Weidai Ltd. Announces Third Quarter 2018 Financial Results
HANGZHOU, China, Dec. 11, 2018 /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, 2018.
Third Quarter 2018 Financial Highlights:
- Net revenues were RMB1,036.7 million (US$150.9 million) in the third quarter of 2018, an increase of 9.3% from RMB948.4 million sequentially.
- Loan facilitation service fees were RMB844.5 million (US$123.0million) in the third quarter of 2018, an increase of 12.3% from RMB752.2 million sequentially.
- Post-facilitation service fees were RMB92.5 million (US$13.5 million) in the third quarter of 2018, an increase of 11.4% from RMB83.1 million sequentially.
- Net income was RMB187.3 million (US$27.3 million) in the third quarter of 2018, compared to RMB182.7 million in the previous quarter.
- Adjusted net income[1] was RMB215.1 million (US$31.3 million) in the third quarter of 2018, compared to RMB205.4 million in the previous quarter.
Third Quarter 2018 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, |
||||
June 30, 2018 |
September 30, 2018 |
|||
RMB |
% of total loan |
RMB |
% of total |
|
(in millions, except for percentages) |
||||
Total loan volume |
19,994 |
100.0 |
17,030 |
100.0 |
Including: |
||||
Loans funded by institutional funding |
564 |
2.8 |
733 |
4.3 |
Loan balance
Total loan balance decreased to RMB20.4 billion (US$3.0 billion) as of September 30, 2018 from RMB22.1 billion as of June 30, 2018.
Third Quarter 2018 Financial Results
Net revenues increased by 9.3% to RMB1,036.7 million (US$150.9 million) in the third quarter of 2018 from RMB948.4 million in the previous quarter, primarily due to an increase in loan facilitation service fees and post-facilitation service fees. The Company's take rate[2] increased to 5.1% in the third quarter of 2018 from 4.3% in the previous quarter.
- Loan facilitation service fees increased by 12.3% to RMB844.5 million (US$123.0 million) in the third quarter of 2018, from RMB752.2 million in the previous quarter. The increase was primarily attributable to product mix changes that resulted in higher blended take rate.
- Post-facilitation service fees increased by 11.4% to RMB92.5 million (US$13.5 million) in the third quarter of 2018, from RMB83.1 million in the previous quarter. The increase was primarily attributable to product mix changes that resulted in higher blended take rate.
- Other revenues decreased by 15.9% to RMB35.8 million (US$5.2 million) in the third quarter of 2018, from RMB42.5 million in the previous quarter, primarily due to a decrease in loan collection fees.
- Net financing income decreased by 9.2% to RMB68.9 million (US$10.0 million) in the third quarter of 2018, from RMB75.9 million in the previous quarter, primarily due to changes in the Company's collaboration arrangements with institutional funding partners, as a result of which a greater proportion of loans funded by institutional funding partners in the third quarter of 2018 were not recorded on the Company's balance sheet.
Provision for loans and advances were RMB186.1 million (US$27.1 million) in the third quarter of 2018, compared to RMB93.5 million in the previous quarter. The increase was primarily due to increase in delinquency rates as a result of industry-wide turmoil, and macroeconomic headwinds that negatively impacted small and micro enterprises. Provision for loans and advances as a percentage of net revenues increased to 17.9% in the third quarter of 2018 from 9.9% in the second quarter of 2018.
Operating costs and expenses increased by 1.1% to RMB640.7 million (US$93.3 million) in the third quarter of 2018, from RMB634.0 million in the previous quarter. Operating costs and expenses as a percentage of net revenues decreased from 66.9% in the second quarter of 2018 to 61.8% in the third quarter of 2018.
Origination and servicing expenses decreased by 5.1% to RMB428.0 million (US$62.3 million) for the third quarter of 2018 from RMB450.9 million in the previous quarter, primarily due to continued cost optimization efforts in anticipation of a subdued industry growth environment. Origination and servicing expenses as a percentage of net revenues decreased to 41.3% in the third quarter of 2018 from 47.5% in the second quarter of 2018.
Sales and marketing expenses increased by 27.1% to RMB77.0 million (US$11.2 million) for the third quarter of 2018 from RMB60.6 million in the previous quarter, which was primarily due to increased marketing activities in the third quarter of 2018.
General and administrative expenses increased by 14.0% to RMB101.4 million (US$14.8 million) for the third quarter of 2018 from RMB88.9 million in the previous quarter. The increase was primarily due to increases in staff salaries, benefits, and share-based compensation expenses. General and administrative expenses for the third quarter of 2018 also included RMB6.9 million (US$1.0 million) IPO-related expenses, compared to RMB5.2 million in the previous quarter.
Research and development expenses increased by 1.9% to RMB34.3 million (US$5.0 million) in the third quarter of 2018 from RMB33.7 million in the previous quarter, primarily due to an increase in staff salaries and benefits, and an increase in the number of the Company's technology personnel.
Share-based compensation expenses were RMB27.8 million (US$4.0 million) in the third quarter of 2018, compared to RMB22.7 million in the previous quarter.
Income tax expenses were RMB79.1 million (US$11.5 million) for the third quarter of 2018, compared to RMB51.4 million in the previous quarter.
Net income was RMB187.3 million (US$27.3 million) for the third quarter of 2018, compared to RMB182.7 million in the previous quarter.
Net income and comprehensive income attributable to ordinary shareholders was RMB184.8 million (US$26.9 million) in the third quarter of 2018, compared to RMB183.0 million in the previous quarter.
Adjusted net income was RMB215.1 million (US$31.3 million) in the third quarter of 2018, compared to RMB205.4 million in the previous quarter.
Selected Third Quarter 2018 Operational Results
The following table sets forth the delinquency rates for all outstanding loans as of September 30, 2018 (excluding (i) loans that were charged off and (ii) loan products that were discontinued[3]):
Delinquent for |
|||||
1-30 days |
31-60 days |
61-90 days |
Over 90 |
Total |
|
As of June 30, 2018 |
0.60% |
0.28% |
0.18% |
1.58% |
2.64% |
As of September 30, 2018 |
0.75% |
0.29% |
0.58% |
1.48% |
3.10% |
The following table sets forth the delinquency rates for all outstanding loans as of September 30, 2018 (including loan products that were discontinued):
Delinquent for |
|||||
1-30 days |
31-60 days |
61-90 days |
Over 90 days |
Total |
|
As of June 30, 2018 |
0.80% |
0.36% |
0.25% |
1.91% |
3.32% |
As of September 30, 2018 |
0.94% |
0.58% |
0.88% |
2.18% |
4.57% |
The following chart displays the M3+ Delinquency Rates by Vintage[4] for all continuing loans facilitated through the Company's online marketplace:
Please click here to view our vintage curve:
https://photos.prnasia.com/prnh/20181211/2323067-1
Initial Public Offering
On November 19, 2018, the Company completed its initial public offering of 4,500,000 American depositary shares ("ADSs") at a price of US$10.00 per ADS for a total offering size of approximately US$45.0 million, assuming the underwriters do not exercise their over-allotment option. Each ADS represents one Class A ordinary share of the Company.
After the initial public offering, the Company has 69,990,750 ordinary shares outstanding, comprised of 34,919,350 Class A ordinary shares and 35,071,400 Class B ordinary shares, assuming the underwriters do not exercise their over-allotment option.
The Company will provide updates on the exercise of underwriters' over-allotment option in the next earnings release.
Conference Call
The Company's management will host an earnings conference call at 7 AM U.S. Eastern Time on December 11, 2018 (8 PM Beijing/Hong Kong time on December 11, 2018).
Dial-in details for the earnings conference call are as follows:
United States: |
1-888-346-8982 |
|
International: |
1-412-902-4272 |
|
Hong Kong: |
800-905945 |
|
China: |
4001-201203 |
Participants should dial-in at least 5 minutes before the scheduled start time and ask to be connected to the call for "Weidai".
A replay of the conference call will be accessible approximately two hours after the conclusion of the live call until December 18, 2018, by dialing the following telephone numbers:
United States: |
1-877-344-7529 |
|
International: |
1-412-317-0088 |
|
Replay Passcode: |
10126932 |
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.
[1] Adjusted net income, a non-GAAP financial measure, is defined as net income before share-based compensation expenses. |
[2] "Take rate" is defined as dividing net revenue of a certain period by the period end loan balance. |
[3] Loan products that were discontinued as of September 30, 2018 include home equity loans, certain types of consumption loans and unsecured auto-financing loans offered to those who have taken out auto-financing loans from certain commercial banks. |
[4] "M3+ Delinquency Rate by Vintage" is defined as the total balance of outstanding principal of a vintage for which any payment of principal or interest is over 90 calendar days past due as of a particular date (adjusted to reflect total amount of past due payments for principal and interest that have been subsequently collected), divided by the total initial principal in such vintage. |
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 RMB6.8680 to US$1.00, the noon buying rate on September 28, 2018 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: [email protected]
In US:
Christensen
Ms. Linda Bergkamp
Tel: +1-480-614-3004
E-mail: [email protected]
WEIDAI LTD. |
|||
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
(All amounts in thousands, except share data, or otherwise noted) |
|||
As of December 31, |
As of September 30, |
||
2017 |
2018 |
||
RMB |
RMB |
US$ |
|
(in thousands) |
|||
ASSETS Current assets: |
|||
Cash and cash equivalents |
1,765,572 |
1,703,630 |
248,053 |
Restricted cash |
1,092,921 |
1,072,591 |
156,172 |
Loans and advances, net |
1,938,492 |
1,719,854 |
250,416 |
Short-term investments |
8,500 |
57,600 |
8,387 |
Prepaid expenses and other assets |
433,597 |
626,576 |
91,231 |
Amounts due from related parties |
9,168 |
13,717 |
1,997 |
Total current assets |
5,248,250 |
5,193,968 |
756,256 |
Non-current assets: |
|||
Restricted cash |
4,000 |
9,000 |
1,310 |
Long-term investments |
359,333 |
13,333 |
1,941 |
Loans and advances, net |
390,171 |
480,526 |
69,966 |
Prepaid expenses and other assets |
8,048 |
4,835 |
704 |
Property, equipment and software, net |
99,433 |
99,686 |
14,515 |
Goodwill |
- |
5,812 |
846 |
Deferred tax assets |
158,566 |
217,940 |
31,733 |
Total non-current assets |
1,019,551 |
831,132 |
121,015 |
Total assets |
6,267,801 |
6,025,100 |
877,271 |
LIABILITIES, MEZZANINE EQUITY AND |
|||
Current liabilities (including current liabilities of |
|||
Short-term borrowings |
200,000 |
- |
- |
Payable to institutional funding partners and |
1,770,681 |
1,318,416 |
191,965 |
Current account with online investors and |
1,883,446 |
1,838,635 |
267,710 |
Income tax payable |
243,338 |
95,675 |
13,931 |
Accrued expenses and other liabilities |
461,295 |
440,642 |
64,159 |
Amounts due to related parties |
62,900 |
19,883 |
2,895 |
Deferred revenue |
12,330 |
10,600 |
1,543 |
Total current liabilities |
4,633,990 |
3,723,851 |
542,203 |
Non-current liabilities (including non-current |
|||
Payable to institutional funding partners and |
416,118 |
515,624 |
75,077 |
Deferred revenue |
887 |
9,830 |
1,431 |
Other non-current liabilities |
40,719 |
81,931 |
11,929 |
Total non-current liabilities. |
457,724 |
607,385 |
88,437 |
Total liabilities |
5,091,714 |
4,331,236 |
630,640 |
Mezzanine equity: |
|||
Series A preferred shares (par value of |
18,856 |
- |
- |
Series A+ preferred shares (par value of |
3,771 |
3,771 |
549 |
Series B preferred shares (par value of |
6,283 |
6,283 |
915 |
Series C preferred shares (par value of |
360,000 |
240,000 |
34,945 |
Total mezzanine equity |
388,910 |
250,054 |
36,409 |
Shareholders' equity |
|||
Ordinary shares (par value of US$0.000002 per |
1 |
1 |
- |
Series A preferred shares (par value of |
- |
18,856 |
2,745 |
Additional paid-in capital |
468,352 |
485,962 |
70,757 |
Retained earnings |
318,824 |
931,769 |
135,668 |
Total Weidai Ltd. shareholders' equity |
787,177 |
1,436,588 |
209,170 |
Noncontrolling interests |
- |
7,222 |
1,052 |
Total shareholders' equity |
787,177 |
1,443,810 |
210,222 |
TOTAL LIABILITIES, MEZZANINE |
6,267,801 |
6,025,100 |
877,271 |
Weidai Ltd. |
||||
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE |
||||
INCOME |
||||
(All amounts in thousands, except share data, or otherwise noted) |
||||
Three Months Ended September |
Nine Months Ended |
|||
2018 |
2018 |
|||
RMB |
US$ |
RMB |
US$ |
|
(in thousands, except for share, per share and per ADS data) |
||||
Net revenues: |
||||
Loan facilitation service fees |
844,467 |
122,957 |
2,310,986 |
336,486 |
Post facilitation service fees |
92,487 |
13,466 |
257,878 |
37,548 |
Other revenues |
35,770 |
5,208 |
140,818 |
20,503 |
Financing income |
105,979 |
15,431 |
340,586 |
49,590 |
Less: Funding costs |
(37,076) |
(5,398) |
(115,278) |
(16,785) |
Net financing income |
68,903 |
10,033 |
225,308 |
32,805 |
Business related taxes and surcharges |
(4,937) |
(719) |
(15,030) |
(2,188) |
Total net revenues |
1,036,690 |
150,945 |
2,919,960 |
425,154 |
Provision for loan losses |
(186,083) |
(27,094) |
(424,941) |
(61,873) |
Net revenues after provision for |
850,607 |
123,851 |
2,495,019 |
363,281 |
Operating costs and expenses: |
||||
Origination and servicing expenses |
(428,025) |
(62,322) |
(1,344,185) |
(195,717) |
Sales and marketing expenses |
(76,972) |
(11,207) |
(181,966) |
(26,495) |
General and administrative expenses |
(101,361) |
(14,758) |
(266,509) |
(38,804) |
Research and development expenses |
(34,333) |
(4,999) |
(101,547) |
(14,786) |
Total operation costs and expenses |
(640,691) |
(93,286) |
(1,894,207) |
(275,802) |
Income from operations |
209,916 |
30,565 |
600,812 |
87,479 |
Interest income, net |
18,656 |
2,716 |
45,544 |
6,631 |
Government subsidies |
37,019 |
5,390 |
37,924 |
5,522 |
Other income/(expenses), net |
821 |
120 |
(8,503) |
(1,238) |
Net income before income taxes |
266,412 |
38,791 |
675,777 |
98,394 |
Income tax expenses |
(79,111) |
(11,519) |
(181,125) |
(26,372) |
Net income |
187,301 |
27,272 |
494,652 |
72,022 |
Net income attributable to |
(2,452) |
(357) |
(1,707) |
(249) |
Net income and comprehensive |
184,849 |
26,915 |
492,945 |
71,773 |
Reversal of accretion on Series C |
- |
- |
120,000 |
17,472 |
Net income and comprehensive |
184,849 |
26,915 |
612,945 |
89,245 |
Earnings per share: |
||||
Basic |
2.82 |
0.41 |
9.36 |
1.36 |
Diluted |
2.82 |
0.41 |
7.53 |
1.10 |
Shares used in earnings per share |
||||
Basic |
48,392,050 |
48,392,050 |
48,392,050 |
48,392,050 |
Diluted |
65,490,750 |
65,490,750 |
60,405,015 |
60,405,015 |
Weidai Ltd. |
||||
UNAUDITED Reconciliation of GAAP And Non-GAAP Results |
||||
(All amounts in thousands, except share data, or otherwise noted) |
||||
Three Months Ended September |
Nine Months Ended |
|||
2018 |
2018 |
|||
RMB |
US$ |
RMB |
US$ |
|
(in thousands, except for share, per share and per ADS data) |
||||
Net income |
187,301 |
27,272 |
494,652 |
72,022 |
Add: |
||||
Share-based compensation expenses |
27,760 |
4,042 |
83,355 |
12,137 |
Adjusted net income. |
215,061 |
31,314 |
578,007 |
84,159 |
SOURCE Weidai Ltd.
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