360 Finance Announces Second Quarter 2019 Unaudited Financial Results

SHANGHAI, Aug. 23, 2019 /PRNewswire/ -- 360 Finance, Inc. (QFIN) ("360 Finance" or the "Company"), a leading digital consumer finance platform, today announced its unaudited financial results for the second quarter ended June 30, 2019.

Second Quarter Operational Highlights

    --  Loan origination volume(*1) was RMB48,378 million, an increase of 127%
        from RMB21,277 million in the same period of 2018, and an increase of
        17% from RMB41,202 million in the first quarter of 2019.
    --  Outstanding loan balance(*2) was RMB61,289 million as of June 30, 2019,
        an increase of 133% from RMB26,268 million as of June 30, 2018, and an
        increase of 17% from RMB52,578 million as of March 31, 2019.
    --  The weighted average tenor of loans originated was approximately 7.76
        months, compared with 8.82 months in the same period of 2018, and 8.01
        months in the first quarter of 2019.
    --  Cumulative registered users was 109.28 million, an increase of 96% from
        55.6 million as of June 30, 2018, and an increase of 15% from 95.08
        million as of March 31, 2019.
    --  Users with approved credit lines(*3) was 19.23 million as of June 30,
        2019, an increase of 169% from 7.16 million as of June 30, 2018, and an
        increase of 20% from 16.03 million as of March 31, 2019.
    --  Cumulative borrowers with successful drawdown, including repeat
        borrowers was 12.54 million as of June 30, 2019, an increase of 167%
        from 4.69 million as of June 30, 2018, and an increase of 20% from 10.43
        million as of March 31, 2019.
    --  90 day+ delinquency ratio(*4) was 1.02% as of June 30, 2019.
    --  The percentage of funding from financial institutions(*5) was 85%
    --  Repeat borrower contribution(*6) was 69.7%.

                        (1)
               "Loan origination
                         volume" refers to the total
                         principal amount of loans
                         originated through the Company's
                         platform during the given period.


                                     (2)
                 "Outstanding loan
                                      balance" refers to the total amount
                                      of principal outstanding for loans
                                      originated through the Company's
                                      platform at the end of each period,
                                      excluding loans delinquent for more
                                      than 180 days.


                        (3) "Users with approved credit
                         lines" refers to the total number
                         of users who had submitted their
                         credit applications and were
                         approved with a credit line by the
                         Company at the end of each period.


                        4 "90 day+ delinquency ratio" refers
                         to the outstanding principal
                         balance of on- and off-balance
                         sheet loans that were 90 to 179
                         calendar days past due as a
                         percentage of the total outstanding
                         principal balance of on- and off-
                         balance sheet loans on our platform
                         as of a specific date. Loans that
                         are charged-off are not included
                         in the delinquency rate
                         calculation.


                        5 "The percentage of funding from
                         financial institutions" is based on
                         cumulative loan origination during
                         the given period.


                        6 "Repeat borrower contribution" for
                         a given period refers to (i) the
                         principal amount of loans borrowed
                         during that period by borrowers who
                         had historically made at least one
                         successful drawdown, divided by
                         (ii) the total loan origination
                         volume through our platform during
                         that period.

Second Quarter 2019 Financial Highlights

    --  Total net revenue was RMB2,226.9 million (US$324.4 million), an increase
        of 128% from RMB978.5 million in the same period of 2018.
    --  Income from operations was RMB829.6 million (US$120.8 million), compared
        with loss from operations of RMB 41.3 million in the same period of
        2018.
    --  Non-GAAP(*7) income from operations was RMB 903.2 million (US$131.6
        million), an increase of 113% from RMB424.7 million in the same period
        of 2018.
    --  Operating margin was 37.3%. Non-GAAP operating margin was 40.6%,
        compared with 43.4% in the same period of 2018.
    --  Net income was RMB618.2 million (US$90.0 million), compared with net
        loss of RMB 142.4 million in the same period of 2018.
    --  Non-GAAP net income was RMB691.7 million (US$100.8 million), an increase
        of 114% from RMB323.6 million in the same period of 2018.
    --  Net income margin was 27.8%. Non-GAAP net income margin was 31.1%,
        compared with 33.1% in the same period of 2018.

                            7 Non-GAAP income from operations
                             and Non-GAAP net income are non-
                             GAAP financial measures. For more
                             information on this 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.

Mr. Haisheng Wu, Chief Executive Officer and Director of 360 Finance, commented, "We are pleased to report another quarter of solid business growth, with loan origination volume increasing by 17% from the previous quarter to RMB 48.4 billion, cumulative registered users reaching 109.3 million and outstanding loan balance reaching RMB 61.3 billion. We are very proud of acquiring more than 100 million registered users in less than 3 years since our inception. Our strong business development is primarily driven by our expanding user base and continuous investment in advanced technologies such as big data and artificial intelligence. As of June 30, 2019, we had submitted applications for 139 patents for our proprietary financial technologies. As we continue to see enormous market potential, we remain committed to attracting more high-quality users to drive sustainable growth in the future."

Mr. Wu continued, "We have significantly increased our loan origination under a 'capital light' model for our institutional funding partners. We expect this trend to continue as we focus more on offering technology services to our partners. Leveraging our big data technology, we will further address the various consumption needs of our huge user base by providing them with more diversified products and services. In addition, we are actively exploring opportunities to extend our fintech services to select international markets such as Southeast Asia and South Asia."

Mr. Jiang Wu, Chief Financial Officer of 360 Finance, stated, "Our total net revenues increased 128% year-on-year to RMB2.2 billion in the second quarter. In addition to driving the steady growth of our business, we are also optimizing the mix of loans facilitated under different models. During the quarter, loan origination under the 'capital light' model reached RMB 3.8 billion, which was over 10 times higher than the previous quarter and accounted for 8% of our loan origination in this quarter. In the second quarter, we also originated more on-balance sheet loans through consolidated trusts, which generate financing income and better match revenue recognition with cash flow. Furthermore, we continued to invest vigorously in brand promotion and customer acquisition for sustainable growth in the long-term."

Mr. Yan Zheng, Vice President of 360 Finance, added, "The industry-leading performance of loans originated through our platform is well recognized by our institutional funding partners. It has enabled us to obtain sufficient institutional funding at competitive cost and offer more affordable credit products to our users. We believe our exceptional research and development capabilities driven by artificial intelligence and proven track record in terms of risk management have laid a solid foundation for our cooperation with financial institutions. We will continue to invest in artificial intelligence to enhance our risk management capabilities in order to safeguard our business and deliver sustainable value to our users and funding partners."

Second Quarter 2019 Financial Results

Total net revenues increased 128% to RMB2,226.9 million (US$324.4 million) from RMB978.5 million in the same period of 2018, primarily due to an increase in loan facilitation service fees, post origination service fees and financing income associated with an increase in loan origination volume.

Revenue from loan facilitation services increased 83% to RMB1,293.1 million (US$188.4 million) from RMB706.7 million in the same period of 2018, primarily due to an increase in loan origination volume through the Company's platform.

Revenue from post-origination services increased 327% to RMB500.4 million (US$72.9 million) from RMB117.1 million in the same period of 2018, primarily due to an increase in loan origination volume and the cumulative effect of loans originated during prior periods through the Company's platform.

Financing income(*8) increased 187% to RMB234.3 million (US$34.1 million) from RMB81.5 million in the same period of 2018, primarily due to an increase in loan origination funded by our consolidated trusts. Financing income was recognized over the lifetime of the loans; therefore its growth rate lagged the growth rate of on-balance sheet loans.

Other service fee revenues increased 172% to RMB199.2 million (US$29.0 million) from RMB73.2 million in the same period of 2018, primarily due to an increase in referral service fees.

Total operating costs and expenses increased 37% to RMB1,397.3 million (US$203.5 million) from RMB1019.8 million in the same period of 2018, primarily due to an increase in expenses associated with loan origination and online customer acquisition.

Origination and servicing expenses increased 33% to RMB304.0 million (US$44.3 million) from RMB229.0 million in the same period of 2018, primarily due to an increase in loan origination volume and the associated costs incurred to originate and service loans through the Company's platform.

Sales and marketing expenses increased 124% to RMB838.6 million (US$122.2 million) from RMB374.0 million in the same period of 2018, primarily due to an increase in advertising expenses to promote the Company's brand and attract users to the platform.

General and administrative expenses decreased 62% to RMB142.7 million (US$20.8 million) from RMB371.5 million in the same period of 2018, primarily due to a decrease in share-based compensation.

Provision for loans receivable increased 213% to RMB37.3 million (US$5.4 million) from RMB11.9 million in the same period of 2018, primarily due to an increase in loan origination funded by consolidated trusts.

Provision for financial assets receivable increased 158% to RMB31.8 million (US$4.6 million) from RMB12.3 million in the same period of 2018, primarily due to an increase in loan origination volume.

Provision for accounts receivable and contract assets increased 103% to RMB43.0 million (US$6.3 million) from RMB21.2 million in the same period of 2018, primarily due to an increase in loan origination volume.

Income from operations was RMB829.6 million (US$120.8 million), compared with a loss from operations of RMB41.3 million in the same period of 2018.

Non-GAAP income from operations increased 113% to RMB903.2 million (US$131.6 million) from RMB424.7 million in the same period of 2018.

Operating margin was 37.3%. Non-GAAP operating margin was 40.6%, compared with non-GAAP operating margin of 43.4% in the same period of 2018.

Income before income tax expense was RMB791.1 million (US$115.2 million), compared with a loss before income tax expense of RMB38.7 million in the same period of 2018.

Income tax expense was RMB172.9 million (US$25.2 million), compared with RMB103.8 million in the same period of 2018.

Net income was RMB618.2 million (US$90.0 million), compared with a net loss of RMB142.4 million in the same period of 2018.

Non-GAAP net income increased 114% to RMB691.7 million (US$100.8 million) from RMB323.6 million in the same period of 2018.

Net income margin was 27.8%. Non-GAAP net income margin was 31.1%, compared with non-GAAP net income margin of 33.1% in the same period of 2018.


                            8 "Financing income" is
                             generated from loans originated
                             through the Company's platform
                             funded by the consolidated
                             trusts and Fuzhou Microcredit,
                             which charge fees and interests
                             from borrowers.

M6+ Delinquency Rate by Vintage

The following chart displays the historical cumulative M6+ delinquency rates by loan origination vintage for all loans originated through the Company's platform:

https://photos.prnasia.com/prnk/20190823/2560101-1

Business Outlook

360 Finance currently expects total net revenue for fiscal year 2019 to be in the range of RMB8,000 million to RMB8,500 million. This forecast reflects the Company's current and preliminary views, which are subject to change.

Conference Call

360 Finance's management team will host an earnings conference call at 8:00 AM U.S. Eastern Time on Friday, August 23, 2019 (8:00 PM Beijing Time on August 23, 2019).

Dial-in details for the earnings conference call are as follows:



              United States:                      1-888-346-8982



              Hong Kong:                          852-3018-4992



              
                China:                 4001-201-203



              International:                      1-412-902-4272



              Passcode:                
              360 Finance

Please dial in 15 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 one hour after the end of the conference call until 7:59 AM ET on August 30, 2019 at the following numbers:



              United States:           
              1-877-344-7529



              International:           
              1-412-317-0088



              Passcode:                                  10134530

Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of the Company's website at ir.360jinrong.net.

About 360 Finance

360 Finance, Inc. (NASDAQ: QFIN) ("360 Finance" or the "Company") is a leading digital consumer finance platform and the finance partner of the 360 Group. The Company provides tailored online consumer finance products to prime, underserved borrowers funded primarily by its funding partners. The Company's proprietary technology platform enables a unique user experience supported by resolute risk management. When coupled with its partnership with 360 Group, the Company's technology translates to a meaningful borrower acquisition, borrower retention and funding advantage, supporting the rapid growth and scaling of its business.

For more information, please visit: ir.360jinrong.net

Use of Non-GAAP Financial Measures Statement

To supplement our financial results presented in accordance with U.S. GAAP, we use non-GAAP financial measure, which is adjusted from results based on U.S. GAAP to exclude share-based compensation expenses. Reconciliations of our non-GAAP financial measures to our U.S. GAAP financial measures are set forth in tables at the end of this earnings release, which provide more details on the non-GAAP financial measures.

We use non-GAAP income from operation and non-GAAP net income in evaluating our operating results and for financial and operational decision-making purposes. Non-GAAP income from operation represents income from operation excluding share-based compensation expenses, and non-GAAP net income represents net income excluding share-based compensation expenses. Such adjustments have no impact on income tax. We believe that non-GAAP income from operation and non-GAAP net income help identify underlying trends in our business that could otherwise be distorted by the effect of certain expenses that we include in results based on U.S. GAAP. We believe that non-GAAP income from operation and non-GAAP net income provide useful information about our 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. Our non-GAAP financial information should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for or superior to U.S. GAAP results. In addition, our calculation of non-GAAP financial information may be different from the calculation used by other companies, and therefore comparability may be limited.

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 RMB6.8650 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of June 30, 2019.

Safe Harbor Statement

Any forward-looking statements contained in this announcement are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. 360 Finance may also make written or oral forward-looking statements in its reports to the U.S. Securities and Exchange Commission ("SEC") on Forms 20-F and 6-K, 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. Statements that are not historical facts, including the Company's business outlook for 2019, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Further information regarding such risks and uncertainties is included in 360 Finance's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and 360 Finance does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For more information, please contact:

360 Finance
Mr. Matthew Li
E-mail: ir@360jinrong.net

Christensen

In China
Mr. Christian Arnell
Phone: +86-10-5900-1548
E-mail: carnell@christensenir.com

In US
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: lbergkamp@christensenir.com



                                                                             
              
                Unaudited Condensed Consolidated Balance Sheets


                                                                           
             (Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("USD")
                                                                               except for number of shares and per share data, or otherwise noted)




                                                                                                                                 
              
               December 31,      June 30,      June 30,


                                                                                                                                                                2018           2019           2019



                                                                                                                                      
              
               RMB     
     
         RMB    
     
       USD



              
                ASSETS



              
                Current assets:



              Cash and cash equivalents                                                                                                                   1,445,802      1,827,758        266,243



              Restricted cash                                                                                                                               567,794      1,297,091        188,943



              Security deposit prepaid to third-party guarantee companies                                                                                   795,700      1,072,705        156,257



              Funds receivable from third party payment service providers                                                                                   142,622      1,175,271        171,198



              Accounts receivable and contract assets, net                                                                                                1,791,745      2,526,816        368,072



              Financial assets receivable, net                                                                                                            1,193,621      1,676,132        244,156



              Amounts due from related parties                                                                                                              484,286        591,325         86,136



              Loans receivable, net                                                                                                                         811,433      4,691,458        683,388



              Prepaid expenses and other assets                                                                                                             109,016        367,856         53,585



              
                Total current assets                                                                                                           7,342,019     15,226,412      2,217,978



              
                Non-current assets:



              Accounts receivable and contract assets, net-non current                                                                                            -           168             24



              Financial assets receivable, net-non current                                                                                                        -           462             67



              Property and equipment, net                                                                                                                     6,869         14,062          2,048



              Intangible assets                                                                                                                                 847          1,651            240



              
                Total non-current assets                                                                                                           7,716         16,343          2,379



              
                TOTAL ASSETS                                                                                                                   7,349,735     15,242,755      2,220,357





              
                LIABILITIES AND EQUITY
    LIABILITIES



              
                Current liabilities:



              Payable to investors of the consolidated trusts-current                                                                                       300,341      2,334,074        339,997



              Accrued expenses and other current liabilities                                                                                                518,955      1,738,644        253,260



              Amounts due to related parties                                                                                                                 78,767        165,074         24,046



              Short term loans                                                                                                                                    -     1,435,000        209,031



              Guarantee liabilities                                                                                                                       1,399,174      2,063,953        300,649



              Income tax payable                                                                                                                            432,066        556,828         81,111



              Other tax payable                                                                                                                             164,478        252,988         36,852



              
                Total current liabilities                                                                                                      2,893,781      8,546,561      1,244,946



              
                Non-current liabilities:



              Deferred tax liabilities                                                                                                                       15,758         12,629          1,840



              Payable to investors of the consolidated trusts-noncurrent                                                                                          -       765,400        111,493



              
                Total non-current liabilities                                                                                                     15,758        778,029        113,333



              
                TOTAL LIABILITIES                                                                                                              2,909,539      9,324,590      1,358,279



              Ordinary shares                                                                                                                                    20             20              3



              Additional paid-in capital                                                                                                                  4,866,756      5,009,137        729,663



              Accumulated (deficit)/retained earnings                                                                                                     (430,263)       907,855        132,244



              Other comprehensive income                                                                                                                      3,683          1,153            168



              
                TOTAL EQUITY                                                                                                                   4,440,196      5,918,165        862,078



              
                TOTAL LIABILITIES AND EQUITY                                                                                                   7,349,735     15,242,755      2,220,357


                                                                                           
       
                Unaudited Condensed Consolidated Statements of Operations


                                                                                             
       (Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("USD")

                                                                                             
       except for number of shares and per share data, or otherwise noted)




                                                                                                                                                                      Three months ended June 30,                                   Six months ended June 30,

                                                                                                                                                                                                                                  ---

                                                                                                                                                          2018                     2019                    2019             2018                       2019              2019

                                                                                                                                                                                                                                                                     ---

                                                                                                                                   
              
                RMB   
        
                RMB   
            
           USD   
     
           RMB   
          
                RMB   
       
          USD



              Revenue from loan facilitation services                                                                                                 706,671                1,293,100                 188,361        1,095,263                  2,647,171           385,604



              Revenue from post-origination services                                                                                                  117,120                  500,402                  72,892          192,377                    921,159           134,182



              Financing income                                                                                                                         81,489                  234,275                  34,126          156,011                    314,460            45,806



              Other service fee revenues                                                                                                               73,215                  199,171                  29,013          134,214                    353,137            51,440



              
                Total net revenue                                                                                                          978,495                2,226,948                 324,392        1,577,865                  4,235,927           617,032



              Origination and servicing                                                                                                               228,956                  303,986                  44,281          328,649                    532,091            77,508



              Sales and marketing                                                                                                                     373,961                  838,619                 122,159          603,234                  1,529,935           222,860



              General and administrative                                                                                                              371,506                  142,693                  20,786          398,349                    244,193            35,571



              Provision for loans receivable                                                                                                           11,894                   37,279                   5,430           24,655                     54,798             7,982



              Provision for financial assets receivable                                                                                                12,313                   31,778                   4,629           19,457                     56,910             8,290



              Provision for accounts receivable and contract assets                                                                                    21,179                   42,966                   6,259           31,424                    128,993            18,790



              
                Total operating costs and expenses                                                                                       1,019,809                1,397,321                 203,544        1,405,769                  2,546,920           371,001



              
                (Loss) Income from operations                                                                                             (41,314)                 829,627                 120,848          172,096                  1,689,007           246,031



              Interest income (expense), net                                                                                                            2,627                  (5,109)                  (744)           3,584                    (1,932)            (281)



              Foreign exchange loss                                                                                                                                          (35,264)                (5,137)                                   (2,728)            (397)



              Other income, net                                                                                                                             3                    1,854                     270            1,676                     23,896             3,481



              
                (Loss) Income before income tax expense                                                                                   (38,684)                 791,108                 115,237          177,356                  1,708,243           248,834



              Income tax expense                                                                                                                    (103,762)               (172,929)               (25,190)       (156,220)                 (370,125)         (53,915)



              
                Net (loss) income                                                                                                        (142,446)                 618,179                  90,047           21,136                  1,338,118           194,919



              
                Net (loss) income attributable to ordinary shareholders of the                                                           (142,446)                 618,179                  90,047           21,136                  1,338,118           194,919
    Company



              Net (loss) income per ordinary share attributable to ordinary shareholders
    of 360 Finance, Inc.



              Basic                                                                                                                                    (0.72)                    2.15                    0.31             0.11                       4.65              0.68



              Diluted                                                                                                                                  (0.72)                    2.04                    0.30             0.11                       4.43              0.65



              Weighted average shares used in calculating net income per ordinary
    share



              Basic                                                                                                                               198,347,168              287,652,707             287,652,707      198,347,168                287,652,707       287,652,707



              Diluted                                                                                                                             198,347,168              303,477,406             303,477,406      198,347,168                301,933,074       301,933,074


            
              
                Unaudited Condensed Consolidated Statements of Comprehensive (Loss)/Income


                      
              (Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("USD")
                           except for number of shares and per share data, or otherwise noted)






                                                                                                          Three months ended June 30,



                                                                                        2018                           2019              2019

                                                                                                                                        ---

                                                                                         RMB   
              
                RMB              USD


                            Net (loss) income                                      (142,446)                       618,179            90,047


               Other comprehensive income, net of tax of nil:


               Foreign currency
                translation adjustment                                                                              37,483             5,460


               Other comprehensive income                                                                           37,483             5,460


                            Total comprehensive (loss)
                             income                                                (142,446)                       655,662            95,507


                            Comprehensive (loss)
                             income attributable to
                             ordinary                                              (142,446)                       655,662            95,507
    shareholders




                                                                                                           Six months ended June 30,



                                                                                        2018                           2019              2019

                                                                                                                                        ---

                                                                                         RMB   
              
                RMB              USD


                            Net income                                                21,136                      1,338,118           194,919


               Other comprehensive income, net of tax of nil:


               Foreign currency
                translation adjustment                                                                             (2,530)            (369)


               Other comprehensive loss                                                                            (2,530)            (369)


                            Total comprehensive income                                21,136                      1,335,588           194,550


                            Comprehensive income
                             attributable to ordinary
                             shareholders                                             21,136                      1,335,588           194,550


                     
              
                Unaudited Reconciliations of GAAP and Non-GAAP Results


                     
              (Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("USD")
                          except for number of shares and per share data, or otherwise noted)




                                                                                                      Three months ended June 30,



                                                                                               2018                2019               2019

                                                                                                                                     ---

                                                                        
              
                RMB 
     
                RMB               USD


                   Reconciliation of Non-GAAP Net Income to Net
                    Income


      Net (loss) income                                                                   (142,446)            618,179             90,047


      Add: Share-based
       compensation expenses                                                                466,008              73,537             10,712


                   Non-GAAP net income                                                      323,562             691,716            100,759

                                                                                                                                     ---

      Non-GAAP net income
       margin                                                                                 33.1%              31.1%




                   Reconciliation of Non-GAAP Income from operations
                    to Income from operations


      (Loss) Income from
       operations                                                                          (41,314)            829,627            120,848


      Add: Share-based
       compensation expenses                                                                466,008              73,537             10,712


                   Non-GAAP Income from
                    operations                                                              424,694             903,164            131,560

                                                                                                                                     ---

      Non-GAAP opreating
       margin                                                                                 43.4%              40.6%




                                                                                                       Six months ended June 30,



                                                                                               2018                2019               2019

                                                                                                                                     ---

                                                                        
              
                RMB 
     
                RMB               USD


                   Reconciliation of Non-GAAP Net Income to Net
                    Income



     Net income                                                                             21,136           1,338,118            194,919


      Add: Share-based
       compensation expenses                                                                466,008             142,382             20,740


                   Non-GAAP net income                                                      487,144           1,480,500            215,659

                                                                                                                                     ---

      Non-GAAP net income
       margin                                                                                 30.9%              35.0%




                   Reconciliation of Non-GAAP Income from operations
                    to Income from operations


      Income from operations                                                                172,096           1,689,007            246,031


      Add: Share-based
       compensation expenses                                                                466,008             142,382             20,740


                   Non-GAAP Income from
                    operations                                                              638,104           1,831,389            266,771

                                                                                                                                     ---

      Non-GAAP opreating
       margin                                                                                 40.4%              43.2%

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SOURCE 360 Finance, Inc.