X Financial Reports First Quarter 2021 Unaudited Financial Results
X Financial (NYSE: XYF) reported strong financial performance for Q1 2021, with total net revenue surging by 71.3% to RMB906.3 million (US$138.3 million). The company posted a net income of RMB192.8 million (US$29.4 million), reversing a loss of RMB196.3 million from the previous year. Loan facilitation amounts reached a record RMB10.9 billion, up 59.1% year-over-year. Moreover, the firm received regulatory approval to establish Xiaoying Microcredit, expanding its service offerings. For Q2 2021, X Financial projects total loan facilitations between RMB12.4 billion and RMB13.0 billion.
- Total net revenue increased 71.3% year-over-year to RMB906.3 million.
- Net income turned positive at RMB192.8 million, compared to a loss of RMB196.3 million in Q1 2020.
- Loan facilitation amount reached RMB10.9 billion, a 59.1% annual increase.
- Received approval to establish Xiaoying Microcredit for expanded services.
- Financing income dropped by 24.7% year-over-year to RMB131.5 million.
- Post-origination service fees decreased by 6.9% to RMB59.7 million.
SHENZHEN, China, June 15, 2021 /PRNewswire/ -- X Financial (NYSE: XYF) (the "Company" or "we"), a leading online personal finance company in China, today announced its unaudited financial results for the first quarter ended March 31, 2021.
First Quarter 2021 Financial Highlights
- Total net revenue in the first quarter of 2021 was RMB906.3 million (US
$138.3 million ), representing an increase of71.3% from RMB529.0 million in the same period of 2020. - Income from operations in the first quarter of 2021 was RMB251.2 million (US
$38.3 million ), compared with loss from operations of RMB130.0 million in the same period of 2020. - Net income attributable to X Financial shareholders in the first quarter of 2021 was RMB192.8 million (US
$29.4 million ), compared with net loss attributable to X Financial shareholders of RMB196.3 million in the same period of 2020. - Non-GAAP[1] adjusted net income attributable to X Financial shareholders in the first quarter of 2021 was RMB212.0 million (US
$32.4 million ), compared with Non-GAAP adjusted net loss attributable to X Financial shareholders of RMB159.9 million in the same period of 2020. - Net income per basic and diluted American depositary share ("ADS")[2] in the first quarter of 2021 was RMB3.54 (US
$0.54) and RMB3.48 (US$0.53) , compared with net loss per basic and diluted ADS of RMB3.66 and RMB3.66 in the same period of 2020. - Non-GAAP adjusted net income per basic and adjusted diluted ADS in the first quarter of 2021 was RMB3.90 (US
$0.60) , and RMB3.84 (US$0.59) , compared with Non-GAAP adjusted net loss per basic and diluted ADS of RMB3.00 and RMB3.00 in the same period of 2020.
First Quarter 2021 Operational Highlights
- The total loan facilitation amount[3] in the first quarter of 2021 was RMB10,855 million, representing an increase of
59.1% from RMB6,823 million in the same period of 2020 and an increase of25.2% from RMB8,673 million in the previous quarter. - The loan facilitation amount of Xiaoying Credit Loan[4] in the first quarter of 2021 was RMB10,855 million, representing an increase of
134.4% from RMB4,631 million in the same period of 2020 and an increase of35.7% from RMB7,997 million in the previous quarter. Xiaoying Credit Loan accounted for100.0% of the Company's total loan facilitation amount in the first quarter of 2021, compared with67.9% in the same period of 2020. - The total outstanding loan balance[5] as of March 31, 2021 was RMB16,589 million, compared with RMB12,960 million as of March 31, 2020 and RMB13,218 million as of December 31, 2020.
- The delinquency rates for all outstanding loans that are past due for 31-60 days as of March 31, 2021 was
0.82% , compared with0.79% as of December 31, 2020, and4.28% as of March 31, 2020. - The number of cumulative borrowers[6] was 7.0 million as of March 31, 2021.
- Total cumulative registered users reached 58.2 million as of March 31, 2021.
[1] The Company uses in this press release the following non-GAAP financial measures: (i) adjusted net income (loss), (ii) adjusted net income (loss) attributable to X Financial shareholders, (iii) adjusted net income (loss) per basic ADS, and (iv) adjusted net income (loss) per diluted ADS, each of which excludes share-based compensation expense and income (loss) from investments in VC funds. For more information on non-GAAP financial measure, please see the section of "Use of Non-GAAP Financial Measures Statement" and the table captioned "Unaudited Reconciliations of GAAP and Non-GAAP Results" set forth at the end of this press release. |
[2] Each American depositary share ("ADS") represents six Class A ordinary shares. On November 19, 2020, a ratio change that has the same effect as a 1-for-3 reverse ADS split took effect, and as a result, one ADS currently represents six Class A ordinary shares. |
[3] Represents the total amount of loans that X Financial facilitated during the relevant period. |
[4] Xiaoying Credit Loan is a category of online personal credit loan products facilitated through our platform, including Xiaoying Card Loan, Xiaoying Preferred Loan and other unsecured loan products we introduce from time to time. We ceased the operation of Xiaoying Preferred Loan in October 2019. |
[5] Represents the total amount of loans outstanding for loans X Financial facilitated at the end of the relevant period. Loans that are delinquent for more than 60 days are charged-off and are excluded in the calculation of delinquency rate by balance, except for Xiaoying Housing Loan. Xiaoying Housing Loan is a secured loan product and the Company is entitled to payment by exercising its rights to the collateral. X Financial does not charge off Xiaoying Housing Loans delinquent for more than 60 days and such loans are included in the calculation of delinquency rate by balance. |
[6] Represents borrowers who made at least one transaction during that period from the commencement of the Company's loan facilitation business to a certain date on the Company's platform. |
Mr. Justin Tang, the Founder, Chief Executive Officer and Chairman of the Company, commented, "We're very pleased to report a strong start of the year as our business is fully back on its growth trajectory amid the subsiding COVID-19 pandemic in China. In the first quarter of 2021, both our operational and financial results continued to show progress against our strategic objectives. Our top line significantly improved on both a yearly and quarterly basis in line with the substantial increase in our loan facilitation amount. We also managed to turn profitable with net income exceeding our guidance and outperforming compared with the fourth quarter of 2019, just before the COVID-19 pandemic."
"In May 2021, we received the approval from the Local Financial Regulatory Bureau of Shenzhen Municipality to set up Shenzhen Xiaoying Microcredit Co., Ltd. ("Xiaoying Microcredit"), which is a newly established entity as one of our VIEs for the purpose of operating a microcredit business. Xiaoying Microcredit is the first company of its kind to successfully transform from a P2P business to an online microcredit business. Such an approval is a major milestone towards our full regulatory compliance. It will also expand our services beyond consumer financing, and provide more comprehensive financial services to the large pool of micro and small businesses and self-employed individuals in China, which are key drivers and contributors of China's economic growth. The government is taking a series of active measures to promote the development of micro and small businesses and self-employed individuals, and we will cooperate with other licensed financial institutions to meet their financing needs. This license will enhance our credibility and give us the advantage when we cooperate with other financial institutions, including the benefit of cutting intermediate costs. We are expecting to commence operation in the third quarter of 2021."
"Moving forward, market demand for our products and services continues to grow and we expect to maintain our current growth momentum throughout the year. China's consumer financing and micro and small businesses financing markets have great potential. We believe we are well positioned to capture opportunities ahead with our trusted brand, full regulatory compliance, and our deepening cooperation with financial institutions."
Mr. Kent Li, President of the Company, added, "During the first quarter, our total loan facilitation amount reached RMB10.9 billion, an increase of
"In the meantime, we have been working to expand our service coverage by exploring more opportunities to cooperate with more regional financial institutions. A diversified geographic reach will further enhance our business flexibility and help us navigate uncertainties in the macro environment and expand our funding sources. This is one of our key business development strategies in 2021 and beyond. In addition, we will further strengthen risk management by introducing more advanced and effective data analytics, and further improve asset quality."
Mr. Frank Fuya Zheng, Chief Financial Officer of the Company, added, "We are pleased to have delivered a strong financial performance during the first quarter. Total net revenue increased
"During the first quarter, the proportion of loan amount we facilitated covered by third-party financial guarantee companies increased to
"In conclusion, the progress we have made this quarter has strengthened our position and reputation in the markets and improved our ability to expand and deepen cooperation with financial institutions. We are entering a new chapter of our journey as our core consumer financing business gets back on track and we are ready to explore additional opportunities in the microcredit sector as well. We remain confident of the enormous potential of the industry and our capabilities to deliver long-term growth and return to our shareholders."
First Quarter 2021 Financial Results
Total net revenue in the first quarter of 2021 increased by
Loan facilitation service fees under the direct model in the first quarter of 2021 increased by
Loan facilitation service fees under the intermediary model in the first quarter of 2021 decreased by
Post-origination service fees in the first quarter of 2021 decreased by
Financing income in the first quarter of 2021 decreased by
Other revenue in the first quarter of 2021 increased by
Origination and servicing expenses in the first quarter of 2021 increased by
General and administrative expenses in the first quarter of 2021 decreased by
Sales and marketing expenses in the first quarter of 2021 decreased by
Provision for accounts receivable and contract assets in the first quarter was RMB17.3 million (US
Provision for loans receivable in the first quarter of 2021 was RMB26.6 million (US
Income from operations in the first quarter of 2021 was RMB251.2 million (US
Income before income taxes and gain from equity in affiliates in the first quarter of 2021 was RMB228.1 million (US
Income tax expense in the first quarter of 2021 was RMB37.2 million (US
Net income attributable to X Financial shareholders in the first quarter of 2021 was RMB192.8 million (US
Non-GAAP adjusted net income attributable to X Financial shareholders in the first quarter of 2021 was RMB212.0 million (US
Net income per basic and diluted ADS in the first quarter of 2021 was RMB3.54 (US
Non-GAAP adjusted net income per basic and diluted ADS in the first quarter of 2021 was RMB3.90 (US
Cash and cash equivalents was RMB799.8 million (US
Business Outlook
For the second quarter of 2021, the Company raises the guidance for total loan facilitations to be in the range of RMB12.4 billion to RMB13.0 billion and net income attributable to X Financial's shareholders to be no less than RMB220 million. This forecast reflects the Company's current and preliminary views, which are subject to changes.
Conference Call
X Financial's management team will host an earnings conference call at 7:00 AM U.S. Eastern Time on 16, June, 2021 (7:00 PM Beijing / Hong Kong Time on the same day).
Dial-in details for the earnings conference call are as follows:
United States: | 1-888-346-8982 |
Hong Kong: | 852-301-84992 |
Mainland China: | 4001-201203 |
International: | 1-412-902-4272 |
Passcode: | X Financial |
Please dial in ten minutes before the call is scheduled to begin and provide the passcode to join the call.
A replay of the conference call may be accessed by phone at the following numbers until June 23, 2021:
United States: | 1-877-344-7529 |
International: | 1-412-317-0088 |
Passcode: | 10157507 |
Additionally, a live and archived webcast of the conference call will be available at http://ir.xiaoyinggroup.com.
About X Financial
X Financial (NYSE: XYF) (the "Company") is a leading online personal finance company in China. The Company is committed to connecting borrowers on its platform with its institutional funding partners. With its proprietary big data-driven technology, the Company has established strategic partnerships with financial institutions across multiple areas of its business operations, enabling it to facilitate loans to prime borrowers under a robust risk assessment and control system.
For more information, please visit: http://ir.xiaoyinggroup.com.
Use of Non-GAAP Financial Measures Statement
In evaluating our business, we consider and use non-GAAP measures as supplemental measures to review and assess our operating performance. We present the non-GAAP financial measures because they are used by our management to evaluate our operating performance and formulate business plans. We believe that the use of the non-GAAP financial measures facilitates investors' assessment of our operating performance and help investors to identify underlying trends in our business that could otherwise be distorted by the effect of certain income or expenses that we include in income (loss) from operations and net income (loss). We also believe that the non-GAAP measures provide useful information about our core operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.
We use in this press release the following non-GAAP financial measures: (i) adjusted net income, (ii) adjusted net income attributable to X Financial shareholders, (iii) adjusted net income per basic ADS, and (iv) adjusted net income per diluted ADS, each of which excludes investment income and share-based compensation expense. These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, investors should not consider them in isolation, or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP.
We mitigate these limitations by reconciling the non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures, which should be considered when evaluating our performance. We encourage you 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 table captioned "Reconciliations of GAAP and Non-GAAP results" set forth at the end of this press release.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.5518 to US
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "potential," "continue," "ongoing," "targets," "guidance" and similar statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: the Company's goals and strategies; its future business development, financial condition and results of operations; the expected growth of the credit industry, and marketplace lending in particular, in China; the demand for and market acceptance of its marketplace's products and services; its ability to attract and retain borrowers and investors on its marketplace; its relationships with its strategic cooperation partners; competition in its industry; and relevant government policies and regulations relating to the corporate structure, business and industry. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the SEC. All information provided in this announcement is current as of the date of this announcement, and the Company does not undertake any obligation to update such information, except as required under applicable law.
For more information, please contact:
X Financial
Mr. Frank Fuya Zheng
E-mail: ir@xiaoying.com
Christensen
In China
Mr. Eric Yuan
Phone: +86-10-5900-1548
E-mail: eyuan@christensenir.com
In US
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: lbergkamp@christensenir.com
X Financial | ||||
Unaudited Condensed Consolidated Balance Sheets | ||||
(In thousands, except for share and per share data) | As of December 31, 2020 | As of March 31, 2021 | ||
RMB | RMB | USD | ||
ASSETS | ||||
Cash and cash equivalents | 746,388 | 799,777 | 122,070 | |
Restricted cash | 852,134 | 596,403 | 91,029 | |
Accounts receivable and contract assets, net of | 413,307 | 588,734 | 89,858 | |
Loans receivable from Xiaoying Credit Loans and | 1,236,026 | 1,215,400 | 185,506 | |
Loans at fair value | 1,585,732 | 1,111,234 | 169,607 | |
Deposits to institutional cooperators, net | 907,923 | 1,207,531 | 184,305 | |
Prepaid expenses and other current assets, net | 403,779 | 394,627 | 60,232 | |
Financial guarantee derivative | 297,928 | 73,316 | 11,190 | |
Deferred tax assets, net | 605,653 | 561,392 | 85,685 | |
Long term investments | 295,615 | 283,261 | 43,234 | |
Property and equipment, net | 11,137 | 9,324 | 1,423 | |
Intangible assets, net | 37,440 | 36,972 | 5,643 | |
Loan receivable from Xiaoying Housing Loans, net | 47,490 | 32,568 | 4,971 | |
Investments in VC funds | - | 49,651 | 7,578 | |
Short-term investment | 6,000 | - | - | |
Other non-current assets | 51,458 | 46,915 | 7,161 | |
TOTAL ASSETS | 7,498,010 | 7,007,105 | 1,069,492 | |
LIABILITIES | ||||
Payable to investors at fair value | 1,914,184 | 1,305,725 | 199,293 | |
Payable to institutional funding partners | 1,460,395 | 1,395,678 | 213,022 | |
Guarantee liabilities | 9,790 | 2,203 | 336 | |
Financial guarantee derivative | 130,442 | 268,692 | 41,010 | |
Short-term bank borrowings | 350,545 | 128,050 | 19,544 | |
Accrued payroll and welfare | 34,781 | 19,484 | 2,974 | |
Other tax payable | 73,077 | 103,415 | 15,783 | |
Income tax payable | 75,917 | 68,766 | 10,496 | |
Deposit payable to channel cooperators | 21,472 | 21,472 | 3,277 | |
Accrued expenses and other liabilities | 323,748 | 375,462 | 57,307 | |
Other non-current liabilities | 27,615 | 22,501 | 3,434 | |
Deferred tax liabilities | - | - | - | |
TOTAL LIABILITIES | 4,421,966 | 3,711,448 | 566,476 | |
Commitments and Contingencies | ||||
Equity: | ||||
Common shares | 203 | 207 | 32 | |
Additional paid-in capital | 3,068,045 | 3,090,977 | 471,775 | |
Retained earnings (accumulated deficit) | (14,551) | 178,288 | 27,212 | |
Other comprehensive income | 21,059 | 26,185 | 3,997 | |
Total X Financial shareholders' equity | 3,074,756 | 3,295,657 | 503,016 | |
Non-controlling interests | 1,288 | - | - | |
TOTAL EQUITY | 3,076,044 | 3,295,657 | 503,016 | |
TOTAL LIABILITIES AND EQUITY | 7,498,010 | 7,007,105 | 1,069,492 | |
X Financial | |||
Unaudited Condensed Consolidated Statements of Comprehensive Income | |||
Three Months Ended March 31, | |||
(In thousands, except for share and per share data) | 2020 | 2021 | 2021 |
RMB | RMB | USD | |
Net revenues | |||
Loan facilitation service-Direct Model | 245,960 | 692,080 | 105,632 |
Loan facilitation service-Intermediary Model | 37,012 | 143 | 22 |
Post-origination service | 64,113 | 59,665 | 9,107 |
Financing income | 174,617 | 131,452 | 20,063 |
Other revenue | 7,290 | 23,009 | 3,512 |
Total net revenue | 528,992 | 906,349 | 138,336 |
Operating costs and expenses: | |||
Origination and servicing | 447,164 | 572,503 | 87,381 |
General and administrative | 47,640 | 42,534 | 6,492 |
Sales and marketing | 11,813 | 4,525 | 691 |
Provision for accounts receivable and contract assets | 82,116 | 17,255 | 2,634 |
Provision for loans receivable | 42,831 | 26,589 | 4,058 |
Provision for contingent guarantee liabilities | 17,876 | - | - |
Reversal of provision for credit losses on deposits to institutional cooperators | - | (8,252) | (1,260) |
Provision for credit losses for other financial assets | 9,597 | - | - |
Total operating costs and expenses | 659,037 | 655,154 | 99,996 |
Income (loss) from operations | (130,045) | 251,195 | 38,340 |
Interest income (expense), net | 6,453 | 2,330 | 356 |
Foreign exchange loss | (84) | (1,574) | (240) |
Income from investments in VC funds | - | 3,639 | 555 |
Fair value adjustments related to Consolidated Trusts | (32,352) | 51 | 8 |
Change in fair value of financial guarantee derivative | (77,522) | (33,726) | (5,148) |
Other income (loss), net | 5,236 | 6,159 | 940 |
Income (loss) before income taxes and | (228,314) | 228,074 | 34,811 |
Income tax benefit (expenses) | 31,153 | (37,220) | (5,681) |
Gain from equity in affiliates, net of tax | 820 | 1,985 | 303 |
Net income (loss) | (196,341) | 192,839 | 29,433 |
Less: net income attributable to non-controlling interests | - | - | - |
Net income (loss) attributable to X Financial shareholders | (196,341) | 192,839 | 29,433 |
Net income (loss) | (196,341) | 192,839 | 29,433 |
Other comprehensive income, net of tax of nil: | |||
Foreign currency translation adjustments | 12,115 | 5,126 | 782 |
Comprehensive income (loss) | (184,226) | 197,965 | 30,215 |
Less: comprehensive income attributable to non controlling interests | - | - | - |
Comprehensive income (loss) attributable to X Financial shareholders | (184,226) | 197,965 | 30,215 |
Net income (loss) per share—basic | (0.61) | 0.59 | 0.09 |
Net income (loss) per share—diluted | (0.61) | 0.58 | 0.09 |
Net income (loss) per ADS—basic | (3.66) | 3.54 | 0.54 |
Net income (loss) per ADS—diluted | (3.66) | 3.48 | 0.53 |
Weighted average number of ordinary shares outstanding—basic | 320,667,943 | 324,668,619 | 324,668,619 |
Weighted average number of ordinary shares outstanding—diluted | 320,667,943 | 333,245,214 | 333,245,214 |
X Financial | |||
Unaudited Reconciliations of GAAP and Non-GAAP Results | |||
Three Months Ended March 31, | |||
(In thousands, except for share and per share data) | 2020 | 2021 | 2021 |
RMB | RMB | USD | |
GAAP net income (loss) | (196,341) | 192,839 | 29,433 |
Less: Income from investments in VC funds (net of tax of nil) | - | 3,639 | 555 |
Add: Share-based compensation expenses (net of tax of nil) | 36,402 | 22,848 | 3,487 |
Non-GAAP adjusted net income (loss) | (159,939) | 212,048 | 32,365 |
Net income (loss) attributable to X Financial shareholders | (196,341) | 192,839 | 29,433 |
Less: Income from investments in VC funds (net of tax of nil) | - | 3,639 | 555 |
Add: Share-based compensation expenses (net of tax of nil) | 36,402 | 22,848 | 3,487 |
Non-GAAP adjusted net income (loss) attributable to X Financial shareholders | (159,939) | 212,048 | 32,365 |
Non-GAAP adjusted net income (loss) per share—basic | (0.50) | 0.65 | 0.10 |
Non-GAAP adjusted net income (loss) per share—diluted | (0.50) | 0.64 | 0.10 |
Non-GAAP adjusted net income (loss) per ADS—basic | (3.00) | 3.90 | 0.60 |
Non-GAAP adjusted net income (loss) per ADS—diluted | (3.00) | 3.84 | 0.59 |
Weighted average number of ordinary shares outstanding—basic | 320,667,943 | 324,668,619 | 324,668,619 |
Weighted average number of ordinary shares outstanding—diluted | 320,667,943 | 333,245,214 | 333,245,214 |
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SOURCE X Financial
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