Fanhua Reports Fourth Quarter and Fiscal Year 2022 Unaudited Financial Results
Fanhua reported a significant rise in net income attributable to shareholders for Q4 2022, up 545.0% year-over-year, reaching RMB 70.6 million (US$ 10.2 million). Despite a 4.4% decline in total net revenues to RMB 767.4 million (US$ 111.3 million), the company showed resilience with operating income increasing 3.1% to RMB 84.9 million (US$ 12.3 million). However, the fiscal year saw a 15.0% revenue drop to RMB 2.78 billion (US$ 403.3 million) and a 60.0% decrease in net income. Looking ahead, Fanhua aims for at least 50% growth in life insurance premiums and operating income for 2023.
- Q4 2022 net income attributable to shareholders increased 545.0% YoY to RMB 70.6 million.
- Operating income improved 3.1% YoY to RMB 84.9 million for Q4 2022.
- Total gross written premiums (GWP) increased 11.7% YoY to RMB 3.6 billion in Q4 2022.
- Total net revenues decreased 4.4% YoY to RMB 767.4 million for Q4 2022.
- Fiscal year 2022 net income attributable to shareholders decreased 60.0% YoY to RMB 100.3 million.
- Total net revenues for 2022 declined by 15.0% to RMB 2.78 billion.
-- Net Income Attributable to Shareholders for the Fourth Quarter of 2022 up
GUANGZHOU, China, March 13, 2023 (GLOBE NEWSWIRE) -- Fanhua Inc. (Nasdaq: FANH) (the “Company” or “Fanhua”), a leading independent financial services provider in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 20221.
Financial Highlights for the Fourth Quarter of 2022:
| (In thousands, except per ADS) | 2021Q4 (RMB) | 2022Q4 (RMB) | 2022Q4 (US$) | Change % | ||||
| Total net revenues | 802,629 | 767,365 | 111,258 | (4.4 | ) | |||
| Operating income | 82,336 | 84,893 | 12,309 | 3.1 | ||||
| Impairment on investment in an affiliate | (29,316 | ) | — | — | N/A | |||
| Net income attributable to the Company’s shareholders | 10,949 | 70,616 | 10,239 | 545.0 | ||||
| Non-GAAP net income attributable to the Company’s shareholders2 | 40,265 | 70,915 | 10,282 | 76.1 | ||||
| Diluted net income per ADS | 0.20 | 1.31 | 0.19 | 555.0 | ||||
| Non-GAAP diluted net income per ADS3 | 0.75 | 1.32 | 0.19 | 76.0 | ||||
| Cash, cash equivalents, short- term investments and others (As of December, 31, 2021 and 2022) | 1,435,306 | 1,488,6324 | 215,831 | 3.7 | ||||
Financial Highlights for Year 2022:
| (In thousands, except per ADS) | 2021 (RMB) | 2022 (RMB) | 2022 (US$) | Change % | ||||
| Total net revenues | 3,271,114 | 2,781,614 | 403,296 | (15.0 | ) | |||
| Operating income | 301,905 | 168,675 | 24,455 | (44.1 | ) | |||
| Impairment on investment in an affiliate | (29,316 | ) | (78,277 | ) | (11,349 | ) | 167.0 | |
| Net income attributable to the Company’s shareholders | 250,989 | 100,272 | 14,538 | (60.0 | ) | |||
| Non-GAAP net income attributable to the Company’s shareholders2 | 280,305 | 179,010 | 25,954 | (36.1 | ) | |||
| Diluted net income per ADS | 4.67 | 1.87 | 0.27 | (60.0 | ) | |||
| Non-GAAP diluted net income per ADS3 | 5.22 | 3.33 | 0.48 | (36.2 | ) | |||
Mr. Yinan Hu, chairman and chief executive officer of Fanhua, commented on the financial results of fourth quarter and fiscal year of 2022, “China’s insurance market is undergoing profound transformation. We believe life insurance sales intermediaries will become increasingly more professional, personalized and fragmented, while the service providers of supporting platforms will become more concentrated.
“To fully capitalize on the growth opportunities amid industry transformation, Fanhua has been steadfastly implementing the “Professionalization, Career-based, Digitalization and Open-Platform” strategy, aiming to transform the company from a sole insurance distributor to a technology-driven digital platform that empowers the industry.
“As we focused on executing the new strategy in 2022, we continued to see fruitful results with steady growth across various operating metrics. During the fourth quarter of 2022, despite challenges from surge of COVID-19 cases in December 2022, we delivered approximately RMB3.6 billion in total gross written premiums (“GWP”), up
“As we accelerate our strategic transformation in 2023, we aim to gain more market share by focusing on the following initiatives: (i) enhancing efforts on the professionalization and career-based development of our sales force; (ii) increasing investment in enhancing digital operation capabilities; and (iii) speeding up strategic acquisitions. Our target is to achieve no less than
Share Repurchase Program
On December 20, 2022, the Company’s board of directors announced a share repurchase program which authorized the Company to repurchase up to US
Financial Results for the Fourth Quarter of 2022
Total net revenues were RMB767.4 million (US
- Net revenues for agency business were RMB662.8 million (US
$96.1 million ) for 2022, representing a decrease of1.4% from RMB672.3 million for the corresponding period in 2021. Total GWP increased by11.7% year-over-year to RMB3,572.5 million, of which FYP grew by19.6% year-over-year to RMB1,026.1 million while renewal premiums increased by8.9% year-over-year to RMB2,546.4 million.- Net revenues for the life insurance business were RMB627.5 million (US
$91.0 million ) for the fourth quarter of 2022, representing a decrease of2.3% from RMB642.5 million for the corresponding period in 2021. Total life insurance GWP increased by11.4% year-over-year to RMB3,465.3 million, of which FYP increased by19.1% year-over-year to RMB918.9 million and renewal premiums increased by8.9% year-over-year to RMB2,546.4 million. The decrease in net revenues for the life insurance business was mainly due to the decrease in renewal commission income as a result of the decreased weighted average renewal commission rate of renewal premium collected, and to a lesser extent, due to changes in the product mix. For long-term life insurance policies that we sell, renewal commissions are paid throughout the policy payment period but the renewal commission rates are higher in the first few years after the sales of the insurance policies and recede in subsequent periods.
Net revenues generated from our life insurance business accounted for81.8% of our total net revenues in the fourth quarter of 2022, as compared to80.1% in the same period of 2021. - Net revenues for the P&C insurance business were RMB35.3 million (US
$5.1 million ) for the fourth quarter of 2022, representing an increase of18.5% from RMB29.8 million for the corresponding period in 2021. The increase was mainly due to the contribution from a newly acquired brokerage firm. Net revenues for the P&C insurance business are mainly derived from commissions for medical insurance, accident insurance, travel insurance and homeowner insurance products facilitated on Baowang (www.baoxian.com). Net revenues generated from the P&C insurance business accounted for4.6% of our total net revenues in the fourth quarter of 2022, as compared to3.7% in the same period of 2021.
- Net revenues for the life insurance business were RMB627.5 million (US
- Net revenues for the claims adjusting business were RMB104.6 million (US
$15.2 million ) for the fourth quarter of 2022, representing a decrease of19.8% from RMB130.4 million for the corresponding period in 2021. The decrease was due to the disruption to our claims adjusting business as a result of the lockdowns in response to the COVID-19 outbreaks in multiple areas in China and contraction of our medical-insurance related claims adjusting business. Net revenues generated from the claims adjusting business accounted for13.6% of our total net revenues in the fourth quarter of 2022, as compared to16.2% in the same period of 2021.
Total operating costs and expenses were RMB682.5 million (US
- Commission costs were RMB494.4 million (US
$71.7million ) for the fourth quarter of 2022, representing a decrease of2.1% from RMB504.9 million for the corresponding period in 2021.- Commission costs for agency business were RMB428.7 million (US
$62.2 million ) for the fourth quarter of 2022, representing a decrease of0.5% from RMB430.7 million for the corresponding period in 2021.- Costs of the life insurance business were RMB406.2 million (US
$58.9 million ) for the fourth quarter of 2022, representing a decrease of1.2% from RMB411.1 million for the corresponding period in 2021. The decrease was in line with the decrease in net revenues generated from our life insurance business. Costs incurred by the life insurance business accounted for82.2% of our total commission costs in the fourth quarter of 2022, as compared to81.4% in the same period of 2021. - Costs of the P&C insurance business were RMB22.5 million (US
$3.3 million ) for the fourth quarter of 2022, representing an increase of14.8% from RMB19.6 million for the corresponding period in 2021. The costs of the P&C insurance business mainly represent commission costs we incurred for operating Baowang (www.baoxian.com). Costs incurred by the P&C insurance business accounted for4.5% of our total commission costs in the fourth quarter of 2022, as compared to3.9% in the same period of 2021.
- Costs of the life insurance business were RMB406.2 million (US
- Costs of claims adjusting business were RMB65.7 million (US
$9.5 million ) for the fourth quarter of 2022, representing a decrease of11.5% from RMB74.2 million for the corresponding period in 2021. Costs incurred by the claims adjusting business accounted for13.3% of our total commission costs in the fourth quarter of 2022, as compared to14.7% in the same period of 2021.
- Commission costs for agency business were RMB428.7 million (US
- Selling expenses were RMB61.8 million (US
$9.0 million ) for the fourth quarter of 2022, representing a decrease of19.8% from RMB77.1 million for the corresponding period in 2021. The decrease was due to cost savings from personnel optimization and decreased sales events and rental costs of our sales outlets. - General and administrative expenses were RMB126.3 million (US
$18.3 million ) for the fourth quarter of 2022, representing a decrease of8.7% from RMB138.3 million for the corresponding period in 2021. The decrease was mainly due to decreased Yuntong branches in the fourth quarter of 2022.
As a result of the foregoing factors, we recorded operating income of RMB84.9 million (US
Operating margin was
Investment income was RMB8.8 million (US
Income tax expense was RMB18.5 million (US
Net income was RMB65.5 million (US
Net income attributable to the Company’s shareholders was RMB70.6 million (US
Non-GAAP net income attributable to the Company’s shareholders2, which excluded impairment on investment in CNFinance Holdings Limited (NYSE:CNF), or CNFinance, and share-based compensation expenses, was RMB70.9 million (US
Net margin was
Non-GAAP net margin5 was
Basic and diluted net income per ADS were RMB1.31 (US
Non-GAAP basic6 and diluted net income per ADS3 were RMB1.32 (US
Financial Results for Year 2022
Total net revenues were RMB2,781.6 million (US
- Net revenues for agency business were RMB2,376.8 million (US
$344.6 million ) for 2022, representing a decrease of15.5% from RMB2,811.9 million in 2021. Total GWP increased by10.3% year-over-year to RMB12,778.5 million, of which FYP increased by3.5% year-over-year to RMB2,926.4 million while renewal premiums increased by12.6% year-over-year to RMB9,852.1 million.- Net revenues for the life insurance business were RMB2,237.3 million (US
$324.4 million ) for 2022, representing a decrease of16.5% from RMB2,679.7 million in 2021. The decrease was mainly due to (i) high base in the first quarter of 2021 as a result of the strong sales of critical illness products prior to the transition to the new critical illness definition framework and (ii) the decrease in the weighted average renewal commission rate of renewal premium collected, and to a lesser extent, due to the change in the product mix. In 2022, total life insurance GWP increased by10.2% year-over-year to RMB12,409.0 million, of which FYP increased by2.0% year-over-year to RMB2,556.9 million and renewal premiums increased by12.6% year-over-year to RMB9,852.1 million.
Net revenues generated from our life insurance business accounted for80.4% of our total net revenues in 2022, as compared to81.9% in 2021. - Net revenues for the P&C insurance business were RMB139.5 million (US
$20.2 million ) for 2022, representing an increase of5.5% from RMB132.2 million in 2021. Net revenues for the P&C insurance business are mainly derived from commissions for medical insurance, accident insurance, travel insurance and homeowner insurance products facilitated on Baowang (www.baoxian.com). Net revenues generated from the P&C insurance business accounted for5.0% of our total net revenues in 2022, as compared to4.1% in 2021.
- Net revenues for the life insurance business were RMB2,237.3 million (US
- Net revenues for the claims adjusting business were RMB404.8 million (US
$58.7 million ) for 2022, representing a decrease of11.8% from RMB459.2 million in 2021. The decrease was due to the disruption to our claims adjusting business as a result of the lockdowns in response to the COVID-19 outbreaks in multiple areas in China and contraction of our medical-insurance related claims adjusting business. Net revenues generated from the claims adjusting business accounted for14.6% of our total net revenues in 2022, as compared to14.0% in 2021.
Total operating costs and expenses were RMB2,612.9 million (US
- Commission costs were RMB1,795.6 million (US
$260.3 million ) for 2022, representing a decrease of15.1% from RMB2,115.2 million in 2021.- Commission costs for agency business were RMB1,527.6 million (US
$221.5 million ) for 2022, representing a decrease of16.8% from RMB1,835.8 million in 2021.- Costs of the life insurance business were RMB1,436.6 million (US
$208.3 million ) for 2022, representing a decrease of17.6% from RMB1,742.6 million in 2021. The decrease was in line with the decrease in net revenues generated from our life insurance business. Costs incurred by the life insurance business accounted for80.0% of our total commission costs in 2022, as compared to82.4% in 2021. - Costs of the P&C insurance business were RMB91.0 million (US
$13.2 million ) for 2022, representing a decrease of2.4% from RMB93.2 million in 2021. The costs of the P&C insurance business mainly represent commission costs we incurred for operating Baowang (www.baoxian.com). Costs incurred by the P&C insurance business accounted for5.1% of our total commission costs in 2022, as compared to4.4% in 2021.
- Costs of the life insurance business were RMB1,436.6 million (US
- Costs of claims adjusting business were RMB268.0 million (US
$38.9 million ) for 2022, representing a decrease of4.0% from RMB279.3 million in 2021. Costs incurred by the claims adjusting business accounted for14.9% of our total commission costs in 2022, as compared to13.2% in 2021.
- Commission costs for agency business were RMB1,527.6 million (US
- Selling expenses were RMB272.7 million (US
$39.5 million ) for 2022, representing a decrease of11.0% from RMB306.5 million in 2021. The decrease was due to decreased sales events and rental costs of our sales outlets, partially offset by increased headcount in our Yuntong branches. - General and administrative expenses were RMB544.6 million (US
$79.0 million ) for 2022, representing a decrease of0.5% from RMB547.6 million in 2021. The decrease was mainly due to cost savings from office expenses, partially offset by increased headcount in our IT center.
As a result of the foregoing factors, we recorded operating income of RMB168.7 million (US
Operating margin was
Investment income was RMB17.8 million (US
Income tax expense was RMB41.0 million (US
Net income was RMB85.7 million (US
Net income attributable to the Company’s shareholders was RMB100.3 million (US
Non-GAAP net income attributable to the Company’s shareholders2, which excluded impairment on investment in CNFinance and share-based compensation expenses, was RMB179.0 million (US
Net margin was
Non-GAAP net margin4 was
Basic and diluted net income per ADS were RMB1.87 (US
Non-GAAP basic5 and diluted net income per ADS3 were RMB3.33 (US
As of December 31, 2022, the Company had RMB1,488.6 million (US
Fanhua’s Insurance Sales and Service Distribution Network:
- As of December 31, 2022, Fanhua had 141,088 registered sales agents7 as compared with 284,053 as of December 31, 2021. Fanhua’s distribution network consisted of 675 sales outlets in 24 provinces and 99 services outlets in 31 provinces as of December 31, 2022, compared with 771 sales outlets in 23 provinces and 109 service outlets in 31 provinces as of December 31, 2021.
- The number of performing agents8 was 60,942 in 2022, compared to 111,602 in 2021. Insurance premiums facilitated per performing agent were RMB47,664 in 2022, representing a growth of
90.3% year-over-year from RMB25,049 in 2021.
The decrease in the number of performing agents was primarily due to (i) slow down of new recruits as a result of the impact of COVID-19 pandemic during the year and the Company’s shifted focus to serving high-end customers and high-performing agents and maintaining an elite-based agent pool, and (ii) the high base in the first quarter of 2021 on strong sales of critical illness products prior to the transition to the new critical illness definition framework.
- The number of performing agents for selling life insurance products in 2022 was 26,344 in 2022, compared to 53,322 in 2021. Insurance premiums facilitated per performing agents for selling life insurance products were RMB97,057 in 2022, representing a growth of
106.4% year-over-year from RMB47,033 in 2021.
Recent Developments
- As of December 31, 2022, eHuzhu, our online mutual aid platform which serves to provide alternative risk-protection programs to lower-income group at more affordable costs, have over 1.8 million paying members and assisted 11,046 families in raising approximately RMB1.2 billion to cover their medical costs and help them get through tough times.
- On January 13th, 2023, Fanhua Insurance Sales & Service Group Co., Ltd., a subsidiary wholly owned by Fanhua, was awarded “Piloting Insurance Intermediary of the Year” in the 3rd China Insurance White Elephant List published by Insurance Today, a well-known Chinese insurance trade media.
- On January 9th, 2023, Fanhua Open Platform was listed among “Top 100 Insurance Technologies in China of 2022” by Molecular Laboratory, a leading research institution of China’s insurance technology.
Business Outlook
Fanhua expects its operating income to be no less than RMB30.0 million for the first quarter of 2023. This forecast is based on the current market conditions and reflects Fanhua’s preliminary estimate, which is subject to change caused by various factors.
Conference Call
The Company will host a conference call to discuss its fourth quarter and fiscal year 2022 financial results as per the following details.
Time: 9:00 p.m. Eastern Daylight Time on March 13, 2023 or 9:00 a.m. Beijing/Hong Kong Time on March 14, 2023
Please pre-register online in advance to join the conference call by navigating to the link provided below and dial in 10 minutes before the call is scheduled to begin. Conference call details will be provided upon registration.
Conference Call Preregistration:
https://register.vevent.com/register/BI1f6414ce731248b190436eb44d1b011d
Additionally, a live and archived webcast of the conference call will be available at Fanhua’s investor relations website:
https://edge.media-server.com/mmc/p/8w878j8d
About Fanhua Inc.
Fanhua Inc. is a leading independent financial services provider. Through our online platforms and offline sales and service network, we offer a wide variety of financial products and services to individuals, including life and property and casualty insurance products. We also provide insurance claims adjusting services, such as damage assessments, surveys, authentications and loss estimations, as well as value-added services, such as emergency vehicle roadside assistance.
Our online platforms include: (i) Lan Zhanggui, an all-in-one platform which allows our agents to access and purchase for their policy holders a wide variety of insurance products, including life insurance, auto insurance, accident insurance, travel insurance and standard health insurance products from multiple insurance companies on their mobile devices; (ii) Baowang (www.baoxian.com), an online entry portal for comparing and purchasing short term health, accident, travel and homeowner insurance products and (iii) eHuzhu (www.ehuzhu.com), a non-profit online mutual aid platform in China.
As of December 31, 2022, our distribution and service network consisted of 675 sales outlets covering 24 provinces, autonomous regions and centrally-administered municipalities and 99 service outlets covering 31 provinces.
For more information about Fanhua Inc., please visit http://ir.fanhuaholdings.com/.
Forward-looking Statements
This press release contains statements of a forward-looking nature. These statements, including the statements relating to the Company’s future financial and operating results, are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as “will,” “expects,” “believes,” “anticipates,” “intends,” “estimates” and similar statements. Among other things, management’s quotations and the Business Outlook section contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about Fanhua and the industry. Potential risks and uncertainties include, but are not limited to, those relating to its ability to attract and retain productive agents, especially entrepreneurial agents, its ability to maintain existing and develop new business relationships with insurance companies, its ability to execute its growth strategy, its ability to adapt to the evolving regulatory environment in the Chinese insurance industry, its ability to compete effectively against its competitors, quarterly variations in its operating results caused by factors beyond its control and macroeconomic conditions in China, future development of COVID-19 outbreak and their potential impact on the sales of insurance products. Except as otherwise indicated, all information provided in this press release speaks as of the date hereof, and Fanhua undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although Fanhua believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by Fanhua is included in Fanhua’s filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F.
About Non-GAAP Financial Measures
In addition to the Company’s consolidated financial results under generally accepted accounting principles in the United States (“GAAP”), the Company also provides non-GAAP net income attributable to the Company’s shareholders, non-GAAP net margin and non-GAAP basic and diluted net income per ADS, all of which are non-GAAP financial measures, as supplemental measures to review and assess operating performance. Non-GAAP net income attributable to the Company’s shareholders is defined as net income attributable to the Company’s shareholders before impairment on investment in an affiliate and share-based compensation expenses. Non-GAAP net margin is defined as non-GAAP net income attributable to the Company's shareholders as a percentage of net revenues. Non-GAAP basic net income per ADS is defined as non-GAAP net income attributable to the Company’s shareholders divided by total weighted average number of ADSs of the Company outstanding during the period. Non-GAAP diluted net income per ADS is defined as non-GAAP net income attributable to the Company’s shareholders divided by total weighted average number of diluted ADSs of the Company outstanding during the period. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company’s performance and when planning and forecasting future periods. The Company’s non-GAAP financial measures do not reflect all items of income and expenses that affect the Company’s operations. Specifically, the Company’s non-GAAP measures exclude impairment on investment in an affiliate and share-based compensation expenses. Further, these non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies, including peer companies. The presentation of these non-GAAP financial measures has limitations as analytical tools, and investors should not consider them in isolation from, or as a substitute for analysis of, the financial information prepared and presented in accordance with GAAP. We encourage investors and other interested persons to review our financial information in its entirety and not rely on a single financial measure.
For more information on these non-GAAP financial measures, please see the tables captioned “Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures” set forth at the end of this press release.
FANHUA INC.
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
| As of December 31, | As of December 31, | As of December 31, | ||||
| 2021 | 2022 | 2022 | ||||
| RMB | RMB | US$ | ||||
| ASSETS: | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | 564,624 | 567,525 | 82,283 | |||
| Restricted cash | 76,303 | 59,957 | 8,693 | |||
| Short term investments | 870,682 | 347,754 | 50,420 | |||
| Accounts receivable, net | 653,757 | 667,554 | 96,786 | |||
| Other receivables | 60,755 | 231,049 | 33,499 | |||
| Other current assets | 39,947 | 419,735 | 60,856 | |||
| Total current assets | 2,266,068 | 2,293,574 | 332,537 | |||
| Non-current assets: | ||||||
| Restricted bank deposit – non-current | 15,595 | 20,729 | 3,005 | |||
| Contract assets, net - non-current | 192,114 | 385,834 | 55,941 | |||
| Property, plant, and equipment, net | 46,800 | 98,459 | 14,275 | |||
| Goodwill and intangible assets, net | 109,869 | 109,997 | 15,948 | |||
| Deferred tax assets | 18,728 | 20,402 | 2,958 | |||
| Investment in affiliates | 335,808 | 4,035 | 585 | |||
| Other non-current assets | 31,459 | 11,400 | 1,653 | |||
| Right of use assets | 225,677 | 145,086 | 21,036 | |||
| Total non-current assets | 976,050 | 795,942 | 115,401 | |||
| Total assets | 3,242,118 | 3,089,516 | 447,938 |
| Current liabilities: | ||||||
| Short-term loan | — | 35,679 | 5,173 | |||
| Accounts payable | 377,558 | 436,784 | 63,328 | |||
| Insurance premium payables | 24,054 | 16,580 | 2,404 | |||
| Other payables and accrued expenses | 178,157 | 174,326 | 25,275 | |||
| Accrued payroll | 111,672 | 96,279 | 13,959 | |||
| Income tax payable | 130,222 | 130,024 | 18,852 | |||
| Current operating lease liability | 87,012 | 62,304 | 9,033 | |||
| Total current liabilities | 908,675 | 951,976 | 138,024 | |||
| Non-current liabilities: | ||||||
| Accounts payable – non-current | 97,869 | 192,917 | 27,970 | |||
| Other tax liabilities | 73,213 | 36,647 | 5,313 | |||
| Deferred tax liabilities | 73,716 | 102,455 | 14,855 | |||
| Non-current operating lease liability | 128,283 | 74,190 | 10,756 | |||
| Total non-current liabilities | 373,081 | 406,209 | 58,894 | |||
| Total liabilities | 1,281,756 | 1,358,185 | 196,918 | |||
| Ordinary shares | 8,089 | 8,091 | 1,173 | |||
| Treasury stock | — | (10 | ) | (1 | ) | |
| Additional Paid-in capital | — | 461 | 67 | |||
| Statutory reserves | 557,221 | 559,520 | 81,123 | |||
| Retained earnings | 1,311,715 | 1,087,984 | 157,743 | |||
| Accumulated other comprehensive loss | (39,140 | ) | (32,643 | ) | (4,733 | ) |
| Total shareholders’ equity | 1,837,885 | 1,623,403 | 235,372 | |||
| Non-controlling interests | 122,477 | 107,928 | 15,648 | |||
| Total equity | 1,960,362 | 1,731,331 | 251,020 | |||
| Total liabilities and equity | 3,242,118 | 3,089,516 | 447,938 |
FANHUA INC.
Unaudited Condensed Consolidated Statements of Income and Comprehensive Income
(In thousands, except for shares and per share data)
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||
| December 31, | December 31, | |||||||||||
| 2021 | 2022 | 2022 | 2021 | 2022 | 2022 | |||||||
| RMB | RMB | USD | RMB | RMB | US$ | |||||||
| Net revenues: | ||||||||||||
| Agency | 672,252 | 662,755 | 96,091 | 2,811,936 | 2,376,851 | 344,611 | ||||||
| Life insurance business | 642,456 | 627,479 | 90,976 | 2,679,720 | 2,237,312 | 324,380 | ||||||
| P&C insurance business | 29,796 | 35,276 | 5,115 | 132,216 | 139,539 | 20,231 | ||||||
| Claims adjusting | 130,377 | 104,610 | 15,167 | 459,178 | 404,763 | 58,685 | ||||||
| Total net revenues | 802,629 | 767,365 | 111,258 | 3,271,114 | 2,781,614 | 403,296 | ||||||
| Operating costs and expenses: | ||||||||||||
| Agency | (430,735 | ) | (428,707 | ) | (62,157 | ) | (1,835,825 | ) | (1,527,572 | ) | (221,477 | ) |
| Life insurance Business | (411,121 | ) | (406,188 | ) | (58,892 | ) | (1,742,640 | ) | (1,436,606 | ) | (208,288 | ) |
| P&C insurance Business | (19,614 | ) | (22,519 | ) | (3,265 | ) | (93,185 | ) | (90,966 | ) | (13,189 | ) |
| Claims adjusting | (74,160 | ) | (65,702 | ) | (9,526 | ) | (279,342 | ) | (268,031 | ) | (38,861 | ) |
| Total operating costs | (504,895 | ) | (494,409 | ) | (71,683 | ) | (2,115,167 | ) | (1,795,603 | ) | (260,338 | ) |
| Selling expenses | (77,111 | ) | (61,754 | ) | (8,953 | ) | (306,463 | ) | (272,706 | ) | (39,539 | ) |
| General and administrative expenses | (138,287 | ) | (126,309 | ) | (18,313 | ) | (547,579 | ) | (544,630 | ) | (78,964 | ) |
| Total operating costs and expenses | (720,293 | ) | (682,472 | ) | (98,949 | ) | (2,969,209 | ) | (2,612,939 | ) | (378,841 | ) |
| Income from operations | 82,336 | 84,893 | 12,309 | 301,905 | 168,675 | 24,455 | ||||||
| Other income, net: | ||||||||||||
| Investment income | 7,510 | 8,765 | 1,271 | 32,898 | 17,809 | 2,582 | ||||||
| Interest income | 1,461 | 3,899 | 565 | 2,971 | 13,674 | 1,983 | ||||||
| Others, net | 9,203 | (12,743 | ) | (1,848 | ) | 33,314 | (3,823 | ) | (554 | ) | ||
| Income from operations before income taxes and share income of affiliates | 100,510 | 84,814 | 12,297 | 371,088 | 196,335 | 28,466 | ||||||
| Income tax expense | (32,668 | ) | (18,465 | ) | (2,677 | ) | (90,574 | ) | (41,016 | ) | (5,947 | ) |
| Share of income (loss) and impairment of affiliates, net | (49,386 | ) | (841 | ) | (122 | ) | (20,573 | ) | (69,596 | ) | (10,090 | ) |
| Net income | 18,456 | 65,508 | 9,498 | 259,941 | 85,723 | 12,429 | ||||||
| Less: net income attributable to non-controlling interests | 7,507 | (5,108 | ) | (741 | ) | 8,952 | (14,549 | ) | (2,109 | ) | ||
| Net income attributable to the Company’s shareholders | 10,949 | 70,616 | 10,239 | 250,989 | 100,272 | 14,538 | ||||||
FANHUA INC.
Unaudited Condensed Consolidated Statements of Income and Comprehensive Income-(Continued)
(In thousands, except for shares and per share data)
| For The Three Months Ended | For The Twelve Months Ended | |||||||||||
| December 31, | December 31, | |||||||||||
| 2021 | 2022 | 2022 | 2021 | 2022 | 2022 | |||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||
| Net income per share: | ||||||||||||
| Basic | 0.01 | 0.07 | 0.01 | 0.23 | 0.09 | 0.01 | ||||||
| Diluted | 0.01 | 0.07 | 0.01 | 0.23 | 0.09 | 0.01 | ||||||
| Net income per ADS: | ||||||||||||
| Basic | 0.20 | 1.31 | 0.19 | 4.67 | 1.87 | 0.27 | ||||||
| Diluted | 0.20 | 1.31 | 0.19 | 4.67 | 1.87 | 0.27 | ||||||
| Shares used in calculating net income per share: | ||||||||||||
| Basic | 1,073,891,784 | 1,074,204,304 | 1,074,204,304 | 1,073,891,784 | 1,074,196,310 | 1,074,196,310 | ||||||
| Diluted | 1,074,291,118 | 1,075,017,689 | 1,075,017,689 | 1,074,291,194 | 1,074,457,821 | 1,074,457,821 | ||||||
| Net income | 18,456 | 65,508 | 9,498 | 259,941 | 85,723 | 12,429 | ||||||
| Other comprehensive income, net of tax: Foreign currency translation adjustments | (1,148 | ) | (1,018 | ) | (148 | ) | (9,116 | ) | 3,728 | 541 | ||
| Share of other comprehensive (loss) gain of affiliates | (982 | ) | — | — | (1,281 | ) | 4,688 | 680 | ||||
| Unrealized net gains on available-for-sale investments | 4,477 | (3,157 | ) | (458 | ) | 6,252 | (1,919 | ) | (278 | ) | ||
| Comprehensive income | 20,803 | 61,333 | 8,892 | 255,796 | 92,220 | 13,372 | ||||||
| Less: Comprehensive income attributable to the non-controlling interests | 7,507 | (5,108 | ) | (741 | ) | 8,952 | (14,549 | ) | (2,109 | ) | ||
| Comprehensive income attributable to the Company’s shareholders | 13,296 | 66,441 | 9,633 | 246,844 | 106,769 | 15,481 | ||||||
FANHUA INC.
Unaudited Condensed Consolidated Statements of Cash Flow
(In thousands, except for shares and per share data)
| For the Three Months Ended | For theTwelveMonths Ended | |||||||||||
| December 31, | December 31, | |||||||||||
| 2021 | 2022 | 2022 | 2021 | 2022 | 2022 | |||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||
| OPERATING ACTIVITIES | ||||||||||||
| Net income | 18,456 | 65,508 | 9,498 | 259,941 | 85,723 | 12,429 | ||||||
| Adjustments to reconcile net income to net cash generated from operating activities: | ||||||||||||
| Investment income | (8 | ) | (8,006 | ) | (1,161 | ) | (3,171 | ) | (10,937 | ) | (1,586 | ) |
| Share of income of affiliates | 49,386 | 841 | 122 | 20,573 | 69,596 | 10,090 | ||||||
| Other non-cash adjustments | 137,079 | 54,511 | 7,904 | 142,848 | 169,587 | 24,587 | ||||||
| Changes in operating assets and liabilities | (136,796 | ) | 42,063 | 6,097 | (293,993 | ) | (176,217 | ) | (25,548 | ) | ||
| Net cash generated from operating activities | 68,117 | 154,917 | 22,460 | 126,198 | 137,752 | 19,972 | ||||||
| Cash flows from investing activities: | ||||||||||||
| Purchase of short-term investments | (929,353 | ) | (556,540 | ) | (80,691 | ) | (8,184,363 | ) | (2,550,300 | ) | (369,759 | ) |
| Proceeds from disposal of short-term investments | 847,702 | 751,694 | 108,985 | 8,646,532 | 3,239,556 | 469,691 | ||||||
| Prepayment for acquisition of short-term investments | — | (200,000 | ) | (28,997 | ) | — | (540,000 | ) | (78,293 | ) | ||
| Cash lent to third parties | — | — | — | — | (205,800 | ) | (29,838 | ) | ||||
| Repayment of loan receivables from a third party | 6,830 | 4,500 | 652 | 6,830 | 24,500 | 3,552 | ||||||
| Others | (8,568 | ) | (1,271 | ) | (183 | ) | (18,600 | ) | (95,518 | ) | (13,848 | ) |
| Net cash generated from (used in) investing activities | (83,389 | ) | (1,617 | ) | (234 | ) | 450,399 | (127,562 | ) | (18,495 | ) | |
| Cash flows from financing activities： | ||||||||||||
| Dividends paid | (51,092 | ) | — | — | (242,518 | ) | (52,069 | ) | (7,549 | ) | ||
| Repurchase of ordinary shares from open market | — | (3,984 | ) | (578 | ) | — | (3,984 | ) | (578 | ) | ||
| Borrowing | — | 35,679 | 5,173 | — | 35,679 | 5,173 | ||||||
| Dividend distributed to non-controlling interest | — | — | — | (7,580 | ) | — | — | |||||
| Others | — | — | — | (10,200 | ) | 3 | — | |||||
| Net cash provided (used) in financing activities | (51,092 | ) | 31,695 | 4,595 | (260,298 | ) | (20,371 | ) | (2,954 | ) | ||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (66,364 | ) | 184,995 | 26,821 | 316,299 | (10,181 | ) | (1,477 | ) | |||
| Cash, cash equivalents and restricted cash at beginning of period | 724,099 | 462,837 | 67,105 | 350,098 | 656,522 | 95,187 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | (1,213 | ) | 379 | 55 | (9,875 | ) | 1,870 | 271 | ||||
| Cash, cash equivalents and restricted cash at end of period | 656,522 | 648,211 | 93,981 | 656,522 | 648,211 | 93,981 | ||||||
FANHUA INC.
Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures
(In RMB in thousands, except shares and per share data)
| For Three Months Ended December 31 | ||||||||||||||||||
| 2021 | 2022 | |||||||||||||||||
| GAAP | Impairment on investment in affiliates | Share-based compensation expenses | Non-GAAP | GAAP | Impairment on investment in affiliates | Share-based compensation expenses | Non-GAAP | Change% | ||||||||||
| Net revenues | 802,629 | — | — | 802,629 | 767,365 | — | — | 767,365 | (4.4 | ) | ||||||||
| General and administrative expense | (138,287 | ) | — | — | (138,287 | ) | (126,309 | ) | — | (299 | ) | (126,010 | ) | (8.9 | ) | |||
| Income from operations | 82,336 | — | — | 82,336 | 84,893 | — | (299 | ) | 85,192 | 3.5 | ||||||||
| Operating margin | 10.3 | % | 10.3 | % | 11.1 | % | 11.1 | % | 7.8 | |||||||||
| Share of income (loss) and impairment of affiliates, net | (49,386 | ) | (29,316 | ) | (20,070 | ) | (841 | ) | — | — | (841 | ) | （95.8 | ) | ||||
| Net income attributable to the Company’s shareholders | 10,949 | (29,316 | ) | — | 40,265 | 70,616 | (299 | ) | 70,915 | 76.1 | ||||||||
| Net margin | 1.4 | % | 5.0 | % | 9.2 | % | 9.2 | % | 84.0 | |||||||||
| Net income per share | ||||||||||||||||||
| Basic | 0.01 | — | — | 0.04 | 0.07 | — | — | 0.07 | 75.0 | |||||||||
| Diluted | 0.01 | — | — | 0.04 | 0.07 | — | — | 0.07 | 75.0 | |||||||||
| Net income per ADS： | ||||||||||||||||||
| Basic | 0.20 | — | — | 0.75 | 1.31 | — | — | 1.32 | 76.0 | |||||||||
| Diluted | 0.20 | — | — | 0.75 | 1.31 | — | — | 1.32 | 76.0 | |||||||||
| Shares used in calculating net income per share： | ||||||||||||||||||
| Basic | 1,073,891,784 | — | — | 1,073,891,784 | 1,074,204,304 | — | — | 1,074,204,304 | — | |||||||||
| Diluted | 1,074,291,118 | — | — | 1,074,291,118 | 1,075,017,689 | — | — | 1,075,017,689 | — | |||||||||
| For The Twelve Months Ended December 31 | ||||||||||||||||||
| 2021 | 2022 | |||||||||||||||||
| GAAP | Impairment on investment in affiliates | Share-based Compensation expenses | Non-GAAP | GAAP | Impairment on investment in affiliates | Share-based compensation expenses | Non-GAAP | Change% | ||||||||||
| Net revenues | 3,271,114 | — | — | 3,271,114 | 2,781,614 | — | — | 2,781,614 | (15.0 | ) | ||||||||
| General and administrative expenses | (547,579 | ) | — | — | (547,579 | ) | (544,630 | ) | — | (461 | ) | (544,169 | ) | (0.6 | ) | |||
| Income from operations | 301,905 | — | — | 301,905 | 168,675 | — | (461 | ) | 169,136 | (44.0 | ) | |||||||
| Operating margin | 9.2 | % | 9.2 | % | 6.1 | % | 6.1 | % | (33.7 | ) | ||||||||
| Share of income and impairment of affiliates, net | (20,573 | ) | (29,316 | ) | — | 8,743 | (69,596 | ) | (78,277 | ) | — | 8,681 | (0.7 | ) | ||||
| Net income attributable to the Company’s shareholders | 250,989 | (29,316 | ) | — | 280,305 | 100,272 | (78,277 | ) | (461 | ) | 179,010 | (36.1 | ) | |||||
| Net margin | 7.7 | % | 8.6 | % | 3.6 | % | 6.4 | % | (25.6 | ) | ||||||||
| Net income per share | ||||||||||||||||||
| Basic | 0.23 | — | — | 0.26 | 0.09 | — | 0.17 | (34.6 | ) | |||||||||
| Diluted | 0.23 | — | — | 0.26 | 0.09 | — | 0.17 | (34.6 | ) | |||||||||
| Net income per ADS： | ||||||||||||||||||
| Basic | 4.67 | — | — | 5.22 | 1.87 | — | 3.33 | (36.2 | ) | |||||||||
| Diluted | 4.67 | — | — | 5.22 | 1.87 | — | 3.33 | (36.2 | ) | |||||||||
| Shares used in calculating net income per share： | ||||||||||||||||||
| Basic | 1,073,891,784 | — | — | 1,073,891,784 | 1,074,196,310 | — | 1,074,196,310 | — | ||||||||||
| Diluted | 1,074,291,194 | — | — | 1,074,291,194 | 1,074,457,821 | — | 1,074,457,821 | — | ||||||||||
Source: Fanhua Inc.
1 This announcement contains currency conversions of certain Renminbi (“RMB”) amounts into U.S. dollars (US$) 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 RMB6.8972 to US
2 Non-GAAP net income attributable to the Company’s shareholders is defined as net income attributable to the Company’s shareholders before impairment on investment in an affiliate and share-based compensation expenses.
3 Non-GAAP diluted net income per ADS is defined as non-GAAP net income attributable to the Company’s shareholders divided by total weighted average number of diluted ADSs of the Company outstanding during the period.
4 The amount includes short term loans to third parties of RMB183.4 million as recorded in other receivables and an advance payment of RMB390.0 million for the purchase of short-term investment products as recorded in other current assets.
5 Non-GAAP net margin is defined as non-GAAP net income attributable to the Company's shareholders as a percentage of net revenues
6 Non-GAAP basic net income per ADS is defined as non-GAAP net income attributable to the Company’s shareholders divided by total weighted average number of ADSs of the Company outstanding during the period.
4 Non-GAAP net margin is defined as non-GAAP net income attributable to the Company's shareholders as a percentage of net revenues.
5 Non-GAAP basic net income per ADS is defined as non-GAAP net income attributable to the Company’s shareholders divided by total weighted average number of ADSs of the Company outstanding during the period.
7 Registered agents refer to agents who have completed practice registration with the CBIRC’s Insurance Intermediaries Regulatory Information System.
8 Performing agents in a given period refer to agents who sold at least one insurance policy during such period.
FAQ
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