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, 20201.
Financial Highlights for
the First Quarter of
2020:
(In thousands, except per ADS) |
2019Q1(RMB) |
2020Q1(RMB) |
2020Q1(US$) |
Change % |
Total net revenues |
971,654 |
722,623 |
|
102,054 |
|
(25.6 |
) |
Operating income |
126,423 |
60,044 |
|
8,480 |
|
(52.5 |
) |
Share of income (loss) of affiliates |
25,413 |
(12,339 |
) |
(1,743 |
) |
- |
|
Net income attributable to the Company’s shareholders |
147,268 |
45,793 |
|
6,467 |
|
(68.9 |
) |
Diluted net income per ADS |
2.62 |
0.85 |
|
0.12 |
|
(67.6 |
) |
Cash, cash equivalents and short- term investments (As of March,
31, 2019 and 2020) |
2,394,009 |
1,843,238 |
|
260,315 |
|
(23.0 |
) |
Commenting on the financial results of first
quarter of 2020, Mr. Chunlin Wang, chairman and chief executive
officer of Fanhua, stated, “As the global economy was hit hard by
the COVID-19 outbreak, the life insurance sector in China has also
been severely affected, with a low single digit growth of 2.7%
year-over-year in life insurance gross written premiums (“GWP”).
Despite this challenging environment, Fanhua still managed to
generate RMB2.4 billion GWP in our life insurance business segment,
representing a growth of 9.3% year-over-year, outpacing industry
growth. Of the RMB2.4 billion, first year premiums (“FYP”) achieved
RMB499.3 million and renewal premiums were RMB1.9 billion while
annualized premiums equivalent (“APE”) were RMB307.7 million.
“Affected by the pandemic, a large number of
enterprises at home and abroad have suffered serious losses, with
many struggling to survive. Against this market backdrop, we beat
expectation with operating income of RMB60.0 million and recorded
net operating cash flow of RMB134.6 million during the quarter. The
results vindicated the snowballing effect of our profit model, and
reflected the strength and resilience of our business model.
“We previously expected the Covid-19 outbreak
would be nearly over in China by the end of March and that our
business could start to recover rapidly in the second quarter of
2020. However, as the pandemic spread rampantly around the world, a
full resumption of work and production in China has also been
delayed. Business activities originally planned for April such as
agent recruitment, trainings and product seminars could not be
carried out offline as usual, which significantly impacted our
results for the second quarter of 2020, especially for the sales of
higher ticket savings-typed products as face-to-face meetings are
important in customers’ decision-making process.
“Since the outbreak, Fanhua has responded with
effective and vigorous countermeasures, including conducting our
operational activities digitally by leveraging our strength in
digital technologies and introducing several supportive policies
for our employees and agents. We are pleased that these measures
and policies have helped keep our employees and agents united and
motivated. Since the beginning of May, our agents across China have
gradually resumed all kinds of offline trainings, agent recruitment
and sales activities.
“Based on our preliminary assessment, we remain
optimistic that we will be able to outpace industry growth and
achieve positive quarter-over-quarter growth in the second quarter
of 2020, with APE to be no less than RMB350 million and operating
income no less than RMB70 million.
“As the insurance market is a crucial part for
China’s plans to become a financial powerhouse, we believe that the
underlying growth trend of the Chinese insurance market remains
unchanged in the long run. In addition, risk awareness has been
significantly enhanced among Chinese consumers during this
unprecedented health crisis, which is expected to significantly
drive the demand for insurance products. We believe we are
well-positioned to benefit from such growth opportunities.
“Despite the uncertainties caused by the
pandemic, we are confident that we will be able to remain
profitable with stable operating cash flow. As such, management
reiterates that we will maintain our regular dividend policy of
$0.25 per ADS for the remainder of the year.”
Financial Results for the First quarter
of 2020
Total net revenues were
RMB722.6 million (US$102.1 million) for the first quarter of 2020,
representing a decrease of 25.6% from RMB971.7 million for the
corresponding period in 2019.
- Net revenues for
the life insurance
business were RMB625.2 million (US$88.3 million)
for the first quarter of 2020, representing a decrease of 27.2%
from RMB859.2 million for the corresponding period in 2019. The
decrease was mainly due to the decline of 42.5% in first year
commission from RMB670.2 million to RMB385.2 million, offset by the
growth of 27.0% in renewal commissions from RMB189.0 million to
RMB240.0 million as a result of the accumulation of renewal
business and high persistency ratio. Revenues generated from
our life insurance business accounted for 86.5% of our total net
revenues in the first quarter of 2020.
- Net revenues for the
P&C insurance business were RMB25.0 million (US$3.5
million) for the first quarter of 2020, representing a decrease of
34.4% from RMB38.1 million for the corresponding period in 2019.
Revenues for the P&C insurance business are mainly derived from
commissions generated from Baowang (www.baoxian.com). The decrease
was primarily due to the cessation by certain insurance companies
in underwriting several popular accident insurance products
distributed through Baowang (www.baoxian.com). Revenues generated
from the P&C insurance business accounted for 3.5% of our total
net revenues in the first quarter of 2020.
- Net revenues for the claims
adjusting business were RMB72.4 million (US$10.2 million)
for the first quarter of 2020, representing a decrease of 2.7% from
RMB74.4 million for the corresponding period in 2019. The decrease
was mainly due to the decline in auto-insurance related claims
adjusting business, offsetting the growth in our medical
insurance-related claims adjusting business. Revenues generated
from the claims adjusting business accounted for 10.0% of our total
net revenues in the first quarter of 2020.
Total operating costs and
expenses were RMB662.6 million (US$93.6 million) for the
first quarter of 2020, representing a decrease of 21.6% from
RMB845.2 million for the corresponding period in 2019.
- Commission costs
were RMB490.9 million (US$69.3 million) for the first quarter of
2020, representing a decrease of 26.6% from RMB668.7 million for
the corresponding period in 2019. The decrease in commission cost
was mainly in line with the decrease of life insurance
business.
- Costs of the life insurance business were
RMB427.4 million (US$60.4 million) for the first quarter of 2020,
representing a decrease of 28.9% from RMB601.5 million for the
corresponding period in 2019. The decrease was in line with the
decline in net revenues generated from our life insurance business.
Costs incurred by the life insurance business accounted for 87.1%
of our total commission costs in the first quarter of 2020.
- Costs of the P&C
insurance business were RMB16.7 million (US$2.4 million)
for the first quarter of 2020, representing a decrease of 32.1%
from RMB24.6 million for the corresponding period in 2019. The
costs of the P&C insurance business mainly represent commission
costs we incurred for operating Baowang (www.baoxian.com). The
decrease was in line with the decrease in net revenues generated
from our P&C insurance business. Costs incurred by the P&C
insurance business accounted for 3.4% of our total commission costs
in the first quarter of 2020.
- Costs of claims adjusting business were
RMB46.8 million (US$6.6 million) for the first quarter of 2020,
representing an increase of 9.9% from RMB42.6 million for the
corresponding period in 2019. Costs incurred by the claims
adjusting business accounted for 9.5% of our total commission costs
in the first quarter of 2020. The increase was due to the growth in
our medical insurance-related claims adjusting business, which has
a relatively lower margin.
- Selling expenses
were RMB61.3 million (US$8.7 million) for the first quarter of
2020, representing a decrease of 5.1% from RMB64.6 million for the
corresponding period in 2019.
- General
and administrative
expenses were RMB110.4
million (US$15.6 million) for the first quarter of 2020,
representing a decrease of 1.3% from RMB111.9 million for the
corresponding period in 2019.
As a result of the preceding factors, we had an
operating income of RMB60.0 million (US$8.5
million) for the first quarter of 2020, representing a decrease of
52.5% from RMB126.4 million for the corresponding period in
2019.
Operating margin was 8.3% for
the first quarter of 2020, compared to 13.0% for the corresponding
period in 2019.
Investment income was RMB8.9
million (US$1.3 million) for the first quarter of 2020,
representing a decrease of 75.8% from RMB36.8 million for the
corresponding period in 2019. The investment income in the first
quarter of 2020 consisted of yields from short-term investments in
financial products. The decrease in yields from short-term
investments in financial products was mainly due to (i) changes in
composition of our short-term investment portfolio, with increased
allocation to wealth management products issued by banks which
offer relatively lower yields as compared to other financial
products in the portfolio; (ii) a year-over-year decrease in yields
from wealth management products issued by banks; (iii) a decrease
in cash available for investment in short-term investment products
due to the share buyback program of 2019. Our investment income
fluctuates from quarter to quarter because investment income is
recognized when investments matured or disposed.
Interest income was RMB2.9
million (US$0.4 million) for the first quarter of 2020,
representing an increase of 590.9% from RMB0.4 million for the
corresponding period in 2019. The increase in interest income in
the first quarter of 2020 was mainly due to (i) the increase in
bank deposits; and (ii) short-term loans amounted to RMB60.0
million with 10% annual interest rate.
Income tax expense was RMB18.7
million (US$2.6 million) for the first quarter of 2020,
representing a decrease of 56.4% from RMB42.9 million for the
corresponding period in 2019. The effective tax rate for the first
quarter of 2020 was 25.3% compared with 26.0% for the corresponding
period in 2019.
Share of loss of affiliates was
RMB12.3 million (US$1.7 million) for the first quarter of 2020,
compared with share of income of affiliates of RMB25.4 million for
the corresponding period in 2019, mainly attributable to a loss
from CNFinance due to the increase in its provision for credit loss
as a result of (i) the impact of the new current expected credit
loss (“CECL”) model that took into account the deterioration in the
economic outlook caused by the COVID-19 pandemic, and (ii) an
increase in the amount of non-performing loans as a result of the
inefficient legal proceedings due to the COVID-19 pandemic.
Net income was RMB42.8 million
(US$6.0 million) for the first quarter of 2020, representing a
decrease of 71.0% from RMB147.7 million for the corresponding
period in 2019.
Net income attributable to the Company’s
shareholders was RMB45.8 million (US$6.5 million) for the
first quarter of 2020, representing a decrease of 68.9% from
RMB147.3 million for the corresponding period in 2019. The decrease
was mainly due to the decreases in operating income and investment
income and share of loss of affiliates.
Net margin was 6.3% for the
first quarter of 2020 as compared to 15.2% for the corresponding
period in 2019.
Basic and
diluted net income per ADS were RMB0.85
(US$0.12) and RMB0.85 (US$0.12) for the first quarter of 2020,
respectively, representing decreases of 67.6% and 67.6% from
RMB2.62 and RMB2.62 for the corresponding period in 2019.
As of March 31, 2020, the Company had RMB1,843.2
million (US$260.3 million) in cash, cash
equivalents and short-term
investments.
Key Operational Metrics for Fanhua’s
Online Initiatives in the First Quarter of
2020:
- Lan Zhanggui -
Our one-stop insurance service platform:
- The number of registered users of Lan Zhanggui
was 1.2 million as of March 31, 2020, representing an increase of
35.9% from 860,550 as of March 31, 2019;
- The number of active users of Lan Zhanggui2
was 34,278 in the first quarter of 2020, as compared to 61,468 in
the corresponding period of 2019. The number of active users of Lan
Zhanggui who have sold at least one life insurance policy was
30,489 in the first quarter of 2020, as compared to 52,529 in the
corresponding period of 2019;
- Insurance premiums generated
through Lan Zhanggui were RMB451.7
million (US$63.8 million) in the first quarter of 2020, among which
life insurance premiums was RMB438.4 million (US$61.9 million) and
non-life insurance premiums were RMB13.4 million (US$1.9 million),
respectively, as compared to RMB887.5 million total insurance
premiums generated through Lan Zhanggui which included RMB757.4
million life insurance premiums and RMB130.0 million non-life
insurance premiums in the corresponding period of 2019.
- eHuzhu - Our online mutual
aid platform:
- The number of paying members was 3.4 million
as of March 31, 2020, as compared to 3.5 million as of March 31,
2019.
- Baowang
(www.baoxian.com) - Our online insurance
platform:
- The number of registered
customer accounts was 2.8 million as of March 31, 2020,
representing an increase of 21.7% from approximately 2.3 million as
of March 31, 2019;
- The number of active
customer accounts3 was 142,004 in the first quarter
of 2020, representing an increase of 71.4% from 82,869 in the
corresponding period of 2019;
- Insurance premiums
generated on Baoxian.com was RMB69.3 million (US$9.8
million) in the first quarter of 2020 as compared to RMB90.2
million in the corresponding period of 2019.
Recent Developments
- As of March 31, 2020, Fanhua had
650,065 sales agents and 1,668 professional claims adjusters,
compared with 860,550 sales agents and 1,213 claims adjusters as of
March 31, 2019. The decrease in the number of sales agents was
mainly due to our efforts to clean up sales force and focus more on
higher quality sales agents. The number of performing agents4 was
95,932, and the number of performing agents for selling life
insurance products was approximately 33,152 in the first quarter of
2020. As of March 31, 2020, Fanhua’s distribution network consisted
of 763 sales outlets in 21 provinces and 159 services outlets in 31
provinces, compared with 709 sales outlets in 21 provinces and 143
service outlets in 31 provinces as of March 31, 2019.
Business Outlook
Fanhua expects its operating income to be no
less than RMB70.0 million for the second quarter of 2020. This
forecast is based on the current market conditions and reflects
Fanhua’s preliminary estimate, which is subject to change caused by
various uncertainties, including those related to the ongoing
COVID-19 pandemic.
Conference Call
The Company will host a conference call to
discuss its first quarter 2020 financial results as per the
following details.
Time: 9:00 PM Eastern Daylight Time on May 26, 2020
or 9:00 AM Beijing/Hong Kong Time on May
27, 2020
Due to the outbreak of COVID-19,
operator-assisted conference calls are not available at the moment.
Please pre-register online in advance to join the conference call
by navigating to the link provided below and dial-in 10 minutes
before the call is scheduled to begin. Conference call details will
be provided upon registration.
Conference Call Preregistration:
http://apac.directeventreg.com/registration/event/2348224
Additionally, a live and archived webcast of the conference call
will be available at Fanhua’s investor relations website
https://edge.media-server.com/mmc/p/25m7duce
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) 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) Baowang (www.baoxian.com),
an online entry portal for comparing and purchasing short term
health, accident, travel and homeowner insurance products and (3)
eHuzhu (www.ehuzhu.com), a non-profit online mutual aid platform
in China.
As of March 31, 2020, our distribution and
service network is consisted of 763 sales outlets covering 21
provinces and 159 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, future development of COVID-19 outbreak 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, |
|
|
20195 |
|
2020 |
|
2020 |
|
|
RMB |
|
RMB |
|
US$ |
|
ASSETS: |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
169,653 |
|
503,323 |
|
71,083 |
|
Restricted cash |
95,952 |
|
123,037 |
|
17,376 |
|
Short term investments |
1,612,351 |
|
1,339,915 |
|
189,232 |
|
Accounts receivable, net |
682,171 |
|
490,520 |
|
69,275 |
|
Insurance premium receivables |
5,067 |
|
660 |
|
93 |
|
Other receivables |
61,570 |
|
117,629 |
|
16,612 |
|
Other current assets |
54,987 |
|
46,143 |
|
6,517 |
|
Total current assets |
2,681,751 |
|
2,621,227 |
|
370,188 |
|
|
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
|
Property, plant, and equipment, net |
40,806 |
|
38,568 |
|
5,447 |
|
Goodwill and intangible assets, net |
110,191 |
|
109,970 |
|
15,531 |
|
Deferred tax assets |
7,327 |
|
10,188 |
|
1,439 |
|
Investment in affiliates |
363,414 |
|
351,925 |
|
49,701 |
|
Other non-current assets |
46,917 |
|
46,170 |
|
6,520 |
|
Right of use assets |
190,437 |
|
192,338 |
|
27,163 |
|
Total non-current assets |
759,092 |
|
749,159 |
|
105,801 |
|
Total assets |
3,440,843 |
|
3,370,386 |
|
475,989 |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
382,882 |
|
269,913 |
|
38,119 |
|
Insurance premium payables |
7,901 |
|
25,980 |
|
3,669 |
|
Other payables and accrued expenses |
220,290 |
|
210,638 |
|
29,748 |
|
Accrued payroll |
101,664 |
|
79,233 |
|
11,190 |
|
Income tax payable |
155,251 |
|
160,867 |
|
22,719 |
|
Dividend payable |
— |
|
114,060 |
|
16,108 |
|
Current operating lease liability |
79,986 |
|
80,557 |
|
11,377 |
|
Total current liabilities |
947,974 |
|
941,248 |
|
132,930 |
|
|
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
|
|
Refundable share rights deposits |
266,901 |
|
271,464 |
|
38,338 |
|
Other tax liabilities |
70,350 |
|
67,219 |
|
9,493 |
|
Deferred tax liabilities |
7,898 |
|
12,648 |
|
1,786 |
|
Non-current operating lease liability |
103,252 |
|
104,875 |
|
14,811 |
|
Total non-current liabilities |
448,401 |
|
456,206 |
|
64,428 |
|
Total liabilities |
1,396,375 |
|
1,397,454 |
|
197,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares |
9,235 |
|
9,235 |
|
1,304 |
|
Treasury stock |
(1,146 |
) |
(1,146 |
) |
(162 |
) |
Additional paid-in capital |
393 |
|
492 |
|
69 |
|
Statutory reserves |
508,739 |
|
508,739 |
|
71,848 |
|
Retained earnings |
1,479,494 |
|
1,403,704 |
|
198,241 |
|
Accumulated other comprehensive loss |
(65,429 |
) |
(58,298 |
) |
(8,233 |
) |
Total shareholders’ equity |
1,931,286 |
|
1,862,726 |
|
263,067 |
|
Non-controlling interests |
113,182 |
|
110,206 |
|
15,564 |
|
Total equity |
2,044,468 |
|
1,972,932 |
|
278,631 |
|
Total liabilities and equity |
3,440,843 |
|
3,370,386 |
|
475,989 |
|
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, |
|
2019 |
|
|
2020 |
|
|
2020 |
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
Net revenues: |
|
|
|
|
|
|
|
|
Agency |
897,304 |
|
|
650,211 |
|
|
91,827 |
|
Life insurance business |
859,185 |
|
|
625,205 |
|
|
88,296 |
|
P&C insurance business |
38,119 |
|
|
25,006 |
|
|
3,531 |
|
Claims adjusting |
74,350 |
|
|
72,412 |
|
|
10,227 |
|
Total net revenues |
971,654 |
|
|
722,623 |
|
|
102,054 |
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agency |
(626,097 |
) |
|
(444,097 |
) |
|
(62,718 |
) |
Life insurance Business |
(601,482 |
) |
|
(427,419 |
) |
|
(60,363 |
) |
P&C insurance Business |
(24,615 |
) |
|
(16,678 |
) |
|
(2,355 |
) |
Claims adjusting |
(42,597 |
) |
|
(46,816 |
) |
|
(6,612 |
) |
Total operating costs |
(668,694 |
) |
|
(490,913 |
) |
|
(69,330 |
) |
Selling expenses |
(64,642 |
) |
|
(61,255 |
) |
|
(8,651 |
) |
General and administrative expenses |
(111,895 |
) |
|
(110,411 |
) |
|
(15,593 |
) |
Total operating costs and expenses |
(845,231 |
) |
|
(662,579 |
) |
|
(93,574 |
) |
Income from operations |
126,423 |
|
|
60,044 |
|
|
8,480 |
|
Other income, net: |
|
|
|
|
|
|
|
|
Investment income |
36,825 |
|
|
8,860 |
|
|
1,251 |
|
Interest income |
419 |
|
|
2,895 |
|
|
409 |
|
Others, net |
1,449 |
|
|
2,014 |
|
|
285 |
|
Income from operations before income taxes and
share income of affiliates |
165,116 |
|
|
73,813 |
|
|
10,425 |
|
Income tax expense |
(42,863 |
) |
|
(18,657 |
) |
|
(2,635 |
) |
Share of income (loss) of affiliates |
25,413 |
|
|
(12,339 |
) |
|
(1,743 |
) |
Net income |
147,666 |
|
|
42,817 |
|
|
6,047 |
|
Less: net income (loss) attributable to noncontrolling
interests |
398 |
|
|
(2,976 |
) |
|
(420 |
) |
Net income attributable to the Company’s
shareholders |
147,268 |
|
|
45,793 |
|
|
6,467 |
|
FANHUA
INC.Unaudited
Condensed Consolidated Statements
of Income and
Comprehensive
Income-(Continued)(In thousands, except for shares
and per share data)
|
For The Three Months Ended |
|
March 31, |
|
2019 |
|
2020 |
|
2020 |
|
|
RMB |
|
RMB |
|
US$ |
|
Net income per
share: |
|
|
|
|
|
|
Basic |
0.13 |
|
0.04 |
|
0.01 |
|
Diluted |
0.13 |
|
0.04 |
|
0.01 |
|
Net income per ADS: |
|
|
|
Basic |
2.62 |
|
0.85 |
|
0.12 |
|
Diluted |
2.62 |
|
0.85 |
|
0.12 |
|
Shares used in calculating net income per
share: |
|
|
|
|
|
|
Basic |
1,122,290,708 |
|
1,073,891,784 |
|
1,073,891,784 |
|
Diluted |
1,123,329,865 |
|
1,074,291,427 |
|
1,074,291,427 |
|
|
|
|
|
|
|
|
Net income |
147,666 |
|
42,817 |
|
6,047 |
|
Other comprehensive income (loss), net of tax: Foreign currency
translation adjustments |
(4,747 |
) |
3,720 |
|
525 |
|
Share of other comprehensive gain (loss) of affiliates |
(1,278 |
) |
850 |
|
120 |
|
Unrealized net gains on available-for-sale investments |
— |
|
2,561 |
|
362 |
|
Comprehensive
income |
141,641 |
|
49,948 |
|
7,054 |
|
Less: Comprehensive income (loss) attributable to the
noncontrolling interests |
398 |
|
(2,976 |
) |
(420 |
) |
Comprehensive income
attributable to the Company’s shareholders |
141,243 |
|
52,924 |
|
7,474 |
|
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, |
|
2019 |
|
|
2020 |
|
|
2020 |
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
OPERATING
ACTIVITIES |
|
|
|
|
|
|
|
|
Net
income |
147,666 |
|
|
42,817 |
|
|
6,047 |
|
Adjustments to
reconcile net income to net cash generated from operating
activities: |
|
|
|
|
|
|
|
|
Investment income |
(32,899 |
) |
|
(5,102 |
) |
|
(721 |
) |
Share of (income) loss of
affiliates |
(25,413 |
) |
|
12,339 |
|
|
1,743 |
|
Other non-cash
adjustments |
24,852 |
|
|
33,064 |
|
|
4,670 |
|
Changes in operating assets
and liabilities |
(67,394 |
) |
|
51,444 |
|
|
7,264 |
|
Net cash generated
from operating activities |
46,812 |
|
|
134,562 |
|
|
19,003 |
|
Cash flows
from investing activities: |
|
|
|
|
|
|
|
|
Purchase of short term
investments |
(1,604,900 |
) |
|
(2,780,732 |
) |
|
(392,714 |
) |
Proceeds from disposal of
short term investments |
1,824,222 |
|
|
3,060,832 |
|
|
432,272 |
|
Cash paid for loan receivables
to a third party |
— |
|
|
(60,000 |
) |
|
(8,474 |
) |
Others |
(4,404 |
) |
|
(2,189 |
) |
|
(309 |
) |
Net cash generated
from investing activities |
214,918 |
|
|
217,911 |
|
|
30,775 |
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Repurchase of shares from open
market |
(82,381 |
) |
|
— |
|
|
— |
|
Proceeds of cash consideration
related to disposal of subsidiaries |
5,000 |
|
|
— |
|
|
— |
|
Subscription of 650 million
ADSs to Participants upon 521 Plan |
111,305 |
|
|
— |
|
|
— |
|
Net cash
generated from financing
activities... |
33,924 |
|
|
— |
|
|
— |
|
Net
increase in cash and cash equivalents, and restricted
cash |
295,654 |
|
|
352,473 |
|
|
49,778 |
|
Cash and cash
equivalents and restricted cash at beginning of year |
848,166 |
|
|
265,605 |
|
|
37,511 |
|
Effect of exchange rate
changes on cash and cash equivalents |
(4,524 |
) |
|
8,282 |
|
|
1,170 |
|
Cash and cash
equivalents and restricted cash at end of year |
1,139,296 |
|
|
626,360 |
|
|
88,459 |
|
For more information, please
contact:Investor RelationsTel: +86 (20) 8388-3191Email:
qiusr@fanhuaholdings.comSource: 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
RMB7.0808 to US$1.00, the effective noon buying rate as of March
31, 2020 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
insurance policy through Lan Zhanggui (through either its mobile
application or WeChat public account) during the specific
period. |
|
|
3 |
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. |
|
|
4 |
Performing agents are defined as agents who have sold at least one
insurance policy during the specified period. |
|
|
5 |
In June 2016, FASB issued ASU No. 2016-13, “Financial
Instruments-Credit Losses (Topic 326): Measurement of Credit Losses
on Financial Instruments”. This standard requires entities to
measure all expected credit losses of financial assets held at a
reporting date based on historical experience, current conditions,
and reasonable and supportable forecasts in order to record credit
losses in a timelier manner. ASU 2016-13 also amends the accounting
for credit losses on available-for-sale debt securities and
purchased financial assets with credit deterioration. ASU 2016-13
adds to U.S. GAAP an impairment model (known as the current
expected credit loss (CECL) model) that is based on expected losses
rather than incurred losses. The Company adopted the ASU No.
2016-13 on a modified-retrospective basis, the cumulative-effect
adjustment reduce opening retained earnings balance by
approximately RMB7.4million in the statement of financial position
as of January 1, 2020. |
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