Weidai Ltd. Announces Second quarter 2019 Financial Results
HANGZHOU, China, Sept. 18, 2019 /PRNewswire/ -- Weidai Ltd. ("Weidai" or the "Company") (NYSE: WEI), a leading auto-backed financing solution provider in China, today announced its unaudited financial results for the second quarter ended June 30, 2019.
Second quarter 2019 Financial Highlights:
- Net revenues were RMB906.7 million (US$132.1 million) in the second quarter of 2019, a decrease of 4.4% from RMB948.4 million in the same period of 2018 and a decrease of 4.5% from RMB949.7 million sequentially.
- Loan facilitation service fees were RMB758.5 million (US$110.5 million) in the second quarter of 2019, compared to RMB752.2 million in the same period of 2018 and RMB766.9 million in the first quarter of 2019.
- Post-facilitation service fees were RMB89.0 million (US$13.0 million) in the second quarter of 2019, an increase of 7.2% from RMB83.1 million in the same period of 2018 and an increase of 6.6% from RMB83.5 million sequentially.
- Net income was RMB106.9 million (US$15.6 million) in the second quarter of 2019, compared to RMB182.7 million in the same period of 2018 and RMB109.0 million in the first quarter of 2019.
- Adjusted net income[1] was RMB130.1 million (US$18.9 million) in the second quarter of 2019, compared to RMB205.4 million in the same period of 2018 and RMB134.6 million in the first quarter of 2019.
[1] Adjusted net income, a non-GAAP financial measure, is defined as net income before share-based compensation expenses. |
Second quarter 2019 Operational Highlights:
Loan volume
The following table sets forth the volume of loans we facilitated and originated (including loans funded by institutional funding partners) for the periods indicated:
For the three months ended, |
||||
March 31, 2019 |
June 30, 2019 |
|||
RMB |
% of total loan |
RMB |
% of total |
|
(in millions, except for percentages) |
||||
Total loan volume |
15,247 |
100.0 |
17,603 |
100.0 |
Including: |
||||
Loans funded by institutional funding |
733 |
4.8 |
749 |
4.3 |
Loan balance
Total loan balance decreased to RMB18.2 billion (US$2.7 billion) as of June 30, 2019 from RMB19.6 billion as of March 31, 2019.
Second quarter 2019 Financial Results
Net revenues decreased by 4.5% to RMB906.7 million (US$132.1 million) in the second quarter of 2019 from RMB949.7 million in the previous quarter, primarily due to decreases in other revenues and net financing income. The decrease was partially offset by an increase in post-facilitation service fees. The Company's take rate[2] increased to 5.0% in the second quarter of 2019 from 4.8% in the previous quarter.
- Loan facilitation service fees remained relatively stable at RMB758.5 million (US$110.5 million) in the second quarter of 2019, compared to RMB766.9 million in the previous quarter. In the second quarter of 2019, the impact of applying ASC 606 resulted in a decrease in loan facilitation service fees of RMB 126.4 million (US$18.4 million).
- Post-facilitation service fees increased by 6.6% to RMB89.0 million (US$13.0 million) in the second quarter of 2019, from RMB83.5 million in the previous quarter.
- Other revenues decreased by 58.5% to RMB21.4 million (US$3.1 million) in the second quarter of 2019, from RMB51.6 million in the previous quarter, primarily due to the reclassification of insurance revenue, which previously was recorded under other revenues, to loan facilitation service fees and post-facilitation service fees according to its nature.
- Net financing income decreased by 20.7% to RMB37.8 million (US$5.5 million) in the second quarter of 2019, from RMB47.7 million in the previous quarter, primarily due to a decrease in loan balance of the Company's on-balance sheet loans.
[2] "Take rate" is defined as dividing net revenue of a certain period by the period end loan balance. |
Provision for loans and advances increased by 3.3% to RMB252.3 million (US$36.8 million) in the second quarter of 2019, from RMB244.1 million in the previous quarter. Provision for loans and advances as a percentage of total loan volume decreased to 1.4% in the second quarter of 2019 from 1.6% in the previous quarter. Provision for loans and advances as a percentage of net revenue increased to 27.8% in the second quarter of 2019 from 25.7% in the previous quarter.
Operating costs and expenses decreased by 2.4% to RMB566.7 million (US$82.5 million) in the second quarter of 2019, from RMB580.8 million in the previous quarter. Operating costs and expenses as a percentage of net revenues increased to 62.5% in the second quarter of 2019 from 61.2% in the previous quarter.
- Provision for financial guarantee liabilities increased by 53.5% to RMB82.7 million (US$12.0 million) in the second quarter of 2019, from RMB53.9 million in the previous quarter.
- Origination and servicing expenses decreased by 15.2% to RMB319.1 million (US$46.5 million) for the second quarter of 2019 from RMB376.4 million in the previous quarter, primarily due to continued cost optimization efforts. Origination and servicing expenses as a percentage of net revenues decreased to 35.2% in the second quarter of 2019 from 39.6% in the previous quarter.
- Sales and marketing expenses increased by 56.4% to RMB76.4 million (US$11.1 million) for the second quarter of 2019 from RMB48.9 million in the previous quarter, primarily due to an increase in online marketing activities in the second quarter of 2019.
- General and administrative expenses decreased by 23.5% to RMB58.2 million (US$8.5 million) for the second quarter of 2019 from RMB76.1 million in the previous quarter. The decrease was primarily due to a decrease in staff costs.
- Research and development expenses increased by 18.3% to RMB30.2 million (US$4.4 million) in the second quarter of 2019 from RMB25.5 million in the previous quarter, primarily due to continued investment in technology infrastructure and systems.
Share-based compensation expenses decreased by 9.5% to RMB23.2 million (US$3.4 million) in the second quarter of 2019, from RMB25.6 million in the previous quarter.
Income tax expenses decreased by 64.7% to RMB13.4 million (US$2.0 million) for the second quarter of 2019, from RMB38.1 million in the previous quarter.
Net income decreased by 1.9% to RMB106.9 million (US$15.6 million) in the second quarter of 2019, from RMB109.0 million in the previous quarter.
Net income and comprehensive income attributable to ordinary shareholders decreased by 2.0% to RMB103.3 million (US$15.1 million) in the second quarter of 2019, from RMB105.4 million in the previous quarter.
Adjusted net income decreased by 3.3% to RMB130.1 million (US$18.9 million) in the second quarter of 2019, from RMB134.6 million in the previous quarter.
Recent Developments
Change of Custodian Bank
To provide better and more efficient services to borrowers and investors, the Company changed its custodian bank to Sichuan Xinwang Bank Co., Ltd., the third privately-owned Internet bank in China, in August 2019, after its custodian agreement with Xiamen Bank had expired.
Change of accounting treatment for certain consumption loans
From July 1, 2019 onwards, the Company no longer provided financial guarantees to online investors for consumption loans pursuant to regulatory requirements. As a result, no guarantee liability will be recorded for new consumption loans facilitated after July 1, 2019.
Filing of Annual Report on Form 20-F
The Company filed its annual report on Form 20-F for the fiscal year ended December 31, 2018 with the Securities and Exchange Commission on April 16, 2019 (U.S. Time). The annual report on Form 20-F can be accessed on the Company's investor relations website at https://weidai.investorroom.com/.
Weidai will provide a hard copy of the annual report containing its audited consolidated financial statements, free of charge, to its shareholders and ADS holders upon request. Requests should be directed to Investor Relations department, 50/F, West Building, Fortune Finance Center, No. 33 Jiefang East Road, Jianggan District, Hangzhou, Zhejiang Province, the People's Republic of China.
Use of Non-GAAP Financial Measures
The Company uses adjusted net income, a non-GAAP financial measure, in evaluating its operating results and for financial and operational decision-making purposes. The Company believes that adjusted net income helps identify underlying trends in its business by excluding the impact of share-based compensation expenses. The Company believes that adjusted net income provides useful information about its operating results, enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision-making.
Adjusted net income is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. This non-GAAP financial measure has limitations as an analytical tool, and when assessing the Company's operating performance, cash flows or liquidity, investors should not consider it in isolation, or as a substitute for net income, cash flows provided by operating activities or other consolidated statements of operation and cash flow data prepared in accordance with U.S. GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.
For more information on this non-GAAP financial measure, please see the table captioned "Reconciliations of GAAP and Non-GAAP results" set forth at the end of this press release.
About Weidai Ltd.
Weidai Ltd. is a pioneer and leading auto-backed financing solution provider in China supported by sophisticated and effective risk management system and technology. The Company transforms used automobiles, a type of "non-standard" collateral, into investable assets, to provide accessible credit for China's small and micro enterprises, and connects the borrowers with both online investors and institutional funding partners through its platform.
For more information, please visit http://weidai.investorroom.com/.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.8650 to US$1.00, the noon buying rate on June 28, 2019 set forth in the H.10 statistical release of the U.S. Federal Reserve Board.
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. Weidai may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Weidai's beliefs and expectations, are forward-looking 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 the Company'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 the following: Weidai's goal and strategies; Weidai's expansion plans; Weidai's future business development, financial condition and results of operations; Weidai's expectations regarding demand for, and market acceptance of, its solutions and services; Weidai's expectations regarding keeping and strengthening its relationships with borrowers, investors and financial institutions and other platform participants; general economic and business conditions; Weidai's assumptions underlying or related to any of the foregoing regulations and governmental policies relating to the online consumer finance industry in China; and Weidai's ability to meet the standards necessary to maintain listing of its ADSs on the NYSE, 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 the Company'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 Weidai 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.
For investor and media inquiries, please contact:
In China:
Christensen
Mr. Christian Arnell
Tel: +86-10-5900-1548
E-mail: [email protected]
In US:
Christensen
Ms. Linda Bergkamp
Tel: +1-480-614-3004
E-mail: [email protected]
WEIDAI LTD. |
|||
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
(All amounts in thousands, except share data, or otherwise noted) |
|||
As of March 31, |
As of June 30, |
||
2019 |
2019 |
||
RMB |
RMB |
US$ |
|
(in thousands) |
|||
ASSETS Current assets: |
|||
Cash and cash equivalents |
1,472,593 |
862,841 |
125,687 |
Restricted cash |
838,961 |
806,203 |
117,437 |
Loans and advances, net |
1,155,368 |
1,676,616 |
244,227 |
Contract assets |
944,495 |
840,125 |
122,378 |
Short-term investments |
222,920 |
336,192 |
48,972 |
Prepaid expenses and other assets |
483,135 |
562,560 |
81,946 |
Amounts due from related parties |
17,198 |
38,746 |
5,644 |
Total current assets |
5,134,670 |
5,123,283 |
746,291 |
Non-current assets: |
|||
Restricted cash |
27,901 |
31,547 |
4,595 |
Long-term investments |
13,333 |
13,333 |
1,942 |
Loans and advances, net |
402,260 |
211,829 |
30,856 |
Prepaid expenses and other assets |
5,606 |
9,606 |
1,399 |
Property, equipment and software, net |
81,568 |
74,156 |
10,802 |
Goodwill |
5,812 |
5,812 |
847 |
Contract assets. |
366,060 |
343,982 |
50,107 |
Deferred tax assets |
317,498 |
388,404 |
56,577 |
Total non-current assets |
1,220,038 |
1,078,669 |
157,125 |
Total assets |
6,354,708 |
6,201,952 |
903,416 |
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||
Current liabilities (including current liabilities of |
|||
Payable to institutional funding partners and |
504,402 |
456,764 |
66,535 |
Current account with online investors and |
1,197,838 |
1,187,500 |
172,979 |
Income tax payable |
94,959 |
117,644 |
17,137 |
Accrued expenses and other liabilities |
451,253 |
431,344 |
62,832 |
Amounts due to related parties |
14,705 |
21,142 |
3,080 |
Contract liabilities |
22,918 |
19,573 |
2,851 |
Total current liabilities |
2,286,075 |
2,233,967 |
325,414 |
Non-current liabilities (including non-current |
|||
Payable to institutional funding partners and |
425,875 |
222,906 |
32,470 |
Contract liabilities |
6,041 |
18,637 |
2,715 |
Other non-current liabilities |
14,615 |
22,459 |
3,272 |
Deferred tax liabilities |
280,067 |
233,730 |
34,046 |
Total non-current liabilities |
726,598 |
497,732 |
72,503 |
Total liabilities |
3,012,673 |
2,731,699 |
397,917 |
Shareholders' equity |
|||
Class A ordinary shares (par value of |
- |
- |
- |
Class B ordinary shares (par value of |
1 |
1 |
- |
Additional paid-in capital |
1,196,580 |
1,219,767 |
177,679 |
Accumulated other comprehensive loss |
(8,253) |
(2,984) |
(435) |
Retained earnings |
2,144,968 |
2,248,289 |
327,500 |
Total Weidai Ltd. shareholders' equity |
3,333,296 |
3,465,073 |
504,744 |
Noncontrolling interests |
8,739 |
5,180 |
755 |
Total shareholders' equity |
3,342,035 |
3,470,253 |
505,499 |
TOTAL LIABILITIES AND |
6,354,708 |
6,201,952 |
903,416 |
Weidai Ltd. |
|||
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
|||
(All amounts in thousands, except share data, or otherwise noted) |
|||
Three Months Ended March 31, 2019 |
Three Months Ended June 30, 2019 |
||
RMB |
RMB |
US$ |
|
(in thousands, except for share, per share and per ADS data) |
|||
Net revenues: |
|||
Loan facilitation service fees |
766,930 |
758,463 |
110,483 |
Post facilitation service fees |
83,464 |
89,011 |
12,966 |
Other revenues |
51,617 |
21,436 |
3,123 |
Financing income |
86,666 |
68,664 |
10,002 |
Less: Funding costs |
(38,977) |
(30,865) |
(4,496) |
Net financing income |
47,689 |
37,799 |
5,506 |
Total net revenues |
949,700 |
906,709 |
132,078 |
Provision for loans and advances |
(244,124) |
(252,293) |
(36,751) |
Net revenues after provision for |
705,576 |
654,416 |
95,327 |
Operating costs and expenses: |
|||
Provision for financial guarantee |
(53,872) |
(82,710) |
(12,048) |
Origination and servicing expenses |
(376,374) |
(319,082) |
(46,480) |
Sales and marketing expenses |
(48,873) |
(76,429) |
(11,133) |
General and administrative expenses |
(76,093) |
(58,237) |
(8,483) |
Research and development expenses |
(25,549) |
(30,219) |
(4,402) |
Total operation costs and expenses |
(580,761) |
(566,677) |
(82,546) |
Income from operations |
124,815 |
87,739 |
12,781 |
Interest income, net |
12,358 |
9,584 |
1,396 |
Government subsidies |
10,591 |
10,513 |
1,531 |
Other (expenses)/income, net |
(710) |
12,494 |
1,820 |
Net income before income taxes |
147,054 |
120,330 |
17,528 |
Income tax expenses |
(38,096) |
(13,438) |
(1,957) |
Net income |
108,958 |
106,892 |
15,571 |
Net income attributable to |
(3,566) |
(3,571) |
(520) |
Net income and comprehensive |
105,392 |
103,321 |
15,051 |
Earnings per share: |
|||
Basic |
1.50 |
1.47 |
0.21 |
Diluted |
1.49 |
1.46 |
0.21 |
Shares used in earnings per share |
|||
Basic |
70,447,177 |
70,447,177 |
70,447,177 |
Diluted |
70,929,790 |
70,662,869 |
70,662,869 |
Weidai Ltd. |
||||
UNAUDITED Reconciliation of GAAP And Non-GAAP Results |
||||
(All amounts in thousands, except share data, or otherwise noted) |
||||
Three Months Ended March 31, 2019 |
Three Months Ended June 30, 2019 |
|||
RMB |
RMB |
US$ |
||
(in thousands, except for share, per share and per ADS data) |
||||
Net income |
108,958 |
106,892 |
15,571 |
|
Add: |
||||
Share-based compensation expenses |
25,624 |
23,187 |
3,378 |
|
Adjusted net income |
134,582 |
130,079 |
18,949 |
|
SOURCE Weidai Ltd.
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