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 2019

 


 

Commission File Number: 001-37657

 


 

YIREN DIGITAL 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/ Jia Liu

 

Name:

Jia Liu

 

Title:

Chief Financial Officer

 

Date: November 15, 2019

 

2


 

Exhibit Index

 

Exhibit 99.1—Press Release

 

3


Exhibit 99.1

 

Yiren Digital Reports Third Quarter 2019 Financial Results

 

BEIJING, Nov. 14, 2019 (GLOBE NEWSWIRE) — Yiren Digital Ltd. (NYSE: YRD) (“Yiren Digital” or the “Company”), a leading fintech company in China, today announced its unaudited financial results for the third quarter ended September 30, 2019.

 

Third Quarter 2019 Operational Highlights

 

Wealth Management—Yiren Wealth

 

·      Cumulative number of investors served reached 2,200, 223, representing an increase of 0.7% from 2,185,513 in the second quarter of 2019 and compared to 2,042,607 in the third quarter of 2018.

 

·      Number of active investors in the third quarter of 2019 was 586,333, representing a decrease of 13% from 671,957 in the second quarter of 2019.

 

·      Total assets under management (“AUM”) for Yiren Wealth’s P2P products was RMB 40,191.7 million (US$ 5,623.0 million) as of September 30, 2019, representing a decrease of 7% from RMB 43,249.9 million as of June 30, 2019. Average AUM per investor reached RMB 152,289 (US$ 21,306) as of September 30, 2019, representing an increase of 1% from RMB 151,378 as of June 30, 2019.

 


 

·      Total assets under administration (“AUA”) of non-P2P products amounted to RMB 767.2 million (US$ 107.3 million) in the third quarter of 2019, representing an increase of 169% from RMB 284.8 million in the second quarter of 2019. Total AUM of non-P2P products was RMB 645.9 million (US$90.4 million) as of September 30, 2019, representing an increase of 80% from RMB 358.6 million as of June 30, 2019. Non-P2P products include bank’s wealth management products, mutual funds and insurance.

 

·      Number of non-P2P investors was 19,496 as of September 30, 2019, representing an increase of 14% from 17,133 as of June 30, 2019.

 

Consumer Credit—Yiren Credit

 

·      Total loan originations in the third quarter of 2019 reached RMB 10.5 billion (US$1.5 billion), representing an increase of 9% from RMB 9.7 billion in the second quarter of 2019 and compared to RMB 11.8 billion in the third quarter of 2018.

 

·      Cumulative number of borrowers served reached 4,593,590, representing an increase of 2% from 4,491,761 in the second quarter of 2019 and compared to 4,161,600 in the third quarter of 2018.

 

·      Number of borrowers in the third quarter of 2019 was 150,280, representing an increase of 11% from 135,246 in the second quarter of 2019 and compared to 174,630 in the third quarter of 2018.

 


 

·      The percentage of loan volume generated by repeat borrowers was 34.0 % in the third quarter of 2019.

 

·      45.7% of loan originations were generated online in the third quarter of 2019.

 

·      Total outstanding principal balance of performing loans reached RMB 54,553.7 million (US$7,632.3 million) as of September 30, 2019, representing a decrease of 6% from RMB 58,071.3 million as of June 30, 2019.

 

“We are pleased to deliver solid performance this quarter amidst a tightening regulatory environment, as highlighted by a 48% increase in net profit to RMB 228.0 million from RMB 154.5 million in the previous quarter, a sign of improvement in our business fundamentals and operating efficiency resulted from the synergies of our business re-alignments,” said Mr. Ning Tang, Chairman and Chief Executive Officer of Yiren Digital. “Looking forward, we will stay focused on driving our credit business and enhancing shareholder value by expanding our product portfolio, achieving further diversification in funding sources and seeking new marketing channels. On wealth management, we rolled out online financial advisory services to selected clients in the third quarter of 2019 and we will continue to focus on building up our investor’s investment portfolio in non-p2p wealth management products.”

 

“We resumed loan origination growth this quarter with loan volume increasing to RMB 10.5 billion, representing a 9% growth quarter over quarter,” said Mr. Dennis Cong, Senior VP of Yiren Digital. “Our balance sheet remained strong with approximately RMB 3.0 billion of cash and short-term liquidity. In particular, we also generated a positive net cash flow from operating activities of RMB 808.1 million this quarter, indicating a resilient and profitable business model. On institutional funding, we want to highlight that we have increased the line of facility from our institutional partners to RMB 35.0 billion in the third quarter of 2019 from RMB 30.0 billion in the second quarter of 2019.”

 


 

“On credit performance and risk management, we are seeing promising improvements in early delinquencies this quarter indicating an enhanced asset quality” said Mr. Huan Chen, Chief Risk Officer of Yiren Digital. “Despite industry uncertainties our early conservative credit policy adjustment has shown improving trends and we are working with regulators in connecting our data to PBOC.”

 

Third Quarter 2019 Financial Results

 

Total amount of loans facilitated in the third quarter of 2019 was RMB 10,496.3 million (US$1,468.5 million), compared to RMB 11,781.9 million in the same period last year. As of September 30, 2019, the total outstanding principal amount of the performing loans was RMB 54.6 billion (US$7.6 billion), decreased by 6% from RMB 58.1 billion as of June 30, 2019.

 

Total net revenue in the third quarter of 2019 was RMB 2,056.1 million (US$287.7 million), compared to RMB 2,187.6 million in the same period last year. Revenue from Yiren Credit reached RMB 1,515.5 million (US$212.1 million), representing a decrease of 8% from RMB 1,643.8 million in the third quarter of 2018. Revenue from Yiren Wealth reached RMB 540.6 million (US$75.6 million), representing a decrease of 1% from RMB 543.8 million in the third quarter of 2018.

 

Sales and marketing expenses in the third quarter of 2019 were RMB 1,160.4 million (US$162.3 million), compared to RMB 1,449.6 million in the same period last year. Sales and marketing expenses in the third quarter of 2019 accounted for 11.1% of the total amount of loans facilitated, as compared to 12.3% in the same period last year mainly due to an increase in customer acquisition and as well as operating efficiencies.

 


 

Origination and servicing costs in the third quarter of 2019 were RMB 156.1 million (US$21.8 million), compared to RMB 262.1 million in the same period last year. Origination and servicing costs in the third quarter of 2019 accounted for 1.5% of the total amount of loans facilitated, compared to 2.2% in the same period last year.

 

General and administrative expenses in the third quarter of 2019 were RMB 168.1 million (US$23.5 million), compared to RMB 367.9 million in the same period last year. General and administrative expenses in the third quarter of 2019 accounted for 8.2% of the total net revenue, compared to 16.8% in the same period last year.

 

Allowance for contract assets in the third quarter of 2019 were RMB 344.7 million (US$48.2 million), compared to RMB 272.9 million in the same period last year. The increase was mainly attributable to changes in future collectability estimates.

 

Income tax expense in the third quarter of 2019 was RMB 19.9 million (US$2.8 million).

 

Net income in the third quarter of 2019 was RMB 228.0 million (US$31.9 million), compared to a net loss of RMB 135.8 million in the same period last year.

 

Adjusted EBITDA (non-GAAP) in the third quarter of 2019 was RMB 274.2 million (US$38.4 million), compared to an adjusted EBITDA loss of RMB 12.3 million in the same period last year. Adjusted EBITDA margin1 (non-GAAP) in the third quarter of 2019 was 13.3%, compared to -0.6% in the same period last year.

 


 

Basic income per ADS in the third quarter of 2019 was RMB 2.46 (US$0.34), compared to a basic loss per ADS of RMB 1.47 in the same period last year.

 

Diluted income per ADS in the third quarter of 2019 was RMB 2.45 (US$0.34), compared to a diluted loss per ADS of RMB 1.47 in the same period last year.

 

Net cash generated from operating activities in the third quarter of 2019 was RMB 808.1 million (US$113.1 million), compared to RMB 216.9 million in the same period last year.

 

Net cash used in investing activities in the third quarter of 2019 was RMB 924.1 million (US$129.3 million) which includes a payment of RMB 846.0 million made to CreditEase as part of the contingent consideration for the business realignment.

 

As of September 30, 2019, cash and cash equivalents was RMB 2,633.0 million (US$368.4 million), compared to RMB 2,706.5 million as of June 30, 2019. As of September 30, 2019, the balance of held-to-maturity investments was RMB 8.1 million (US$1.1 million), compared to RMB 9.5 million as of June 30, 2019. As of September 30, 2019, the balance of available-for-sale investments was RMB 426.3 million (US$59.6 million), compared to RMB 387.5 million as of June 30, 2019.

 

Delinquency rates. As of September 30, 2019, the delinquency rates for loans that are past due for 15-29 days, 30-59 days and 60-89 days were 1.0%, 1.8%, and 1.6%, respectively compared to 1.1%, 1.8%, and 1.9%, as of June 30, 2019.

 


 

Cumulative M3+ net charge-off rates. As of September 30, 2019, the cumulative M3+ net charge-off rate for loans originated in 2016 was 9.4%, compared to 9.2% as of June 30, 2019. As of September 30, 2019, the cumulative M3+ net charge-off rate for loans originated in 2017 was 15.3%, compared to 14.0% as of June 30, 2019. As of September 30, 2019, the cumulative M3+ net charge-off rate for loans originated in 2018 was 11.6%, compared to 8.7% as of June 30, 2019.

 

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 7.1477 to US$1.00, the effective noon buying rate on September 30, 2019, as set forth in the H.10 statistical release of the Federal Reserve Board.

 


 

Conference Call

 

Yiren Digital’s management will host an earnings conference call at 7:00 p.m. U.S. Eastern Time on November 14, 2019, (or 8:00 a.m. Beijing/Hong Kong Time on November 15, 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:

9299687

 

A replay of the conference call may be accessed by phone at the following numbers until November 22, 2019:

 

International:

+61 2-8199-0299

U.S. Toll Free:

+1 646-254-3697

Replay Access Code:

9299687

 


 

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 Yiren Digital’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 Yiren Digital’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 Yiren Digital’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 Yiren Digital’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 Yiren Digital 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 Yiren Digital

 

Yiren Digital 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. Yiren Digital 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. Yiren Digital’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:

 

Yiren Digital
Investor Relations
Email: ir@Yirendai.com

 


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

 


 

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,
2018

 

June 30,
2019

 

September 30,
2019

 

September 30,
2019

 

September 30,
2018

 

September 30,
2019

 

September 30,
2019

 

 

 

RMB
(Recast*)

 

RMB

 

RMB

 

USD

 

RMB
(Recast*)

 

RMB

 

USD

 

Net revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan facilitation services

 

1,251,834

 

1,237,718

 

1,286,923

 

180,047

 

6,303,575

 

3,579,687

 

500,817

 

Post-origination services

 

269,874

 

241,321

 

103,073

 

14,420

 

854,749

 

640,673

 

89,633

 

Account management services

 

508,625

 

549,024

 

489,673

 

68,508

 

1,302,170

 

1,527,037

 

213,640

 

Others

 

157,301

 

188,577

 

176,439

 

24,685

 

479,095

 

505,759

 

70,758

 

Total net revenue

 

2,187,634

 

2,216,640

 

2,056,108

 

287,660

 

8,939,589

 

6,253,156

 

874,848

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

1,449,556

 

1,208,647

 

1,160,365

 

162,341

 

5,421,523

 

3,496,957

 

489,241

 

Origination and servicing

 

262,050

 

162,945

 

156,073

 

21,835

 

834,187

 

491,141

 

68,713

 

General and administrative

 

367,894

 

175,534

 

168,092

 

23,517

 

1,394,173

 

601,333

 

84,130

 

Allowance for contract assets and receivables

 

272,889

 

500,861

 

344,742

 

48,231

 

783,596

 

1,036,707

 

145,041

 

Total operating costs and expenses

 

2,352,389

 

2,047,987

 

1,829,272

 

255,924

 

8,433,479

 

5,626,138

 

787,125

 

Other income/(expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

8,440

 

25,213

 

13,825

 

1,934

 

58,088

 

62,913

 

8,802

 

Fair value adjustments related to Consolidated ABFE

 

55,658

 

5,787

 

(1,323

)

(185

)

203,278

 

39,462

 

5,521

 

Others, net

 

1,089

 

17,480

 

7,112

 

995

 

(5,834

)

184,815

 

25,857

 

Total other income

 

65,187

 

48,480

 

19,614

 

2,744

 

255,532

 

287,190

 

40,180

 

Income before provision for income taxes

 

(99,568

)

217,133

 

246,450

 

34,480

 

761,642

 

914,208

 

127,903

 

Share of results of equity investees

 

(917

)

(816

)

1,505

 

211

 

(5,946

)

(4,268

)

(597

)

Income tax expense

 

35,307

 

61,856

 

19,924

 

2,788

 

161,802

 

158,314

 

22,149

 

Net income

 

(135,792

)

154,461

 

228,031

 

31,903

 

593,894

 

751,626

 

105,157

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of ordinary shares outstanding, basic

 

185,024,291

 

184,608,337

 

185,548,214

 

185,548,214

 

183,933,356

 

185,095,873

 

185,095,873

 

Basic income per share

 

(0.7339

)

0.8367

 

1.2290

 

0.1719

 

3.2289

 

4.0607

 

0.5681

 

Basic income per ADS

 

(1.4678

)

1.6734

 

2.4580

 

0.3438

 

6.4578

 

8.1214

 

1.1362

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of ordinary shares outstanding, diluted

 

185,024,291

 

186,667,233

 

186,351,678

 

186,351,678

 

186,088,414

 

186,433,058

 

186,433,058

 

Diluted income per share

 

(0.7339

)

0.8275

 

1.2237

 

0.1712

 

3.1915

 

4.0316

 

0.5640

 

Diluted income per ADS

 

(1.4678

)

1.6550

 

2.4474

 

0.3424

 

6.3830

 

8.0632

 

1.1280

 

 


 

Unaudited Condensed Consolidated Cash Flow Data

(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,
2018

 

June 30,
2019

 

September 30,
2019

 

September 30,
2019

 

September 30,
2018

 

September 30,
2019

 

September 30,
2019

 

 

 

RMB
(Recast*)

 

RMB
(Recast**)

 

RMB

 

USD

 

RMB
(Recast*)

 

RMB

 

USD

 

Net cash generated from/ (used in) operating activities

 

216,874

 

36,352

 

808,148

 

113,064

 

(2,505,496

)

186,065

 

26,032

 

Net cash provided by/ (used in) investing activities

 

2,220,043

 

240,896

 

(924,146

)

(129,293

)

2,426,607

 

(933,181

)

(130,557

)

Net cash (used in)/ provided by financing activities

 

(2,307,038

)

(73,385

)

6,886

 

963

 

(2,272,048

)

426,890

 

59,724

 

Effect of foreign exchange rate changes

 

(119,172

)

1,532

 

3,193

 

448

 

(122,031

)

2,529

 

354

 

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

 

10,707

 

205,395

 

(105,919

)

(14,818

)

(2,472,968

)

(317,697

)

(44,447

)

Cash, cash equivalents and restricted cash, beginning of period

 

1,996,647

 

2,617,311

 

2,822,706

 

394,911

 

4,480,322

 

3,034,484

 

424,540

 

Cash, cash equivalents and restricted cash, end of period

 

2,007,354

 

2,822,706

 

2,716,787

 

380,093

 

2,007,354

 

2,716,787

 

380,093

 

 


 

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

As of

 

 

 

December 31,
2018

 

June 30,
2019

 

September 30,
2019

 

September 30,
2019

 

 

 

RMB
(Recast*)

 

RMB

 

RMB

 

USD

 

Cash and cash equivalents

 

2,606,939

 

2,706,530

 

2,632,952

 

368,364

 

Restricted cash

 

427,546

 

116,176

 

83,835

 

11,729

 

Accounts receivable

 

40,326

 

27,212

 

67,231

 

9,406

 

Contract assets, net

 

3,909,263

 

2,958,476

 

2,598,202

 

363,502

 

Contract cost

 

145,460

 

141,480

 

143,066

 

20,016

 

Prepaid expenses and other assets

 

2,552,319

 

1,142,757

 

1,280,784

 

179,188

 

Loans at fair value

 

1,375,221

 

677,354

 

552,648

 

77,318

 

Financing receivables

 

 

25,175

 

24,630

 

3,446

 

Amounts due from related parties

 

1,361,805

 

1,791,515

 

1,678,499

 

234,831

 

Held-to-maturity investments

 

329,597

 

9,542

 

8,051

 

1,126

 

Available-for-sale investments

 

835,565

 

387,519

 

426,321

 

59,644

 

Long term investments

 

217,636

 

143,047

 

144,552

 

20,224

 

Property, equipment and software, net

 

266,002

 

230,078

 

213,962

 

29,934

 

Deferred tax assets

 

184,136

 

149,269

 

150,363

 

21,037

 

Right-of-use assets

 

 

398,154

 

383,545

 

53,660

 

Total assets

 

14,251,815

 

10,904,284

 

10,388,641

 

1,453,425

 

Accounts payable

 

307,046

 

54,158

 

62,313

 

8,718

 

Amounts due to related parties

 

8,276,459

 

169,189

 

289,820

 

40,547

 

Liabilities from quality assurance program and guarantee

 

9,950

 

6,539

 

5,644

 

790

 

Deferred revenue

 

569,469

 

390,621

 

381,899

 

53,430

 

Payable to investors at fair value

 

626,207

 

 

 

 

Accrued expenses and other liabilities

 

2,193,576

 

2,265,288

 

2,351,078

 

328,928

 

Refund liability

 

2,145,748

 

2,039,998

 

2,002,785

 

280,200

 

Deferred tax liabilities

 

486,773

 

329,347

 

267,647

 

37,445

 

Lease liabilities

 

 

341,364

 

322,832

 

45,166

 

Contingent consideration

 

 

2,626,734

 

1,780,734

 

249,134

 

Total liabilities

 

14,615,228

 

8,223,238

 

7,464,752

 

1,044,358

 

Ordinary shares

 

77

 

77

 

121

 

17

 

Shares to be issued

 

 

2,754,444

 

 

 

Additional paid-in capital

 

1,293,968

 

1,106,153

 

3,872,219

 

541,743

 

Treasury stock

 

(254

)

(37,097

)

(37,097

)

(5,190

)

Accumulated other comprehensive income

 

16,390

 

18,367

 

25,225

 

3,529

 

Accumulated deficit

 

(1,673,594

)

(1,160,898

)

(936,579

)

(131,032

)

Total (deficit)/ equity

 

(363,413

)

2,681,046

 

2,923,889

 

409,067

 

Total liabilities and equity

 

14,251,815

 

10,904,284

 

10,388,641

 

1,453,425

 

 


 

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,
2018

 

June 30,
2019

 

September
30, 2019

 

September
30, 2019

 

September
30, 2018

 

September
30, 2019

 

September
30, 2019

 

 

 

RMB
(Recast*)

 

RMB

 

RMB

 

USD

 

RMB
(Recast*)

 

RMB

 

USD

 

Operating Highlights

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amount of investment

 

18,235,782

 

11,939,582

 

9,037,670

 

1,264,417

 

53,890,936

 

32,412,841

 

4,534,723

 

AUM of investment

 

71,950,315

 

64,476,635

 

59,792,510

 

8,365,280

 

71,950,315

 

59,792,510

 

8,365,280

 

Number of investors

 

257,159

 

157,973

 

113,955

 

113,955

 

647,024

 

319,538

 

319,538

 

Amount of loans facilitated

 

11,781,947

 

9,673,818

 

10,496,261

 

1,468,481

 

49,733,287

 

31,105,001

 

4,351,750

 

Number of borrowers

 

174,630

 

135,246

 

150,280

 

150,280

 

726,917

 

423,414

 

423,414

 

Remaining principal of performing loans

 

71,625,593

 

58,071,303

 

54,553,702

 

7,632,343

 

71,625,593

 

54,553,702

 

7,632,343

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wealth management:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

543,857

 

592,378

 

540,554

 

75,626

 

1,498,458

 

1,654,366

 

231,454

 

Sales and marketing expenses

 

220,561

 

213,168

 

219,390

 

30,694

 

1,169,242

 

576,462

 

80,650

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer credit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

1,643,777

 

1,624,262

 

1,515,554

 

212,034

 

7,441,131

 

4,598,790

 

643,394

 

Sales and marketing expenses

 

1,228,995

 

995,479

 

940,975

 

131,647

 

4,252,281

 

2,920,495

 

408,591

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

(135,792

)

154,461

 

228,031

 

31,903

 

593,894

 

751,626

 

105,157

 

Interest income, net

 

(8,440

)

(25,213

)

(13,825

)

(1,934

)

(58,088

)

(62,913

)

(8,802

)

Income tax expense

 

35,307

 

61,856

 

19,924

 

2,788

 

161,802

 

158,314

 

22,149

 

Depreciation and amortization

 

35,959

 

31,112

 

32,153

 

4,498

 

111,356

 

95,767

 

13,398

 

Share-based compensation

 

60,632

 

17,732

 

7,954

 

1,113

 

99,931

 

40,385

 

5,650

 

Adjusted EBITDA

 

(12,334

)

239,948

 

274,237

 

38,368

 

908,895

 

983,179

 

137,552

 

Adjusted EBITDA margin

 

-0.6

%

10.8

%

13.3

%

13.3

%

10.2

%

15.7

%

15.7

%

 


* Prior period financials have been recast to reflect the acquisition from CreditEase under common control.

** The Company reclassified 368.2 million payments made in the second quarter of 2019 related to future acquisitions from cash used in operating activities to cash used in investing activities.

 


 

Delinquency Rates

 

 

 

Delinquent for

 

 

 

15-29 days

 

30-59 days

 

60-89 days

 

All Loans

 

 

 

 

 

 

 

December 31, 2015

 

0.7

%

1.2

%

1.0

%

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

%

September 30, 2019

 

1.0

%

1.8

%

1.6

%

 

 

 

 

 

 

 

 

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

%

September 30, 2019

 

1.3

%

2.4

%

2.3

%

 

 

 

 

 

 

 

 

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

%

September 30, 2019

 

0.9

%

1.5

%

1.4

%

 


 

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, 2019

 

Total Net Charge-Off
Rate
as of September 30, 2019*

 

 

 

 

 

(in RMB thousands)

 

(in RMB thousands)

 

 

 

2015

 

I

 

4,894,936

 

201,064

 

4.1

%

 

 

II

 

14,492,035

 

486,144

 

3.4

%

 

 

III

 

11,272,838

 

711,683

 

6.3

%

 

 

IV

 

11,283,656

 

1,357,155

 

12.0

%

 

 

V

 

11,199,563

 

1,718,367

 

15.3

%

 

 

Total

 

53,143,029

 

4,474,413

 

8.4

%

2016

 

I

 

5,858,273

 

234,148

 

4.0

%

 

 

II

 

12,360,346

 

532,664

 

4.3

%

 

 

III

 

9,951,614

 

749,365

 

7.5

%

 

 

IV

 

8,652,543

 

922,419

 

10.7

%

 

 

V

 

16,982,336

 

2,603,436

 

15.3

%

 

 

Total

 

53,805,112

 

5,042,032

 

9.4

%

2017

 

I

 

10,431,218

 

670,341

 

6.4

%

 

 

II

 

12,270,230

 

1,507,339

 

12.3

%

 

 

III

 

13,837,922

 

2,183,484

 

15.8

%

 

 

IV

 

13,663,558

 

2,356,569

 

17.2

%

 

 

V

 

19,680,365

 

3,968,677

 

20.2

%

 

 

Total

 

69,883,293

 

10,686,410

 

15.3

%

2018

 

I

 

9,451,125

 

486,383

 

5.1

%

 

 

II

 

14,656,758

 

1,338,476

 

9.1

%

 

 

III

 

13,903,217

 

1,624,453

 

11.7

%

 

 

IV

 

13,812,989

 

1,961,234

 

14.2

%

 

 

V

 

11,326,230

 

1,886,516

 

16.7

%

 

 

Total

 

63,150,319

 

7,297,061

 

11.6

%

2019H1

 

I

 

3,911,679

 

28,326

 

0.7

%

 

 

II

 

6,050,230

 

86,221

 

1.4

%

 

 

III

 

4,993,682

 

97,867

 

2.0

%

 

 

IV

 

3,220,517

 

63,400

 

2.0

%

 

 

V

 

2,432,632

 

56,458

 

2.3

%

 

 

Total

 

20,608,740

 

332,273

 

1.6

%

 


 

M3+ Net Charge-Off Rate*

 

 

 

Month on Book

 

Loan Issued
Period

 

4

 

7

 

10

 

13

 

16

 

19

 

22

 

25

 

28

 

31

 

34

 

2015Q1

 

0.8

%

2.0

%

3.4

%

4.7

%

5.7

%

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

%

7.9

%

8.3

%

8.5

%

8.7

%

8.8

%

2015Q3

 

0.4

%

1.6

%

3.1

%

4.4

%

5.6

%

6.5

%

7.1

%

7.6

%

7.9

%

8.1

%

8.4

%

2015Q4

 

0.4

%

1.6

%

3.1

%

4.4

%

5.5

%

6.3

%

6.9

%

7.4

%

7.9

%

8.3

%

8.5

%

2016Q1

 

0.3

%

1.2

%

2.5

%

3.6

%

4.5

%

5.2

%

5.8

%

6.4

%

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

%

9.8

%

2016Q4

 

0.2

%

1.5

%

2.9

%

4.4

%

5.9

%

7.4

%

8.4

%

9.3

%

10.0

%

10.4

%

 

 

2017Q1

 

0.3

%

1.5

%

3.2

%

5.1

%

7.1

%

8.6

%

9.8

%

10.8

%

11.5

%

 

 

 

 

2017Q2

 

1.1

%

2.9

%

5.6

%

8.4

%

10.4

%

12.1

%

13.5

%

14.5

%

 

 

 

 

 

 

2017Q3

 

0.3

%

2.9

%

6.3

%

9.1

%

11.6

%

13.6

%

15.0

%

 

 

 

 

 

 

 

 

2017Q4

 

0.5

%

3.8

%

7.2

%

10.4

%

13.2

%

15.3

%

 

 

 

 

 

 

 

 

 

 

2018Q1

 

0.4

%

3.0

%

6.6

%

10.1

%

12.9

%

 

 

 

 

 

 

 

 

 

 

 

 

2018Q2

 

0.5

%

3.6

%

7.4

%

10.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018Q3

 

0.3

%

2.9

%

6.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018Q4

 

0.3

%

2.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019Q1

 

0.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


* As one division has already been spun off from the company, as of third quarter 2019, M3+ net charge-off rates no longer reflect the risk performance of loans generated by this division.