Fanhua Reports Second Quarter and First Half 2021 Unaudited Financial Results
Fanhua Inc. (NASDAQ: FANH) reported its Q2 2021 financial results, showing total net revenues of RMB 689.9 million (USD 106.9 million), a 21.7% decrease year-over-year. Operating income fell by 47.4% to RMB 51 million (USD 7.9 million). Net income attributable to shareholders was RMB 67.4 million (USD 10.4 million), down 32.1%. Despite a shrinking life insurance market, Fanhua's life insurance business grew by 16.9% year-over-year to RMB 5.5 billion in GWP. The company anticipates a stronger Q3 2021, aiming for operating income over RMB 25 million.
- Life insurance GWP grew by 16.9% year-over-year in H1 2021 to RMB 5.5 billion.
- Operating income for H1 2021 increased by 21.9% to RMB 191.4 million.
- Net income attributable to shareholders rose by 41.8% in H1 2021 to RMB 205.8 million.
- Q2 2021 total net revenues fell by 21.7% compared to Q2 2020.
- Operating income for Q2 2021 dropped 47.4% year-over-year.
- Net income in Q2 2021 decreased by 32.1%.
GUANGZHOU, China, Aug. 23, 2021 (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 second quarter and first half ended June 30, 20211.
Financial Highlights for the Second Quarter of 2021:
| (In thousands, except per ADS) | 2020Q2 (RMB) | 2021Q2 (RMB) | 2021Q2 (US$) | Change % | |
| Total net revenues | 881,545 | 689,919 | 106,855 | (21.7 | ) |
| Operating income | 96,942 | 51,005 | 7,900 | (47.4 | ) |
| Share of income of affiliates | 4,487 | 10,965 | 1,698 | 144.4 | |
| Net income attributable to the Company’s shareholders | 99,313 | 67,405 | 10,440 | (32.1 | ) |
| Diluted net income per ADS | 1.85 | 1.25 | 0.19 | (32.4 | ) |
| Cash, cash equivalents and short- term investments (As of June 30, 2020 and 2021) | 1,655,866 | 1,447,685 | 224,218 | (12.6 | ) |
Financial Highlights for the First Half of 2021:
| (In thousands, except per ADS) | First Half 2020 (RMB) | First Half 2021 (RMB) | First Half 2021 (US$) | Change % | |
| Total net revenues | 1,604,168 | 1,784,948 | 276,453 | 11.3 | |
| Operating income | 156,986 | 191,406 | 29,645 | 21.9 | |
| Share of income (loss) of affiliates | (7,852 | ) | 26,327 | 4,078 | - |
| Net income attributable to the Company’s shareholders | 145,106 | 205,790 | 31,873 | 41.8 | |
| Diluted net income per ADS | 2.70 | 3.83 | 0.59 | 41.9 | |
“The resurgences of COVID-19 have brought far-reaching impact on China’s economy and business activities nation-wide, directly or indirectly hurting consumer confidence and purchasing power of middle-class families. Many industries have been drastically impacted, and the insurance industry was certainly not immune” Commenting on the financial results of second quarter of 2021, Mr. Chunlin Wang, chairman and chief executive officer of Fanhua, stated, “In the second quarter, China’s life insurance industry saw a decline of
“Faced with industrial challenges, we also see great opportunities. We believe that there is tremendous room waiting to be explored in China’s life insurance market in the long run, and that professional insurance intermediaries, as an important insurance distribution force, still will benefit from the huge growth potential.
“With an ageing population, the demand of Chinese middle-class families for commercial pension insurance and long-term annuity is expected to continue to grow, and thus opens up a huge blue ocean market. The key to cultivating and meeting such demand is to build a high-quality sales force, gain customer insight through digital intelligence, and provide customers with a variety of customized products according to their individual needs, thus prolonging customer life cycle. We believe that our ‘Professionalization, Digitalization and Open Platform’ strategy has prepared us well for grasping such market opportunities.
“We are glad that we have made good progress in implementing our ‘Professionalization, Digitalization and Open Platform’ strategy. To date, we have approved the establishment of 14 Yuntong (literally translated as Cloud Phoenixtree) branches2, among which nine are preparing for opening. In the meantime, we have initiated the application of new digital tools in Hebei Province on a pilot basis since May 2021 and received positive feedback. Building on our experience in the Hebei pilot zone, we plan to roll out digital tools among our frontline sales force on a wider basis across China in the third quarter of 2021, so as to assist our team leaders to manage their teams more efficiently and empower agents to better engage with the clients based on data-driven insights and digitalized operations.
“We expect our new business for the third quarter of 2021 to improve on a quarter-over-quarter basis while operating income to be no less than RMB25 million, as we will accelerate the pace of the implementation of our new strategy, with increased spending on setting up Yuntong branches and promotion of digitalization initiatives. In the meantime, we will also spare no effort to ramp up sales in the last quarter to achieve our full-year sales target and gear up for the Jumpstart Sales Campaign for 2022. Operating income is expected to exceed RMB100 million for the second half of 2021 and RMB300 million for 2021.”
Financial Results for the Second Quarter of 2021
Total net revenues were RMB689.9 million (US
- Net revenues for agency business were RMB577.4 million (US
$89.4 million ) for the second quarter of 2021, representing a decrease of24.6% from RMB765.8 million for the corresponding period in 2020. In the second quarter of 2021, total GWP increased by4.3% year-over-year to RMB2.5 billion, of which first year premiums decreased by16.7% year-over-year to RMB509.7 million and renewal premiums grew by17.3% year-over-year to RMB2,031.3 million.- Net revenues for the life insurance business were RMB542.8 million (US
$84.0 million ) for the second quarter of 2021, representing a decrease of25.5% from RMB728.5 million for the corresponding period in 2020. The decrease was mainly due to the weakened demand for critical illness insurance after the strong sales prior to the transition to the new critical illness definition framework in the first quarter of 2021, and relatively high base due to post-COVID19 boost in the corresponding period in 2020. In the second quarter of 2021, total GWP increased by4.9% year-over-year to RMB2.5 billion, of which first year premiums decreased by30.0% year-over-year to RMB428.5 million and renewal premiums increased by17.3% year-over-year to RMB2,031.3 million.
During the current period, estimated variable renewal commissions related to long-term life insurance products of RMB57.2 million (US$8.9 million ) was recognized in our financial statements. The estimated renewal commissions are contingent on future renewals of initial policies or achievement of certain performance targets. Given the material uncertainty around the subsequent renewal of the insurance policies, the estimated renewal commissions expected to be collected are recognized as revenue only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty is subsequently resolved. With the passing of time and accumulation of historical experiences and data, the judgment and assumptions will be continuously re-evaluated and adjusted as needed when more information becomes available. Actual renewal commissions in the future may differ significantly from those previously estimated.
Revenues generated from our life insurance business accounted for78.7% of our total net revenues in the second quarter of 2021. - Net revenues for the P&C insurance business were RMB34.6 million (US
$5.4 million ) for the second quarter of 2021, representing a decrease of7.0% from RMB37.3 million for the corresponding period in 2020. Net revenues for the P&C insurance business are mainly derived from commissions for short term products, including accident insurance, medical insurance, travel insurance and homeowner insurance products facilitated on Baowang (www.baoxian.com). The decrease was primarily due to the decline in the sales of accident insurance through Baowang. Revenues generated from the P&C insurance business accounted for5.0% of our total net revenues in the second quarter of 2021.
- Net revenues for the life insurance business were RMB542.8 million (US
- Net revenues for the claims adjusting business were RMB112.5 million (US
$17.4 million ) for the second quarter of 2021, representing a decrease of2.8% from RMB115.8 million for the corresponding period in 2020. The decrease was mainly due to the decline in claims adjusting business related to non-auto P&C insurance and marine & cargo insurance. Such decrease was partially offset by the growth in our medical insurance-related claims adjusting business. Revenues generated from the claims adjusting business accounted for16.3% of our total net revenues in the second quarter of 2021.
Total operating costs and expenses were RMB638.9 million (US
- Commission costs were RMB431.7 million (US
$66.9 million ) for the second quarter of 2021, representing a decrease of28.0% from RMB599.7 million for the corresponding period in 2020.- Commission cost for agency business were RMB363.6 million (US
$56.3 million ) for the second quarter of 2021, representing a decrease of32.1% from RMB535.4 million for the corresponding period in 2020.- Costs of the life insurance business were RMB337.2 million (US
$52.2 million ) for the second quarter of 2021, representing a decrease of33.4% from RMB506.8 million for the corresponding period in 2020. The decrease was in line with the decline in net revenues generated from our life insurance business. Costs incurred by the life insurance business accounted for78.1% of our total commission costs in the second quarter of 2021. - Costs of the P&C insurance business were RMB26.4 million (US
$4.1 million ) for the second quarter of 2021, representing a decrease of7.7% from RMB28.6 million for the corresponding period in 2020. 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 for6.1% of our total commission costs in the second quarter of 2021.
- Costs of the life insurance business were RMB337.2 million (US
- Costs of claims adjusting business were RMB68.1 million (US
$10.6 million ) for the second quarter of 2021, representing an increase of5.9% from RMB64.3 million for the corresponding period in 2020. Costs incurred by the claims adjusting business accounted for15.8% of our total commission costs in the second quarter of 2021.
- Commission cost for agency business were RMB363.6 million (US
- Selling expenses were RMB79.3 million (US
$12.3 million ) for the second quarter of 2021, representing an increase of13.1% from RMB70.1 million for the corresponding period in 2020. The increase was the result of headcount increase related to digital operation division.
- General and administrative expenses were RMB127.9 million (US
$19.8 million ) for the second quarter of 2021, representing an increase of11.5% from RMB114.7 million for the corresponding period in 2020. The increase was mainly due to increased contributions to employees' defined contribution plans which had a lower base in the same period of last year as the government waived the contribution in 2020 in view of the impact of COVID-19 and increased expenditure including payroll and rental expense on the establishment of Fanhua Yuntong branches.
As a result of the preceding factors, we recorded an operating income of RMB51.0 million (US
Operating margin was
Investment income was RMB6.3 million (US
Interest income was RMB0.5 million (US
Income tax expense was RMB15.9 million (US
Share of income of affiliates was RMB11.0 million (US
Net income was RMB69.4 million (US
Net income attributable to the Company’s shareholders was RMB67.4 million (US
Net margin was
Basic and diluted net income per ADS were RMB1.26 (US
As of June 30, 2021, the Company had RMB1,447.7 million (US
Financial Results for the First Half of 2021
Total net revenues were RMB1,784.9 million (US
- Net revenues for agency business were RMB1,577.5 million (US
$244.3 million )for the first half of 2021, representing an increase of11.4% from RMB1,416.0 million for the corresponding period in 2020. In the first half of 2021, total GWP increased by16.1% year-over-year to RMB5.7 billion, of which first year premiums increased10.3% year-over-year to RMB1,402.9 million.- Net revenues for the life insurance business were RMB1,512.0 million (US
$234.2 million ) for the first half of 2021, representing an increase of11.7% from RMB1,353.7 million for the corresponding period in 2020, primarily reflecting the strong sales of life insurance business during the jumpstart sales season in the first quarter of 2021. In the first half of 2021, total GWP increased by16.9% year-over-year to RMB5.5 billion, of which first year premiums increased12.6% year-over-year to RMB1,251.6 million and renewal premiums increased18.2% year-over-year to RMB4,273.6 million. During the current period, estimated variable renewal commissions related to long-term life insurance products of RMB138.6 million (US$21.5 million ) was recognized in our financial statements.
Revenues generated from our life insurance business accounted for84.7% of our total net revenues in the first half of 2021. - Net revenues for the P&C insurance business were RMB65.5 million (US
$10.1 million ) for the first half of 2021, representing an increase of5.1% from RMB62.3 million for the corresponding period in 2020. Net revenues for the P&C insurance business are mainly derived from commissions for accident insurance, short-term medical insurance, travel insurance and homeowner insurance products facilitated on Baowang (www.baoxian.com). The increase was primarily due to growth of short-term medical insurance sales through Baowang in the first quarter of 2021. Revenues generated from the P&C insurance business accounted for3.7% of our total net revenues in the first half of 2021.
- Net revenues for the life insurance business were RMB1,512.0 million (US
- Net revenues for the claims adjusting business were RMB207.4 million (US
$32.1 million ) for the first half of 2021, representing an increase of10.1% from RMB188.3 million for the corresponding period in 2020. The increase was mainly due to the growth in our medical insurance-related claims adjusting business in the first quarter of 2021. Revenues generated from the claims adjusting business accounted for11.6% of our total net revenues in the first half of 2021.
Total operating costs and expenses were RMB1,593.5 million (US
- Commission costs were RMB1,169.4 million (US
$181.1 million ) for the first half of 2021, representing an increase of7.2% from RMB1,090.6 million for the corresponding period in 2020. The increase in commission cost was mainly in line with the increase of life insurance business.- Commission cost for agency business were RMB1,037.6 million (US
$160.7 million ) for the first half of 2021, representing an increase of5.9% from RMB979.6 million for the corresponding period in 2020.- Costs of the life insurance business were RMB989.9 million (US
$153.3 million ) for the first half of 2021, representing an increase of6.0% from RMB934.3 million for the corresponding period in 2020. The increase was in line with the increase in net revenues generated from our life insurance business. Costs incurred by the life insurance business accounted for84.6% of our total commission costs in the first half of 2021. - Costs of the P&C insurance business were RMB47.7 million (US
$7.4 million ) for the first half of 2021, representing an increase of5.3% from RMB45.3 million for the corresponding period in 2020. The costs of the P&C insurance business mainly represent commission costs we incurred for operating Baowang (www.baoxian.com). The increase was in line with the increase in net revenues generated from our P&C insurance business. Costs incurred by the P&C insurance business accounted for4.1% of our total commission costs in the first half of 2021.
- Costs of the life insurance business were RMB989.9 million (US
- Costs of claims adjusting business were RMB131.8 million (US
$20.4 million ) for the first half of 2021, representing an increase of18.6% from RMB111.1 million for the corresponding period in 2020. Costs incurred by the claims adjusting business accounted for11.3% of our total commission costs in the first half of 2021.
- Commission cost for agency business were RMB1,037.6 million (US
- Selling expenses were RMB157.7 million (US
$24.4 million ) for the first half of 2021, representing an increase of20.0% from RMB131.4 million for the corresponding period in 2020. The increase was mainly contributed by i) headcount increase related to digital operation division; and ii) increased marketing expenditures related to the jumpstart sales campaigns in the first quarter of 2021. - General and administrative expenses were RMB266.4 million (US
$41.3 million ) for the first half of 2021, representing an increase of18.3% from RMB225.2 million for the corresponding period in 2020. The increase was mainly due to the increased contributions to employees' defined contribution plans which had a lower base in the same period of last year as the government waived the contribution in 2020 in view of the impact of COVID-19 and increased expenditure including payroll and rental expense on the establishment of Fanhua Yuntong branches.
As a result of the preceding factors, we recorded an operating income of RMB191.4 million (US
Operating margin was
Investment income was RMB16.5 million (US
Interest income was RMB1.0 million (US
Income tax expense was RMB48.6 million (US
Share of income of affiliates was RMB26.3 million (US
Net income was RMB204.7 million (US
Net income attributable to the Company’s shareholders was RMB205.8 million (US
Net margin was
Basic and diluted net income per ADS were RMB3.83 (US
Key Operational Metrics for Fanhua’s Online Initiatives in the Second Quarter of 2021:
- Baowang (www.baoxian.com) - Our direct-to-consumer (“DTC”) online insurance platform for Accident & Short Term Health insurance(“A&H”), travel and homeowner insurance:
- The number of registered customer accounts was 3.1 million as of June 30, 2021, representing an increase of
6.9% from approximately 2.9 million as of June 30, 2020; - The number of active customer accounts3 was 96,978 in the second quarter of 2021, representing an increase of
23.4% from 78,570 in the corresponding period of 2020 - Insurance premiums generated on Baoxian.com was RMB88.6 million (US
$13.7 million ) in the second quarter of 2021 as compared to RMB91.6 million in the corresponding period of 2020.
- The number of registered customer accounts was 3.1 million as of June 30, 2021, representing an increase of
- Lan Zhanggui - Our one-stop insurance service platform:
- The number of active users of Lan Zhanggui4 was 30,760 in the second quarter of 2021, as compared to 38,321 in the corresponding period in 2020. The number of active users of Lan Zhanggui who have sold at least one life insurance policy was 15,741 in the second quarter of 2021, as compared to 35,277 in the corresponding period in 2020. The decrease was mainly due to the weakened demand for critical illness insurance after the strong sales prior to the transition to the new critical illness definition framework in the first quarter of 2021, and relatively high base due to post-COVID19 boost in the corresponding period in 2020;
- Insurance premiums generated through Lan Zhanggui were RMB495.4 million (US
$76.7 million ) in the second quarter of 2021, among which life insurance premiums was RMB386.1million (US$59.8 million ) and non-life insurance premiums were RMB109.3 million (US$16.9 million ), respectively, as compared to RMB602.7 million total insurance premiums generated through Lan Zhanggui which included RMB581.2 million life insurance premiums and RMB21.5 million non-life insurance premiums in the corresponding period in 2020.
- eHuzhu - Our online mutual aid platform:
- The number of paying members was 2.4 million as of June 30, 2021, as compared to 3.2 million as of June 30, 2020.
- The number of paying members was 2.4 million as of June 30, 2021, as compared to 3.2 million as of June 30, 2020.
Recent Developments
- As of June 30, 2021, Fanhua had 339,543 sales agents and 2,022 professional claims adjusters, compared with 629,773 sales agents and 1,620 claims adjusters as of June 30, 2020. The decrease in the number of sales agents was mainly due to our efforts to streamline sales force and focus more on high-performing sales agents. The number of performing agents5 was 50,982, and the number of performing agents for selling life insurance products was approximately 16,487 in the second quarter of 2021. As of June 30, 2021, Fanhua’s distribution network consisted of 771 sales outlets in 23 provinces and 112 services outlets in 31 provinces, compared with 775 sales outlets in 21 provinces and 118 service outlets in 31 provinces as of June 30, 2020.
- In July 2021, Fanhua ranked 20th among the “Top 20 Global Insurance Brokers” in 2020, according to Best’s Review, a monthly magazine published by A. M. Best, one of the most prestigious insurance rating agencies in the world. Fanhua first made the list in 2009 and has been the only Asian insurance broker on the list. The ranking was based on total revenues in 2020.
Business Outlook
Fanhua expects its operating income to be no less than RMB25 million for the third quarter of 2021. This forecast is based on the current market conditions and reflects Fanhua’s preliminary estimate, which is subject to change caused by various factors, including those related to the ongoing COVID-19 pandemic.
Conference Call
The Company will host a conference call to discuss its second quarter 2021 financial results as per the following details.
Time: 9:00 PM Eastern Daylight Time on August 23, 2021
or 9:00 AM Beijing/Hong Kong Time on August 24, 2021
| The toll free dial-in numbers: | |
| United States | 1-866-519-4004 |
| United Kingdom | 0808-234-6646 |
| France | 0800-912-761 |
| Germany | 0800-182-0671 |
| Australia | 1-300-717-205 |
| Hong Kong, China | 800-906-601 |
| Japan | 0120-925-376 |
| South Korea | 080-850-0474 |
| The toll dial-in numbers: | |
| China (Mainland) | 400-620-8038 |
| Hong Kong, China & Other Areas | +852 30186771 |
Conference ID #: 9690739
Additionally, a live and archived web cast of this call will be available at: https://edge.media-server.com/mmc/p/ws5egp8d
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: (1) Lan Zhanggui, an all-in-one platform which allows our agents to access and purchase 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; (2) Baowang (www.baoxian.com), an online entry portal for comparing and purchasing short term health, accident, travel and homeowner insurance products and (3) eHuzhu (www.ehuzhu.com), a non-profit online mutual aid platform in China.
As of June 30, 2021, our distribution and service network is consisted of 771 sales outlets covering 23 provinces, autonomous regions and centrally-administered municipalities and 112 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. All information provided in this press release is 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.
FANHUA INC.
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
| As of December 31, | As of June 30, | As of June 30, | |||
| 2020 | 2021 | 2021 | |||
| RMB | RMB | US$ | |||
| ASSETS: | |||||
| Current assets: | |||||
| Cash and cash equivalents | 245,428 | 340,242 | 52,697 | ||
| Restricted cash | 83,981 | 73,377 | 11,365 | ||
| Short term investments | 1,307,865 | 1,107,443 | 171,521 | ||
| Accounts receivable, net | 583,116 | 547,946 | 84,866 | ||
| Other receivables | 50,242 | 57,163 | 8,853 | ||
| Other current assets | 41,148 | 33,929 | 5,255 | ||
| Total current assets | 2,311,780 | 2,160,100 | 334,557 | ||
| Non-current assets: | |||||
| Restricted bank deposit - non current | 20,689 | 15,711 | 2,433 | ||
| Accounts receivable, net – non-current | — | 101,041 | 15,649 | ||
| Property, plant, and equipment, net | 36,778 | 44,966 | 6,964 | ||
| Goodwill and intangible assets, net | 109,913 | 109,875 | 17,018 | ||
| Deferred tax assets | 10,032 | 15,290 | 2,368 | ||
| Investment in affiliates | 357,661 | 383,491 | 59,395 | ||
| Other non-current assets | 33,743 | 31,952 | 4,949 | ||
| Right of use assets | 200,403 | 196,003 | 30,357 | ||
| Total non-current assets | 769,219 | 898,329 | 139,133 | ||
| Total assets | 3,080,999 | 3,058,429 | 473,690 | ||
| Current liabilities: | |||||
| Accounts payable | 377,386 | 305,529 | 47,320 | ||
| Insurance premium payables | 25,421 | 20,586 | 3,188 | ||
| Other payables and accrued expenses | 188,448 | 158,210 | 24,504 | ||
| Accrued payroll | 105,739 | 90,020 | 13,942 | ||
| Income tax payable | 145,983 | 127,053 | 19,678 | ||
| Current operating lease liability | 86,233 | 84,897 | 13,149 | ||
| Total current liabilities | 929,210 | 786,295 | 121,781 | ||
| Non-current liabilities: | |||||
| Accounts payable – non-current | — | 52,427 | 8,120 | ||
| Other tax liabilities | 67,219 | 67,219 | 10,411 | ||
| Deferred tax liabilities | 26,380 | 51,464 | 7,971 | ||
| Non-current operating lease liability | 103,526 | 99,568 | 15,421 | ||
| Total non-current liabilities | 197,125 | 270,678 | 41,923 | ||
| Total liabilities | 1,126,335 | 1,056,973 | 163,704 | ||
| Ordinary shares | 8,088 | 8,088 | 1,253 | ||
| Statutory reserves | 553,911 | 553,911 | 85,790 | ||
| Retained earnings | 1,306,554 | 1,372,875 | 212,631 | ||
| Accumulated other comprehensive loss | (34,994) | (45,873) | (7,105) | ||
| Total shareholders’ equity | 1,833,559 | 1,889,001 | 292,569 | ||
| Non-controlling interests | 121,105 | 112,455 | 17,417 | ||
| Total equity | 1,954,664 | 2,001,456 | 309,986 | ||
| Total liabilities and equity | 3,080,999 | 3,058,429 | 473,690 | ||
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 Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2020 | 2021 | 2021 | 2020 | 2021 | 2021 | |||||||
| RMB | RMB | USD | RMB | RMB | US$ | |||||||
| Net revenues: | ||||||||||||
| Agency | 765,707 | 577,453 | 89,436 | 1,415,918 | 1,577,557 | 244,332 | ||||||
| Life insurance business | 728,455 | 542,789 | 84,067 | 1,353,660 | 1,512,023 | 234,182 | ||||||
| P&C insurance business | 37,252 | 34,664 | 5,369 | 62,258 | 65,534 | 10,150 | ||||||
| Claims adjusting | 115,838 | 112,466 | 17,419 | 188,250 | 207,391 | 32,121 | ||||||
| Total net revenues | 881,545 | 689,919 | 106,855 | 1,604,168 | 1,784,948 | 276,453 | ||||||
| Operating costs and expenses: | ||||||||||||
| Agency | (535,468) | (363,620) | (56,318) | (979,565) | (1,037,638) | (160,710) | ||||||
| Life insurance Business | (506,845) | (337,260) | (52,235) | (934,264) | (989,942) | (153,323) | ||||||
| P&C insurance Business | (28,623) | (26,360) | (4,083) | (45,301) | (47,696) | (7,387) | ||||||
| Claims adjusting | (64,250) | (68,117) | (10,550) | (111,066) | (131,756) | (20,406) | ||||||
| Total operating costs | (599,718) | (431,737) | (66,868) | (1,090,631) | (1,169,394) | (181,116) | ||||||
| Selling expenses | (70,144) | (79,322) | (12,285) | (131,399) | (157,725) | (24,428) | ||||||
| General and administrative expenses | (114,741) | (127,855) | (19,802) | (225,152) | (266,423) | (41,264) | ||||||
| Total operating costs and expenses | (784,603) | (638,914) | (98,955) | (1,447,182) | (1,593,542) | (246,808) | ||||||
| Income from operations | 96,942 | 51,005 | 7,900 | 156,986 | 191,406 | 29,645 | ||||||
| Other income, net: | ||||||||||||
| Investment income | 5,269 | 6,308 | 977 | 14,129 | 16,541 | 2,562 | ||||||
| Interest income | 5,050 | 516 | 80 | 7,944 | 1,042 | 161 | ||||||
| Others, net | 23,373 | 16,518 | 2,558 | 25,388 | 17,995 | 2,787 | ||||||
| Income from operations before income taxes and share income of affiliates | 130,634 | 74,347 | 11,515 | 204,447 | 226,984 | 35,155 | ||||||
| Income tax expense | (29,967) | (15,890) | (2,461) | (48,624) | (48,591) | (7,526) | ||||||
| Share of income (loss) of affiliates | 4,487 | 10,965 | 1,698 | (7,852) | 26,327 | 4,078 | ||||||
| Net income | 105,154 | 69,422 | 10,752 | 147,971 | 204,720 | 31,707 | ||||||
| Less: net income (loss) attributable to noncontrolling interests | 5,841 | 2,017 | 312 | 2,865 | (1,070) | (166) | ||||||
| Net income attributable to the Company’s shareholders | 99,313 | 67,405 | 10,440 | 145,106 | 205,790 | 31,873 | ||||||
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 Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2020 | 2021 | 2021 | 2020 | 2021 | 2021 | |||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||
| Net income per share: | ||||||||||||
| Basic | 0.09 | 0.06 | 0.01 | 0.14 | 0.19 | 0.03 | ||||||
| Diluted | 0.09 | 0.06 | 0.01 | 0.14 | 0.19 | 0.03 | ||||||
| Net income per ADS: | ||||||||||||
| Basic | 1.85 | 1.26 | 0.19 | 2.70 | 3.83 | 0.59 | ||||||
| Diluted | 1.85 | 1.25 | 0.19 | 2.70 | 3.83 | 0.59 | ||||||
| Shares used in calculating net income per share: | ||||||||||||
| Basic | 1,073,891,784 | 1,073,891,784 | 1,073,891,784 | 1,073,891,784 | 1,073,891,784 | 1,073,891,784 | ||||||
| Diluted | 1,074,291,378 | 1,074,291,210 | 1,074,291,210 | 1,074,291,402 | 1,074,291,224 | 1,074,291,224 | ||||||
| Net income | 105,154 | 69,422 | 10,752 | 147,971 | 204,720 | 31,707 | ||||||
| Other comprehensive income, net of tax: Foreign currency translation adjustments | 137 | (1,311) | (203) | 3,857 | (7,689) | (1,191) | ||||||
| Share of other comprehensive gain(loss) of affiliates | 9 | (1,038) | (161) | 859 | (496) | (77) | ||||||
| Unrealized net gains on available-for-sale investments | 9,224 | 4,286 | 664 | 11,785 | (2,694) | (417) | ||||||
| Comprehensive income | 114,524 | 71,359 | 11,052 | 164,472 | 193,841 | 30,022 | ||||||
| Less: Comprehensive (loss) income attributable to the noncontrolling interests | 5,841 | 2,017 | 312 | 2,865 | (1,070) | (166) | ||||||
| Comprehensive income attributable to the Company’s shareholders | 108,683 | 69,342 | 10,740 | 161,607 | 194,911 | 30,188 | ||||||
FANHUA INC.
Unaudited Condensed Consolidated Statements of Cash Flow
(In thousands, except for shares and per share data)
| For the Three Months Ended | For the Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2020 | 2021 | 2021 | 2020 | 2021 | 2021 | |||||||
| RMB | RMB | US$ | RMB | RMB | US$ | |||||||
| OPERATING ACTIVITIES | ||||||||||||
| Net income | 105,154 | 69,422 | 10,752 | 147,971 | 204,720 | 31,707 | ||||||
| Adjustments to reconcile net income to net cash generated from operating activities: | ||||||||||||
| Investment income | — | (1,335) | (207) | (5,102) | (1,427) | (221) | ||||||
| Share of loss (income) of affiliates | (4,487) | (10,965) | (1,698) | 7,852 | (26,327) | (4,078) | ||||||
| Other non-cash adjustments | 37,873 | (5,878) | (910) | 70,937 | (4,621) | (716) | ||||||
| Changes in operating assets and liabilities | (98,533) | (91,318) | (14,143) | (47,090) | (131,968) | (20,438) | ||||||
| Net cash generated from (used in) operating activities | 40,007 | (40,074) | (6,206) | 174,568 | 40,377 | 6,254 | ||||||
| Cash flows from investing activities: | ||||||||||||
| Purchase of short term investments | (1,827,390) | (2,977,210) | (461,111) | (4,608,122) | (5,744,640) | (889,731) | ||||||
| Proceeds from disposal of short term investments | 2,190,382 | 2,736,181 | 423,780 | 5,251,214 | 5,956,254 | 922,506 | ||||||
| Cash received from disposal of nominee shareholding | — | — | — | — | 10,200 | 1,580 | ||||||
| Cash paid for loan receivables to a third party | (30,000) | — | — | (90,000) | — | — | ||||||
| Others | (3,554) | (10,065) | (1,559) | (5,743) | (17,391) | (2,694) | ||||||
| Net cash generated from (used in) investing activities | 329,438 | (251,094) | (38,890) | 547,349 | 204,423 | 31,661 | ||||||
| Cash flows from financing activities： | ||||||||||||
| Dividends paid | (208,830) | (139,469) | (21,601) | (208,830) | (139,469) | (21,601) | ||||||
| Repayment of borrowing related to nominee shareholding | — | — | — | — | (10,200) | (1,580) | ||||||
| Dividend distributed to non-controlling interest | — | (7,580) | (1,174) | — | (7,580) | (1,174) | ||||||
| Net cash used in financing activities | (208,830) | (147,049) | (22,775) | (208,830) | (157,249) | (24,355) | ||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 160,615 | (438,217) | (67,871) | 513,087 | 87,551 | 13,560 | ||||||
| Cash, cash equivalents and restricted cash at beginning of period | 626,359 | 869,338 | 134,643 | 265,605 | 350,098 | 54,224 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | (237) | (1,791) | (277) | 8,045 | (8,319) | (1,289) | ||||||
| Cash, cash equivalents and restricted cash at end of period | 786,737 | 429,330 | 66,495 | 786,737 | 429,330 | 66,495 | ||||||
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 RMB6.4566 to US
2 Yuntong, literally translated as Cloud Phoenixtree, is a high-end brand designated for our branches for elite and professional sales force in major cities
3 Active customer accounts are defined as customer accounts that made at least one purchase directly throughwww.baoxian.com, its mobile application, or WeChat public account during the specified period.
4 Active users of Lan Zhanggui included users who sold at least one insurance policy through Lan Zhanggui (through either its mobile application or WeChat public account) during the specific period.
5 Performing agents are defined as agents who have sold at least one insurance policy during the specified period.
FAQ
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