107.1% from RMB340 million in the same period of 2019.
- Total outstanding loan balance*2
was RMB73,116 million as of March 31, 2020, an increase of 39.1%
from RMB52,578 million as of March 31, 2019, and an increase of
1.3% from RMB72,155 million as of December 31, 2019. Outstanding
loan balance for Credit Driven Services was RMB57,610 million,
including RMB48,579 million for off-balance-sheet loans and
RMB9,031 million for on-balance-sheet loans, compared to RMB51,733
million, RMB49,787 million and RMB1,946 million as of March 31,
2019, respectively. Outstanding loan balance under capital-light
model within Platform Services was RMB15,506 million as of March
31, 2020, an increase of 1735.0% from RMB845 million as of March
31, 2019.
- The weighted average tenor of
loans*3 originated in the first quarter of 2020 was approximately
8.18 months, compared with 8.01 months in the same period of 2019,
and 7.38 months in the fourth quarter of 2019.
- Cumulative registered users was
141.63 million, an increase of 49.0% from 95.08 million as of March
31, 2019, and an increase of 4.9% from 135.01 million as of
December 31, 2019.
- Users with approved credit lines*4
was 26.11 million as of March 31, 2020, an increase of 62.9% from
16.03 million as of March 31, 2019, and an increase of 5.6% from
24.72 million as of December 31, 2019.
- Cumulative borrowers with
successful drawdown, including repeat borrowers was 16.81 million
as of March 31, 2020, an increase of 61.2% from 10.43 million as of
March 31, 2019, and an increase of 5.7% from 15.91 million as of
December 31, 2019.
- 90 day+ delinquency ratio*5 was
2.17% as of March 31, 2020.
- The percentage of funding from
financial institutions*6 in the first quarter of 2020 was 98%.
- Repeat borrower contribution*7 was
84.9%.
1 "Loan origination volume" refers to the total
principal amount of loans originated through the Company’s platform
during the given period.2 "Outstanding loan balance" refers to the
total amount of principal outstanding for loans originated through
the Company’s platform at the end of each period, excluding loans
delinquent for more than 180 days.3 For loan facilitated in the
first quarter of 2020 and fourth quarter of 2019, we use the actual
term for extinguished loans and use the contractual term for
outstanding loans to calculate the weighted average tenor.4 "Users
with approved credit lines" refers to the total number of users who
had submitted their credit applications and were approved with a
credit line by the Company at the end of each period.5 "90 day+
delinquency ratio" refers to the outstanding principal balance of
on- and off-balance sheet loans that were 90 to 179 calendar days
past due as a percentage of the total outstanding principal balance
of on- and off-balance sheet loans on our platform as of a specific
date. Loans that are charged-off are not included in the
delinquency rate calculation.6 "The percentage of funding from
financial institutions" is based on cumulative loan origination
during the given period.7 “Repeat borrower contribution” for a
given period refers to (i) the principal amount of loans borrowed
during that period by borrowers who had historically made at least
one successful drawdown, divided by (ii) the total loan origination
volume through our platform during that period.
First Quarter 2020 Financial
Highlights
- Total net revenue increased by
58.4% to RMB3,182.9 million (US$449.5 million) from RMB2,009.0
million in the same period of 2019.
- Income from operations was RMB184.2
million (US$26.0 million).
- Non-GAAP*8 income from operations
was RMB255.5 million (US$36.1 million).
- Operating margin was 5.8%. Non-GAAP
operating margin was 8.0%.
- Net income was RMB183.2 million
(US$25.9 million).
- Non-GAAP net income was RMB254.5
million (US$35.9 million).
- Net income margin was 5.8%.
Non-GAAP net income margin was 8.0%.
8 Non-GAAP income from operations (Adjusted
Income from operations) and Non-GAAP net income (Adjusted net
income) are non-GAAP financial measures. For more information on
this non-GAAP financial measure, please see the section of “Use of
Non-GAAP Financial Measures Statement” and the table captioned
"Unaudited Reconciliations of GAAP and Non-GAAP Results" set forth
at the end of this press release.
Mr. Haisheng Wu, Chief Executive Officer and
Director of 360 Finance, commented, “The first quarter of 2020 was
an unusual quarter, as the entire fintech industry essentially went
through a COVID-19-induced extreme stress test in terms of business
performance and asset quality. Our results for the quarter
demonstrate that we successfully passed this test with flying
colors, while maintaining high standards in compliance and a
prudent risk management strategy. We attribute this success to our
high-quality borrower base and the cautious operation approach.
Furthermore, we attained remarkable progress in every aspect of our
business operation despite challenging market conditions. Loan
origination volume reached RMB51.8 billion during the quarter, a
25.6% year-over-year increase. Despite the unfavorable market
conditions in the first quarter, we endeavored to sustain a
considerable loan origination volume with decent risk profile
compared to last quarter in 2019. During the quarter, the total
revenue reached RMB3.18 billion. Free cash flow increased
substantially as well which will provide additional cushion for
risk management and further uphold our strong risk resilience.”
“In face of COVID-19 outbreak, we persist in
refining our management, continuously improving operational
efficiency and bolstering sustainable development. This is the
third sequential quarter during which we effectively brought down
both customer acquisition cost and funding cost. What’s worth
noting here is that we have successfully issued three ABSs to date
this year. The cost of the most recent one reached a coupon rate as
low as 4.2% for the senior A tranche. During this quarter, the
outstanding balance of loans under capital-light model within
Platform Services, for which we bear limited principle risk,
continued to increase and accounted for 21.2% out of total
outstanding loan balance contributing to a further descending
leverage ratio and a sufficient 4.0x of provision coverage ratio.
In terms of compliance, recently China Banking and Insurance
Regulatory Commission for the first time issued a consultative
“Guidelines on Commercial Banks’ Online Lending Business” draft
(the “Draft”) which is viewed as the basic law for the online
lending industry in China. The Draft substantially reduces
regulatory overhang and is beneficial for the overall fintech
industry, and in particular, the leading players like us.
In addition, we have committed great efforts in
launching more pilot projects aiming to expand customer acquisition
channels and boost existing users’ stickiness. We not only have
expanded more user traffic channels such as external platforms with
consumption scenarios, but also considerably enhanced users’
stickiness through a virtual credit product called V-pocket. As
indicated by recent operation data, our business is stably
recovering with growth prospects. We management team anticipate a
very solid quarter going forward and remain in full confidence to
achieve full year operation target.”Mr. Jiang Wu, Chief Financial
Officer and Director of 360 Finance, stated, “In compliance with
FASB requirements, we adopted the new accounting standard ASC 326:
Financial instruments – Credit Losses starting this quarter. This
change in accounting standards essentially leads that our results
this quarter are not directly comparable with previous periods on a
like-for-like basis. Let me explain the main differences between
the old and new accounting standards and how the adjustments have
impacted our financial statements. First, revenue from releasing of
guarantee liabilities, which represents guarantee revenue
recognized from our existing loan portfolios, was RMB1.01 billion
under new accounting standards, among which RMB838 million is
attributable to the adoption of new accounting standards. Second,
provision for contingent liability includes provisions of RMB1.42
billion for estimated credit losses associated with new loan
origination during the quarter which is recognized under the new
accounting standards. Lastly, as of March 31, 2020, retained
earnings on our balance sheet decreased by approximately RMB1.25
billion during this quarter. This reduction is mainly attributed to
loss of RMB1.43 billion for loan portfolios existing as of December
31, 2019 recognized according to new accounting standards, which is
caused by the net impact of recognizing provision upfront and
deferring revenue from guarantee services to future period.
In addition, in this quarter, we accrued RMB 280
million of guarantee liabilities for loans originated in previous
periods as a result of the impact of the pandemic.”
“Total net revenue in the first quarter was
RMB3.18 billion, among which RMB838 million was accounted for
incremental revenue from releasing of guarantee liabilities under
new accounting standards. Owing to revenue increase and provision
for contingent liabilities corresponding to loan origination in the
first quarter, under new accounting standards, non-GAAP operating
income dropped by RMB599 million to RMB256 million. Hence we
essentially achieved one of the most exceptional quarterly
financial results since our IPO.”
In the second quarter, we are witnessing a
continuing improvement of asset quality and modest growth of loan
origination volume, driven by the recovery of domestic economy and
our efforts on the enhancing operation efficiency. Hence, we do
expect further improvement on our financials in the coming quarter.
However, we are still evaluating the impact of global pandemic
situation on China’s economy and our business. Given that, we will
remain cautious on the full year outlook.
Mr. Yan Zheng, Vice President of 360
Finance, added, “In response to the pandemic, we implemented a more
prudent risk management strategy. When granting credit lines to
borrowers, we quickly adjusted to adopt a tighter credit approval
policy for new borrowers living in areas most affected by the
pandemic and to those working in industries that were significantly
impacted. After borrowers made a credit drawdown, we focused on
borrower management and offered more flexible and diversified
products. We also continued to enhance overall efficiency in loan
collection processes through constantly refining our AI bots.”
“As the pandemic subsides in China, we have seen
D1 delinquency and collection rate improved to normal level. Up to
present, D1 delinquency rate*9 fell to the level which is roughly
the same as 6.77% in the fourth quarter of 2019, compared to
roughly 7.28% in the first quarter of 2020. M1 collection rate*10
is gaining momentum and improved to above 86.0% to date. At the
same time, asset quality proved resilient having effectively
withstood the pandemic challenges. The consumer finance ecosystem
empowered by our technology platform started to take shape and has
played a pivotal role in improving customer retention rate,
optimizing risk models and strengthening the collection of customer
behavior data with adequate customer authorization.”
“In next quarter we will continue to focus on
our differentiated risk strategies for various customer groups
aiming to continuously expedite our risk management improvement
through technology and support our growth going forward.”
9 "D1 delinquency rate" is defined as (i) the
total amount of principal that became overdue as a specified date,
divided by (ii) the total amount of principal that was due for
repayment as of such date.10 "M1 collection rate" is defined as (i)
the amount of principal that was repaid in one month among the
total amount of principal that became overdue as a specified date,
divided by (ii) the total amount of principal that became overdue
as a specified date.
First Quarter 2020 Financial
Results
Total net revenues increased by
58.4% to RMB3,182.9 million (US$449.5 million) from RMB2,009.0
million in the same period of 2019, primarily due to the revenue
from releasing guarantee liabilities under Credit Driven Services
over the term of the guarantee as a result of the recently adopted
accounting guidance. And the increase is primarily due to an
increase in Credit Driven Services and Platform Services associated
with an increase in loan origination volume. For more information,
please refer to “Recently Adopted Accounting Guidance”.
Credit Driven Services
increased by 48.7% to RMB2,810.1 million (US$396.9 million) from
RMB1,890.1 million in the same period of 2019, primarily due to the
revenue from releasing of guarantee liabilities over the term of
the guarantee as a result of the recently adopted accounting
guidance. And the increase is primarily due to an increase in
financing income and partially offset by decrease in loan
facilitation and services fees for off-balance-sheet loan. For more
information, please refer to “Recently Adopted Accounting
Guidance”.
Loan facilitation and servicing fees-capital
heavy decreased by 33.7% to RMB1,167.1 million (US$164.8 million)
from RMB1,760.2 million in the same period of 2019, primarily due
to a decrease in loan origination volume associated with
off-balance-sheet loans and an increase in provisions due to the
outbreak of COVID-19 during the first quarter of 2020.
Financing income*11 increased
by 659.9% to RMB609.4 million (US$86.1 million) from RMB80.2
million in the same period of 2019, primarily due to an increase in
loan volume through the consolidated trusts.
Revenue from releasing of guarantee liabilities
increased by 2590.4% to RMB1,006.2 million (US$142.1 million) from
RMB37.4 million in the same period of 2019. The revenue from
releasing of guarantee liabilities under old standard was RMB168.7
million. Under the new standard, we recognized the stand-ready
guarantee liability*12 at the inception of each loan, and it was
amortized to “revenue from releasing of guarantee liabilities” over
the term of the guarantee, the amount of the effect of transition
of 2020 was RMB837.5 million. For more information, please refer to
“Recently Adopted Accounting Guidance”.
Other services fees increased by 121.0% to
RMB27.4 million (US$3.9 million) from RMB12.4 million in the same
period of 2019, primarily due to an increase in revenue from late
fees.
Platform Services increased by
213.5% to RMB372.8 million (US$52.7 million) from RMB118.9 million
in the same period of 2019, primarily due to an increase in loan
origination volume under capital-light model.
Loan facilitation and servicing fees-capital
light increased by 1979.5% to RMB303.6 million (US$42.9 million)
from RMB14.6 million in the same period of 2019, primarily due to
an increase in loan origination volume under capital-light model
within Platform services.
Referral services fees decreased by 47.2% to
RMB54.6 million (US$7.7 million) from RMB103.4 million in the same
period of 2019, primarily due to a decrease in volume of referral
business as a result of a more conservative customer acquisition
strategy adopted during the first quarter in face of the
COVID-19.
Other services fees increased by 1737.5% to
RMB14.7 million (US$2.1 million) from RMB0.8 million in the same
period of 2019, primarily due to an increase in revenue from late
fees and an increase in loan origination volume under capital-light
model within Platform Services.
Total operating costs and
expenses increased by 160.8% to RMB2,998.7 million
(US$423.5 million) from RMB1,149.6 million in the same period of
2019 primarily due to an increase in expenses associated with loan
origination volume and the provision for contingent liabilities
associated with allowance for credit losses.
Origination and servicing expenses increased by
67.5% to RMB347.7 million (US$49.1 million) from RMB207.6 million
in the same period of 2019, primarily due to an increase in loan
origination volume and the associated costs incurred to originate
and service loans through the Company’s platform.
Funding costs increased by 507.7% to RMB158.6
million (US$22.4 million) from RMB26.1 million in the same period
of 2019, primarily due to an increase in loan origination volume
funded by consolidated trusts.
Sales and marketing expenses decreased by 67.7%
to RMB223.0 million (US$31.5 million) from RMB690.3 million in the
same period of 2019, primarily due to a significantly reduced user
acquisition cost as a result of a more conservative customer
acquisition strategy adopted during the first quarter and an
increase of customer acquisition efficiency.
General and administrative expenses increased by
12.1% to RMB108.7 million (US$15.4 million) from RMB97.0 million in
the same period of 2019. The general and administrative expenses
remained stable, while professional fees increased slightly.
Provision for loans receivable increased by
1656.0% to RMB307.3 million (US$43.4 million) from RMB17.5 million
in the same period of 2019, primarily due to an increase in loan
volume through the consolidated trusts, in addition, for the
outbreak of COVID-19 during the first quarter of 2020, we provided
additional allowance to ensure sufficient coverage for loans
facilitated both in prior periods and current quarter.
Provision for financial assets receivable
increased by 273.3% to RMB93.7 million (US$13.2 million) from
RMB25.1 million in the same period of 2019. The outbreak of
COVID-19 during the first quarter of 2020 also had an impact on the
expected default rates, we provided additional allowance to ensure
sufficient coverage for loans facilitated both in prior periods and
current quarter.
Provision for accounts receivable and contract
assets decreased by 33.7% to RMB57.0 million (US$8.0 million) from
RMB86.0 million in the same period of 2019, primarily due to the
additional allowance of the deemed uncollectible contract assets
and accounts receivable that were written off later during the
first quarter of 2019.
Provision for contingent liability was
RMB1,702.8 million (US$240.5 million). Allowance for credit losses
under CECL model was included in "Provision for contingent
liabilities". The provision for contingent liability under old
standard was RMB280.2 million, this part is essentially the
“Expense on guarantee liabilities” in the last quarter. For more
information, please refer to “Recently Adopted Accounting
Guidance”.
Income from operations was
RMB184.2 million (US$26.0 million).
Non-GAAP income from operations
was RMB255.5 million (US$36.1 millions).
Operating margin was 5.8%.
Non-GAAP operating margin was 8.0%.
Income before income tax
expense was RMB228.1 million (US$32.2 million).
Income taxes expense was
RMB44.9 million (US$6.3 million).
Net income was RMB183.2 million
(US$25.9 million).
Non-GAAP net income was
RMB254.5 million (US$35.9 million).
Net income margin was 5.8%.
Non-GAAP net income margin was 8.0%.
11 “Financing income” is generated from loans
originated through the Company’s platform funded by the
consolidated trusts and Fuzhou Microcredit, which charge fees and
interests from borrowers.12 “Stand-ready guarantee liability”
refers to the liability determined on a loan by loan basis at the
inception of each loan in accordance with ASC 460 under US GAAP,
and it is amortized into revenue over the entire loan tenure.
M6+ Delinquency Rate by
Vintage
The following chart and table display the
historical cumulative M6+ delinquency rates by loan origination
vintage for all loans originated through the company’s
platform:
https://www.globenewswire.com/NewsRoom/AttachmentNg/cd3ceacf-51a3-4e8e-8268-f28dae6aadd8
Recently Adopted Accounting
Guidance
In June 2016, the FASB issued ASU No. 2016-13,
Financial Instruments—Credit Losses (Topic 326): Measurement of
Credit Losses on Financial Instruments which has subsequently been
amended by ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10, ASU
2019-11 and ASU 2020-03. This ASU is intended to improve financial
reporting by requiring timelier recording of credit losses on loans
and other financial instruments held by financial institutions and
other organizations. This ASU requires the measurement of all
expected credit losses for financial assets held at the reporting
date based on historical experience, current conditions, and
reasonable and supportable forecasts. For public business entities,
the guidance is effective for fiscal years beginning after December
15, 2019, including final periods within those fiscal years.
We have adopted the new standard effective
January 1, 2020, using the modified retrospective transition
method. The new guidance requires the recognition of credit losses
to be measured using an expected credit loss model (referred to as
the current expected credit loss (CECL) model). ASC 326 establishes
a new accounting principle which requires gross accounting for
guarantee liability. That is, to record both a guarantee obligation
and an allowance for credit losses, calculated using the CECL
impairment model, in addition to the guarantee obligation under ASC
460. As a result, at inception of the guarantee, we have recognized
both a stand-ready guarantee liability under ASC 460 with an
associated financial assets receivable, and a contingent guarantee
liability with an allowance for credit losses under CECL model.
Subsequent to the initial recognition, the ASC 460 stand-ready
guarantee is recognized into guarantee revenue over the term of the
guarantee, while the contingent guarantee is reduced by the payouts
made by the company to compensate the investors upon borrowers'
default. Upon adoption, we recognized the cumulative effect of
approximately RMB1.43 billion after tax as a decrease to the
opening balance of retained earnings and RMB1.9 billion as an
increase to the opening balance of guarantee liabilities as of
January 1, 2020.
Business Outlook
360 Finance currently expects total loan
origination volume for fiscal year 2020 to be in the range of RMB
200 billion to RMB 220 billion. This forecast reflects the
Company’s current and preliminary views, which are subject to
change.
Conference Call
360 Finance’s management team will host an earnings conference
call at 8:00 AM U.S. Eastern Time on Thursday, May 28, 2020 (8:00
PM Beijing Time on the same day).
Dial-in details for the earnings conference call
are as follows:
United States: |
+1-646-722-4977 |
Hong Kong: |
+852-3027-6500 |
Mainland China: |
400-821-0637 |
International: |
+65-6408-5782 |
PIN: |
46179651# |
Please dial in 15 minutes before the call is
scheduled to begin and provide the PIN to join the call.
A telephone replay of the call will be available
after the conclusion of the conference call until June 4, 2020:
United States: |
+1-646-982-0473 |
International: |
+65-6408-5781 |
Access code: |
319334377# |
Additionally, a live and archived webcast of the
conference call will be available on the Investor Relations section
of the Company's website at ir.360jinrong.net.
About 360 Finance
360 Finance, Inc. (NASDAQ: QFIN) (“360 Finance”
or the “Company”) is a leading digital consumer finance platform
and the finance partner of the 360 Group. The Company provides
tailored online consumer finance products to prime, underserved
borrowers funded primarily by its funding partners. The Company’s
proprietary technology platform enables a unique user experience
supported by resolute risk management. When coupled with its
partnership with 360 Group, the Company’s technology translates to
a meaningful borrower acquisition, borrower retention and funding
advantage, supporting the rapid growth and scaling of its
business.
For more information, please visit:
ir.360jinrong.net
Use of Non-GAAP Financial Measures
Statement
To supplement our financial results presented in
accordance with U.S. GAAP, we use non-GAAP financial measure, which
is adjusted from results based on U.S. GAAP to exclude share-based
compensation expenses. Reconciliations of our non-GAAP financial
measures to our U.S. GAAP financial measures are set forth in
tables at the end of this earnings release, which provide more
details on the non-GAAP financial measures.
We use non-GAAP income from operation, non-GAAP
operation margin, non-GAAP net income and non-GAAP net income
margin in evaluating our operating results and for financial and
operational decision-making purposes. Non-GAAP income from
operation represents income from operation excluding share-based
compensation expenses, and non-GAAP net income represents net
income excluding share-based compensation expenses. Such
adjustments have no impact on income tax. We believe that non-GAAP
income from operation and non-GAAP net income help identify
underlying trends in our business that could otherwise be distorted
by the effect of certain expenses that we include in results based
on U.S. GAAP. We believe that non-GAAP income from operation and
non-GAAP net income 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. Our non-GAAP financial information
should be considered in addition to results prepared in accordance
with U.S. GAAP, but should not be considered a substitute for or
superior to U.S. GAAP results. In addition, our calculation of
non-GAAP financial information may be different from the
calculation used by other companies, and therefore comparability
may be limited.
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
RMB7.0808 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 March 31, 2020.
Safe Harbor Statement
Any forward-looking statements contained in this
announcement are made under the "safe harbor" provisions of the
U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates" and similar statements. 360 Finance may
also make written or oral forward-looking statements in its reports
to the U.S. Securities and Exchange Commission ("SEC") on Forms
20-F and 6-K, 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 the Company’s business
outlook for 2019, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. A number of
factors could cause actual results to differ materially from those
contained in any forward-looking statement. Further information
regarding such risks and uncertainties is included in 360 Finance's
filings with the SEC. All information provided in this press
release and in the attachments is as of the date of this press
release, and 360 Finance does not undertake any obligation to
update any forward-looking statement, except as required under
applicable law.
For more information, please
contact:
360 FinanceE-mail: ir@360jinrong.net
Christensen
In ChinaMr. Christian ArnellPhone:
+86-10-5900-1548 E-mail: carnell@christensenir.com
In US Ms. Linda BergkampPhone:
+1-480-614-3004Email: lbergkamp@christensenir.com
360 Finance,
Inc |
Unaudited
Condensed Consolidated Balance Sheets |
(Amounts in
thousands of Renminbi ("RMB") and U.S. dollars ("USD") except for
number of shares and per share data, or otherwise noted) |
|
|
|
|
|
December 31, |
March 31, |
March 31, |
|
2019 |
2020 |
2020 |
|
RMB |
RMB |
USD |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
2,108,123 |
3,616,553 |
510,755 |
Restricted
cash |
1,727,727 |
2,279,043 |
321,862 |
Security
deposit prepaid to third-party guarantee companies |
932,983 |
955,805 |
134,985 |
Funds
receivable from third party payment service providers |
118,860 |
148,455 |
20,966 |
Accounts
receivable and contract assets, net |
2,332,364 |
2,050,353 |
289,565 |
Financial
assets receivable, net |
1,912,554 |
2,438,878 |
344,435 |
Amounts due
from related parties |
478,767 |
345,561 |
48,803 |
Loans
receivable, net |
9,239,565 |
8,668,981 |
1,224,294 |
Prepaid
expenses and other assets |
652,545 |
553,621 |
78,187 |
Total current assets |
19,503,488 |
21,057,250 |
2,973,852 |
Non-current assets: |
|
|
|
Accounts
receivable and contract assets, net-non current |
19,508 |
117,959 |
16,659 |
Financial
assets receivable, net-non current |
59,270 |
231,174 |
32,648 |
Property and
equipment, net |
17,113 |
16,141 |
2,280 |
Intangible
assets |
3,512 |
3,230 |
456 |
Deferred tax
assets |
697,348 |
1,343,781 |
189,778 |
Other
non-current assets |
55,362 |
57,277 |
8,089 |
Total non-current assets |
852,113 |
1,769,562 |
249,910 |
TOTAL ASSETS |
20,355,601 |
22,826,812 |
3,223,762 |
|
|
|
|
LIABILITIES AND EQUITY LIABILITIES |
|
|
|
Current liabilities: |
|
|
|
Payable to
investors of the consolidated trusts-current |
4,423,717 |
4,948,812 |
698,906 |
Accrued
expenses and other current liabilities |
720,918 |
811,497 |
114,605 |
Amounts due
to related parties |
55,622 |
80,311 |
11,342 |
Short term
loans |
200,000 |
435,000 |
61,434 |
Guarantee
liabilities-stand ready * |
2,212,125 |
2,704,747 |
381,983 |
Guarantee
liabilities-contingent * |
734,730 |
3,184,259 |
449,703 |
Income tax
payable |
1,056,219 |
1,294,401 |
182,804 |
Other tax
payable |
263,856 |
190,001 |
26,833 |
Total current liabilities |
9,667,187 |
13,649,028 |
1,927,610 |
Non-current liabilities: |
|
|
|
Deferred tax
liabilities |
- |
4,462 |
630 |
Payable to
investors of the consolidated trusts-noncurrent |
3,442,500 |
3,072,067 |
433,859 |
Other
long-term liabilities |
31,184 |
31,309 |
4,422 |
Total non-current liabilities |
3,473,684 |
3,107,838 |
438,911 |
TOTAL LIABILITIES |
13,140,871 |
16,756,866 |
2,366,521 |
Ordinary
shares |
20 |
20 |
3 |
Additional
paid-in capital |
5,117,184 |
5,188,559 |
732,765 |
Retained
earnings * |
2,071,332 |
824,344 |
116,420 |
Other
comprehensive income |
24,906 |
55,866 |
7,890 |
TOTAL 360 FINANCE INC EQUITY |
7,213,442 |
6,068,789 |
857,078 |
Noncontroling interests |
1,288 |
1,157 |
163 |
TOTAL EQUITY |
7,214,730 |
6,069,946 |
857,241 |
TOTAL LIABILITIES AND EQUITY |
20,355,601 |
22,826,812 |
3,223,762 |
|
|
|
|
* We have adopted the
new standard (ASU No. 2016-13, Financial Instruments—Credit Losses)
effective January 1, 2020 using the modified retrospective
transition method, which establishes a new accounting principle
requiring gross accounting for guarantee liability. We recognized
both a stand-ready guarantee liability under ASC 460 with an
associated financial assets receivable, and a contingent guarantee
liability with an allowance for credit losses under CECL model.
Upon adoption, we recognized the cumulative effect of approximately
RMB1.43 billion as a decrease to the opening balances of retained
earnings, as of January 1, 2020, after adjusting to deferred
taxes. |
|
360 Finance,
Inc |
|
|
Unaudited
Condensed Consolidated Statements of Operations |
|
|
(Amounts in
thousands of Renminbi ("RMB") and U.S. dollars ("USD") except for
number of shares and per share data, or otherwise noted) |
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2019 |
|
2020 |
|
2020 |
|
|
|
|
RMB |
RMB |
USD |
|
|
Credit driven services |
1,890,120 |
|
2,810,050 |
|
396,855 |
|
|
|
Loan
facilitation and servicing fees-capital heavy |
1,760,182 |
|
1,167,119 |
|
164,829 |
|
|
|
Financing income |
80,185 |
|
609,396 |
|
86,063 |
|
|
|
Revenue from releasing of guarantee liabilities * |
37,351 |
|
1,006,176 |
|
142,099 |
|
|
|
Other
services fees |
12,402 |
|
27,359 |
|
3,864 |
|
|
|
Platform services |
118,859 |
|
372,845 |
|
52,656 |
|
|
|
Loan
facilitation and servicing fees-capital light |
14,646 |
|
303,622 |
|
42,880 |
|
|
|
Referral services fees |
103,375 |
|
54,566 |
|
7,706 |
|
|
|
Other
services fees |
838 |
|
14,657 |
|
2,070 |
|
|
|
Total net revenue |
2,008,979 |
|
3,182,895 |
|
449,511 |
|
|
|
Origination and servicing |
207,606 |
|
347,653 |
|
49,098 |
|
|
|
Funding costs |
26,064 |
|
158,614 |
|
22,401 |
|
|
|
Sales
and marketing |
690,251 |
|
223,008 |
|
31,495 |
|
|
|
General and administrative |
97,000 |
|
108,731 |
|
15,356 |
|
|
|
Provision for loans receivable |
17,519 |
|
307,259 |
|
43,393 |
|
|
|
Provision for financial assets receivable |
25,132 |
|
93,724 |
|
13,236 |
|
|
|
Provision for accounts receivable and contract assets |
86,027 |
|
56,976 |
|
8,047 |
|
|
|
Provision for contingent liabilities * |
- |
|
1,702,757 |
|
240,475 |
|
|
|
Total operating costs and expenses |
1,149,599 |
|
2,998,722 |
|
423,501 |
|
|
|
Income from operations |
859,380 |
|
184,173 |
|
26,010 |
|
|
|
Interest income, net |
3,177 |
|
9,750 |
|
1,377 |
|
|
|
Foreign exchange gain (loss) |
32,536 |
|
(28,572 |
) |
(4,035 |
) |
|
|
Other
income, net |
22,042 |
|
62,721 |
|
8,858 |
|
|
|
Income before income tax expense |
917,135 |
|
228,072 |
|
32,210 |
|
|
|
Income taxes expense |
(197,196 |
) |
(44,917 |
) |
(6,343 |
) |
|
|
Net
income |
719,939 |
|
183,155 |
|
25,867 |
|
|
|
Net
loss attributable to noncontrolling interests |
- |
|
253 |
|
36 |
|
|
|
Net
income attributable to ordinary shareholders of the
Company |
719,939 |
|
183,408 |
|
25,903 |
|
|
|
Net income
per ordinary share attributable to ordinary shareholders of 360
Finance, Inc. |
|
|
|
|
|
Basic |
2.50 |
|
0.62 |
|
0.09 |
|
|
|
Diluted |
2.40 |
|
0.61 |
|
0.09 |
|
|
|
Weighted
average shares used in calculating net income per ordinary
share |
|
|
|
|
|
Basic |
287,652,707 |
|
293,592,210 |
|
293,592,210 |
|
|
|
Diluted |
300,042,315 |
|
301,626,149 |
|
301,626,149 |
|
|
|
|
|
|
|
|
|
* We have adopted the new standard (ASU No. 2016-13, Financial
Instruments—Credit Losses) effective January 1, 2020, using the
modified retrospective transition method. We recognized a
contingent guarantee liability with an allowance for credit losses
under CECL model at inception of the guarantee together with the
stand-ready guarantee liability. Allowance for credit losses under
CECL model was included in "Provision for contingent liabilities",
while the stand-ready guarantee liability was released into
"Revenue from releasing of guarantee liabilities" over the term of
the guarantee. |
|
360 Finance,
Inc |
|
|
Unaudited
Condensed Consolidated Statements of Comprehensive
(Loss)/Income |
|
|
(Amounts in
thousands of Renminbi ("RMB") and U.S. dollars ("USD") except for
number of shares and per share data, or otherwise noted) |
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2019 |
|
2020 |
2020 |
|
|
|
RMB |
RMB |
USD |
|
|
Net
income |
719,939 |
|
183,155 |
25,867 |
|
|
Other
comprehensive income, net of tax of nil: |
|
|
|
|
|
Foreign
currency translation adjustment |
(40,013 |
) |
30,960 |
4,372 |
|
|
Other
comprehensive (income) loss |
(40,013 |
) |
30,960 |
4,372 |
|
|
Total comprehensive income |
679,926 |
|
214,115 |
30,239 |
|
|
Net loss
attributable to noncontrolling interests |
- |
|
253 |
36 |
|
|
Comprehensive income attributable to ordinary
shareholders |
679,926 |
|
214,368 |
30,275 |
|
|
|
|
|
|
|
360 Finance,
Inc |
|
Unaudited
Reconciliations of GAAP and Non-GAAP Results |
|
(Amounts in
thousands of Renminbi ("RMB") and U.S. dollars ("USD") except for
number of shares and per share data, or otherwise noted) |
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
2019 |
|
2020 |
|
2020 |
|
|
RMB |
RMB |
USD |
|
Reconciliation of Non-GAAP Net Income to Net
Income |
|
|
|
|
Net
income |
719,939 |
|
183,155 |
|
25,867 |
|
Add:
Share-based compensation expenses |
68,843 |
|
71,374 |
|
10,080 |
|
Non-GAAP net income |
788,782 |
|
254,529 |
|
35,947 |
|
Non-GAAP net
income margin |
39.3% |
|
8.0% |
|
|
|
GAAP net
income margin |
35.8% |
|
5.8% |
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Income from operations to Income
from operations |
|
|
|
|
Income from
operations |
859,380 |
|
184,173 |
|
26,010 |
|
Add:
Share-based compensation expenses |
68,843 |
|
71,374 |
|
10,080 |
|
Non-GAAP Income from operations |
928,223 |
|
255,547 |
|
36,090 |
|
Non-GAAP
operating margin |
46.2% |
|
8.0% |
|
|
|
GAAP
operating margin |
42.8% |
|
5.8% |
|
|
|
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