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, 20231.
Financial Highlights for the First
Quarter of 2023:
|
(In thousands, except per ADS) |
2022Q1(RMB) |
2023Q1(RMB) |
2023Q1(US$) |
Change % |
|
Total net revenues |
686,387 |
|
827,737 |
120,528 |
20.6 |
|
Operating income |
20,589 |
|
60,355 |
8,789 |
193.1 |
|
Non-GAAP operating income2 |
20,589 |
|
63,474 |
9,243 |
208.3 |
|
Net income (loss) attributable to the Company’s
shareholders |
(37,838 |
) |
60,452 |
8,803 |
N/A |
|
Non-GAAP net income attributable to the Company’s
shareholders3 |
40,439 |
|
63,571 |
9,257 |
57.2 |
|
Diluted net income (loss) per ADS |
(0.70 |
) |
1.13 |
0.16 |
N/A |
|
Non-GAAP diluted net income per ADS4 |
0.75 |
|
1.18 |
0.17 |
57.3 |
|
Cash, cash equivalents, short- term investments and others (As of
March 31, 2022 and 2023) |
1,281,469 |
|
1,654,1865 |
240,868 |
29.1 |
Mr. Yinan Hu, chairman and chief executive
officer of Fanhua, commented on the financial results of first
quarter of 2023, “With the positive macro and industry environment
over the first quarter of 2023, we are pleased to report strong
results over the period with solid growth across various key
operating metrics：
- Total gross written premiums
(“GWP”) grew by 29.0% year-over-year to RMB4.4 billion,
significantly above the premium growth rate of 8.9% of the life
insurance industry
- First year premiums(“FYP”) grew by
51.4% year-over-year to RMB851.9 million, significantly above the
average growth rate of approximately 15% achieved by listed Chinese
life insurers
- Total net revenues grew by 20.6%
year-over-year to RMB827.7 million, and
- Operating income grew by 193.1% to
RMB60.4 million, significantly above our previous estimate of RMB30
million.
“The impressive figures were combined results of
significant increase in agent quality and productivity, material
contribution from acquisitions and open-platform strategy as well
as material operational gains from digitization, demonstrating that
we are executing on our well-defined strategy of driving
sustainable growth in our business through ‘Professionalization,
Specialization, Digitalization, and Open Platform’.
“Our good start in the first quarter of 2023
will help lay a solid foundation for us to accelerate the execution
of our strategies and achieve our 2023 operational targets of
generating 50% year-over-year growth in life insurance new business
sales and non-GAAP operating income. In the coming quarters, we
will focus on i) enhancing our unique competitive edge through
optimizing various value-added service offerings to our end
customers in addition to insurance products, ii) attracting top
talents from various industries through our Family Office
Consultant (“FOC”) training programs, iii) accelerating market
consolidation through both acquisitions and expansion of digital
tenants on our open platform, and iv) encouraging and supporting
Million-Dollar Round Table (“MDRT”) members in Fanhua to obtain
relevant financial qualifications and certificates to further
improve their professional expertise.
“2023 marks the 25th anniversary of our company.
It is a milestone that each and one of us at Fanhua are truly proud
for. Over the past 25 years, we are proud that we have navigated
through China’s economic and financial industry cycles. Relative to
other developed markets, the industry we operate in remains young
and continues to be filled with opportunities. Relative to our
global peers, our company remains young, and we see immense growth
opportunities ahead. We are confident that with the continued
execution of our well-defined strategy, Fanhua will continue to
deliver superior results to our shareholders.”
Financial Results for the First Quarter
of 2023
Total net revenues were
RMB827.7 million (US$120.5 million) for the first quarter of 2023,
representing an increase of 20.6% from RMB686.4 million for the
corresponding period in 2022.
-
Net revenues for agency business were RMB725.5
million (US$105.6 million) for the first quarter of 2023,
representing an increase of 23.4% from RMB588.0 million for the
corresponding period in 2022. Total GWP increased by 29.0%
year-over-year to RMB4,444.0 million, of which FYP grew by 51.4%
year-over-year to RMB851.9 million while renewal premiums increased
by 24.6% year-over-year to RMB3,592.1 million.
-
Net revenues for the life insurance business were
RMB683.4 million (US$99.5 million) for the first quarter of 2023,
representing an increase of 22.3% from RMB558.6 million for the
corresponding period in 2022. Total life insurance GWP increased by
29.1% year-over-year to RMB4,359.8 million, of which life insurance
FYP increased by 55.9% year-over-year to RMB767.8 million and
renewal premiums increased by 24.6% year-over-year to RMB3,592.1
million. The increase in net revenues for the life insurance
business was mainly due to an increase in new policy sales and
acquisitions completed in the first quarter of 2023 which generated
total revenues of RMB163.6 million, offset by the decrease in
renewal commission income as a result of the decreased weighted
average renewal commission rate of renewal premium collected, and
to a lesser extent, due to changes in product mix. For long-term
life insurance policies that we sell, renewal commissions are paid
throughout the policy payment period but the renewal commission
rates tend to recede few years after the sales of the insurance
policies.Net revenues generated from our life insurance business
accounted for 82.6% of our total net revenues in the first quarter
of 2023, as compared to 81.4% in the same period of 2022.
-
Net revenues for the P&C insurance business
were RMB42.1 million (US$6.1 million) for the first quarter of
2023, representing an increase of 43.2% from RMB29.4 million for
the corresponding period in 2022. The increase was mainly due to
the contribution from a brokerage firm which was acquired in the
second half of 2022. Net revenues generated from the P&C
insurance business accounted for 5.1% of our total net revenues in
the first quarter of 2023, as compared to 4.3% in the same period
of 2022.
-
Net revenues for the claims adjusting business
were RMB102.2 million (US$14.9 million) for the first quarter of
2023, representing an increase of 3.9% from RMB98.4 million for the
corresponding period in 2022. Net revenues generated from the
claims adjusting business accounted for 12.3% of our total net
revenues in the first quarter of 2023, as compared to 14.3% in the
same period of 2022.
Total operating costs and
expenses were RMB767.4 million (US$111.7million) for the
first quarter of 2023, representing an increase of 15.3% from
RMB665.8 million for the corresponding period in 2022.
-
Commission costs were RMB553.1 million
(US$80.5million) for the first quarter of 2023, representing an
increase of 22.7% from RMB450.7 million for the corresponding
period in 2022.
-
Commission costs for agency business were RMB487.4
million (US$71.0 million) for the first quarter of 2023,
representing an increase of 27.1% from RMB383.4 million for the
corresponding period in 2022.
-
Costs of the life insurance business were RMB456.6
million (US$66.5 million) for the first quarter of 2023,
representing an increase of 25.6% from RMB363.5 million for the
corresponding period in 2022. The increase was mainly attributable
to the commission cost associated with and incurred by new
acquisitions which were completed in the first quarter of 2023. Our
cost increased faster than revenues, primarily due to the managing
general agency platform model adopted by one of the newly acquired
entity, under which it earns a relatively lower gross profit than
our self-operated business. Costs incurred by the life insurance
business accounted for 82.5% of our total commission costs in the
first quarter of 2023, as compared to 80.7% in the same period of
2022.
-
Costs of the P&C insurance business were
RMB30.8 million (US$4.5 million) for the first quarter of 2023,
representing an increase of 54.8% from RMB19.9 million for the
corresponding period in 2022. The costs of the P&C insurance
business mainly represent commission costs we incurred for
operating Baowang (www.baoxian.com) and brokerage business. Costs
incurred by the P&C insurance business accounted for 5.6% of
our total commission costs in the first quarter of 2023, as
compared to 4.4% in the same period of 2022.
- Costs
of claims adjusting business were RMB65.8 million (US$9.6
million) for the first quarter of 2023, representing a decrease of
2.1% from RMB67.2 million for the corresponding period in 2022.
Costs incurred by the claims adjusting business accounted for 11.9%
of our total costs in the first quarter of 2023, as compared to
14.9% in the same period of 2022.
-
Selling expenses were RMB66.5 million (US$9.7
million) for the first quarter of 2023, representing a decrease of
11.2% from RMB74.9 million for the corresponding period in 2022.
The decrease was due to cost savings from personnel optimization
and decreased rental costs of our sales outlets, partially offset
by the increase in sales events and the recognition of RMB2.7
million (US$0.4 million) share-based compensation expenses related
to shares options granted to MDRT members from sales teams under
the Company’s MDRT Share Incentive Plan in the first quarter of
2023.
-
General and administrative expenses were RMB147.7
million (US$21.5 million) for the first quarter of 2023,
representing an increase of 5.3% from RMB140.2 million for the
corresponding period in 2022. The increase was mainly contributed
by the acquisitions completed in the first quarter of 2023
amounting to approximately RMB17.6 million offset by savings from
personnel optimization and decrease in the number of branches since
2022.
As a result of the foregoing factors, we
recorded operating income of RMB60.4 million
(US$8.8 million) for the first quarter of 2023, representing an
increase of 193.1% from RMB20.6 million for the corresponding
period in 2022.
Non-GAAP operating income was
RMB63.5 million (US$9.2 million) for the first quarter of 2023,
representing an increase of 208.3% from RMB20.6 million for the
corresponding period in 2022.
Operating margin was 7.3% for
the first quarter of 2023, compared to 3.0% for the corresponding
period in 2022.
Investment income was RMB12.6
million (US$1.8 million) for the first quarter of 2023,
representing an increase of 207.3% from RMB4.1 million for the
corresponding period in 2022. The investment income in the first
quarter of 2023 consisted of yields from short-term investments in
financial products, and is recognized when the investment matures
or is disposed of.
Income tax expense was RMB18.1
million (US$2.6 million) for the first quarter of 2023,
representing an increase of 187.3% from RMB6.3 million for the
corresponding period in 2022. The effective tax rate for the first
quarter of 2023 was 22.9% compared with 18.0% for the corresponding
period in 2022.
Net income was RMB60.5 million
(US$8.8 million) for the first quarter of 2023, as compared to net
loss of RMB41.7 million for the corresponding period in 2022.
Net income attributable to the Company’s
shareholders was RMB60.5 million (US$8.8 million) for the
first quarter of 2023, as compared to net loss attributable to the
Company’s shareholders of RMB37.8 million for the corresponding
period in 2022.
Non-GAAP net income attributable to the
Company’s shareholders2 was RMB63.6
million (US$9.3 million) for the first quarter of 2023,
representing an increase of 57.2% as compared to RMB40.4 million
for the corresponding period in 2022.
Net margin was 7.3% for the
first quarter of 2023, as compared to negative 5.5% for the
corresponding period in 2022.
Non-GAAP net margin6 was 7.7%
for the first quarter of 2023, as compared to 5.9% for the
corresponding period in 2022.
Basic and diluted net income per
ADS were RMB1.13 (US$0.16) and RMB1.13 (US$0.16) for the
first quarter of 2023, respectively, as compared to basic and
diluted net loss per ADS RMB0.70 and RMB0.70 for the corresponding
period in 2022, respectively.
Non-GAAP
basic7 and diluted net income per
ADS4 were RMB1.18 (US$0.17) and RMB1.18
(US$0.17) for the first quarter of 2023, respectively, as compared
to RMB0.75 and RMB0.75 for the corresponding period in 2022,
respectively.
As of March 31, 2023, the Company had RMB1,654.2
million (US$240.9 million) in cash, cash
equivalents, short-term investments and others.
The amount included short term loans to third parties of RMB183.2
million as recorded in other receivables and an advance payment of
RMB200.0 million for the purchase of short-term investment products
as recorded in other current assets.
Fanhua’s Insurance Sales and Service
Distribution Network:
- The
number of performing agents for selling life insurance products was
6,941 in the first quarter of 2023, compared to 9,371 in the same
period of 2022. Insurance premiums facilitated per performing
agents for selling life insurance products were RMB82,448 in the
first quarter of 2023, representing a growth of 95.1%
year-over-year from RMB42,261 in the same period of 2022.
- The
decrease in the number of performing agents was primarily due to
the Company’s shifted focus to serving high-end customers and
high-performing agents and maintaining an elite-based agent pool.
The decrease was mainly due to the decrease in the number of
low-performing agents while the number of elite agents increased in
the same period, which led to the sharp increase in premiums
facilitated per performing agents.
- As of
March 31, 2023, Fanhua had 2,063 in-house claims adjustors as
compared with 2,174 in-house claims adjustors as of March 31, 2022.
Fanhua’s distribution network consisted of 631 sales outlets in 24
provinces and 92 services outlets in 31 provinces as of March 31,
2023, compared with 717 sales outlets in 23 provinces and 109
service outlets in 31 provinces as of March 31, 2022.
Recent Developments
- As of
March 31, 2023, eHuzhu, our online mutual aid platform which serves
to provide alternative risk-protection programs to lower-income
group at more affordable costs, have approximately 1.8 million
paying members8 and assisted 11,862 families in raising
approximately RMB1.3 billion to cover their medical costs and help
them get through tough times.
Business Outlook
Fanhua expects its non-GAAP operating income
adjusted for share-based compensation expenses to be no less than
RMB46 million for the second quarter of 2023. Fanhua reaffirms its
full year life insurance first year premiums target of no less than
RMB3.7 billion for 2023, representing a year-over-year growth of
50% and non-GAAP operating income target of no less than RMB253
million for 2023, representing a year-over-year growth of 50%. This
forecast is based on the current market conditions and reflects
Fanhua’s preliminary estimate, which is subject to change caused by
various factors.
Conference Call
The Company will host a conference call to
discuss its first quarter 2023 financial results as per the
following details.
Time: 9:00 p.m. Eastern Daylight Time on June 5, 2023
or 9:00 a.m. Beijing/Hong Kong Time on June
6, 2023
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:
https://register.vevent.com/register/BI858e6e49b05c4b44a667fed864942a88
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/ecbdzyh4
About Fanhua Inc.
Driven by its digital technologies and
professional expertise in the insurance industry, Fanhua Inc. is
the leading independent financial service provider in China,
focusing on providing insurance-oriented family asset allocation
services that covers customers’ full lifecycle and a one-stop
service platform for individual sales agents and independent
insurance intermediaries.
With strategic focus on long-term life insurance
products, we offer a broad range of insurance products, claims
adjusting services and various value-added services to meet
customers’ diverse needs, through an extensive network of digitally
empowered sales agents and professional claims adjustors. We also
operate Baowang (www.baoxian.com), an online insurance platform
that provides customers with a one-stop insurance shopping
experience.
As of March 31, 2023, our distribution and
service network consisted of 631 sales outlets covering 24
provinces, autonomous regions and centrally-administered
municipalities and 92 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. Except
as otherwise indicated, all information provided in this press
release speaks 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.
About Non-GAAP Financial Measures
In addition to the Company’s consolidated
financial results under generally accepted accounting principles in
the United States (“GAAP”), the Company also provides non-GAAP
operating income,non-GAAP net income attributable to the Company’s
shareholders, non-GAAP net margin and non-GAAP basic and diluted
net income per ADS, all of which are non-GAAP financial measures,
as supplemental measures to review and assess operating
performance. Non-GAAP operating income is defined as income of
operation before share-based compensation expenses. Non-GAAP net
income attributable to the Company’s shareholders is defined as net
income attributable to the Company’s shareholders before impairment
on investment in an affiliate and share-based compensation
expenses. Non-GAAP net margin is defined as non-GAAP net income
attributable to the Company's shareholders as a percentage of net
revenues. Non-GAAP basic net income per ADS is defined as non-GAAP
net income attributable to the Company’s shareholders divided by
total weighted average number of ADSs of the Company outstanding
during the period. Non-GAAP diluted net income per ADS is defined
as non-GAAP net income attributable to the Company’s shareholders
divided by total weighted average number of diluted ADSs of the
Company outstanding during the period. The Company believes that
both management and investors benefit from referring to these
non-GAAP financial measures in assessing the Company’s performance
and when planning and forecasting future periods. The Company’s
non-GAAP financial measures do not reflect all items of income and
expenses that affect the Company’s operations. Specifically, the
Company’s non-GAAP measures exclude impairment on investment in an
affiliate and share-based compensation expenses. Further, these
non-GAAP financial measures may not be comparable to similarly
titled measures presented by other companies, including peer
companies. The presentation of these non-GAAP financial measures
has limitations as analytical tools, and investors should not
consider them in isolation from, or as a substitute for analysis
of, the financial information prepared and presented in accordance
with GAAP. We encourage investors and other interested persons to
review our financial information in its entirety and not rely on a
single financial measure.
For more information on these non-GAAP financial
measures, please see the tables captioned “Reconciliations of GAAP
Financial Measures to Non-GAAP Financial Measures” set forth at the
end of this press release.
|
|
|
|
FANHUA INC.Unaudited Condensed
Consolidated Balance Sheets (In
thousands) |
|
|
|
|
|
|
As of December 31, |
|
As of March 31, |
|
As of March 31, |
|
|
|
2022 |
|
2023 |
|
2023 |
|
|
|
RMB |
|
RMB |
|
US$ |
|
|
ASSETS: |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
567,525 |
|
574,565 |
|
83,663 |
|
|
Restricted cash |
59,957 |
|
63,469 |
|
9,242 |
|
|
Short term investments |
347,754 |
|
696,401 |
|
101,404 |
|
|
Accounts receivable, net |
667,554 |
|
776,349 |
|
113,045 |
|
|
Other receivables |
231,049 |
|
286,523 |
|
41,721 |
|
|
Other current assets |
419,735 |
|
232,743 |
|
33,890 |
|
|
Total current assets |
2,293,574 |
|
2,630,050 |
|
382,965 |
|
|
|
|
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
|
|
Restricted bank deposit – non-current |
20,729 |
|
22,747 |
|
3,312 |
|
|
Contract assets, net - non-current |
385,834 |
|
484,345 |
|
70,526 |
|
|
Property, plant, and equipment, net |
98,459 |
|
96,654 |
|
14,074 |
|
|
Goodwill and intangible assets, net |
109,997 |
|
481,300 |
|
70,083 |
|
|
Deferred tax assets |
20,402 |
|
31,958 |
|
4,653 |
|
|
Investment in affiliates |
4,035 |
|
3,704 |
|
539 |
|
|
Other non-current assets |
11,400 |
|
20,042 |
|
2,918 |
|
|
Right of use assets |
145,086 |
|
132,867 |
|
19,347 |
|
|
Total non-current assets |
795,942 |
|
1,273,617 |
|
185,452 |
|
|
Total assets |
3,089,516 |
|
3,903,667 |
|
568,417 |
|
|
Current liabilities: |
|
|
|
|
Short-term loan |
35,679 |
|
208,895 |
|
30,417 |
|
|
Accounts payable |
436,784 |
|
593,920 |
|
86,481 |
|
|
Insurance premium payables |
16,580 |
|
17,488 |
|
2,546 |
|
|
Other payables and accrued expenses |
174,326 |
|
227,286 |
|
33,095 |
|
|
Accrued payroll |
96,279 |
|
94,942 |
|
13,825 |
|
|
Income tax payable |
130,024 |
|
125,235 |
|
18,236 |
|
|
Current operating lease liability |
62,304 |
|
58,409 |
|
8,505 |
|
|
Total current liabilities |
951,976 |
|
1,326,175 |
|
193,105 |
|
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
Accounts payable – non-current |
192,917 |
|
173,505 |
|
25,264 |
|
|
Other tax liabilities |
36,647 |
|
35,650 |
|
5,191 |
|
|
Deferred tax liabilities |
102,455 |
|
131,365 |
|
19,128 |
|
|
Non-current operating lease liability |
74,190 |
|
67,835 |
|
9,878 |
|
|
Total non-current liabilities |
406,209 |
|
408,355 |
|
59,461 |
|
|
Total liabilities |
1,358,185 |
|
1,734,530 |
|
252,566 |
|
|
|
|
|
|
|
Ordinary shares |
8,091 |
|
8,675 |
|
1,263 |
|
|
Treasury stock |
(10 |
) |
(10 |
) |
(1 |
) |
|
Additional Paid-in capital |
461 |
|
213,980 |
|
31,158 |
|
|
Statutory reserves |
559,520 |
|
559,520 |
|
81,472 |
|
|
Retained earnings |
1,087,984 |
|
1,148,436 |
|
167,225 |
|
|
Accumulated other comprehensive loss |
(32,643 |
) |
(33,350 |
) |
(4,856 |
) |
|
Total shareholders’ equity |
1,623,403 |
|
1,897,251 |
|
276,261 |
|
|
Non-controlling interests |
107,928 |
|
271,886 |
|
39,590 |
|
|
Total equity |
1,731,331 |
|
2,169,137 |
|
315,851 |
|
|
Total liabilities and equity |
3,089,516 |
|
3,903,667 |
|
568,417 |
|
|
|
|
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, |
|
|
2022 |
|
2023 |
|
2023 |
|
|
|
RMB |
|
RMB |
|
USD |
|
|
Net revenues: |
|
|
|
|
Agency |
587,988 |
|
725,552 |
|
105,649 |
|
|
Life insurance business |
558,574 |
|
683,402 |
|
99,511 |
|
|
P&C insurance business |
29,414 |
|
42,150 |
|
6,138 |
|
|
Claims adjusting |
98,399 |
|
102,185 |
|
14,879 |
|
|
Total net revenues |
686,387 |
|
827,737 |
|
120,528 |
|
|
Operating costs and expenses: |
|
|
|
|
Agency |
(383,443 |
) |
(487,367 |
) |
(70,966 |
) |
|
Life insurance Business |
(363,527 |
) |
(456,616 |
) |
(66,488 |
) |
|
P&C insurance Business |
(19,916 |
) |
(30,751 |
) |
(4,478 |
) |
|
Claims adjusting |
(67,249 |
) |
(65,753 |
) |
(9,574 |
) |
|
Total operating costs |
(450,692 |
) |
(553,120 |
) |
(80,540 |
) |
|
Selling expenses |
(74,868 |
) |
(66,521 |
) |
(9,686 |
) |
|
General and administrative expenses |
(140,238 |
) |
(147,741 |
) |
(21,513 |
) |
|
Total operating costs and expenses |
(665,798 |
) |
(767,382 |
) |
(111,739 |
) |
|
Income from operations |
20,589 |
|
60,355 |
|
8,789 |
|
| Other income, net: |
|
|
|
|
Investment income |
4,054 |
|
12,632 |
|
1,839 |
|
|
Interest income |
679 |
|
5,327 |
|
776 |
|
|
Financial cost |
— |
|
(1,959 |
) |
(285 |
) |
|
Others, net |
9,973 |
|
2,542 |
|
370 |
|
|
Income from operations before income taxes and share income
of affiliates |
35,295 |
|
78,897 |
|
11,489 |
|
|
Income tax expense |
(6,348 |
) |
(18,087 |
) |
(2,634 |
) |
|
Share of income (loss) of affiliates, net of impairment |
(70,634 |
) |
(331 |
) |
(48 |
) |
|
Net (loss) income |
(41,687 |
) |
60,479 |
|
8,807 |
|
|
Less: net (loss) income attributable to non-controlling
interests |
(3,849 |
) |
27 |
|
4 |
|
| Net (loss) income
attributable to the Company’s shareholders |
(37,838 |
) |
60,452 |
|
8,803 |
|
|
|
|
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 |
| |
December 31, |
| |
2022 |
|
2023 |
|
2023 |
|
|
|
RMB |
|
RMB |
|
US$ |
|
|
Net (loss) income per share: |
|
|
|
|
Basic |
(0.04 |
) |
0.06 |
|
0.01 |
|
|
Diluted |
(0.04 |
) |
0.06 |
|
0.01 |
|
|
Net (loss) income per ADS: |
|
|
|
|
Basic |
(0.70 |
) |
1.13 |
|
0.16 |
|
|
Diluted |
(0.70 |
) |
1.13 |
|
0.16 |
|
|
Shares used in calculating net income per
share: |
|
|
|
|
Basic |
1,073,994,006 |
|
1,073,981,523 |
|
1,073,981,523 |
|
|
Diluted |
1,073,994,006 |
|
1,074,400,371 |
|
1,074,400,371 |
|
| Net (loss)
income |
(41,687 |
) |
60,479 |
|
8,807 |
|
|
Other comprehensive income, net of tax: Foreign currency
translation adjustments |
90 |
|
(887 |
) |
(129 |
) |
|
Share of other comprehensive loss of affiliates |
(413 |
) |
— |
|
— |
|
|
Unrealized net (loss) gains on available-for-sale investments |
(5,112 |
) |
180 |
|
26 |
|
| Comprehensive (loss)
income |
(47,122 |
) |
59,772 |
|
8,704 |
|
|
Less: Comprehensive (loss) income attributable to the
non-controlling interests |
(3,849 |
) |
27 |
|
4 |
|
|
Comprehensive (loss) income attributable to the Company’s
shareholders |
(43,273 |
) |
59,745 |
|
8,700 |
|
|
|
|
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, |
|
|
2022 |
|
2023 |
|
2023 |
|
|
|
RMB |
|
RMB |
|
US$ |
|
|
OPERATING ACTIVITIES |
|
|
|
|
Net (loss) income |
(41,687 |
) |
60,479 |
|
8,807 |
|
| Adjustments to
reconcile net income to net cash generated from operating
activities: |
|
|
|
|
Investment income |
(1,649 |
) |
(3,529 |
) |
(514 |
) |
|
Share of income of affiliates |
70,634 |
|
331 |
|
48 |
|
| Other
non-cash adjustments |
35,655 |
|
30,294 |
|
4,411 |
|
|
Changes in operating assets and liabilities |
(150,027 |
) |
(106,311 |
) |
(15,480 |
) |
| Net cash used in
operating activities |
(87,074 |
) |
(18,736 |
) |
(2,728 |
) |
|
Cash flows from investing activities: |
|
|
|
|
Purchase of short-term investments |
(855,000 |
) |
(615,030 |
) |
(89,555 |
) |
|
Proceeds from disposal of short-term investments |
1,068,447 |
|
461,333 |
|
67,175 |
|
| Cash
acquired from business acquisitions |
— |
|
21,208 |
|
3,088 |
|
|
Others |
(61,764 |
) |
(1,950 |
) |
(284 |
) |
|
Net cash generated from (used in) investing
activities |
151,683 |
|
(134,439 |
) |
(19,576 |
) |
|
Cash flows from financing activities： |
|
|
|
|
Proceeds from bank and other borrowings |
— |
|
170,268 |
|
24,793 |
|
|
Interests paid |
— |
|
(1,703 |
) |
(248 |
) |
|
Acquisition of additional equity interests in non-wholly owned
subsidiaries |
— |
|
(110 |
) |
(16 |
) |
|
Others |
3 |
|
— |
|
— |
|
|
Net cash generated from financing activities |
3 |
|
168,455 |
|
24,529 |
|
|
Net increase in cash, cash equivalents and restricted
cash |
64,612 |
|
15,280 |
|
2,225 |
|
|
Cash, cash equivalents and restricted cash at beginning of
period |
656,522 |
|
648,211 |
|
94,387 |
|
|
Effect of exchange rate changes on cash and cash equivalents |
254 |
|
(2,710 |
) |
(395 |
) |
|
Cash, cash equivalents and restricted cash at end of
period |
721,388 |
|
660,781 |
|
96,217 |
|
|
|
|
FANHUA INC.Reconciliations of GAAP
Financial Measures to Non-GAAP Financial Measures
(In RMB in thousands, except shares and per share
data) |
|
|
| |
For the Three Months Ended March 31， |
| |
2022 |
|
2023 |
|
|
|
|
GAAP |
|
Impairment on investment in affiliates |
|
Share-based Compensation expenses |
|
Non-GAAP |
|
GAAP |
|
Impairment on investment in affiliates |
Share-based Compensation expenses |
|
Non-GAAP |
|
Change% |
|
|
Net revenues |
686,387 |
|
— |
|
— |
|
686,387 |
|
827,737 |
|
— |
— |
|
827,737 |
|
20.6 |
|
|
Selling expenses |
(74,868 |
) |
— |
|
— |
|
(74,868 |
) |
(66,521 |
) |
— |
(2,685 |
) |
(63,836 |
) |
(14.7 |
) |
|
General and administrative expenses |
(140,238 |
) |
— |
|
— |
|
(140,238 |
) |
(147,741 |
) |
— |
(434 |
) |
(147,307 |
) |
5.0 |
|
|
Income from operations |
20,589 |
|
— |
|
— |
|
20,589 |
|
60,355 |
|
— |
(3,119 |
) |
63,474 |
|
208.3 |
|
|
Operating margin |
3.0% |
|
|
|
|
3.0% |
|
7.3% |
|
|
|
7.7% |
|
155.6 |
|
| Share
of income and impairment of affiliates, net |
(70,634 |
) |
(78,277 |
) |
— |
|
7,643 |
|
(331 |
) |
— |
— |
|
(331 |
) |
(104.3 |
) |
| Net
income attributable to the Company’s shareholders |
(37,838 |
) |
(78,277 |
) |
— |
|
40,439 |
|
60,452 |
|
— |
(3,119 |
) |
63,571 |
|
57.2 |
|
| Net
margin |
(5.5% |
) |
|
|
|
5.9% |
|
7.3% |
|
|
|
7.7% |
|
30.4 |
|
| Net
income per share： |
|
|
|
|
|
|
|
|
|
|
|
Basic |
(0.04 |
) |
— |
|
— |
|
0.04 |
|
0.06 |
|
|
|
0.06 |
|
50.0 |
|
|
Diluted |
(0.04 |
) |
— |
|
— |
|
0.04 |
|
0.06 |
|
|
|
0.06 |
|
50.0 |
|
| Net
income per ADS： |
|
|
|
|
|
|
|
|
|
|
|
Basic |
(0.70 |
) |
— |
|
— |
|
0.75 |
|
1.13 |
|
|
|
1.18 |
|
57.3 |
|
|
Diluted |
(0.70 |
) |
— |
|
— |
|
0.75 |
|
1.13 |
|
|
|
1.18 |
|
57.3 |
|
|
Shares used in calculating net income per
share： |
|
|
|
|
|
|
|
|
|
|
|
Basic |
1,073,994,006 |
|
|
— |
|
1,073,994,006 |
|
1,073,981,523 |
|
|
|
1,073,981,523 |
|
|
|
Diluted |
1,073,994,006 |
|
|
— |
|
1,073,994,006 |
|
1,074,400,371 |
|
|
|
1,074,400,371 |
|
|
|
1 |
This announcement contains currency conversions of certain Renminbi
(“RMB”) amounts into U.S. dollars (US$) at specified rate solely
for the convenience of the reader. Unless otherwise noted, all
translations from RMB to U.S. dollars are made at a rate of
RMB6.8676 to US$1.00, the effective noon buying rate as of March
31, 2023 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 |
Non-GAAP operating income is defined as income of operation before
share-based compensation expenses. |
|
3 |
Non-GAAP net income attributable to the Company’s shareholders is
defined as net income attributable to the Company’s shareholders
before share-based compensation expenses and impairment on
investment in an affiliate. |
|
4 |
Non-GAAP diluted net income per ADS is defined as non-GAAP net
income attributable to the Company’s shareholders divided by total
weighted average number of diluted ADSs of the Company outstanding
during the period. |
|
5 |
This amount includes short term loans to third parties of RMB183.2
million as recorded in other receivables and an advance payment of
RMB200.0 million. |
|
6 |
Non-GAAP net margin is defined as non-GAAP net income attributable
to the Company's shareholders as a percentage of net revenues |
|
7 |
Non-GAAP basic net income per ADS is defined as non-GAAP net income
attributable to the Company’s shareholders divided by total
weighted average number of ADSs of the Company outstanding during
the period. |
|
8 |
Including approximately 1.0 million paying members for cancel
coverage plan and approximately 0.8 million paying members for
accidental death coverage plan. |
For more information, please contact:
Investor Relations
Tel: +86 (20) 8388-3191
Email: qiusr@fanhuaholdings.com
Source: Fanhua Inc.
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