X Financial Reports Fourth Quarter and Fiscal Year 2023 Unaudited Financial Results
SHENZHEN, China, March 26, 2024 /PRNewswire/ -- X Financial (NYSE: XYF) (the "Company" or "we"), a leading online personal finance company in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2023.
Fourth Quarter and Fiscal Year 2023 Operational Highlights
Three Months Three Months Three Months Twelve Months Twelve Months
Ended December Ended September Ended December Ended December Ended December
31, 2022 30, 2023 31, 2023 31, 2022 31, 2023
QoQ YoY YoY
Total loan amount facilitated and 21,700 29,462 26,134 (11.3 %) 20.4 % 73,655 105,557 43.3 %
originated (RMB in million)
Number of active borrowers 1,370,496 1,809,815 1,603,760 (11.4 %) 17.0 % 3,326,774 4,495,997 35.1 %
-- The total loan amount facilitated and originated([1]) in the fourth
quarter of 2023 was RMB26,134 million, representing an increase of 20.4%
from RMB21,700 million in the same period of 2022.
-- The total loan amount facilitated and originated in 2023 was RMB105,557
million, representing an increase of 43.3% from RMB73,655 million in
2022.
-- Total number of active borrowers([2]) was 1,603,760 in the fourth
quarter of 2023, representing an increase of 17.0% from 1,370,496 in the
same period of 2022.
-- Total number of active borrowers was 4,495,997 in 2023, representing an
increase of 35.1% from 3,326,774 in 2022.
As of December 31, As of September 30, As of December 31,
2022 2023 2023
Total outstanding loan balance (RMB in million) 37,992 49,685 48,847
Delinquency rates for all outstanding loans that are past 1.02 % 1.11 % 1.57 %
due for 31-60 days
Delinquency rates for all outstanding loans that are past 1.93 % 2.50 % 3.12 %
due for 91-180 days
-- The total outstanding loan balance([3]) as of December 31, 2023 was
RMB48,847 million, compared with RMB37,992 million as of December 31,
2022.
-- The delinquency rate for all outstanding loans that are past due for
31-60 days([4]) as of December 31, 2023 was 1.57%, compared with 1.02%
as of December 31, 2022.
-- The delinquency rate for all outstanding loans that are past due for
91-180 days([5] )as of December 31, 2023 was 3.12%, compared with 1.93%
as of December 31, 2022.
[1] Represents the total amount of loans that the Company facilitated and originated during the relevant period.
[2] Represents borrowers who made at least one transaction on the Company's platform during the relevant period.
[3] Represents the total amount of loans outstanding for loans that the Company facilitated and originated at the end of the relevant period. Loans that are delinquent for more than 60 days are charged-off and are excluded in the outstanding loan balance, except for Xiaoying Housing Loan. As Xiaoying Housing Loan is a secured loan product and the Company is entitled to payment by exercising its rights to the collateral, the Company does not
exclude Xiaoying Housing Loan delinquent for more than 60 days in the outstanding loan balance.
[4] Represents the balance of the outstanding principal and accrued outstanding interest for loans that were 31 to 60 days past due as a percentage of the total balance of outstanding principal and accrued outstanding interest for loans that the Company facilitated and originated as of a specific date. Loans that are delinquent for more than 60 days are charged-off and excluded in the calculation of delinquency rate by balance. Xiaoying Housing
Loan was launched in 2015 and ceased in 2019, and all the outstanding loan balance of housing loan as of December 31, 2022, September 30, 2023 and December 31, 2023 were overdue more than 60 days. To make the delinquency rate by balance comparable, the Company excludes Xiaoying Housing Loan in the calculation of delinquency rate.
[5] To make the delinquency rate by balance comparable to the peers, the Company also defines the delinquency rate as the balance of the outstanding principal and accrued outstanding interest for loans that were 91 to 180 days past due as a percentage of the total balance of outstanding principal and accrued outstanding interest for the loans that the Company facilitated and originated as of a specific date. Loans that are delinquent for more than
180 days are excluded in the calculation of delinquency rate by balance, except for Xiaoying Housing Loan. All the outstanding loan balance of housing loan as of December 31, 2022, September 30, 2023 and December 31, 2023 were overdue more than 180 days. To make the delinquency rate by balance comparable, the Company excludes Xiaoying Housing Loan in the calculation of delinquency rate.
Fourth Quarter 2023 Financial Highlights
(In thousands, except for share and per share data) Three Months Three Months Three Months QoQ YoY
Ended December Ended September Ended December
31, 2022 30, 2023 31, 2023
RMB RMB RMB
Total net revenue 955,640 1,396,864 1,192,664 (14.6 %) 24.8 %
Total operating costs and expenses (681,687) (962,120) (938,472) (2.5 %) 37.7 %
Income from operations 273,953 434,744 254,192 (41.5 %) (7.2 %)
Net income 274,639 347,190 188,968 (45.6 %) (31.2 %)
Non-GAAP adjusted net income 277,939 374,507 230,782 (38.4 %) (17.0 %)
Net income per ADS-basic 5.28 7.26 3.90 (46.3 %) (26.1 %)
Net income per ADS-diluted 5.16 7.02 3.84 (45.3 %) (25.6 %)
Non-GAAP adjusted net income per ADS-basic 5.34 7.80 4.74 (39.2 %) (11.2 %)
Non-GAAP adjusted net income per ADS-diluted 5.22 7.56 4.68 (38.1 %) (10.3 %)
-- Total net revenue in the fourth quarter of 2023 was RMB1,192.7 million
(US$168.0 million), representing an increase of 24.8% from RMB955.6
million in the same period of 2022.
-- Income from operations in the fourth quarter of 2023 was RMB254.2
million (US$35.8 million), compared with RMB274.0 million in the same
period of 2022.
-- Net income in the fourth quarter of 2023 was RMB189.0 million (US$26.6
million), compared with RMB274.6 million in the same period of 2022.
-- Non-GAAP([6]) adjusted net income in the fourth quarter of 2023 was
RMB230.8 million (US$32.5 million), compared with RMB277.9 million in
the same period of 2022.
-- Net income per basic and diluted American depositary share ("ADS") ([7])
in the fourth quarter of 2023 was RMB3.90 (US$0.55) and RMB3.84
(US$0.54), compared with RMB5.28 and RMB5.16, respectively, in the same
period of 2022.
-- Non-GAAP adjusted net income per basic and adjusted diluted ADS in the
fourth quarter of 2023 was RMB4.74 (US$0.67) and RMB4.68 (US$0.66),
compared with RMB5.34 and RMB5.22, respectively, in the same period of
2022.
[6] The Company uses in this press release the following non-GAAP financial measures: (i) adjusted net income (loss), (ii) adjusted net income (loss) per basic ADS, and (iii) adjusted net income (loss) per diluted ADS, each of which excludes share-based compensation expense, impairment losses on financial investments, income (loss) from financial investments and impairment losses on long-term investments. For more information on non-GAAP
financial measure, please see the section of "Use of Non-GAAP Financial Measures Statement" and the table captioned "Unaudited Reconciliations of GAAP and Non-GAAP Results" set forth at the end of this press release.
[7] Each American depositary share ("ADS") represents six Class A ordinary shares.
Fiscal Year 2023 Financial Highlights
Twelve Months Ended December 31,
(In thousands, except for share and per share data) 2022 2023 YoY
RMB RMB
Total net revenue 3,562,950 4,814,884 35.1 %
Total operating costs and expenses (2,480,657) (3,377,202) 36.1 %
Income from operations 1,082,293 1,437,682 32.8 %
Net income 811,995 1,186,794 46.2 %
Non-GAAP adjusted net income 873,658 1,276,696 46.1 %
Net income per ADS-basic 15.42 24.72 60.3 %
Net income per ADS-diluted 15.12 24.48 61.9 %
Non-GAAP adjusted net income per ADS-basic 16.56 26.58 60.5 %
Non-GAAP adjusted net income per ADS-diluted 16.26 26.34 62.0 %
-- Total net revenue in 2023 was RMB4,814.9 million (US$678.2 million),
representing an increase of 35.1% from RMB3,563.0 million in 2022.
-- Income from operations in 2023 was RMB1,437.7 million (US$202.5
million), compared with RMB1,082.3 million in 2022.
-- Net income in 2023 was RMB1,186.8 million (US$167.2 million), compared
with RMB812.0 million in 2022.
-- Non-GAAP adjusted net income in 2023 was RMB1,276.7 million (US$179.8
million), compared with RMB873.7 million in 2022.
-- Net income per basic and diluted American depositary share ("ADS") in
2023 was RMB24.72 (US$3.48) and RMB24.48 (US$3.45), compared with
RMB15.42 and RMB15.12, respectively, in 2022.
-- Non-GAAP adjusted net income per basic and adjusted diluted ADS in 2023
was RMB26.58 (US$3.74) and RMB26.34 (US$3.71), compared with RMB16.56
and RMB16.26, respectively, in 2022.
Mr. Justin Tang, the Founder, Chief Executive Officer and Chairman of the Company, commented, "We are pleased to conclude the year with solid operational and financial results, emphasizing our commitment to sustained growth. In 2023, we facilitated and originated 43% more loans than in 2022 and delivered notable year-over-year growth in both revenue and profit. Total net revenue increased 35% on an annual basis, while income from operations increased 33%, and net income improved by 46%. However, as we entered the second half of 2023, particularly in the fourth quarter, we experienced increased risk levels in asset quality. While we strengthened our risk control system and implemented various measures to manage delinquency rates, we also made the strategic decision to proactively reduce loan volumes in the fourth quarter, prioritizing profitability over sheer volume growth."
"For fiscal year 2024, our strategic approach will remain consistent and somewhat conservative, aligning with current market conditions in China. We believe the regulatory environment has become stable, and the government is committed to promoting economic recovery. However, we recognize that challenges and uncertainties exist as the country undergoes a transformative shift in its economic growth model away from the rapid expansion of the past, and structural adjustments are imperative. All of this has far-reaching impacts on various sectors, including our targeted market. Despite these challenges, we remain committed to executing our strategy and prioritizing profitable growth. Our commitment to delivering value to shareholders is unwavering, and we intend to pay dividends as and when profitability and smooth operations allow. This overall approach reflects our dedication to navigating the evolving economic landscape while ensuring the sustainable success of our business and returning value to our shareholders."
Mr. Kent Li, President of the Company, added, "During the fourth quarter of 2023, our total loan amount facilitated and originated was RMB26 billion, a 20% year-over-year increase but an 11% quarter-over-quarter decline. Delinquency rates for loans past due for 31-60 days and 91-180 days were 1.57% and 3.12%, respectively, at the end of the quarter, compared with 1.02% and 1.93%, respectively, a year ago. Our team remains vigilant in monitoring asset dynamics and has taken further steps to mitigate risk by reducing our exposure to higher risk areas and adjusting our business approach to ensure sustainable profitability. We aim for continued gradual improvement over the course of 2024, and these measures have begun to have a positive impact on our risk indicators."
Mr. Frank Fuya Zheng, Chief Financial Officer of the Company, added, "We are pleased to deliver solid financial results in 2023. Total net revenue increased by 35% year-over-year to RMB4.8 billion, and net income rose by 46% to approximately RMB1.2 billion. In response to heightened asset quality risks in the fourth quarter, we proactively reduced loan volumes to safeguard profitability, resulting in a 15% sequential decline in total net revenue for the quarter. We recognized RMB26.9 million and RMB46.8 million of impairment losses on long-term investments related to our indirect investment in Newup Bank of Liaoning in 2022 and 2023, respectively, mainly due to the depreciation in the market valuation of the Chinese banking sector. However, the bank's loan portfolio and operations remain healthy, and we believe it continues to be a good investment for us. Looking ahead, we will not pursue pure loan volume growth at the expense of profitability, which is always our strategic focus to ensure long-term growth and returns to shareholders. We will continue to strengthen our risk management system to improve asset quality and balance our revenue and profitability growth."
Fourth Quarter 2023 Financial Results
Total net revenue in the fourth quarter of 2023 increased by 24.8% to RMB1,192.7 million (US$168.0 million) from RMB955.6 million in the same period of 2022, primarily due to an increase in the total loan amount facilitated and originated this quarter compared with the same period of 2022.
Three Months Ended December 31,
(In thousands, except for share and per share data) 2022 2023 YoY
RMB % of Revenue RMB % of Revenue
Loan facilitation service 562,137 58.8 % 615,482 51.6 % 9.5 %
Post-origination service 106,777 11.2 % 166,807 14.0 % 56.2 %
Financing income 248,639 26.0 % 307,692 25.8 % 23.8 %
Other revenue 38,087 4.0 % 102,683 8.6 % 169.6 %
Total net revenue 955,640 100.0 % 1,192,664 100.0 % 24.8 %
Loan facilitation service fees in the fourth quarter of 2023 increased by 9.5% to RMB615.5 million (US$86.7 million) from RMB562.1 million in the same period of 2022, primarily due to an increase in the total loan amount facilitated this quarter compared with the same period of 2022.
Post-origination service fees in the fourth quarter of 2023 increased by 56.2% to RMB166.8 million (US$23.5 million) from RMB106.8 million in the same period of 2022, primarily due to the cumulative effect of increased volume of loans facilitated in the previous quarters. Revenues from post-origination services are recognized on a straight-line basis over the term of the underlying loans as the services are being provided.
Financing income in the fourth quarter of 2023 increased by 23.8% to RMB307.7 million (US$43.3 million) from RMB248.6 million in the same period of 2022, primarily due to an increase in average loan balances compared with the same period of 2022.
Other revenue in the fourth quarter of 2023 increased by 169.6% to RMB102.7 million (US$14.5 million), compared with RMB38.1 million in the same period of 2022, primarily due to an increase in referral service fee for introducing borrowers to other platforms and increase in guarantee income generated from financing guarantee business operated by a subsidiary which holds the financing guarantee license and commenced the financing guarantee business in 2023.
Origination and servicing expenses in the fourth quarter of 2023 increased by 28.3% to RMB755.2 million (US$106.4 million) from RMB588.7 million in the same period of 2022, primarily due to the increase in commission fees and collection expenses resulting from the increase in total loan amount facilitated and originated this quarter compared with the same period of 2022.
Provision for loans receivable in the fourth quarter of 2023 was RMB99.4 million (US$14.0 million), compared with RMB75.4 million in the same period of 2022, primarily due to an increase both in loans receivable held by the Company as a result of the increase in total loan amount facilitated and originated this quarter and in estimated default rate compared with the same period of 2022.
Income from operations in the fourth quarter of 2023 was RMB254.2 million (US$35.8 million), compared with RMB274.0 million in the same period of 2022.
Income before income taxes and gain (loss) from equity in affiliates in the fourth quarter of 2023 was RMB211.1 million (US$29.7 million), compared with RMB382.5 million in the same period of 2022.
Income tax expense in the fourth quarter of 2023 was RMB35.7 million (US$5.0 million), compared with RMB75.0 million in the same period of 2022.
Net income in the fourth quarter of 2023 was RMB189.0 million (US$26.6 million), compared with RMB274.6 million in the same period of 2022.
Non-GAAP adjusted net income in the fourth quarter of 2023 was RMB230.8 million (US$32.5 million), compared with RMB277.9 million in the same period of 2022.
Net income per basic and diluted ADS in the fourth quarter of 2023 was RMB3.90 (US$0.55), and RMB3.84 (US$0.54), compared with RMB5.28 and RMB5.16, respectively, in the same period of 2022.
Non-GAAP adjusted net income per basic and diluted ADS in the fourth quarter of 2023 was RMB4.74 (US$0.67), and RMB4.68 (US$0.66), compared with RMB5.34 and RMB5.22 respectively, in the same period of 2022.
Cash and cash equivalents was RMB1,195.4 million (US$168.4 million) as of December 31, 2023, compared with RMB1,427.9 million as of September 30, 2023.
Fiscal Year 2023 Financial Results
Total net revenue in 2023 increased by 35.1% to RMB4,814.9 million (US$678.2 million) from RMB3,563.0 million in 2022, primarily due to an increase in the total loan amount facilitated and originated this year compared with 2022.
Twelve Months Ended December 31,
(In thousands, except for share and per share data) 2022 2023 YoY
RMB % of Revenue RMB % of Revenue
Loan facilitation service 2,044,344 57.4 % 2,740,974 56.9 % 34.1 %
Post-origination service 372,451 10.5 % 596,582 12.4 % 60.2 %
Financing income 966,277 27.1 % 1,137,336 23.6 % 17.7 %
Other revenue 179,878 5.0 % 339,992 7.1 % 89.0 %
Total net revenue 3,562,950 100.0 % 4,814,884 100.0 % 35.1 %
Loan facilitation service fees in 2023 increased by 34.1% to RMB2,741.0 million (US$386.1 million) from RMB2,044.3 million in 2022, primarily due to an increase in the total loan amount facilitated this year compared with 2022.
Post-origination service fees in 2023 increased by 60.2% to RMB596.6 million (US$84.0 million) from RMB372.5 million in 2022, primarily due to the cumulative effect of increased volume of loans facilitated during the year. Revenues from post-origination services are recognized on a straight-line basis over the term of the underlying loans as the services are being provided.
Financing income in 2023 increased by 17.7% to RMB1,137.3 million (US$160.2 million) from RMB966.3 million in 2022, primarily due to an increase in average loan balances compared with 2022.
Other revenue in 2023 increased by 89.0% to RMB340.0 million (US$47.9 million), compared with RMB179.9 million in 2022, primarily due to an increase in referral service fee for introducing borrowers to other platforms and increase in guarantee income generated from financing guarantee business operated by a subsidiary which holds the financing guarantee license and commenced the financing guarantee business in 2023.
Origination and servicing expenses in 2023 increased by 34.9% to RMB2,869.8 million (US$404.2 million) from RMB2,126.7 million in 2022, primarily due to the following factors: (i) an increase in commission fees and collection expenses resulting from the increase in total loan amount facilitated and originated this year, and (ii) an increase in interest expenses as a result of an increase in payable to institutional funding partners and investors.
Provision for loans receivable in 2023 was RMB229.1 million (US$32.3 million), compared with RMB158.6 million in 2022, primarily due to an increase in loans receivable held by the Company as a result of the increase in the total loan amount facilitated and originated this year and in estimated default rate compared with 2022.
Provision for contingent guarantee liabilities in 2023 was RMB67.5 million (US$ 9.5 million) due to increase in guarantee liability arising from financing guarantee business operated by a subsidiary which holds the financing guarantee license and commenced the financing guarantee business in 2023.
Income from operations in 2023 was RMB1,437.7 million (US$202.5 million), compared with RMB1,082.3 million in 2022.
Income before income taxes and gain (loss) from equity in affiliates in 2023 was RMB1,403.1 million (US$197.6 million), compared with RMB1,223.5 million in 2022.
Income tax expense in 2023 was RMB249.4 million (US$35.1 million), compared with RMB389.4 million in 2022.
Net income in 2023 was RMB1,186.8 million (US$167.2 million), compared with RMB812.0 million in 2022.
Non-GAAP adjusted net income in 2023 was RMB1,276.7 million (US$179.8 million), compared with RMB873.7 million in 2022.
Net income per basic and diluted ADS in 2023 was RMB24.72 (US$3.48), and RMB24.48 (US$3.45), compared with RMB15.42 and RMB15.12, respectively, in 2022.
Non-GAAP adjusted net income per basic and diluted ADS in 2023 was RMB26.58 (US$3.74), and RMB26.34 (US$3.71), compared with RMB16.56 and RMB16.26 respectively, in 2022.
Cash and cash equivalents was RMB1,195.4 million (US$168.4 million) as of December 31, 2023, compared with RMB602.3 million as of December 31, 2022.
Recent Development
Share Repurchase Plan
In the fourth quarter of 2023, the Company repurchased an aggregate of 35,922 ADSs for a total consideration of US$143,400. Since the beginning of 2023, the Company had repurchased an aggregate of 837,729 ADSs for a total consideration of US$3.46 million. The Company has approximately US$5.5 million remaining for potential repurchases under our current share repurchase plan.
Declaration of Semi-Annual Dividend
The Company today announced that the Company's board of directors (the "Board") has approved a semi-annual dividend policy. Under this policy, 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.
Pursuant to the semi-annual dividend policy, the Board has approved the declaration and payment of a semi-annual dividend of US$0.17 per ADS (approximately US$0.028 per ordinary share) for the second half of 2023. The holders of the Company's ordinary shares shown on the Company's record at the close of trading on May 10, 2024 (U.S. Eastern Daylight Time) will be entitled to these dividends. These shareholders, including the Bank of New York Mellon, the depositary of our ADS program (the "Depositary"), will receive the payments of dividends on or about May 31, 2024. Dividends to the Company's ADS holders will be paid through the Depositary on or after May 31, 2024, and the precise timing of receipt will vary based on the processing efficiency of the respective holding brokerage.
Business Outlook
The Company expects the total loan amount facilitated and originated for the first quarter of 2024 to be between RMB21.0 billion and RMB22.5 billion.
This forecast reflects the Company's current and preliminary views, which are subject to changes.
Conference Call
X Financial's management team will host an earnings conference call at 7:00 AM U.S. Eastern Time on March 27, 2024 (7:00 PM Beijing / Hong Kong Time on March 27, 2024).
Dial-in details for the earnings conference call are as follows:
United States: 1-888-346-8982
Hong Kong: 852-301-84992
Mainland China: 4001-201203
International: 1-412-902-4272
Passcode: X Financial
Please dial in ten minutes before the call is scheduled to begin and provide the passcode to join the call.
A replay of the conference call may be accessed by phone at the following numbers until April 3, 2024:
United States: 1-877-344-7529
International: 1-412-317-0088
Passcode: 3077685
Additionally, a live and archived webcast of the conference call will be available at http://ir.xiaoyinggroup.com.
About X Financial
X Financial (NYSE: XYF) (the "Company") is a leading online personal finance company in China. The Company is committed to connecting borrowers on its platform with its institutional funding partners. With its proprietary big data-driven technology, the Company has established strategic partnerships with financial institutions across multiple areas of its business operations, enabling it to facilitate and originate loans to prime borrowers under a risk assessment and control system.
For more information, please visit: http://ir.xiaoyinggroup.com.
Use of Non-GAAP Financial Measures Statement
In evaluating our business, we consider and use non-GAAP measures as supplemental measures to review and assess our operating performance. We present the non-GAAP financial measures because they are used by our management to evaluate our operating performance and formulate business plans. We believe that the use of the non-GAAP financial measures facilitates investors' assessment of our operating performance and help investors to identify underlying trends in our business that could otherwise be distorted by the effect of certain income or expenses that we include in income (loss) from operations and net income (loss). We also believe that the non-GAAP measures provide useful information about our core operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.
We use in this press release the following non-GAAP financial measures: (i) adjusted net income, (ii) adjusted net income per basic ADS, and (iii) adjusted net income per diluted ADS, each of which excludes share-based compensation expense, impairment losses on financial investments, income (loss) from financial investments and impairment losses on long-term investments. These non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, investors should not consider them in isolation, or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP.
We mitigate these limitations by reconciling the non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures, which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure.
For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of GAAP and Non-GAAP results" set forth at the end of this press release.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.0999 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 December 29, 2023.
Disclaimer
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "potential," "continue," "ongoing," "targets," "guidance" and similar statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the followings: the Company's goals and strategies; its future business development, financial condition and results of operations; the expected growth of the credit industry, and marketplace lending in particular, in China; the demand for and market acceptance of its marketplace's products and services; its ability to attract and retain borrowers and investors on its marketplace; its relationships with its strategic cooperation partners; competition in its industry; and relevant government policies and regulations relating to the corporate structure, business and industry. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the SEC. All information provided in this announcement is current as of the date of this announcement, and the Company does not undertake any obligation to update such information, except as required under applicable law.
Use of Projections
This announcement also contains certain financial forecasts (or guidance) with respect to the Company's projected financial results. The Company's independent auditors have not audited, reviewed, compiled or performed any procedures with respect to the projections or guidance for the purpose of their inclusion in this announcement, and accordingly, they did not express an opinion or provide any other form assurance with respect thereto for the purpose of this announcement. This guidance should not be relied upon as being necessarily indicative of future results. The assumptions and estimates underlying the prospective financial information are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could actual results to differ materially from those contained in the prospective financial information. Accordingly, there can be no assurance that the prospective results are indicative of the future performance of the Company, or that actual results will not diff materially from those set forth in the prospective financial information. Inclusion of the prospective financial information in this announcement should not be regarded as a representation by any person that the results contained in the prospective financial information will actually be achieved. You should review this information together with the Company's historical information.
For more information, please contact:
X Financial
Mr. Frank Fuya Zheng
E-mail: ir@xiaoying.com
Christensen IR
In China
Mr. Rene Vanguestaine
Phone: +86-178-1749 0483
E-mail: rene.vanguestaine@christensencomms.com
In US
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: linda.bergkamp@christensencomms.com
X Financial
Unaudited Condensed Consolidated Balance Sheets
(In thousands, except for share and per share data) As of December 31, As of December 31, As of December 31,
2022 2023 2023
RMB RMB USD
ASSETS
Cash and cash equivalents 602,271 1,195,352 168,362
Restricted cash 404,689 749,070 105,504
Accounts receivable and contract assets, net 1,161,912 1,659,588 233,748
Loans receivable from Xiaoying Credit Loans and other loans, net 3,810,393 4,947,833 696,888
Loans at fair value 120,280
Deposits to institutional cooperators, net 1,770,317 1,702,472 239,788
Prepaid expenses and other current assets, net 71,082 48,767 6,870
Deferred tax assets, net 88,428 135,958 19,149
Long-term investments 495,995 493,411 69,495
Property and equipment, net 5,861 8,642 1,217
Intangible assets, net 36,550 36,810 5,185
Loan receivable from Xiaoying Housing Loans, net 10,061 8,657 1,219
Financial investments 192,620 608,198 85,663
Other non-current assets 67,204 55,265 7,784
TOTAL ASSETS 8,837,663 11,650,023 1,640,872
LIABILITIES
Payable to investors and institutional funding partners at amortized cost 2,627,910 3,584,041 504,802
Payable to investors at fair value 141,289
Guarantee liabilities 61,907 8,719
Financial guarantee derivative 107,890
Short-term borrowings 70,209 565,000 79,579
Accrued payroll and welfare 63,681 86,771 12,221
Other tax payable 255,691 289,819 40,819
Income tax payable 270,089 446,500 62,888
Deposit payable to channel cooperators 19,700 19,700 2,775
Accrued expenses and other current liabilities 476,035 622,324 87,653
Dividend payable 59,226 8,342
Other non-current liabilities 51,193 37,571 5,292
Deferred tax liabilities 722 30,040 4,231
TOTAL LIABILITIES 4,084,409 5,802,899 817,321
Commitments and Contingencies
Equity:
Common shares 207 207 29
Treasury stock (124,597) (111,520) (15,707)
Additional paid-in capital 3,191,194 3,196,942 450,280
Retained earnings 1,622,851 2,692,018 379,163
Other comprehensive income 63,599 69,477 9,786
Total X Financial shareholders' equity 4,753,254 5,847,124 823,551
Non-controlling interests
TOTAL EQUITY 4,753,254 5,847,124 823,551
TOTAL LIABILITIES AND EQUITY 8,837,663 11,650,023 1,640,872
X Financial
Unaudited Condensed Consolidated Statements of Comprehensive Income
Three Months Ended December 31, Twelve Months Ended December 31,
(In thousands, except for share and per share data) 2022 2023 2023 2022 2023 2023
RMB RMB USD RMB RMB USD
Net revenues
Loan facilitation service 562,137 615,482 86,689 2,044,344 2,740,974 386,058
Post-origination service 106,777 166,807 23,494 372,451 596,582 84,027
Financing income 248,639 307,692 43,338 966,277 1,137,336 160,190
Other revenue 38,087 102,683 14,463 179,878 339,992 47,887
Total net revenue 955,640 1,192,664 167,984 3,562,950 4,814,884 678,162
Operating costs and expenses:
Origination and servicing 588,730 755,238 106,373 2,126,742 2,869,845 404,209
General and administrative 42,445 48,142 6,781 171,524 186,515 26,270
Sales and marketing 2,497 3,711 523 15,448 12,539 1,766
(Reversal of) provision for accounts receivable and contract assets (25,550) 6,250 880 21,836 12,234 1,723
Provision for loans receivable 75,396 99,365 13,995 158,576 229,137 32,273
(Reversal of) provision for contingent guarantee liabilities - 25,926 3,652 (14,000) 67,520 9,510
(Reversal of) provision for credit losses on deposits to institutional cooperators (1,831) (246) (35) 1,296 (674) (95)
(Reversal of) provision for credit losses for other financial assets - 86 12 (765) 86 12
Total operating costs and expenses 681,687 938,472 132,181 2,480,657 3,377,202 475,668
Income from operations 273,953 254,192 35,803 1,082,293 1,437,682 202,494
Interest income (expenses), net 396 (2,587) (364) 3,756 (20,365) (2,868)
Foreign exchange gain (loss) 6,175 3,232 455 (19,963) (4,023) (567)
Income (loss) from financial investments 28,702 1,686 237 20,900 (12,225) (1,722)
Impairment losses on financial investments - (8,875)
Impairment losses on long-term investments (26,866) (46,771) (6,588) (26,866) (46,771) (6,588)
Fair value adjustments related to Consolidated Trusts 209 (6,168) (531) (75)
Change in fair value of financial guarantee derivative 91,380 137,654 24,966 3,516
Other income, net 8,590 1,346 190 40,724 24,351 3,430
Income before income taxes and gain (loss) from equity in affiliates 382,539 211,098 29,733 1,223,455 1,403,084 197,620
Income tax expense (74,977) (35,659) (5,022) (389,358) (249,438) (35,133)
Gain (loss) from equity in affiliates, net of tax (32,923) 13,529 1,906 (22,102) 33,148 4,669
Net income 274,639 188,968 26,617 811,995 1,186,794 167,156
Less: net income attributable to non-controlling interests -
Net income attributable to X Financial shareholders 274,639 188,968 26,617 811,995 1,186,794 167,156
Net income 274,639 188,968 26,617 811,995 1,186,794 167,156
Other comprehensive income, net of tax of nil:
Gain (loss) from equity in affiliates 39 (52) (7) 204 (7) (1)
Income (loss) from financial investments - 475 67 475 67
Foreign currency translation adjustments (12,887) (8,214) (1,157) 57,085 5,410 762
Comprehensive income 261,791 181,177 25,520 869,284 1,192,672 167,984
Less: comprehensive income attributable to non-controlling interests -
Comprehensive income attributable to X Financial shareholders 261,791 181,177 25,520 869,284 1,192,672 167,984
Net income per share-basic 0.88 0.65 0.09 2.57 4.12 0.58
Net income per share-diluted 0.86 0.64 0.09 2.52 4.08 0.57
Net income per ADS-basic 5.28 3.90 0.55 15.42 24.72 3.48
Net income per ADS-diluted 5.16 3.84 0.54 15.12 24.48 3.45
Weighted average number of ordinary shares outstanding-basic 311,832,013 291,312,698 291,312,698 316,444,826 288,115,969 288,115,969
Weighted average number of ordinary shares outstanding-diluted 317,710,296 294,631,195 294,631,195 322,403,387 290,833,214 290,833,214
X Financial
Unaudited Reconciliations of GAAP and Non-GAAP Results
Three Months Ended December 31, Twelve Months Ended December 31,
(In thousands, except for share and per share data) 2022 2023 2023 2022 2023 2023
RMB RMB USD RMB RMB USD
GAAP net income 274,639 188,968 26,617 811,995 1,186,794 167,156
Less: Income (loss) from financial investments (net of tax of nil) 28,702 1,686 237 20,900 (12,225) (1,722)
Less: Impairment losses on financial investments (net of tax of nil) - (8,875)
Less: Impairment losses on long-term investments (net of tax) (20,150) (35,079) (4,941) (20,150) (35,079) (4,941)
Add: Share-based compensation expenses (net of tax of nil) 11,852 8,421 1,186 53,538 42,598 6,000
Non-GAAP adjusted net income 277,939 230,782 32,507 873,658 1,276,696 179,819
Non-GAAP adjusted net income per share-basic 0.89 0.79 0.11 2.76 4.43 0.62
Non-GAAP adjusted net income per share-diluted 0.87 0.78 0.11 2.71 4.39 0.62
Non-GAAP adjusted net income per ADS-basic 5.34 4.74 0.67 16.56 26.58 3.74
Non-GAAP adjusted net income per ADS-diluted 5.22 4.68 0.66 16.26 26.34 3.71
Weighted average number of ordinary shares outstanding-basic 311,832,013 291,312,698 291,312,698 316,444,826 288,115,969 288,115,969
Weighted average number of ordinary shares outstanding-diluted 317,710,296 294,631,195 294,631,195 322,403,387 290,833,214 290,833,214
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SOURCE X Financial
