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 March 2018

 


 

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:  March 15, 2018

 

2



 

Exhibit Index

 

Exhibit 99.1—Press Release

 

3


Exhibit 99.1

 

Yirendai Reports Fourth Quarter and Full Year 2017 Financial Results

 

BEIJING, March 14, 2018 — Yirendai Ltd. (NYSE: YRD) (“Yirendai” or the “Company”), a leading fintech company in China, today announced its unaudited financial results for the quarter and full year ended December 31, 2017.

 

 

 

For Three Months Ended

 

For Twelve Months Ended

 

in RMB million

 

December
31, 2017

 

December
31, 2016

 

YoY
Change

 

December
31, 2017

 

December
31, 2016

 

YoY
Change

 

Amount of Loans Facilitated

 

13,438.5

 

6,883.4

 

95

%

41,406.1

 

20,486.1

 

102

%

Total Net Revenue

 

1,824.8

 

1,071.1

 

70

%

5,543.4

 

3,238.0

 

71

%

Total Fees Billed (non-GAAP)

 

2,944.0

 

1,630.4

 

81

%

8,865.2

 

4,911.2

 

81

%

Net Income

 

448.8

 

379.8

 

18

%

1,371.8

 

1,116.4

 

23

%

Adjusted EBITDA (non-GAAP)

 

542.7

 

401.1

 

35

%

1,743.8

 

1,093.4

 

59

%

 

In the fourth quarter of 2017, Yirendai facilitated RMB 13,438.5 million (US$2,065.5 million) of loans to 202,370 qualified individual borrowers through its online marketplace, representing a year-over-year growth of 95%; 74.6% of the borrowers were acquired from online channels; nearly 100% of the loan volume originated from online channels was facilitated through mobile.

 

In the fourth quarter of 2017, Yirendai facilitated 233,374 investors with total investment amount of RMB 15,967.4 million (US$2,454.2 million), 100% of which was facilitated through its online platform and 92% of which was facilitated through its mobile application.

 

For the fourth quarter of 2017, total net revenue was RMB 1,824.8 million (US$280.5 million), an increase of 21% from the previous quarter and 70% year-over-year; net income was RMB 448.8 million (US$69.0 million), an increase of 48% from the previous quarter and 18% year-over-year.

 

In the full year of 2017, Yirendai facilitated RMB 41,406.1 million (US$6,364.0 million) of loans to 649,154 qualified individual borrowers through its online marketplace, representing a year-over-year growth of 102%; 72.9% of the borrowers were acquired from online channels; nearly 100% of the loan volume originated from online channels was facilitated through mobile.

 

In the full year of 2017, Yirendai facilitated 592,642 investors with total investment amount of RMB 48,074.1 million (US$7,388.9 million), 100% of which was facilitated through its online platform and 87% of which was facilitated through its mobile application.

 

For the full year of 2017, total net revenue was RMB 5,543.4 million (US$852.0 million), representing a year-over-year growth of 71%; net income was RMB 1,371.8 million (US$210.8 million), representing an increase of 23% from prior year.

 

“We are pleased to conclude 2017 with another strong quarter driven by continued expansion of our online business,” commented Ms. Yihan Fang, Chief Executive Officer of Yirendai. “We will continue to grow our online lending platform, online wealth management and technology platform businesses.  In addition, over the next few months, we will remain in close communications with the regulatory bodies to ensure that we will be fully prepared for the upcoming registration process. We believe leading platforms including Yirendai will benefit from a heathier industry development driven by tightening regulations.”

 

“We have maintained strong growth momentum during the quarter,” commented Mr. Dennis Cong, Chief Financial Officer of Yirendai. “We delivered solid financial results in 2017 as we further grow our business from online channels and start to expand into new business such as wealth management and technology platform business. Going into 2018, we will continue to grow overall topline and bottom line while capture all the business opportunities as we enter into industry consolidation period. We will also strive to expand our partnerships with leading financial institutions to diversify funding sources and maintain funding cost advantage.”

 

1



 

Fourth quarter 2017 Financial Results

 

Total amount of loans facilitated in the fourth quarter of 2017 was RMB 13,438.5 million (US$2,065.5 million), increased by 95% from RMB 6,883.4 million in the same period last year, reflecting strong demand for our products and services, especially from customers acquired from online channels. As of December 31, 2017, the Yirendai platform had facilitated approximately RMB 73.9 billion (US$11.4 billion) in loan principal since its inception.

 

Total net revenue in the fourth quarter of 2017 was RMB 1,824.8 million (US$280.5 million), increased by 70% from RMB 1,071.1 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 fourth quarter of 2017 were RMB 2,944.0 million (US$452.5 million), increased by 81% from RMB 1,630.4 million in the same period last year. Upfront fees billed to borrowers in the fourth quarter of 2017 were RMB 2,376.9 million (US$365.3 million), increased by 62% from RMB 1,468.3 million in the same period last year, primarily driven by the growth of loan origination volume. Monthly fees billed to borrowers in the fourth quarter of 2017 were RMB 384.3 million (US$59.1 million), increased by 193% from RMB 131.3 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 fourth quarter of 2017 were RMB 339.8 million (US$52.2 million), increased by 150% from RMB 135.7 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 asset under management.

 

Sales and marketing expenses in the fourth quarter of 2017 were RMB 989.8 million (US$152.1 million), increased by 17% from RMB 844.2 million in the previous quarter and compared to RMB 538.0 million in the same period last year. Sales and marketing expenses in the fourth quarter of 2017 accounted for 7.4% of amount of loans facilitated, increased from 6.9% in the previous quarter and decreased from 7.8% in the same period last year. Sales and marketing expenses as a percentage of amount of loans facilitated increased from the previous quarter due to the increase of investor acquisition spending as we build up our online wealth management service and our slightly decreased approval rate in anticipation of potential volatility of borrower credit performance caused by the tightening of industry regulations.

 

2



 

Origination and servicing costs in the fourth quarter of 2017 were RMB 146.9 million (US$22.6 million), compared to RMB 119.0 million in the previous quarter and RMB 56.7 million in the same period last year. Origination and servicing costs in the fourth quarter of 2017 accounted for 1.1% of amount of loans facilitated, increased from 1.0% in the previous quarter and 0.8% in the same period last year mainly due to increased collection efforts this quarter.

 

General and administrative expenses in the fourth quarter of 2017 were RMB 155.1 million (US$23.8 million), compared to RMB 172.6 million in the previous quarter and RMB 79.7 million in the same period last year. General and administrative expenses in the fourth quarter of 2017 accounted for 8.5% of total net revenue, compared to 11.4 % in the previous quarter and 7.4% in the same period last year. General and administrative expenses in the fourth quarter of 2017 include an expense of RMB 61.0 million (US$9.4 million) related to the quality assurance program and a contra-expense of RMB 17.9 million (US$2.8 million) related to an organized fraud incident in the third quarter of 2016.

 

In the third quarter of 2016, the Company recognized an expense of RMB 81.3 million (US$12.5 million) related to an organized fraud incident concerning one type of our FastTrack loan products. After evaluating future payouts as of December 31, 2017, the Company reversed a RMB 17.9 million (US$2.8 million) contingent liability related to the organized fraud incident.

 

Income tax expense in the fourth quarter of 2017 was RMB 97.4 million (US$15.0 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 fourth quarter of 2017 was RMB 448.8 million (US$69.0 million), increased by 48% from RMB 303.0 million in the previous quarter and increased by 18% from RMB 379.8 million for the same period last year.

 

Adjusted EBITDA (non-GAAP) in the fourth quarter of 2017 was RMB 542.7 million (US$83.4 million), increased by 28% from RMB 422.4 million in the previous quarter and increased by 35% from RMB 401.1 million in the same period last year. Adjusted EBITDA margin1 (non-GAAP) in the fourth quarter of 2017 was 29.7%, compared to 27.9% in the previous quarter and 37.5% in the same period last year.

 

Basic income per ADS in the fourth quarter of 2017 was RMB 7.40 (US$1.14), increased from RMB 5.00 in the previous quarter and RMB 6.36 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.

 

3



 

Diluted income per ADS in the fourth quarter of 2017 was RMB 7.25 (US$1.11), increased from RMB 4.91 in the previous quarter and RMB 6.28 in the same period last year.

 

Net cash generated from operating activities in the fourth quarter of 2017 was RMB 1,275.3 million (US$196.0 million), increased from RMB 346.3 million in the previous quarter and RMB 836.1 million in the same period last year.

 

As of December 31, 2017, cash and cash equivalents was RMB 1,857.2 million (US$ 285.4 million), compared to RMB 1,403.5 million as of September 30, 2017. As of December 31, 2017, balance of held-to-maturity investments was RMB 9.9 million (US$1.5 million), compared to RMB 168.9 million as of September 30, 2017. As of December 31, 2017, balance of available-for-sale investments was RMB 969.8 million (US$149.0 million), compared to RMB 996.7 million as of September 30, 2017.

 

Quality Assurance Program and Guarantee. In anticipation of potential volatility of borrower credit performance caused by the recent tightening of industry regulations, in the fourth quarter of 2017, Yirendai accrued liabilities from quality assurance program and guarantee of RMB 1,047.8 million (US$161.0 million), which is equal to approximately 8.5% of the loans facilitated through its marketplace covered by the quality assurance program during the period. In the fourth quarter of 2017, the Company released liabilities of RMB 689.7 million (US$ 106.0 million) to pay out the outstanding principal and accrued interest of default loans. During the quarter, the Company also reversed a contingent liability of RMB 17.9 million (US$2.8 million) in relation to the organized fraud incident in July 2016 during the quarter after evaluating future payouts. In addition, in the fourth quarter of 2017, after reviewing the sufficiency of the liability as of December 31, 2017, the Company recognized an additional contingent liability of RMB 61.0 million (US$9.4 million) according to historical loans’ performance. As of December 31, 2017, liabilities from quality assurance program and guarantee were RMB 2,793.9 million (US$429.4 million).

 

Delinquency rates. As of December 31, 2017, the delinquency rates for loans that are past due for 15-29 days, 30-59 days and 60-89 days were 0.8%, 0.9% and 0.7%, compared to 0.5%, 0.7% and 0.6%, as of September 30, 2017. The delinquency rates for loans that are past due for 15-29 days has increased as compared to prior quarter due to a short-term volatility of borrower credit performance since new regulations were issued in December 2017.

 

Cumulative M3+ net charge-off rates. As of December 31, 2017, the cumulative M3+ net charge-off rate for loans originated in 2015 was 9.3%, compared to 8.8% as of September 30, 2017. As of December 31, 2017, the cumulative M3+ net charge-off rate for loans originated in 2016 was 5.9%, compared to 4.6% as of September 30, 2017. As the 2015 and 2016 vintage loans continue to mature, the charge off level is broadly consistent with our risk performance expectation.

 

4



 

Dividend

 

The board of directors has approved a dividend of RMB 0.9298 (US$0.14) per ordinary share of the Company (or RMB 1.8596 (US$0.28) per American depositary share of the Company) for the second half of 2017, which is expected to be paid on May 15, 2018 to holders of the Company’s ordinary shares of record as of the close of business on April 30, 2018.

 

Under the Company’s semi-annual dividend policy announced on August 1, 2017, semi-annual dividends will be set at an amount equivalent to approximately 15% of the Company’s anticipated net income after tax in each half year commencing from the second half of 2017. The determination to declare and pay such semi-annual dividend and the amount of dividend in any particular half year will be made at the discretion of the Board and will be based upon the Company’s operations and earnings, cash flow, financial condition and other relevant factors that the Board may deem appropriate.

 

Other Operating Metrics and Business Results

 

·                      As of December 31, 2017, remaining principal of performing loans totaled RMB 40.6 billion (US$6.2 billion), increased by 19% from RMB 34.2 billion as of September 30, 2017 and 95% from RMB 20.8 billion as of December 31, 2016.

·                      In the fourth quarter of 2017, Grade A, B, C and D loans represented 2.0%, 8.8%, 13.0%, and 76.2% and Grade I, II, III, IV and V loans represented 7.4%, 23.6%, 26.7%, 25.5% and 16.8% of the Company’s product portfolio, respectively.

 

Other Developments

 

Partnership with PICC P&C

 

On February 9, 2018, the Company announced that it had entered into a three-year business agreement (the “Agreement”) with PICC Property and Casualty Company Limited (“PICC P&C”). Under the terms of the Agreement, PICC P&C will provide surety insurance for loans, with maximum term of 12 months and maximum contract amount of RMB 200,000 (US$31,000 approximately) which are facilitated through Yirendai’s online marketplace. PICC P&C will charge borrowers an insurance premium and will reimburse lenders their principal and expected interest in the event of loan defaults within the agreed scope of the Agreement.

 

Accounting Policy Change

 

Effective from January 1, 2018, Yirendai has adopted a new revenue recognition policy, ASC 606 — Revenue from Contracts with Customers, in accordance with US GAAP. As a result of adopting ASC 606, we expect to record a cumulative-effect adjustment to the opening balance of retained earnings. Management has substantially completed the assessment on revenue recognition for the business under ASC 606 and is in the process of finalizing the conclusion.

 

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 and is based upon the new revenue recognition policy under US GAAP, ASC 606.

 

First Quarter 2018

 

·                      Total loans facilitated will be in the range of RMB 11,000 million to RMB 11,200 million.

·                      Total net revenue will be in the range of RMB 1,530 million to RMB 1,570 million.

·                      Adjusted EBITDA (non-GAAP) will be in the range of RMB 430 million to RMB 450 million.

 

5



 

Non-GAAP Financial Measures

 

In evaluating the business, the Company considers and uses several non-GAAP financial measures, such as fees billed, adjusted EBITDA, and adjusted EBITDA margin 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.

 

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 6.5063 to US$1.00, the effective noon buying rate on December 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 8:00 p.m. Eastern Time on March 14, 2018, (or 8:00 a.m. Beijing/Hong Kong Time on March 15, 2018).

 

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:

8097206

 

A replay of the conference call may be accessed by phone at the following numbers until March 21, 2018:

 

International:

+61 2-8199-0299

U.S. Toll Free:

+1 646-254-3697

Replay Access Code:

8097206

 

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

 

6



 

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 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 ir.yirendai.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 Full Year Ended

 

 

 

December 31, 2016

 

September 30,
2017

 

December 31,
2017

 

December 31,
2017

 

December 31,
2016

 

December 31,
2017

 

December 31,
2017

 

 

 

RMB

 

RMB

 

RMB

 

USD

 

RMB

 

RMB

 

USD

 

Net revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan facilitation services

 

1,036,630

 

1,425,162

 

1,703,931

 

261,889

 

3,133,423

 

5,226,691

 

803,328

 

Post-origination services

 

25,039

 

49,951

 

62,564

 

9,616

 

84,154

 

187,216

 

28,775

 

Others

 

9,441

 

38,791

 

58,295

 

8,960

 

20,414

 

129,443

 

19,895

 

Total net revenue

 

1,071,110

 

1,513,904

 

1,824,790

 

280,465

 

3,237,991

 

5,543,350

 

851,998

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

537,953

 

844,165

 

989,811

 

152,131

 

1,571,038

 

2,921,236

 

448,986

 

Origination and servicing

 

56,668

 

119,036

 

146,915

 

22,580

 

180,076

 

417,882

 

64,227

 

General and administrative

 

79,714

 

172,643

 

155,090

 

23,837

 

402,111

 

526,845

 

80,976

 

Total operating costs and expenses

 

674,335

 

1,135,844

 

1,291,816

 

198,548

 

2,153,225

 

3,865,963

 

594,189

 

Interest income

 

14,778

 

33,250

 

30,054

 

4,619

 

36,843

 

114,851

 

17,652

 

Fair value adjustments related to Consolidated ABFE

 

(1,287

)

(22,762

)

(16,802

)

(2,582

)

(19,735

)

(40,124

)

(6,167

)

Non-operating income, net

 

225

 

158

 

(44

)

(7

)

575

 

876

 

135

 

Income before provision for income taxes

 

410,491

 

388,706

 

546,182

 

83,947

 

1,102,449

 

1,752,990

 

269,429

 

Income tax expense/(benefit)

 

30,710

 

85,732

 

97,370

 

14,966

 

(13,949

)

381,207

 

58,590

 

Net income

 

379,781

 

302,974

 

448,812

 

68,981

 

1,116,398

 

1,371,783

 

210,839

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of ordinary shares outstanding, basic

 

119,493,662

 

121,249,448

 

121,319,117

 

121,319,117

 

118,240,414

 

120,457,573

 

120,457,573

 

Basic income per share

 

3.1783

 

2.4988

 

3.6994

 

0.5686

 

9.4418

 

11.3881

 

1.7503

 

Basic income per ADS

 

6.3566

 

4.9976

 

7.3988

 

1.1372

 

18.8836

 

22.7762

 

3.5006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of ordinary shares outstanding, diluted

 

120,859,390

 

123,509,834

 

123,744,151

 

123,744,151

 

118,937,082

 

122,256,838

 

122,256,838

 

Diluted income per share

 

3.1423

 

2.4530

 

3.6269

 

0.5574

 

9.3865

 

11.2205

 

1.7246

 

Diluted income per ADS

 

6.2846

 

4.9060

 

7.2538

 

1.1148

 

18.7730

 

22.4410

 

3.4492

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited Condensed Consolidated Cash Flow Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash generated from operating activities

 

836,055

 

346,329

 

1,275,309

 

196,012

 

2,113,435

 

2,716,513

 

417,520

 

Net cash (used in)/provided by investing activities

 

(807,744

)

342,289

 

(193,498

)

(29,740

)

(1,421,663

)

(374,597

)

(57,574

)

Net cash provided by/(used in) financing activities

 

60,400

 

(127,864

)

(581,752

)

(89,414

)

135,298

 

(849,450

)

(130,558

)

Effect of foreign exchange rate changes

 

17,193

 

(14,885

)

9,018

 

1,386

 

29,356

 

(16,109

)

(2,476

)

Net increase in cash, cash equivalents and restricted cash

 

105,904

 

545,869

 

509,077

 

78,244

 

856,426

 

1,476,357

 

226,912

 

Cash, cash equivalents and restricted cash, beginning of period

 

2,080,607

 

2,607,922

 

3,153,791

 

484,729

 

1,330,085

 

2,186,511

 

336,061

 

Cash, cash equivalents and restricted cash, end of period

 

2,186,511

 

3,153,791

 

3,662,868

 

562,973

 

2,186,511

 

3,662,868

 

562,973

 

 

8



 

Unaudited Consolidated Balance Sheet

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

 

 

 

As of

 

 

 

December
31, 2016

 

September
30, 2017

 

December
31, 2017

 

December
31, 2017

 

 

 

RMB

 

RMB

 

RMB

 

USD

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

968,225

 

1,403,529

 

1,857,175

 

285,443

 

Restricted cash

 

1,218,286

 

1,750,262

 

1,805,693

 

277,530

 

Accounts receivable

 

28,581

 

24,050

 

21,368

 

3,284

 

Prepaid expenses and other assets

 

466,763

 

1,136,993

 

1,062,484

 

163,301

 

Loans at fair value

 

371,033

 

558,178

 

791,681

 

121,679

 

Amounts due from related parties

 

1,678

 

176,867

 

117,222

 

18,017

 

Held-to-maturity investments

 

98,917

 

168,917

 

9,944

 

1,528

 

Available-for-sale investments

 

1,158,000

 

996,660

 

969,759

 

149,049

 

Property, equipment and software, net

 

35,503

 

81,515

 

82,249

 

12,641

 

Deferred tax assets

 

436,402

 

685,875

 

801,089

 

123,125

 

Total assets

 

4,783,388

 

6,982,846

 

7,518,664

 

1,155,597

 

Accounts payable

 

13,691

 

22,634

 

33,841

 

5,201

 

Amounts due to related parties

 

11,609

 

23,153

 

76,544

 

11,765

 

Liabilities from quality assurance program and guarantee

 

1,471,000

 

2,392,794

 

2,793,948

 

429,422

 

Deferred revenue

 

164,318

 

194,646

 

222,906

 

34,260

 

Payable to investors at fair value

 

418,686

 

145,200

 

113,445

 

17,436

 

Accrued expenses and other liabilities

 

564,165

 

1,704,207

 

1,296,650

 

199,291

 

Deferred tax liability

 

 

 

4,545

 

11,277

 

1,733

 

Total liabilities

 

2,643,469

 

4,487,179

 

4,548,611

 

699,108

 

Ordinary shares

 

75

 

76

 

76

 

12

 

Additional paid-in capital

 

933,272

 

1,094,916

 

1,123,443

 

172,670

 

Accumulated other comprehensive income

 

29,457

 

4,330

 

11,478

 

1,764

 

Retained earnings

 

1,177,115

 

1,396,345

 

1,835,056

 

282,043

 

Total equity

 

2,139,919

 

2,495,667

 

2,970,053

 

456,489

 

Total liabilities and equity

 

4,783,388

 

6,982,846

 

7,518,664

 

1,155,597

 

 

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 Full Year Ended

 

 

 

December
31,
2016

 

September
30, 2017

 

December
31,
2017

 

December
31,
2017

 

December
31,
2016

 

December
31,
2017

 

December
31,
2017

 

 

 

RMB

 

RMB

 

RMB

 

USD

 

RMB

 

RMB

 

USD

 

Operating Highlights:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amount of loans facilitated

 

6,883,442

 

12,185,367

 

13,438,520

 

2,065,463

 

20,486,128

 

41,406,058

 

6,363,995

 

Loans generated from online channels

 

2,497,623

 

6,972,156

 

7,709,403

 

1,184,914

 

7,780,555

 

22,543,298

 

3,464,842

 

Loans generated from offline channels

 

4,385,819

 

5,213,211

 

5,729,117

 

880,549

 

12,705,573

 

18,862,760

 

2,899,153

 

Fees billed

 

1,630,358

 

2,475,271

 

2,943,953

 

452,478

 

4,911,221

 

8,865,228

 

1,362,561

 

Remaining principal of performing loans

 

20,780,617

 

34,235,727

 

40,616,167

 

6,242,591

 

20,780,617

 

40,616,167

 

6,242,591

 

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

 

20,103,043

 

33,622,142

 

39,717,029

 

6,104,396

 

20,103,043

 

39,717,029

 

6,104,396

 

Number of borrowers

 

110,785

 

192,725

 

202,370

 

202,370

 

321,019

 

649,154

 

649,154

 

Borrowers from online channels

 

63,010

 

145,838

 

150,982

 

150,982

 

184,430

 

472,960

 

472,960

 

Borrowers from offline channels

 

47,775

 

46,887

 

51,388

 

51,388

 

136,589

 

176,194

 

176,194

 

Number of investors

 

194,505

 

214,967

 

233,374

 

233,374

 

597,765

 

592,642

 

592,642

 

Investors from online channels

 

194,505

 

214,967

 

233,374

 

233,374

 

597,765

 

592,642

 

592,642

 

Investors from offline channels

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

401,146

 

422,413

 

542,704

 

83,412

 

1,093,437

 

1,743,848

 

268,024

 

Adjusted EBITDA margin

 

37.5

%

27.9

%

29.7

%

29.7

%

33.8

%

31.5

%

31.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Net Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees billed:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transaction fees billed to borrowers

 

1,599,674

 

2,338,933

 

2,761,147

 

424,381

 

4,830,566

 

8,361,026

 

1,285,066

 

Upfront fees billed to borrowers

 

1,468,330

 

2,046,742

 

2,376,885

 

365,321

 

4,450,465

 

7,296,284

 

1,121,418

 

Monthly fees billed to borrowers

 

131,344

 

292,191

 

384,262

 

59,060

 

380,101

 

1,064,742

 

163,648

 

Service fees billed to investors

 

135,747

 

271,961

 

339,786

 

52,224

 

399,311

 

1,011,724

 

155,499

 

Others

 

10,007

 

41,118

 

61,746

 

9,490

 

21,639

 

137,163

 

21,082

 

Value-added tax

 

(115,070

)

(176,741

)

(218,726

)

(33,617

)

(340,295

)

(644,685

)

(99,086

)

Total fees billed

 

1,630,358

 

2,475,271

 

2,943,953

 

452,478

 

4,911,221

 

8,865,228

 

1,362,561

 

Stand-ready liabilities associated with quality assurance program and guarantee

 

(528,852

)

(896,155

)

(1,051,211

)

(161,568

)

(1,598,238

)

(3,156,349

)

(485,122

)

Deferred revenue

 

(18,545

)

(26,040

)

(32,492

)

(4,994

)

(71,322

)

(78,491

)

(12,064

)

Cash incentives

 

(42,836

)

(91,371

)

(100,057

)

(15,379

)

(98,173

)

(273,397

)

(42,020

)

Value-added tax

 

30,985

 

52,199

 

64,597

 

9,928

 

94,503

 

186,359

 

28,643

 

Net revenues

 

1,071,110

 

1,513,904

 

1,824,790

 

280,465

 

3,237,991

 

5,543,350

 

851,998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

379,781

 

302,974

 

448,812

 

68,981

 

1,116,398

 

1,371,783

 

210,839

 

Interest income

 

(14,778

)

(33,250

)

(30,054

)

(4,619

)

(36,843

)

(114,851

)

(17,652

)

Income tax expense

 

30,710

 

85,732

 

97,370

 

14,966

 

(13,949

)

381,207

 

58,590

 

Depreciation and amortization

 

3,554

 

6,892

 

7,738

 

1,189

 

10,609

 

23,729

 

3,647

 

Share-based compensation

 

1,879

 

60,065

 

18,838

 

2,895

 

17,222

 

81,980

 

12,600

 

Adjusted EBITDA

 

401,146

 

422,413

 

542,704

 

83,412

 

1,093,437

 

1,743,848

 

268,024

 

 

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

%

December 31, 2017

 

0.8

%

0.9

%

0.7

%

 

 

 

 

 

 

 

 

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

%

December 31, 2017

 

1.2

%

1.2

%

0.9

%

 

 

 

 

 

 

 

 

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

%

December 31, 2017

 

0.5

%

0.7

%

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 December 31, 2017

 

Total Net Charge-Off Rate
as of December 31, 2017

 

 

 

 

 

(in RMB thousands)

 

(in RMB thousands)

 

 

 

2014

 

A

 

1,917,542

 

88,935

 

4.6

%

 

 

B

 

303,030

 

20,243

 

6.7

%

 

 

C

 

 

 

 

 

 

D

 

7,989

 

518

 

6.5

%

 

 

Total

 

2,228,561

 

109,696

 

4.9

%

2015

 

A

 

873,995

 

50,703

 

5.8

%

 

 

B

 

419,630

 

33,646

 

8.0

%

 

 

C

 

557,414

 

60,527

 

10.9

%

 

 

D

 

7,706,574

 

743,268

 

9.6

%

 

 

Total

 

9,557,613

 

888,144

 

9.3

%

2016

 

A

 

1,141,835

 

25,183

 

2.2

%

 

 

B

 

749,868

 

36,335

 

4.8

%

 

 

C

 

1,403,553

 

94,914

 

6.8

%

 

 

D

 

17,085,347

 

1,053,336

 

6.2

%

 

 

Total

 

20,380,603

 

1,209,768

 

5.9

%

2017

 

A

 

970,550

 

3,328

 

0.3

%

 

 

B

 

3,277,816

 

16,763

 

0.5

%

 

 

C

 

5,030,271

 

31,014

 

0.6

%

 

 

D

 

32,127,421

 

391,318

 

1.2

%

 

 

Total

 

41,406,058

 

442,423

 

1.1

%

 

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 December 31, 2017

 

Total Net Charge-Off Rate
as of December 31, 2017

 

 

 

 

 

(in RMB thousands)

 

(in RMB thousands)

 

 

 

2014

 

I

 

 

 

 

 

 

II

 

1,921,372

 

88,935

 

4.6

%

 

 

III

 

303,276

 

20,243

 

6.7

%

 

 

IV

 

 

 

 

 

 

V

 

3,913

 

518

 

13.2

%

 

 

Total

 

2,228,561

 

109,696

 

4.9

%

2015

 

I

 

146,490

 

3,865

 

2.6

%

 

 

II

 

1,614,354

 

83,880

 

5.2

%

 

 

III

 

2,521,705

 

195,378

 

7.7

%

 

 

IV

 

2,506,107

 

238,742

 

9.5

%

 

 

V

 

2,768,957

 

366,279

 

13.2

%

 

 

Total

 

9,557,613

 

888,144

 

9.3

%

2016

 

I

 

497,220

 

7,824

 

1.6

%

 

 

II

 

3,137,889

 

81,607

 

2.6

%

 

 

III

 

3,763,081

 

141,208

 

3.8

%

 

 

IV

 

5,183,233

 

269,657

 

5.2

%

 

 

V

 

7,799,180

 

709,472

 

9.1

%

 

 

Total

 

20,380,603

 

1,209,768

 

5.9

%

2017

 

I

 

2,701,162

 

6,522

 

0.2

%

 

 

II

 

9,079,647

 

43,501

 

0.5

%

 

 

III

 

10,611,451

 

83,420

 

0.8

%

 

 

IV

 

10,263,135

 

106,168

 

1.0

%

 

 

V

 

8,750,663

 

202,812

 

2.3

%

 

 

Total

 

41,406,058

 

442,423

 

1.1

%

 

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

%

5.3

%

2015Q1

 

0.6

%

2.7

%

4.4

%

5.8

%

7.1

%

8.2

%

9.1

%

9.6

%

9.9

%

10.2

%

10.3

%

2015Q2

 

0.5

%

2.1

%

3.7

%

5.3

%

6.6

%

7.7

%

8.6

%

9.2

%

9.6

%

9.9

%

 

 

2015Q3

 

0.2

%

1.6

%

3.4

%

4.9

%

6.4

%

7.4

%

8.1

%

8.6

%

9.0

%

 

 

 

 

2015Q4

 

0.2

%

1.6

%

3.2

%

4.9

%

6.2

%

7.2

%

8.0

%

8.7

%

 

 

 

 

 

 

2016Q1

 

0.2

%

1.3

%

2.9

%

4.3

%

5.4

%

6.4

%

7.2

%

 

 

 

 

 

 

 

 

2016Q2

 

0.2

%

1.7

%

3.4

%

4.9

%

6.1

%

7.1

%

 

 

 

 

 

 

 

 

 

 

2016Q3

 

0.1

%

1.5

%

3.2

%

4.6

%

5.9

%

 

 

 

 

 

 

 

 

 

 

 

 

2016Q4

 

0.2

%

1.5

%

3.0

%

4.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017Q1

 

0.2

%

1.4

%

3.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017Q2

 

0.3

%

1.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017Q3

 

0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14