Weidai Ltd. Announces Second quarter 2019 Financial Results
HANGZHOU, China, Sept. 18, 2019 /PRNewswire/ -- Weidai Ltd. ("Weidai" or the "Company") (NYSE: WEI), a leading auto-backed financing solution provider in China, today announced its unaudited financial results for the second quarter ended June 30, 2019.
Second quarter 2019 Financial Highlights:
-- Net revenues were RMB906.7 million (US$132.1 million) in the second
quarter of 2019, a decrease of 4.4% from RMB948.4 million in the same
period of 2018 and a decrease of 4.5% from RMB949.7 million
sequentially.
-- Loan facilitation service fees were RMB758.5 million (US$110.5 million)
in the second quarter of 2019, compared to RMB752.2 million in the same
period of 2018 and RMB766.9 million in the first quarter of 2019.
-- Post-facilitation service fees were RMB89.0 million (US$13.0 million) in
the second quarter of 2019, an increase of 7.2% from RMB83.1 million in
the same period of 2018 and an increase of 6.6% from RMB83.5 million
sequentially.
-- Net income was RMB106.9 million (US$15.6 million) in the second quarter
of 2019, compared to RMB182.7 million in the same period of 2018 and
RMB109.0 million in the first quarter of 2019.
-- Adjusted net income([1]) was RMB130.1 million (US$18.9 million) in the
second quarter of 2019, compared to RMB205.4 million in the same period
of 2018 and RMB134.6 million in the first quarter of 2019.
[1] Adjusted net income, a non-
GAAP financial measure, is defined
as net income before share-based
compensation expenses.
Second quarter 2019 Operational Highlights:
Loan volume
The following table sets forth the volume of loans we facilitated and originated (including loans funded by institutional funding partners) for the periods indicated:
For the three months ended,
March 31, 2019 June 30, 2019
RMB % of total loan RMB % of total
volume loan volume
(in millions, except for percentages)
Total loan volume 15,247 100.0 17,603 100.0
Including:
Loans funded by institutional funding 733 4.8 749 4.3
partners
Loan balance
Total loan balance decreased to RMB18.2 billion (US$2.7 billion) as of June 30, 2019 from RMB19.6 billion as of March 31, 2019.
Second quarter 2019 Financial Results
Net revenues decreased by 4.5% to RMB906.7 million (US$132.1 million) in the second quarter of 2019 from RMB949.7 million in the previous quarter, primarily due to decreases in other revenues and net financing income. The decrease was partially offset by an increase in post-facilitation service fees. The Company's take rate([2]) increased to 5.0% in the second quarter of 2019 from 4.8% in the previous quarter.
-- Loan facilitation service fees remained relatively stable at RMB758.5
million (US$110.5 million) in the second quarter of 2019, compared to
RMB766.9 million in the previous quarter. In the second quarter of 2019,
the impact of applying ASC 606 resulted in a decrease in loan
facilitation service fees of RMB 126.4 million (US$18.4 million).
-- Post-facilitation service fees increased by 6.6% to RMB89.0 million
(US$13.0 million) in the second quarter of 2019, from RMB83.5 million in
the previous quarter.
-- Other revenues decreased by 58.5% to RMB21.4 million (US$3.1 million) in
the second quarter of 2019, from RMB51.6 million in the previous
quarter, primarily due to the reclassification of insurance revenue,
which previously was recorded under other revenues, to loan facilitation
service fees and post-facilitation service fees according to its nature.
-- Net financing income decreased by 20.7% to RMB37.8 million (US$5.5
million) in the second quarter of 2019, from RMB47.7 million in the
previous quarter, primarily due to a decrease in loan balance of the
Company's on-balance sheet loans.
[2] "Take rate" is
defined as dividing
net revenue of a
certain period by the
period end loan
balance.
Provision for loans and advances increased by 3.3% to RMB252.3 million (US$36.8 million) in the second quarter of 2019, from RMB244.1 million in the previous quarter. Provision for loans and advances as a percentage of total loan volume decreased to 1.4% in the second quarter of 2019 from 1.6% in the previous quarter. Provision for loans and advances as a percentage of net revenue increased to 27.8% in the second quarter of 2019 from 25.7% in the previous quarter.
Operating costs and expenses decreased by 2.4% to RMB566.7 million (US$82.5 million) in the second quarter of 2019, from RMB580.8 million in the previous quarter. Operating costs and expenses as a percentage of net revenues increased to 62.5% in the second quarter of 2019 from 61.2% in the previous quarter.
-- Provision for financial guarantee liabilities increased by 53.5% to
RMB82.7 million (US$12.0 million) in the second quarter of 2019, from
RMB53.9 million in the previous quarter.
-- Origination and servicing expenses decreased by 15.2% to RMB319.1
million (US$46.5 million) for the second quarter of 2019 from RMB376.4
million in the previous quarter, primarily due to continued cost
optimization efforts. Origination and servicing expenses as a percentage
of net revenues decreased to 35.2% in the second quarter of 2019 from
39.6% in the previous quarter.
-- Sales and marketing expenses increased by 56.4% to RMB76.4 million
(US$11.1 million) for the second quarter of 2019 from RMB48.9 million in
the previous quarter, primarily due to an increase in online marketing
activities in the second quarter of 2019.
-- General and administrative expenses decreased by 23.5% to RMB58.2
million (US$8.5 million) for the second quarter of 2019 from RMB76.1
million in the previous quarter. The decrease was primarily due to a
decrease in staff costs.
-- Research and development expenses increased by 18.3% to RMB30.2 million
(US$4.4 million) in the second quarter of 2019 from RMB25.5 million in
the previous quarter, primarily due to continued investment in
technology infrastructure and systems.
Share-based compensation expenses decreased by 9.5% to RMB23.2 million (US$3.4 million) in the second quarter of 2019, from RMB25.6 million in the previous quarter.
Income tax expenses decreased by 64.7% to RMB13.4 million (US$2.0 million) for the second quarter of 2019, from RMB38.1 million in the previous quarter.
Net income decreased by 1.9% to RMB106.9 million (US$15.6 million) in the second quarter of 2019, from RMB109.0 million in the previous quarter.
Net income and comprehensive income attributable to ordinary shareholders decreased by 2.0% to RMB103.3 million (US$15.1 million) in the second quarter of 2019, from RMB105.4 million in the previous quarter.
Adjusted net income decreased by 3.3% to RMB130.1 million (US$18.9 million) in the second quarter of 2019, from RMB134.6 million in the previous quarter.
Recent Developments
Change of Custodian Bank
To provide better and more efficient services to borrowers and investors, the Company changed its custodian bank to Sichuan Xinwang Bank Co., Ltd., the third privately-owned Internet bank in China, in August 2019, after its custodian agreement with Xiamen Bank had expired.
Change of accounting treatment for certain consumption loans
From July 1, 2019 onwards, the Company no longer provided financial guarantees to online investors for consumption loans pursuant to regulatory requirements. As a result, no guarantee liability will be recorded for new consumption loans facilitated after July 1, 2019.
Filing of Annual Report on Form 20-F
The Company filed its annual report on Form 20-F for the fiscal year ended December 31, 2018 with the Securities and Exchange Commission on April 16, 2019 (U.S. Time). The annual report on Form 20-F can be accessed on the Company's investor relations website at https://weidai.investorroom.com/.
Weidai will provide a hard copy of the annual report containing its audited consolidated financial statements, free of charge, to its shareholders and ADS holders upon request. Requests should be directed to Investor Relations department, 50/F, West Building, Fortune Finance Center, No. 33 Jiefang East Road, Jianggan District, Hangzhou, Zhejiang Province, the People's Republic of China.
Use of Non-GAAP Financial Measures
The Company uses adjusted net income, a non-GAAP financial measure, in evaluating its operating results and for financial and operational decision-making purposes. The Company believes that adjusted net income helps identify underlying trends in its business by excluding the impact of share-based compensation expenses. The Company believes that adjusted net income provides useful information about its operating results, enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision-making.
Adjusted net income is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. This non-GAAP financial measure has limitations as an analytical tool, and when assessing the Company's operating performance, cash flows or liquidity, investors should not consider it in isolation, or as a substitute for net income, cash flows provided by operating activities or other consolidated statements of operation and cash flow data prepared in accordance with U.S. GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.
For more information on this non-GAAP financial measure, please see the table captioned "Reconciliations of GAAP and Non-GAAP results" set forth at the end of this press release.
About Weidai Ltd.
Weidai Ltd. is a pioneer and leading auto-backed financing solution provider in China supported by sophisticated and effective risk management system and technology. The Company transforms used automobiles, a type of "non-standard" collateral, into investable assets, to provide accessible credit for China's small and micro enterprises, and connects the borrowers with both online investors and institutional funding partners through its platform.
For more information, please visit http://weidai.investorroom.com/.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.8650 to US$1.00, the noon buying rate on June 28, 2019 set forth in the H.10 statistical release of the U.S. Federal Reserve Board.
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. Weidai may also make written or oral forward-looking statements in its periodic reports to 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. Statements that are not historical facts, including statements about Weidai's beliefs and expectations, are forward-looking 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 the Company'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 the following: Weidai's goal and strategies; Weidai's expansion plans; Weidai's future business development, financial condition and results of operations; Weidai's expectations regarding demand for, and market acceptance of, its solutions and services; Weidai's expectations regarding keeping and strengthening its relationships with borrowers, investors and financial institutions and other platform participants; general economic and business conditions; Weidai's assumptions underlying or related to any of the foregoing regulations and governmental policies relating to the online consumer finance industry in China; and Weidai's ability to meet the standards necessary to maintain listing of its ADSs on the NYSE, 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 the Company'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 Weidai 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.
For investor and media inquiries, please contact:
In China:
Christensen
Mr. Christian Arnell
Tel: +86-10-5900-1548
E-mail: carnell@christensenir.com
In US:
Christensen
Ms. Linda Bergkamp
Tel: +1-480-614-3004
E-mail: lbergkamp@christensenir.com
WEIDAI LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except share data, or otherwise noted)
As of March 31, As of June 30,
---
2019 2019
RMB
RMB US$
---
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents 1,472,593 862,841 125,687
Restricted cash 838,961 806,203 117,437
Loans and advances, net 1,155,368 1,676,616 244,227
Contract assets 944,495 840,125 122,378
Short-term investments 222,920 336,192 48,972
Prepaid expenses and other assets 483,135 562,560 81,946
Amounts due from related parties 17,198 38,746 5,644
Total current assets 5,134,670 5,123,283 746,291
Non-current assets:
Restricted cash 27,901 31,547 4,595
Long-term investments 13,333 13,333 1,942
Loans and advances, net 402,260 211,829 30,856
Prepaid expenses and other assets 5,606 9,606 1,399
Property, equipment and software, net 81,568 74,156 10,802
Goodwill 5,812 5,812 847
Contract assets. 366,060 343,982 50,107
Deferred tax assets 317,498 388,404 56,577
Total non-current assets 1,220,038 1,078,669 157,125
Total assets 6,354,708 6,201,952 903,416
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities (including current liabilities of
the consolidated VIE and subsidiaries without
recourse to the primary beneficiary of
RMB2,231,239 and RMB2,195,061
(US$319,747) as of March 31, 2019 and June 30,
2019, respectively):
Payable to institutional funding partners and 504,402 456,764 66,535
online investors
Current account with online investors and 1,197,838 1,187,500 172,979
borrowers.
Income tax payable 94,959 117,644 17,137
Accrued expenses and other liabilities 451,253 431,344 62,832
Amounts due to related parties 14,705 21,142 3,080
Contract liabilities 22,918 19,573 2,851
Total current liabilities 2,286,075 2,233,967 325,414
Non-current liabilities (including non-current
liabilities of the consolidated VIE and
subsidiaries without recourse to the primary
beneficiary of RMB726,598 and RMB497,732
(US$72,503) as of March 31, 2019 and June 30,
2019, respectively):
Payable to institutional funding partners and 425,875 222,906 32,470
online investors
Contract liabilities 6,041 18,637 2,715
Other non-current liabilities 14,615 22,459 3,272
Deferred tax liabilities 280,067 233,730 34,046
Total non-current liabilities 726,598 497,732 72,503
Total liabilities 3,012,673 2,731,699 397,917
Shareholders' equity
Class A ordinary shares (par value of -
US$0.000002 per share; 35,375,777 shares
issued and outstanding as of March 31, 2019 and
June 30, 2019)
Class B ordinary shares (par value of 1 1 -
US$0.000002 per share; 35,071,400 shares
issued and outstanding as of March 31, 2019 and
June 30, 2019)
Additional paid-in capital 1,196,580 1,219,767 177,679
Accumulated other comprehensive loss (8,253) (2,984) (435)
Retained earnings 2,144,968 2,248,289 327,500
Total Weidai Ltd. shareholders' equity 3,333,296 3,465,073 504,744
Noncontrolling interests 8,739 5,180 755
Total shareholders' equity 3,342,035 3,470,253 505,499
TOTAL LIABILITIES AND 6,354,708 6,201,952 903,416
SHAREHOLDERS' EQUITY
Weidai Ltd.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(All amounts in thousands, except share data, or otherwise noted)
Three Months Ended Three Months Ended
March 31, 2019 June 30, 2019
---
RMB
RMB
US$
(in thousands, except for share, per share and per ADS
data)
Net revenues:
Loan facilitation service fees 766,930 758,463 110,483
Post facilitation service fees 83,464 89,011 12,966
Other revenues 51,617 21,436 3,123
Financing income 86,666 68,664 10,002
Less: Funding costs (38,977) (30,865) (4,496)
Net financing income 47,689 37,799 5,506
Total net revenues 949,700 906,709 132,078
Provision for loans and advances (244,124) (252,293) (36,751)
Net revenues after provision for 705,576 654,416 95,327
loans and advances
Operating costs and expenses:
Provision for financial guarantee (53,872) (82,710) (12,048)
liabilities
Origination and servicing expenses (376,374) (319,082) (46,480)
Sales and marketing expenses (48,873) (76,429) (11,133)
General and administrative expenses (76,093) (58,237) (8,483)
Research and development expenses (25,549) (30,219) (4,402)
Total operation costs and expenses (580,761) (566,677) (82,546)
Income from operations 124,815 87,739 12,781
Interest income, net 12,358 9,584 1,396
Government subsidies 10,591 10,513 1,531
Other (expenses)/income, net (710) 12,494 1,820
Net income before income taxes 147,054 120,330 17,528
Income tax expenses (38,096) (13,438) (1,957)
Net income 108,958 106,892 15,571
Net income attributable to (3,566) (3,571) (520)
noncontrolling interests
Net income and comprehensive 105,392 103,321 15,051
income attributable to Weidai
Ltd.'s ordinary shareholders
Earnings per share:
Basic 1.50 1.47 0.21
Diluted 1.49 1.46 0.21
Shares used in earnings per share
computation:
Basic 70,447,177 70,447,177 70,447,177
Diluted 70,929,790 70,662,869 70,662,869
Weidai Ltd.
UNAUDITED Reconciliation of
GAAP And Non-GAAP Results
(All amounts in thousands, except share data, or otherwise noted)
Three Months Ended Three Months Ended
March 31, 2019 June 30, 2019
---
RMB RMB
US$
(in thousands, except for share, per share and per ADS
data)
Net income 108,958 106,892 15,571
Add:
Share-based compensation expenses 25,624 23,187 3,378
Adjusted net income 134,582 130,079 18,949
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SOURCE Weidai Ltd.
