FANHUA Reports Third Quarter 2023 Unaudited Financial Results
- None.
- None.
Net Income Attributable to Shareholders for the Third Quarter of 2023 Up
GUANGZHOU, China, Nov. 20, 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 third quarter ended September 30, 20231.
Financial Highlights for the Third Quarter of 2023:
| (In thousands, except per ADS data and percentages) | 2022Q3 (RMB) | 2023Q3 (RMB) | 2023Q3 (US$) | Change % | |
| Total net revenues | 624,746 | 634,620 | 86,982 | 1.6 | |
| Operating income | 32,165 | 33,196 | 4,549 | 3.2 | |
| Net income attributable to shareholders | 35,371 | 170,699 | 23,396 | 382.6 | |
| Diluted net income per ADS | 0.66 | 3.18 | 0.44 | 381.8 | |
| Cash, cash equivalent, short-term investments at end of the period | 917,901 | 1,498,417 | 205,375 | 63.2 | |
| Key operating metrics | |||||
| Total life gross written premiums (“GWP”) | 2,789,859 | 3,437,045 | 471,086 | 23.2 | |
| - First year premium (“FYP”) | 529,720 | 584,437 | 80,104 | 10.3 | |
| - Renewal premium | 2,260,139 | 2,852,608 | 390,982 | 26.2 | |
| Number of life insurance performing agents | 7,598 | 5,117 | - | (32.7 | ) |
| FYP per life insurance performing agent | 59,113 | 81,081 | - | 37.2 | |
Mr. Yinan Hu, Co-Chairman and Chief Executive Officer, commented: “Due to the pricing rate change in traditional life insurance, China’s life insurance industry has witnessed substantial fluctuations in premium growth, with overall growth coming under pressure.”
He added, “In the face of challenges stemming from policy shifts, we are delighted that our various strategic initiatives have made commendable progress. The effective implementation of our established strategies has contributed to the resilience of our operations.
“We believe that although the changes in pricing rates and the impending new rule requiring consistency in commissions reported with the level actually paid may have short-term impact on the industry, in the long run, they will drive the industry towards more standardized and sustainable high-quality development.
“We anticipate that the industry will gradually transition from being primarily driven by products and fees to being driven by technology and services in the future. This shift will enhance the competitiveness of companies with innovative services and technological capabilities. The industry is likely to become more concentrated with large insurance intermediary companies transitioning towards platform-based operations, and current market challenges will drive more small and medium-sized intermediary firms to choose collaboration with major platforms to reduce costs and enhance service capabilities.
“For FANHUA, this trend presents significant opportunities for our platform-centric development which will accelerate our transformation from a sales-oriented company to a platform-centric one, and further foster the growth of our business scale and market share. We will also continue to strengthen collaborations with small and medium-sized insurance companies, creating greater value for them through technology and customer service, thereby securing more substantial value distribution.”
Ben Lin, co-chairman and chief strategy officer of FANHUA, commented: “The third quarter was a very exciting period for FANHUA with many significant developments. Firstly, together with Tencent Cloud, we hosted our inaugural Open Platform Day on September 25, 2023 and officially introduced our sales technology expertise to the broader market. We are pleased to say that following such event, we have received numerous enquiries from independent brokers and insurers respectively and have so far successfully signed up two independent brokers as our digital tenants.
“The second major development relate to our overseas expansion. On October 23, 2023, we announced the establishment of two non-wholly owned subsidiaries with Asia Insurance Co., Ltd., or Asia Insurance as a noncontrolling shareholder, which marked our expansion outside of mainland China. FANHUA will be the majority shareholder of both companies with a
“Thirdly, we have completed most of the IT integration with Zhongronghuijin ("ZRHJ"), which we acquired
“Lastly, while the weak investment market environment over the quarters has impacted many of our listed insurance peers, FANHUA was able to report significant increase in net profit due to an unrealized holding gain on fair value change over an equity investment as a result of the Nasdaq listing of Cheche Group Inc., or Cheche, in September 2023. FANHUA currently holds a
“Over the coming quarters, taking advantage of the opportunities presented by the regulatory changes, our strategic focus will remain on executing on our core strategies which include driving growth in our Open Platform and Digital Tenant and exploring value accretive consolidation opportunities while driving organic growth through enhancing the quality of our distribution team. In Hong Kong, we will continue to work with Asia Insurance to map out our business opportunities and build up our human resources in the two subsidiaries we have established.”
Open Platform and M&A Contributions over the Third Quarter of 2023
- The number of platform professional users who used our Open Platform reached 791 as of September 30, 2023, generating RMB165.6 million in first year premiums for the third quarter of 2023 which accounted for
28.3% of our life insurance FYP; 21.6% of our life insurance FYP and21.3% of our net revenues for the life insurance business were generated from entities we acquired within the past 12 months.
Share Repurchase Program
On December 20, 2022, the Company’s board of directors announced a share repurchase program under which the Company may repurchase its American depositary shares, or ADSs, with an aggregate value of US
Business Outlook and Guidance
We expect to deliver
This forecast is based on the current market conditions and reflects FANHUA’s preliminary estimate, which is subject to change caused by various uncertainties.
Analysis of our Financial Results for the Third Quarter of 2023
Revenues
Total net revenues were RMB634.6 million (US
- Net revenues for agency business were RMB524.1 million (US
$71.8 million ) for the third quarter of 2023, which remained relatively stable compared to RMB522.7 million for the corresponding period in 2022. Total GWP increased by22.8% year-over-year to RMB3,525.1 million, of which FYP grew by10.1% year-over-year to RMB672.5 million while renewal premiums increased by26.2% year-over-year to RMB2,852.6 million.- Net revenues for the life insurance business were RMB483.8 million (US
$66.3million ) for the third quarter of 2023, which remained relatively stable compared to RMB480.6 million for the corresponding period in 2022. The slight increase was a net result mainly due to (i) the business fluctuation caused by the pricing rate change to life insurance products from3.5% to3% effective on August 1, 2023 which caused a spike in new business sales in July and then followed by a slow-down in sales in August and September and (ii) contribution from newly acquired entities, partially offset by the decrease in renewal commission income as a result of the decreased portfolio based average renewal commission rate of renewal premiums collected, and to a lesser extent, due to changes in product mix.
Net revenues generated from our life insurance business accounted for76.2% of our total net revenues in the third quarter of 2023, as compared to76.9% in the same period of 2022. - Net revenues for the non-life insurance business (formerly categorized as “property and casualty insurance business”) were RMB40.3 million (US
$5.5 million ) for the third quarter of 2023, representing a decrease of4.3% from RMB42.1 million for the corresponding period in 2022. Net revenues generated from the non-life insurance business accounted for6.4% of our total net revenues in the third quarter of 2023, as compared to6.8% in the same period of 2022.
- Net revenues for the life insurance business were RMB483.8 million (US
- Net revenues for the claims adjusting business were RMB110.5 million (US
$15.1 million ) for the third quarter of 2023, representing an increase of8.3% from RMB102.0 million for the corresponding period in 2022. The increase was mainly due to business recovery after the pandemic. Net revenues generated from the claims adjusting business accounted for17.4% of our total net revenues in the third quarter of 2023, as compared to16.3% in the same period of 2022.
Gross profit
Total gross profit was RMB235.2 million (US
- Life insurance business recorded a gross profit of RMB182.0 million (US
$24.9 million ), as compared with RMB181.7 million for the third quarter of 2022. Gross margin for the period was37.6% , as compared with37.8% in the same period of 2022. - Non-life insurance business recorded a gross profit of RMB12.8 million (US
$1.8 million ), representing a decrease of23.8% from RMB16.8 million for the third quarter of 2022. Gross margin for the period was31.8% , as compared with40.0% in the same period of 2022. The decrease in gross margin was mainly due to changes in product mix. - Claims adjusting business recorded a gross profit of RMB 40.4million (US
$5.5 million ), representing an increase of23.2% from RMB32.8 million for the third quarter of 2022. Gross margin for the period was36.6% , as compared with32.1% in the same period of 2022.
Operating expenses
Selling expenses were RMB59.2 million (US
General and administrative expenses were RMB142.9 million (US
As a result of the foregoing factors, we recorded operating income of RMB33.2 million (US
Operating margin was
Fair value change in an equity investment represents an unrealized holding gain of RMB164.3 million (US
Investment income was RMB1.9 million (US
Income tax expense was RMB16.1 million (US
Net income was RMB160.8 million (US
Net income attributable to the Company’s shareholders was RMB170.7million (US
Net margin was
Adjusted EBITDA2 was RMB24.9 million (US
Adjusted EBITDA margin3 was
Basic and diluted net income per ADS were RMB3.18 (US
Basic4 and diluted5 adjusted EBITDA per ADS were RMB0.46 (US
As of September 30, 2023, the Company had RMB1,498.4 million (US
FANHUA’s Insurance Sales and Service Distribution Network:
- As of September 30, 2023, excluding newly acquired entities, FANHUA’s distribution network consisted of 592 sales outlets in 23 provinces and 81 services outlets in 31 provinces as of September 30, 2023, compared with 697 sales outlets in 23 provinces and 100 services outlets in 31 provinces as of September 30, 2022. The decrease in the number of sales outlets reflected our focus on growing profitable branches, coupled with the challenging decisions to close those which were not yielding profits. The number of the Company's in-house claims adjustors was 2,215 as of September 30, 2023, compared with 2,221 as of September 30, 2022.
Conference Call
The Company will host a conference call to discuss its third quarter 2023 financial results as per the following details.
Time: 8:00 p.m. Eastern Standard Time on November 20, 2023
or 9:00 a.m. Beijing/Hong Kong Time on November 21, 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/BIf20d116c9e8d48fb981b734c1aae6e2d
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/c9t3fais
About FANHUA Inc.
Driven by its digital technologies and professional expertise in the insurance industry, FANHUA Inc. is the leading independent financial service provider in China, focusing on providing insurance-oriented family asset allocation services that covers customers’ full lifecycle and a one-stop service platform for individual sales agents and independent insurance intermediaries.
With strategic focus on long-term life insurance products, we offer a broad range of insurance products, claims adjusting services and various value-added services to meet customers’ diverse needs, through an extensive network of digitally empowered sales agents and professional claims adjustors. We also operate Baowang (www.baoxian.com), an online insurance platform that provides customers with a one-stop insurance shopping experience.
For more information about FANHUA Inc., please visit https://ir.fanhgroup.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 including macroeconomic conditions in China. 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 adjusted EBITDA, adjusted EBITDA margin and basic and diluted adjusted EBITDA per ADS, all of which are non-GAAP financial measures, as supplemental measures to review and assess operating performance. Adjusted EBITDA is defined as net income before income tax expense, share of income of affiliates, net of impairment, investment income, interest income, financial cost, depreciation, amortization of intangible assets, share-based compensation expenses and fair value change in an equity investment. Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of net revenues. Basic adjusted EBITDA per ADS is defined as adjusted EBITDA divided by total weighted average number of ADSs of the Company outstanding during the period. Diluted adjusted EBITDA per ADS is defined as adjusted EBITDA 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 interest income, investment income, financial cost, income tax expense, depreciation, amortization of intangible assets, share of income of affiliates, net of impairment, share-based compensation expenses and fair value change in an equity investment. 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 Net Income to Adjusted EBITDA and Adjusted EBITDA Margin” set forth at the end of this press release.
| FANHUA INC. | |||||
| Unaudited Condensed Consolidated Balance Sheets | |||||
| (In thousands) | |||||
| As of December 31, | As of September 30, | As of September 30, | |||
| 2022 | 2023 | 2023 | |||
| RMB | RMB | US$ | |||
| ASSETS: | |||||
| Current assets: | |||||
| Cash and cash equivalents | 567,525 | 554,897 | 76,055 | ||
| Restricted cash | 59,957 | 55,941 | 7,667 | ||
| Short term investments | 347,754 | 943,520 | 129,320 | ||
| Accounts receivable, net | 667,554 | 588,317 | 80,636 | ||
| Other receivables | 231,049 | 113,756 | 15,594 | ||
| Other current assets | 419,735 | 190,497 | 26,110 | ||
| Total current assets | 2,293,574 | 2,446,928 | 335,382 | ||
| Non-current assets: | |||||
| Restricted bank deposit – non-current | 20,729 | 22,168 | 3,038 | ||
| Contract assets, net - non-current | 385,834 | 643,571 | 88,209 | ||
| Property, plant, and equipment, net | 98,459 | 91,968 | 12,605 | ||
| Goodwill and intangible assets, net | 109,997 | 476,672 | 65,333 | ||
| Deferred tax assets | 20,402 | 33,223 | 4,554 | ||
| Investment in affiliates | 4,035 | 3,271 | 448 | ||
| Other non-current assets | 11,400 | 176,972 | 24,256 | ||
| Right of use assets | 145,086 | 110,682 | 15,170 | ||
| Total non-current assets | 795,942 | 1,558,527 | 213,613 | ||
| Total assets | 3,089,516 | 4,005,455 | 548,995 | ||
| Current liabilities: | |||||
| Short-term loan | 35,679 | 199,980 | 27,410 | ||
| Accounts payable | 436,784 | 320,027 | 43,863 | ||
| Insurance premium payables | 16,580 | 24,755 | 3,393 | ||
| Other payables and accrued expenses | 174,326 | 210,745 | 28,885 | ||
| Accrued payroll | 96,279 | 88,596 | 12,143 | ||
| Income tax payable | 130,024 | 108,423 | 14,861 | ||
| Current operating lease liability | 62,304 | 48,363 | 6,629 | ||
| Total current liabilities | 951,976 | 1,000,889 | 137,184 | ||
| Non-current liabilities: | |||||
| Accounts payable – non-current | 192,917 | 356,565 | 48,871 | ||
| Other tax liabilities | 36,647 | 33,656 | 4,613 | ||
| Deferred tax liabilities | 102,455 | 150,201 | 20,587 | ||
| Non-current operating lease liability | 74,190 | 55,800 | 7,648 | ||
| Total non-current liabilities | 406,209 | 596,222 | 81,719 | ||
| Total liabilities | 1,358,185 | 1,597,111 | 218,903 | ||
| Ordinary shares | 8,091 | 8,675 | 1,189 | ||
| Treasury stock | (10) | (96) | (13) | ||
| Additional Paid-in capital | 461 | 192,177 | 26,340 | ||
| Statutory reserves | 559,520 | 559,520 | 76,689 | ||
| Retained earnings | 1,087,984 | 1,395,650 | 191,290 | ||
| Accumulated other comprehensive loss | (32,643) | (15,958) | (2,187) | ||
| Total shareholders’ equity | 1,623,403 | 2,139,968 | 293,308 | ||
| Non-controlling interests | 107,928 | 268,376 | 36,784 | ||
| Total equity | 1,731,331 | 2,408,344 | 330,092 | ||
| Total liabilities and equity | 3,089,516 | 4,005,455 | 548,995 | ||
| 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 Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2022 | 2023 | 2023 | 2022 | 2023 | 2023 | ||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||
| Net revenues: | |||||||||||||||||
| Agency | 522,702 | 524,154 | 71,841 | 1,714,096 | 2,276,896 | 312,075 | |||||||||||
| Life insurance business | 480,605 | 483,830 | 66,314 | 1,609,833 | 2,147,293 | 294,311 | |||||||||||
| Non-life insurance business | 42,097 | 40,324 | 5,527 | 104,263 | 129,603 | 17,764 | |||||||||||
| Claims adjusting | 102,044 | 110,466 | 15,141 | 300,153 | 318,101 | 43,599 | |||||||||||
| Total net revenues | 624,746 | 634,620 | 86,982 | 2,014,249 | 2,594,997 | 355,674 | |||||||||||
| Operating costs and expenses: | |||||||||||||||||
| Agency | (324,164 | ) | (329,300 | ) | (45,135 | ) | (1,098,865 | ) | (1,558,472 | ) | (213,606 | ) | |||||
| Life insurance business | (298,915 | ) | (301,812 | ) | (41,367 | ) | (1,030,418 | ) | (1,465,314 | ) | (200,838 | ) | |||||
| Non-life insurance business | (25,249 | ) | (27,488 | ) | (3,768 | ) | (68,447 | ) | (93,158 | ) | (12,768 | ) | |||||
| Claims adjusting | (69,253 | ) | (70,055 | ) | (9,602 | ) | (202,329 | ) | (203,534 | ) | (27,897 | ) | |||||
| Total operating costs | (393,417 | ) | (399,355 | ) | (54,737 | ) | (1,301,194 | ) | (1,762,006 | ) | (241,503 | ) | |||||
| Selling expenses | (69,323 | ) | (59,176 | ) | (8,111 | ) | (210,952 | ) | (189,978 | ) | (26,039 | ) | |||||
| General and administrative expenses | (129,841 | ) | (142,893 | ) | (19,585 | ) | (418,321 | ) | (463,430 | ) | (63,518 | ) | |||||
| Total operating costs and expenses | (592,581 | ) | (601,424 | ) | (82,433 | ) | (1,930,467 | ) | (2,415,414 | ) | (331,060 | ) | |||||
| Income from operations | 32,165 | 33,196 | 4,549 | 83,782 | 179,583 | 24,614 | |||||||||||
| Other income, net: | |||||||||||||||||
| Investment income | 2,770 | 1,925 | 264 | 9,044 | 26,882 | 3,685 | |||||||||||
| Fair value change in an equity investment | — | 164,326 | 22,523 | — | 164,326 | 22,523 | |||||||||||
| Interest income | 7,938 | 3,374 | 462 | 9,775 | 12,471 | 1,709 | |||||||||||
| Financial cost | — | (2,666 | ) | (365 | ) | — | (7,348 | ) | (1,007 | ) | |||||||
| Others, net | (488 | ) | (23,048 | ) | (3,159 | ) | 8,920 | (16,566 | ) | (2,271 | ) | ||||||
| Income from operations before income taxes and share income of affiliates | 42,385 | 177,107 | 24,274 | 111,521 | 359,348 | 49,253 | |||||||||||
| Income tax expense | (8,562 | ) | (16,113 | ) | (2,208 | ) | (22,551 | ) | (54,402 | ) | (7,456 | ) | |||||
| Share of income of affiliates, net of impairment | (621 | ) | (223 | ) | (31 | ) | (68,755 | ) | (763 | ) | (105 | ) | |||||
| Net income | 33,202 | 160,771 | 22,035 | 20,215 | 304,183 | 41,692 | |||||||||||
| Less: net loss attributable to non controlling interests | (2,169 | ) | (9,928 | ) | (1,361 | ) | (9,441 | ) | (3,483 | ) | (477 | ) | |||||
| Net income attributable to the Company’s shareholders | 35,371 | 170,699 | 23,396 | 29,656 | 307,666 | 42,169 | |||||||||||
| 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 Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2022 | 2023 | 2023 | 2022 | 2023 | 2023 | ||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||
| Net income per share: | |||||||||||||||||
| Basic | 0.03 | 0.16 | 0.02 | 0.03 | 0.29 | 0.04 | |||||||||||
| Diluted | 0.03 | 0.16 | 0.02 | 0.03 | 0.29 | 0.04 | |||||||||||
| Net income per ADS: | |||||||||||||||||
| Basic | 0.66 | 3.18 | 0.44 | 0.55 | 5.72 | 0.78 | |||||||||||
| Diluted | 0.66 | 3.18 | 0.44 | 0.55 | 5.72 | 0.78 | |||||||||||
| Shares used in calculating net income per share: | |||||||||||||||||
| Basic | 1,074,291,784 | 1,072,848,471 | 1,072,848,471 | 1,074,193,616 | 1,075,669,859 | 1,075,669,859 | |||||||||||
| Diluted | 1,074,500,364 | 1,073,480,335 | 1,073,480,335 | 1,074,262,500 | 1,076,119,487 | 1,076,119,487 | |||||||||||
| Net income | 33,202 | 160,771 | 22,035 | 20,215 | 304,183 | 41,692 | |||||||||||
| Other comprehensive income, net of tax: Foreign currency translation adjustments | 3,950 | (277 | ) | (38 | ) | 4,746 | 8,603 | 1,179 | |||||||||
| Share of other comprehensive income of affiliates | — | — | — | 4,688 | — | — | |||||||||||
| Unrealized net gains on available-for-sale investments | 1,848 | 5,388 | 738 | 1,238 | 8,083 | 1,108 | |||||||||||
| Comprehensive income | 39,000 | 165,882 | 22,735 | 30,887 | 320,869 | 43,979 | |||||||||||
| Less: Comprehensive loss attributable to the non-controlling interests | (2,169 | ) | (9,928 | ) | (1,361 | ) | (9,441 | ) | (3,483 | ) | (477 | ) | |||||
| Comprehensive income attributable to the Company’s shareholders | 41,169 | 175,810 | 24,096 | 40,328 | 324,352 | 44,456 | |||||||||||
| 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 Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2022 | 2023 | 2023 | 2022 | 2023 | 2023 | ||||||||||||
| RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||
| OPERATING ACTIVITIES | |||||||||||||||||
| Net income | 33,202 | 160,771 | 22,035 | 20,215 | 304,183 | 41,692 | |||||||||||
| Adjustments to reconcile net income to net cash generated from operating activities: | |||||||||||||||||
| Investment income | (1,133 | ) | (1,579 | ) | (216 | ) | (2,931 | ) | (8,568 | ) | (1,174 | ) | |||||
| Share of income of affiliates, net of impairment | 621 | 223 | 31 | 68,755 | 763 | 105 | |||||||||||
| Other non-cash adjustments | 35,027 | (98,249 | ) | (13,467 | ) | 115,076 | (23,389 | ) | (3,207 | ) | |||||||
| Changes in operating assets and liabilities | (47,929 | ) | (48,340 | ) | (6,626 | ) | (218,280 | ) | (226,514 | ) | (31,046 | ) | |||||
| Net cash generated from (used in) operating activities | 19,788 | 12,826 | 1,757 | (17,165 | ) | 46,475 | 6,370 | ||||||||||
| Cash flows from investing activities: | |||||||||||||||||
| Purchase of short-term investments | (452,760 | ) | (815,300 | ) | (111,746 | ) | (1,993,760 | ) | (2,918,310 | ) | (399,988 | ) | |||||
| Proceeds from disposal of short-term investments | 503,531 | 909,241 | 124,622 | 2,337,862 | 2,732,390 | 374,505 | |||||||||||
| Prepayment for acquisition of short-term investments | (240,000 | ) | - | - | (340,000 | ) | - | - | |||||||||
| Cash rendered for loan receivables from a third party | (105,800 | ) | (30,000 | ) | (4,112 | ) | (205,800 | ) | (110,000 | ) | (15,077 | ) | |||||
| Cash received for loan receivables from a third party | 20,000 | 40,000 | 5,482 | 20,000 | 220,000 | 30,154 | |||||||||||
| Net cash inflow (outflow) for business acquisitions | — | (11,512 | ) | (1,578 | ) | — | 9,696 | 1,329 | |||||||||
| Purchase of a long-term investment | — | (125,000 | ) | (17,133 | ) | — | (125,000 | ) | (17,133 | ) | |||||||
| Others | 123,909 | (1,420 | ) | (194 | ) | 55,753 | (7,605 | ) | (1,043 | ) | |||||||
| Net cash used in investing activities | (151,120 | ) | (33,991 | ) | (4,659 | ) | (125,945 | ) | (198,829 | ) | (27,253 | ) | |||||
| Cash flows from financing activities： | |||||||||||||||||
| Dividends paid | — | — | — | (52,069 | ) | — | — | ||||||||||
| Proceeds from bank and other borrowings | — | — | — | — | 182,268 | 24,982 | |||||||||||
| Repayment of bank and other borrowings | — | (2,889 | ) | (396 | ) | — | (20,915 | ) | (2,867 | ) | |||||||
| Interests paid | — | (2,300 | ) | (315 | ) | — | (6,428 | ) | (881 | ) | |||||||
| Acquisition of additional equity interests in non-wholly owned subsidiaries | — | — | — | — | (110 | ) | (15 | ) | |||||||||
| Repurchase of ordinary shares from open market | — | (1,925 | ) | (264 | ) | — | (24,032 | ) | (3,294 | ) | |||||||
| Others | — | — | — | 3 | — | — | |||||||||||
| Net cash (used in) generated from financing activities | — | (7,114 | ) | (975 | ) | (52,066 | ) | 130,783 | 17,925 | ||||||||
| Net decrease in cash, cash equivalents and restricted cash | (131,332 | ) | (28,279 | ) | (3,877 | ) | (195,176 | ) | (21,571 | ) | (2,958 | ) | |||||
| Cash, cash equivalents and restricted cash at beginning of period | 592,425 | 661,587 | 90,678 | 656,522 | 648,211 | 88,845 | |||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 1,744 | (302 | ) | (41 | ) | 1,491 | 6,366 | 873 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | 462,837 | 633,006 | 86,760 | 462,837 | 633,006 | 86,760 | |||||||||||
| FANHUA INC. | |||||||||||||||||
| Reconciliations of Net Income to Adjusted EBITDA and Adjusted EBITDA Margin | |||||||||||||||||
| (In thousands, except for shares and per share data) | |||||||||||||||||
| For The Three Months Ended | For The Nine Months Ended | ||||||||||||||||
| September 30 | September 30 | ||||||||||||||||
| 2022 | 2023 | 2023 | 2022 | 2023 | 2023 | ||||||||||||
| RMB | RMB | USD | RMB | RMB | USD | ||||||||||||
| Net income | 33,202 | 160,771 | 22,035 | 20,215 | 304,183 | 41,692 | |||||||||||
| Income tax expense | 8,562 | 16,113 | 2,208 | 22,551 | 54,402 | 7,456 | |||||||||||
| Share of income of affiliates, net of impairment | 621 | 223 | 31 | 68,755 | 763 | 105 | |||||||||||
| Investment income | (2,770 | ) | (1,925 | ) | (264 | ) | (9,044 | ) | (26,882 | ) | (3,685 | ) | |||||
| Interest income | (7,938 | ) | (3,374 | ) | (462 | ) | (9,775 | ) | (12,471 | ) | (1,709 | ) | |||||
| Financial cost | — | 2,666 | 365 | — | 7,348 | 1,007 | |||||||||||
| Depreciation | 4,796 | 3,912 | 536 | 14,819 | 12,283 | 1,684 | |||||||||||
| Amortization of intangible assets | — | 4,864 | 667 | — | 13,661 | 1,872 | |||||||||||
| Share-based compensation expenses | 162 | 6,006 | 823 | 162 | 14,190 | 1,945 | |||||||||||
| Fair value change in an equity investment | — | (164,326 | ) | (22,523 | ) | — | (164,326 | ) | (22,523 | ) | |||||||
| Adjusted EBITDA | 36,635 | 24,930 | 3,416 | 107,683 | 203,151 | 27,844 | |||||||||||
| Total net revenues | 624,746 | 634,620 | 86,982 | 2,014,249 | 2,594,997 | 355,674 | |||||||||||
| Adjusted EBITDA Margin | 5.9 | % | 3.9 | % | 3.9 | % | 5.3 | % | 7.8 | % | 7.8 | % | |||||
| Adjusted EBITDA per ADS ： | |||||||||||||||||
| Basic | 0.68 | 0.46 | 0.06 | 2.00 | 3.78 | 0.52 | |||||||||||
| Diluted | 0.68 | 0.46 | 0.06 | 2.00 | 3.78 | 0.52 | |||||||||||
| Shares used in calculating adjusted EBITDA per share: | |||||||||||||||||
| Basic | 1,074,291,784 | 1,072,848,471 | 1,072,848,471 | 1,074,193,616 | 1,075,669,859 | 1,075,669,859 | |||||||||||
| Diluted | 1,074,500,364 | 1,073,480,335 | 1,073,480,335 | 1,074,262,500 | 1,076,119,487 | 1,076,119,487 | |||||||||||
For more information, please contact:
Investor Relations
Tel: +86 (20) 8388-3191
Email: qiusr@fanhgroup.com
Source: FANHUA Inc.
______________________
| 1 | This announcement contains currency conversions of certain Renminbi (“RMB”) amounts into U.S. dollars (US$) at specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.296 to US |
| 2 | Adjusted EBITDA is defined as net income before income tax expense, share of income of affiliates, net of impairment, investment income, interest income, financial cost, depreciation, amortization of intangible assets, share-based compensation expenses and fair value change in an equity investment. |
| 3 | Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of net revenues. |
| 4 | Basic adjusted EBITDA per ADS is defined as adjusted EBITDA divided by total weighted average number of ADSs of the Company outstanding during the period. |
| 5 | Diluted adjusted EBITDA per ADS is defined as adjusted EBITDA divided by total weighted average number of diluted ADSs of the Company outstanding during the period. |
FAQ
What is the net income increase for FANHUA in Q3 2023?
What strategic initiatives have contributed to FANHUA's operational resilience?
What developments have contributed to FANHUA's increased net profit?
What is FANHUA's growth forecast for life insurance first year premiums and adjusted EBITDA for 2023?
