360 DigiTech, Inc. (QFIN) (“360 DigiTech” or the “Company”), a
leading financial technology platform in China, today announced its
unaudited financial results for the fourth quarter and full year
ended December 31, 2021.
Fourth Quarter 2021 Business
Highlights
- As of December 31, 2021, our
digital platform has connected 119 financial institutional partners
and 188.2 million consumers*1 with potential credit needs,
cumulatively, an increase of 15.7% from 162.6 million a year
ago.
- Cumulative users with approved
credit lines*2 were 38.5 million as of December 31, 2021, an
increase of 24.6% from 30.9 million as of December 31, 2020.
- Cumulative borrowers with
successful drawdown, including repeat borrowers was 24.3 million as
of December 31, 2021, an increase of 23.4% from 19.7 million as of
December 31, 2020.
- In the fourth quarter of 2021,
financial institutional partners originated 20,819,996 loans*3,
totaling RMB96,910 million*4 through our platform, an increase of
40.4% from RMB69,045 million in the same period of 2020.
- Out of those loans originated by
financial institutions, RMB51,866 million was under capital-light
model and other technology solutions, representing 53.5% of the
total, an increase of 120.2% from RMB23,550 million in the same
period of 2020.
- Total outstanding balance*5 of the
loans originated by financial institutional partners through our
platform was RMB141,987 million as of December 31, 2021, an
increase of 54.2% from RMB92,075 million as of December 31,
2020.
- RMB77,268 million of such loan
balance was under capital-light model and other technology
solutions, an increase of 163.2% from RMB29,357 million as of
December 31, 2020.
- Financial institutions granted
approximately RMB9.3 billion credit lines to small and micro-sized
enterprises owners (SME Owners)*6 through our platform in the
fourth quarter of 2021, an increase of 16.3% from approximately
RMB8.0 billion in the prior quarter.
- The weighted average contractual
tenor of loans originated by financial institutions across our
platform in the fourth quarter of 2021 was approximately 10.33
months, compared with 10.41 months in the same period of 2020.
- 90 day+ delinquency ratio*7 of
loans originated by financial institutions across our platform was
1.54% as of December 31, 2021.
- Repeat borrower contribution*8 of
loans originated by financial institutions across our platform for
the fourth quarter of 2021 was 87.3%.
1 Refers to cumulative registered users across
our platform.2 “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.3 Including 7,405,777 loans across “V-pocket”, and
13,414,219 loans across other products.4 Refers to the total
principal amount of loans facilitated and originated during the
given period, including loan volume facilitated through
Intelligence Credit Engine (“ICE”) and other technology solutions.
“ICE” is an open platform on our “360 Jietiao” APP, we match
borrowers and financial institutions through big data and cloud
computing technology on “ICE”, and provide pre-loan investigation
report of borrowers. For loans facilitated through “ICE”, the
Company do not provide post-loan risk management nor bear principal
risk. 5 “Total outstanding loan balance” refers to the total amount
of principal outstanding for loans facilitated and originated at
the end of each period, including loan balance for “ICE” and other
technology solutions, excluding loans delinquent for more than 180
days.6 SME loans are Loans issued to SME Owners with e-commerce
operations, with business sales receipt, and/or with business
taxation record.7 “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 across our platform as of a specific date. Loans that are
charged-off and loans under “ICE” and other technology solutions
are not included in the delinquency rate calculation.8 “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 facilitation and origination volume through
our platform during that period.
Fourth Quarter 2021 Financial
Highlights
- Total net revenue increased by
32.5% to RMB4,422.1 million (US$693.9 million) from RMB3,337.5
million in the same period of 2020.
- Income from operations increased by
19.4% to RMB1,481.6 million (US$232.5 million) from RMB1,241.3
million in the same period of 2020.
- Non-GAAP*9 income from operations
increased by 14.1% to RMB1,539.1 million (US$241.5 million) from
RMB1,349.1 million in the same period of 2020.
- Operating margin was 33.5%.
Non-GAAP operating margin was 34.8%.
- Net income increased by 8.4% to
RMB1,305.3 million (US$204.8 million) from RMB1,204.4 million in
the same period of 2020.
- Non-GAAP net income increased by
3.9% to RMB1,362.9 million (US$213.9 million) from RMB1,312.1
million in the same period of 2020.
- Net income attributed to the
Company increased by 9.8% to RMB1,322.6 million (US$207.5 million)
from RMB1,204.8 million in the same period of 2020.
- Net income margin was 29.5%.
Non-GAAP net income margin was 30.8%.
Full Year 2021 Operational
Highlights
- Total loan facilitation and
origination volume in 2021 was RMB357,103 million, representing an
increase of 44.7% from RMB246,758 million in 2020. Loan
facilitation volume under capital-light model within Platform
Services was RMB194,225 million, an increase of 179.4% from
RMB69,524 million in 2020.
- The weighted average contractual
tenor of loans facilitated and originated was 10.62 months in full
year 2021, compared with 9.72 months in 2020.
- Repeat borrower contribution was
88.1% in full year 2021, compared with 86.5% in 2020.
Full Year 2021 Financial
Highlights
- Total net revenue increased by
22.6% to RMB16,635.6 million (US$2,610.5 million) from RMB13,564.0
million in 2020.
- Income from operations increased by
79.0% to RMB6,786.2 million (US$1,064.9 million) from RMB3,790.2
million in 2020.
- Non-GAAP income from operations
increased by 72.1% to RMB7,040.1 million (US$1,104.7 million) from
RMB4,091.3 million in 2020.
- Operating margin was 40.8%.
Non-GAAP operating margin was 42.3%.
- Net income increased by 64.9% to
RMB5,764.5 million (US$904.6 million) from RMB3,495.7 million in
2020.
- Non-GAAP net income increased by
58.5% to RMB6,018.4 million (US$944.4 million) from RMB3,796.9
million in 2020.
- Net income attributed to the
Company increased by 65.4% to RMB5,781.7 million (US$907.3 million)
from RMB3,496.6 million in 2020.
- Net income margin was 34.7%.
Non-GAAP net income margin was 36.2%.
9 Non-GAAP income from operations (Adjusted
Income from operations), Non-GAAP net income (Adjusted net income),
Non-GAAP operating margin and Non-GAAP net income margin 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 DigiTech, commented, “We are pleased to report a
strong quarter and close the year with record breaking operational
and financial results. In 2021 we have experienced significant
challenges from subdued macro environment and drastically changing
regulatory settings. We are proud to demonstrate management’s solid
execution and the resilience of the Company’s business model. For
year 2021, financial institutions originated RMB357.1 billion loans
through our platform, up approximately 45% year-on-year.
Approximately 54% of the loans was facilitated under the
capital-light model and other technology solutions*10, as we
continued to pursue long term strategic transition toward
sustainable technology driven business models.
In 2021 we made significant progress in SME
market. At the end of the year, SME loans accounted for
approximately 13% of total loan balance. We continue to enhance our
services and reach out to potential SME customers through diverse
channel partners and direct sales. In consumer market, as we
gradually lower the prices, we are targeting better customer
segments with generally lower risk and higher retention. We will
further optimize our online and offline customer acquisition
channels. We are encouraged by recent comments from economic policy
makers showing continuous support to healthy development in both
consumer and SME markets.
On the regulatory front, as one of the top
Internet platforms, we have worked diligently to implement
necessary adjustment to our operations according to regulatory
requirement. At the end of 2021, we increased the registered
capital of our micro-lending unit to RMB5 billion, significantly
enhanced its capacity to serve broader customer base and its
capability to handle market risks. We note that recent speech from
top regulators suggesting that the rectification of the industry is
running smoothly. We are confident that we should be able to make
timely adjustments to satisfy with the requirements and guidelines
set out by regulators.”
“We are very glad to report another quarter of
strong financial results that tops our expectations despite
multiple macro challenges we were facing. Total revenue was RMB4.42
billion and non-GAAP net income was RMB1.36 billion,” Mr. Alex Xu,
Chief Financial Officer, commented. “We continued to see solid
demand for consumer credit, although the seasonal tightening in
liquidity caused some fluctuation in asset quality. During the
quarter we generated approximately RMB2 billion cash from
operations. At the end of 2021, we held an ever strong financial
position that not only enables us to support our long term growth
and withstand market volatilities, but also allows us to continue
improving returns to our shareholders through a quarterly dividend
policy.”
Mr. Yan Zheng, Chief Risk Officer, added, “We
are very pleased to achieve our 2021 risk management performance
targets, despite experiencing some macro headwinds. In particular,
we set multiple best-in-history record in key risk management
metrics in first half of the year. Although we saw some fluctuation
in asset quality during the fourth quarter, we believe such
volatility was mainly reflecting the seasonally tightening funding
cycle near year end. Among the key leading indicators, Day-1
delinquency*11 was 5.4%, while the 30-day collection rate*12 was
over 87% in the quarter. As we move toward higher quality customer
base, we are expecting noticeable improvement in our overall risk
performance from current level throughout the year of 2022,
particularly in the second half.”
10 We’ve used mainly data technology tools and
AI risk management systems in the process of providing such
services as loan facilitation, post-facilitation and borrowers’
referral to our customers. Revenue from these technology powered
services amount to 49% of our total net revenue for the fourth
quarter 2021. 11 “D1 delinquency rate” is defined as (i) the total
amount of principal that became overdue as of a specified date,
divided by (ii) the total amount of principal that was due for
repayment as of such date.12 “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.
Fourth Quarter 2021 Financial
Results
Total net revenue was
RMB4,422.1 million (US$693.9 million), compared to RMB3,337.5
million in the same period of 2020, and RMB4,612.8 million in the
prior quarter.
Net revenue from Credit Driven
Services was RMB2,713.2 million (US$425.8 million),
compared to RMB2,557.1 million in the same period of 2020, and
RMB2,620.0 million in the prior quarter.
Loan facilitation and servicing fees-capital
heavy were RMB479.9 million (US$75.3 million), compared to RMB854.8
million in the same period of 2020 and RMB581.1 million in the
prior quarter. The year-over-year decreases were driven by lower
volume and interest rates of the capital heavy loans, and
sequential declines were primarily due to lower interest rates and
average tenor of the loans
Financing income*13 was
RMB716.1 million (US$112.4 million), compared to RMB415.9 million
in the same period of 2020 and RMB570.5 million in the prior
quarter. The year-over-year and sequential increases were primarily
due to growth in outstanding on-balance-sheet loans.
Revenue from releasing of guarantee liabilities
was RMB1,494.7 million (US$234.5 million), compared to RMB1,251.6
million in the same period of 2020, and RMB1,440.7 million in the
prior quarter. The year-over-year and sequential growth mainly
reflected trends in average outstanding balance of
off-balance-sheet capital-heavy loans during the period.
Other services fees were RMB22.5 million (US$3.5
million), compared to RMB34.8 million in the same period of 2020,
and RMB27.6 million in the prior quarter. The year-over-year and
sequential declines were mainly due to declines of late payment
fees under capital-heavy model.
Net revenue from Platform
Services was RMB1,708.9 million (US$268.2 million),
compared to RMB780.4 million in the same period of 2020 and
RMB1,992.8 million in the prior quarter.
Loan facilitation and servicing fees-capital
light were RMB1,485.3 million (US$233.1 million), compared to
RMB681.1 million in the same period of 2020 and RMB1,800.1 million
in the prior quarter. The year-over-year growth was primarily due
to growth in loan facilitation volume under capital-light model,
the sequential decline was in part due to decline in capital light
loan volume and lower average interest rates of the loans
Referral services fees were RMB177.4 million
(US$27.8 million), compared to RMB78.2 million in the same period
of 2020 and RMB156.3 million in the prior quarter. The
year-over-year and sequential increases were primarily due to
growth in facilitation volume through ICE.
Other services fees were RMB46.2 million (US$7.3
million), compared to RMB21.1 million in the same period of 2020
and RMB36.5 million in the prior quarter. The year-over-year and
sequential growth reflected growth of late payment fees under
capital-light model.
Total operating costs and
expenses were RMB2,940.5 million (US$461.4 million),
compared to RMB2,096.1 million in the same period of 2020 and
RMB2,719.1 million in the prior quarter.
Facilitation, origination and servicing expenses
were RMB589.2 million (US$92.5 million), compared to RMB444.5
million in the same period of 2020 and RMB627.2 million in the
prior quarter. The year-over-year increase was primarily due to
growth in loan facilitation and origination volume. The sequential
decline was in part due to improvement in operational
efficiency.
Funding costs were RMB91.4 million (US$14.3
million), compared to RMB131.4 million in the same period of 2020
and RMB83.8 million in the prior quarter. The year-over-year
decline was mainly due to increased funding contribution from ABS
which has lower funding cost compared to trusts despite growth in
loans facilitated through ABS and trusts. The sequential increase
was mainly due to growth in funding from ABS and trusts.
Sales and marketing expenses were RMB628.2
million (US$98.6 million), compared to RMB316.4 million in the same
period of 2020 and RMB577.3 million in the prior quarter. The
year-over-year and sequential increases were mainly due to a more
proactive customer acquisition strategy, particularly related to
acquiring large ticket-size customers.
General and administrative expenses were
RMB140.5 million (US$22.1 million), compared to RMB135.3 million in
the same period of 2020 and RMB173.0 million in the prior quarter.
The sequential declines were due to lower professional service fees
and our continued effort to improve operational efficiency.
Provision for loans receivable was RMB223.1
million (US$35.0 million), compared to RMB105.5 million in the same
period of 2020 and RMB360.4 million in the prior quarter. The
year-over-year increase was mainly due to growth in on-balance
sheet loans. The sequential decrease was mainly due to decline in
facilitation and origination volume of on-balance sheet loans.
Provision for financial assets receivable was
RMB70.3 million (US$11.0 million), compared to RMB57.5 million in
the same period of 2020 and RMB70.1 million in the prior quarter.
The year-over-year and sequential changes primarily reflected the
Company’s consistent approach in assessing provisions commensurate
with its underlying loan profile.
Provision for accounts receivable and contract
assets was RMB38.4 million (US$6.0 million), compared to RMB23.3
million in the same period of 2020 and RMB129.1 million in the
prior quarter. The year-over-year increase was primarily due to
increases in facilitation and origination volume. The sequential
decrease was mainly due to loans facilitated under capital-light
model performed better than expected.
Provision for contingent liability was RMB1159.3
million (US$181.9 million), compared to RMB882.3 million in the
same period of 2020 and RMB698.3 million in the prior quarter. The
year-over-year and sequential changes primarily reflected the
Company’s consistent approach in assessing provisions commensurate
with its underlying loan profile.
Income from operations was
RMB1,481.6 million (US$232.5 million), compared to RMB1,241.3
million in the same period of 2020 and RMB1,893.7 million in the
prior quarter.
Non-GAAP income from operations
was RMB1,539.1 million (US$241.5 million), compared to RMB1,349.1
million in the same period of 2020 and RMB1,963.3 million in the
prior quarter.
Operating margin was 33.5%.
Non-GAAP operating margin was 34.8%.
Income before income tax
expense was RMB1,541.5 million (US$241.9 million),
compared to RMB1,351.9 million in the same period of 2020 and
RMB1,922.7 million in the prior quarter.
Net income attributed to the
Company was RMB1,322.6 million (US$207.5 million),
compared to RMB1,204.8 million in the same period of 2020 and
RMB1,564.1 million in the prior quarter.
Non-GAAP net income
attributed to the Company was RMB1,380.1 million
(US$216.6 million), compared to RMB1,312.5 million in the same
period of 2020 and RMB1,633.6 million in the prior quarter.
Net income margin was 29.5%.
Non-GAAP net income margin was 30.8%.
Net income per fully diluted
ADS was RMB8.22 (US$1.30).
Non-GAAP net income per fully diluted
ADS was RMB8.58 (US$1.35).
Weighted average basic ADS used in
calculating GAAP and non-GAAP net income per ADS was
154.57 million.
Weighted average diluted ADS used in
calculating GAAP and non-GAAP net income per ADS was
160.82 million.
13 “Financing income” is generated from loans
facilitated through the Company’s platform funded by the
consolidated trusts and Fuzhou Microcredit, which charge fees and
interests from borrowers.
Full Year 2021 Financial
Results
Total net revenues was
RMB16,635.6 million (US$2,610.5 million), compared to RMB13,564.0
million in 2020.
Net revenue from Credit Driven
Services was RMB10,189.2 million (US$1,598.9 million),
compared to RMB11,403.7 million in 2020.
Loan facilitation and servicing fees-capital
heavy were RMB2,326.0 million (US$365.0 million), compared to
RMB4,596.6 million in 2020. The year-over-year decrease was
primarily due to lower average interest rates of the loans and a
decrease in facilitation volume under capital heavy model.
Financing income was RMB2,184.1 million
(US$342.7 million), compared to RMB2,184.2 million in 2020.
Contributions from increases in on-balance loans were largely
offset by lower average interest rates.
Revenue from releasing of guarantee liabilities
was RMB5,583.1 million (US$876.1 million), compared to RMB4,506.9
million in 2020. The year-over-year increase was mainly due to the
growth in outstanding balance under capital-heavy model.
Other services fees were RMB95.9 million
(US$15.0 million), compared to RMB116.0 million in 2020. The
year-over-year decline was primarily due to decrease of late
payment fees under capital-heavy model.
Net revenue from Platform
Services was RMB6,446.5 million (US$1,011.6 million),
compared to RMB2,160.2 million in 2020.
Loan facilitation and servicing fees-capital
light were RMB5,677.9 million (US$891.0 million), compared to
RMB1,826.7 million in 2020. The year-over-year increase was
primarily due to growth in loan facilitation volume under
capital-light model.
Referral services fees were RMB620.3 million
(US$97.3 million), compared to RMB265.3 million in 2020. The
year-over-year increase was primarily due to the facilitation
volume growth through ICE.
Other services fees were RMB148.2 million
(US$23.3 million), compared to RMB68.3 million in 2020. The
year-over-year increase was mainly due to growth in late payment
fees as loan facilitation volume under capital-light model
increased.
Total operating costs and
expenses were RMB9,849.4 million (US$1,545.6 million),
compared to RMB9,773.8 million in 2020.
Facilitation, origination and servicing expenses
were RMB2,252.2 million (US$353.4 million), compared to RMB1,600.6
million in 2020. The year-over-year increase was primarily due to
growth in loan facilitation volume.
Funding costs were RMB337.4 million (US$53.0
million), compared to RMB595.6 million in 2020. The year-over-year
decline was mainly due to increased funding contribution from ABS
which has lower funding cost compared to trusts.
Sales and marketing expenses were RMB2,090.4
million (US$328.0 million), compared to RMB1,079.5 million in 2020.
The year-over-year increase was mainly due to a more proactive
customer acquisition strategy, particularly related to acquiring
large ticket-size customers.
General and administrative expenses were
RMB557.3 million (US$87.5 million), compared to RMB456.0 million in
2020. The year-over-year increase was due to expanded business
operations, partially offset by our continued effort to improve
operational efficiency.
Provision for loans receivable was RMB965.4
million (US$151.5 million), compared to RMB698.7 million in 2020.
The year-over-year increase was mainly due to growth in outstanding
on-balance sheet loans.
Provision for financial assets receivable was
RMB243.9 million (US$38.3 million), compared to RMB312.1million in
2020. The year-over-year decline was in part due to decrease in
loan facilitation volume under capital-heavy model.
Provision for accounts receivable and contract
assets was RMB324.6 million (US$50.9 million), compared to RMB237.3
million in 2020. The year-over-year increase was mainly due to
growth in total loan facilitation volume under capital-heavy and
capital-light model.
Provision for contingent liability was
RMB3,078.2 million (US$483.0 million), compared to RMB4,794.1
million in 2020. The year-over-year decline was mainly due to
decrease in loan facilitation volume under capital-heavy model and
in part due to loans facilitated in second and third quarter of
2021 performed better than expected.
Income from operations was
RMB6,786.2 million (US$1,064.9 million), compared to RMB3,790.2
million in 2020.
Non-GAAP income from operations
was RMB7,040.1 million (US$1,104.7 million), compared to RMB4,091.3
million in 2020.
Operating margin was 40.8%.
Non-GAAP operating margin was 42.3%.
Income before income tax
expense was RMB7,022.7 million (US$1,102.0 million),
compared to RMB4,081.7 million in 2020.
Income taxes expense was
RMB1,258.2 million (US$197.4 million). Effective tax rate was
17.3%, compared to 13.4% in 2020.
Net income attributed to the
Company was RMB5,781.7 million (US$907.3 million),
compared to RMB3,496.6 million in 2020.
Non-GAAP net income
attributed to the Company was RMB6,035.6 million
(US$947.1 million), compared to RMB3,797.8 million in 2020.
Net income margin was 34.7%.
Non-GAAP net income margin was 36.2%.
Net income per fully diluted
ADS was RMB35.98 (US$5.64).
Non-GAAP net income per fully diluted
ADS was RMB37.56 (US$5.89).
Weighted average basic ADS used in
calculating GAAP and non-GAAP net income per ADS was
153.63 million.
Weighted average diluted ADS used in
calculating GAAP and non-GAAP net income per ADS was
160.70 million.
M1+ Delinquency Rate by Vintage and M6+
Delinquency Rate by Vintage
The following charts and tables display the
historical cumulative M1+ delinquency rates by loan facilitation
and origination vintage and M6+ delinquency rates by loan
facilitation and origination vintage for all loans facilitated and
originated through the Company’s platform. Loans that are
charged-off and loans under “ICE” and other technology solutions
are not included in the M1+ charts, loans under “ICE” and other
technology solutions are not included in the M6+ charts:
http://ml.globenewswire.com/Resource/Download/66e1d6dc-24d7-415d-90b4-96204cbedec0
http://ml.globenewswire.com/Resource/Download/f5c6f061-aad3-445d-888d-301868a533a8
Quarterly Dividend
The board of directors of the Company has
approved a dividend of US$0.13 per ordinary share, or US$0.26 per
ADS, for the fourth fiscal quarter of 2021 in accordance with the
Company’s dividend policy, which is expected to be paid on May 13,
2022 to shareholders of record as of the close of business on April
6, 2022.
Business Outlook
The Company currently expects total loan
facilitation and origination volume for 2022 to be between RMB410
billion and RMB450 billion, representing year-on-year growth of 15%
to 26%. This forecast reflects the Company’s current and
preliminary views, which is subject to material change.
Conference Call
360 DigiTech’s management team will host an
earnings conference call at 7:30 PM U.S. Eastern Time on Thursday,
March 10, 2022 (8:30 AM Beijing Time on March 11).
United States: |
+1-646-722-4977 |
Hong Kong: |
+852-3027-6500 |
Mainland China: |
400-821-0637 |
International: |
+65-6408-5782 |
PIN: |
51117881# |
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 March 17,
2022:
United States: |
+1-646-982-0473 |
International: |
+65-6408-5781 |
Access code: |
520000711# |
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.360shuke.com.
About 360 DigiTech
360 DigiTech, Inc. (NASDAQ: QFIN) (“360
DigiTech” or the “Company”) is a leading financial technology
platform. Through its platform the Company enables financial
institutions to provide better and targeted products and services
to a broader consumer base. The Company also offers standardized
risk management service, in the form of SaaS modules to
institutional clients. When coupled with its partnership with 360
Group, the Company’s solutions created noticeable advantages in
customer acquisition, funding optimization, risk assessment and
post-lending management.
For more information, please visit:
ir.360shuke.com
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, non-GAAP net income margin,
Non-GAAP net income attributed to the Company and Non-GAAP net
income per fully diluted ADS 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, non-GAAP net income
represents net income excluding share-based compensation expenses,
non-GAAP net income attributed to the Company represents net income
attributed to the Company excluding share-based compensation
expenses and non-GAAP net income per fully diluted ADS represents
net income per fully diluted ADS excluding share-based
compensation. 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
RMB6.3726 to US$1.00, the exchange rate set forth in the H.10
statistical release of the Board of Governors of the Federal
Reserve System as of December 30, 2021.
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. Among other things,
the business outlook and quotations from management in this
announcement, as well as the Company’s strategic and operational
plans, contain forward-looking statements. 360 DigiTech may also
make written or oral forward-looking statements in its reports to
the U.S. Securities and Exchange Commission ("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 the Company’s business outlook, beliefs and
expectations, 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, which factors include
but not limited to the following: the Company’s growth strategies,
the Company’s cooperation with 360 Group, changes in laws, rules
and regulatory environments, the recognition of the Company’s
brand, market acceptance of the Company’s products and services,
trends and developments in the credit-tech industry, governmental
policies relating to the credit-tech industry, general economic
conditions in China and around the globe, and assumptions
underlying or related to any of the foregoing. Further information
regarding these and other risks and uncertainties is included in
360 DigiTech'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 DigiTech does not undertake any obligation
to update any forward-looking statement, except as required under
applicable law.
For more information, please
contact:
360 DigiTechE-mail: ir@360shuke.com
Christensen
In ChinaMr. Eric YuanPhone: +86-138-0111-0739E-mail:
Eyuan@christensenir.com
In USMs. Linda BergkampPhone: +1-480-614-3004Email:
lbergkamp@christensenir.com
|
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, |
|
December 31, |
|
December 31, |
|
2020 |
|
2021 |
|
2021 |
|
RMB |
|
RMB |
|
USD |
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
4,418,416 |
|
6,116,360 |
|
959,790 |
Restricted cash |
2,355,850 |
|
2,643,587 |
|
414,836 |
Security deposit prepaid to third-party guarantee companies |
915,144 |
|
874,886 |
|
137,289 |
Funds receivable from third party payment service providers |
131,464 |
|
153,151 |
|
24,033 |
Accounts receivable and
contract assets, net |
2,394,528 |
|
3,097,254 |
|
486,027 |
Financial assets receivable, net |
3,565,482 |
|
3,806,243 |
|
597,283 |
Amounts due from related parties |
193,305 |
|
837,324 |
|
131,394 |
Loans receivable, net |
7,500,629 |
|
9,844,481 |
|
1,544,814 |
Prepaid expenses and other assets |
401,224 |
|
383,937 |
|
60,246 |
Total current assets |
21,876,042 |
|
27,757,223 |
|
4,355,712 |
Non-current assets: |
|
|
|
|
|
Accounts receivable and contract assets, net-non current |
307,937 |
|
223,474 |
|
35,068 |
Financial assets receivable, net-non current |
645,326 |
|
597,965 |
|
93,834 |
Amounts due from related parties |
- |
|
140,851 |
|
22,103 |
Loans receivable, net-non current |
87,685 |
|
2,859,349 |
|
448,694 |
Property and equipment, net |
19,360 |
|
24,941 |
|
3,914 |
Land use rights,net |
- |
|
1,018,908 |
|
159,889 |
Intangible assets |
3,403 |
|
4,961 |
|
778 |
Deferred tax assets |
1,398,562 |
|
834,717 |
|
130,985 |
Other non-current assets |
48,990 |
|
42,606 |
|
6,686 |
Total non-current assets |
2,511,263 |
|
5,747,772 |
|
901,951 |
TOTAL ASSETS |
24,387,305 |
|
33,504,995 |
|
5,257,663 |
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Payable to investors of the consolidated trusts-current |
3,117,634 |
|
2,304,518 |
|
361,629 |
Accrued expenses and other
current liabilities |
809,761 |
|
2,258,329 |
|
354,381 |
Amounts due to related parties |
71,562 |
|
214,057 |
|
33,590 |
Short term loans |
186,800 |
|
397,576 |
|
62,388 |
Guarantee liabilities-stand ready |
4,173,497 |
|
4,818,144 |
|
756,072 |
Guarantee liabilities-contingent |
3,543,454 |
|
3,285,081 |
|
515,501 |
Income tax payable |
1,227,314 |
|
624,112 |
|
97,937 |
Other tax payable |
254,486 |
|
241,369 |
|
37,876 |
Total current liabilities |
13,384,508 |
|
14,143,186 |
|
2,219,374 |
Non-current liabilities: |
|
|
|
|
|
Deferred tax liabilities |
37,843 |
|
121,426 |
|
19,054 |
Payable to investors of the consolidated trusts-noncurrent |
1,468,890 |
|
4,010,597 |
|
629,350 |
Other long-term liabilities |
14,974 |
|
13,177 |
|
2,068 |
Total non-current liabilities |
1,521,707 |
|
4,145,200 |
|
650,472 |
TOTAL LIABILITIES |
14,906,215 |
|
18,288,386 |
|
2,869,846 |
TOTAL 360 DIGITECH INC EQUITY |
9,480,578 |
|
15,203,863 |
|
2,385,817 |
Noncontroling interests |
512 |
|
12,746 |
|
2,000 |
TOTAL EQUITY |
9,481,090 |
|
15,216,609 |
|
2,387,817 |
TOTAL LIABILITIES AND EQUITY |
24,387,305 |
|
33,504,995 |
|
5,257,663 |
|
|
|
|
|
|
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 December 31, |
|
Year ended December 31, |
|
2020 |
|
2021 |
|
2021 |
|
2020 |
|
2021 |
|
2021 |
|
RMB |
|
RMB |
|
USD |
|
|
RMB |
|
RMB |
|
USD |
|
Credit driven services |
2,557,129 |
|
2,713,161 |
|
425,754 |
|
|
11,403,675 |
|
10,189,167 |
|
1,598,902 |
|
Loan facilitation and servicing fees-capital heavy |
854,817 |
|
479,925 |
|
75,311 |
|
|
4,596,555 |
|
2,326,027 |
|
365,004 |
|
Financing income |
415,901 |
|
716,053 |
|
112,364 |
|
|
2,184,180 |
|
2,184,128 |
|
342,737 |
|
Revenue from releasing of guarantee liabilities |
1,251,564 |
|
1,494,682 |
|
234,548 |
|
|
4,506,935 |
|
5,583,135 |
|
876,116 |
|
Other services fees |
34,847 |
|
22,501 |
|
3,531 |
|
|
116,005 |
|
95,877 |
|
15,045 |
|
Platform services |
780,356 |
|
1,708,904 |
|
268,164 |
|
|
2,160,279 |
|
6,446,478 |
|
1,011,593 |
|
Loan facilitation and servicing fees-capital light |
681,090 |
|
1,485,268 |
|
233,071 |
|
|
1,826,654 |
|
5,677,941 |
|
890,993 |
|
Referral services fees |
78,151 |
|
177,428 |
|
27,842 |
|
|
265,300 |
|
620,317 |
|
97,341 |
|
Other services fees |
21,115 |
|
46,208 |
|
7,251 |
|
|
68,325 |
|
148,220 |
|
23,259 |
|
Total net
revenue |
3,337,485 |
|
4,422,065 |
|
693,918 |
|
|
13,563,954 |
|
16,635,645 |
|
2,610,495 |
|
Facilitation, origination and servicing |
444,452 |
|
589,230 |
|
92,463 |
|
|
1,600,564 |
|
2,252,157 |
|
353,413 |
|
Funding costs |
131,351 |
|
91,431 |
|
14,348 |
|
|
595,623 |
|
337,426 |
|
52,950 |
|
Sales and marketing |
316,350 |
|
628,164 |
|
98,573 |
|
|
1,079,494 |
|
2,090,374 |
|
328,025 |
|
General and administrative |
135,346 |
|
140,518 |
|
22,050 |
|
|
455,952 |
|
557,295 |
|
87,452 |
|
Provision for loans receivable |
105,490 |
|
223,133 |
|
35,014 |
|
|
698,701 |
|
965,419 |
|
151,495 |
|
Provision for financial assets receivable |
57,493 |
|
70,285 |
|
11,029 |
|
|
312,058 |
|
243,946 |
|
38,280 |
|
Provision for accounts receivable and contract assets |
23,327 |
|
38,403 |
|
6,026 |
|
|
237,277 |
|
324,605 |
|
50,938 |
|
Provision for contingent liabilities |
882,334 |
|
1,159,325 |
|
181,923 |
|
|
4,794,127 |
|
3,078,224 |
|
483,041 |
|
Total operating costs
and expenses |
2,096,143 |
|
2,940,489 |
|
461,426 |
|
|
9,773,796 |
|
9,849,446 |
|
1,545,594 |
|
Income from
operations |
1,241,342 |
|
1,481,576 |
|
232,492 |
|
|
3,790,158 |
|
6,786,199 |
|
1,064,901 |
|
Interest income, net |
32,568 |
|
16,466 |
|
2,584 |
|
|
77,169 |
|
126,256 |
|
19,812 |
|
Foreign exchange gain |
62,013 |
|
17,652 |
|
2,770 |
|
|
101,534 |
|
35,549 |
|
5,578 |
|
Investment gain |
- |
|
- |
|
- |
|
|
- |
|
10,115 |
|
1,587 |
|
Other income, net |
15,985 |
|
25,853 |
|
4,057 |
|
|
112,884 |
|
64,590 |
|
10,136 |
|
Income before income
tax expense |
1,351,908 |
|
1,541,547 |
|
241,903 |
|
|
4,081,745 |
|
7,022,709 |
|
1,102,014 |
|
Income taxes expense |
(147,544 |
) |
(236,240 |
) |
(37,071 |
) |
|
(586,036 |
) |
(1,258,196 |
) |
(197,438 |
) |
Net
income |
1,204,364 |
|
1,305,307 |
|
204,832 |
|
|
3,495,709 |
|
5,764,513 |
|
904,576 |
|
Net loss attributable to noncontrolling interests |
444 |
|
17,254 |
|
2,708 |
|
|
897 |
|
17,212 |
|
2,701 |
|
Net income
attributable to ordinary shareholders of the Company |
1,204,808 |
|
1,322,561 |
|
207,540 |
|
|
3,496,606 |
|
5,781,725 |
|
907,277 |
|
Net income per ordinary share attributable to ordinary shareholders
of 360 DigiTech, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
3.97 |
|
4.28 |
|
0.67 |
|
|
11.72 |
|
18.82 |
|
2.95 |
|
Diluted |
3.86 |
|
4.11 |
|
0.65 |
|
|
11.40 |
|
17.99 |
|
2.82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per ADS attributable to ordinary shareholders of 360
DigiTech, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
7.94 |
|
8.56 |
|
1.34 |
|
|
23.44 |
|
37.64 |
|
5.90 |
|
Diluted |
7.72 |
|
8.22 |
|
1.30 |
|
|
22.80 |
|
35.98 |
|
5.64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in calculating net income per ordinary
share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
303,298,903 |
|
309,132,813 |
|
309,132,813 |
|
|
298,222,207 |
|
307,265,600 |
|
307,265,600 |
|
Diluted |
312,423,549 |
|
321,634,368 |
|
321,634,368 |
|
|
306,665,099 |
|
321,397,753 |
|
321,397,753 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Condensed Consolidated Statements of Cash
Flows(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 December 31, |
|
Year ended December 31, |
|
2020 |
|
2021 |
|
2021 |
|
|
2020 |
|
2021 |
|
2021 |
|
|
RMB |
RMB |
USD |
|
RMB |
RMB |
USD |
Net cash provided by operating activities |
1,159,202 |
|
2,011,384 |
|
315,630 |
|
|
5,325,810 |
|
5,789,700 |
|
908,530 |
|
Net cash provided by (used in) investing activities |
428,208 |
|
(345,515 |
) |
(54,219 |
) |
|
892,770 |
|
(6,064,328 |
) |
(951,625 |
) |
Net cash provided by(used in) financing activities |
(2,038,398 |
) |
456,950 |
|
71,705 |
|
|
(3,282,400 |
) |
2,263,720 |
|
355,227 |
|
Effect of foreign exchange rate changes |
3,606 |
|
(702 |
) |
(110 |
) |
|
2,236 |
|
(3,411 |
) |
(536 |
) |
Net increase(decrease) in cash and cash equivalents |
(447,382 |
) |
2,122,117 |
|
333,006 |
|
|
2,938,416 |
|
1,985,681 |
|
311,596 |
|
Cash, cash equivalents, and restricted cash, beginning of
year/period |
7,221,648 |
|
6,637,830 |
|
1,041,620 |
|
|
3,835,850 |
|
6,774,266 |
|
1,063,030 |
|
Cash, cash equivalents, and restricted cash, end of year
/period |
6,774,266 |
|
8,759,947 |
|
1,374,626 |
|
|
6,774,266 |
|
8,759,947 |
|
1,374,626 |
|
|
|
|
|
|
|
|
|
During the quarter, the Company acquired 30% equity interest of
Shanghai 360 Changfeng Technology Co., Ltd. (“360 Changfeng”).
Before the transaction, the Company owns 40% equity interest of 360
Changfeng and accounted for it as equity method investment. As
such, it consolidated 360 Changfeng's financial statement into its
financial statements after the transaction. The transaction is
between entities under common control and has been retrospectively
reflected in the consolidated financial statements from the
beginning of 2021, but not to prior year as there is no impact. 360
Changfeng's major transaction in 2021 is to purchase the land use
right at the amount of RMB 1 billion in the first quarter which is
classified as "net cash used in operating activities" reflected in
the Condensed Consolidated Statements of Cash Flows for year 2021.
The details of the transaction was provided in the Company's press
release furnished to the SEC on form 6-K which dated on December
20, 2021. |
|
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 December 31, |
|
2020 |
|
2021 |
|
2021 |
|
RMB |
|
RMB |
|
USD |
Net
income |
1,204,364 |
|
|
1,305,307 |
|
|
204,832 |
|
Other comprehensive income, net of tax of nil: |
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
(61,851 |
) |
|
(16,314 |
) |
|
(2,560 |
) |
Other comprehensive income |
(61,851 |
) |
|
(16,314 |
) |
|
(2,560 |
) |
Total comprehensive income |
1,142,513 |
|
|
1,288,993 |
|
|
202,272 |
|
Comprehensive loss attributable to noncontrolling interests |
444 |
|
|
17,254 |
|
|
2,708 |
|
Comprehensive income
attributable to ordinary shareholders |
1,142,957 |
|
|
1,306,247 |
|
|
204,980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
2020 |
|
2021 |
|
2021 |
|
RMB |
|
RMB |
|
USD |
Net
income |
3,495,709 |
|
|
5,764,513 |
|
|
904,576 |
|
Other comprehensive income, net of tax of nil: |
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
(99,296 |
) |
|
(36,541 |
) |
|
(5,734 |
) |
Other comprehensive (loss) income |
(99,296 |
) |
|
(36,541 |
) |
|
(5,734 |
) |
Total comprehensive income |
3,396,413 |
|
|
5,727,972 |
|
|
898,842 |
|
Comprehensive loss attributable to noncontrolling interests |
897 |
|
|
17,212 |
|
|
2,701 |
|
Comprehensive income
attributable to ordinary shareholders |
3,397,310 |
|
|
5,745,184 |
|
|
901,543 |
|
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 December 31, |
|
|
2020 |
|
2021 |
|
2021 |
|
|
RMB |
|
RMB |
|
USD |
Reconciliation of Non-GAAP Net Income to Net
Income |
|
|
|
|
|
|
|
|
Net income |
|
1,204,364 |
|
|
1,305,307 |
|
|
204,832 |
Add: Share-based compensation expenses |
|
107,714 |
|
|
57,551 |
|
|
9,031 |
Non-GAAP net income |
|
1,312,078 |
|
|
1,362,858 |
|
|
213,863 |
Non-GAAP net income
margin |
|
39.3 |
% |
|
30.8 |
% |
|
|
GAAP net income margin |
|
36.1 |
% |
|
29.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to shareholders of 360 DigiTech, Inc |
|
1,204,808 |
|
|
1,322,561 |
|
|
207,540 |
Add: Share-based compensation expenses |
|
107,714 |
|
|
57,551 |
|
|
9,031 |
Non-GAAP net income
attributable to shareholders of 360 DigiTech, Inc |
|
1,312,522 |
|
|
1,380,112 |
|
|
216,571 |
Weighted average ADS used in calculating net income per ordinary
share for both GAAP and non-GAAP EPS -diluted |
|
156,211,775 |
|
|
160,817,184 |
|
|
160,817,184 |
Net income per ADS attributable to ordinary shareholders of 360
DigiTech, Inc. -diluted |
|
7.72 |
|
|
8.22 |
|
|
1.30 |
Non-GAAP net income per ADS attributable to ordinary shareholders
of 360 DigiTech, Inc. -diluted |
|
8.40 |
|
|
8.58 |
|
|
1.35 |
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Income from operations to Income from
operations |
|
|
|
|
|
|
|
|
Income from operations |
|
1,241,342 |
|
|
1,481,576 |
|
|
232,492 |
Add: Share-based compensation expenses |
|
107,714 |
|
|
57,551 |
|
|
9,031 |
Non-GAAP Income from operations |
|
1,349,056 |
|
|
1,539,127 |
|
|
241,523 |
Non-GAAP operating margin |
|
40.4 |
% |
|
34.8 |
% |
|
|
GAAP operating margin |
|
37.2 |
% |
|
33.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2020 |
|
|
2021 |
|
|
2021 |
|
|
RMB |
|
|
RMB |
|
|
USD |
Reconciliation of
Non-GAAP Net Income to Net Income |
|
|
|
|
|
|
|
|
Net income |
|
3,495,709 |
|
|
5,764,513 |
|
|
904,576 |
Add: Share-based compensation expenses |
|
301,161 |
|
|
253,922 |
|
|
39,846 |
Non-GAAP net income |
|
3,796,870 |
|
|
6,018,435 |
|
|
944,422 |
Non-GAAP net income
margin |
|
28.0 |
% |
|
36.2 |
% |
|
|
GAAP net income margin |
|
25.8 |
% |
|
34.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to shareholders of 360 Finance, Inc |
|
3,496,606 |
|
|
5,781,725 |
|
|
907,277 |
Add: Share-based compensation
expenses |
|
301,161 |
|
|
253,922 |
|
|
39,846 |
Non-GAAP net income
attributable to shareholders of 360 Finance, Inc |
|
3,797,767 |
|
|
6,035,647 |
|
|
947,123 |
Weighted average ADS used in calculating net income per
ordinary share -diluted |
|
153,332,550 |
|
|
160,698,877 |
|
|
160,698,877 |
Net income per ADS attributable to ordinary shareholders of 360
Finance, Inc. -diluted |
|
22.80 |
|
|
35.98 |
|
|
5.64 |
Non-GAAP net income per ADS attributable to ordinary shareholders
of 360 Finance, Inc. -diluted |
|
24.77 |
|
|
37.56 |
|
|
5.89 |
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Income from operations to Income from
operations |
|
|
|
|
|
|
|
|
Income from operations |
|
3,790,158 |
|
|
6,786,199 |
|
|
1,064,901 |
Add: Share-based compensation expenses |
|
301,161 |
|
|
253,922 |
|
|
39,846 |
Non-GAAP Income from operations |
|
4,091,319 |
|
|
7,040,121 |
|
|
1,104,747 |
Non-GAAP operating margin |
|
30.2 |
% |
|
42.3 |
% |
|
|
GAAP operating margin |
|
27.9 |
% |
|
40.8 |
% |
|
|
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