FANHUA Inc. (Nasdaq: FANH) (the “Company” or “FANHUA”), a leading
independent financial services provider in China, today announced
its unaudited financial results for the second quarter ended June
30, 20231.
Financial Highlights for the Second
Quarter of 2023:
(In thousands, except per ADS data and percentages) |
2022Q2(RMB) |
2023Q2(RMB) |
2023Q2(US$) |
Change % |
Total net revenues |
703,116 |
1,132,640 |
156,198 |
61.1 |
Operating income |
31,028 |
86,032 |
11,864 |
177.3 |
Net income attributable to shareholders |
32,123 |
76,515 |
10,551 |
138.2 |
Adjusted EBITDA2 |
35,711 |
104,141 |
14,361 |
191.6 |
Diluted net income per ADS |
0.60 |
1.42 |
0.20 |
136.7 |
Diluted adjusted EBITDA per ADS3 |
0.66 |
1.93 |
0.27 |
192.4 |
Cash, cash equivalent, short-term investments at end of the
period |
1,090,044 |
1,611,554 |
222,243 |
47.8 |
Key operating metrics |
|
|
|
|
Total life gross written premiums (“GWP”) |
2,778,100 |
4,340,012 |
598,515 |
56.2 |
- First year premium (“FYP”) |
615,723 |
1,558,093 |
214,871 |
153.1 |
- Renewal premium |
2,162,376 |
2,781,918 |
383,644 |
28.7 |
Number of life insurance performing agents |
10,653 |
8,189 |
- |
- |
FYP per life insurance performing agent |
47,671 |
122,436 |
- |
156.8 |
|
|
|
|
|
Mr. Yinan Hu, Co-Chairman and Chief
Executive Officer, commented: “FANHUA has delivered a set
of excellent results, boasting a remarkable revenue growth of 61.1%
year over year and an impressive operating income growth of 177.3%
year-over-year. These results were driven by a combination of our
continued execution of a well-defined strategy and a regulatory
body-mandated pricing rate change with regard to traditional life
insurance products ("pricing rate change"), which led to a strong
surge in certain savings products across the industry.
“I am particularly pleased that our focus on
quality services has resulted in a consistent improvement of our
persistency ratio which is a positive outcome for our insurance
partners. Our digitization and platform strategy continue to
deliver operating efficiency for us and is a key driver of our
financial results over the quarter.
“While the outlook for the industry in the
second half of 2023 is likely to be adversely impacted by the
recent pricing rate change, we remain confident that the medium- to
long-term outlook of the life insurance industry and in particular,
the third-party distribution channel that we operate in, remain
promising.
“We have recently released a new version of our
company mission statement and core values. In essence, our mission
revolves around empowering the growth of independent financial
advisors and fostering sustainable value creation for our clients.
We seek to become a globally leading technology-driven financial
services platform, distinguished by the highest standards of ethics
and trust for all our stakeholders.”
“We will celebrate the 25th anniversary of our
founding in September 2023, a milestone that everyone of us at
FANHUA is extremely proud of. Throughout the past quarter of a
century, we have demonstrated a strong track record of adapting our
business model and strategy to the constant changes in the industry
and market environment in which we operate in. For our
shareholders, since our IPO in 2007, we have achieved an
accumulated operating cash flow of RMB4.0 billion and returned over
RMB2.8 billion of capital through dividends and buybacks. With the
continued execution of our strategy, I am confident in our ability
to continuously deliver value for our shareholders.”
Commenting on the results, Mr. Ben Lin,
Co-Chairman and Chief Strategy Officer, stated: “The
second quarter and first half of 2023 results highlight that our
organic and inorganic growth strategies are working well, helping
us to grow significantly ahead of the Chinese insurance
market.”
“As we enter the second half of 2023, our core
strategy remains on fostering quality organic growth. We will
continue to work closely with our insurance partners to launch new
products and continue to execute on improving the quality and
productivity of our advisory team.”
“With over 2,000 independent agencies and
brokers in the market, we continue to see immense opportunity for
inorganic growth. Our financial position is amongst the strongest
within our industry with over RMB1.6 billion cash reserve4,
positioning us favorably to take advantage of consolidation
opportunities. These prospects could become more visible as the
industry experiences a short-term slowdown due to the pricing rate
change in the second half of 2023. Moreover, we are also exploring
opportunities to expand our strategy to markets beyond mainland
China. We see significant growth opportunities for independent
financial services distribution in markets such as Hong Kong and
Southeast Asia, which we are currently evaluating.”
Open Platform and M&A Contributions
over the Second Quarter of 2023
- The number of platform professional users who used our
open-platform reached 721 during the second quarter of 2023,
generating RMB546.1 million in first year premiums, which accounted
for 35.0% of our life insurance FYP;
- 26.2% of our life insurance FYP and 25.3% of our net revenues
for the life insurance business were generated from our
acquisitions made within the past 12 months.
Share Repurchase Program
On December 20, 2022, the Company’s board of
directors announced a share repurchase program under which the
Company may repurchase its American depositary shares, or ADSs,
with an aggregate value of US$20 million from time to time. As of
June 30, 2023, the Company had repurchased an aggregate of 458,341
ADSs, at an average price of approximately US$7.9 per ADS for a
total amount of approximately US$3.6 million under this share
repurchase program.
Acquisition of Minority Interests in
Ningbo Censhi Insurance Agency Co., Ltd. ("Censhi")
On July 20, 2023, the Company entered into
definitive agreements to acquire 10% of the minority interests in
Censhi, an insurance agency primarily engaged in the distribution
of life insurance. FANHUA also holds the right to acquire an
additional 50% of the equity interests in Censhi, which could
increase its shareholding in Censhi to 60% of its equity interests,
subject to Censhi achieving specific performance targets.
Business
Outlook and GuidanceWe expect to
deliver 50% year-over-year growth in life insurance first year
premiums and 50% year-over-year growth in adjusted EBITDA for
2023.
This forecast is based on the current market
conditions and reflects FANHUA’s preliminary estimate, which is
subject to change caused by various uncertainties.
Analysis of our Financial Results for
the Second Quarter of
2023
Revenues
Total net revenues were
RMB1,132.6 million (US$156.2 million) for the second quarter of
2023, representing an increase of 61.1% from RMB703.1 million for
the corresponding period in 2022.
- Net revenues for agency business were
RMB1,027.2 million (US$141.7 million) for the second quarter of
2023, representing an increase of 70.2% from RMB603.4 million for
the corresponding period in 2022. Total GWP increased by 55.2%
year-over-year to RMB4,423.9 million, of which FYP grew by 138.6%
year-over-year to RMB1,642.0 million while renewal premiums
increased by 28.7% year-over-year to RMB2,782.0 million.
- Net revenues for the life insurance business
were RMB980.1 million (US$135.2 million) for the second quarter of
2023, representing an increase of 71.7% from RMB570.7 million for
the corresponding period in 2022. The increase in net revenues for
the life insurance business was mainly due to i) effective
implementation of our strategy which resulted in strong growth in
sales agent productivity and the increase in number of
high-performing agents; ii) strong sales of higher-interest rate
savings products during the quarter as result of a recent pricing
rate change which lowered the pricing rate of traditional life
insurance products from 3.5% to 3% effective on August 1, 2023; and
iii) contribution from acquisitions completed in the first quarter
of 2023 which generated revenues of RMB247.8 million, partially
offset by the decrease in renewal commission income as a result of
the decreased weighted average renewal commission rate of renewal
premiums collected, and to a lesser extent, due to changes in
product mix. The decrease in weighted average renewal commission
rate was mainly because renewal commission rates derived from
long-term life insurance policies tend to recede over time
throughout the policy payment period, particularly after the sixth
year.Net revenues generated from our life insurance business
accounted for 86.5% of our total net revenues in the second quarter
of 2023, as compared to 81.2% in the same period of 2022.
- Net revenues for the non-life insurance business
(formerly categorized as “property and casualty insurance
business”) were RMB47.1 million (US$6.5 million) for the
second quarter of 2023, representing an increase of 43.6% from
RMB32.7 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 non-life insurance business accounted for 4.2% of our total net
revenues in the second quarter of 2023, as compared to 4.6% in the
same period of 2022.
- Net revenues for the claims adjusting business
were RMB105.5 million (US$14.5 million) for the second quarter of
2023, representing an increase of 5.8% from RMB99.7 million for the
corresponding period in 2022. Net revenues generated from the
claims adjusting business accounted for 9.3% of our total net
revenues in the second quarter of 2023, as compared to 14.2% in the
same period of 2022.
Gross profit
Total gross profit was RMB323.1
million (US$44.6 million) for the second quarter of 2023,
representing an increase of 31.3% from RMB246.0 for the
corresponding period in 2022. By product line, the results
were:
- Life insurance business recorded a gross
profit of RMB273.2 million (US$37.7 million), representing an
increase of 34.8% from the second quarter of 2022. Gross margin for
the period was 27.9%, as compared with 35.5% in the same period of
2022. The decrease in gross margin was mainly due to the impact of
a newly acquired managing general agency which earns relatively
lower gross margin than our self-operated business.
- Non-life insurance business recorded a gross
profit of RMB12.2 million (US$1.7 million), an increase of 28.4%
from the second quarter of 2022. Gross margin for the period was
25.9%, as compared with 28.9% in the same period of 2022. The
decrease in gross margin was mainly due to changes in product
mix.
- Claims adjusting business recorded a gross
profit of RMB 37.7 million (US$5.2 million), an increase of 11.2%
from the second quarter of 2022. Gross margin for the period was
35.8%, as compared with 34.0% in the same period of 2022.
Operating expenses
- Selling expenses were RMB64.3 million (US$8.9
million) for the second quarter of 2023, representing a decrease of
3.7% from RMB66.8 million for the corresponding period in 2022. The
decrease was due to cost savings from personnel optimization and
decreased number of sales outlets, partially offset by the increase
in sales training events and the recognition of RMB4.7 million
(US$0.7 million) share-based compensation expenses related to
shares options granted to MDRT members from sales teams under the
Company’s MDRT ("Million-Dollar Roundtable Members") Share
Incentive Plan in the second quarter of 2023.
- General and administrative expenses were
RMB172.8 million (US$23.8 million) for the second quarter of 2023,
representing an increase of 16.6% from RMB148.2 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 RMB23.2 million (US$3.2 million),
partially offset by cost 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 RMB86.0 million (US$11.9
million) for the second quarter of 2023, representing an increase
of 177.3% from RMB31.0 million for the corresponding period in
2022.
Operating margin was 7.6% for
the second quarter of 2023, compared to 4.4% for the corresponding
period in 2022.
Investment income was RMB12.3
million (US$1.7 million) for the second quarter of 2023,
representing an increase of 459.1% from RMB2.2 million for the
corresponding period in 2022. The investment income in the second
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
RMB20.2 million (US$2.8 million) for the second quarter of 2023,
representing an increase of 165.8% from RMB7.6 million for the
corresponding period in 2022. The effective tax rate for the second
quarter of 2023 was 19.5% compared with 22.6% for the corresponding
period in 2022.
Net income was RMB82.9 million
(US$11.4 million) for the second quarter of 2023, representing an
increase of 188.9% from RMB28.7 million for the corresponding
period in 2022.
Net income attributable to the Company’s
shareholders was RMB76.5 million (US$10.6 million) for the
second quarter of 2023, representing an increase of 138.2% from
RMB32.1 million for the corresponding period in 2022.
Net margin was 6.8% for the
second quarter of 2023, as compared to 4.6% for the corresponding
period in 2022.
Adjusted EBITDA2 was RMB104.1
million (US$14.4 million) for the second quarter of 2023,
representing an increase of 191.6% as compared to RMB35.7 million
for the corresponding period in 2022.
Adjusted EBITDA margin5 was
9.2% for the second quarter of 2023, as compared to 5.1% for the
corresponding period in 2022.
Basic and
diluted net income per ADS were RMB1.42
(US$0.20) and RMB1.42 (US$0.20) for the second quarter of 2023,
respectively, representing an increase of 136.7% from RMB0.60 and
RMB0.60 for the corresponding period in 2022, respectively.
Basic6 and diluted3 adjusted EBITDA
per ADS were RMB1.93 (US$0.27) and RMB1.93 (US$0.27) for
the second quarter of 2023, representing an increase of 192.4% from
RMB0.66 and RMB0.66 for the corresponding period in 2022,
respectively.
As of June 30, 2023, the Company had RMB1,611.6 million
(US$222.2 million) in cash, cash
equivalents and short-term
investments.
FANHUA’s Insurance Sales and Service Distribution
Network:
- As of June 30, 2023, excluding newly acquired entities,
FANHUA’s distribution network consisted of 606 sales outlets in 23
provinces and 89 services outlets in 31 provinces as of June 30,
2023, compared with 712 sales outlets in 23 provinces and 104
services outlets in 31 provinces as of June 30, 2022. The decrease
in the number of sales outlets reflected our focus on growing
profitable branches, coupled with the challenging decisions to
close those which were not yielding profits. The number of the
Company's in-house claims adjustors was 2,120 as of June 30, 2023,
compared with 2,197 as of June 30, 2022.
Conference Call
The Company will host a conference call to
discuss its second quarter 2023 financial results as per the
following details.
Time: 9:00 p.m. Eastern Daylight Time on August 30, 2023
or 9:00 a.m. Beijing/Hong Kong Time on
August 31, 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/BId6d3ca220d82489bade7c973ed379772
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/e3jg2sip
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.
For more information about FANHUA Inc., please visit
https://ir.fanhgroup.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 including
macroeconomic conditions in China. 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 adjusted
EBITDA, adjusted EBITDA margin and basic and diluted adjusted
EBITDA per ADS, all of which are non-GAAP financial measures, as
supplemental measures to review and assess operating performance.
Adjusted EBITDA is defined as net income before income tax expense,
share of income and impairment from affiliates, investment income,
interest income, financial cost, depreciation, amortization of
intangible assets and share-based compensation expenses. Adjusted
EBITDA margin is defined as adjusted EBITDA as a percentage of net
revenues. Basic adjusted EBITDA per ADS is defined as adjusted
EBITDA divided by total weighted average number of ADSs of the
Company outstanding during the period. Diluted adjusted EBITDA per
ADS is defined as adjusted EBITDA 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 interest income, investment income,
financial cost, income tax expense, depreciation, amortization of
intangible assets, share of income and impairment from affiliates
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 Net Income to
Adjusted EBITDA and Adjusted EBITDA Margin” set forth at the end of
this press release.
|
FANHUA INC.Unaudited
Condensed Consolidated Balance Sheets (In
thousands) |
|
|
As of December
31, |
|
As of June
30, |
|
As of June
30, |
|
2022 |
|
2023 |
|
2023 |
|
RMB |
|
RMB |
|
US$ |
ASSETS: |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
567,525 |
|
|
582,184 |
|
|
80,287 |
|
Restricted cash |
59,957 |
|
|
57,251 |
|
|
7,895 |
|
Short term investments |
347,754 |
|
|
1,029,370 |
|
|
141,957 |
|
Accounts receivable, net |
667,554 |
|
|
913,052 |
|
|
125,916 |
|
Other receivables |
231,049 |
|
|
183,509 |
|
|
25,307 |
|
Other current assets |
419,735 |
|
|
24,066 |
|
|
3,318 |
|
Total current assets |
2,293,574 |
|
|
2,789,432 |
|
|
384,680 |
|
|
|
|
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
|
|
|
Restricted bank deposit – non-current |
20,729 |
|
|
22,152 |
|
|
3,055 |
|
Contract assets, net - non-current |
385,834 |
|
|
595,250 |
|
|
82,089 |
|
Property, plant, and equipment, net |
98,459 |
|
|
93,885 |
|
|
12,947 |
|
Goodwill and intangible assets, net |
109,997 |
|
|
481,536 |
|
|
66,407 |
|
Deferred tax assets |
20,402 |
|
|
35,886 |
|
|
4,949 |
|
Investment in affiliates |
4,035 |
|
|
3,495 |
|
|
482 |
|
Other non-current assets |
11,400 |
|
|
20,115 |
|
|
2,774 |
|
Right of use assets |
145,086 |
|
|
112,396 |
|
|
15,500 |
|
Total non-current assets |
795,942 |
|
|
1,364,715 |
|
|
188,203 |
|
Total assets |
3,089,516 |
|
|
4,154,147 |
|
|
572,883 |
|
Current liabilities: |
|
|
|
Short-term loan |
35,679 |
|
|
202,869 |
|
|
27,977 |
|
Accounts payable |
436,784 |
|
|
620,652 |
|
|
85,592 |
|
Insurance premium payables |
16,580 |
|
|
16,302 |
|
|
2,248 |
|
Other payables and accrued expenses |
174,326 |
|
|
249,184 |
|
|
34,364 |
|
Accrued payroll |
96,279 |
|
|
93,484 |
|
|
12,892 |
|
Income tax payable |
130,024 |
|
|
114,184 |
|
|
15,747 |
|
Current operating lease liability |
62,304 |
|
|
47,994 |
|
|
6,619 |
|
Total current liabilities |
951,976 |
|
|
1,344,669 |
|
|
185,439 |
|
|
|
|
|
Non-current liabilities: |
|
|
|
Accounts payable – non-current |
192,917 |
|
|
328,260 |
|
|
45,269 |
|
Other tax liabilities |
36,647 |
|
|
34,653 |
|
|
4,779 |
|
Deferred tax liabilities |
102,455 |
|
|
144,094 |
|
|
19,871 |
|
Non-current operating lease liability |
74,190 |
|
|
55,161 |
|
|
7,607 |
|
Total non-current
liabilities |
406,209 |
|
|
562,168 |
|
|
77,526 |
|
Total liabilities |
1,358,185 |
|
|
1,906,837 |
|
|
262,965 |
|
|
|
|
|
Ordinary shares |
8,091 |
|
|
8,675 |
|
|
1,196 |
|
Treasury stock |
(10 |
) |
|
(65 |
) |
|
(9 |
) |
Additional Paid-in capital |
461 |
|
|
196,993 |
|
|
27,167 |
|
Statutory reserves |
559,520 |
|
|
559,520 |
|
|
77,161 |
|
Retained earnings |
1,087,984 |
|
|
1,224,951 |
|
|
168,928 |
|
Accumulated other comprehensive loss |
(32,643 |
) |
|
(21,068 |
) |
|
(2,905 |
) |
Total shareholders’ equity |
1,623,403 |
|
|
1,969,006 |
|
|
271,538 |
|
Non-controlling interests |
107,928 |
|
|
278,304 |
|
|
38,380 |
|
Total equity |
1,731,331 |
|
|
2,247,310 |
|
|
309,918 |
|
Total liabilities and equity |
3,089,516 |
|
|
4,154,147 |
|
|
572,883 |
|
|
FANHUA INC.Unaudited Condensed
Consolidated Statements of Income and Comprehensive
Income (In thousands, except for shares and per
share data) |
|
|
For the Three Months Ended |
|
For the Six Months Ended |
|
June 30, |
|
June 30, |
|
2022 |
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
2023 |
|
RMB |
|
RMB |
|
US$ |
|
RMB |
|
RMB |
|
US$ |
Net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agency |
603,406 |
|
|
1,027,190 |
|
|
141,656 |
|
|
1,191,394 |
|
|
1,752,742 |
|
|
241,714 |
|
Life insurance business |
570,654 |
|
|
980,061 |
|
|
135,157 |
|
|
1,129,228 |
|
|
1,663,463 |
|
|
229,402 |
|
Non-life insurance business |
32,752 |
|
|
47,129 |
|
|
6,499 |
|
|
62,166 |
|
|
89,279 |
|
|
12,312 |
|
Claims adjusting |
99,710 |
|
|
105,450 |
|
|
14,542 |
|
|
198,109 |
|
|
207,635 |
|
|
28,634 |
|
Total net
revenues |
703,116 |
|
|
1,132,640 |
|
|
156,198 |
|
|
1,389,503 |
|
|
1,960,377 |
|
|
270,348 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
Agency |
(391,258 |
) |
|
(741,805 |
) |
|
(102,300 |
) |
|
(774,701 |
) |
|
(1,229,172 |
) |
|
(169,511 |
) |
Life insurance business |
(367,976 |
) |
|
(706,886 |
) |
|
(97,484 |
) |
|
(731,503 |
) |
|
(1,163,502 |
) |
|
(160,455 |
) |
Non-life insurance business |
(23,282 |
) |
|
(34,919 |
) |
|
(4,816 |
) |
|
(43,198 |
) |
|
(65,670 |
) |
|
(9,056 |
) |
Claims adjusting |
(65,827 |
) |
|
(67,726 |
) |
|
(9,340 |
) |
|
(133,076 |
) |
|
(133,479 |
) |
|
(18,408 |
) |
Total operating
costs |
(457,085 |
) |
|
(809,531 |
) |
|
(111,640 |
) |
|
(907,777 |
) |
|
(1,362,651 |
) |
|
(187,919 |
) |
Selling expenses |
(66,761 |
) |
|
(64,281 |
) |
|
(8,864 |
) |
|
(141,629 |
) |
|
(130,802 |
) |
|
(18,038 |
) |
General and administrative
expenses |
(148,242 |
) |
|
(172,796 |
) |
|
(23,830 |
) |
|
(288,480 |
) |
|
(320,537 |
) |
|
(44,204 |
) |
Total operating costs
and expenses |
(672,088 |
) |
|
(1,046,608 |
) |
|
(144,334 |
) |
|
(1,337,886 |
) |
|
(1,813,990 |
) |
|
(250,161 |
) |
Income from
operations |
31,028 |
|
|
86,032 |
|
|
11,864 |
|
|
51,617 |
|
|
146,387 |
|
|
20,187 |
|
Other income, net: |
|
|
|
|
|
|
Investment income |
2,220 |
|
|
12,325 |
|
|
1,700 |
|
|
6,274 |
|
|
24,957 |
|
|
3,442 |
|
Interest income |
1,158 |
|
|
3,770 |
|
|
520 |
|
|
1,837 |
|
|
9,097 |
|
|
1,255 |
|
Financial cost |
— |
|
|
(2,723 |
) |
|
(376 |
) |
|
— |
|
|
(4,682 |
) |
|
(646 |
) |
Others, net |
(565 |
) |
|
3,940 |
|
|
543 |
|
|
9,408 |
|
|
6,482 |
|
|
894 |
|
Income from operations
before income taxes and share income of affiliates |
33,841 |
|
|
103,344 |
|
|
14,251 |
|
|
69,136 |
|
|
182,241 |
|
|
25,132 |
|
Income tax expense |
(7,641 |
) |
|
(20,202 |
) |
|
(2,786 |
) |
|
(13,989 |
) |
|
(38,289 |
) |
|
(5,280 |
) |
Share of income (loss) of
affiliates, net of impairment |
2,500 |
|
|
(209 |
) |
|
(29 |
) |
|
(68,134 |
) |
|
(540 |
) |
|
(74 |
) |
Net (loss)
income |
28,700 |
|
|
82,933 |
|
|
11,436 |
|
|
(12,987 |
) |
|
143,412 |
|
|
19,778 |
|
Less: net (loss) income
attributable to non-controlling interests |
(3,423 |
) |
|
6,418 |
|
|
885 |
|
|
(7,272 |
) |
|
6,445 |
|
|
889 |
|
Net (loss) income
attributable to the Company’s shareholders |
32,123 |
|
|
76,515 |
|
|
10,551 |
|
|
(5,715 |
) |
|
136,967 |
|
|
18,889 |
|
|
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 |
|
For The Six Months
Ended |
|
June 30, |
|
June 30, |
|
2022 |
|
2023 |
|
2023 |
|
2022 |
2023 |
|
2023 |
|
RMB |
|
RMB |
|
|
US$ |
|
RMB |
RMB |
|
US$ |
Net (loss) income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
0.03 |
|
|
0.07 |
|
|
0.01 |
|
|
(0.01 |
) |
|
0.13 |
|
|
0.02 |
Diluted |
0.03 |
|
|
0.07 |
|
|
0.01 |
|
|
(0.01 |
) |
|
0.13 |
|
|
0.02 |
Net (loss) income per ADS: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
0.60 |
|
|
1.42 |
|
|
0.20 |
|
|
(0.11 |
) |
|
2.54 |
|
|
0.35 |
Diluted |
0.60 |
|
|
1.42 |
|
|
0.20 |
|
|
(0.11 |
) |
|
2.54 |
|
|
0.35 |
Shares used in calculating net income per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
1,074,291,784 |
|
|
1,080,192,033 |
|
|
1,080,192,033 |
|
|
1,074,143,718 |
|
|
1,077,103,934 |
|
|
1,077,103,934 |
Diluted |
1,074,291,784 |
|
|
1,080,669,621 |
|
|
1,080,669,621 |
|
|
1,074,143,718 |
|
|
1,077,451,347 |
|
|
1,077,451,347 |
Net
(loss) income |
28,700 |
|
|
82,933 |
|
|
11,436 |
|
|
(12,987 |
) |
|
143,412 |
|
|
19,778 |
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
706 |
|
|
9,767 |
|
|
1,347 |
|
|
796 |
|
|
8,880 |
|
|
1,225 |
Share of other comprehensive loss of affiliates |
5,101 |
|
|
— |
|
|
— |
|
|
4,688 |
|
|
— |
|
|
— |
Unrealized net (loss) gains on available-for-sale investments |
4,502 |
|
|
2,515 |
|
|
347 |
|
|
(610 |
) |
|
2,695 |
|
|
372 |
Comprehensive (loss)
income |
39,009 |
|
|
95,215 |
|
|
13,130 |
|
|
(8,113 |
) |
|
154,987 |
|
|
21,375 |
Less: Comprehensive (loss) income attributable to the
non-controlling interests |
(3,423 |
) |
|
6,418 |
|
|
885 |
|
|
(7,272 |
) |
|
6,445 |
|
|
889 |
Comprehensive (loss) income attributable to the
Company’s shareholders |
42,432 |
|
|
88,797 |
|
|
12,245 |
|
|
(841 |
) |
|
148,542 |
|
|
20,486 |
|
FANHUA INC.Unaudited
Condensed Consolidated Statements of Cash
Flow (In thousands, except for shares and per
share data) |
|
|
For the
Three Months Ended |
|
For the Six
Months Ended |
|
June 30, |
|
June 30, |
|
2022 |
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
2023 |
|
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
OPERATING
ACTIVITIES |
|
|
|
|
|
|
Net (loss) income |
28,700 |
|
|
82,933 |
|
|
11,436 |
|
|
(12,987 |
) |
|
143,412 |
|
|
19,778 |
|
Adjustments to reconcile net
income to net cash generated from operating activities: |
|
|
|
|
|
|
Investment income |
(149 |
) |
|
(3,460 |
) |
|
(477 |
) |
|
(1,798 |
) |
|
(6,989 |
) |
|
(964 |
) |
Share of income of
affiliates |
(2,500 |
) |
|
209 |
|
|
29 |
|
|
68,134 |
|
|
540 |
|
|
74 |
|
Other non-cash
adjustments |
44,394 |
|
|
44,565 |
|
|
6,147 |
|
|
80,049 |
|
|
74,859 |
|
|
10,324 |
|
Changes in operating assets
and liabilities |
(20,324 |
) |
|
(71,862 |
) |
|
(9,910 |
) |
|
(170,351 |
) |
|
(178,173 |
) |
|
(24,572 |
) |
Net cash used in
operating activities |
50,121 |
|
|
52,385 |
|
|
7,225 |
|
|
(36,953 |
) |
|
33,649 |
|
|
4,640 |
|
Cash flows
from investing activities: |
|
|
|
|
|
|
Purchase of short-term
investments |
(686,000 |
) |
|
(1,487,980 |
) |
|
(205,203 |
) |
|
(1,541,000 |
) |
|
(2,103,010 |
) |
|
(290,019 |
) |
Proceeds from disposal of
short-term investments |
765,884 |
|
|
1,361,816 |
|
|
187,803 |
|
|
1,834,331 |
|
|
1,823,149 |
|
|
251,423 |
|
Prepayment for acquisition of
short-term investments |
(100,000 |
) |
|
— |
|
|
— |
|
|
(100,000 |
) |
|
— |
|
|
— |
|
Cash rendered for loan
receivables from a third party |
(100,000 |
) |
|
(80,000 |
) |
|
(11,032 |
) |
|
(100,000 |
) |
|
(80,000 |
) |
|
(11,032 |
) |
Repayment of loan receivables
from a third party |
— |
|
|
180,000 |
|
|
24,823 |
|
|
— |
|
|
180,000 |
|
|
24,823 |
|
Cash acquired from business
acquisitions |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
21,208 |
|
|
2,925 |
|
Others |
(6,392 |
) |
|
(4,235 |
) |
|
(584 |
) |
|
(68,156 |
) |
|
(6,185 |
) |
|
(852 |
) |
Net cash generated
from (used in) investing activities |
(126,508 |
) |
|
(30,399 |
) |
|
(4,193 |
) |
|
25,175 |
|
|
(164,838 |
) |
|
(22,732 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
Dividends paid |
(52,069 |
) |
|
— |
|
|
— |
|
|
(52,069 |
) |
|
— |
|
|
— |
|
Proceeds from bank and other
borrowings |
— |
|
|
12,000 |
|
|
1,655 |
|
|
— |
|
|
182,268 |
|
|
25,136 |
|
Repayment of bank and other
borrowings |
— |
|
|
(18,026 |
) |
|
(2,486 |
) |
|
— |
|
|
(18,026 |
) |
|
(2,486 |
) |
Interests paid |
— |
|
|
(2,425 |
) |
|
(334 |
) |
|
— |
|
|
(4,128 |
) |
|
(569 |
) |
Acquisition of additional
equity interests in non-wholly owned subsidiaries |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(110 |
) |
|
(15 |
) |
Repurchase of ordinary shares
from open market |
— |
|
|
(22,107 |
) |
|
(3,049 |
) |
|
— |
|
|
(22,107 |
) |
|
(3,049 |
) |
Net cash
generated from financing
activities |
(52,069 |
) |
|
(30,558 |
) |
|
(4,214 |
) |
|
(52,069 |
) |
|
137,897 |
|
|
19,017 |
|
Net increase in cash,
cash equivalents and restricted cash |
(128,456 |
) |
|
(8,572 |
) |
|
(1,182 |
) |
|
(63,847 |
) |
|
6,708 |
|
|
925 |
|
Cash, cash equivalents
and restricted cash at beginning of period |
721,388 |
|
|
660,781 |
|
|
91,126 |
|
|
656,522 |
|
|
648,211 |
|
|
89,392 |
|
Effect of exchange rate
changes on cash and cash equivalents |
(507 |
) |
|
9,378 |
|
|
1,293 |
|
|
(250 |
) |
|
6,668 |
|
|
920 |
|
Cash, cash equivalents
and restricted cash at end of period |
592,425 |
|
|
661,587 |
|
|
91,237 |
|
|
592,425 |
|
|
661,587 |
|
|
91,237 |
|
|
FANHUA
INC.Reconciliations of Net Income to Adjusted
EBITDA and Adjusted EBITDA Margin(In thousands,
except for shares and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The
Three Months Ended |
|
For The Six
Months Ended |
|
30-Jun |
|
30-Jun |
|
2022 |
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
2023 |
|
RMB |
|
RMB |
|
USD |
|
RMB |
|
RMB |
|
USD |
Net
income |
28,700 |
|
|
82,933 |
|
|
11,436 |
|
|
(12,987 |
) |
|
143,412 |
|
|
19,778 |
|
Income tax expense |
7,641 |
|
|
20,202 |
|
|
2,786 |
|
|
13,989 |
|
|
38,289 |
|
|
5,280 |
|
Share of income and impairment
of affiliates, net |
(2,500 |
) |
|
209 |
|
|
29 |
|
|
68,134 |
|
|
540 |
|
|
74 |
|
Investment income |
(2,220 |
) |
|
(12,325 |
) |
|
(1,700 |
) |
|
(6,274 |
) |
|
(24,957 |
) |
|
(3,442 |
) |
Interest income |
(1,158 |
) |
|
(3,770 |
) |
|
(520 |
) |
|
(1,837 |
) |
|
(9,097 |
) |
|
(1,255 |
) |
Financial cost |
— |
|
|
2,723 |
|
|
376 |
|
|
— |
|
|
4,682 |
|
|
646 |
|
Depreciation |
5,248 |
|
|
4,241 |
|
|
585 |
|
|
10,023 |
|
|
8,371 |
|
|
1,154 |
|
Amortization of intangible
assets |
— |
|
|
4,864 |
|
|
671 |
|
|
— |
|
|
8,797 |
|
|
1,213 |
|
Compensation expenses
associated with stock option |
— |
|
|
5,064 |
|
|
698 |
|
|
— |
|
|
8,184 |
|
|
1,129 |
|
Adjusted
EBITDA |
35,711 |
|
|
104,141 |
|
|
14,361 |
|
|
71,048 |
|
|
178,221 |
|
|
24,577 |
|
Total net revenues |
703,116 |
|
|
1,132,640 |
|
|
156,198 |
|
|
1,389,503 |
|
|
1,960,377 |
|
|
270,348 |
|
Adjusted EBITDA Margin |
5.1 |
% |
|
9.2 |
% |
|
9.2 |
% |
|
5.1 |
% |
|
9.1 |
% |
|
9.1 |
% |
Adjusted EBITDA per
ADS : |
|
|
|
|
|
|
Basic |
0.66 |
|
|
1.93 |
|
|
0.27 |
|
|
1.32 |
|
|
3.31 |
|
|
0.46 |
|
Diluted |
0.66 |
|
|
1.93 |
|
|
0.27 |
|
|
1.32 |
|
|
3.31 |
|
|
0.46 |
|
Shares used in calculating adjusted
EBITDA per share: |
|
|
|
|
|
|
Basic |
1,074,291,784 |
|
|
1,080,192,033 |
|
|
1,080,192,033 |
|
|
1,074,143,718 |
|
|
1,077,103,934 |
|
|
1,077,103,934 |
|
Diluted |
1,074,291,784 |
|
|
1,080,669,621 |
|
|
1,080,669,621 |
|
|
1,074,143,718 |
|
|
1,077,451,347 |
|
|
1,077,451,347 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For more information, please contact:
Investor RelationsTel: +86 (20) 8388-3191Email:
qiusr@fanhgroup.comSource: FANHUA Inc.
_____________________
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
RMB7.2513 to US$1.00, the effective noon buying rate as of June 30,
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 |
|
Adjusted EBITDA is defined as net
income before income tax expense, share of income and impairment
from affiliates, interest income, financial cost, investment
income, depreciation, amortization of intangible assets and
share-based compensation expenses. |
3 |
|
Diluted adjusted EBITDA per ADS
is defined as adjusted EBITDA divided by total weighted average
number of diluted ADSs of the Company outstanding during the
period. |
4 |
|
Including cash, cash equivalent
and short-term investments |
5 |
|
Adjusted EBITDA margin is defined
as adjusted EBITDA as a percentage of net revenues. |
6 |
|
Basic adjusted EBITDA per ADS is
defined as adjusted EBITDA divided by total weighted average number
of ADSs of the Company outstanding during the period. |
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