UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of September 2019

 


 

Commission File Number: 001-37657

 


 

YIRENDAI LTD.

 

10/F, Building 9, 91 Jianguo Road

Chaoyang District, Beijing 100022

The People’s Republic of China

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F     x          Form 40-F     o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

 


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Yiren Digital Ltd.

 

 

 

 

By

/s/ Yu Cong

 

Name:

Yu Cong

 

Title:

Co-Chief Financial Officer

 

Date: September 4, 2019

 

2


 

Exhibit Index

 

Exhibit 99.1—Press Release

 

3


Exhibit 99.1

 

Yirendai Reports Second Quarter 2019 Financial Results

 

BEIJING, Sept. 03, 2019 (GLOBE NEWSWIRE) — Yirendai Ltd. (NYSE: YRD) (“Yirendai” or the “Company”), a leading fintech company in China, today announced its unaudited financial results for the second quarter ended June 30, 2019.

 

Second Quarter 2019 Operational Highlights

 

Wealth Management—Yiren Wealth

 

·         Cumulative number of investors served reached 2,185,513, representing an increase of 1% from 2,159,490 in the first quarter of 2019 and compared to 1,974,984 in the second quarter of 2018.

 

·         Number of active investors in the second quarter of 2019 was 671,957, representing a decrease of 13% from 768,514 in the first quarter of 2019 and compared to 928,251 in the second quarter of 2018. 

 

·         Total assets under management (“AUM”) for Yiren Wealth was RMB 43,604.2 million (US$ 6,351.7 million) as of June 30, 2019, representing a decrease of 7% from RMB 46,663.1 million as of March 31, 2019. Average AUM per investor reached RMB 149,480 (US$ 21,774) as of June 30, 2019, representing an increase of 7% from RMB 139,473 as of March 31, 2019. 

 

·         AUM of non-P2P products amounted to RMB 354.3 million (US$ 51.6 million) in the second quarter of 2019, representing a decrease of 23% from RMB 457.7 million in the first quarter of 2019 and compared to RMB 951.0 million in the second quarter of 2018. Non-P2P products include money market funds, mutual funds and insurance.

 


 

Consumer Credit—Yiren Credit

 

·         Total loan originations in the second quarter of 2019 reached RMB 9.7 billion (US$1.4 billion), representing a decrease of 12% from RMB 10.9 billion in the first quarter of 2019 and compared to RMB 18.2 billion in the second quarter of 2018.

 

·         Cumulative number of borrowers served reached 4,491,466, representing an increase of 2% from 4,404,812 in the first quarter of 2019 and compared to 4,027,254 in the second quarter of 2018.

 

·         Number of borrowers in the second quarter of 2019 was 135,246, representing a decrease of 10% from 149,715 in the first quarter of 2019 and compared to 267,628 in the second quarter of 2018.

 

·         The percentage of loan volume generated by repeat borrowers was 35.9% in the second quarter of 2019. 

 

·         52.5% of loan originations were generated online in the second quarter of 2019.

 

·         Remaining principal of performing loans reached RMB 58,071.3 million (US$8,459.0 million) as of June 30, 2019, representing a decrease of 8% from RMB 63,213.8 million as of March 31, 2019.

 

“We achieved another solid quarter of operation in both credit and wealth management business, in particular we gained strong momentum in working with our bank partners to diversify our funding source,” said Mr. Ning Tang, Chairman and Chief Executive Officer of Yirendai. “We are seeing strong demand from bank and institutional partners for our stable consumer loan assets, which demonstrated our industry leadership position and strong asset sourcing capabilities leveraging our online/offline network. Our technology enabling solution further strengthen our partnership with banks, we have successfully deployed our turn-key online lending solution to the Bank of Ningxia, which marks the first milestone of our fintech solution for financial institutions. On wealth management, as part of our business transition to an asset-allocation based online wealth management platform, Yiren Wealth launched a new brand and rolled out several new products including bank savings, insurance and target risk funds on our wealth management platforms. We also released the first asset allocation guide targeted at China’s mass affluent population. In the second half of 2019, we will continue to focus on diversifying our wealth management product portfolio, acquiring key talent as well as streamlining our operations to better serve our investors. On the regulation front, we have increased our registered capital to RMB 1 billion, to prepare ourselves for the potential upcoming regulatory trial program.”

 

“On credit performance and risk management, we saw slight volatilities in early delinquencies this quarter as a result of industry conditions and a declining loan balance,” said Mr. Huan Chen, Board of Director and Chief Risk Officer of Yirendai. “To improve our overall risk levels, we have been actively optimizing our product portfolio to reduce risk exposure and enhancing our risk data set to lower borrowers’ over-indebteness risk. Our integration with institutional bank funding could provide further risk performance improvement as we connect to PBOC credit system directly.”

 


 

“This quarter, we continue to maintain stable loan originations volume as we prioritize risk management and quality of asset growth,” said Mr. Dennis Cong, Senior V.P. of Yirendai. “Diversifying our funding source continues to be a top priority this year and we are pleased to announce that we have obtained close to RMB 30 billion line of credit from our institutional funding partners, thus we expect a significant portion of our new loan origination volume to be from institutional funding towards the end of 2019. This quarter, we maintained a healthy operating efficiency and profitability despite low business volume, our balance sheet remained strong with approximately RMB 3.1 billion of cash and short-term liquidity.”

 

Second Quarter 2019 Financial Results

 

Total amount of loans facilitated in the second quarter of 2019 was RMB 9,673.8 million (US$1,409.2 million), compared to RMB 18,180.3 million in the same period last year. As of June 30, 2019, the total outstanding principal amount of the performing loans was RMB 58.1 billion (US$8.5 billion), decreased by 8% from RMB 63.2 billion as of March 31, 2019.

 

Total net revenue in the second quarter of 2019 was RMB 2,216.6 million (US$322.9 million), compared to RMB 2,987.3 million in the same period last year. Revenue from Yiren Credit reached RMB 1,624.3 million (US$236.6 million), representing a decrease of 34% from RMB 2,455.7 million in the second quarter of 2018. Revenue from Yiren Wealth reached RMB 592.4 million (US$86.3 million), representing an increase of 11% from RMB 531.6 million in the second quarter of 2018.

 

Sales and marketing expenses in the second quarter of 2019 were RMB 1,208.6 million (US$176.1 million), compared to RMB 1,816.0 million in the same period last year. Sales and marketing expenses in the second quarter of 2019 accounted for 12.5% of the total amount of loans facilitated, as compared to 10.0% in the same period last year mainly due to a decrease in the amount of loans facilitated.

 


 

Origination and servicing costs in the second quarter of 2019 were RMB 162.9 million (US$23.7 million), compared to RMB 307.5 million in the same period last year. Origination and servicing costs in the second quarter of 2019 accounted for 1.7% of the total amount of loans facilitated, compared to 1.7% in the same period last year.

 

General and administrative expenses in the second quarter of 2019 were RMB 175.5 million (US$25.6 million), compared to RMB 504.2 million in the same period last year. General and administrative expenses in the second quarter of 2019 accounted for 7.9% of the total net revenue, compared to 16.9% in the same period last year mainly due to an expense of RMB 200.0 million related to the quality assurance program in the second quarter of 2018.

 

Allowance for contract assets and receivables in the second quarter of 2019 were RMB 500.9 million (US$73.0 million), compared to RMB 275.7 million in the same period last year. The increase was mainly attributable to changes in future collectability estimates.

 

Income tax expense in the second quarter of 2019 was RMB 61.9 million (US$9.0 million).

 

Net income in the second quarter of 2019 was RMB 154.5 million (US$22.5 million), compared to RMB 193.8 million in the same period last year.

 

Adjusted EBITDA (non-GAAP) in the second quarter of 2019 was RMB 239.9 million (US$35.0 million), compared to RMB 272.3 million in the same period last year. Adjusted EBITDA margin1 (non-GAAP) in the second quarter of 2019 was 10.8%, compared to 9.1% in the same period last year.

 

Basic income per ADS in the second quarter of 2019 was RMB 1.67 (US$0.24), compared to RMB 2.11 in the same period last year.

 

Diluted income per ADS in the second quarter of 2019 was RMB 1.66 (US$0.24), compared to RMB 2.09 in the same period last year.

 


1 Adjusted EBITDA margin is a non-GAAP financial measure calculated as adjusted EBITDA divided by total net revenue.

 


 

Net cash used in operating activities in the second quarter of 2019 was RMB 331.8 million (US$48.3 million), compared to net cash used of RMB 1,905.3 million in the same period last year.

 

As of June 30, 2019, cash and cash equivalents was RMB 2,706.5 million (US$394.3 million), compared to RMB 2,519.4 million as of March 31, 2019. As of June 30, 2019, the balance of held-to-maturity investments was RMB 9.5 million (US$1.4 million), compared to RMB 312.8 million as of March 31, 2019. As of June 30, 2019, the balance of available-for-sale investments was RMB 387.5 million (US$56.4 million), compared to RMB 1,187.6 million as of March 31, 2019.

 

Delinquency rates. As of June 30, 2019, the delinquency rates for loans that are past due for 15-29 days, 30-59 days and 60-89 days were 1.1%, 1.8%, and 1.9%, respectively compared to 0.9%, 1.9%, and 1.7% as of March 31, 2019. The overall increase in delinquency rates was mainly due to the slower growth in loan volumes and volatile credit performance of the loans.

 

Cumulative M3+ net charge-off rates. As of June 30, 2019, the cumulative M3+ net charge-off rate for loans originated in 2016 was 9.2%, compared to 9.0% as of March 31, 2019. As of June 30, 2019, the cumulative M3+ net charge-off rate for loans originated in 2017 was 14.0%, compared to 12.7% as of March 31, 2019. As of June 30, 2019, the cumulative M3+ net charge-off rate for loans originated in 2018 was 8.7%, compared to 5.9% as of March 31, 2019.

 

Management Change                    Effective September 4, 2019, Mr. Dennis Cong, Co-CFO of Yirendai, will assume the role of Senior Vice President of Corporate Business Development and continue his responsibilities of new business development, capital markets and strategic planning. Ms. Jia Liu, Co-CFO of Yirendai will become the sole CFO of the Company.

 

Non-GAAP Financial Measures                   In evaluating the business, the Company considers and uses several non-GAAP financial measures, such as adjusted EBITDA and adjusted EBITDA margin as supplemental measures to review and assess operating performance. We believe these non-GAAP measures provide useful information about our core operating results, enhance the overall understanding of our past performance and prospects and allow for greater visibility with respect to key metrics used by our management in our financial and operational decision-making. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The non-GAAP financial measures have limitations as analytical tools. Other companies, including peer companies in the industry, may calculate these non-GAAP measures differently, which may reduce their usefulness as a comparative measure. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. See “Operating Highlights and Reconciliation of GAAP to Non-GAAP measures” at the end of this press release.

 


 

Currency Conversion                  This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB 6.865 to US$1.00, the effective noon buying rate on June 28, 2019, as set forth in the H.10 statistical release of the Federal Reserve Board.

 

Conference Call                    Yirendai’s management will host an earnings conference call at 8:00 p.m. U.S. Eastern Time on September 3, 2019, (or 8:00 a.m. Beijing/Hong Kong Time on September 4, 2019).

 

Dial-in details for the earnings conference call are as follows:

 

International:

+65 6713-5091

U.S. Toll Free:

+1 866-519-4004

Hong Kong Toll Free:

800-906-601

China Toll Free:

400-620-8038

Conference ID:

4045996

 

A replay of the conference call may be accessed by phone at the following numbers until September 10, 2019:

 

International:

+61 2-8199-0299

U.S. Toll Free:

+1 646-254-3697

Replay Access Code:

4045996

 


 

Additionally, a live and archived webcast of the conference call will be available at ir.yirendai.com.

 

Safe Harbor Statement   This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in 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,” “target,” “confident” and similar statements. Such statements are based upon management’s current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Yirendai’s control. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited to, uncertainties as to Yirendai’s ability to attract and retain borrowers and investors on its marketplace, its ability to introduce new loan products and platform enhancements, its ability to compete effectively, PRC regulations and policies relating to the peer-to-peer lending service industry in China, general economic conditions in China, and Yirendai’s ability to meet the standards necessary to maintain listing of its ADSs on the NYSE or other stock exchange, including its ability to cure any non-compliance with the NYSE’s continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in Yirendai’s filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and Yirendai does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

 

About Yirendai   Yirendai Ltd. (NYSE: YRD) is a leading fintech company in China connecting investors and individual borrowers. The Company provides an effective solution to address largely underserved investor and individual borrower demand in China through online and offline channels to efficiently match borrowers with investors and execute loan transactions. Yirendai deploys a proprietary risk management system, which enables the Company to effectively assess the creditworthiness of borrowers, appropriately price the risks associated with borrowers, and offer quality loan investment opportunities to investors. Yirendai’s marketplace provides borrowers with quick and convenient access to consumer credit at competitive prices and investors with easy and quick access to an alternative asset class with attractive returns. For more information, please visit ir.Yirendai.com.

 


 

For investor and media inquiries, please contact: 

 

Yirendai

 

Investor Relations

 

Email: ir@Yirendai.com

 


 

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except for share, per share and per ADS data, and percentages)

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

 

June 30,
2018

 

March 31,
2019

 

June 30,
2019

 

June 30,
2019

 

June 30,
2018

 

June 30,
2019

 

June 30,
2019

 

 

 

RMB

 

RMB

 

RMB

 

USD

 

RMB

 

RMB

 

USD

 

Net revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan facilitation services

 

2,054,278

 

1,055,046

 

1,237,718

 

180,295

 

5,051,741

 

2,292,764

 

333,979

 

Post-origination services

 

303,757

 

296,279

 

241,321

 

35,152

 

584,875

 

537,600

 

78,310

 

Account management services

 

431,803

 

488,340

 

549,024

 

79,974

 

793,545

 

1,037,364

 

151,109

 

Others

 

197,445

 

140,743

 

188,577

 

27,469

 

321,794

 

329,320

 

47,971

 

Total net revenue

 

2,987,283

 

1,980,408

 

2,216,640

 

322,890

 

6,751,955

 

4,197,048

 

611,369

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

1,816,005

 

1,127,945

 

1,208,647

 

176,059

 

3,971,967

 

2,336,592

 

340,363

 

Origination and servicing

 

307,524

 

172,123

 

162,945

 

23,736

 

572,137

 

335,068

 

48,808

 

General and administrative

 

504,175

 

257,707

 

175,534

 

25,569

 

1,026,279

 

433,241

 

63,109

 

Allowance for contract assets and receivables

 

275,706

 

191,104

 

500,861

 

72,959

 

510,707

 

691,965

 

100,796

 

Total operating costs and expenses

 

2,903,410

 

1,748,879

 

2,047,987

 

298,323

 

6,081,090

 

3,796,866

 

553,076

 

Other income/(expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

21,314

 

23,875

 

25,213

 

3,673

 

49,648

 

49,088

 

7,150

 

Fair value adjustments related to Consolidated ABFE

 

140,549

 

34,998

 

5,787

 

843

 

147,620

 

40,785

 

5,941

 

Others, net

 

(6,347

)

160,223

 

17,480

 

2,546

 

(6,923

)

177,703

 

25,886

 

Total other income

 

155,516

 

219,096

 

48,480

 

7,062

 

190,345

 

267,576

 

38,977

 

Income before provision for income taxes

 

239,389

 

450,625

 

217,133

 

31,629

 

861,210

 

667,758

 

97,270

 

Share of results of equity investees

 

(2,705

)

(4,957

)

(816

)

(119

)

(5,029

)

(5,773

)

(841

)

Income tax expense

 

42,916

 

76,534

 

61,856

 

9,010

 

126,495

 

138,390

 

20,159

 

Net income

 

193,768

 

369,134

 

154,461

 

22,500

 

729,686

 

523,595

 

76,270

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of ordinary shares outstanding, basic

 

183,410,702

 

185,126,457

 

184,608,337

 

184,608,337

 

183,378,858

 

184,865,964

 

184,865,964

 

Basic income per share

 

1.0565

 

1.9940

 

0.8367

 

0.1219

 

3.9791

 

2.8323

 

0.4126

 

Basic income per ADS

 

2.1130

 

3.9880

 

1.6734

 

0.2438

 

7.9582

 

5.6646

 

0.8252

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of ordinary shares outstanding, diluted

 

185,638,122

 

186,578,885

 

186,667,233

 

186,667,233

 

185,695,053

 

186,621,626

 

186,621,626

 

Diluted income per share

 

1.0438

 

1.9784

 

0.8275

 

0.1205

 

3.9295

 

2.8057

 

0.4087

 

Diluted income per ADS

 

2.0876

 

3.9568

 

1.6550

 

0.2410

 

7.8590

 

5.6114

 

0.8174

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited Condensed Consolidated Cash Flow Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

(1,905,334

)

(658,435

)

(331,829

)

(48,336

)

(2,722,370

)

(990,264

)

(144,248

)

Net cash provided by/ (used in) investing activities

 

469,124

 

(249,931

)

609,077

 

88,722

 

206,564

 

359,146

 

52,316

 

Net cash (used in)/provided by financing activities

 

(201,584

)

493,389

 

(73,385

)

(10,690

)

34,990

 

420,004

 

61,180

 

Effect of foreign exchange rate changes

 

8,117

 

(2,196

)

1,532

 

223

 

(2,859

)

(664

)

(97

)

Net (decrease)/ increase in cash, cash equivalents and restricted cash

 

(1,629,677

)

(417,173

)

205,395

 

29,919

 

(2,483,675

)

(211,778

)

(30,849

)

Cash, cash equivalents and restricted cash, beginning of period

 

3,626,324

 

3,034,484

 

2,617,311

 

381,254

 

4,480,322

 

3,034,484

 

442,022

 

Cash, cash equivalents and restricted cash, end of period

 

1,996,647

 

2,617,311

 

2,822,706

 

411,173

 

1,996,647

 

2,822,706

 

411,173

 

 


 

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

As of

 

 

 

December 31,
2018

 

March 31,
2019

 

June 30,
2019

 

June 30,
2019

 

 

 

RMB
(Recast*)

 

RMB
(Recast*)

 

RMB

 

USD

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

2,606,939

 

2,519,423

 

2,706,530

 

394,250

 

Restricted cash

 

427,546

 

97,888

 

116,176

 

16,923

 

Accounts receivable

 

40,326

 

70,297

 

27,212

 

3,963

 

Contract assets, net

 

3,909,263

 

3,431,014

 

2,958,476

 

430,951

 

Contract cost

 

145,460

 

143,323

 

141,480

 

20,609

 

Prepaid expenses and other assets

 

2,552,319

 

1,221,074

 

1,142,757

 

166,460

 

Loans at fair value

 

1,375,221

 

851,406

 

677,354

 

98,668

 

Financing receivables

 

 

 

25,175

 

3,667

 

Amounts due from related parties

 

1,361,805

 

270,626

 

1,791,515

 

260,964

 

Held-to-maturity investments

 

329,597

 

312,768

 

9,542

 

1,390

 

Available-for-sale investments

 

835,565

 

1,187,588

 

387,519

 

56,449

 

Long term investments

 

217,636

 

167,428

 

143,047

 

20,837

 

Property, equipment and software, net

 

266,002

 

239,822

 

230,078

 

33,515

 

Deferred tax assets

 

184,136

 

156,322

 

149,269

 

21,744

 

Right-of-use assets

 

 

389,299

 

398,154

 

57,998

 

Total assets

 

14,251,815

 

11,058,278

 

10,904,284

 

1,588,388

 

Accounts payable

 

307,046

 

53,667

 

54,158

 

7,889

 

Amounts due to related parties

 

8,276,459

 

310,592

 

169,189

 

24,646

 

Liabilities from quality assurance program and guarantee

 

9,950

 

8,384

 

6,539

 

953

 

Deferred revenue

 

569,469

 

459,806

 

390,621

 

56,900

 

Payable to investors at fair value

 

626,207

 

7,386

 

 

 

Accrued expenses and other liabilities

 

2,193,576

 

2,154,786

 

2,265,288

 

329,976

 

Refund liability

 

2,145,748

 

2,137,835

 

2,039,998

 

297,159

 

Deferred tax liabilities

 

486,773

 

417,629

 

329,347

 

47,975

 

Lease liabilities

 

 

348,176

 

341,364

 

49,725

 

Contingent consideration

 

 

2,626,734

 

2,626,734

 

382,627

 

Total liabilities

 

14,615,228

 

8,524,995

 

8,223,238

 

1,197,850

 

Ordinary shares

 

77

 

77

 

77

 

11

 

Shares to be issued

 

 

2,754,444

 

2,754,444

 

401,230

 

Additional paid-in capital

 

1,293,968

 

1,081,499

 

1,106,153

 

161,129

 

Treasury stock

 

(254

)

(5,694

)

(37,097

)

(5,404

)

Accumulated other comprehensive income

 

16,390

 

13,160

 

18,367

 

2,676

 

Accumulated deficit

 

(1,673,594

)

(1,310,203

)

(1,160,898

)

(169,104

)

Total (deficit)/ equity

 

(363,413

)

2,533,283

 

2,681,046

 

390,538

 

Total liabilities and equity

 

14,251,815

 

11,058,278

 

10,904,284

 

1,588,388

 

 


 

Operating Highlights and Reconciliation of GAAP to Non-GAAP Measures

(in thousands, except for number of borrowers, number of investors and percentages)

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

 

June 30,
2018

 

March 31, 2019

 

June 30,
2019

 

June 30,
2019

 

June 30,
2018

 

June 30,
2019

 

June 30,
2019

 

 

 

RMB
(Recast*)

 

RMB
(Recast*)

 

RMB

 

USD

 

RMB
(Recast*)

 

RMB

 

USD

 

Operating Highlights

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amount of investment

 

17,627,499

 

11,435,588

 

11,939,582

 

1,739,196

 

35,655,154

 

23,375,170

 

3,404,977

 

AUM of investment

 

74,296,263

 

67,251,285

 

64,476,635

 

9,392,081

 

74,296,263

 

64,476,635

 

9,392,081

 

Number of investors

 

314,507

 

200,780

 

157,973

 

157,973

 

529,962

 

320,054

 

320,054

 

Amount of loans facilitated

 

18,180,272

 

10,934,923

 

9,673,818

 

1,409,150

 

37,951,340

 

20,608,740

 

3,002,002

 

Number of borrowers

 

267,628

 

149,715

 

135,246

 

135,246

 

553,938

 

280,634

 

280,634

 

Remaining principal of performing loans

 

76,479,235

 

63,213,843

 

58,071,303

 

8,459,039

 

76,479,235

 

58,071,303

 

8,459,039

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wealth management:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

531,611

 

521,434

 

592,378

 

86,290

 

954,601

 

1,113,812

 

162,245

 

Sales and marketing expenses

 

249,748

 

143,904

 

213,168

 

31,051

 

948,681

 

357,072

 

52,013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer credit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

2,455,672

 

1,458,974

 

1,624,262

 

236,600

 

5,797,354

 

3,083,236

 

449,124

 

Sales and marketing expenses

 

1,566,257

 

984,041

 

995,479

 

145,008

 

3,023,286

 

1,979,520

 

288,350

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

193,768

 

369,134

 

154,461

 

22,500

 

729,686

 

523,595

 

76,270

 

Interest income, net

 

(21,314

)

(23,875

)

(25,213

)

(3,673

)

(49,648

)

(49,088

)

(7,150

)

Income tax expense

 

42,916

 

76,534

 

61,856

 

9,010

 

126,495

 

138,390

 

20,159

 

Depreciation and amortization

 

37,144

 

32,502

 

31,112

 

4,532

 

75,397

 

63,614

 

9,266

 

Share-based compensation

 

19,766

 

14,699

 

17,732

 

2,583

 

39,299

 

32,431

 

4,724

 

Adjusted EBITDA

 

272,280

 

468,994

 

239,948

 

34,952

 

921,229

 

708,942

 

103,269

 

Adjusted EBITDA margin

 

9.1

%

23.7

%

10.8

%

10.8

%

13.6

%

16.9

%

16.9

%

 


 

Delinquency Rates

 

 

 

Delinquent for

 

 

 

15-29 days

 

30-59 days

 

60-89 days

 

All Loans

 

 

 

 

 

 

 

December 31, 2015

 

0.7

%

1.2

%

0.9

%

December 31, 2016

 

0.6

%

0.9

%

0.8

%

December 31, 2017

 

0.8

%

1.0

%

0.8

%

December 31, 2018

 

1.0

%

1.8

%

1.7

%

March 31, 2019

 

0.9

%

1.9

%

1.7

%

June 30, 2019

 

1.1

%

1.8

%

1.9

%

 

 

 

 

 

 

 

 

Online Channels

 

 

 

 

 

 

 

December 31, 2015

 

0.5

%

0.8

%

0.6

%

December 31, 2016

 

0.5

%

0.9

%

0.8

%

December 31, 2017

 

1.1

%

1.1

%

0.9

%

December 31, 2018

 

1.2

%

2.3

%

2.2

%

March 31, 2019

 

1.2

%

2.6

%

2.4

%

June 30, 2019

 

1.4

%

2.2

%

2.6

%

 

 

 

 

 

 

 

 

Offline Channels

 

 

 

 

 

 

 

December 31, 2015

 

0.7

%

1.2

%

1.0

%

December 31, 2016

 

0.6

%

0.9

%

0.8

%

December 31, 2017

 

0.6

%

0.9

%

0.7

%

December 31, 2018

 

0.9

%

1.6

%

1.5

%

March 31, 2019

 

0.8

%

1.6

%

1.5

%

June 30, 2019

 

1.0

%

1.6

%

1.7

%

 


 

Net Charge-Off Rate for Upgraded Risk Grid

 

Loan Issued
Period

 

Customer
Grade

 

Amount of Loans Facilitated
During the Period

 

 

 

Accumulated M3+ Net Charge-Off
as of June 30, 2019

 

Total Net Charge-Off Rate
as of June 30, 2019

 

 

 

 

 

(in RMB thousands)

 

 

 

(in RMB thousands)

 

 

 

2015

 

I

 

4,894,936

 

0

 

204,257

 

4.2

%

 

 

II

 

17,502,449

 

0

 

490,328

 

2.8

%

 

 

III

 

11,272,838

 

0

 

715,240

 

6.3

%

 

 

IV

 

11,283,656

 

0

 

1,362,071

 

12.1

%

 

 

V

 

11,199,563

 

0

 

1,725,698

 

15.4

%

 

 

Total

 

56,153,444

 

0

 

4,497,593

 

8.0

%

2016

 

I

 

5,858,473

 

0

 

229,407

 

3.9

%

 

 

II

 

12,781,372

 

0

 

516,174

 

4.0

%

 

 

III

 

9,951,614

 

0

 

734,157

 

7.4

%

 

 

IV

 

8,652,543

 

0

 

911,659

 

10.5

%

 

 

V

 

16,981,990

 

0

 

2,582,818

 

15.2

%

 

 

Total

 

54,225,993

 

0

 

4,974,216

 

9.2

%

2017

 

I

 

11,223,886

 

0

 

626,827

 

5.6

%

 

 

II

 

12,270,230

 

0

 

1,369,026

 

11.2

%

 

 

III

 

13,837,922

 

0

 

2,015,072

 

14.6

%

 

 

IV

 

13,663,558

 

0

 

2,186,320

 

16.0

%

 

 

V

 

19,680,365

 

0

 

3,720,647

 

18.9

%

 

 

Total

 

70,675,961

 

0

 

9,917,892

 

14.0

%

2018

 

I

 

9,604,220

 

0

 

361,355

 

3.8

%

 

 

II

 

14,656,703

 

0

 

961,532

 

6.6

%

 

 

III

 

13,903,094

 

0

 

1,190,224

 

8.6

%

 

 

IV

 

13,812,989

 

0

 

1,511,587

 

10.9

%

 

 

V

 

11,326,230

 

0

 

1,513,789

 

13.4

%

 

 

Total

 

63,303,236

 

0

 

5,538,487

 

8.7

%

2019Q1

 

I

 

1,834,364

 

0

 

3,213

 

0.2

%

 

 

II

 

3,309,340

 

0

 

11,289

 

0.3

%

 

 

III

 

2,617,979

 

0

 

11,815

 

0.5

%

 

 

IV

 

1,866,640

 

0

 

8,316

 

0.4

%

 

 

V

 

1,306,600

 

0

 

6,983

 

0.5

%

 

 

Total

 

10,934,923

 

0

 

41,617

 

0.4

%

 


 

M3+ Net Charge-Off Rate

 

Loan Issued
Period

 

Month on Book

 

 

 

4

 

7

 

10

 

13

 

16

 

19

 

22

 

25

 

28

 

31

 

34

 

2015Q1

 

0.8

%

2.0

%

3.5

%

4.7

%

5.8

%

6.5

%

7.1

%

7.5

%

7.7

%

7.8

%

7.8

%

2015Q2

 

0.8

%

2.3

%

3.8

%

5.2

%

6.4

%

7.3

%

8.0

%

8.3

%

8.5

%

8.7

%

8.8

%

2015Q3

 

0.4

%

1.6

%

3.1

%

4.4

%

5.6

%

6.5

%

7.2

%

7.6

%

7.9

%

8.2

%

8.4

%

2015Q4

 

0.4

%

1.6

%

3.1

%

4.4

%

5.5

%

6.3

%

6.9

%

7.4

%

7.9

%

8.3

%

8.6

%

2016Q1

 

0.3

%

1.2

%

2.5

%

3.6

%

4.5

%

5.2

%

5.8

%

6.5

%

7.0

%

7.4

%

7.6

%

2016Q2

 

0.4

%

1.6

%

3.1

%

4.3

%

5.2

%

6.0

%

6.8

%

7.6

%

8.1

%

8.4

%

8.7

%

2016Q3

 

0.3

%

1.6

%

3.1

%

4.3

%

5.4

%

6.6

%

7.8

%

8.6

%

9.2

%

9.5

%

 

 

2016Q4

 

0.2

%

1.5

%

2.9

%

4.4

%

5.9

%

7.4

%

8.4

%

9.3

%

10.0

%

 

 

 

 

2017Q1

 

0.3

%

1.5

%

3.2

%

5.1

%

7.1

%

8.6

%

9.8

%

10.8

%

 

 

 

 

 

 

2017Q2

 

1.1

%

2.9

%

5.6

%

8.4

%

10.4

%

12.1

%

13.5

%

 

 

 

 

 

 

 

 

2017Q3

 

0.3

%

2.9

%

6.3

%

9.1

%

11.6

%

13.6

%

 

 

 

 

 

 

 

 

 

 

2017Q4

 

0.5

%

3.8

%

7.2

%

10.5

%

13.2

%

 

 

 

 

 

 

 

 

 

 

 

 

2018Q1

 

0.4

%

3.0

%

6.6

%

10.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018Q2

 

0.5

%

3.6

%

7.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018Q3

 

0.3

%

2.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018Q4

 

0.3

%