Fanhua Inc., (Nasdaq:FANH), (the "Company" or "Fanhua"), a leading
independent online-to-offline ("O2O") financial services provider
in China, today announced its unaudited financial results for the
second quarter ended June 30, 20171.
Financial Highlights for
the Second quarter of
2017:
(In thousands, except per ADS) |
2016 Q2
(RMB) |
2017 Q2(RMB) |
2017 Q2(US$) |
Change % |
Total net revenues |
1,066,054 |
|
1,012,972 |
149,422 |
-5.0 |
Operating (loss) income |
(8,182 |
) |
71,208 |
10,504 |
N/A |
Net income attributable to the Company’s shareholders |
30,999 |
|
140,347 |
20,702 |
352.7 |
Diluted net income per ADS |
0.51 |
|
2.20 |
0.32 |
328.1 |
Financial Highlights for the First half
of 2017:
(In thousands, except per ADS) |
First Half 2016
(RMB) |
First Half 2017(RMB) |
First Half 2017 (US$) |
Change % |
Total net revenues |
1,973,918 |
|
2,480,352 |
365,872 |
25.7 |
Operating (loss) income |
(28,180 |
) |
134,410 |
19,827 |
N/A |
Net income attributable to the Company’s shareholders |
50,359 |
|
210,087 |
30,989 |
317.2 |
Diluted net income per ADS |
0.84 |
|
3.37 |
0.50 |
303.7 |
Driven by rapid growth in our life insurance
business, we recorded RMB71.2 million in operating income for the
second quarter of 2017, beating expectations. We also achieved
RMB140.3 million in net income attributable to the Company’s
shareholders, representing a year-on-year increase of 352.7%."
Commenting on the financial results of the second quarter of 2017,
Mr. Chunlin Wang, Chief Executive Officer of Fanhua, stated, "In
spite of the challenge of an industry-wide product adjustment,
Fanhua still managed to grow its life insurance premiums 88.9%
year-on-year, significantly outpacing the industry, among which
first year premiums on term life insurance products and renewal
premiums grew 131.3% and 56.8% on a year-on-year basis,
respectively. Of particular note, we took pride in the fact that
the 13-month persistency ratio of the term life insurance products
that we distributed improved to 93.3% from 89% a year ago,
reflecting the recognition of Fanhua’s high products and service
quality by our customers.
"During the second quarter of 2017, as part of
our efforts to develop our life insurance business through
expanding and strengthening our sales force, we abandoned certain
channels of our P&C business, which has been suffering from
declining margins and devoted more resources to advancing our life
insurance business. Despite a short-term negative impact on total
net revenue brought about by this move, we believe that, from a
long term perspective, it will further optimize our company’s
business structure and improve our profitability.
"Building on the progress made in the first half
of 2017, during the second half of 2017 we will channel more
resources to building up our platform and operating capability. We
will focus on the key areas of regional expansion, office setup,
staff recruitment, assembling our sales team, sales agent
management system development, as well as marketing and training,
in order to set the stage for sustained and rapid growth of our
life insurance business in the years to come."
Financial Results for the Second
Quarter of 2017
Total net revenues were RMB1.0
billion (US$149.4 million) for the second quarter of 2017,
representing a decrease of 5.0% from RMB1.1 billion for the
corresponding period in 2016.
- Net revenues for the life
insurance business were RMB590.3
million (US$87.1 million) for the second quarter of 2017,
representing an increase of 187.9% from RMB205.0 million for the
corresponding period in 2016. The increase was due to i) growth in
sales agents; ii) implementation of our cross-selling strategy and
iii) recognition of more performance bonuses in the second
quarter of 2017. Revenues generated from our life insurance
business accounted for 58.2% of our total net revenues.
- Net revenues for the P&C insurance
business were RMB350.0 million (US$51.6 million) for the
second quarter of 2017, representing a decrease of 55.1% from
RMB780.3 million for the corresponding period in 2016. The decrease
was primarily due to our efforts to abandon lower margin channel
businesses starting from the second quarter of 2017 and the
suspension of business cooperation with PICC Property and Casualty
Company Limited (“PICC P&C”) starting from March 1, 2017.
Revenues generated from the P&C insurance business accounted
for 34.6% of our total net revenues in the second quarter of
2017.
- Net revenues for the claims adjusting business
were RMB72.7 million (US$10.7 million) for the second quarter of
2017, representing a decrease of 10.0% from RMB80.8 million for the
corresponding period in 2016. The decrease was primarily due to
suspension of business cooperation with PICC P&C. Revenues
generated from the claims adjusting business accounted for
7.2% of our total net revenues in the second quarter of 2017.
Total operating costs and
expenses were RMB941.8 million (US$138.9 million) for the
second quarter of 2017, representing a decrease of 12.3% from
RMB1.1 billion for the corresponding period in 2016.
- Commission costs were RMB743.9 million
(US$109.7 million) for the second quarter of 2017, representing a
decrease of 9.3% from RMB820.0 million for the corresponding period
in 2016. - Costs of the life insurance
business were RMB375.3 million (US$55.4 million) for the
second quarter of 2017, representing an increase of 174.2% from
RMB136.9 million for the corresponding period in 2016. The increase
was in line with the growth in sales. Costs incurred by the life
insurance business accounted for 50.4% of our total commission
costs in the second quarter of 2017. - Costs
of the P&C insurance
business were RMB325.6 million (US$48.0 million)
for the second quarter of 2017, representing a decrease of 48.9%
from RMB637.7 million for the corresponding period in 2016. The
decrease was primarily in line with the decline in sales, partially
offset by the increased rate of commissions paid to sales agents.
Costs incurred by the P&C insurance business accounted for
43.8% of our total commission costs in the second quarter of
2017. - Costs of claims adjusting business
were RMB43.0 million (US$6.3 million) for the second quarter of
2017, representing a decrease of 5.1% from RMB45.4 million for the
corresponding period in 2016. Costs incurred by the claims
adjusting business accounted for 5.8% of our total commission costs
in the second quarter of 2017.
- Selling expenses were RMB53.7 million (US$7.9
million) for the second quarter of 2017, representing a decrease of
61.7% from RMB140.4 million for the corresponding period in 2016.
The decrease was primarily because promotional marketing expenses
were paid to sales agents in the second quarter of 2016 while no
promotional marketing plan of such nature was launched in the year
of 2017.
- General and administrative
expenses were RMB144.1
million (US$21.3 million) for the second quarter of 2017,
representing an increase of 26.6% from RMB113.9 million for the
corresponding period in 2016. The increase was primarily due to an
increase in expenses incurred by new office setup and staff
recruitment as a result of regional expansion.
As a result of the preceding factors, we had an
operating income of RMB71.2 million (US$10.5
million) for the second quarter of 2017, as compared to an
operating loss of RMB8.2 million for the corresponding period in
2016.
Operating margin was 7.0% for
the second quarter of 2017, compared to negative 0.8% for the
corresponding period in 2016. The increase was primarily due to the
increase in sales of regular term life insurance policies which
have higher profit margins.
Investment income was RMB97.9
million (US$14.4 million) for the second quarter of 2017,
representing an increase of 267.6% from RMB26.6 million for the
corresponding period in 2016. The investment income represented
yields from short-term investments in financial products which
mainly consist of inter-bank deposits or collective trust products
with terms ranging from half a year to two years and interest
payable on a quarterly, semi-annual or annual basis. Our investment
income fluctuates from quarter to quarter because investment income
is recognized when received.Interest income was
RMB2.0 million (US$0.3 million) for the second quarter of 2017,
representing an increase of 6.6% from RMB1.8 million for the
corresponding period in 2016.
Income tax expense was RMB50.8
million (US$7.5 million) for the second quarter of 2017,
representing an increase of 29.2 times from RMB1.7 million for the
corresponding period in 2016. The increase was primarily due to an
increase in operating income and investment income. The effective
tax rate for the second quarter of 2017 was 28.2% compared with
6.9% for the corresponding period in 2016. The increase in
effective tax rate was primarily due to operating losses of some of
our subsidiaries in the second quarter of 2017 which are not
expected to be compensated by future profits, and therefore we
reserved the full amount of provisions for the deferred corporate
income tax assets resulted from these operating losses.
Share of income of affiliates
was RMB12.0 million (US$1.8 million) for the second quarter of
2017, representing an increase of 6.8% from RMB11.2 million for the
corresponding period in 2016, mainly attributable to an increase of
profits from Sincere Fame International Limited, a company in which
we own 20.6% of the equity interest.
Net income attributable to the Company’s
shareholders was RMB140.3 million (US$20.7 million) for
the second quarter of 2017, representing an increase of 352.7% from
RMB31.0 million for the corresponding period in 2016.
Net margin was 13.9% for the
second quarter of 2017 compared with 2.9% for the corresponding
period in 2016.
Basic and
diluted net income per ADS were RMB2.28
(US$0.34) and RMB2.20 (US$0.32) for the second quarter of 2017,
respectively, representing increases of 326.1% and 328.1% from
RMB0.53 and RMB0.51 for the corresponding period in 2016.
As of June 30, 2017, the Company had RMB3.0 billion (US$442.8
million) in cash, cash
equivalents and short term
investments.
Financial Results for the First
Half of
2017
Total net revenues were RMB2.5
billion (US$365.9 million) for the first half of 2017, representing
an increase of 25.7% from RMB2.0 billion for the corresponding
period in 2016.
- Net revenues for the life
insurance business were RMB1.2
billion (US$177.5 million) for the first half of 2017, representing
an increase of 229.8% from RMB365.0 million for the corresponding
period in 2016. The increase was due to growth in the number of
sales agents, implementation of our cross-selling strategy and
industry growth. Revenues generated from our life insurance
business accounted for 48.5% of our total net revenues during the
first half of 2017.
- Net revenues for the P&C insurance
business were RMB1.1 billion (US$168.1 million) for the
first half of 2017, representing a decrease of 22.0% from RMB1.5
billion for the corresponding period in 2016. The decrease was
primarily due to our efforts to abandon lower margin channel
businesses starting from the second quarter of 2017 and suspension
of our business cooperation with PICC P&C since March 1, 2017.
Revenues generated from the P&C insurance business accounted
for 46.0% of our total net revenues in the first half of 2017.
- Net revenues for the claims adjusting business
were RMB137.3 million (US$20.2 million) for the first half of 2017,
representing a decrease of 7.3% from RMB148.1 million for the
corresponding period in 2016. The decrease was primarily due to
suspension of our business cooperation with PICC P&C. Revenues
generated from the claims adjusting business accounted for 5.5% of
our total net revenues in the first half of 2017.
Total operating costs and
expenses were RMB2.3 billion (US$346.0 million) for the
first half of 2017, representing an increase of 17.2% from RMB2.0
billion for the corresponding period in 2016.
- Commission costs were RMB2.0 billion (US$289.3
million) for the first half of 2017, representing an increase of
28.3% from RMB1.5 billion for the corresponding period in
2016. - Costs of the life insurance business
were RMB810.4 million (US$119.5 million) for the first half of
2017, representing an increase of 229.1% from RMB246.2 million for
the corresponding period in 2016. The increase was in line with the
growth in sales. Costs incurred by the life insurance business
accounted for 41.3% of our total commission costs in the first half
of 2017. - Costs of the
P&C insurance business were
RMB1.1 billion (US$156.0 million) for the first half of 2017,
representing a decrease of 11.0% from RMB1.2 billion for the
corresponding period in 2016. The decrease was primarily in line
with the decline in sales, partially offset by an increased rate of
commissions paid to sale agents. Costs incurred by the P&C
insurance business accounted for 53.9% of our total commission
costs in the first half of 2017. - Costs of claims
adjusting business were RMB93.3 million (US$13.8 million)
for the first half of 2017, representing a decrease of 0.4% from
RMB93.7 million for the corresponding period in 2016. Costs
incurred by the claims adjusting business accounted for 4.8% of our
total commission costs in the first half of 2017.
- Selling expenses were RMB106.1 million
(US$15.7 million) for the first half of 2017, representing a
decrease of 57.5% from RMB249.5 million for the corresponding
period in 2016. The decrease was primarily because promotional
marketing expenses were paid to sales agents in the first half of
2016 while no promotional marketing plan of such nature was
launched in the year of 2017.
- General and
administrative expenses
were RMB278.3 million (US$41.1 million) for the first half of 2017,
representing an increase of 24.4% from RMB223.8 million for the
corresponding period in 2016. The increase was primarily due to an
increase in expenses incurred by new office setup and staff
recruitment as a result of regional expansion.
As a result of the preceding factors, we had an
operating income of RMB134.4 million (US$19.8
million) for the first half of 2017, as compared to an operating
loss of RMB28.2 million for the corresponding period in 2016.
Operating margin was 5.4% for
the first half of 2017, compared to negative 1.4% for the
corresponding period in 2016. The increase was primarily due to the
increase in sales of regular term life insurance policies which
have a higher profit margin.
Investment income was RMB108.2
million (US$16.0 million) for the first half of 2017, representing
an increase of 151.1% from RMB43.1 million for the corresponding
period in 2016. The investment income represented yields from
short-term investments in financial products which mainly consist
of inter-bank deposits or collective trust products with terms
ranging from half a year to two years and interest payable on a
quarterly, semi-annual or annual basis. Our investment income
fluctuates from quarter to quarter because investment income is
recognized when received.
Interest income was RMB2.5
million (US$0.4 million) for the first half of 2017, representing a
decrease of 60.3% from RMB6.4 million for the corresponding period
in 2016. The decrease in interest income was primarily due to
decreases in term deposits as a result of increases in short-term
investments.
Income tax expense was RMB79.3
million (US$11.7 million) for the first half of 2017, representing
an increase of 37.2 times from RMB2.1 million for the corresponding
period in 2016. The increase was primarily due to an increase in
operating income and investment income. The effective tax rate for
the first half of 2017 was 31.0% compared with 6.8% for the
corresponding period in 2016. The increase in effective tax rate
was primarily due to operating losses of some of our subsidiaries
in the first half year of 2017 which are not expected to be
compensated by future profits, and therefore we reserved the full
amount of provisions for the deferred corporate income tax assets
resulted from these operating losses.
Share of income of affiliates
was RMB29.7 million (US$4.4 million) for the first half of 2017,
representing an increase of 39.1% from RMB21.3 million for the
corresponding period in 2016, mainly attributable to an increase of
profits from Sincere Fame International Limited, in which the
Company owns 20.6% of the equity interests.
Net income attributable to the Company’s
shareholders was RMB210.1 million (US$31.0 million) for
the first half of 2017, representing an increase of 317.2% from
RMB50.4 million for the corresponding period in 2016.
Net margin was 8.5% for the
first half of 2017 compared with 2.6% for the corresponding period
in 2016.
Basic and
diluted net income per ADS were RMB3.50
(US$0.52) and RMB3.37 (US$0.50) for the first half of 2017,
respectively, representing increases of 302.7% and 303.7% from
RMB0.87 and RMB0.84 for the corresponding period in 2016.
Key Operational Metrics for Fanhua's Online Initiatives
for the Second quarter of 2017:
- CNpad Mobile Application ("CNpad App") - Our
proprietary mobile sales support system: -
CNpad App had been downloaded and activated 294,228 times
as of June 30, 2017, representing an increase of 114.9% from
136,909 times as of June 30, 2016; - The number of
active users2 of CNpad App was 60,234 in
the second quarter of 2017, representing an increase of 110.1% from
28,675 in the second quarter of 2016; -
Insurance premiums generated through
CNpad App were RMB923.3 million
(US$136.2 million) in the second quarter of 2017, representing an
increase of 23.1% from RMB750.2 million for the corresponding
period of 2016 and accounted for 44.3% of our total insurance
premiums in the second quarter of 2017 as compared to 22.0% for the
corresponding period of 2016.
- eHuzhu - Our online non-profit mutual aid
platform: - The number of registered
members was 1.8 million as of June 30, 2017, representing
an increase of 111.5% from 872,922 as of June 30, 2016.
- Baoxian.com - Our online insurance
platform: - The number of registered
customer accounts was 1.0 million as of June 30, 2017,
representing an increase of 189.3% from approximately 356,000 as of
June 30, 2016. - The number of active customer
accounts3 was 45,520 in the second quarter of 2017,
representing an increase of 84.1% from 24,724 in the corresponding
period of 2016; - Insurance premiums generated on or
through Baoxian.com was RMB44.7 million (US$6.6 million)
in the second quarter of 2017, representing an increase of 131.8%
from RMB19.3 million in the corresponding period of 2016.
Recent Development
- On June 15, 2017, in recognition of its extraordinary
performance in the internet insurance sector, Baoxian.com was
awarded Outstanding Internet Insurance Platform for the Year 2016
during the 2017 China Internet Insurance Conference held by China’s
Insurance Quote, one of the most authoritative insurance trade
publications in China. Mr. Anlin Hu, CEO of Baoxian.com, was
recognized as Internet Insurance Leader of the Year 2016 in the
event.
- On June 13, 2017, Fanhua Insurance Surveyors & Loss
Adjustors Co., Ltd., or FISLA, a subsidiary of Fanhua, entered into
a framework agreement with Jintai Property & Casualty Insurance
Co., Ltd., or Jintai, for a long-term comprehensive strategic
partnership. Both parties will reinforce their cooperative efforts
at both the headquarters and branch level, in order to provide
better service experience for Jintai’s customers.
- On May 27, 2017, Fanhua signed a headquarter-to-headquarter
agreement with Evergrande Life Insurance Co., Ltd., or Evergrande
Life. Both parties will engage in comprehensive cooperation on
product sales, product development and value-added services for
their customers. Evergrande Life, a subsidiary of Evergrande Group,
one of the largest real estate conglomerates in China, primarily
focuses on the life insurance, health insurance and casualty
insurance businesses.
- Fanhua had 328,267 sales agents and 1,228
professional claims adjustors as of June 30, 2017, compared
with 151,532 sales agents, and 1,352 professional claims adjustors
as of June 30, 2016. As of June 30, 2017, Fanhua’s distribution
network consisted of 856 sales outlets operating in 21
provinces, compared with 494 sales outlets operating in 19
provinces as of June 30, 2016. Its claims adjusting service network
covered 29 provinces with 156 service outlets as of June 30, 2017,
compared with 153 service outlets in 29 provinces as of June 30,
2016.
Business Outlook
Fanhua expects its operating income to be no
less than RMB50.0 million for the third quarter of 2017. This
forecast reflects Fanhua’s current view, which is subject to
change.
Conference Call
The Company will host a conference call to
discuss its second quarter and first half 2017 financial results as
per the following details.
Time: 9:00
PM Eastern Daylight Time on August 21, 2017 |
or
9:00 AM Beijing/Hong Kong Time on August 22, 2017 |
|
The toll free dial-in
numbers: |
|
United States |
1-855-500-8701 |
United Kingdom |
0800-015-9724 |
France |
0800-918-648 |
Germany |
0800-184-4876 |
Australia |
1-300-713-759 |
Canada |
1-855-757-1565 |
Taiwan |
0080-665-1951 |
Hong Kong |
800-906-606 |
|
|
The toll dial-in
numbers: |
|
China (Mainland) |
400-120-0654 |
Singapore & Other
Areas |
+ 65-6713-5440 |
|
Conference ID #: |
64223082 |
Additionally, a live and archived web cast of this call will be
available at: http://ir.fanhuaholdings.com/events.cfm
About Fanhua Inc.
Fanhua Inc. is a leading independent
online-to-offline financial services provider. Through our online
platforms and offline sales and service network, we offer a wide
variety of financial products and services to individuals and
businesses, including property and casualty and life insurance
products. We also provide insurance claims adjusting services, such
as damage assessments, surveys, authentications and loss
estimations.
Our online platforms include (1) CNpad, a mobile
sales support application, (2) Baoxian.com, an online entry portal
for comparing and purchasing health, accident, travel and homeowner
insurance products; and (3) eHuzhu (www.ehuzhu.com), a non-profit
online mutual aid platform in China.
As of June 30, 2017, our distribution and
service network consisted of 328,267 sales agents and 1,228
professional claims adjustors with 1,012 sales and service outlets
covering 29 provinces.
For more information about Fanhua Inc., please
visit http://ir.fanhuaholdings.com/.
Forward-looking Statements
This press release contains statements of a
forward-looking nature. These statements, including the statements
relating to the Company’s future financial and operating results,
are made under the “safe harbor” provisions of the U.S. Private
Securities Litigation Reform Act of 1995. You can identify these
forward-looking statements by terminology such as “will,”
“expects,” “believes,” “anticipates,” “intends,” “estimates” and
similar statements. Among other things, management's quotations and
the Business Outlook section contain forward-looking statements.
These forward-looking statements involve known and unknown risks
and uncertainties and are based on current expectations,
assumptions, estimates and projections about Fanhua and the
industry. Potential risks and uncertainties include, but are not
limited to, those relating to its ability to attract and retain
productive agents, especially entrepreneurial agents, its ability
to maintain existing and develop new business relationships with
insurance companies, its ability to execute its growth strategy,
its ability to adapt to the evolving regulatory environment in the
Chinese insurance industry, its ability to compete effectively
against its competitors, quarterly variations in its operating
results caused by factors beyond its control and macroeconomic
conditions in China and their potential impact on the sales of
insurance products. All information provided in this press release
is as of the date hereof, and Fanhua undertakes no obligation to
update any forward-looking statements to reflect subsequent
occurring events or circumstances, or changes in its expectations,
except as may be required by law. Although Fanhua believes that the
expectations expressed in these forward-looking statements are
reasonable, it cannot assure you that its expectations will turn
out to be correct, and investors are cautioned that actual results
may differ materially from the anticipated results. Further
information regarding risks and uncertainties faced by Fanhua is
included in Fanhua's filings with the U.S. Securities and Exchange
Commission, including its annual report on Form 20-F.
|
FANHUA
INC. |
Unaudited Condensed
Consolidated Balance Sheets |
(In thousands) |
|
|
As of December 31, |
|
As of June 30, |
|
As of June 30, |
|
2016 |
|
2017 |
|
2017 |
|
RMB |
|
RMB |
|
US$ |
ASSETS: |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash
and cash equivalents |
240,242 |
|
621,303 |
|
91,647 |
Restricted cash |
33,737 |
|
87,830 |
|
12,956 |
Short
term investments |
2,797,842 |
|
2,380,694 |
|
351,171 |
Accounts receivable, net |
502,975 |
|
492,040 |
|
72,580 |
Insurance premium receivables |
187 |
|
305 |
|
45 |
Other
receivables |
49,186 |
|
78,915 |
|
11,640 |
Amounts due from related parties |
32,495 |
|
433,943 |
|
64,010 |
Other
current assets |
37,900 |
|
43,101 |
|
6,358 |
Total current assets |
3,694,564 |
|
4,138,131 |
|
610,407 |
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
Property, plant, and equipment, net |
31,414 |
|
31,651 |
|
4,669 |
Goodwill and intangible assets, net |
181,549 |
|
164,533 |
|
24,270 |
Deferred tax assets |
8,277 |
|
32,510 |
|
4,795 |
Investment in affiliates |
294,576 |
|
323,723 |
|
47,752 |
Other
non-current assets |
28,188 |
|
28,188 |
|
4,158 |
Total non-current assets |
544,004 |
|
580,605 |
|
85,644 |
Total assets |
4,238,568 |
|
4,718,736 |
|
696,051 |
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
278,188 |
|
369,825 |
|
54,552 |
Insurance premium payables |
5,491 |
|
13,706 |
|
2,022 |
Other
payables and accrued expenses |
314,051 |
|
227,496 |
|
33,557 |
Accrued payroll |
59,201 |
|
81,570 |
|
12,032 |
Income tax payable |
90,188 |
|
135,591 |
|
20,001 |
Dividend payable |
— |
|
15,033 |
|
2,218 |
Total current liabilities |
747,119 |
|
843,221 |
|
124,382 |
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
|
Other
tax liabilities |
72,778 |
|
72,612 |
|
10,711 |
Deferred tax liabilities |
14,577 |
|
13,872 |
|
2,046 |
Total non-current liabilities |
87,355 |
|
86,484 |
|
12,757 |
Total liabilities |
834,474 |
|
929,705 |
|
137,139 |
|
|
|
|
|
|
Ordinary shares |
8,658 |
|
9,174 |
|
1,353 |
Additional paid-in capital |
2,301,655 |
|
2,461,774 |
|
363,131 |
Statutory reserves |
311,590 |
|
301,590 |
|
44,487 |
Retained earnings |
1,018,928 |
|
1,239,015 |
|
182,765 |
Accumulated other comprehensive loss |
(65,844) |
|
(76,794) |
|
(11,328) |
Subscription receivables |
(288,135) |
|
(259,153) |
|
(38,227) |
Total shareholders’ equity |
3,286,852 |
|
3,675,606 |
|
542,181 |
Non-controlling interests |
117,242 |
|
113,425 |
|
16,731 |
Total equity |
3,404,094 |
|
3,789,031 |
|
558,912 |
Total liabilities and equity |
4,238,568 |
|
4,718,736 |
|
696,051 |
|
|
FANHUA INC. |
|
Unaudited Condensed Consolidated Statements of
Income and Comprehensive Income |
|
(In thousands, except for
shares and per share data) |
|
|
|
|
For The Three Months Ended |
|
For The Six Months Ended |
|
June 30, |
|
June 30, |
|
2016 |
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2017 |
|
|
RMB |
|
RMB |
|
US$ |
|
RMB |
|
RMB |
|
US$ |
|
Net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Life
insurance Business |
205,020 |
|
590,258 |
|
87,068 |
|
364,951 |
|
1,203,649 |
|
177,548 |
|
P&C
insurance Business |
780,270 |
|
350,026 |
|
51,632 |
|
1,460,916 |
|
1,139,430 |
|
168,075 |
|
Claims
adjusting Business |
80,764 |
|
72,688 |
|
10,722 |
|
148,051 |
|
137,273 |
|
20,249 |
|
Total net revenues |
1,066,054 |
|
1,012,972 |
|
149,422 |
|
1,973,918 |
|
2,480,352 |
|
365,872 |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Life insurance Business |
(136,888 |
) |
(375,282 |
) |
(55,357 |
) |
(246,245 |
) |
(810,392 |
) |
(119,539 |
) |
P&C insurance Business |
(637,737 |
) |
(325,615 |
) |
(48,031 |
) |
(1,188,816 |
) |
(1,057,784 |
) |
(156,032 |
) |
Claims
adjusting Business |
(45,360 |
) |
(43,033 |
) |
(6,348 |
) |
(93,699 |
) |
(93,336 |
) |
(13,768 |
) |
Total operating costs |
(819,985 |
) |
(743,930 |
) |
(109,736 |
) |
(1,528,760 |
) |
(1,961,512 |
) |
(289,339 |
) |
Selling
expenses |
(140,395 |
) |
(53,710 |
) |
(7,923 |
) |
(249,527 |
) |
(106,118 |
) |
(15,653 |
) |
General
and administrative expenses |
(113,856 |
) |
(144,124 |
) |
(21,259 |
) |
(223,811 |
) |
(278,312 |
) |
(41,053 |
) |
Total operating costs and expenses |
(1,074,236 |
) |
(941,764 |
) |
(138,918 |
) |
(2,002,098 |
) |
(2,345,942 |
) |
(346,045 |
) |
Income (loss) from operations |
(8,182 |
) |
71,208 |
|
10,504 |
|
(28,180 |
) |
134,410 |
|
19,827 |
|
Other income, net: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment income |
26,626 |
|
97,890 |
|
14,440 |
|
43,086 |
|
108,178 |
|
15,957 |
|
Interest
income |
1,835 |
|
1,957 |
|
289 |
|
6,353 |
|
2,524 |
|
372 |
|
Others,
net |
4,241 |
|
9,190 |
|
1,355 |
|
9,482 |
|
10,801 |
|
1,593 |
|
Income before income taxes and income of
affiliates |
24,520 |
|
180,245 |
|
26,588 |
|
30,741 |
|
255,913 |
|
37,749 |
|
Income
tax expense |
(1,683 |
) |
(50,811 |
) |
(7,495 |
) |
(2,077 |
) |
(79,336 |
) |
(11,703 |
) |
Share of
income of affiliates |
11,249 |
|
12,024 |
|
1,773 |
|
21,339 |
|
29,693 |
|
4,380 |
|
Net income |
34,086 |
|
141,458 |
|
20,866 |
|
50,003 |
|
206,270 |
|
30,426 |
|
less: net
income (loss) attributable to noncontrolling interests |
3,087 |
|
1,111 |
|
164 |
|
(356 |
) |
(3,817 |
) |
(563 |
) |
Net income attributable to the Company’s
shareholders |
30,999 |
|
140,347 |
|
20,702 |
|
50,359 |
|
210,087 |
|
30,989 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
0.03 |
|
0.11 |
|
0.02 |
|
0.04 |
|
0.18 |
|
0.03 |
|
Diluted |
0.03 |
|
0.11 |
|
0.02 |
|
0.04 |
|
0.17 |
|
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per ADS: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
0.53 |
|
2.28 |
|
0.34 |
|
0.87 |
|
3.5 |
|
0.52 |
|
Diluted |
0.51 |
|
2.2 |
|
0.32 |
|
0.84 |
|
3.37 |
|
0.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in calculating net income per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
1,159,471,268 |
1,231,971,654 |
1,231,971,654 |
1,157,270,347 |
1,198,884,443 |
1,198,884,443 |
Diluted |
1,206,953,720 |
|
1,276,541,316 |
|
1,276,541,316 |
|
1,204,692,713 |
|
1,245,046,426 |
|
1,245,046,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
34,086 |
|
141,458 |
|
20,866 |
|
50,003 |
|
206,270 |
|
30,426 |
|
Other comprehensive
income (loss), net of tax: Foreign currency translation
adjustments |
6,195 |
|
(2,820 |
) |
(415 |
) |
4,897 |
|
(2,979 |
) |
(438 |
) |
Fair
value changes |
— |
|
(896 |
) |
(132 |
) |
— |
|
(632 |
) |
(93 |
) |
Share of
other comprehensive gain (loss) of affiliates |
(8,718 |
) |
911 |
|
134 |
|
(28,361) |
|
(546) |
|
(81) |
|
Comprehensive
income |
31,563 |
|
138,653 |
|
20,453 |
|
26,539 |
|
202,113 |
|
29,814 |
|
Less:
Comprehensive income (loss) attributable to the noncontrolling
interests |
3,087 |
|
1,111 |
|
164 |
|
(356 |
) |
(3,817 |
) |
(563 |
) |
Comprehensive
income attributable to the Company’s
shareholders |
28,476 |
|
137,542 |
|
20,289 |
|
26,895 |
|
205,930 |
|
30,377 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FANHUA INC. |
Unaudited Condensed
Consolidated Statements of Cash Flow |
(In thousands) |
|
|
For The Three Months Ended |
|
For The Six Months Ended |
|
|
June 30, |
|
June 30, |
|
|
2016 |
|
2017 |
|
2017 |
|
2016 |
|
2017 |
|
2017 |
|
|
RMB |
|
RMB |
|
US$ |
|
RMB |
|
RMB |
|
US$ |
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
34,086 |
|
141,458 |
|
20,866 |
|
50,003 |
|
206,270 |
|
30,426 |
|
Adjustments to reconcile net income to net cash (used in)
generated from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
3,331 |
|
4,025 |
|
594 |
|
6,675 |
|
7,728 |
|
1,140 |
|
Amortization of intangible assets |
1,309 |
|
8,453 |
|
1,247 |
|
2,626 |
|
17,016 |
|
2,510 |
|
Allowance for doubtful receivables |
(345 |
) |
1,237 |
|
182 |
|
(1,035 |
) |
8,906 |
|
1,314 |
|
Compensation expenses associated with stock option |
2,042 |
|
— |
|
— |
|
4,937 |
|
— |
|
— |
|
Investment income |
(11,839 |
) |
(93,649 |
) |
(13,814 |
) |
(20,937 |
) |
(99,913 |
) |
(14,738 |
) |
Gain
on disposal of subsidiaries |
(52 |
) |
— |
|
— |
|
(3,082 |
) |
(1,302 |
) |
(192 |
) |
Loss
(gain) on disposal of property, plant and equipment |
— |
|
32 |
|
5 |
|
2 |
|
(2 |
) |
0 |
|
Share
of income of affiliates |
(11,249 |
) |
(12,024 |
) |
(1,773 |
) |
(21,339 |
) |
(29,693 |
) |
(4,380 |
) |
Changes in operating assets and liabilities |
(95,256 |
) |
59,326 |
|
8,751 |
|
(73,116 |
) |
8,943 |
|
1,319 |
|
Net cash (used in) generated from operating
activities |
(77,973 |
) |
108,858 |
|
16,058 |
|
(55,266 |
) |
117,953 |
|
17,399 |
|
Cash flows
(used in) generated from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
(2,384 |
) |
(5,333 |
) |
(787 |
) |
(4,017 |
) |
(8,205 |
) |
(1,210 |
) |
Proceeds from disposal of property and equipment |
24 |
|
18 |
|
3 |
|
48 |
|
56 |
|
8 |
|
Purchase of short term investments |
(2,647,300 |
) |
(3,159,000 |
) |
(465,977 |
) |
(4,852,300 |
) |
(4,278,194 |
) |
(631,067 |
) |
Proceeds from disposal of short term investments |
2,575,794 |
|
3,518,149 |
|
518,954 |
|
4,243,393 |
|
4,794,413 |
|
707,213 |
|
Disposal of subsidiaries, net of cash |
22,890 |
|
20,867 |
|
3,078 |
|
29,326 |
|
14,350 |
|
2,117 |
|
Purchase of intangible assets |
(20,000 |
) |
— |
|
— |
|
(20,000 |
) |
— |
|
— |
|
Increase in amounts due from related parties |
— |
|
(370,000 |
) |
(54,578 |
) |
— |
|
(400,000 |
) |
(59,003 |
) |
Net cash (used in) generated from investing
activities |
(70,976 |
) |
4,701 |
|
693 |
|
(603,550 |
) |
122,420 |
|
18,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows (used in) generated
from financing activities: |
|
|
|
|
|
|
Acquisition of
additional interest in subsidiaries |
(73,560 |
) |
— |
|
— |
|
(74,760 |
) |
— |
|
— |
|
Proceeds on exercise of
stock options |
1 |
|
6,866 |
|
1,013 |
|
2 |
|
10,702 |
|
1,578 |
|
Proceeds of employee
subscriptions |
— |
|
22,187 |
|
3,273 |
|
— |
|
22,187 |
|
3,273 |
|
Proceeds of issuance of
ordinary shares upon private placement |
— |
|
201,087 |
|
29,662 |
|
— |
|
201,087 |
|
29,662 |
|
Dividends
paid |
— |
|
(36,121 |
) |
(5,328 |
) |
— |
|
(36,121 |
) |
(5,328 |
) |
Net cash (used
in) generated from financing activities |
(73,559 |
) |
194,019 |
|
28,620 |
|
(74,758 |
) |
197,855 |
|
29,185 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease)
increase in cash, cash equivalents and restricted
cash |
(222,508 |
) |
307,578 |
|
45,371 |
|
(733,574 |
) |
438,228 |
|
64,642 |
|
Cash, cash
equivalents and restricted cash at beginning of
period |
621,724 |
|
404,435 |
|
59,657 |
|
1,132,851 |
|
273,979 |
|
40,414 |
|
Effect of exchange rate
changes on cash and cash equivalents |
(1,903 |
) |
(2,880 |
) |
(425 |
) |
(1,964 |
) |
(3,074 |
) |
(453 |
) |
Cash, cash
equivalents and restricted cash at end of
period |
397,313 |
|
709,133 |
|
104,603 |
|
397,313 |
|
709,133 |
|
104,603 |
|
Interest
paid |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
Income
taxes paid |
721 |
|
48,033 |
|
7,085 |
|
3,328 |
|
55,162 |
|
8,137 |
|
|
|
|
|
|
|
|
1 This announcement contains currency
conversions of certain Renminbi (RMB) amounts into U.S. dollars
(US$) at specified rates solely for the convenience of the reader.
Unless otherwise noted, all translations from RMB to U.S. dollars
are made at a rate of RMB 6.7793 to US$ 1.00, the effective noon
buying rate as of June 30, 2017 in The City of New York for cable
transfers of RMB as set forth in the H.10 weekly statistical
release of the Federal Reserve Board.
2 Active users are defined as users who made at least one
purchase through CNpad App during the specified period.
3 Active customer accounts are defined as
customer accounts that made at least one purchase directly through
www.baoxian.com or its mobile application during the specified
period.
For more information, please
contact:Oasis QiuInvestor Relations ManagerTel: +86 (20)
8388-3191Email: qiusr@fanhuaholdings.comSource:
Fanhua Inc.
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