Weidai Ltd. Announces Third Quarter 2019 Financial Results
HANGZHOU, China, Dec. 31, 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 third quarter ended September 30, 2019.
Third quarter 2019 Financial Highlights:
-- Net revenues were RMB765.9 million (US$107.1 million) in the third
quarter of 2019, compared to RMB1,036.7 million in the same period of
2018 and RMB906.7 million in the second quarter of 2019.
-- Loan facilitation service fees were RMB595.8 million (US$83.4 million)
in the third quarter of 2019, compared to RMB844.5 million in the same
period of 2018 and RMB758.5 million in the second quarter of 2019.
-- Post-facilitation service fees were RMB84.8 million (US$11.9 million) in
the third quarter of 2019, compared to RMB92.5 million in the same
period of 2018 and RMB89.0 million in the second quarter of 2019.
-- Net income was RMB144.9 million (US$20.3 million) in the third quarter
of 2019, compared to RMB187.3 million in the same period of 2018 and
RMB106.9 million in the second quarter of 2019.
-- Adjusted net income([1]) was RMB144.3 million (US$20.2 million) in the
third quarter of 2019, compared to RMB215.1 million in the same period
of 2018 and RMB130.1 million in the second quarter of 2019.
[1] Adjusted net income, a non-
GAAP financial measure, is defined
as net income before share-based
compensation expenses.
Third quarter 2019 Operational Highlights:
Loan volume
The following table sets forth the volume of loans the Company facilitated and originated (including loans funded by institutional funding partners) for the periods indicated:
For the three months ended,
June 30, 2019 September 30, 2019
RMB % of total RMB % of total
loan volume loan volume
(in millions, except for percentages)
Total loan volume 17,603 100.0 15,971 100.0
Including:
Loans funded by institutional funding 749 4.3 503 3.2
partners
Loan balance
Total loan balance decreased to RMB16.6 billion (US$2.3 billion) as of September 30, 2019 from RMB18.2 billion as of June 30, 2019.
Third quarter 2019 Financial Results
Net revenues decreased by 15.5% to RMB765.9 million (US$107.1 million) in the third quarter of 2019 from RMB906.7 million in the previous quarter, primarily due to decreases in loan facilitation service fees. The decrease was partially offset by the increase in other revenues. The Company's take rate([2]) decreased to 4.6% in the third quarter of 2019 from 5.0% in the previous quarter.
-- Loan facilitation service fees decreased by 21.5% to RMB595.8 million
(US$83.4 million) in the third quarter of 2019, compared to RMB758.5
million in the previous quarter, primarily due to a decrease in loan
volume. In the third quarter of 2019, the impact of applying ASC 606
resulted in a decrease in loan facilitation service fees of RMB133.3
million (US$18.6 million).
-- Post-facilitation service fees decreased by 4.7% to RMB84.8 million
(US$11.9 million) in the third quarter of 2019, from RMB89.0 million in
the previous quarter.
-- Other revenues increased by 188.3% to RMB61.7 million (US$8.6 million)
in the third quarter of 2019, from RMB21.4 million in the previous
quarter, primarily due to increase in loan collection fees.
-- Net financing income decreased by 37.8% to RMB23.5 million (US$3.3
million) in the third quarter of 2019, from RMB37.8 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 decreased by 66.7% to RMB84.1 million (US$11.8 million) in the third quarter of 2019, from RMB252.3 million in the previous quarter. The decrease was primarily because of a decrease in loss rates resulted from the Company's optimization efforts in loan collection as well as a decrease in loan volume. Provision for loans and advances as a percentage of net revenue decreased to 11.0% in the third quarter of 2019 from 27.8% in the previous quarter.
Operating costs and expenses decreased by 5.0% to RMB538.1 million (US$75.3 million) in the third quarter of 2019, from RMB566.7 million in the previous quarter. Operating costs and expenses as a percentage of net revenues increased to 70.3% in the third quarter of 2019 from 62.5% in the previous quarter.
-- Provision for financial guarantee liabilities decreased by 60.3% to
RMB32.8 million (US$4.6 million) in the third quarter of 2019, from
RMB82.7 million in the previous quarter, primarily because of decreases
in loss rates and loan volume, as well as the Company's discontinuation
of providing financial guarantees to online investors for consumption
loans since July 1, 2019.
-- Origination and servicing expenses increased by 5.2% to RMB335.6 million
(US$46.9 million) for the third quarter of 2019 from RMB319.1 million in
the previous quarter, primarily due to increased one-off compensation
costs due to the termination of certain employees and the acquisition of
a new subsidiary.
-- Sales and marketing expenses decreased by 11.9% to RMB67.3 million
(US$9.4 million) for the third quarter of 2019 from RMB76.4 million in
the previous quarter, primarily due to cost optimization efforts.
-- General and administrative expenses increased by 31.3% to RMB76.4
million (US$10.7 million) for the third quarter of 2019 from RMB58.2
million in the previous quarter. The increase was primarily due to
increased one-off compensation costs, which was as a result of the
termination of certain employees and the acquisition of a new
subsidiary.
-- Research and development expenses decreased by 13.6% to RMB26.1 million
(US$3.7 million) in the third quarter of 2019 from RMB30.2 million in
the previous quarter, primarily due to cost optimization efforts.
Share-based compensation benefits was RMB0.6 million (US$0.1 million) in the third quarter of 2019, compared to share-based compensation expenses of RMB23.2 million in the previous quarter due to the termination of certain employees.
Income tax expenses increased to RMB33.4 million (US$4.7 million) in the third quarter of 2019, from RMB13.4 million in the previous quarter.
Net income increased by 35.5% to RMB144.9 million (US$20.3 million) in the third quarter of 2019, from RMB106.9 million in the previous quarter.
Net income and comprehensive income attributable to ordinary shareholders increased by 39.6% to RMB144.2 million (US$20.2 million) in the third quarter of 2019, from RMB103.3 million in the previous quarter.
Adjusted net income increased by 10.9% to RMB144.3 million (US$20.2 million) in the third quarter of 2019, from RMB130.1 million in the previous quarter.
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 RMB7.1477 to US$1.00, the noon buying rate on September 30, 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 June 30, As of September 30,
---
2019 2019
RMB
RMB
US$
---
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents 862,841 1,217,479 170,332
Restricted cash 806,203 858,748 120,143
Loans and advances, net 1,676,616 1,493,982 209,016
Contract assets 840,125 685,121 95,852
Short-term investments 336,192 336,919 47,137
Prepaid expenses and other assets 562,560 589,063 82,409
Amounts due from related parties 38,746 31,604 4,422
Total current assets 5,123,283 5,212,916 729,311
Non-current assets:
Restricted cash 31,547 31,547 4,414
Long-term investments 13,333 13,574 1,899
Loans and advances, net 211,829 114,177 15,974
Prepaid expenses and other assets 9,606 9,608 1,344
Property, equipment and software, net 74,156 67,448 9,436
Goodwill 5,812 5,812 813
Contract assets 343,982 365,725 51,167
Deferred tax assets 388,404 418,110 58,496
Total non-current assets 1,078,669 1,026,001 143,543
Total assets 6,201,952 6,238,917 872,854
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities (including current liabilities of
the consolidated VIE and subsidiaries without
recourse to the primary beneficiary of
RMB2,195,061 and RMB2,163,463
(US$302,680) as of June 30, 2019 and September
30, 2019, respectively):
Payable to institutional funding partners and 456,764 352,542 49,322
online investors
Current account with online investors and 1,187,500 1,236,390 172,977
borrowers
Income tax payable 117,644 185,467 25,948
Accrued expenses and other liabilities 431,344 444,812 62,231
Amounts due to related parties 21,142 13,926 1,948
Contract liabilities 19,573 20,165 2,821
Total current liabilities 2,233,967 2,253,302 315,247
Non-current liabilities (including non-current
liabilities of the consolidated VIE and
subsidiaries without recourse to the primary
beneficiary of RMB497,732 and RMB361,574
(US$50,586) as of June 30, 2019 and September
30, 2019, respectively):
Payable to institutional funding partners and online 222,906 118,314 16,553
investors
Contract liabilities 18,637 16,360 2,289
Other non-current liabilities 22,459 24,633 3,446
Deferred tax liabilities 233,730 202,267 28,298
Total non-current liabilities 497,732 361,574 50,586
Total liabilities 2,731,699 2,614,876 365,833
Shareholders' equity
Class A voting ordinary shares (par value of -
US$0.000002 per share; 35,375,777 shares
issued and outstanding as of June 30, 2019 and
September 30, 2019)
Class B voting ordinary shares (par value of 1 1 -
US$0.000002 per share; 35,071,400 shares
issued and outstanding as of June 30, 2019 and
September 30, 2019)
Additional paid-in capital 1,219,767 1,219,172 170,568
Accumulated other comprehensive (loss)/income (2,984) 7,078 990
Retained earnings 2,248,289 2,392,492 334,722
Total Weidai Ltd. shareholders' equity 3,465,073 3,618,743 506,280
Noncontrolling interests 5,180 5,298 741
Total shareholders' equity 3,470,253 3,624,041 507,021
TOTAL LIABILITIES AND 6,201,952 6,238,917 872,854
SHAREHOLDERS' EQUITY
WEIDAI LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(All amounts in thousands, except share data, or otherwise noted)
Three Months Ended Three Months Ended
June 30, 2019 September 30, 2019
---
RMB
RMB
US$
(in thousands, except for share, per
share and per ADS data)
Net revenues:
Loan facilitation service fees 758,463 595,838 83,361
Post facilitation service fees 89,011 84,790 11,863
Other revenues 21,436 61,714 8,634
Financing income 68,664 43,272 6,054
Less: Funding costs (30,865) (19,747) (2,763)
Net financing income 37,799 23,525 3,291
Total net revenues 906,709 765,867 107,149
Provision for loans and advances (252,293) (84,097) (11,766)
Net revenues after provision for 654,416 681,770 95,383
loans and advances
Operating costs and expenses:
Provision for financial guarantee (82,710) (32,794) (4,588)
liabilities
Origination and servicing expenses (319,082) (335,550) (46,945)
Sales and marketing expenses (76,429) (67,259) (9,410)
General and administrative expenses (58,237) (76,398) (10,688)
Research and development expenses (30,219) (26,100) (3,652)
Total operation costs and expenses (566,677) (538,101) (75,283)
Income from operations 87,739 143,669 20,100
Interest income, net 9,584 10,720 1,500
Government subsidies 10,513 16,093 2,251
Other expenses, net 12,494 7,784 1,089
Net income before income taxes 120,330 178,266 24,940
Income tax expenses (13,438) (33,376) (4,669)
Net income 106,892 144,890 20,271
Net income attributable to (3,571) (687) (96)
noncontrolling interests
Net income and comprehensive 103,321 144,203 20,175
income attributable to Weidai
Ltd.'s ordinary shareholders
Earnings per share:
Basic 1.47 2.05 0.29
Diluted 1.46 2.05 0.29
Shares used in earnings per share
computation:
Basic 70,447,177 70,447,177 70,447,177
Diluted 70,662,869 70,472,073 70,472,073
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
June 30, 2019 September 30, 2019
---
RMB
RMB
US$
(in thousands, except for share, per
share and per ADS data)
Net income 106,892 144,890 20,271
Add:
Share-based compensation
expenses/(benefits) 23,187 (595) (83)
Adjusted net income 130,079 144,295 20,188
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SOURCE Weidai Ltd.
