Fanhua Inc., (Nasdaq: FANH), (the "Company" or "Fanhua"), a leading
independent financial services provider in China, today announced
its unaudited financial results for the first quarter ended March
31, 20191.
Financial Highlights for the First
Quarter of 2019:
(In thousands, except per ADS) |
2018Q1(RMB) |
2019Q1(RMB) |
2019Q1(US$) |
Change % |
Total net revenues |
843,263 |
971,654 |
144,781 |
15.2 |
Operating income |
90,181 |
126,423 |
18,837 |
40.2 |
Net income attributable to the Company’s shareholders |
130,218 |
147,268 |
21,944 |
13.1 |
Diluted net income per ADS |
2.00 |
2.62 |
0.39 |
31.0 |
Commenting on the first quarter 2019 financial
results, Mr. Chunlin Wang, chairman and chief executive officer of
Fanhua, stated, “In the first quarter of 2019, total personal
insurance premiums in China reached RMB1.3 trillion, with an
increase of 18.0% year-over-year, while many life insurance
companies saw a major decline in their first year regular life
insurance premiums and a continued drop in sales headcount.
“Against this backdrop, our life insurance
business registered strong growth of 45.1% year-over-year to RMB2.2
billion in terms of total insurance premiums, of which first year
premiums increased by 45.6% year-over-year to RMB809.1 million,
annualized insurance premiums increased by 20.9% year-over-year to
RMB533.0 million and renewal insurance premiums grew by 44.9%
year-over-year to approximately RMB1.4 billion. The solid growth of
our life insurance business was due to the continued expansion of
salesforce and a more balanced product mix strategy.
“Driven by the steady growth of our life
insurance business, our operating profit reached RMB126.4 million,
with a year-over-year increase of 40.2%, which was in line with our
prior expectations. Our net income per ADS grew by 31.0%
year-over-year to RMB2.62.”
Results of Independent
Review:
On May 21, 2019, the Special Committee of the
Board of Directors of the Company (the “Special Committee”)
completed its review of certain allegations raised by short
sellers. The Special Committee concluded that the short sellers'
allegations that characterize the Company as a fraudulent business
designed to enrich insiders through a series of related party and
self-dealing transactions were unsubstantiated. The short seller
reports proved to contain baseless speculation and misleading and
inaccurate allegations. As a result of the investigation, to
further improve the Company’s corporate governance, the Special
Committee will recommend, and management will implement, a series
of measures intended to improve the Company’s operational,
compliance and financial processes and controls.
As previously announced, the Special Committee
is comprised of three independent directors of the Company, Mr.
Allen Lueth, Mr. Stephen Markscheid and Mr. Mengbo Yin. The Special
Committee retained Kirkland & Ellis International LLP
(“Kirkland & Ellis”) to assist in the internal
investigation. FTI Consulting ("FTI") was retained as forensic
accountants in its investigation. Kirkland & Ellis and FTI
directly reported its findings to the Special Committee.
Financial Results for the First quarter
of 2019
Total net revenues were
RMB971.7 million (US$144.8 million) for the first quarter of 2019,
representing an increase of 15.2% from RMB843.3 million for the
corresponding period in 2018.
- Net revenues for
the life insurance
business were RMB859.2 million (US$128.0 million)
for the first quarter of 2019, representing an increase of 27.7%
from RMB673.0 million for the corresponding period in 2018. The
increase was mainly driven by the growth in first year commissions
due to sales volume expansion and the growth in renewal commissions
as a result of high persistency ratio. First year commissions
increased 27.3% year-over-year to RMB670.2 million and renewal
commissions increased 29.4% year-over-year to RMB189.0 million.
Revenues generated from our life insurance business accounted for
88.4% of our total net revenues in the first quarter of 2019.
- Net revenues for the
P&C insurance business were RMB38.1 million (US$5.7
million) for the first quarter of 2019, representing a decrease of
58.8% from RMB92.5 million for the corresponding period in 2018.
The decrease was primarily due to the termination of cooperation
between Baoxian.com and one of its major channel partners in June
2018. 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. The 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 3.9% of
our total net revenues in the first quarter of 2019.
- Net revenues for the claims
adjusting business were RMB74.4 million (US$11.1 million)
for the first quarter of 2019, representing a decrease of 4.4% from
RMB77.8 million for the corresponding period in 2018. Revenues
generated from the claims adjusting business accounted for 7.7% of
our total net revenues in the first quarter of 2019.
Total operating costs and
expenses were RMB845.2 million (US$125.9 million) for the
first quarter of 2019, representing an increase of 12.2% from
RMB753.1 million for the corresponding period in 2018.
- Commission costs
were RMB668.7 million (US$99.6 million) for the first quarter of
2019, representing an increase of 11.9% from RMB597.4 million for
the corresponding period in 2018. The increase in commission cost
was mainly in line with the growth of life insurance
business.
- Costs of the life insurance
business were RMB601.5 million (US$89.6 million) for the
first quarter of 2019, representing an increase of 28.4% from
RMB468.3 million for the corresponding period in 2018. The increase
was in line with the growth in sales. Costs incurred by the life
insurance business accounted for 89.9% of our total commission
costs in the first quarter of 2019.
- Costs of
the P&C insurance business
were RMB24.6 million (US$3.7 million) for the first quarter of
2019, representing a decrease of 69.3% from RMB80.2 million for the
corresponding period in 2018. The decrease was in line with the
decrease in sales. The costs of the P&C insurance business
mainly represent commission costs incurred for business on
Baoxian.com. Costs incurred by the P&C insurance business
accounted for 3.7% of our total commission costs in the first
quarter of 2019.
- Costs of claims adjusting
business were RMB42.6 million (US$6.3 million) for the
first quarter of 2019, representing a decrease of 13.1% from
RMB49.0 million for the corresponding period in 2018. Costs
incurred by the claims adjusting business accounted for 6.4% of our
total commission costs in the first quarter of 2019.
- Selling expenses
were RMB64.6 million (US$9.6 million) for the first quarter of
2019, representing an increase of 32.6% from RMB48.7 million for
the corresponding period in 2018. The increase was primarily due to
an increase of sales outlets in 2018.
- General
and administrative
expenses were RMB111.9
million (US$16.7 million) for the first quarter of 2019,
representing an increase of 4.6% from RMB107.0 million for the
corresponding period in 2018.
As a result of the preceding factors, we had an
operating income of RMB126.4 million (US$18.8
million) for the first quarter of 2019, representing an increase of
40.2% from RMB90.2 million for the corresponding period in
2018.
Operating margin was 13.0% for
the first quarter of 2019, compared to 10.7% for the corresponding
period in 2018.
Investment income was RMB36.8
million (US$5.5 million) for the first quarter of 2019,
representing an increase of 11.2% from RMB33.1 million for the
corresponding period in 2018. The increase was mainly due to the
investment income from certain one-year investment products which
matured in the first quarter of 2019. The investment income
represents yields from short-term investments in financial products
which mainly consist of wealth management products issued by banks
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 RMB0.4 million (US$0.1
million) for the first quarter of 2019, representing a decrease of
96.3% from RMB10.8 million for the corresponding period in 2018.
The interest income in the first quarter of 2019 solely represented
interest income from bank deposits while the interest income in the
first quarter of 2018 was mainly contributed by a one-year loan to
a third party, with 7.3% annual interest rate, which was fully
settled in the third quarter of 2018.
Income tax expense was RMB42.9
million (US$6.4 million) for the first quarter of 2019,
representing a decrease of 2.1% from RMB43.8 million for the
corresponding period in 2018. The effective tax rate for the first
quarter of 2019 was 26.0% compared with 33.0% for the corresponding
period in 2018. The decrease in effective tax rate was mainly due
to the tax holiday enjoyed by one of our wholly-owned subsidiaries
starting from the fourth quarter of 2018.
Share of income of affiliates
was RMB25.4 million (US$3.8 million) for the first quarter of 2019,
representing a decrease of 37.3% from RMB40.5 million for the
corresponding period in 2018, mainly attributable to a decrease of
profits from CNFinance Holdings Limited due to the upgrade of its
business model.
Net income was RMB147.7 million
(US$22.0 million) for the first quarter of 2019, representing an
increase of 14.0% from RMB129.6 million for the corresponding
period in 2018.
Net income attributable to the Company’s
shareholders was RMB147.3 million (US$21.9 million) for
the first quarter of 2019, representing an increase of 13.1% from
RMB130.2 million for the corresponding period in 2018.
Net margin was 15.2% for the
first quarter of 2019 compared with 15.4% for the corresponding
period in 2018.
Basic and
diluted net income per ADS were RMB2.62
(US$0.39) and RMB2.62 (US$0.39) for the first quarter of 2019,
respectively, representing increases of 31% and 31% from RMB2.00
and RMB2.00 for the corresponding period in 2018.
Key Operational Metrics for Fanhua's Online Initiatives
in 2019Q1:
- Lan Zhanggui - Our one-stop insurance service platform
that integrates the key functions of both the CNpad Auto Insurance
and CNpad Life Insurance Apps.
- Lan Zhanggui had
been downloaded and activated 860,550 times as of March 31, 2019,
representing an increase of 48.5% from 579,348 downloads as of
March 31, 2018;
- The number of active users
of Lan Zhanggui2 was 61,468 in the first quarter of 2019,
as compared to 64,685 in the corresponding period of 2018. The
number of active users of Lan Zhanggui who have sold at least one
life insurance policy was 52,529 in the first quarter of 2019,
representing an increase of 10.2% from 47,682 in the corresponding
period of 2018;
- Insurance
premiums generated through Lan Zhanggui
were RMB887.5 million (US$132.2 million) in the first quarter of
2019, among which life insurance premiums was RMB757.4 million
(US$112.9 million) and non-life insurance premiums were RMB130.0
million (US$19.3 million), respectively, as compared to RMB631.0
million total insurance premiums generated through Lan Zhanggui
which included RMB513.0 million life insurance premiums and
RMB118.0 million non-life insurance premiums in the corresponding
period of 2018.
- CNpad Auto Insurance Mobile
Application (“CNpad Auto Insurance App”) - Our proprietary mobile
sales support system for auto insurance:
- CNpad Auto Insurance
App had been downloaded and activated 568,367 times as of
March 31, 2019, representing an increase of 35.9% from 418,342
times as of March 31, 2018;
- The number of active users
of CNpad Auto Insurance App3 was 51,064 in the first
quarter of 2019, representing a decrease of 20.2% from 63,955 in
the corresponding period of 2018;
- Insurance
premiums generated through CNpad Auto
Insurance App were RMB423.0 million
(US$63.0 million) in the first quarter of 2019, representing a
decrease of 25.9% from RMB571.0 million in the corresponding period
of 2018.
- eHuzhu - Our online non-profit mutual aid
platform:
- The number of registered
members was 3.5 million as of March 31, 2019, representing
an increase of 13.4% from 3.1 million as of March 31, 2018.
- Baoxian.com - Our online insurance
platform:
- The number of registered
customer accounts was 2.3 million as of March 31, 2019,
representing an increase of 42.2% from approximately 1.6 million as
of March 31, 2018;
- The number of active
customer accounts4 was 82,869 in the first quarter of
2019, representing an increase of 33.4% from 62,100 in the
corresponding period of 2018;
- Insurance premiums
generated on Baoxian.com was RMB90.2 million (US$13.4
million) in the first quarter of 2019 as compared to RMB605.0
million in the corresponding period of 2018. The decrease was
primarily due to termination of business cooperation with one
channel partner, a third party online lending service provider.
Insurance premiums directly generated on Baoxian.com which excluded
insurance premiums generated through its channel partners was
approximately RMB90.2 million (US$13.4 million), representing an
increase of 62.8% from RMB55.4 million in the corresponding period
of 2018.
Recent Developments
- On April 25, 2019, Fanhua Insurance
Sales Service Group Company Limited won the “Outstanding Insurance
Intermediary Company of the Year” at the 1st Insurance Today -
Insurance Intermediary Awards 2018. The award was initiated and
organized by Insurance Today, a well-known insurance trade
magazine, in recognition of the outstanding performance of the
leading players in the insurance intermediary sector.
- As of March 31, 2019, Fanhua had
860,550 sales agents and 1,213 professional claims, compared with
579,348 sales agents and 1,253 claims adjusters as of March 31,
2018. The number of performing agents5 was 123,053, and the number
of performing agents for selling life insurance products was
approximately 53,486 in the first quarter of 2019. As of March 31,
2019, Fanhua's distribution network consisted of 709 sales outlets
in 21 provinces and 143 services outlets in 31 provinces, compared
with 541 sales outlets in 21 provinces and 142 service outlets in
31 provinces as of March 31, 2018.
Business Outlook
Fanhua expects its operating income to grow by
no less than 20% year-over-year for the second 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 first quarter 2019 financial results as per the
following details.
Time: 9:00 PM Eastern Daylight Time on May 22, 2019 or 9:00
AM Beijing/Hong Kong Time on May 23, 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 |
Japan |
0120-925-493 |
South Korea |
080-850-0565 |
The toll dial-in numbers:
China (Mainland) |
400-120-0654 |
Hong Kong & Other Areas |
+852 30186776 |
Conference ID #:9309498
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, including life and property and
casualty insurance products. We also provide insurance claims
adjusting services, such as damage assessments, surveys,
authentications and loss estimations, as well as value-added
services, such as emergency vehicle roadside assistance.
Our online platforms include: (1) LanZhanggui,
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 March 31, 2019, our distribution and
service network is consisted of 709 sales outlets covering 21
provinces and 143 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.
FANHUA INC.
Unaudited Condensed Consolidated Balance
Sheets (In thousands)
|
As of December
31, |
|
As of March
31, |
|
As of March
31, |
|
2018 |
|
2019 |
|
2019 |
|
RMB |
|
RMB |
|
US$ |
ASSETS: |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
772,823 |
|
1,026,371 |
|
152,934 |
Restricted cash |
75,343 |
|
112,925 |
|
16,826 |
Short term investments |
1,554,060 |
|
1,367,638 |
|
203,784 |
Accounts receivable, net |
508,474 |
|
644,464 |
|
96,028 |
Insurance premium receivables |
5,267 |
|
6,707 |
|
999 |
Other receivables |
86,150 |
|
97,790 |
|
14,571 |
Other current assets |
58,990 |
|
57,820 |
|
8,615 |
Total current assets |
3,061,107 |
|
3,313,715 |
|
493,757 |
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
Property, plant, and equipment, net |
37,934 |
|
38,729 |
|
5,771 |
Goodwill and intangible assets, net |
111,133 |
|
110,898 |
|
16,525 |
Deferred tax assets |
9,320 |
|
7,894 |
|
1,176 |
Investment in affiliates |
587,517 |
|
611,652 |
|
91,139 |
Other non-current assets |
59,600 |
|
58,970 |
|
8,787 |
Right of use assets6 |
— |
|
177,690 |
|
26,477 |
Total non-current assets |
805,504 |
|
1,005,833 |
|
149,875 |
Total assets |
3,866,611 |
|
4,319,548 |
|
643,632 |
Current liabilities: |
|
|
|
|
|
Accounts
payable |
332,685 |
|
444,334 |
|
66,208 |
Insurance
premium payables |
15,248 |
|
48,228 |
|
7,186 |
Other
payables and accrued expenses |
254,824 |
|
238,559 |
|
35,546 |
Accrued
payroll |
97,637 |
|
81,254 |
|
12,107 |
Income
tax payable |
205,189 |
|
198,787 |
|
29,620 |
Dividend
payable |
— |
|
93,947 |
|
13,999 |
Current
operating lease liability6 |
— |
|
61,630 |
|
9,183 |
Total current liabilities |
905,583 |
|
1,166,739 |
|
173,849 |
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
|
Refundable share rights deposits |
138,328 |
|
257,818 |
|
38,416 |
Other
non-current liabilities |
— |
|
3,304 |
|
492 |
Other tax
liabilities |
70,350 |
|
70,350 |
|
10,482 |
Deferred
tax liabilities |
5,624 |
|
5,925 |
|
883 |
Non-current operating lease liability6 |
— |
|
116,771 |
|
17,399 |
Total non-current
liabilities |
214,302 |
|
454,168 |
|
67,672 |
Total liabilities |
1,119,885 |
|
1,620,907 |
|
241,521 |
|
|
|
|
|
|
Ordinary shares |
9,583 |
|
9,583 |
|
1,428 |
Treasury stock |
(1,156) |
|
(1,230) |
|
(184) |
Additional paid-in capital |
437,176 |
|
341,248 |
|
50,848 |
Statutory reserves |
480,881 |
|
480,881 |
|
71,654 |
Retained earnings |
1,799,989 |
|
1,853,533 |
|
276,185 |
Accumulated other comprehensive loss |
(93,290) |
|
(99,315) |
|
(14,798) |
Total shareholders’ equity |
2,633,183 |
|
2,584,700 |
|
385,133 |
Non-controlling interests |
113,543 |
|
113,941 |
|
16,978 |
Total equity |
2,746,726 |
|
2,698,641 |
|
402,111 |
Total liabilities and equity |
3,866,611 |
|
4,319,548 |
|
643,632 |
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 |
|
March 31, |
|
2018 |
|
2019 |
|
2019 |
|
|
|
|
|
RMB |
|
RMB |
|
US$ |
Net revenues: |
|
|
|
Life insurance Business |
672,967 |
|
859,185 |
|
128,023 |
P&C insurance Business |
92,459 |
|
38,119 |
|
5,680 |
Claims adjusting Business |
77,837 |
|
74,350 |
|
11,078 |
Total net revenues |
843,263 |
|
971,654 |
|
144,781 |
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
Life insurance Business |
(468,253) |
|
(601,482) |
|
(89,624) |
P&C insurance Business |
(80,167) |
|
(24,615) |
|
(3,668) |
Claims adjusting Business |
(49,006) |
|
(42,597) |
|
(6,347) |
Total operating costs |
(597,426) |
|
(668,694) |
|
(99,639) |
Selling expenses |
(48,702) |
|
(64,642) |
|
(9,632) |
General and administrative expenses |
(106,954) |
|
(111,895) |
|
(16,673) |
Total operating costs and expenses |
(753,082) |
|
(845,231) |
|
(125,944) |
Income from operations |
90,181 |
|
126,423 |
|
18,837 |
Other income, net: |
|
|
|
Investment income |
33,111 |
|
36,825 |
|
5,487 |
Interest income |
10,757 |
|
419 |
|
63 |
Others, net |
(1,120) |
|
1,449 |
|
216 |
Income from operations before income taxes and
share income of affiliates |
132,929 |
|
165,116 |
|
24,603 |
Income tax expense |
(43,824) |
|
(42,863) |
|
(6,387) |
Share of income of affiliates |
40,484 |
|
25,413 |
|
3,787 |
Net income |
129,589 |
|
147,666 |
|
22,003 |
less: net (loss)income attributable to noncontrolling
interests |
(629) |
|
398 |
|
59 |
Net income attributable to the Company’s
shareholders |
130,218 |
|
147,268 |
|
21,944 |
Net income per share: |
|
|
|
|
|
|
|
Basic |
0.10 |
|
0.13 |
|
0.02 |
|
|
|
|
|
|
Diluted |
0.10 |
|
0.13 |
|
0.02 |
|
|
|
|
|
|
Net income per ADS: |
|
|
|
|
|
|
|
Basic |
2.00 |
|
2.62 |
|
0.39 |
|
|
|
|
|
|
Diluted |
2.00 |
|
2.62 |
|
0.39 |
Shares used in calculating net income per
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
1,300,191,084 |
|
1,122,290,708 |
|
1,122,290,708 |
Diluted |
1,302,989,111 |
|
1,123,329,865 |
|
1,123,329,865 |
|
|
|
|
|
|
Net
income |
129,589 |
|
147,666 |
|
22,003 |
|
|
|
|
|
|
Other comprehensive income (loss), net of tax: Foreign currency
translation adjustments |
(7,322) |
|
(4,747) |
|
(707) |
Less: Comprehensive income attributable to the noncontrolling
interests |
(1,827) |
|
(1,278) |
|
(190) |
Comprehensive
income |
120,440 |
|
141,641 |
|
21,106 |
Less: Comprehensive income attributable to the noncontrolling
interests |
(629) |
|
398 |
|
59 |
Comprehensive income
attributable to the Company’s
shareholders |
121,069 |
|
141,243 |
|
21,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FANHUA
INC.Unaudited Condensed
Consolidated Statements of Cash Flow
(In thousands, except for shares and per
share data)
|
For The Three Months Ended |
|
March 31, |
|
March 31, |
|
March 31, |
|
2018 |
|
2019 |
|
2019 |
|
RMB |
|
RMB |
|
US$ |
OPERATING
ACTIVITIES |
|
|
|
|
|
Net
income |
129,589 |
|
147,666 |
|
22,003 |
Adjustments to
reconcile net income to net cash generated from operating
activities: |
|
|
|
|
|
Depreciation and amortization
of property and equipment |
2,367 |
|
3,638 |
|
542 |
Amortization of intangible
assets |
7,740 |
|
235 |
|
35 |
Noncash lease expense |
— |
|
14,767 |
|
2,200 |
Allowance for doubtful
accounts |
3,892 |
|
1,210 |
|
180 |
Compensation expenses
associated with 521 Plan |
— |
|
3,304 |
|
492 |
Gain on disposal of property,
plant and equipment |
(23) |
|
(30) |
|
(4) |
Investment income |
(29,419) |
|
(32,899) |
|
(4,902) |
Share of income of
affiliates |
(40,484) |
|
(25,413) |
|
(3,787) |
Deferred taxes |
7,221 |
|
1,728 |
|
257 |
Changes in operating assets
and liabilities: |
(50,329) |
|
(67,394) |
|
(10,042) |
Net cash generated
from operating activities |
30,554 |
|
46,812 |
|
6,974 |
Cash flows
used in investing activities: |
|
|
|
|
|
Purchase of short term
investments |
(2,440,997) |
|
(1,604,900) |
|
(239,138) |
|
|
|
|
|
|
Proceeds from disposal of
short term investments |
2,221,749 |
|
1,824,222 |
|
271,818 |
Purchase of property, plant
and equipment |
(4,012) |
|
(4,637) |
|
(691) |
|
|
|
|
|
|
Proceeds from disposal of
property and equipment |
26 |
|
233 |
|
35 |
Net cash (used in)
generated from investing
activities |
(223,234) |
|
214,918 |
|
32,024 |
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
Proceeds of employee
subscriptions |
24,013 |
|
— |
|
— |
Dividends paid |
(4,927) |
|
— |
|
— |
Repurchase of shares from open
market |
— |
|
(82,381) |
|
(12,275) |
Proceeds of cash consideration
related to disposal of subsidiaries |
11,630 |
|
5,000 |
|
745 |
Subscription of 650 million
ADSs to Participants upon 521 Plan |
— |
|
111,305 |
|
16,585 |
Net cash
generated from financing
activities |
30,716 |
|
33,924 |
|
5,055 |
Net
(decrease) increase in cash and cash equivalents,
and restricted cash |
(161,964) |
|
295,654 |
|
44,053 |
Cash and cash
equivalents and restricted cash at beginning of
year |
439,033 |
|
848,166 |
|
126,381 |
Effect of exchange rate
changes on cash and cash equivalents |
(7,322) |
|
(4,524) |
|
(674) |
Cash and cash
equivalents and restricted cash at end of year |
269,747 |
|
1,139,296 |
|
169,760 |
Source: Fanhua Inc.
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 RMB6.7112 to US$1.00, the effective noon
buying rate as of March 29, 2019 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
LanZhanggui included users who sold at least one life insurance
policy and/or non-life insurance policy through LanZhanggui
(including both its mobile application or WeChat public account)
during the specific period.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.5 Performing agents are defined as agents who have sold
at least one life insurance policy and/or non-life insurance policy
during the specified period.6 In February 2016, the FASB issued ASU
2016-02, "Leases (Topic 842)" and associated ASUs related to Topic
842, which requires organizations to recognize lease assets and
lease liabilities on the balance sheet for the rights and
obligations created by those leases. On January 1, 2019, the
Company adopted Topic 842, using the modified retrospective
transition approach, applying the new standard to leases existing
at the date of initial adoption, and prior periods were not
restated. In addition, the Company elected to apply the package of
practical expedients permitted under the transition guidance which
does not require reassessment of prior conclusions, lease
classification and initial direct lease costs. Adoption of the new
standard resulted in the recording of lease assets and liabilities
of RMB182 million and RMB181 million respectively on January 1,
2019. The adoption of the new guidance did not have a material
impact on the Company's consolidated statements of income and
consolidated statements of cash flows.
For more information, please contact:
Investor Relations
Tel: +86 (20) 8388-3191
Email: qiusr@fanhuaholdings.com
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