Yirendai Reports Second Quarter 2017 Financial Results
BEIJING, Aug. 1, 2017 /PRNewswire/ -- Yirendai Ltd. (NYSE: YRD) ("Yirendai" or the "Company"), a leading fintech company in China, today announced its unaudited financial results for the quarter ended June 30, 2017.
For Three Months Ended
in RMB million June 30, March 31, June 30, QoQ YoY
2017 2017 2016 Change Change
--- ---- ---- ---- ------ ------
Amount of Loans Facilitated 8,189.6 6,922.7 4,538.7 18% 80%
Total Net Revenue 1,183.1 1,021.6 733.8 16% 61%
Total Fees Billed (non-GAAP) 1,862.5 1,583.5 1,110.8 18% 68%
Adjusted EBITDA (non-GAAP) 378.4 400.3 265.0 -5% 43%
Net Income 269.1 350.9 260.6 -23% 3%
In the second quarter of 2017, Yirendai facilitated RMB 8,189.6 million (US$1,208.0 million) of loans to 138,529 qualified individual borrowers on its online marketplace, representing a year-over-year growth of 80%; 70.9% of the borrowers were acquired from online channels; 51.2% of the loan volume was originated from online channels and nearly 100% of the online volume was facilitated through mobile.
In the second quarter of 2017, Yirendai facilitated 199,591 investors with total investment amount of RMB 11,446.7 million (US$1,688.5 million), 100% of which was facilitated through its online platform and 90% of which was facilitated through its mobile application.
For the second quarter of 2017, total net revenue was RMB 1,183.1 million (US$174.5 million), an increase of 61% year over year; net income was RMB 269.1 million (US$39.7 million), an increase of 3% year over year.
"We are delighted to deliver yet another solid quarter," commented Ms. Yihan Fang, Chief Executive Officer of Yirendai. "Loan origination continued the strong growth momentum, especially from online channels driven by our relentless focus on technological innovation. This quarter, we also launched our credit scoring system, the Yiren Score, in aims of delivering more precise and accurate characterization of our borrower's credit profile. We stay committed to strengthening our technological and risk management capabilities to further enhance our industry leadership. Meanwhile, we will also continue to execute our strategic expansion into online wealth management business to provide more comprehensive investment solutions for our platform investors, leveraging CreditEase's broad wealth management product portfolio."
"Yirendai's revenue has continued to show strong year-over-year growth," commented Mr. Dennis Cong, Chief Financial Officer of Yirendai. "The risk performance of our loan portfolio has remained stable due to our efforts in enhancing our credit underwriting and risk management system. We will continue to invest in our technology development and AI capability to drive our operational efficiency and risk management abilities. We will also continue to work closely with regulators to ensure our full compliance status with online lending industry interim measures. In addition, given our strong cash position and positive cash flow generation ability, our board has approved a special cash dividend and a semi-annual dividend policy going forward."
Second Quarter 2017 Financial Results
Total amount of loans facilitated in the second quarter of 2017 was RMB 8,189.6 million (US$1,208.0 million), increased by 80% year over year from RMB 4,538.7 million in the same period last year, reflecting strong demand for our products and services, especially from customers acquired from online channels. As of June 30, 2017, the Yirendai platform had facilitated approximately RMB 47.4 billion (US$7.0 billion) in loan principal since its inception.
Total net revenue in the second quarter of 2017 was RMB 1,183.1 million (US$174.5 million), increased by 61% from RMB 733.8 million in the same period last year. The increase of total net revenue was mainly attributable to the growth of loan origination volume, increased service fees billed to investors and increased monthly fees billed to borrowers as our remaining loan balance continued to expand.
Total fees billed (non-GAAP) in the second quarter of 2017 were RMB 1,862.5 million (US$274.7 million), increased by 68% from RMB 1,110.8 million in the same period last year, driven by the growth of loan origination volume. Upfront fees billed to borrowers in the second quarter of 2017 were RMB 1,538.0 million (US$226.9 million), increased by 51% from RMB 1,016.4 million in the same period last year. Monthly fees billed to borrowers in the second quarter of 2017 were RMB 215.2 million (US$31.7 million), increased by 171% from RMB 79.4 million in the same period last year. The significant year-over-year increase in monthly fees billed to borrowers was primarily attributable to the increase in loans generated from online channels, which features a fee collection schedule with monthly payments in addition to the upfront portion. Service fees billed to investors in the second quarter of 2017 were RMB 222.8 million (US$32.9 million), increased by 153% from RMB 88.1 million in the same period last year. The significant year-over-year increase in service fees billed to investors was primarily attributable to the increase in the total investment amount under management.
Operating costs and expenses in the second quarter of 2017 were RMB 809.6 million (US$119.4 million), increased by 29% from RMB 628.7 million in the previous quarter and compared to RMB 471.1 million in the same period last year.
Sales and marketing expenses in the second quarter of 2017 were RMB 617.9 million (US$91.1 million), increased by 32% from RMB 469.4 million in the previous quarter and compared to RMB 355.2 million in the same period last year. Sales and marketing expenses in the second quarter of 2017 accounted for 7.5% of amount of loans facilitated, increased from 6.8% in the previous quarter and decreased from 7.8% in the same period last year. Sales and marketing expenses have decreased as a percentage of loan volume on a year-over-year basis primarily due to improvements in customer acquisition efficiency.
Origination and servicing costs in the second quarter of 2017 were RMB 93.1 million (US$13.7 million), compared to RMB 58.8 million in the previous quarter and RMB 42.5 million in the same period last year. Origination and servicing costs in the second quarter of 2017 accounted for 1.1% of amount of loans facilitated, increased from 0.8% in the previous quarter and 0.9% in the same period last year. Origination and servicing costs increased due to our enhanced efforts in loan collection this quarter.
General and administrative expenses in the second quarter of 2017 were RMB 98.6 million (US$14.5 million), compared to RMB 100.5 million in the previous quarter and RMB 73.3 million in the same period last year. General and administrative expenses in the second quarter of 2017 accounted for 8.3% of total net revenue, compared to 9.8% in the previous quarter and 10.0% in the same period last year. The decrease in general and administrative expenses as percentage of total net revenue was primarily attributable to improved operational efficiency and leverage, despite our increased level of investment in technology development.
Income tax expense in the second quarter of 2017 was RMB 130.4 million (US$19.2 million), which includes a RMB 60 million (US$8.85 million) withholding tax expense resulting from the special cash dividend declared.
Net income in the second quarter of 2017 was RMB 269.1 million (US$39.7 million), increased by 3% from RMB 260.6 million for the same period last year.
Adjusted EBITDA (non-GAAP) in the second quarter of 2017 was RMB 378.4 million (US$55.8 million), compared to RMB 400.3 million in the previous quarter and increased by 43% from RMB 265.0 million in the same period last year. Adjusted EBITDA margin([1]) (non-GAAP) in the second quarter of 2017 was 32.0%, compared to 39.2% in the previous quarter and 36.1% in the same period last year.
[1] Adjusted EBITDA margin
is a non-GAAP financial
measure calculated as
adjusted EBITDA divided by
total net revenue.
Basic income per ADS in the second quarter of 2017 was RMB 4.50 (US$0.66), compared to RMB 5.87 in the previous quarter and RMB 4.46 in the same period last year.
Diluted income per ADS in the second quarter of 2017 was RMB 4.45 (US$0.66), compared to RMB 5.81 in the previous quarter and RMB 4.46 in the same period last year.
Net cash generated from operating activities in the second quarter of 2017 was RMB 530.4 million (US$78.2million), compared to RMB 564.5 million in the previous quarter and increased by 35% from RMB 392.5 million in the same period last year.
As of June 30, 2017, cash and cash equivalents was RMB 891.2 million (US$ 131.5 million), compared to RMB 864.4 million as of March 31, 2017. As of June 30, 2017, balance of held-to-maturity investments was RMB 589.3 million (US$86.9 million), compared to RMB 494.8 million as of March 31, 2017. As of June 30, 2017, balance of available-for-sale investments was RMB 1,262.3 million (US$186.2 million), compared to RMB 1,232.3 million as of March 31, 2017.
Quality Assurance Program. In the second quarter of 2017, Yirendai accrued liabilities from quality assurance program of RMB 655.2 million (US$96.6 million), which is equal to 8% of the loans facilitated through its marketplace during the period. During the quarter, the Company released liabilities of RMB 395.4 million (US$ 58.3 million) to pay out the outstanding principal and accrued interest of default loans. As of June 30, 2017, liabilities from quality assurance program were RMB 1,961.3 million (US$289.3 million).
Delinquency rates. As of June 30, 2017, the delinquency rates for loans that are past due for 15-29 days, 30-59 days and 60-89 days were 0.4%, 0.7% and 0.5%, as compared to 0.4%, 0.8% and 0.6% as of March 31, 2017.
Cumulative M3+ net charge-off rates. As of June 30, 2017, the cumulative M3+ net charge-off rate for loans originated in 2015 was 8.3%, compared to 7.6% as of March 31, 2017. As of June 30, 2017, the cumulative M3+ net charge-off rate for loans originated in 2016 was 3.4%, compared to 2.0% as of March 31, 2017. As the 2015 and 2016 vintage loans continue to mature, the charge off level is consistent with our risk performance expectation.
Recent Development
Yiren Score and Upgraded Risk Grid
As a leader in China's fintech industry, the Company strives to uphold industry best practices for all aspects of its business. The Company is pleased to see the continuous progress it has made in refining its credit scoring model to deliver more precise and accurate credit assessment of loan applicants. The Company launched in the second quarter of 2017 its new credit scoring system, the Yiren score, which can be used to more accurately characterize borrower's credit profile. The Company has also decided to adopt, starting May 1, 2017, an upgraded risk grid with five segments - Grade I, Grade II, Grade III, Grade IV and Grade V. The expected net charge off rate and actual observed results for each of these customer groups divide potential borrowers into distinctively different credit segments.
The following table summarizes the upgraded risk grades with the corresponding Yiren scores, the volume mix in the second quarter of 2017, the expected lifetime net charge off rate, the current annualized interest rate and the average transaction fee rate:
Risk % of Q2 2017 Yiren Scores Expected Interest Average
Loan Rate (1) Transaction
Grade Facilitation M3+ net
Volume charge-off Fee Rate (2)
rate
--- ----
I 5.8% 790+ [0%, 3.0%) 10.0-12.0% 13.60%
--- --- --- --------- --------- -----
II 21.9% 750-<790 [3.0%, 5.0%) 10.0-12.0% 17.40%
--- ---- -------- ----------- --------- -----
III 23.2% 720-<750 [5.0%, 7.0%) 10.0-12.0% 19.70%
--- ---- -------- ----------- --------- -----
IV 24.5% 690-<720 [7.0%, 9.0%) 10.0-12.0% 24.00%
--- ---- -------- ----------- --------- -----
V 24.6% 640-<690 [9.0%, 13.0%) 10.0-12.0% 27.00%
--- ---- -------- ------------ --------- -----
(1) The annualized interest
rate that borrowers pay to
investors varies from 10.0%
to 12.0%, depending on the
term of the loan.
(2) The transaction fee rate
is calculated as the total
transaction fee that the
Company charges borrowers
for the entire life of the
loan, divided by the total
amount of principal. The
average transaction fee rate
presented in the table above
is the simple average of the
transaction fee rates for
loans falling under the same
risk grade, but with
different tenures and
repayment schedules.
In the transition period from May 1, 2017 to September 30, 2017, the Company will use both the upgraded risk grid and the previous risk grid for loans facilitated on the Company's platform.
Amendment to Cash Contribution Rules for the Quality Assurance Program
To further enhance the Company's cash management, the Company has determined to amend cash contribution rules for the Program, effective July 1, 2017. The Company will contribute 30% of the transaction fee collected from the borrowers, following the actual fee collection schedule, over the life of the loan to a restricted bank account as a quality assurance service fee. The total contribution over the life of a loan is approximately equal to 8% of the loan contract amount, which is similar to the previous accrual ratio. The Company reserve the right to revise this percentage upwards or downwards from time to time as a result of continuing evaluation of factors such as market dynamics as well as of our product lines, profitability and cash position.
Dividend
On July 29, 2017, the board of directors (the "Board") of the Company approved a special cash dividend of RMB 5.0845 (US$0.75) per ordinary share of the Company (or RMB 10.1690 (US$1.50) per American depositary share of the Company), which is expected to be paid on October 16, 2017 to holders of the Company's ordinary shares of record as of the close of business on September 29, 2017.
On July 29, 2017, the Board also approved a semi-annual dividend policy. Under this policy, semi-annual dividends will be set at an amount equivalent to approximately 15% of the Company's anticipated net income after tax in each half year commencing from the second half of 2017. The determination to declare and pay such semi-annual dividend and the amount of dividend in any particular half year will be made at the discretion of the Board and will be based upon the Company's operations and earnings, cash flow, financial condition and other relevant factors that the Board may deem appropriate.
Other Operating Metrics and Business Results
-- As of June 30, 2017, Yirendai had facilitated RMB 47.4 billion (US$7.0
billion) of loans on the Yirendai online marketplace since its inception
in 2012.
-- As of June 30, 2017, remaining principal of performing loans totaled RMB
27.9 billion (US$4.1 billion), increased by 16% from RMB 24.0 billion as
of March 31, 2017 and 102% from RMB 13.8 billion as of June 30, 2016.
-- In the second quarter of 2017, Grade A, B, C and D loans represented
2.3%, 7.3%, 12.7%, and 77.7% and Grade I, II, III, IV and V loans
represented 5.8%, 21.9%, 23.2%, 24.5% and 24.6% of the Company's product
portfolio, respectively.
Business Outlook
Based on the information available as of the date of this press release, Yirendai provides the following outlook, which reflects the Company's current and preliminary view and is subject to change. The following outlook does not take into consideration the impact of stock-based compensation expenses.
Third Quarter 2017
-- Total loans facilitated will be in the range of RMB 10,000 million to
RMB 10,500 million.
-- Total net revenue will be in the range of RMB 1,300 million to RMB 1,350
million.
-- Adjusted EBITDA (non-GAAP) will be in the range of RMB 280 million to
RMB 320 million.
Full Year 2017
-- Total loans facilitated will be in the range of RMB 35,000 million to
RMB 37,000 million.
-- Total net revenue will be in the range of RMB 4,800 million to RMB 5,000
million.
-- Adjusted EBITDA (non-GAAP) will be in the range of RMB 1,300 million to
RMB 1,400 million.
Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses several non-GAAP financial measures, such as fees billed, adjusted EBITDA and adjusted EBITDA margin as supplemental measures to review and assess operating performance. We believe that fees billed and adjusted EBITDA margin provide useful information about our core operating results, enhance the overall understanding of our past performance and prospects and allow for greater visibility with respect to key metrics used by our management in our financial and operational decision-making. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The non-GAAP financial measures have limitations as analytical tools. Other companies, including peer companies in the industry, may calculate these non-GAAP measures differently, which may reduce their usefulness as a comparative measure. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. See "Operating Highlights and Reconciliation of GAAP to Non-GAAP measures" at the end of this press release.
Currency Conversion
This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB 6.7793 to US$1.00, the effective noon buying rate on June 30, 2017 as set forth in the H.10 statistical release of the Federal Reserve Board.
Conference Call
Yirendai will host an earnings conference call at 8:00 a.m. Eastern Time on August 1, 2017, (or 8:00 p.m. Beijing/Hong Kong Time on August 1, 2017).
Dial-in details for the earnings conference call are as follows:
International: 1-412-902-4272
U.S. Toll Free: 1-888-346-8982
Hong Kong Toll Free: 800-905945
China Toll Free: 4001-201203
Conference ID: Yirendai
A replay of the conference call may be accessed by phone at the following numbers until August 8, 2017:
International: 1-412-317-0088
U.S. Toll Free: 1-877-344-7529
Replay Access Code: 10110363
Additionally, a live and archived webcast of the conference call will be available at yirendai.investorroom.com.
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "confident" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Yirendai's control. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited to, uncertainties as to Yirendai's ability to attract and retain borrowers and investors on its marketplace, its ability to introduce new loan products and platform enhancements, its ability to compete effectively, PRC regulations and policies relating to the peer-to-peer lending service industry in China, general economic conditions in China, and Yirendai's ability to meet the standards necessary to maintain listing of its ADSs on the NYSE or other stock exchange, including its ability to cure any non-compliance with the NYSE's continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in Yirendai's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and Yirendai does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
About Yirendai
Yirendai Ltd. (NYSE: YRD) is a leading fintech company in China connecting investors and individual borrowers. The Company provides an effective solution to address largely underserved investor and individual borrower demand in China through an online platform that automates key aspects of its operations to efficiently match borrowers with investors and execute loan transactions. Yirendai deploys a proprietary risk management system, which enables the Company to effectively assess the creditworthiness of borrowers, appropriately price the risks associated with borrowers, and offer quality loan investment opportunities to investors. Yirendai's online marketplace provides borrowers with quick and convenient access to consumer credit at competitive prices and investors with easy and quick access to an alternative asset class with attractive returns. For more information, please visit yirendai.investorroom.com.
For investor and media inquiries, please contact:
Yirendai
Hui (Matthew) Li
Director of Investor Relations
Email: ir@yirendai.com
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except for share, per share and per ADS data, and percentages)
For the Three Months Ended For the Six Months Ended
-------------------------- ------------------------
June 30, March 31, June 30, June 30, June 30, June 30, June 30,
2016 2017 2017 2017 2016 2017 2017
---- ---- ---- ---- ---- ---- ----
RMB RMB RMB USD RMB RMB USD
Net revenue:
Loan facilitation services 713,383 976,398 1,121,200 165,386 1,248,470 2,097,598 309,412
Post-origination services 17,232 33,312 41,389 6,105 35,629 74,701 11,019
Others 3,176 11,889 20,468 3,019 6,071 32,357 4,773
----- ------ ------ ----- ----- ------ -----
Total net revenue 733,791 1,021,599 1,183,057 174,510 1,290,170 2,204,656 325,204
------- --------- --------- ------- --------- --------- -------
Operating costs and expenses:
Sales and marketing 355,246 469,380 617,880 91,142 610,082 1,087,260 160,379
Origination and servicing 42,535 58,784 93,147 13,740 75,894 151,931 22,411
General and administrative 73,330 100,498 98,614 14,546 133,436 199,112 29,371
------
Total operating costs and expenses 471,111 628,662 809,641 119,428 819,412 1,438,303 212,161
Interest income 7,253 24,149 27,398 4,042 12,287 51,547 7,604
Fair value adjustments related to Consolidated ABFE (118) 1,355 (1,915) (283) (3,513) (560) (83)
Non-operating income, net 91 207 555 82 91 762 112
Income before provision for income taxes 269,906 418,648 399,454 58,923 479,623 818,102 120,676
Income tax expense/(benefit) 9,286 67,747 130,358 19,229 87,287 198,105 29,222
----- ------ ------- ------ ------ ------- ------
Net income 260,620 350,901 269,096 39,694 392,336 619,997 91,454
======= ======= ======= ====== ======= ======= ======
Weighted average number of ordinary shares outstanding, 117,000,000 119,560,832 119,603,286 119,603,286 117,000,000 119,582,176 119,582,176
basic
Basic income per share 2.2275 2.9349 2.2499 0.3319 3.3533 5.1847 0.7648
====== ====== ====== ====== ====== ====== ======
Basic income per ADS 4.4550 5.8698 4.4998 0.6638 6.7066 10.3694 1.5296
====== ====== ====== ====== ====== ======= ======
Weighted average number of ordinary shares outstanding, 117,000,000 120,842,350 120,833,406 120,833,406 117,000,000 120,837,995 120,837,995
diluted
Diluted income per share 2.2275 2.9038 2.2270 0.3285 3.3533 5.1308 0.7568
====== ====== ====== ====== ====== ====== ======
Diluted income per ADS 4.4550 5.8076 4.4540 0.6570 6.7066 10.2616 1.5136
====== ====== ====== ====== ====== ======= ======
Unaudited Condensed Consolidated Cash Flow Data
Net cash generated from operating activities 392,474 564,504 530,371 78,234 826,797 1,094,875 161,503
Net cash provided by/(used in) investing activities 51,515 (427,686) (95,702) (14,117) 65,567 (523,388) (77,204)
Net cash used in financing activities (87,914) (44,841) (94,993) (14,012) (104,323) (139,834) (20,627)
Effect of foreign exchange rate changes 12,733 (3,779) (6,463) (953) 10,840 (10,242) (1,511)
Net increase in cash, cash equivalents and restricted cash 368,808 88,198 333,213 49,152 798,881 421,411 62,161
Cash, cash equivalents and restricted cash, beginning of period 1,760,158 2,186,511 2,274,709 335,537 1,330,085 2,186,511 322,528
Cash, cash equivalents and restricted cash, end of period 2,128,966 2,274,709 2,607,922 384,689 2,128,966 2,607,922 384,689
========= ========= ========= ======= ========= ========= =======
Unaudited Consolidated Balance Sheet
(in thousands, except for share, per share and per ADS data, and percentages)
As of
-----
June 30, March 31, June 30, June 30,
2016 2017 2017 2017
---- ---- ---- ----
RMB RMB RMB USD
Cash and cash equivalents 1,336,329 864,361 891,154 131,452
Restricted cash 792,637 1,410,348 1,716,768 253,237
Accounts receivable 50,496 22,851 18,109 2,671
Prepaid expenses and other assets 272,977 475,979 618,076 91,171
Loans at fair value 175,614 319,984 269,952 39,820
Amounts due from related parties 105,809 18,436 4,252 627
Held-to-maturity investments 2,500 494,847 589,329 86,931
Available-for-sale investments - 1,232,260 1,262,260 186,193
Property, equipment and software, net 22,281 42,309 59,838 8,827
Deferred tax assets 282,700 495,464 559,794 82,574
Total assets 3,041,343 5,376,839 5,989,532 883,503
--------- --------- --------- -------
Accounts payable 5,176 12,192 15,153 2,235
Amounts due to related parties 18,799 4,272 45,425 6,701
Liabilities from quality assurance program 928,166 1,701,519 1,961,315 289,309
Deferred revenue 141,330 168,422 173,386 25,576
Payable to investors at fair value 166,193 380,048 200,947 29,641
Accrued expenses and other liabilities 401,560 621,723 780,555 115,138
Deffered tax liability - - 60,000 8,851
Total liabilities 1,661,224 2,888,176 3,236,781 477,451
--------- --------- --------- -------
Ordinary shares 73 75 75 11
Additional paid-in capital 791,841 942,604 950,151 140,155
Accumulated other comprehensive income 10,942 25,678 19,216 2,834
Retained earnings 577,263 1,520,306 1,783,309 263,052
Total equity 1,380,119 2,488,663 2,752,751 406,052
--------- --------- --------- -------
Total liabilities and equity 3,041,343 5,376,839 5,989,532 883,503
========= ========= ========= =======
Operating Highlights and Reconciliation of GAAP to Non-GAAP Measures
(in thousands, except for number of borrowers, number of investors and percentages)
For the Three Months Ended For the Six Months Ended
-------------------------- ------------------------
June 30, March 31, June 30, June 30, June 30, June 30, June 30,
2016 2017 2017 2017 2016 2017 2017
---- ---- ---- ---- ---- ---- ----
RMB RMB RMB USD RMB RMB USD
Operating Highlights:
Amount of loans facilitated 4,538,687 6,922,678 8,189,589 1,208,028 7,985,203 15,112,267 2,229,178
Loans generated from online channels 1,832,078 3,515,727 4,195,406 618,855 3,007,460 7,711,133 1,137,453
Loans generated from offline channels 2,706,609 3,406,951 3,994,183 589,173 4,977,743 7,401,134 1,091,725
Fees billed 1,110,849 1,583,537 1,862,467 274,728 1,958,262 3,446,004 508,312
Remaining principal of performing loans 13,771,180 24,037,078 27,871,922 4,111,327 13,771,180 27,871,922 4,111,327
Remaining principal of performing loans covered by 12,963,604 23,524,227 27,502,314 4,056,807 12,963,604 27,502,314 4,056,807
quality assurance program
Number of borrowers 68,882 124,953 138,529 138,529 119,305 263,319 263,319
Borrowers from online channels 40,033 86,095 98,245 98,245 67,849 184,190 184,190
Borrowers from offline channels 28,849 38,858 40,284 40,284 51,456 79,129 79,129
Number of investors 206,706 192,505 199,591 199,591 367,229 324,672 324,672
Investors from online channels 206,706 192,505 199,591 199,591 367,229 324,672 324,672
Investors from offline channels - - - - - - -
Adjusted EBITDA 264,962 400,297 378,434 55,822 471,575 778,731 114,868
Adjusted EBITDA margin 36.1% 39.2% 32.0% 32.0% 36.6% 35.3% 35.3%
Reconciliation of Net Revenues
Fees billed:
Transaction fees billed to borrowers 1,095,749 1,507,754 1,753,192 258,610 1,932,645 3,260,946 481,015
Upfront fees billed to borrowers 1,016,393 1,334,688 1,537,969 226,863 1,789,685 2,872,657 423,739
Monthly fees billed to borrowers 79,356 173,066 215,223 31,747 142,960 388,289 57,276
Service fees billed to investors 88,068 177,132 222,845 32,871 152,620 399,977 59,000
Others 3,366 12,602 21,697 3,200 6,435 34,299 5,059
Value-added tax (76,334) (113,951) (135,267) (19,953) (133,438) (249,218) (36,762)
------- -------- -------- ------- -------- -------- -------
Total fees billed 1,110,849 1,583,537 1,862,467 274,728 1,958,262 3,446,004 508,312
Stand-ready liabilities associated with (363,095) (553,816) (655,167) (96,642) (638,816) (1,208,983) (178,334)
quality assurance program
Deferred revenue (15,857) (9,662) (10,297) (1,519) (36,223) (19,959) (2,944)
Cash incentives (19,556) (30,355) (51,614) (7,613) (31,263) (81,969) (12,091)
Value-added tax 21,450 31,895 37,668 5,556 38,210 69,563 10,261
Net revenues 733,791 1,021,599 1,183,057 174,510 1,290,170 2,204,656 325,204
======= ========= ========= ======= ========= ========= =======
Reconciliation of EBITDA
Net income 260,620 350,901 269,096 39,694 392,336 619,997 91,454
Interest income (7,253) (24,149) (27,398) (4,042) (12,287) (51,547) (7,604)
Income tax expense 9,286 67,747 130,358 19,229 87,287 198,105 29,222
Depreciation and amortization 2,309 4,176 4,923 726 4,239 9,099 1,342
Share-based compensation - 1,622 1,455 215 - 3,077 454
Adjusted EBITDA 264,962 400,297 378,434 55,822 471,575 778,731 114,868
------- ------- ------- ------ ------- ------- -------
Delinquency Rates
-----------------
Delinquent for
--------------
15-29 days 30-59 days 60-89 days
---------- ---------- ----------
All Loans
December 31, 2013 0.2% 0.4% 0.3%
December 31, 2014 0.3% 0.2% 0.2%
December 31, 2015 0.4% 0.5% 0.4%
December 31, 2016 0.4% 0.7% 0.6%
March 31, 2017 0.4% 0.8% 0.6%
June 30, 2017 0.4% 0.7% 0.5%
Online Channels
December 31, 2013 0.1% 0.9% 0.3%
December 31, 2014 0.4% 0.3% 0.2%
December 31, 2015 0.6% 0.8% 0.6%
December 31, 2016 0.6% 1.0% 0.8%
March 31, 2017 0.5% 1.0% 0.8%
June 30, 2017 0.5% 0.8% 0.7%
Offline Channels
December 31, 2013 0.3% 0.2% 0.2%
December 31, 2014 0.3% 0.2% 0.2%
December 31, 2015 0.3% 0.4% 0.3%
December 31, 2016 0.4% 0.6% 0.4%
March 31, 2017 0.4% 0.6% 0.5%
June 30, 2017 0.4% 0.6% 0.5%
Net Charge-Off Rate for Previous Risk Grid
------------------------------------------
Loan issued Loan grade Amount of loans facilitated Accumulated M3+ Net Charge- Total Net Charge-Off Rate
period during the period Off as of June 30, 2017 as of June 30, 2017
------ ----------------- ----------------------- -------------------
(in RMB thousands) (in RMB thousands)
2014 A 1,917,542 92,771 4.8%
B 303,030 20,560 6.8%
C - - -
D 7,989 528 6.6%
--- ----- --- ---
Total 2,228,561 113,859 5.1%
===== ========= ======= ===
2015 A 873,995 49,517 5.7%
B 419,630 31,969 7.6%
C 557,414 56,467 10.1%
D 7,706,575 654,607 8.5%
--- --------- ------- ---
Total 9,557,614 792,560 8.3%
===== ========= ======= ===
2016 A 1,109,094 13,852 1.2%
B 745,508 19,720 2.6%
C 1,398,721 55,690 4.0%
D 16,919,079 587,640 3.5%
--- ---------- ------- ---
Total 20,172,402 676,902 3.4%
===== ========== ======= ===
1H 2017 A 428,742 86 0.0%
B 1,005,640 976 0.1%
C 1,548,768 1,312 0.1%
D 12,129,117 14,804 0.1%
--- ---------- ------ ---
Total 15,112,267 17,178 0.1%
===== ========== ====== ===
Net Charge-Off Rate for Upgraded Risk Grid
------------------------------------------
Loan issued Customer Amount of loans facilitated Accumulated M3+ Net Charge- Total Net Charge-Off Rate
period grade during the period Off as of June 30, 2017 as of June 30, 2017
------ ----- ----------------- ----------------------- -------------------
(in RMB thousands) (in RMB thousands)
2014 I - - -
II 1,921,372 92,771 4.8%
III 303,276 20,560 6.8%
IV - - -
V 3,913 528 13.5%
--- ----- --- ----
Total 2,228,561 113,859 5.1%
===== ========= ======= ===
2015 I 146,490 3,285 2.2%
II 1,614,354 70,286 4.4%
III 2,521,705 175,454 7.0%
IV 2,506,107 209,658 8.4%
V 2,768,957 333,877 12.1%
--- --------- ------- ----
Total 9,557,613 792,560 8.3%
===== ========= ======= ===
2016 I 445,515 3,705 0.8%
II 3,011,304 41,257 1.4%
III 3,757,434 80,212 2.1%
IV 5,178,402 149,417 2.9%
V 7,779,747 402,311 5.2%
--- --------- ------- ---
Total 20,172,402 676,902 3.4%
===== ========== ======= ===
1H 2017 I 707,851 39 0.0%
II 2,690,524 485 0.0%
III 3,295,540 1,267 0.0%
IV 3,352,051 1,778 0.1%
V 5,066,301 13,608 0.3%
--- --------- ------ ---
Total 15,112,267 17,178 0.1%
===== ========== ====== ===
M3+ Net Charge-Off Rate
Loan issued Month on Book
period
------
4 7 10 13 16 19 22 25 28 31 34
2013Q1 1.9% 3.2% 3.1% 2.3% 2.0% 0.9% 0.5% 0.5% 0.4% 0.4% 0.4%
2013Q2 1.8% 3.6% 4.5% 5.9% 6.4% 7.4% 6.1% 7.0% 7.5% 7.5% 7.8%
2013Q3 0.5% 2.8% 4.2% 5.5% 6.1% 6.5% 7.1% 7.1% 7.0% 6.9% 6.9%
2013Q4 0.7% 3.4% 4.8% 6.2% 6.8% 7.5% 8.3% 8.3% 8.2% 8.5% 8.3%
2014Q1 1.0% 4.2% 6.1% 7.0% 8.4% 9.3% 9.8% 9.7% 9.9% 9.8% 9.5%
2014Q2 0.5% 1.8% 2.6% 3.8% 4.3% 4.6% 4.6% 4.7% 4.7% 4.7% 4.8%
2014Q3 0.2% 0.8% 2.0% 2.8% 3.3% 3.7% 4.0% 4.2% 4.2% 4.1% 4.1%
2014Q4 0.3% 1.5% 2.7% 3.5% 4.1% 4.6% 5.1% 5.2% 5.2% 5.3%
2015Q1 0.6% 2.7% 4.4% 5.8% 7.1% 8.2% 9.1% 9.6% 9.9%
2015Q2 0.5% 2.1% 3.7% 5.3% 6.6% 7.7% 8.6% 9.1%
2015Q3 0.2% 1.6% 3.4% 4.9% 6.4% 7.4% 8.1%
2015Q4 0.2% 1.6% 3.2% 4.9% 6.2% 7.2%
2016Q1 0.2% 1.3% 2.9% 4.3% 5.4%
2016Q2 0.2% 1.7% 3.4% 4.9%
2016Q3 0.1% 1.5% 3.2%
2016Q4 0.2% 1.5%
2017Q1 0.2%
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SOURCE Yirendai Ltd.
