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 November 2017

 


 

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.

 

 

 

YIRENDAI LTD.

 

 

 

 

 

 

By

/s/ Yu Cong

 

Name:

Yu Cong

 

Title:

Chief Financial Officer

 

 

Date:  November 16, 2017

 

2



 

Exhibit Index

 

Exhibit 99.1—Press Release

 

3


Exhibit 99.1

 

Yirendai Reports Third Quarter 2017 Financial Results

 

BEIJING, November 14, 2017 — Yirendai Ltd. (NYSE: YRD) (“Yirendai” or the “Company”), a leading fintech company in China, today announced its unaudited financial results for the quarter ended September 30, 2017.

 

 

 

For Three Months Ended

 

in RMB million

 

September 
30, 2017

 

June 30, 
2017

 

September 
30, 2016

 

QoQ 
Change

 

YoY 
Change

 

Amount of Loans Facilitated

 

12,185.4

 

8,536.1

 

5,617.5

 

43

%

117

%

Total Net Revenue

 

1,513.9

 

1,183.1

 

876.7

 

28

%

73

%

Total Fees Billed (non-GAAP)

 

2,475.3

 

1,862.5

 

1,322.6

 

33

%

87

%

Net Income

 

303.0

 

269.1

 

344.3

 

13

%

-12

%

Adjusted EBITDA(1) (non-GAAP)

 

422.4

 

378.4

 

220.7

 

12

%

91

%

Adjusted Net Income (2) (non-GAAP)

 

303.0

 

269.1

 

192.6

 

13

%

57

%

 

In the third quarter of 2017, Yirendai facilitated RMB 12,185.4 million (US$1,831.5 million) of loans to 192,725 qualified individual borrowers through its online marketplace, representing a year-over-year growth of 117%; 75.7% of the borrowers were acquired from online channels; 57.2% of the loan volume was originated from online channels and nearly 100% of the online volume was facilitated through mobile.

 

In the third quarter of 2017, Yirendai facilitated 214,967 investors with total investment amount of RMB 13,510.0 million (US$2,030.6 million), 100% of which was facilitated through its online platform and 92% of which was facilitated through its mobile application.

 

For the third quarter of 2017, total net revenue was RMB 1,513.9 million (US$227.5 million), an increase of 28% from the previous quarter and 73% year-over-year; net income was RMB 303.0 million (US$45.5 million), and increase of 13% from the previous quarter and a decrease of 12% year-over-year. The decrease of net income is mainly because that, in the third quarter of 2016, the Company recognized a tax credit of RMB 151.7 million because one of its subsidiaries became qualified as a software enterprise which makes it eligible for an exemption of enterprise income tax for 2015 and 2016. Excluding the impact of the tax credit, adjusted net income in the third quarter of 2016 was RMB 192.6 million.

 

“We are pleased to deliver another strong quarter as our loan origination continued to grow rapidly, especially driven by online business,” commented Ms. Yihan Fang, Chief Executive Officer of Yirendai. “In addition, we have seen smooth yet accelerating progress of our online wealth management and new platform businesses. We will continue to focus on technological innovations, product development and customer service to drive the robust momentum of our online operations. In addition, we will continue to invest heavily in our technology platform, data analytics, machine learning and AI capabilities to drive our business growth.”

 

“Our strong financial results in this quarter was primarily driven by the continued strong demand of our differentiated product offerings from our customers, enabled by our enhanced online customer acquisition and service capabilities,” commented Mr. Dennis Cong, Chief Financial Officer of Yirendai. “We will continue to focus on driving strong growth with long-term profitability in our core product and service offerings, and expect to see strong momentum in our wealth management and platform business.”

 

1



 

Third quarter 2017 Financial Results

 

Total amount of loans facilitated in the third quarter of 2017 was RMB 12,185.4 million (US$1,831.5 million), increased by 117% year-over-year from RMB 5,617.5 million in the same period last year, reflecting strong demand for our products and services, especially from customers acquired from online channels. As of September 30, 2017, the Yirendai platform had facilitated approximately RMB 60.5 billion (US$9.1 billion) in loan principal since its inception.

 

Starting from the third quarter of 2017, Yirendai changed its calculation method for an operational metric - the amount of loans facilitated. In October 2016, the Company launched a new program named “Top-up Program” whereby we facilitate a new loan for a qualified borrower to replace his or her existing loan on our platform. Previously, only the top-up amount, i.e. the portion of the new loan exceeding the outstanding balance of the existing loan, is included in the amount of loans facilitated presented. To follow the industry’s general practice, under the new calculation method, the total contractual amount of the new loan will be included in the amount of loans facilitated. The Company believes this change of calculation method will better align its operational metrics with the industry and better reflect its risk performance. Prior period numbers have been restated to reflect the change.

 

Total net revenue in the third quarter of 2017 was RMB 1,513.9 million (US$227.5 million), increased by 73% from RMB 876.7 million in the same period last year. The increase of total net revenue was mainly attributable to the growth of loan origination volume, increased service fees billed to investors and increased monthly fees billed to borrowers as our remaining loan balance continued to expand.

 

Total fees billed (non-GAAP) in the third quarter of 2017 were RMB 2,475.3 million (US$372.0 million), increased by 87% from RMB 1,322.6 million in the same period last year, driven by the growth of loan origination volume. Upfront fees billed to borrowers in the third quarter of 2017 were RMB 2,046.7 million (US$307.6 million), increased by 72% from RMB 1,192.4 million in the same period last year. Monthly fees billed to borrowers in the third quarter of 2017 were RMB 292.2 million (US$43.9 million), increased by 176% from RMB 105.8 million in the same period last year. The significant year-over-year increase in monthly fees billed to borrowers was primarily attributable to the increase in loans generated from online channels, which features a fee collection schedule with monthly payments in addition to the upfront portion. Service fees billed to investors in the third quarter of 2017 were RMB 272.0 million (US$40.9 million), increased by 145% from RMB 110.9 million in the same period last year. The significant year-over-year increase in service fees billed to investors was primarily attributable to the increase in the total AUM.

 

Sales and marketing expenses in the third quarter of 2017 were RMB 844.2 million (US$126.9 million), increased by 37% from RMB 617.9 million in the previous quarter and compared to RMB 423.0 million in the same period last year. Sales and marketing expenses in the third quarter of 2017 accounted for 6.9% of amount of loans facilitated, decreased from 7.2% in the previous quarter and 7.5% in the same period last year. Sales and marketing expenses as a percentage of amount of loans facilitated decreased due to increased customer acquisition efficiencies as well as an increase in the amount of loans facilitated from repeat borrowers.

 

2



 

Origination and servicing costs in the third quarter of 2017 were RMB 119.0 million (US$17.9 million), compared to RMB 93.1 million in the previous quarter and RMB 47.5 million in the same period last year. Origination and servicing costs in the third quarter of 2017 accounted for 1.0% of amount of loans facilitated, decreased from 1.1% in the previous quarter and increased from 0.8% in the same period last year.

 

General and administrative expenses in the third quarter of 2017 were RMB 172.6 million (US$25.9 million), compared to RMB 98.6 million in the previous quarter and RMB 189.0 million in the same period last year. General and administrative expenses in the third quarter of 2017 accounted for 11.4% of total net revenue, compared to 8.3% in the previous quarter and 21.6% in the same period last year. The increase in general and administrative expenses as percentage of total net revenue was primarily attributable to share-based compensation expenses of RMB 60.1 million (USD$9.0 million) in this quarter.

 

Income tax expense in the third quarter of 2017 was RMB 85.7 million (US$12.9 million). Since the first quarter of 2017, Yi Ren Heng Ye Technology Development (Beijing) Co., Ltd., a subsidiary of the Company, enjoyed a favorable enterprise income tax rate of 12.5% as a software enterprise which qualification was confirmed by local tax bureau in the third quarter of 2016. This makes it eligible for an exemption of enterprise income tax for 2015 and 2016 and a favorable enterprise income tax rate of 12.5% for 2017, 2018 and 2019.

 

Net income in the third quarter of 2017 was RMB 303.0 million (US$45.5 million), increased by 13% from RMB 269.1 million in the previous quarter and decreased by 12% from RMB 344.3 million for the same period last year.

 

Adjusted EBITDA (non-GAAP) in the third quarter of 2017 was RMB 422.4 million (US$63.5 million), increased by 12% from RMB 378.4 million in the previous quarter and increased by 91% from RMB 220.7 million in the same period last year. Adjusted EBITDA margin1 (non-GAAP) in the third quarter of 2017 was 27.9%, compared to 32.0% in the previous quarter and 25.2% in the same period last year.

 

Adjusted net income (non-GAAP) in the third quarter of 2017 was RMB 303.0 million (US$45.5 million), increased by 13% from RMB 269.1 million in the previous quarter and increased by 57% from RMB 192.6 million for the same period last year. In the third quarter of 2016, the Company recognized a tax credit of RMB 151.7 million because one of its subsidiaries became qualified as a software enterprise which makes it eligible for an exemption of enterprise income tax for 2015 and 2016. Excluding the impact of the tax credit, adjusted net income in the third quarter of 2016 was RMB 192.6 million.

 


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

2Adjusted net income is a non-GAAP financial measure calculated as net income less non-recurring items.

 

3



 

Basic income per ADS in the third quarter of 2017 was RMB 5.00 (US$0.75), compared to RMB 4.50 in the previous quarter and RMB 5.76 in the same period last year.

 

Diluted income per ADS in the third quarter of 2017 was RMB 4.91 (US$0.74), compared to RMB 4.45 in the previous quarter and RMB 5.70 in the same period last year.

 

Net cash generated from operating activities in the third quarter of 2017 was RMB 346.3 million (US$52.1 million), compared to RMB 530.4 million in the previous quarter and RMB 450.6 million in the same period last year.

 

As of September 30, 2017, cash and cash equivalents was RMB 1,403.5 million (US$ 211.0 million), compared to RMB 891.2 million as of June 30, 2017. As of September 30, 2017, balance of held-to-maturity investments was RMB 168.9 million (US$25.4 million), compared to RMB 589.3 million as of June 30, 2017. As of September 30, 2017, balance of available-for-sale investments was RMB 996.7 million (US$149.8 million), compared to RMB 1,262.3 million as of June 30, 2017.  The decrease in the total balance of cash and cash equivalents, held-to-maturity and available-for-sale investments was mainly attributable to the need for increased operating cash to fund our accelerating business growth this quarter.

 

Quality Assurance Program and Guarantee. In the third quarter of 2017, Yirendai accrued liabilities from quality assurance program of RMB 889.7 million (US$133.7 million), which is equal to 8% of the loans facilitated through its marketplace covered by the quality assurance program during the period. For top-up loans, the Company only accrues 8% of the top-up amount, ie. the portion of the new loan exceeding the outstanding balance of the existing loan. During the quarter, the Company released liabilities of RMB 464.7 million (US$ 69.8 million) to pay out the outstanding principal and accrued interest of default loans. As of September 30, 2017, liabilities from quality assurance program and guarantee were RMB 2,392.8 million (US$359.6 million).

 

Delinquency rates. As of September 30, 2017, the delinquency rates for loans that are past due for 15-29 days, 30-59 days and 60-89 days were 0.5%, 0.7% and 0.6%, compared to 0.4%, 0.7% and 0.5%, as of June 30, 2017.

 

Cumulative M3+ net charge-off rates. As of September 30, 2017, the cumulative M3+ net charge-off rate for loans originated in 2015 was 8.8%, compared to 8.3% as of June 30, 2017. As of September 30, 2017, the cumulative M3+ net charge-off rate for loans originated in 2016 was 4.6%, compared to 3.4% as of June 30, 2017. As the 2015 and 2016 vintage loans continue to mature, the charge off level is consistent with our risk performance expectation.

 

Other Operating Metrics and Business Results

 

·                      As of September 30, 2017, remaining principal of performing loans totaled RMB 34.2 billion (US$5.1 billion), increased by 23% from RMB 27.9 billion as of June 30, 2017 and 101% from RMB 17.0 billion as of September 30, 2016.

·                      In the third quarter of 2017, Grade A, B, C and D loans represented 1.7%, 8.7%, 14.1%, and 75.5% and Grade I, II, III, IV and V loans represented 6.5%, 24.6%, 27.6%, 25.7% and 15.6% of the Company’s product portfolio, respectively.

 

4



 

Other Developments

 

Cooperation with Zhejiang Chouzhou Commercial Bank

 

During the third quarter of 2017, Yirendai officially started cooperating with Zhejiang Chouzhou Commercial Bank to provide financing services to individual consumers, leveraging the Company’s online lending and risk management capabilities. The cooperation has a one-year term and commenced in August 2017. Over the one-year term, Yirendai and CreditEase will have access to a RMB 3 billion line-of-credit. The line-of-credit represents an additional source of funding for Yirendai and CreditEase’s lending business.

 

Management Transition

 

In the third quarter of 2017, Ms. Yiting Pan completed her transition from her position as Yirendai’s Chief Risk Officer into a new management role with CreditEase Offshore Private Credit Fund in the U.S. Dr. Yichuan Pei, Yirendai’s Chief Credit Officer appointed in March 2017, officially assumed the role of the Company’s Chief Risk Officer position and took over full responsibilities of risk management. Dr. Pei joined Yirendai from Ping An Bank where he served as Vice General Manager. Dr. Pei brings with him over 26 years of experience in the financial industry from consumer lending risk management, credit product marketing management, and asset-backed securities valuation in the United States.

 

Business Outlook

 

Based on the information available as of the date of this press release, Yirendai provides the following outlook, which reflects the Company’s current and preliminary view and is subject to change. The following outlook does not take into consideration the impact of stock-based compensation expenses.

 

Full Year 2017

 

·                      Total loans facilitated will be in the range of RMB 40,000 million to RMB 40,500 million.

·                      Total net revenue will be in the range of RMB 5,200 million to RMB 5,300 million.

·                      Adjusted EBITDA (non-GAAP) will be in the range of RMB 1,600 million to RMB 1,620 million.

 

Non-GAAP Financial Measures

 

In evaluating the business, the Company considers and uses several non-GAAP financial measures, such as fees billed, adjusted EBITDA, adjusted EBITDA margin and adjusted net income as supplemental measures to review and assess operating performance. We believe that fees billed and adjusted EBITDA margin 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.

 

5



 

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 6.6533 to US$1.00, the effective noon buying rate on September 29, 2017 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 7:00 p.m. Eastern Time on November 14, 2017, (or 8:00 a.m. Beijing/Hong Kong Time on November 15, 2017).

 

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:

9696809

 

A replay of the conference call may be accessed by phone at the following numbers until November 22, 2017:

 

International:

+61 2-8199-0299

U.S. Toll Free:

+1 646-254-3697

Replay Access Code:

9696809

 

A live and archived webcast of the conference call will be available on Yirendai’s website at yirendai.investorroom.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.

 

6



 

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 an online platform that automates key aspects of its operations 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 online 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 yirendai.investorroom.com.

 

For investor and media inquiries, please contact:

Yirendai

Hui (Matthew) Li

Director of Investor Relations

Email: ir@yirendai.com

 

7



 

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 Nine Months Ended

 

 

 

September
30, 2016

 

June 30,
2017

 

September
30, 2017

 

September
30, 2017

 

September
30, 2016

 

September
30, 2017

 

September
30, 2017

 

 

 

RMB

 

RMB

 

RMB

 

USD

 

RMB

 

RMB

 

USD

 

Net revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan facilitation services

 

848,322

 

1,121,200

 

1,425,162

 

214,204

 

2,096,793

 

3,522,760

 

529,476

 

Post-origination services

 

23,487

 

41,389

 

49,951

 

7,508

 

59,115

 

124,652

 

18,735

 

Others

 

4,902

 

20,468

 

38,791

 

5,830

 

10,973

 

71,148

 

10,694

 

Total net revenue

 

876,711

 

1,183,057

 

1,513,904

 

227,542

 

2,166,881

 

3,718,560

 

558,905

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

423,003

 

617,880

 

844,165

 

126,879

 

1,033,085

 

1,931,425

 

290,296

 

Origination and servicing

 

47,514

 

93,147

 

119,036

 

17,891

 

123,408

 

270,967

 

40,727

 

General and administrative

 

188,961

 

98,614

 

172,643

 

25,949

 

322,397

 

371,755

 

55,875

 

Total operating costs and expenses

 

659,478

 

809,641

 

1,135,844

 

170,719

 

1,478,890

 

2,574,147

 

386,898

 

Interest income

 

9,778

 

27,398

 

33,250

 

4,998

 

22,065

 

84,797

 

12,745

 

Fair value adjustments related to Consolidated ABFE

 

(14,935

)

(1,915

)

(22,762

)

(3,421

)

(18,448

)

(23,322

)

(3,505

)

Non-operating income, net

 

259

 

555

 

158

 

23

 

350

 

920

 

138

 

Income before provision for income taxes

 

212,335

 

399,454

 

388,706

 

58,423

 

691,958

 

1,206,808

 

181,385

 

Income tax expense/(benefit)

 

(131,946

)

130,358

 

85,732

 

12,886

 

(44,659

)

283,837

 

42,661

 

Net income

 

344,281

 

269,096

 

302,974

 

45,537

 

736,617

 

922,971

 

138,724

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of ordinary shares outstanding, basic

 

119,441,029

 

119,603,286

 

121,249,448

 

121,249,448

 

117,819,616

 

120,167,235

 

120,167,235

 

Basic income per share

 

2.8824

 

2.2499

 

2.4988

 

0.3756

 

6.2521

 

7.6807

 

1.1544

 

Basic income per ADS

 

5.7648

 

4.4998

 

4.9976

 

0.7512

 

12.5042

 

15.3614

 

2.3088

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of ordinary shares outstanding, diluted

 

120,861,971

 

120,833,406

 

123,509,834

 

123,509,834

 

118,293,263

 

121,757,910

 

121,757,910

 

Diluted income per share

 

2.8485

 

2.2270

 

2.4530

 

0.3687

 

6.2270

 

7.5804

 

1.1393

 

Diluted income per ADS

 

5.6970

 

4.4540

 

4.9060

 

0.7374

 

12.4540

 

15.1608

 

2.2786

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited Condensed Consolidated Cash Flow Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash generated from operating activities

 

450,583

 

530,371

 

346,329

 

52,054

 

1,277,380

 

1,441,204

 

216,615

 

Net cash (used in)/provided by investing activities

 

(679,486

)

(95,702

)

342,289

 

51,446

 

(613,919

)

(181,099

)

(27,220

)

Net cash provided by/(used in) financing activities

 

179,221

 

(94,993

)

(127,864

)

(19,218

)

74,898

 

(267,698

)

(40,235

)

Effect of foreign exchange rate changes

 

1,323

 

(6,463

)

(14,885

)

(2,237

)

12,163

 

(25,127

)

(3,777

)

Net increase in cash, cash equivalents and restricted cash

 

(48,359

)

333,213

 

545,869

 

82,045

 

750,522

 

967,280

 

145,383

 

Cash, cash equivalents and restricted cash, beginning of period

 

2,128,966

 

2,274,709

 

2,607,922

 

391,974

 

1,330,085

 

2,186,511

 

328,636

 

Cash, cash equivalents and restricted cash, end of period

 

2,080,607

 

2,607,922

 

3,153,791

 

474,019

 

2,080,607

 

3,153,791

 

474,019

 

 

8



 

Unaudited Condensed Consolidated Balance Sheet

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

 

 

 

As of

 

 

 

September
30, 2016

 

June 30,
2017

 

September
30, 2017

 

September
30, 2017

 

 

 

RMB

 

RMB

 

RMB

 

USD

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

1,106,262

 

891,154

 

1,403,529

 

210,952

 

Restricted cash

 

974,345

 

1,716,768

 

1,750,262

 

263,067

 

Accounts receivable

 

37,378

 

18,109

 

24,050

 

3,614

 

Prepaid expenses and other assets

 

534,041

 

618,076

 

1,136,993

 

170,892

 

Loans at fair value

 

367,949

 

269,952

 

558,178

 

83,895

 

Amounts due from related parties

 

143,436

 

4,252

 

176,867

 

26,583

 

Held-to-maturity investments

 

172,500

 

589,329

 

168,917

 

25,389

 

Available-for-sale investments

 

298,000

 

1,262,260

 

996,660

 

149,799

 

Property, equipment and software, net

 

29,950

 

59,838

 

81,515

 

12,252

 

Deferred tax assets

 

367,141

 

559,794

 

685,875

 

103,088

 

Total assets

 

4,031,002

 

5,989,532

 

6,982,846

 

1,049,531

 

Accounts payable

 

7,408

 

15,153

 

22,634

 

3,402

 

Amounts due to related parties

 

14,137

 

45,425

 

23,153

 

3,480

 

Liabilities from quality assurance program and guarantee

 

1,238,689

 

1,961,315

 

2,392,794

 

359,640

 

Deferred revenue

 

151,666

 

173,386

 

194,646

 

29,256

 

Payable to investors at fair value

 

355,340

 

200,947

 

145,200

 

21,824

 

Accrued expenses and other liabilities

 

522,696

 

780,555

 

1,704,207

 

256,145

 

Deferred tax liability

 

 

60,000

 

4,545

 

683

 

Total liabilities

 

2,289,936

 

3,236,781

 

4,487,179

 

674,430

 

Ordinary shares

 

75

 

75

 

76

 

11

 

Additional paid-in capital

 

922,404

 

950,151

 

1,094,916

 

164,567

 

Accumulated other comprehensive income

 

12,264

 

19,216

 

4,330

 

651

 

Retained earnings

 

806,323

 

1,783,309

 

1,396,345

 

209,872

 

Total equity

 

1,741,066

 

2,752,751

 

2,495,667

 

375,101

 

Total liabilities and equity

 

4,031,002

 

5,989,532

 

6,982,846

 

1,049,531

 

 

9



 

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 Nine Months Ended

 

 

 

September
30, 2016

 

June 30,
2017

 

September
30, 2017

 

September
30, 2017

 

September
30, 2016

 

September
30, 2017

 

September
30, 2017

 

 

 

RMB

 

RMB

 

RMB

 

USD

 

RMB

 

RMB

 

USD

 

Operating Highlights:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amount of loans facilitated

 

5,617,485

 

8,536,087

 

12,185,367

 

1,831,477

 

13,602,688

 

27,967,538

 

4,203,559

 

Loans generated from online channels

 

2,275,473

 

4,271,610

 

6,972,156

 

1,047,924

 

5,282,933

 

14,833,895

 

2,229,555

 

Loans generated from offline channels

 

3,342,012

 

4,264,477

 

5,213,211

 

783,553

 

8,319,755

 

13,133,643

 

1,974,004

 

Fees billed

 

1,322,598

 

1,862,467

 

2,475,271

 

372,037

 

3,280,861

 

5,921,275

 

889,976

 

Remaining principal of performing loans

 

17,028,346

 

27,871,922

 

34,235,727

 

5,145,676

 

17,028,346

 

34,235,727

 

5,145,676

 

Remaining principal of performing loans covered by quality assurance program and guarantee

 

16,204,583

 

27,502,314

 

33,622,142

 

5,053,454

 

16,204,583

 

33,622,142

 

5,053,454

 

Number of borrowers

 

92,479

 

138,529

 

192,725

 

192,725

 

211,458

 

455,507

 

455,507

 

Borrowers from online channels

 

54,585

 

98,245

 

145,838

 

145,838

 

122,221

 

329,736

 

329,736

 

Borrowers from offline channels

 

37,894

 

40,284

 

46,887

 

46,887

 

89,237

 

125,771

 

125,771

 

Number of investors

 

177,499

 

199,591

 

214,967

 

214,967

 

478,653

 

455,251

 

455,251

 

Investors from online channels

 

177,499

 

199,591

 

214,967

 

214,967

 

478,653

 

455,251

 

455,251

 

Investors from offline channels

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

220,716

 

378,434

 

422,413

 

63,489

 

692,291

 

1,201,144

 

180,533

 

Adjusted EBITDA margin

 

25.2

%

32.0

%

27.9

%

27.9

%

31.9

%

32.3

%

32.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Net Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees billed:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transaction fees billed to borrowers

 

1,298,247

 

1,753,192

 

2,338,933

 

351,545

 

3,230,892

 

5,599,879

 

841,669

 

Upfront fees billed to borrowers

 

1,192,449

 

1,537,969

 

2,046,742

 

307,628

 

2,982,135

 

4,919,399

 

739,392

 

Monthly fees billed to borrowers

 

105,798

 

215,223

 

292,191

 

43,917

 

248,757

 

680,480

 

102,277

 

Service fees billed to investors

 

110,943

 

222,845

 

271,961

 

40,876

 

263,563

 

671,938

 

100,993

 

Others

 

5,196

 

21,697

 

41,118

 

6,180

 

11,631

 

75,417

 

11,335

 

Value-added tax

 

(91,788

)

(135,267

)

(176,741

)

(26,564

)

(225,225

)

(425,959

)

(64,021

)

Total fees billed

 

1,322,598

 

1,862,467

 

2,475,271

 

372,037

 

3,280,861

 

5,921,275

 

889,976

 

Stand-ready liabilities associated with quality assurance program and guarantee

 

(430,569

)

(655,167

)

(896,155

)

(134,694

)

(1,069,386

)

(2,105,138

)

(316,405

)

Deferred revenue

 

(16,553

)

(10,297

)

(26,040

)

(3,914

)

(52,776

)

(45,999

)

(6,914

)

Cash incentives

 

(24,074

)

(51,614

)

(91,371

)

(13,733

)

(55,337

)

(173,340

)

(26,053

)

Value-added tax

 

25,309

 

37,668

 

52,199

 

7,846

 

63,519

 

121,762

 

18,301

 

Net revenues

 

876,711

 

1,183,057

 

1,513,904

 

227,542

 

2,166,881

 

3,718,560

 

558,905

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

344,281

 

269,096

 

302,974

 

45,537

 

736,617

 

922,971

 

138,724

 

Interest income

 

(9,778

)

(27,398

)

(33,250

)

(4,998

)

(22,065

)

(84,797

)

(12,745

)

Income tax expense

 

(131,946

)

130,358

 

85,732

 

12,886

 

(44,659

)

283,837

 

42,661

 

Depreciation and amortization

 

2,816

 

4,923

 

6,892

 

1,036

 

7,055

 

15,991

 

2,403

 

Share-based compensation

 

15,343

 

1,455

 

60,065

 

9,028

 

15,343

 

63,142

 

9,490

 

Adjusted EBITDA

 

220,716

 

378,434

 

422,413

 

63,489

 

692,291

 

1,201,144

 

180,533

 

 

10



 

Delinquency Rates

 

 

 

Delinquent for

 

 

 

15-29 days

 

30-59 days

 

60-89 days

 

All Loans

 

 

 

 

 

 

 

December 31, 2013

 

0.2

%

0.4

%

0.3

%

December 31, 2014

 

0.3

%

0.2

%

0.2

%

December 31, 2015

 

0.4

%

0.5

%

0.4

%

December 31, 2016

 

0.4

%

0.7

%

0.6

%

March 31, 2017

 

0.4

%

0.8

%

0.6

%

June 30, 2017

 

0.4

%

0.7

%

0.5

%

September 30, 2017

 

0.5

%

0.7

%

0.6

%

 

 

 

 

 

 

 

 

Online Channels

 

 

 

 

 

 

 

December 31, 2013

 

0.1

%

0.9

%

0.3

%

December 31, 2014

 

0.4

%

0.3

%

0.2

%

December 31, 2015

 

0.6

%

0.8

%

0.6

%

December 31, 2016

 

0.6

%

1.0

%

0.8

%

March 31, 2017

 

0.5

%

1.0

%

0.8

%

June 30, 2017

 

0.5

%

0.8

%

0.7

%

September 30, 2017

 

0.6

%

0.8

%

0.7

%

 

 

 

 

 

 

 

 

Offline Channels

 

 

 

 

 

 

 

December 31, 2013

 

0.3

%

0.2

%

0.2

%

December 31, 2014

 

0.3

%

0.2

%

0.2

%

December 31, 2015

 

0.3

%

0.4

%

0.3

%

December 31, 2016

 

0.4

%

0.6

%

0.4

%

March 31, 2017

 

0.4

%

0.6

%

0.5

%

June 30, 2017

 

0.4

%

0.6

%

0.5

%

Sep 30, 2017

 

0.4

%

0.6

%

0.5

%

 

11



 

Net Charge-Off Rate for Previous Risk Grid

 

Loan issued
period

 

Loan grade

 

Amount of loans facilitated
during the period

 

Accumulated M3+ Net Charge-Off
as of September 30, 2017

 

Total Net Charge-Off Rate
as of September 30, 2017

 

 

 

 

 

(in RMB thousands)

 

(in RMB thousands)

 

 

 

2014

 

A

 

1,917,542

 

90,940

 

4.7

%

 

 

B

 

303,030

 

20,541

 

6.8

%

 

 

C

 

 

 

 

 

 

D

 

7,989

 

528

 

6.6

%

 

 

Total

 

2,228,561

 

112,009

 

5.0

%

2015

 

A

 

873,995

 

49,849

 

5.7

%

 

 

B

 

419,630

 

33,087

 

7.9

%

 

 

C

 

557,414

 

59,028

 

10.6

%

 

 

D

 

7,706,574

 

701,425

 

9.1

%

 

 

Total

 

9,557,613

 

843,389

 

8.8

%

2016

 

A

 

1,141,835

 

19,360

 

1.7

%

 

 

B

 

749,868

 

27,287

 

3.6

%

 

 

C

 

1,403,553

 

74,550

 

5.3

%

 

 

D

 

17,085,347

 

823,171

 

4.8

%

 

 

Total

 

20,380,603

 

944,368

 

4.6

%

Q1-Q3 2017

 

A

 

701,456

 

1,169

 

0.2

%

 

 

B

 

2,092,715

 

4,109

 

0.2

%

 

 

C

 

3,289,508

 

8,155

 

0.2

%

 

 

D

 

21,883,860

 

111,998

 

0.5

%

 

 

Total

 

27,967,538

 

125,431

 

0.4

%

 

12



 

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 September 30, 2017

 

Total Net Charge-Off Rate
as of September 30, 2017

 

 

 

 

 

(in RMB thousands)

 

(in RMB thousands)

 

 

 

2014

 

I

 

 

 

 

 

 

II

 

1,921,372

 

90,940

 

4.7

%

 

 

III

 

303,276

 

20,541

 

6.8

%

 

 

IV

 

 

 

 

 

 

V

 

3,913

 

528

 

13.5

%

 

 

Total

 

2,228,561

 

112,009

 

5.0

%

2015

 

I

 

146,490

 

3,583

 

2.4

%

 

 

II

 

1,614,354

 

77,638

 

4.8

%

 

 

III

 

2,521,705

 

186,541

 

7.4

%

 

 

IV

 

2,506,107

 

225,124

 

9.0

%

 

 

V

 

2,768,957

 

350,503

 

12.7

%

 

 

Total

 

9,557,613

 

843,389

 

8.8

%

2016

 

I

 

497,220

 

5,891

 

1.2

%

 

 

II

 

3,137,889

 

60,626

 

1.9

%

 

 

III

 

3,763,081

 

110,254

 

2.9

%

 

 

IV

 

5,183,233

 

210,862

 

4.1

%

 

 

V

 

7,799,180

 

556,735

 

7.1

%

 

 

Total

 

20,380,603

 

944,368

 

4.6

%

Q1-Q3 2017

 

I

 

1,705,739

 

947

 

0.1

%

 

 

II

 

5,901,281

 

10,281

 

0.2

%

 

 

III

 

7,023,361

 

15,996

 

0.2

%

 

 

IV

 

6,839,437

 

22,014

 

0.3

%

 

 

V

 

6,497,720

 

76,193

 

1.2

%

 

 

Total

 

27,967,538

 

125,431

 

0.4

%

 

13



 

M3+ Net Charge-Off Rate

 

Loan issued

 

Month on Book

 

period

 

4

 

7

 

10

 

13

 

16

 

19

 

22

 

25

 

28

 

31

 

34

 

2013Q1

 

1.9

%

3.2

%

3.1

%

2.3

%

2.0

%

0.9

%

0.5

%

0.5

%

0.4

%

0.4

%

0.4

%

2013Q2

 

1.8

%

3.6

%

4.5

%

5.9

%

6.4

%

7.4

%

6.1

%

7.0

%

7.5

%

7.5

%

7.8

%

2013Q3

 

0.5

%

2.8

%

4.2

%

5.5

%

6.1

%

6.5

%

7.1

%

7.1

%

7.0

%

6.9

%

6.9

%

2013Q4

 

0.7

%

3.4

%

4.8

%

6.2

%

6.8

%

7.5

%

8.3

%

8.3

%

8.2

%

8.5

%

8.3

%

2014Q1

 

1.0

%

4.2

%

6.1

%

7.0

%

8.4

%

9.3

%

9.8

%

9.7

%

9.9

%

9.8

%

9.5

%

2014Q2

 

0.5

%

1.8

%

2.6

%

3.8

%

4.3

%

4.6

%

4.6

%

4.7

%

4.7

%

4.7

%

4.8

%

2014Q3

 

0.2

%

0.8

%

2.0

%

2.8

%

3.3

%

3.7

%

4.0

%

4.2

%

4.2

%

4.1

%

4.1

%

2014Q4

 

0.3

%

1.5

%

2.7

%

3.5

%

4.1

%

4.6

%

5.1

%

5.2

%

5.2

%

5.3

%

5.2

%

2015Q1

 

0.6

%

2.7

%

4.4

%

5.8

%

7.1

%

8.2

%

9.1

%

9.6

%

9.9

%

10.1

%

 

 

2015Q2

 

0.5

%

2.1

%

3.7

%

5.3

%

6.6

%

7.7

%

8.6

%

9.2

%

9.6

%

 

 

 

 

2015Q3

 

0.2

%

1.6

%

3.4

%

4.9

%

6.4

%

7.4

%

8.1

%

8.6

%

 

 

 

 

 

 

2015Q4

 

0.2

%

1.6

%

3.2

%

4.9

%

6.2

%

7.2

%

7.9

%

 

 

 

 

 

 

 

 

2016Q1

 

0.2

%

1.3

%

2.9

%

4.3

%

5.4

%

6.4

%

 

 

 

 

 

 

 

 

 

 

2016Q2

 

0.2

%

1.7

%

3.4

%

4.9

%

6.0

%

 

 

 

 

 

 

 

 

 

 

 

 

2016Q3

 

0.1

%

1.5

%

3.2

%

4.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016Q4

 

0.2

%

1.5

%

3.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017Q1

 

0.2

%

1.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017Q2

 

0.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14