CNFinance Announces Third Quarter of 2021 Unaudited Financial Results
CNFinance Holdings Limited (NYSE: CNF) announced its third-quarter 2021 results, reporting a loan origination volume of RMB3,117.5 million (US$480.7 million), up from RMB3,093.4 million year-over-year. However, net income dropped 62.1% to RMB19.0 million (US$2.9 million), and earnings per ADS fell to RMB0.28 (US$0.04) from RMB0.73 in Q3 2020. Despite an increase in total outstanding loan principal to RMB11.1 billion, total interest and fees income decreased by 4.0%. The company forecasts a net loss between RMB80 million and RMB100 million for Q4 2021.
- None.
- Net income decreased by 62.1% to RMB19.0 million from RMB50.1 million in Q3 2020.
- Earnings per ADS fell to RMB0.28 from RMB0.73 in Q3 2020.
- Total interest and fees income declined by 4.0% to RMB457.0 million.
- Net interest and fees income dropped by 18.4% to RMB237.9 million.
- Expected net loss of RMB80 million to RMB100 million for Q4 2021.
GUANGZHOU, China, Nov. 23, 2021 /PRNewswire/ -- CNFinance Holdings Limited (NYSE: CNF) ("CNFinance" or the "Company"), a leading home equity loan service provider in China, today announced its unaudited financial results for the third quarter ended September 30, 2021.
Third Quarter 2021 Operational and Financial Highlights
- Total loan origination volume[1] was RMB3,117.5 million (US
$480.7 million ) in the third quarter of 2021, compared to RMB3,093.4 million in the same period of 2020. - Total outstanding loan principal[2] was RMB11.1 billion (US
$1.7 billion ) as of September 30, 2021, compared to RMB9.7 billion as of December 31, 2020. - Total interest and fees income were RMB457.0 million (US
$70.5 million ) in the third quarter of 2021, compared to RMB476.0 million in the same period of 2020. - Net income was RMB19.0 million (US
$2.9 million ) in the third quarter of 2021, compared to RMB50.1 million in the same period of 2020. - Basic and diluted earnings per ADS were RMB0.28 (US
$0.04) and RMB0.25 (US$0.04) , respectively, in the third quarter of 2021, compared to RMB0.73 and RMB0.67, respectively, in the same period of 2020.
[1] Refers to the total amount of loans CNFinance originated during the relevant period. |
[2] Refers to the total amount of loans principal outstanding for CNFinance at the end of the relevant period. |
"Following a good first half, our loan facilitation business remained stable in the third quarter of 2021. During the third quarter, the robust business operations of micro-and small-enterprises (MSEs) created an increase in capital demand. To meet such demand, our professional and dedicated team, with the aid of our efficient and visualized online system, served over 5,000 borrowers. With RMB3.1 billion loans originated in the third quarter of 2021, the total outstanding loan principal reached RMB11.1 billion as of September 30, 2021. Although exposed to the lower funding supply from trust companies and an increase in financing cost, we were still able to record a net income of RMB19.0 million in the third quarter of 2021. It is worth noticing that we enlarged our business scale during the third quarter of 2021 while we lowered the collaboration cost for sales partners as a result of lower rate of incentives due to the overall lowered interest rates on loans, which reflected the success of our efforts to improve the screening and management of sales partners. To promote the strategical transformation to an asset-light platform, we plan to dispose of certain legacy loans under the traditional model in the fourth quarter. We will conduct evaluations and endeavor to sell those loans in bulk at fair market prices. Looking forward, we remain dedicated to building an asset-light service platform with a high turnover at a large scale while staying true to our mission of providing MSE owners with affordable, accessible and efficient financial services," commented Mr. Bin Zhai, CEO and Chairman of CNFinance.
Third Quarter 2021 Financial Results
Total interest and fees income decreased by
Interest and financing service fees on loans decreased by
Interest on deposits with banks decreased by
Total interest and fees expenses increased by
Net interest and fees income was RMB237.9 million (US
Collaboration cost for sales partners decreased to RMB101.5 million (US
Net interest and fees income after collaboration cost was RMB136.4 million (US
Provision for credit losses increased by
Net gains/(losses) on sales of loans decreased to a net loss of RMB3.5 million (US
Other gains/(losses), net increased to a net gain of RMB15.8 million (US
Total operating expenses decreased by
Employee compensation and benefits increased by
Share-based compensation expenses decreased by
Taxes and surcharges decreased by
Operating lease cost decreased by
Other expenses decreased by
Income tax expense decreased by
Effective tax rate decreased to
Net income decreased by
Basic and diluted earnings per ADS were RMB0.28 (US
As of September 30, 2021 and December 31, 2020, the Company had Cash, cash equivalents and restricted cash of RMB2.0 billion (US
The actual delinquency rate for loans originated by the Company decreased to
The actual NPL rate for loans originated by the Company decreased to
Business Outlook
The extent to which the COVID-19 pandemic impacts the Company's results of operations will depend on future developments of the pandemic in China and across the globe, which are subject to change and substantial uncertainty and therefore cannot be predicted. For the fourth quarter of 2021, based on the information available as of the date of this press release, the Company expects to dispose of certain non-performing loans to improve the overall loan portfolio, and expects to incur a net loss of between RMB80 million and RMB100 million.
The above outlook is based on the current market conditions and reflects the Company's current and preliminary estimates of market and operating conditions, which are all subject to substantial uncertainty.
Conference Call
CNFinance's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on Monday, November 23, 2021 (9:00 PM Beijing/ Hong Kong Time on Tuesday, November 23, 2021).
Dial-in numbers for the live conference call are as follows:
International: | +1-412-902-4272 |
Mainland China | +86-4001-201203 |
United States: | +1-888-346-8982 |
Hong Kong: | +852-3018-4992 |
Passcode: | CNFinance |
A telephone replay of the call will be available after the conclusion of the conference call until 11:59 PM ET on November 30, 2021.
Dial-in numbers for the replay are as follows:
International: | +1-412-317-0088 |
United States: | +1-877-344-7529 |
Passcode: | 10162076 |
A live and archived webcast of the conference call will be available on the Investor Relations section of CNFinance's website at http://ir.cashchina.cn/.
Statement Regarding Preliminary Unaudited Financial Information
The unaudited financial information set out in this earnings release is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Company's year-end audit, which could result in significant differences from this preliminary unaudited financial information.
Exchange Rate
The Company's business is primarily conducted in China and all of the revenues are denominated in Renminbi ("RMB"). This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.4854 to US
Safe Harbor Statement
This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and 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", "confident" and similar statements. The Company may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, 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. Any statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: its goals and strategies, its ability to achieve and maintain profitability, its ability to retain existing borrowers and attract new borrowers, its ability to maintain and enhance the relationship and business collaboration with its trust company partners and to secure sufficient funding from them, the effectiveness of its risk assessment process and risk management system, its ability to maintain low delinquency ratios for loans it originated, fluctuations in general economic and business conditions in China, the impact and future development of COVID-19 pandemic in China and across the globe, and relevant government laws, regulations, rules, policies or guidelines relating to the Company's corporate structure, business and industry. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and the Company does not undertake any obligation to update such information, except as required under applicable law.
About CNFinance Holdings Limited
CNFinance Holdings Limited (NYSE: CNF) ("CNFinance" or the "Company") is a leading home equity loan service provider in China. CNFinance conducts business by collaborating with sales partners and trust company partners. Sales partners are responsible for recommending micro-and
small-enterprise ("MSE") owners with financing needs to the Company and the Company introduces eligible borrowers to its trust company partners who will then conduct their own risk assessments and make credit decisions. The Company's primary target borrower segment is MSE owners who own real properties in Tier 1 and Tier 2 cities in China. The loans CNFinance facilitated are primarily funded through a trust lending model with its trust company partners who are well-established with sufficient funding sources and have licenses to engage in lending business nationwide. The Company's risk mitigation mechanism is embedded in the design of its loan products, supported by an integrated online and offline process focusing on risks of both borrowers and collateral and further enhanced by effective post-loan management procedures.
CNFINANCE HOLDINGS LIMITED | |||
Unaudited condensed consolidated balance sheets | |||
(In thousands) | |||
December 31, | September 30, | ||
2020 | 2021 | ||
RMB | RMB | US$ | |
Assets | |||
Cash, cash equivalents and restricted cash | 1,960,923 | 1,964,143 | 302,856 |
Loans principal, interest and financing service fee | 9,688,941 | 11,101,332 | 1,711,742 |
Allowance for credit losses | 659,479 | 641,287 | 98,882 |
Net loans principal, interest and financing service fee receivables | 9,029,462 | 10,460,045 | 1,612,860 |
Investment securities | 418,137 | 1,451,164 | 223,759 |
Property and equipment | 4,716 | 2,726 | 421 |
Intangible assets and goodwill | 3,230 | 4,163 | 642 |
Deferred tax assets | 75,824 | 6,417 | 989 |
Deposits | 114,052 | 157,643 | 24,307 |
Right-of-use assets | 19,468 | 17,102 | 2,637 |
Guaranteed assets | 533,680 | 756,275 | 116,612 |
Other assets | 74,004 | 110,522 | 17,042 |
Total assets | 12,233,496 | 14,930,200 | 2,302,125 |
Liabilities and shareholders' equity | |||
Interest-bearing borrowings | |||
Borrowings under agreements to repurchase | 508,577 | 300,546 | 46,342 |
Other borrowings | 5,649,669 | 8,348,794 | 1,287,322 |
Accrued employee benefits | 29,627 | 23,134 | 3,567 |
Income taxes payable | 154,807 | 188,111 | 29,005 |
Deferred tax liabilities | 396,594 | 211,063 | 32,544 |
Lease liabilities | 19,545 | 16,837 | 2,596 |
Credit risk mitigation position | 1,209,729 | 1,407,171 | 216,975 |
Other liabilities | 523,697 | 510,981 | 78,790 |
Total liabilities | 8,492,245 | 11,006,637 | 1,697,141 |
Ordinary shares (3,800,000,000 shares authorized; | 917 | 917 | 141 |
Additional paid-in capital | 999,663 | 1,013,737 | 156,311 |
Retained earnings | 2,759,128 | 2,928,984 | 451,627 |
Accumulated other comprehensive losses | (18,457) | (20,075) | (3,095) |
Total shareholders' equity | 3,741,251 | 3,923,563 | 604,984 |
Total liabilities and shareholders' equity | 12,233,496 | 14,930,200 | 2,302,125 |
CNFINANCE HOLDINGS LIMITED | |||
Unaudited condensed consolidated statements of comprehensive income | |||
(In thousands, except for earnings per share and earnings per ADS) | |||
Three months ended September 30, | |||
2020 | 2021 | 2021 | |
RMB | RMB | US$ | |
Interest and fees income | |||
Interest and financing service fees on | 472,464 | 454,870 | 70,138 |
Interest on deposits with banks | 3,495 | 2,123 | 327 |
Total interest and fees income | 475,959 | 456,993 | 70,465 |
Total interest and fees expenses | (184,349) | (219,126) | (33,788) |
Net interest and fees income | 291,610 | 237,867 | 36,677 |
Collaboration cost for sales partners | (112,480) | (101,521) | (15,654) |
Net interest and fees income after | 179,130 | 136,346 | 21,023 |
Provision for credit losses | (31,088) | (32,589) | (5,025) |
Net interest and fees income after | 148,042 | 103,757 | 15,998 |
Realized gains on sales of investments, | 7,232 | 2,492 | 384 |
Net gains/(losses) on sales of loans | 39,466 | (3,410) | (526) |
Other (losses)/gains, net | (2,102) | 15,751 | 2,429 |
Total non-interest income | 44,596 | 14,833 | 2,287 |
Operating expenses | |||
Employee compensation and benefits | (46,687) | (47,744) | (7,362) |
Share-based compensation expenses | (15,518) | (4,692) | (723) |
Taxes and surcharges | (11,900) | (10,578) | (1,631) |
Operating lease cost | (4,362) | (3,721) | (574) |
Other expenses | (39,375) | (26,255) | (4,048) |
Total operating expenses | (117,842) | (92,990) | (14,338) |
Income before income tax expense | 74,796 | 25,600 | 3,947 |
Income tax expense | (24,647) | (6,571) | (1,013) |
Net income | 50,149 | 19,029 | 2,934 |
Earnings per share | |||
Basic | 0.04 | 0.01 | 0.002 |
Diluted | 0.03 | 0.01 | 0.002 |
Earnings per ADS (1 ADS equals 20 | |||
Basic | 0.73 | 0.28 | 0.043 |
Diluted | 0.67 | 0.25 | 0.039 |
Other comprehensive income | |||
Net unrealized gains on investment | 75 | - | - |
Foreign currency translation | (8,482) | 1,069 | 165 |
Comprehensive income | 41,742 | 20,098 | 3,099 |
CNFINANCE HOLDINGS LIMITED | |||
Unaudited condensed consolidated statements of comprehensive income | |||
(In thousands, except for earnings per share and earnings per ADS) | |||
Nine months ended September 30, | |||
2020 | 2021 | 2021 | |
RMB | RMB | US$ | |
Interest and fees income | |||
Interest and financing service fees on | 1,411,570 | 1,325,657 | 204,406 |
Interest on deposits with banks | 12,142 | 7,907 | 1,219 |
Total interest and fees income | 1,423,712 | 1,333,564 | 205,625 |
Total interest and fees expenses | (572,003) | (570,367) | (87,946) |
Net interest and fees income | 851,709 | 763,197 | 117,679 |
Collaboration cost for sales partners | (310,723) | (306,282) | (47,226) |
Net interest and fees income after | 540,986 | 456,915 | 70,453 |
Provision for credit losses | (308,460) | (30,054) | (4,634) |
Net interest and fees income after | 232,526 | 426,861 | 65,819 |
Realized gains on sales of investments, | 15,544 | 10,053 | 1,550 |
Net gains on sales of loans | 105,899 | 17,878 | 2,756 |
Other gains, net | 11,929 | 33,884 | 5,225 |
Total non-interest income | 133,372 | 61,815 | 9,531 |
Operating expenses | |||
Employee compensation and benefits | (138,161) | (148,753) | (22,937) |
Share-based compensation expenses | (46,554) | (14,075) | (2,170) |
Taxes and surcharges | (36,784) | (25,658) | (3,956) |
Operating lease cost | (17,164) | (11,538) | (1,779) |
Other expenses | (93,986) | (74,584) | (11,500) |
Total operating expenses | (332,649) | (274,608) | (42,342) |
Income before income tax expense | 33,249 | 214,068 | 33,008 |
Income tax expense | (23,677) | (44,212) | (6,817) |
Net income | 9,572 | 169,856 | 26,191 |
Earnings per share | |||
Basic | 0.01 | 0.12 | 0.019 |
Diluted | 0.01 | 0.11 | 0.017 |
Earnings per ADS (1 ADS equals 20 | |||
Basic | 0.14 | 2.48 | 0.382 |
Diluted | 0.13 | 2.25 | 0.347 |
Other comprehensive income | |||
Net unrealized gains on investment | 422 | - | - |
Foreign currency translation | (4,184) | (1,619) | (250) |
Comprehensive (losses)/income | 5,810 | 168,237 | 25,941 |
View original content:https://www.prnewswire.com/news-releases/cnfinance-announces-third-quarter-of-2021-unaudited-financial-results-301430726.html
SOURCE CNFinance Holdings Limited
FAQ
What were CNFinance's Q3 2021 earnings results?
What is the loan origination volume for CNFinance in Q3 2021?
What is the forecast for CNFinance in Q4 2021?
How did CNFinance's interest and fees income change in Q3 2021?