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 August 2020

 

 

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/ Zhong Bi
	Name:	Zhong Bi
	Title:	Chief Financial Officer

 

 

Date: August 28, 2020

 

2

 

Exhibit Index

 

Exhibit 99.1—Press Release: Yiren Digital Reports Second Quarter 2020 Financial Results and Announces Management Change and Adoption of 2020 Share Incentive Plan

 

3

Exhibit 99.1

 

Yiren Digital Reports Second Quarter 2020 Financial Results

 

BEIJING — August 27, 2020 — Yiren Digital Ltd. (NYSE: YRD) (“Yiren Digital” or the “Company”), a leading fintech company in China, today announced its unaudited financial results for the second quarter ended June 30, 2020.

 

Second Quarter 2020 Operational Highlights

 

Wealth Management—Yiren Wealth

 

·                          Cumulative number of investors served reached 2,223,250 as of June 30, 2020, representing an increase of 0.2% from 2,218,181 as of March 31, 2020 and compared to 2,185,513 as of June 30, 2019.

 

·                          Number of current investors was 195,211 as of June 30, 2020, representing a decrease of 11.5% from 220,568 as of March 31, 2020.

 

·                          Number of current non-P2P investors was 31,530 as of June 30, 2020, representing an increase of 19.7% from 26,346 as of March 31, 2020, and compared to 17,133 as of June 30, 2019.

 

·                          Total assets under administration (“AUA”) for P2P products on Yiren Wealth was RMB 25,896.8 million (US$3,665.4 million) as of June 30, 2020, representing a decrease of 15.2% from RMB 30,536.4 million as of March 31, 2020, and compared to RMB 43,249.9 million as of June 30, 2019.

 

·                          Total AUA for non-P2P products on Yiren Wealth was RMB 2,528.6 million (US$357.9 million) as of June 30, 2020, representing an increase of 47.6% from 1,713.1 million as of March 31, 2020,and compared to RMB 352.7 million as of June 30, 2019.

 

·                          Sales volume of non-P2P products amounted to RMB 2,186.2 million (US$309.4 million) in the second quarter of 2020, representing an increase of 1.1% from RMB 2,163.3 million in the first quarter of 2020 and compared to RMB 284.8 million in the same period of 2019.

 

Consumer Credit—Yiren Credit

 

·                          Total loan originations in the second quarter of 2020 reached RMB 2.4 billion (US$0.3 billion), representing an increase of 30.6% from RMB 1.8 billion in the first quarter of 2020 and compared to RMB 9.7 billion in the second quarter of 2019.

 

·                          Cumulative number of borrowers served reached 4,917,635 as of June 30, 2020, representing an increase of 2.2% from 4,810,184 as of March 31, 2020 and compared to 4,491,334 as of June 30, 2019.

 

·                          Number of borrowers served in the second quarter of 2020 was 107,568 representing a decrease of 6.8% from 115,420 in the first quarter of 2020 and compared to 135,246 in the second quarter of 2019.

 

·                          The percentage of loan volume generated by repeat borrowers was 0.3% in the second quarter of 2020.

 

1

 

·                          25.0% of loan originations were generated online in the second quarter of 2020.

 

·                          Total outstanding principal balance of performing loans reached RMB 33,454.4 million (US$4,735.2 million) as of June 30,2020, representing a decrease of 20.5% from RMB 42,063.0 million as of March 31,2020.

 

“With the pandemic still not far behind us and the changing market environment in the second quarter, we are making comprehensive progresses towards our business transition in our credit-tech business and have achieved meaningful scale in our wealth management business growth.” said Mr. Ning Tang, Chairman and Chief Executive Officer of Yiren Digital.

 

“For our credit-tech business, our new online product initiatives are tracking very well. Our new revolving loan product, Yi Xiang Hua, accounted for 13% of our total loan volume this quarter, growing over 500% quarter over quarter. Meanwhile, by leveraging our vast offline service network coverage, we are ramping up auto loans nicely, achieving a 51% growth from last quarter. Moreover, we have made great strides in repositioning our credit business by moving from a P2P funding model to a loan facilitation model. In the second quarter, 63% of loans facilitated were funded by institutional intuitional partners and we expect this proportion to reach close to 100% by the end of this year with a diversified partner base.”

 

“On wealth management business, we are seeing very strong growth momentum particularly for our fund products. As of June 30, 2020, the number of current non-P2P investors increased 20% from last quarter to 31,530, and total AUA for non-P2P products increased by 48% quarterly to RMB 2.5 billion. Moreover, , average AUA per investor for non-P2P products also sees steady growth, with average AUA per investor for bank’s fixed-income products exceeding RMB 100,000 and for funds over RMB 50,000, which is well above industry average”

 

“We are delighted to see a notable acceleration in loan originations from prior quarter to RMB 2.4 billion, thanks to our strategic initiatives this year in diversification of our loan products,” said Mr. Zhong Bi, Chief Financial Officer of Yiren Digital. “To provide relief to our borrowers who were significantly affected by the pandemic as well as medical workers who fought on the frontlines, we proactively granted a concession totaling RMB 245 million for over 50,000 borrowers in principal, interest and late fees, this represents a one-time hit to our revenue. On the balance sheet side, our cash position remains strong with approximately RMB 3.4 billion of cash and short-term investments as of June 30, 2020. “

 

“Thanks to our continued efforts in risk management, the delinquency rates have shown a progressive improving trend. 15-90 days delinquency has decreased to 5.5% as of June 30, 2020 from 8.9% as of March 31, 2020. 15-90 days delinquency further decreased to 5.2% as of July 31, 2020 as a result of our strengthened efforts in tightening controls and improving borrower’s credit quality.” said Mr. Michael Ji, Chief Risk Officer of Yiren Digital. “To mitigate the risk caused by covid-19 and help customers went through the financial hardship, we have launched 7 relating special collection projects in the second quarter, including continued ‘pandemic customer care program’, which offered payment relief for the customers who were hit by covid-19 and healthcare givers who were fighting the disease. These special collection projects helped us achieve a decline in NCL by over 10% as compared with projection at the beginning of the year, even facing the economic headwind. We will continue to strengthen our risk management and expect delinquency rates to further improve in the second half of the year.

 

2

 

Second Quarter 2020 Financial Results

 

Total amount of loans facilitated in the second quarter of 2020 was RMB 2,402.5 million (US$340.1 million), compared to RMB 9,673.8 million in the same period last year. As of June 30, 2020, the total outstanding principal amount of the performing loans was RMB 33.5 billion (US$4.7 billion), decreased by 20% from RMB 42.1 billion as of March 31, 2020.

 

Total net revenue in the second quarter of 2020 was RMB 754.7 million (US$106.8 million), compared to RMB 2,216.6 million in the same period last year. Revenue from Yiren Credit reached RMB 432.3 million (US$61.2 million), representing a decrease of 73% from RMB 1,624.3 million in the second quarter of 2019. Revenue from Yiren Wealth reached RMB 322.4 million (US$45.6 million), representing a decrease of 46% from RMB 592.4 million in the second quarter of 2019.

 

Sales and marketing expenses in the second quarter of 2020 were RMB 508.5 million (US$72.0 million), compared to RMB 1,208.6 million in the same period last year. Sales and marketing expenses in the second quarter of 2020 accounted for 21.2% of the total amount of loans facilitated, as compared to 12.5% in the same period last year mainly due to the decline of loan volume.

 

Origination and servicing costs in the second quarter of 2020 were RMB 165.2 million (US$23.4 million), compared to RMB 162.9 million in the same period last year. Origination and servicing costs in the second quarter of 2020 accounted for 6.9% of the total amount of loans facilitated, compared to 1.7% in the same period last year due to the decline of loan volume.

 

General and administrative expenses in the second quarter of 2020 were RMB 172.6 million (US$24.4 million), compared to RMB 175.5 million in the same period last year. General and administrative expenses in the second quarter of 2020 accounted for 22.9% of the total net revenue, compared to 7.9% in the same period last year.

 

Allowance for contract assets and receivables in the second quarter of 2020 were RMB 168.7 million (US$23.9 million), compared to RMB 500.9 million in the same period last year.

 

Income tax benefit in the second quarter of 2020 was RMB 47.6 million (US$6.7 million).

 

Net loss in the second quarter of 2020 was RMB 232.2 million (US$32.9 million), compared to net income of RMB 154.5 million in the same period last year.

 

Adjusted EBITDA (non-GAAP) in the second quarter of 2020 was net loss of RMB 269.4 million (US$38.1 million), compared to net income of RMB 239.9 million in the same period last year.

 

Basic income per ADS in the second quarter of 2020 was net loss of RMB 2.5 (US$0.4), compared to a basic income per ADS of RMB 1.7 in the same period last year.

 

3

 

Diluted income per ADS in the second quarter of 2020 was net loss of RMB 2.5 (US$0.4), compared to a diluted income per ADS of RMB 1.7 in the same period last year.

 

Net cash used in operating activities in the second quarter of 2020 was RMB 86.8 million (US$12.3 million), compared to net cash generated from operating activities of RMB 36.4 million in the same period last year.

 

Net cash used in investing activities in the second quarter of 2020 was RMB 164.6 million (US$23.3 million), compared to net cash provided by investing activities of RMB 240.9 million in the same period last year.

 

As of June 30, 2020, cash and cash equivalents was RMB 2,935.5 million (US$415.5 million), compared to RMB 3,195.0 million as of March 31, 2020. As of June 30, 2020, the balance of held-to-maturity investments was RMB 4.1 million (US$0.6 million), compared to RMB 4.4 million as of March 31, 2020. As of June 30, 2020, the balance of available-for-sale investments was RMB 513.0 million (US$72.6 million), compared to RMB 456.1 million as of March 31, 2020.

 

Delinquency rates. As of June 30, 2020, the delinquency rates for loans that are past due for 15-29 days, 30-59 days and 60-89 days were 1.4%, 2.0%, and 2.1%, respectively compared to1.6%, 4.1%, and 3.2%, as of March 31, 2020.

 

Cumulative M3+ net charge-off rates. As of June 30, 2020, the cumulative M3+ net charge-off rate for loans originated in 2017 was 16.7%, compared to 16.5% as of March 31, 2020. As of June 30, 2020, the cumulative M3+ net charge-off rate for loans originated in 2018 was 17.6%, compared to 15.8% as of March 31, 2020. As of June 30, 2020, the cumulative M3+ net charge-off rate for loans originated in 2019 was 9.4%, compared to 5.2% as of March 31, 2020.

 

Recent Development

 

Management Change

 

Mr. Zhong Bi has resigned from his position as the Company’s Chief Financial Officer (“CFO”) to pursue other opportunities, effective on September 10, 2020. The board of directors of the Company has appointed Ms. Na Mei as the Company’s new CFO, effective on September 10, 2020. Over the past two months, Ms. Mei has been working with Mr. Bi on daily CFO duties to ensure a smooth transition.

 

Ms. Mei joined CreditEase Consumer Credit Division, now part of Yiren Digital, in 2015. She has served as the financial controller for this business unit and the head of business finance department. Prior to joining CreditEase, Ms. Mei had worked 12 years at PricewaterhouseCoopers. She brought in seasoned experience in finance management, taxation, internal control and consulting, along with years of first-hand exposure dealing with publicly listed companies in China and abroad. Ms. Mei obtained her bachelor’s degree from Capital Economic University and is a certified public accountant.

 

4

 

2020 Share Incentive Plan

 

Yiren Digital adopted a 2020 share incentive plan (the “2020 Plan”) in the second quarter of 2020. The 2020 Plan has a ten-year term, and has a maximum number of 18,560,000 ordinary shares available for issuance pursuant to all awards under the 2020 Plan. Yiren Digital may grant restricted share units and other form of awards pursuant to the 2020 Plan. In connection with the adoption of the 2020 Plan and to prevent dilution to existing shareholders, CreditEase Holdings (Cayman) Limited, the parent company of Yiren Digital, will surrender for cancellation and for nil consideration 18,560,000 ordinary shares of US$0.0001 par value each standing in its name in the register of members of Yiren Digital.

 

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 7.0651 to US$1.00, the effective noon buying rate on June 30, 2020, 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 8:00 p.m. U.S. Eastern Time on August 27, 2020 (or 8:00 a.m. Beijing/Hong Kong Time on August 28, 2020).

 

Participants who wish to join the call should register online in advance of the conference at:

 

http://apac.directeventreg.com/registration/event/9992747

 

Please note the Conference ID number of 9992747.

 

Once registration is completed, participants will receive the dial-in information for the conference call, an event passcode, and a unique registrant ID number.

 

Participants joining the conference call should dial-in at least 10 minutes before the scheduled start time.

 

5

 

A replay of the conference call may be accessed by phone at the following numbers until September 3, 2020:

 

International		+61 2-8199-0299
U.S.		+1 646-254-3697
Replay Access Code:		9992747

 

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, providing both credit and wealth management services. For its credit business, 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 its wealth management business, the Company targets China’s mass affluent population and strives to provide customized wealth management services, with a combination of long-term and short-term targets as well as different types of investments, ranging from cash and fixed-income assets, to funds and insurance. For more information, please visit ir.Yirendai.com.

 

For investor and media inquiries, please contact:

Yiren Digital

Investor Relations

Email: ir@Yirendai.com

 

6

 

Unaudited Condensed Consolidated Statements of Operations

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

 

		For the Three Months Ended								For the Six Months Ended
		June 30, 2019		March 31, 2020		June 30, 2020		June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2020
		RMB		RMB		RMB		USD		RMB		RMB		USD
Net revenue:
Loan facilitation services		1,237,718		358,541		171,084		24,215		2,292,764		529,625		74,964
Post-origination services		241,321		146,520		126,477		17,902		537,600		272,997		38,640
Account management services		549,024		413,166		300,720		42,564		1,037,364		713,886		101,044
Others		188,577		105,433		156,408		22,138		329,320		261,841		37,061
Total net revenue		2,216,640		1,023,660		754,689		106,819		4,197,048		1,778,349		251,709
Operating costs and expenses:
Sales and marketing		1,208,647		616,441		508,466		71,969		2,336,592		1,124,907		159,220
Origination and servicing		162,945		102,918		165,183		23,380		335,068		268,101		37,947
General and administrative		175,534		149,041		172,568		24,425		433,241		321,609		45,521
Allowance for contract assets and receivables		500,861		143,385		168,708		23,879		691,965		312,093		44,174
Total operating costs and expenses		2,047,987		1,011,785		1,014,925		143,653		3,796,866		2,026,710		286,862
Other income/(expenses):
Interest income, net		25,213		25,116		16,950		2,399		49,088		42,066		5,954
Fair value adjustments related to Consolidated ABFE		5,787		(26,020	)	(32,957	)	(4,665	)	40,785		(58,977	)	(8,348	)
Others, net		17,480		12,184		(3,510	)	(496	)	177,703		8,674		1,228
Total other income/(expenses)		48,480		11,280		(19,517	)	(2,762	)	267,576		(8,237	)	(1,166	)
Income/(loss) before provision for income taxes		217,133		23,155		(279,753	)	(39,596	)	667,758		(256,598	)	(36,319	)
Share of results of equity investees		(816	)	—		—		—		(5,773	)	—		—
Income tax expense/(benefit)		61,856		3,936		(47,558	)	(6,731	)	138,390		(43,622	)	(6,174	)
Net income/(loss)		154,461		19,219		(232,195	)	(32,865	)	523,595		(212,976	)	(30,145	)
Weighted average number of ordinary shares outstanding, basic		184,608,337		185,600,961		185,613,735		185,613,735		184,865,964		185,607,348		185,607,348
Basic income/(loss) per share		0.8367		0.1036		(1.2510	)	(0.1771	)	2.8323		(1.1475	)	(0.1624	)
Basic income/(loss) per ADS		1.6734		0.2072		(2.5020	)	(0.3542	)	5.6646		(2.2950	)	(0.3248	)
Weighted average number of ordinary shares outstanding, diluted		186,667,233		186,166,429		185,613,735		185,613,735		186,621,626		185,607,348		185,607,348
Diluted income/(loss) per share		0.8275		0.1032		(1.2510	)	(0.1771	)	2.8057		(1.1475	)	(0.1624	)
Diluted income/(loss) per ADS		1.6550		0.2064		(2.5020	)	(0.3542	)	5.6114		(2.2950	)	(0.3248	)
Unaudited Condensed Consolidated Cash Flow Data
Net cash generated from/(used in) operating activities		36,352		557,762		(86,768	)	(12,281	)	(622,083	)	470,994		66,664
Net cash provided by/(used in) investing activities		240,896		(524,479	)	(164,623	)	(23,302	)	(9,035	)	(689,102	)	(97,537	)
Net cash (used in)/provided by financing activities		(73,385	)	(65,637	)	39,905		5,648		420,004		(25,732	)	(3,642	)
Effect of foreign exchange rate changes		1,532		1,206		(86	)	(12	)	(664	)	1,120		159
Net increase/(decrease) in cash, cash equivalents and restricted cash		205,395		(31,148	)	(211,572	)	(29,947	)	(211,778	)	(242,720	)	(34,356	)
Cash, cash equivalents and restricted cash, beginning of period		2,617,311		3,269,142		3,237,994		458,308		3,034,484		3,269,142		462,717
Cash, cash equivalents and restricted cash, end of period		2,822,706		3,237,994		3,026,422		428,361		2,822,706		3,026,422		428,361

 

7

 

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

		As of
		December 31, 2019		March 31, 2020		June 30, 2020		June 30, 2020
		RMB		RMB		RMB		USD
Cash and cash equivalents		3,198,086		3,194,993		2,935,543		415,498
Restricted cash		71,056		43,001		90,879		12,863
Accounts receivable		3,398		33,902		27,309		3,865
Contract assets, net		2,398,685		1,873,548		1,356,886		192,055
Contract cost		160,003		149,917		145,809		20,638
Prepaid expenses and other assets		1,333,221		868,462		1,134,257		160,545
Loans at fair value		418,492		313,267		246,475		34,886
Financing receivables		29,612		33,381		54,876		7,767
Amounts due from related parties		988,853		1,583,859		1,560,376		220,857
Held-to-maturity investments		6,627		4,399		4,126		584
Available-for-sale investments		460,991		456,061		513,013		72,612
Property, equipment and software, net		195,855		188,880		184,957		26,179
Deferred tax assets		45,407		42,084		49,051		6,943
Right-of-use assets		334,134		291,028		224,067		31,715
Total assets		9,644,420		9,076,782		8,527,624		1,207,007
Accounts payable		43,583		39,068		40,324		5,708
Amounts due to related parties		106,645		112,034		184,325		26,090
Liabilities from quality assurance program and guarantee		4,397		3,487		2,660		377
Deferred revenue		358,203		254,933		190,712		26,994
Accrued expenses and other liabilities		2,338,745		1,946,205		1,981,040		280,397
Refund liability		1,801,535		1,760,942		1,501,318		212,497
Deferred tax liabilities		218,888		216,304		162,016		22,932
Lease liabilities		282,334		259,197		205,056		29,024
Total liabilities		5,154,330		4,592,170		4,267,451		604,019
Ordinary shares		121		121		121		17
Additional paid-in capital		5,038,691		5,045,268		5,050,226		714,813
Treasury stock		(37,097	)	(37,097	)	(37,097	)	(5,251	)
Accumulated other comprehensive income		21,855		18,671		23,474		3,323
Accumulated deficit		(533,480	)	(542,351	)	(776,551	)	(109,914	)
Total equity		4,490,090		4,484,612		4,260,173		602,988
Total liabilities and equity		9,644,420		9,076,782		8,527,624		1,207,007

 

8

 

Operating Highlights and Reconciliation of GAAP to Non-GAAP Measures

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

 

		For the Three Months Ended								For the Six Months Ended
		June 30, 2019		March 31, 2020		June 30, 2020		June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2020
		RMB		RMB		RMB		USD		RMB		RMB		USD
Operating Highlights
Amount of p2p investment		11,939,582		5,203,747		4,017,751		568,676		23,375,170		9,221,497		1,305,218
Number of p2p investors		157,973		78,256		63,066		63,066		320,054		108,252		108,252
Amount of non-p2p investment		284,782		2,163,313		2,186,210		309,438		613,490		4,349,523		615,635
Number of non-p2p investors		10,235		18,809		30,392		30,392		19,370		39,443		39,443
Amount of loans facilitated		9,673,818		1,839,454		2,402,494		340,051		20,608,740		4,241,948		600,409
Number of borrowers		135,246		115,420		107,568		107,568		280,634		220,731		220,731
Remaining principal of performing loans		58,071,303		42,063,039		33,454,423		4,735,166		58,071,303		33,454,423		4,735,166
Segment Information
Wealth management:
Revenue		592,378		415,876		322,381		45,630		1,113,812		738,257		104,493
Sales and marketing expenses		213,168		67,326		45,454		6,434		357,072		112,780		15,963
Consumer credit:
Revenue		1,624,262		607,784		432,308		61,189		3,083,236		1,040,092		147,216
Sales and marketing expenses		995,479		549,115		463,012		65,535		1,979,520		1,012,127		143,257
Reconciliation of Adjusted EBITDA
Net income/(loss)		154,461		19,219		(232,195	)	(32,865	)	523,595		(212,976	)	(30,145	)
Interest income, net		(25,213	)	(25,116	)	(16,950	)	(2,399	)	(49,088	)	(42,066	)	(5,954	)
Income tax expense/(benefit)		61,856		3,936		(47,558	)	(6,731	)	138,390		(43,622	)	(6,174	)
Depreciation and amortization		31,112		27,171		24,368		3,449		63,614		51,539		7,295
Share-based compensation		17,732		4,541		2,954		418		32,431		7,495		1,061
Adjusted EBITDA		239,948		29,751		(269,381	)	(38,128	)	708,942		(239,630	)	(33,917	)
Adjusted EBITDA margin		10.8	%	2.9	%	-35.7	%	-35.7	%	16.9	%	-13.5	%	-13.5	%

 

9

 

Delinquency Rates

 

		Delinquent for
		15-29 days		30-59 days		60-89 days
All Loans
December 31, 2015		0.7	%	1.2	%	0.9	%
December 31, 2016		0.6	%	0.9	%	0.8	%
December 31, 2017		0.8	%	1.0	%	0.8	%
December 31, 2018		1.0	%	1.8	%	1.7	%
December 31, 2019		1.2	%	2.0	%	1.7	%
March 31, 2020		1.6	%	4.1	%	3.2	%
June 30, 2020		1.4	%	2.0	%	2.1	%
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	%
December 31, 2019		1.6	%	2.9	%	2.5	%
March 31, 2020		1.9	%	5.2	%	3.8	%
June 30, 2020		1.4	%	2.4	%	2.7	%
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	%
December 31, 2019		1.0	%	1.7	%	1.5	%
March 31, 2020		1.6	%	3.7	%	3.1	%
June 30, 2020		1.4	%	1.8	%	2.0	%

 

10

 

Net Charge-Off Rate

 

Loan Issued Period		Amount of Loans Facilitated During the Period		Accumulated M3+ Net Charge-Off as of June 30, 2020		Total Net Charge-Off Rate as of June 30, 2020
		(in RMB thousands)		(in RMB thousands)
2015		53,143,029		4,441,696		8.4	%
2016		53,805,112		5,057,850		9.4	%
2017		69,883,293		11,693,408		16.7	%
2018		63,176,149		11,131,294		17.6	%
2019		39,103,048		3,688,712		9.4	%
2020Q1		1,320,428		6,388		0.5	%

 

11

 

M3+ Net Charge-Off Rate

 

Loan Issued Period		Month on Book
		4		7		10		13		16		19		22		25		28		31		34
2015Q1		0.8	%	2.0	%	3.4	%	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	%	10.7	%
2017Q1		0.3	%	1.5	%	3.2	%	5.1	%	7.1	%	8.6	%	9.8	%	10.8	%	11.5	%	12.0	%	12.2	%
2017Q2		1.1	%	2.9	%	5.6	%	8.4	%	10.4	%	12.1	%	13.5	%	14.5	%	15.3	%	15.8	%	16.0	%
2017Q3		0.3	%	2.9	%	6.4	%	9.1	%	11.6	%	13.6	%	15.0	%	16.2	%	16.9	%	17.5	%
2017Q4		0.5	%	3.9	%	7.3	%	10.5	%	13.2	%	15.3	%	16.9	%	18.0	%	18.8	%
2018Q1		0.4	%	3.0	%	6.6	%	10.1	%	12.9	%	15.2	%	16.9	%	18.2	%
2018Q2		0.5	%	3.6	%	7.4	%	10.8	%	13.6	%	15.8	%	17.7	%
2018Q3		0.4	%	3.0	%	6.2	%	9.1	%	11.7	%	13.9	%
2018Q4		0.3	%	2.5	%	5.6	%	8.6	%	11.7	%
2019Q1		0.2	%	2.5	%	5.6	%	9.0	%
2019Q2		0.3	%	2.9	%	6.9	%
2019Q3		0.3	%	3.4	%
2019Q4		0.3	%

 

12