Yintech Reports Second Quarter 2019 Unaudited Financial Results
Net Commissions and Fees Increased 41.8% Year-over-Year and 25.4% Quarter-over-Quarter
Net Commissions and Fees from Securities Services Increased 53.5% Year-over-Year and 94.1% Year-over-Year for the First Half of 2019
SHANGHAI, Aug. 30, 2019 /PRNewswire/ -- Yintech Investment Holdings Limited (NASDAQ: YIN) ("Yintech" or the "Company"), a leading provider of investment and trading services for individual investors in China, today announced its unaudited financial results for the second quarter of 2019.
Second Quarter 2019 Financial Highlights
For the quarter ended |
||||||
(In RMB million, except |
June 30, |
March 31, |
June 30, |
Q2'19 vs. Q2'18 |
Q2'19 vs. Q1'19 |
|
Revenues |
263.3 |
454.3 |
289.1 |
9.8% |
(36.4%) |
|
Net commissions and fees |
217.9 |
246.5 |
309.0 |
41.8% |
25.4% |
|
Net commissions and fees |
130.5 |
123.7 |
174.8 |
33.9% |
41.3% |
|
Net commissions and fees |
87.4 |
122.8 |
134.2 |
53.5% |
9.3% |
|
Net income/(loss) attributable to |
(48.5) |
69.2 |
(55.0) |
(13.4%) |
(179.5%) |
|
Earnings/(loss) per ADS - |
(0.66) |
0.92 |
(0.76) |
|||
Non-GAAP data (Refer to "Reconciliation of GAAP to Non-GAAP Results") |
||||||
Non-GAAP net income/(loss) |
(31.0) |
85.6 |
(42.1) |
(35.8%) |
(149.2%) |
|
Non-GAAP earnings/(loss) |
(0.42) |
1.14 |
(0.58) |
|||
"So far in 2019, a challenging mix of geopolitical, economic, and market dynamics has persisted and weaker than expected investor confidence amid the complex international environment contributed to the headwinds we faced in this quarter. Despite the increasing macro uncertainties, we saw exciting improvement in our business. We delivered the strongest quarterly results for our core business since the fourth quarter of 2017," said Mr. Wenbin Chen, Chairman and CEO of Yintech.
"Our net commissions and fees generated from five core businesses under commodities and securities services reached the high level of RMB309 million, an increase of 41.8% year-over-year and 25.4% quarter-over-quarter. Revenues from commissions, interest income and other revenues were RMB329 million, 21.9% higher than our high-end guidance. Trading losses were RMB40 million, 42.9% to 60.0% lower than our previous guidance."
"We are pleased to see that our strategic deployment on asset management and our prioritization of solid portfolio performance over pure scale and commercialization has paid off. Our asset management company ranked Top Ten of Private Equity Funds in China for the first half of 2019 by Wind, maintaining its continuum of remarkable performance."
"While sustaining our incremental growth on core business, we continued our execution on customer centric strategies in various ways, in particular our enhanced efforts on investment in AI and big data technology and its adoption in financial trading products, aiming to expand customer base and improve customers' satisfaction and loyalty. The various intelligent investment advisory products that our financial innovation lab had developed and implemented several quarters ago begun to bear fruits. Greater efforts on constantly upgrading the existing products in our apps and broader adoption to cover more of financial trading products such as Gold T+D are well on track."
"In the second quarter, we continued to optimize our business and enhance our bottom-line while maintaining our core competitiveness on technology. Our ongoing focus on driving efficiency while managing our spending in a disciplined manner enabled us to further improve ratio of expenses, drive operation leverage and ultimately improve earnings. We are encouraged to see our net commissions and fees increased 42% year-over-year and 25% over the last quarter, whereas our total cost and expenses increased only 4% and 7% respectively. Our net loss attributable to ordinary shareholders from five core businesses represented a substantial decline from the first quarter."
"In addition, under the current market conditions maintaining an asset-light business model and effective balance sheet management remained one of our priorities as we aim to maintain appropriate liquidity to support anticipated business expansion. We believe this along with our strategies in strengthening our investment and research as well as technology capabilities will help us capture greater market opportunities as investor sentiment and the industry recover," Mr. Chen concluded.
Second Quarter 2019 Financial Results
Revenues for the quarter were RMB289.1 million (US$42.1 million), compared with RMB263.3 million in the same quarter last year and RMB454.3 million in the previous quarter. The sequential decrease was mainly the result of trading losses of RMB40.0million incurred from market-sensitive public equity investment comparing with trading gains of RMB187.1 million in the previous quarter. This was partially offset by the significant increases in net commissions and fees from both commodities and securities. The year-over-year increase was mainly attributable to increase in net commissions and fees.
Net commissions and fees for the quarter were RMB309.0 million (US$45.0 million), representing an increase of 41.8% year-over-year and 25.4% from the previous quarter. The year-over-year and sequential increases were primarily due to the increase in trading volumes of both commodities and securities services.
Customer trading volume for the quarter was RMB571.6 billion (US$83.3 billion), representing an increase of 39.8% year-over-year and 58.5% from the previous quarter.
Customer trading volume for commodities (representing customer trading volume of spot and futures commodities) was RMB489.8 billion (US$71.3 billion) during the quarter, an increase of 20.8% year-over-year and 55.3% from the previous quarter. The increases were primarily attributable to significant increases in trading volumes of overseas futures commodities thanks to our strong execution on strategies of diversifying our products and services offerings to address the growing needs of our clients.
Net commissions and fees from commodities services for the quarter were RMB174.8 million (US$25.5 million), an increase of 33.9% year-over-year and 41.3% from the previous quarter primarily due to the increase in trading volumes for commodities.
Effective fee rate for commodities (representing net commissions and fees from commodities services as a percentage of customer trading volume for commodities) for the quarter was 0.036%, compared with 0.032% in the same quarter last year and 0.039% in the previous quarter.
Customer trading volume for securities (representing customer trading volume of overseas securities brokerage) was RMB81.8 billion (US$11.9 billion) during the quarter, an increase of 2456.3% year-over-year and 80.6% from the previous quarter. The robust growth demonstrates the effectiveness of the Company's strategy to expand its securities business.
Net commissions and fees from securities services for the quarter were RMB134.2 million (US$19.5 million), an increase of 53.5% year-over-year and 9.3% from the previous quarter due to the increase in trading volumes for securities.
Effective fee rate for securities (representing net commissions and fees from overseas securities brokerage services as a percentage of customer trading volume for overseas securities brokerage) for the quarter was 0.053%, compared with 0.443% in the same quarter last year and 0.056% in the previous quarter.
Expenses for the quarter were RMB328.1 million (US$47.8 million), an increase of 4.3% year-over-year and 7.1% from the previous quarter.
Net loss for the quarter was RMB45.2 million (US$6.6 million), compared with net loss of RMB44.2 million in the same quarter last year and net income of RMB75.1 million in the previous quarter. The sequential decrease was primarily the result of trading losses of RMB 40.0 million generated from market-sensitive public equity investment comparing with trading gains of RMB187.1 million in the previous quarter.
Net loss attributable to Yintech for the quarter was RMB55.0 million (US$8.0 million), compared with net loss of RMB48.5 million in the same quarter last year and net income of RMB69.2 million in the previous quarter.
Non-GAAP net loss attributable to Yintech (Refer to "Reconciliation of GAAP to Non-GAAP Results") for the quarter was RMB42.1 million (US$6.1 million), compared with net loss of RMB31.0 million in the same quarter last year and net income of RMB85.6 million in the previous quarter.
Diluted loss per ADS for the quarter was RMB0.76 (US$0.11), compared with diluted loss per ADS of RMB0.66 in the same quarter last year and diluted earnings per ADS of RMB0.92 in the previous quarter.
Non-GAAP diluted loss per ADS (Refer to "Reconciliation of GAAP to Non-GAAP Results") for the quarter was RMB0.58 (US$0.08), compared with non-GAAP diluted loss per ADS of RMB0.42 in the same quarter last year and non-GAAP diluted earnings per ADS of RMB1.14 in the previous quarter.
As of June 30, 2019, the Company had RMB1,858.2 million (US$270.7 million) in cash and short term investments, compared with RMB1,753.2 million as of March 31, 2019.
Business Outlook
Based on the information available as of the date of this press release, Yintech provides the following outlook, which reflects the Company's current and preliminary view and is subject to change:
2019 Third Quarter Guidance
- Revenues from commissions, interest income and other revenues will be the range of RMB380 million to RMB400 million.
- Revenues from trading gains/loss will be in the range of (RMB10 million) to (RMB30 million).
Share Repurchase Program
On May 31, 2019, the Company announced a share repurchase program whereby Yintech is authorized to repurchase up to US$20 million of its issued and outstanding ADSs during the following 12-month period. As of June 30, 2019, the Company had purchased an aggregate of 55,043 ADSs for a total amount of slightly over US$250 thousand since June 1, 2019.
Discussion of Non-GAAP Financial Measures
In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company's earnings release contains non-GAAP financial measures that exclude the effects of all forms of share-based compensation, as well as impairment and amortization of intangible assets and/or goodwill in relation to the acquisition of Gold Master. The reconciliation of these non-GAAP financial measures to the nearest GAAP measures is set forth in the table captioned "Reconciliation of GAAP to Non-GAAP Results" below.
The non-GAAP financial measures disclosed by the Company should not be considered a substitute for financial measures prepared in accordance with U.S. GAAP. The financial results reported in accordance with U.S. GAAP and reconciliation of GAAP to non-GAAP results should be carefully evaluated. The non-GAAP financial measure used by the Company may be prepared differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
When evaluating the Company's operating performance in the periods presented, management reviewed the non-GAAP net income and non-GAAP EPS results reflecting adjustments to exclude the impact of share-based compensation as well as impairment and amortization of intangible assets and/or goodwill in relation to the acquisition of Gold Master to supplement U.S. GAAP financial data. As such, the Company believes that the presentation of the non-GAAP net income and the diluted non-GAAP earnings per ADS provides important supplemental information to investors regarding financial and business trends relating to the Company's financial condition and results of operations in a manner consistent with that used by management. Pursuant to U.S. GAAP, the Company recognized significant amounts of expenses for the restricted shares and share options, as well as amortization of intangible assets in relation to the acquisition of Gold Master in the periods presented. The Company utilized the non-GAAP financial results to make financial results comparable period to period and to better understand its historical business operations.
Currency Conversion
This announcement contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars were made at the exchange rate of RMB6.865 to US$1.00, as set forth in the H.10 statistical release of the Federal Reserve Board on June 28, 2019. No representation is intended to imply that these Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollar amounts at such rate, or at any other rate.
Conference Call Information
The Company will host a conference call to discuss the earnings at 8:00 a.m. U.S. Eastern Time on Friday, August 30, 2019 (8:00 p.m. Hong Kong Time on the same day).
Details of the conference call are as follows:
International: |
1-412-902-4272 |
U.S. Toll Free: |
1-888-346-8982 |
Mainland China Toll Free: |
4001-201203 |
Hong Kong: |
852-301-84992 |
Hong Kong Toll Free: |
800-905945 |
Passcode: |
Yintech |
A telephone replay of the call will be available after the conclusion of the conference call through 11:59 p.m. Hong Kong Time, September 6, 2019.
Dial-in numbers for the replay are as follows:
International Dial-in: |
1-412-317-0088 |
U.S. Toll Free: |
1-877-344-7529 |
Passcode: |
10134420 |
A live and archived webcast will be available on the Investor Relations section of Yintech's website at http://ir.yintech.net/.
Safe Harbor Statement
All statements other than statements of historical fact contained in this release, including statements regarding future results of the operations of the Company are forward-looking statements, which are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: the Company's ability to effectively acquire and retain its customers; the Company's diversification of its business among different commodity exchanges; the adjustments in commissions and other fees set by relevant commodity exchanges; the Company's ability to constantly upgrade its technology platform and software; general market conditions of online spot commodity trading industry and stock market; intense competition among service providers in this industry; the Company's relatively short operating history; the price of the Company's ADSs and changing market conditions for its ADSs; acquisition-related risks, including unknown liabilities and integration risks; as well as those risks detailed from time to time under the caption "Risk Factors" and elsewhere in the Company's Securities and Exchange Commission filings and reports, including in the Company's annual report on Form 20-F for the year ended December 31, 2018. In addition, the Company operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for the management to predict all risks, nor can the Company assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements that the Company may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this release are inherently uncertain and may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, you should not rely upon forward-looking statements as predictions of future events. The Company does not undertake any obligation to update publicly or revise any forward-looking statements for any reason after the date of this release, nor to conform these statements to actual results, future events, or to changes in the Company's expectations.
About Yintech
Yintech (NASDAQ: YIN) is a leading provider of investment and trading services for individual investors in China. Yintech strives to provide best-in-class financial information, investment tools and services to its customers by leveraging financial technology and mobile platforms. Currently, Yintech is focused on the provision of gold and other commodities trading services, securities advisory services, securities information platform services, overseas securities trading services and asset management services.
Operational Highlights |
|||
For the three months ended |
|||
June 30, 2018 |
March 31, 2019 |
June 30, 2019 |
|
Customer trading volume (in RMB billion)[1] |
|||
Commodities services |
405.6 |
315.3 |
489.8 |
Securities services |
3.2 |
45.3 |
81.8 |
Total |
408.8 |
360.6 |
571.6 |
Net commissions and fees (in RMB million) |
|||
Commodities services[2] |
130.5 |
123.7 |
174.8 |
Securities services[3] |
87.4 |
122.8 |
134.2 |
Total |
217.9 |
246.5 |
309.0 |
Effective fee rate[4] |
0.035% |
0.041% |
0.038% |
Commodities services[5] |
0.032% |
0.039% |
0.036% |
Securities services[6] |
0.443% |
0.056% |
0.053% |
Active accounts[7] |
24,141 |
22,091 |
23,062 |
Tradable accounts[8] |
119,282 |
134,793 |
138,251 |
Note |
|||
[1] Represent customer trading volume of spot and futures commodities as well as overseas securities. |
|||
[2] Represent net commissions and fees earned from customer trading of spot and futures commodities contracts. |
|||
[3] Represent net commissions and fees earned by providing securities advisory services, securities information |
|||
[4] Represent net commissions and fees from commodities and overseas securities brokerage services as a |
|||
[5] Represent net commissions and fees from commodities services as a percentage of customer trading volume for |
|||
[6] Represent net commissions and fees from overseas securities brokerage services as a percentage of customer |
|||
[7] Refer to a regular customer account that executed at least one trade of spot and futures commodities contracts or |
|||
[8] Refer to a regular customer account that has been activated for trading of spot and futures commodities contracts |
|||
Consolidated Statements of Comprehensive Income |
|||||
In RMB '000, except otherwise specified |
|||||
For the Three Months Ended |
|||||
June 30, |
March 31, |
June 30, |
|||
Revenue |
|||||
Commission |
217,916 |
246,490 |
308,972 |
||
Trading gains and |
16,195 |
187,090 |
(39,955) |
||
Interest income |
799 |
7,583 |
8,038 |
||
Other revenues |
28,408 |
13,171 |
12,019 |
||
263,318 |
454,334 |
289,074 |
|||
Expenses |
|||||
Commission expense |
- |
(67) |
(303) |
||
Employee compensation and |
(194,004) |
(185,279) |
(204,640) |
||
Advertising and |
(52,312) |
(64,039) |
(66,616) |
||
Information technology |
(7,336) |
(6,430) |
(11,839) |
||
Occupancy and |
(30,815) |
(25,399) |
(25,319) |
||
Taxes and surcharges |
(1,132) |
(1,158) |
(1,282) |
||
Intangible asset |
(15,393) |
(6,995) |
(7,006) |
||
Other expenses |
(13,645) |
(17,012) |
(11,110) |
||
(314,637) |
(306,379) |
(328,115) |
|||
Profit/(loss) before |
(51,319) |
147,955 |
(39,041) |
||
Income tax |
7,129 |
(72,872) |
(6,207) |
||
Net income/(loss) |
(44,190) |
75,083 |
(45,248) |
||
Less: Net income/(loss) |
4,330 |
5,868 |
9,797 |
||
Net income/(loss) |
(48,520) |
69,215 |
(55,045) |
||
Other comprehensive |
7,935 |
(13,183) |
13,630 |
||
Comprehensive income/(loss) |
(40,585) |
56,032 |
(41,415) |
||
Earnings/(loss) per |
|||||
Basic |
(0.66) |
0.95 |
(0.76) |
||
Diluted |
(0.66) |
0.92 |
(0.76) |
||
Weighted average |
|||||
Basic |
1,460,962 |
1,454,486 |
1,457,219 |
||
Diluted |
1,460,962 |
1,505,934 |
1,457,219 |
||
Number of shares |
1,410,544 |
1,428,667 |
1,430,971 |
||
Note |
|||||
[9] Each ADS represents 20 ordinary shares. |
|||||
Consolidated Balance Sheets |
||
In RMB '000, except otherwise specified |
||
March 31, 2019 |
June 30, 2019 |
|
Assets |
||
Cash |
226,174 |
212,257 |
Entrusted bank balances held on behalf of |
46,040 |
70,152 |
Short term investments |
1,527,054 |
1,645,981 |
Deposits with clearing organizations |
15,519 |
22,761 |
Amount due from related parties |
25,000 |
25,000 |
Equipment and leasehold improvements |
21,685 |
16,947 |
Deferred tax assets |
12,303 |
19,657 |
Goodwill |
637,128 |
637,142 |
Intangible assets |
323,301 |
316,658 |
Accounts receivable |
152,416 |
176,222 |
Operating lease right-of-use assets |
86,078 |
74,746 |
Other assets |
299,183 |
220,537 |
Equity method investments |
24,726 |
24,677 |
Total assets |
3,396,607 |
3,462,737 |
Liabilities and shareholders' equity |
||
Amount due to related parties |
7,899 |
7,274 |
Deferred tax liabilities |
114,275 |
95,635 |
Income tax payable |
102,223 |
133,160 |
Accounts payable |
64,297 |
102,730 |
Accrued employee benefits |
161,808 |
184,495 |
Operating lease liabilities |
81,690 |
70,149 |
Other liabilities |
161,029 |
197,771 |
Total liabilities |
693,221 |
791,214 |
Equity attributable to Yintech's shareholder |
2,589,787 |
2,548,127 |
Equity attributable to non-controlling interests |
113,599 |
123,396 |
Total shareholders' equity |
2,703,386 |
2,671,523 |
Total liabilities and shareholders' equity |
3,396,607 |
3,462,737 |
Reconciliation of GAAP to Non-GAAP Results |
|||
In RMB '000, except otherwise specified |
|||
For the three months ended |
|||
June 30, 2018 |
March 31, 2019 |
June 30, 2019 |
|
Net income/(loss) attributable to Yintech |
(48,520) |
69,215 |
(55,045) |
Add: Share-based compensation |
7,180 |
11,668 |
8,233 |
Add: Amortization of intangible |
10,303 |
4,737 |
4,737 |
Non-GAAP net income/(loss) |
(31,037) |
85,620 |
(42,075) |
Non-GAAP earnings/(loss) per ADS[9] (RMB) |
|||
Basic |
(0.42) |
1.18 |
(0.58) |
Diluted |
(0.42) |
1.14 |
(0.58) |
Note |
|||
[9] Each ADS represents 20 ordinary shares. |
|||
For investor and media inquiries, please contact:
Yvonne Young
Phone: +86 21 2028 9009 ext 8270
E-mail: [email protected]
SOURCE Yintech Investment Holdings Ltd.
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