-- Quarterly Operating Income
RMB83.4
million Up 34.3%
YoY -- Annual Operating Income
RMB425.7 million Up
55.9% YoY
Fanhua Inc., (Nasdaq: FANH), (the "Company" or "Fanhua"), a leading
independent financial services provider in China, today announced
its unaudited financial results for the fourth quarter and fiscal
year ended December 31, 20181.
Financial Highlights for
the Fourth Quarter of
2018:
(In thousands,
except per ADS) |
2017Q4(RMB) |
2018Q4(RMB) |
2018Q4(US$) |
Change
% |
Total net revenues |
690,476 |
871,936 |
126,818 |
26.3 |
Operating income |
62,143 |
83,392 |
12,129 |
34.3 |
Net income attributable to the Company’s shareholders |
126,874 |
112,607 |
16,378 |
-11.2 |
Diluted net income per ADS |
1.98 |
1.99 |
0.29 |
0.5 |
Financial Highlights for Year
2018:
(In thousands,
except per ADS) |
2017(RMB) |
2018(RMB) |
2018(US$) |
Change
% |
Total net revenues |
4,088,473 |
3,471,263 |
504,874 |
-15.1 |
Operating income |
273,136 |
425,743 |
61,922 |
55.9 |
Net income attributable to the Company’s shareholders |
449,228 |
609,915 |
88,708 |
35.8 |
Diluted net income per ADS |
7.29 |
9.83 |
1.43 |
34.8 |
Commenting on the fourth quarter and fiscal year
2018 financial results, Mr. Chunlin Wang, chairman and chief
executive officer of Fanhua, stated," Against the backdrop of
tightened regulation focusing on steering the China’s life
insurance industry back to its fundamental function of providing
protection to the society, and as the Circular No. 134 issued by
the CIRC in 2017 continued to exert its impact in 2018, we are glad
to report a continued solid set of key operating metrics which beat
our prior expectations. Our annualized insurance premiums (“APE”)
on regular life insurance products increased by 3.8% year-over-year
to RMB1.9 billion in 2018 while the renewal insurance premiums
registered a strong growth of 119.3% year-over-year to RMB3.7
billion, leading to a total of RMB6.2 billion life insurance
premiums, representing a growth of 46.2% year-over-year.
“Our operating income grew by 55.9%
year-over-year to RMB425.7 million in 2018, with net income growing
by 35.8% year-over-year to RMB609.9 million and earnings per
American Depositary Share (“ADS”) up 34.8% year-over-year to
US$1.43. We declared and distributed cash dividend of US$1.00 per
ADS in 2018, representing a dividend payout ratio of
69.9%.
“We wrapped up the year with strong note in the
fourth quarter of 2018, with an operating income increasing by
34.3% from the corresponding period in 2017 to RMB83.4 million,
primarily driven by a stellar growth of 80.9% year-over-year in
total insurance premiums to RMB 1.7 billion, of which APE on
regular life insurance products grew by 37.7% to RMB467.9 million
and renewal insurance premiums grey 100.4% year-over-year to RMB1.1
billion.
“Looking ahead to 2019, as the complex
international geopolitical landscape adds to uncertainty in
macroeconomic environment in China and abroad, the China Banking
and Insurance Regulatory Commission will highly likely focus on
strict regulatory supervision and risk control. However, we are
convinced that we are on track towards a continued growth,
benefiting from a rapidly expanding middle class in China and
accelerated trend of separation of manufacturing from distribution,
and based on Fanhua’s scalable platform, rapidly expanding sales
force, nationwide footprint and large customer base built over the
past 21 years.
“As such, we expect our APE on regular life
insurance products to increase by 30% year-over-year and operating
income by 40% year-over-year in the first quarter of 2019.
“For 2019, we expect APE on life insurance
products to increase by 30% year-over-year to RMB2.5 billion,
renewal insurance premiums to grow by 50% year-over-year to RMB5.6
billion, and operating income to grow by 40% to RMB600 million.
“Investment income is expected to drop in 2019
mainly due to a decrease in cash reserve as a result of the
Company’s increasing spending on share buyback and cash dividends,
and the loans related to the Company’s 521 development plan, while
share of income from affiliate may decline in 2019 as CNFinance
Holdings Ltd(“CNFinance”), in which Fanhua owns 18.5% equity
interests, intends to upgrade its business model from heavy-asset
model to light-asset platform model which may impact its profit in
2019.
“As a result of the aforementioned factors, we expect a slight
increase in net income attributable to shareholders in 2019 on a
year-on-year basis. However, as the shares related to the 521
development plan will be treated as treasury shares which won’t be
included in the shares used for calculating basic earnings per
share, according to relevant rules under the US GAAP, we anticipate
that the growth of our basic earnings per share will be around 10%.
“On March 8, 2019, our board of directors (the “Board”) passed
the below resolutions:
Firstly, the Board approved to increase the Company’s annual
dividend by 20% from US$1.0 per ADS in 2018 to US$1.2 per ADS in
2019, which will be paid on a quarterly basis.
“Secondly, the Board approved a share repurchase program,
authorizing the management to execute the repurchase of up to
US$200 million of the Company’s ADSs by December 31, 2019, in any
form that the management may deem fit.”
Financial Results for the Fourth
Quarter of 2018
Total net revenues were
RMB871.9 million (US$126.8 million) for the fourth quarter of 2018,
representing an increase of 26.3% from RMB690.5 million for the
corresponding period in 2017.
- Net revenues for the life
insurance business were RMB735.0
million (US$106.9 million) for the fourth quarter of 2018,
representing an increase of 49.9% from RMB490.3 million for the
corresponding period in 2017. The increase was mainly driven by the
growth in first year commissions as a result of the rapid growth in
the number of sales agents and renewal commissions as a result of
high persistency ratio. Revenues generated from our life
insurance business accounted for 84.3% of our total net revenues in
the fourth quarter of 2018.
- Net revenues for the P&C insurance
business were RMB 39.3 million (US$5.7 million) for the
fourth quarter of 2018, representing a decrease of 61.4% from
RMB101.9 million for the corresponding period in 2017. The decrease
was primarily due to i) the suspension of cooperation with an
online lending service provider since June 2018; and ii) the
transition of our auto insurance business from a commission-based
business model towards a platform business model starting from the
fourth quarter of 2017. Revenues for the P&C insurance business
are mainly derived from commissions generated from Baoxian.com and
the technology service fees based on the volume of insurance
premiums transacted through CNpad. A technology service fee is
typically much smaller than the commission we previously received
from insurance companies, though our costs are minimal. Revenues
generated from the P&C insurance business accounted for 4.5% of
our total net revenues in the fourth quarter of
2018.
- Net revenues for the claims adjusting business
were RMB97.6 million (US$14.2 million) for the fourth quarter of
2018, representing a decrease of 0.7% from RMB98.3 million for the
corresponding period in 2017. Revenues generated from the claims
adjusting business accounted for 11.2% of our total net revenues in
the fourth quarter of 2018.
Total operating costs and
expenses were RMB 788.5 million (US$114.7 million) for the
fourth quarter of 2018, representing an increase of 25.5% from
RMB628.3 million for the corresponding period in 2017.
- Commission costs were RMB595.6 million
(US$86.6 million) for the fourth quarter of 2018, representing an
increase of 30.5% from RMB456.4 million for the corresponding
period in 2017. The increase in commission cost was mainly in line
with the growth of life insurance business. -- Costs
of the life insurance business were RMB516.7 million
(US$75.1 million) for the fourth quarter of 2018, representing an
increase of 64.3% from RMB314.5 million for the corresponding
period in 2017. The increase was in line with the growth in sales.
Costs incurred by the life insurance business accounted for 86.7%
of our total commission costs in the fourth quarter of
2018. -- Costs of the
P&C insurance business were RMB23.1 million
(US$3.4 million) for the fourth quarter of 2018, representing a
decrease of 72.6% from RMB84.2 million for the corresponding period
in 2017. The decrease was in line with the decrease in sales. The
costs of the P&C insurance business for the fourth quarter of
2018, mainly represent commission costs incurred for business on
Baoxian.com. Costs incurred by the P&C insurance business
accounted for 3.9% of our total commission costs in the fourth
quarter of 2018. -- Costs of claims adjusting
business were RMB55.8 million (US$8.1 million) for the
fourth quarter of 2018, representing a decrease of 3.1% from
RMB57.6 million for the corresponding period in 2017. Costs
incurred by the claims adjusting business accounted for 9.4% of our
total commission costs in the fourth quarter of 2018.
- Selling expenses were RMB71.5 million (US$10.4
million) for the fourth quarter of 2018, representing an increase
of 16.3% from RMB61.5 million for the corresponding period in 2017.
The increase was primarily due to an increase of sales
outlets.
- General and administrative
expenses were RMB121.5
million (US$17.7 million) for the fourth quarter of 2018,
representing an increase of 10.1% from RMB110.4 million for the
corresponding period in 2017. The increase was primarily due to an
increase in expenses incurred for setting up new offices and staff
recruitment as a result of regional expansion of life
branches.
As a result of the preceding factors, we had an
operating income of RMB83.4 million (US$12.1
million) for the fourth quarter of 2018, representing an increase
of 34.3% from RMB62.1 million for the corresponding period in
2017.
Operating margin was 9.6% for
the fourth quarter of 2018, compared to 9.0% for the corresponding
period in 2017.
Investment income was RMB42.9
million (US$6.2 million) for the fourth quarter of 2018,
representing an increase of 8.6% from RMB39.5 million for the
corresponding period in 2017. The investment income represents
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. The decline in the balance of short
term investments as of December 31, 2018 was primarily due to a
decrease of cash reserve as a result of cash dividend and share
buyback executed in 2018 and loans related to the Company’s 521
development plan.
Interest income was RMB0.8
million (US$0.1 million) for the fourth quarter of 2018,
representing a decrease of 93.5% from RMB12.4 million for the
corresponding period in 2017. The decrease in interest income was
mainly due to i) the decline in bank interest rate; and ii) the
settlement of interest-bearing receivables in the third quarter of
2018.
Income tax expense was RMB57.1
million (US$8.3 million) for the fourth quarter of 2018,
representing an increase of 49.9% from RMB38.1 million for the
corresponding period in 2017. The effective tax rate for the fourth
quarter of 2018 was 41.0% compared with 32.9% for the corresponding
period in 2017.
Share of income of affiliates
was RMB36.0 million (US$5.2 million) for the fourth quarter of
2018, representing a decrease of 34.8% from RMB55.2 million for the
corresponding period in 2017, mainly attributable to a decrease of
profits from CNFinance.
Net income from continuing
operations was RMB118.0 million (US$17.2 million) for the
fourth quarter of 2018, representing a decrease of 11.2% from
RMB132.9 million for the corresponding period in 2017. The decrease
was mainly attributable to a decrease of RMB19.2 million in share
of income of affiliates and a decrease of RMB11.6 million in
interest income.
Net loss from discontinued
operations was nil for the fourth quarter of 2018 and
RMB1.2 million for the fourth quarter of 2017, which mainly
represents the loss from disposal of the brokerage segment in the
fourth quarter of 2017.
Net income attributable to the Company’s
shareholders was RMB112.6 million (US$16.4 million) for
the fourth quarter of 2018, representing a decrease of 11.2% from
RMB126.9 million for the corresponding period in 2017. The decrease
was mainly attributable to a decrease in share of income of
affiliates and a decrease in interest income.
Net margin was 12.9% for the
fourth quarter of 2018 compared with 18.4% for the corresponding
period in 2017.
Basic and
diluted net income per ADS were RMB1.99
(US$0.29) and RMB1.99(US$0.29) for the fourth quarter of 2018,
respectively, representing decreases of 0.5% and 0.5% from RMB1.98
and RMB1.98 for the corresponding period in 2017.
Financial Results for Year
2018
Total net revenues were
RMB3,471.3 million (US$504.9 million) for 2018, representing a
decrease of 15.1% from RMB4,088.5 million for 2017.
- Net revenues for the life
insurance business were
RMB2,870.8 million (US$417.5 million) for 2018, representing an
increase of 18.4% from RMB2,424.4 million in 2017. The increase was
mainly driven by the growth in first year commissions as a result
of the rapid growth in the number of sales agents and renewal
commissions as a result of high persistency ratio.
Revenues generated from our life insurance business
accounted for 82.7% of our total net revenues in 2018.
- Net revenues for the P&C insurance
business were RMB273.1 million (US$39.7 million) for 2018,
representing a decrease of 79.9% from RMB1,355.8 million in 2017.
The decrease was primarily due to i) the suspension of cooperation
with an online lending service provider since June 2018; and ii)
the transition of our auto insurance business from a
commission-based business model towards a platform business model
starting from the fourth quarter of 2017.Revenues for the P&C
insurance business for the year 2018 are mainly derived from
commissions generated from Baoxian.com and the technology service
fees based on the volume of insurance premiums transacted through
CNpad. Revenue generated from our P&C insurance business
accounted for 7.9% of our total net revenue in 2018.
- Net revenues for the claims adjusting business
were RMB327.4 million (US$47.6 million) for 2018, representing an
increase of 6.2% from RMB308.3 million in 2017. Revenues generated
from the claims adjusting business accounted for 9.4% of our total
net revenues in 2018.
Total operating costs and
expenses were RMB3,045.5 million (US$443.0 million) for
2018, representing a decrease of 20.2% from RMB3,815.3 million in
2017.
- Commission costs were RMB2,346.0 million
(US$341.2 million) for 2018, representing a decrease of 23.3% from
RMB3,059.4 million in 2017. The decrease in commission cost was
mainly due to the decrease in our P&C insurance business,
partially offset by the growth of our life insurance
business. -- Costs of the life insurance
business were RMB1,943.1 million (US$282.6 million) for
2018, representing an increase of 18.7% from RMB1,636.3 million in
2017. The increase was in line with the growth in sales. Costs
incurred by the life insurance business accounted for 82.8% of our
total commission costs in 2018. -- Costs
of the P&C insurance
business were RMB208.8 million (US$30.4 million) for 2018,
representing a decrease of 83.0% from RMB1,228.5 million in 2017.
The decrease was in line with the decrease in revenue. Costs
incurred by the P&C insurance business accounted for 8.9% of
our total commission costs in 2018. -- Costs of
claims adjusting business were RMB194.2 million (US$28.2
million) for 2018, representing a decrease of 0.2% from RMB194.5
million in 2017. Costs incurred by the claims adjusting business
accounted for 8.3% of our total commission costs in 2018.
- Selling expenses were RMB231.1 million
(US$33.6 million) for 2018, representing an increase of 4.2% from
RMB221.8 million in 2017. The increase was primarily due to an
increase of sales outlets.
- General and administrative
expenses were RMB468.4
million (US$68.1 million) for 2018, representing a decrease of
12.3% from RMB534.1 million in 2017. The decrease was mainly due to
a significant reduction in expenses incurred by our P&C
insurance agencies as a result of the migration to the platform
business model since the fourth quarter of 2017 as well as the
disposal of certain P&C insurance agencies, partially offset by
an increase in expenses incurred by new offices setup and staff
recruitment in relation to regional expansion of life
branches.
As a result of the preceding factors, we had an
operating income of RMB425.7 million (US$61.9
million) for 2018, representing an increase of 55.9% from RMB273.1
million in 2017.
Operating margin was 12.3% for
2018, compared to 6.7% in 2017.
Investment income was RMB195.5
million (US$28.4 million) for 2018, representing an increase of
1.9% from RMB191.8 million in 2017. 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 RMB34.2
million (US$5.0 million) for 2018, representing an increase of
32.0% from RMB25.9 million in 2017, primarily due to the settlement
of one year interest-bearing receivables in the third quarter of
2018.
Income tax expense was RMB224.6
million (US$32.7 million) for 2018, representing an increase of
33.8% from RMB167.8 million in 2017. The effective tax rate for
2018 was 33.7% compared with 33.2% in 2017. The increase in
effective tax rate was primarily due to the withholding income tax
provision related to dividend payments since the third quarter of
2017.
Share of income of affiliates
was RMB174.5 million (US$25.4 million) for 2018, representing an
increase of 60.2% from RMB108.9 million in 2017, mainly
attributable to an increase of profits from CNFinance in which we
own 18.5% of the equity interest.
Net income from continuing
operations was RMB617.1 million (US$89.8million) for 2018,
representing an increase of 38.3% from RMB446.2 million in
2017.
Net income from discontinued
operations was nil for 2018 and RMB5.5 million for 2017,
mainly representing net income from the divested Brokerage Segment
attributable to the Company.
Net income attributable to the Company’s
shareholders was RMB609.9 million (US$88.7 million) for
2018, representing an increase of 35.8% from RMB449.2 million in
2017.
Net margin was 17.6% for 2018
compared with 11.0% in 2017.
Basic and
diluted net income per ADS were RMB9.84
(US$1.43) and RMB9.83(US$1.43) for 2018, respectively, representing
increases of 35.0% and 34.8% from RMB7.29 and RMB7.29 in 2017.
As of December 31, 2018, the Company had RMB2,326.9 million
(US$338.4 million) in cash, cash
equivalents and short-term
investments.
Key Operational Metrics for Fanhua's Online Initiatives
in 2018:
- Lan Zhanggui - Our one-stop insurance
service platform that integrates the key functions of both CNpad
Auto Insurance and CNpad Life Insurance App, which was launched in
October 2017. All CNpad Life Insurance App accounts have been
converted to Lan Zhanggui. -- Lan
Zhanggui had been downloaded and activated 807,858 times
as of December 31, 2018, representing an increase of 63.7% from
493,360 downloads as of December 31, 2017; -- The
number of active users of Lan Zhanggui 2 was 150,761 users
who have sold at least one life insurance policy, representing an
increase of 19.1% from 126,603 in
2017; -- Insurance premiums
generated through Lan Zhanggui were
RMB2,496.4 million (US$363.1 million) in 2018, among which life
insurance premiums accounted for RMB2,377.7 million (US$345.8
million) and property and casualty insurance premiums were RMB
162.7 million (US$23.7 million).
- CNpad Auto Insurance Mobile Application("CNpad Auto
Insurance App") - Our proprietary mobile sales support
system: -- CNpad Auto Insurance
App had been downloaded and activated 537,588 times as of
December 31, 2018, representing an increase of 47.2% from 365,282
times as of December 31, 2017; -- The number of
active users of CNpad Auto Insurance
App3 was 129,871 in 2018,
representing a decrease of 18.2% from 158,778 in
2017; -- Insurance
premiums generated through CNpad Auto
Insurance App were RMB2.2 billion (US$0.3
billion) in 2018, representing a decrease of 18.5% from RMB2.7
billion for 2017.
- eHuzhu - Our online non-profit mutual aid
platform: -- The number of registered
members was 3.4 million as of December 31, 2018,
representing an increase of 25.9% from 2.7 million as of December
31, 2017.
- Baoxian.com - Our online insurance
platform: -- The number of registered
customer accounts was 2.2 million as of December 31, 2018,
representing an increase of 46.7% from approximately 1.5 million as
of December 31, 2017; -- The number of active
customer accounts4 was 315,000 in 2018, representing an
increase of 69.7% from 185,611 in
2017; -- Insurance premiums generated on or
through Baoxian.com was RMB1.3 billion (US$0.2 billion) in
2018, representing an increase of 85.7% from RMB0.7 billion in
2017.
Recent Developments
As of December 31, 2018, Fanhua had 807,858
sales agents and 1,246 professional claims, compared with 506,231
sales agents and 1,226 claims adjusters as of December 31, 2017.
The number of performing agents was 238,910 and the average number
of performing agents for selling life insurance products on a
monthly basis was approximately 24,590 in 2018. As of December 31,
2018, Fanhua's distribution network consisted of 682 sales outlets
in 21 provinces and 115 services outlets in 29 provinces, compared
with 502 sales outlets in 21 provinces and 144 service outlets in
29 provinces as of December 31, 2017.
Business
Outlook
Fanhua expects its operating income to be no
less than RMB126.0 million for the first quarter of 2019. This
forecast reflects Fanhua’s current view, which is subject to
change.
Conference Call
The Company will host a conference call to
discuss its fourth quarter and fiscal year 2018 financial results
as per the following details.
Time: 9:00 PM Eastern Daylight Time on March 11, 2019
or 9:00 AM Beijing/Hong Kong Time on March
12, 2019
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 |
0809-091-571 |
Hong Kong |
800-906-606 |
|
|
The toll
dial-in numbers: |
China (Mainland) |
400-120-0654 |
Singapore & Other
Areas |
+65-6713-5090 |
|
|
Conference
ID #: 3132748 |
Additionally, a live and archived web cast of this call will be
available
at:http://ir.fanhuaholdings.com/events-and-presentations
About Fanhua Inc.
Fanhua Inc. is a leading independent 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) Lan Zhanggui,
an all-in-one platform which allows our agents to access and
purchase a wide variety of insurance products, including life
insurance, auto insurance, accident insurance, travel insurance and
standard health insurance products from multiple insurance
companies on their mobile devices; (2) CNpad, a mobile sales
support application; (3) Baoxian.com, an online entry portal for
comparing and purchasing health, accident, travel and homeowner
insurance products and (4) eHuzhu (www.ehuzhu.com), a non-profit
online mutual aid platform in China.
As of December 31, 2018, our distribution and
service network is consisted of 682 sales outlets covering 21
provinces and 115 service outlets covering 31 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.
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 RMB6.8755 to US$1.00, the effective noon
buying rate as of December 31, 2018 in The City of New York for
cable transfers of RMB as set forth in the H.10 weekly statistical
release of the Federal Reserve Board.
2 Active users of Lan Zhanggui included users who sold at
least one life insurance policy and/or P&C insurance policy
through Lan Zhanggui (including both its mobile application or
WeChat public account) during the specific period and at least sold
one life insurance policy through CNpad Life Insurance App in the
same period of 2017.
3 Active users of CNpad App included users who made at
least one purchase of auto insurance policy through CNpad App
(including both its mobile application and WeChat public account)
during the specific period.
4 Active customer accounts are defined as
customer accounts that made at least one purchase directly through
www.baoxian.com, its mobile application, or WeChat public account
during the specified period.
FANHUA INC. |
Unaudited Condensed Consolidated Balance
Sheets |
(In thousands) |
|
|
|
|
|
|
|
As of December 31, |
|
As of December 31, |
|
As of December 31, |
|
2017 |
|
2018 |
|
2018 |
|
RMB |
|
RMB |
|
US$ |
ASSETS: |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash
and cash equivalents |
363,746 |
|
772,823 |
|
112,403 |
Restricted cash |
75,287 |
|
75,343 |
|
10,958 |
Short
term investments |
2,498,730 |
|
1,554,060 |
|
226,029 |
Accounts receivable, net |
515,194 |
|
508,474 |
|
73,955 |
Insurance premium receivables |
4,325 |
|
5,267 |
|
766 |
Other
receivables |
631,381 |
|
86,150 |
|
12,530 |
Other
current assets |
43,864 |
|
58,990 |
|
8,580 |
Total current assets |
4,132,527 |
|
3,061,107 |
|
445,221 |
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
Property, plant, and equipment, net |
26,075 |
|
37,934 |
|
5,517 |
Goodwill and intangible assets, net |
127,079 |
|
111,133 |
|
16,164 |
Deferred tax assets |
2,091 |
|
9,320 |
|
1,356 |
Investment in affiliates |
404,783 |
|
587,517 |
|
85,451 |
Other
non-current assets |
45,187 |
|
59,600 |
|
8,668 |
Total non-current assets |
605,215 |
|
805,504 |
|
117,156 |
Total assets |
4,737,742 |
|
3,866,611 |
|
562,377 |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
203,024 |
|
332,685 |
|
48,387 |
Insurance premium payables |
9,553 |
|
15,248 |
|
2,218 |
Other
payables and accrued expenses |
241,894 |
|
254,824 |
|
37,063 |
Accrued payroll |
77,424 |
|
97,637 |
|
14,201 |
Dividend payable |
129,965 |
|
205,189 |
|
29,844 |
Total current liabilities |
661,860 |
|
905,583 |
|
131,713 |
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
|
Other
tax liabilities |
70,350 |
|
70,350 |
|
10,232 |
Deferred tax liabilities |
17,139 |
|
5,624 |
|
818 |
Total non-current liabilities |
87,489 |
|
75,974 |
|
11,050 |
Total liabilities |
749,349 |
|
981,557 |
|
142,763 |
Total shareholders’ equity |
3,877,051 |
|
2,771,511 |
|
403,100 |
Non-controlling interests |
111,342 |
|
113,543 |
|
16,514 |
Total equity |
3,988,393 |
|
2,885,054 |
|
419,614 |
Total liabilities and equity |
4,737,742 |
|
3,866,611 |
|
562,377 |
|
|
|
|
|
|
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 Twelve Months Ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
|
2018 |
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2018 |
|
|
|
|
RMB |
|
RMB |
|
US$ |
|
RMB |
|
RMB |
|
US$ |
|
Net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Life
insurance Business |
|
490,319 |
|
|
734,988 |
|
|
106,900 |
|
|
2,424,444 |
|
|
2,870,776 |
|
|
417,537 |
|
|
P&C insurance Business |
|
101,858 |
|
|
39,315 |
|
|
5,718 |
|
|
1,355,773 |
|
|
273,097 |
|
|
39,720 |
|
|
Claims adjusting Business |
|
98,299 |
|
|
97,633 |
|
|
14,200 |
|
|
308,256 |
|
|
327,390 |
|
|
47,617 |
|
|
Total net revenues |
|
690,476 |
|
|
871,936 |
|
|
126,818 |
|
|
4,088,473 |
|
|
3,471,263 |
|
|
504,874 |
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life
insurance Business |
|
(314,536) |
|
|
(516,657) |
|
|
(75,145) |
|
|
(1,636,340) |
|
|
(1,943,053) |
|
|
(282,606) |
|
|
P&C insurance Business |
|
(84,217) |
|
|
(23,062) |
|
|
(3,354) |
|
|
(1,228,542) |
|
|
(208,803) |
|
|
(30,369) |
|
|
Claims adjusting Business |
|
(57,643) |
|
|
(55,840) |
|
|
(8,122) |
|
|
(194,525) |
|
|
(194,159) |
|
|
(28,239) |
|
|
Total operating costs |
|
(456,396) |
|
|
(595,559) |
|
|
(86,621) |
|
|
(3,059,407) |
|
|
(2,346,015) |
|
|
(341,214) |
|
|
Selling expenses |
|
(61,539) |
|
|
(71,519) |
|
|
(10,402) |
|
|
(221,785) |
|
|
(231,075) |
|
|
(33,608) |
|
|
General and administrative expenses |
|
(110,398) |
|
|
(121,466) |
|
|
(17,666) |
|
|
(534,145) |
|
|
(468,430) |
|
|
(68,130) |
|
|
Total operating costs and expenses |
|
(628,333) |
|
|
(788,544) |
|
|
(114,689) |
|
|
(3,815,337) |
|
|
(3,045,520) |
|
|
(442,952) |
|
|
Income from operations |
|
62,143 |
|
|
83,392 |
|
|
12,129 |
|
|
273,136 |
|
|
425,743 |
|
|
61,922 |
|
|
Other income, net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income |
|
39,454 |
|
|
42,946 |
|
|
6,246 |
|
|
191,784 |
|
|
195,456 |
|
|
28,428 |
|
|
Interest income |
|
12,401 |
|
|
821 |
|
|
119 |
|
|
25,891 |
|
|
34,207 |
|
|
4,975 |
|
|
Others, net |
|
1,863 |
|
|
11,881 |
|
|
1,728 |
|
|
14,284 |
|
|
11,807 |
|
|
1,717 |
|
|
Income from continuing operations before income taxes and
income of affiliates and discontinued operations |
|
115,861 |
|
|
139,040 |
|
|
20,222 |
|
|
505,095 |
|
|
667,213 |
|
|
97,042 |
|
|
Income tax expense |
|
(38,126) |
|
|
(57,075) |
|
|
(8,301) |
|
|
(167,803) |
|
|
(224,586) |
|
|
(32,665) |
|
|
Share
of income of affiliates |
|
55,192 |
|
|
36,047 |
|
|
5,243 |
|
|
108,944 |
|
|
174,468 |
|
|
25,375 |
|
|
Net
income from continuing operations |
|
132,927 |
|
|
118,012 |
|
|
17,164 |
|
|
446,236 |
|
|
617,095 |
|
|
89,752 |
|
|
Net
income (loss) from discontinued operations, net of tax |
|
(1,175) |
|
|
— |
|
|
— |
|
|
5,480 |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
131,752 |
|
|
118,012 |
|
|
17,164 |
|
|
451,716 |
|
|
617,095 |
|
|
89,752 |
|
|
less:
net income attributable to noncontrolling interests |
|
4,878 |
|
|
5,405 |
|
|
786 |
|
|
2,488 |
|
|
7,180 |
|
|
1,044 |
|
|
Net income attributable to the Company’s
shareholders |
|
126,874 |
|
|
112,607 |
|
|
16,378 |
|
|
449,228 |
|
|
609,915 |
|
|
88,708 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations |
|
0.10 |
|
|
0.10 |
|
|
0.01 |
|
|
0.36 |
|
|
0.49 |
|
|
0.07 |
|
|
Net income from
discontinued operations |
|
0.00 |
|
|
0.00 |
|
|
0.00 |
|
|
0.00 |
|
|
0.00 |
|
|
0.00 |
|
|
Net income |
|
0.10 |
|
|
0.10 |
|
|
0.01 |
|
|
0.36 |
|
|
0.49 |
|
|
0.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations |
|
0.10 |
|
|
0.10 |
|
|
0.01 |
|
|
0.36 |
|
|
0.49 |
|
|
0.07 |
|
|
Net income from
discontinued operations |
|
0.00 |
|
|
0.00 |
|
|
0.00 |
|
|
0.00 |
|
|
0.00 |
|
|
0.00 |
|
|
Net income |
|
0.10 |
|
|
0.10 |
|
|
0.01 |
|
|
0.36 |
|
|
0.49 |
|
|
0.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
ADS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations |
|
2.00 |
|
|
1.99 |
|
|
0.29 |
|
|
7.20 |
|
|
9.84 |
|
|
1.43 |
|
|
Net income (loss) from
discontinued operations |
|
(0.02) |
|
|
0.00 |
|
|
0.00 |
|
|
0.09 |
|
|
0.00 |
|
|
0.00 |
|
|
Net income |
|
1.98 |
|
|
1.99 |
|
|
0.29 |
|
|
7.29 |
|
|
9.84 |
|
|
1.43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations |
|
2.00 |
|
|
1.98 |
|
|
0.29 |
|
|
7.20 |
|
|
9.83 |
|
|
1.43 |
|
|
Net income (loss) from
discontinued operations |
|
(0.02) |
|
|
0.00 |
|
|
0.00 |
|
|
0.09 |
|
|
0.00 |
|
|
0.00 |
|
|
Net income |
|
1.98 |
|
|
1.99 |
|
|
0.29 |
|
|
7.29 |
|
|
9.83 |
|
|
1.43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
calculating net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
1,280,599,856 |
|
|
1,131,722,922 |
|
|
1,131,722,922 |
|
|
1,231,698,725 |
|
|
1,239,264,464 |
|
|
1,239,264,464 |
|
|
Diluted |
|
1,283,796,409 |
|
|
1,132,884,871 |
|
|
1,132,884,871 |
|
|
1,261,223,049 |
|
|
1,240,854,034 |
|
|
1,240,854,034 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
131,752 |
|
|
118,012 |
|
|
17,164 |
|
|
451,716 |
|
|
617,095 |
|
|
89,752 |
|
|
Other
comprehensive income (loss), net of tax: Foreign currency
translation adjustments |
|
(9,755) |
|
|
7,288 |
|
|
1,060 |
|
|
21,101 |
|
|
10,194 |
|
|
1,483 |
|
|
Fair
value changes |
|
— |
|
|
— |
|
|
— |
|
|
(632) |
|
|
— |
|
|
— |
|
|
Share of
other comprehensive gain of affiliates |
|
920 |
|
|
4,629 |
|
|
673 |
|
|
1,263 |
|
|
1,763 |
|
|
256 |
|
|
Comprehensive
income |
|
122,917 |
|
|
129,929 |
|
|
18,897 |
|
|
473,448 |
|
|
629,052 |
|
|
91,491 |
|
|
Less:
Comprehensive income attributable to the noncontrolling
interests |
|
4,878 |
|
|
5,405 |
|
|
786 |
|
|
2,488 |
|
|
7,180 |
|
|
1,044 |
|
|
Comprehensive
income attributable to the Company’s shareholders |
|
118,039 |
|
|
124,524 |
|
|
18,111 |
|
|
470,960 |
|
|
621,872 |
|
|
90,447 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FANHUA INC. |
|
Unaudited Condensed Consolidated Statements of
Cash Flow |
|
(In thousands) |
|
|
|
|
For the Three Months Ended |
|
For the Twelve
Months Ended |
|
|
December 31, |
|
December 31, |
|
|
2017 |
|
|
2018 |
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2018 |
|
|
|
RMB |
|
RMB |
|
US$ |
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash generated from
operating activities |
59,853 |
|
|
169,686 |
|
|
24,680 |
|
|
152,127 |
|
|
535,878 |
|
|
77,940 |
|
|
Net cash (used in)
generated from investing activities |
43,668 |
|
|
184,117 |
|
|
26,779 |
|
|
(23,723) |
|
|
1,578,223 |
|
|
229,543 |
|
|
Net cash generated from
(used in) financing activities |
(150,452) |
|
|
(234,145) |
|
|
(34,055) |
|
|
47,558 |
|
|
(1,687,195) |
|
|
(245,392) |
|
|
Net increase (decrease)
in cash and cash equivalents, and restricted cash |
(46,931) |
|
|
119,658 |
|
|
17,404 |
|
|
175,962 |
|
|
426,906 |
|
|
62,091 |
|
|
Cash, cash
equivalents and restricted cash at beginning of
period |
489,895 |
|
|
741,608 |
|
|
107,862 |
|
|
273,979 |
|
|
439,033 |
|
|
63,855 |
|
|
Effect of exchange rate
changes on cash and cash equivalents |
(3,931) |
|
|
(13,100) |
|
|
(1,905) |
|
|
(10,908) |
|
|
(17,773) |
|
|
(2,585) |
|
|
Cash, cash
equivalents and restricted cash at end of period |
439,033 |
|
|
848,166 |
|
|
123,361 |
|
|
439,033 |
|
|
848,166 |
|
|
123,361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For more information, please contact:
Oasis Qiu
Investor Relations Manager
Tel: +86 (20) 8388-3191
Email: qiusr@fanhuaholdings.com
Source: Fanhua Inc.
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