GUANGZHOU, China, Dec. 17, 2018 /PRNewswire/ -- CNFinance Holdings
Limited (NYSE: CNF) ("CNFinance" or the "Company"), a leading home
equity loan service provider in China, today announced its unaudited financial
results for the third quarter ended September 30, 2018.
Third Quarter 2018 Operational Highlights
- Total loan origination volume[1] was RMB2.6 billion during the third quarter of
2018.
- Total outstanding loan principal[2] remained
relatively stable at RMB17.7 billion
as of September 30, 2018, compared to
RMB16.7 billion as of December 31, 2017.
- Total number of active borrowers[3] was 29,864 as of
September 30, 2018.
- Total number of transactions[4] was 4,771 during the
third quarter of 2018.
[1] Refers
to the total amount of loans CNFinance originated during the
relevant period.
|
[2] Refers
to the total amount of loans outstanding for loans CNFinance at the
end of the relevant period.
|
[3] Refers
to borrowers with outstanding loan principal of home equity loans
as at the end of a specific period.
|
[4] Refers
to the total number of loans CNFinance originated during the
relevant period.
|
Third Quarter 2018 Financial Highlights
- Total interest and fees income was RMB1,116.1 million (US$162.5 million) in the third quarter of 2018,
representing an increase of 18.6% from RMB940.8 million in the same period of 2017.
- Net income was RMB234.9 million
(US$34.2 million) in the third
quarter of 2018, representing an increase of 105.3% from
RMB114.4 million in the same period
of 2017.
- Basic and diluted earnings per ADS were RMB3.80 (US$0.55)
and RMB3.40 (US$0.50), respectively, in the third quarter of
2018, as compared to RMB1.80 and
RMB1.80, respectively, in the same
period of 2017.
Mr. Bin Zhai, Chairman and Chief Executive Officer of CNFinance,
commented, "I am pleased to report solid financial results in the
third quarter of 2018, which is also our first quarter as a public
company. Our listing on the NYSE last month was a significant
milestone in our corporate history of which we are all very proud.
We strategically decreased the pace of our expansion plans during
this quarter due to an uncertain macro-economic environment and
fluctuations in the Chinese real estate market which may adversely
impact our target borrowers. Our focus right now is on
strengthening our risk controls while striking a balance between
our business growth and loan quality. In particular, we have been
devoting resources towards strengthening our risk assessment
capabilities and implementing a more selective loan approval
process which is already yielding solid results with a lower
loan-to-value (LTV) ratio during the quarter. We will continue to
cooperate with our trust company partners and other funding
partners to optimize the capital structure and diversify our
funding sources. We remain committed to providing better services
to our micro- and small-enterprise owners in China and to generating sustainable growth
over a long-term."
Third Quarter 2018 Financial Results
Total interest and fees income for the third quarter
of 2018 increased by 18.6% to RMB1,116.1
million (US$162.5 million)
from RMB940.8 million in the same
period of 2017, primarily due to an increase in interest and
financing service fees and in the size of outstanding loan
principal.
Interest and financing service fee on loans increased by
18.3% to RMB1,112.0 million
(US$161.9 million) for the third
quarter of 2018 from RMB939.8 million
in the same period of 2017, primarily due to a substantial increase
in the Company's daily average outstanding loan principal from
RMB13.6 billion in the third quarter
of 2017 to RMB18.1 billion in the
same period in 2018.
Interest on deposits with banks increased by 310.0%
to RMB 4.1 million (US$0.6 million) for the third quarter of 2018
from RMB1.0 million in the same
period of 2017, primarily due to a substantial increase in the
amount of average daily bank deposits due to expansion of our
business.
Total interest expenses increased by 29.0% to
RMB521.5 million (US$75.9 million) for the third quarter of 2018
from RMB404.3 million in the same
period of 2017, primarily due to a substantial increase in
interest-bearing borrowings the Company obtained from different
funding sources.
Interest expense on interest-bearing
borrowings increased by 29.9% to RMB518.6 million (US$75.5
million) for the third quarter of 2018 from RMB399.2 million in the same period of 2017,
primarily due to a substantial increase in capital demand. The
outstanding balance of interest-bearing borrowings increased to
RMB16.2 billion as of September 30, 2018 from RMB14.2 billion as of September 30, 2017.
Interest expense on amounts due to related
parties decreased by 43.1% to RMB2.9 million (US$0.4
million) for the third quarter of 2018 from RMB5.1 million in the same period of 2017. The
interest expense on amounts due to related parties incurred in the
third quarter of 2017 was due to the interest expense paid to
Fanhua, Inc. for a related-party loan, which was fully repaid by
the end of 2017. Interest expense on amounts due to related parties
incurred in the third quarter of 2018 was due to financing costs
associated with the China Foreign Economy and Trade Trust Co., Ltd
(FOTIC) and its subsidiaries' subscriptions to Jinghua Structure
Fund 27's senior units.
Net interest and fees income increased by 10.8% to
RMB 594.6 million (US$86.6 million) for the third quarter of 2018
from RMB536.5 million in the same period of 2017.
Provision for credit losses increased by 3.2% to
RMB86.7 million (US$12.6 million) for the third quarter of 2018
from RMB84.0 million in the same period of 2017.
Total non-interest revenue was RMB0.1 million (US$0.01
million) for the third quarter of 2018, compared to a loss
amounted to RMB2.3 million in
the same period of 2017.
Total operating expenses decreased by 24.3% to
RMB190.6 million (US$27.8 million) for the third quarter of 2018,
compared with RMB251.9 million in the
same period of 2017.
Employee compensation and benefits decreased by 30.8% to
RMB114.9 million (US$16.7 million) for the third quarter of 2018
from RMB166.0 million in the same
period of 2017, primarily due to a decrease in the number of
employees and lower commissions paid.
Share-based compensation expense decreased by
78.3% to RMB9.9 million (US$1.4 million) for the third quarter of 2018
from RMB45.7 million in the same
period of 2017. Approximately 60% of the option grants vested
during 2017 with an additional 20% to become vested during 2018.
Therefore, compensation cost for 60% of the option grants was
recognized over its one-year requisite service period, while
compensation cost for 20% of the option grants was recognized over
its two-year requisite service period under front loading
approach.
Taxes and surcharges increased by 112.7% to
RMB21.7 million (US$3.2 million) for the third quarter of 2018
from RMB10.2 million in the same
period of 2017, primarily due to the following factors:
- Surcharges of value-added tax (VAT) increased from RMB1.5 million in the third quarter of 2017 to
RMB6.2 million (US$0.9 million) in the same period in 2018,
primarily attributable to business expansion.
- Non-deductible VAT increased from RMB8.8
million in the third quarter of 2017 to RMB15.6 million (US$2.3
million) in the same period in 2018, primarily attributable
to the "service fee charged to trust plans," which is a
non-deductible item. According to the current regulations in
China, "service fees charged to
trust plans" records a 6% VAT on service fees charged to trust
plans on the subsidiary level and cannot be recorded as costs on a
consolidated basis.
Other expenses increased by 57.2% to RMB26.1 million (US$3.8
million) for the third quarter of 2018 from RMB16.6 million in the same period of 2017,
primarily due to the increase in consulting fee incurred during the
ordinary course of business, which was RMB2.1 million in the third quarter of 2017 and
RMB11.8 million (US$1.7 million) in the same period in 2018.
Income tax expenses decreased by 2.4% to
RMB82 million (US$11.94 million) for the third quarter of 2018
from RMB84 million in the same period
of 2017, primarily due to the corporate income tax paid for the
disposal of subsidiaries in the third quarter of 2017.
Net income increased by 105.3% to RMB234.9 million (US$34.2million) for the third quarter of 2018
from RMB114.4 million in the same
period of 2017.
Basic and diluted earnings per ADS were RMB3.80 (US$0.55)
and RMB3.40 (US$0.50), respectively, compared to RMB1.80 and RMB1.80, respectively, in the same period of
2017. One ADS represents 20 ordinary shares.
As of September 30, 2018, the
Company had cash and cash equivalents of RMB1.7 billion (US$249.2
million), compared with RMB1.2
billion as of December 31,
2017.
The delinquency ratio for loans originated by the
Company, which represents total balance of outstanding loan
principal for which any installment payment is past-due (for one or
more days) as a percentage of the outstanding loan principal as of
the date, increased from 4.28% as of September 30, 2017 to 12.07% as of September 30, 2018, which was a result of a more
sophisticated and rigorously regulated market, which resulted in
our more prudent and disciplined collection efforts with a longer
loan collection process.
Business Outlook
For the fourth quarter of 2018, based on the information
available as of the date of this press release, we expect net
income to be between RMB130 million
and RMB180 million.
The above outlook is based on the current market conditions and
reflects our current and preliminary estimates of market and
operating conditions, which are all subject to substantial
uncertainty.
Exchange Rate
The Company's business is primarily conducted in China and all of the revenues are denominated
in Renminbi ("RMB"). This announcement contains translations of
certain RMB amounts into U.S. dollars at specified rates solely for
the convenience of the reader. Unless otherwise noted, all
translations from RMB to U.S. dollars are made at a rate of
RMB6.8680 to US$1.00, the exchange rate set forth in the H.10
statistical release of the Board of Governors of the Federal
Reserve System as of September 28,
2018. No representation is made that the RMB amounts could
have been, or could be, converted, realized or settled into U.S.
dollars at that rate on September 28,
2018, or at any other rate.
Safe Harbor Statement
This press release contains forward-looking statements made
under the "safe harbor" provisions of Section 21E of the Securities
Exchange Act of 1934, as amended, and the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can
be identified by terminology such as "will", "expects",
"anticipates", "future", "intends", "plans", "believes",
"estimates", "confident" and similar statements. The Company may
also make written or oral forward-looking statements in its reports
filed with or furnished to the U.S. Securities and Exchange
Commission, in its annual report to shareholders, in press releases
and other written materials and in oral statements made by its
officers, directors or employees to third parties. Any statements
that are not historical facts, including statements about the
Company's beliefs and expectations, are forward-looking statements
that involve factors, risks and uncertainties that could cause
actual results to differ materially from those in the
forward-looking statements. Such factors and risks include, but not
limited to the following: its goals and strategies, its ability to
achieve and maintain profitability, its ability to retain existing
borrowers and attract new borrowers, its ability to maintain and
enhance the relationship and business collaboration with its trust
company partners and to secure sufficient funding from them, the
effectiveness of its risk assessment process and risk management
system, its ability to maintain low delinquency ratios for loans it
originated, and relevant government policies and regulations
relating to the Company's corporate structure, business and
industry. Further information regarding these and other risks is
included in the Company's filings with the U.S. Securities and
Exchange Commission. All information provided in this press release
is current as of the date of the press release, and the Company
does not undertake any obligation to update such information,
except as required under applicable law.
About CNFinance Holdings Limited
CNFinance Holdings Limited (NYSE: CNF) ("CNFinance" or the
"Company) is a leading home equity loan service provider in
China. CNFinance facilitates loans
by connecting micro- and small-enterprise ("MSE") owners with its
funding partners. The Company's primary target borrower segment is
MSE owners who own real properties in Tier 1 and Tier 2 cities in
China. The loans CNFinance
facilitates are primarily funded through a trust lending model with
its trust company partners who are well-established with sufficient
funding sources and have licenses to engage in lending business
nationwide. The Company's risk mitigation mechanism is embedded in
the design of its loan products, supported by an integrated online
and offline process focusing on risks of both borrowers and
collateral and further enhanced by effective post-loan management
procedures.
For more information, please contact:
CNFinance
E-mail: ir@cashchina.com
Christensen
In China
Mr. Christian Arnell
Phone: +86-10-5900-1548
E-mail: carnell@christensenir.com
In US
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: lbergkamp@christensenir.com
CNFINANCE HOLDINGS
LIMITED
|
Unaudited condensed
consolidated balance sheets
|
|
|
|
|
|
|
|
December 31,
2017
|
September 30,
2018
|
|
|
RMB
|
RMB
|
US$
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
1,190,360,385
|
1,711,777,877
|
249,239,644
|
Loans principal,
interest and financing service fee
receivables(net of allowance of
RMB440,336,086 and
RMB744,252,757 as of December 31, 2017
and
September 30, 2018,
respectively)
|
|
16,261,167,957
|
17,036,189,915
|
2,480,516,878
|
Available-for-sale
investments
|
|
360,187,885
|
421,374,839
|
61,353,355
|
Property and
equipment
|
|
22,467,900
|
22,578,794
|
3,287,536
|
Intangible assets and
goodwill
|
|
3,342,463
|
3,558,024
|
518,058
|
Deferred tax
assets
|
|
112,529,947
|
187,870,899
|
27,354,528
|
Deposits
|
|
150,325,225
|
187,254,642
|
27,264,799
|
Other
assets
|
|
115,483,728
|
125,188,254
|
18,227,759
|
|
|
|
|
|
Total
assets
|
|
18,215,865,490
|
19,695,793,244
|
2,867,762,557
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
Interest-bearing
borrowings
|
|
|
|
|
Borrowings under agreements
to repurchase
|
|
3,512,114,961
|
4,064,522,045
|
591,805,772
|
Other borrowings
|
|
12,195,821,217
|
12,094,450,589
|
1,760,985,817
|
Accrued employee
benefits
|
|
68,827,798
|
49,612,898
|
7,223,777
|
Amount due to related
parties
|
|
-
|
126,272,031
|
18,385,561
|
Income tax
payable
|
|
383,338,483
|
610,725,762
|
88,923,378
|
Deferred tax
liabilities
|
|
776,971
|
1,086,210
|
158,155
|
Other
liabilities
|
|
223,737,268
|
213,946,139
|
31,151,156
|
|
|
|
|
|
Total
liabilities
|
|
16,384,616,698
|
17,160,615,674
|
2,498,633,616
|
|
|
|
|
|
Ordinary
shares(3,800,000,000 shares authorized, 1 share
with HKD0.0001 as par value and
1,230,434,040
shares with USD0.0001 as par value issued
as of
December 31, 2017 and September 30,
2018,
respectively)
|
|
-
|
819,211
|
119,279
|
Additional paid-in
capital
|
|
569,125,240
|
598,092,405
|
87,083,926
|
Retained
earnings
|
|
1,266,592,996
|
1,939,439,365
|
282,387,794
|
Accumulated other
comprehensive income
|
|
(4,469,444)
|
(3,173,411)
|
(462,058)
|
|
|
|
|
|
Total
shareholders' equity
|
|
1,831,248,792
|
2,535,177,570
|
369,128,941
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
|
18,215,865,490
|
19,695,793,244
|
2,867,762,557
|
CNFINANCE HOLDINGS
LIMITED
|
Unaudited condensed
consolidated statements of comprehensive income
|
|
|
|
|
|
Three months ended
September 30,
|
|
2017
|
2018
|
2018
|
|
RMB
|
RMB
|
US$
|
|
|
|
|
Interest and fees
income
|
|
|
|
Interest and
financing service fee on
loans
|
939,824,863
|
1,112,028,257
|
161,914,423
|
Interest on deposits
with banks
|
983,446
|
4,087,843
|
595,201
|
Total interest and
fees income
|
940,808,309
|
1,116,116,100
|
162,509,624
|
|
|
|
|
Interest
expense
|
|
|
|
Interest expense on
interest-bearing
borrowings
|
(399,176,984)
|
(518,629,842)
|
(75,513,955)
|
Interest expense on
amount due to
related parties
|
(5,102,000)
|
(2,907,586)
|
(423,353)
|
Total interest
expense
|
(404,278,984)
|
(521,537,428)
|
(75,937,308)
|
|
|
|
|
Net interest and
fees income
|
536,529,325
|
594,578,672
|
86,572,316
|
Provision for credit
losses
|
(84,011,721)
|
(86,672,968)
|
(12,619,826)
|
Net interest and
fees income after
provision for credit
losses
|
452,517,604
|
507,905,704
|
73,952,490
|
|
|
|
|
Realized (losses) /
gains on sales of
investments, net
|
(15,306,592)
|
184,986
|
26,934
|
Other
revenue
|
12,983,821
|
(113,534)
|
(16,531)
|
Total non-interest
revenue
|
(2,322,771)
|
71,452
|
10,403
|
|
|
|
|
Operating
expenses
|
|
|
|
Employee compensation
and benefits
|
(166,038,674)
|
(114,932,677)
|
(16,734,519)
|
Share-based
compensation expense
|
(45,672,442)
|
(9,928,792)
|
(1,445,660)
|
Taxes and
surcharges
|
(10,212,798)
|
(21,733,792)
|
(3,164,501)
|
Rental and property
management
expenses
|
(13,470,673)
|
(15,284,929)
|
(2,225,528)
|
Offering
expenses
|
-
|
(2,652,514)
|
(386,213)
|
Other
expenses
|
(16,554,559)
|
(26,098,020)
|
(3,799,945)
|
Total Operating
expenses
|
(251,949,146)
|
(190,630,724)
|
(27,756,366)
|
|
|
|
|
Income before
income taxes
|
198,245,687
|
317,346,432
|
46,206,527
|
Income tax
expense
|
(83,886,981)
|
(82,493,732)
|
(12,011,318)
|
Net
income
|
114,358,706
|
234,852,700
|
34,195,209
|
|
|
|
|
Earnings per
share
|
|
|
|
Basic
|
0.09
|
0.19
|
0.03
|
Diluted
|
0.09
|
0.17
|
0.03
|
|
|
|
|
Earnings per ADS (1
ADS equals 20
ordinary shares)
|
|
|
|
Basic
|
1.80
|
3.80
|
0.55
|
Diluted
|
1.80
|
3.40
|
0.50
|
|
|
|
|
Other
comprehensive income
|
|
|
|
Net unrealized
(losses)/ gains on available-for-
sale investments
|
12,848,473
|
528,814
|
76,997
|
Foreign currency
translation
adjustment
|
475,516
|
211,993
|
30,867
|
Comprehensive
income
|
127,682,695
|
235,593,507
|
34,303,073
|
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SOURCE CNFinance Holdings Limited