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PR Newswire

Ericsson Reports Second Quarter Results 2020

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STOCKHOLM, July 17, 2020 —

Second quarter highlights           

  • Sales were SEK 55.6 (54.8) b. Sales adjusted for comparable units and currency were flat YoY.           
  • Gross margin excluding restructuring charges improved to 38.2% (36.7%), including the earlier communicated inventory write-down related to Mainland China (SEK -0.9 b., which equals to -1.6 percentage points).           
  • Operating income excluding restructuring charges improved to SEK 4.5 b. (8.2% operating margin) from SEK 3.9 b. (7.0% operating margin) driven by improvements in segment Digital Services.            
  • Networks sales[1] increased by 4% YoY. Networks operating margin excluding restructuring charges  was 14.1% (15.0%) impacted by strategic contracts and the inventory write-down, partly compensated by operational leverage and a favorable business mix.            
  • Digital Services operating income excluding restructuring charges was SEK -0.7 (-1.3) b. Gross margin improved driven mainly by higher software sales while sales1 declined by -5%.            
  • Net income was SEK 2.6 (1.8) b.            
  • Free cash flow before M&A was SEK 3.2 (1.6) b. Net cash June 30, 2020, was SEK 37.5 (33.8) b.           
  • The Covid-19 pandemic had a limited impact on operating income and cash flow in the quarter.

1 Adjusted for comparable units and currency.

Planning assumptions highlights (please see the quarterly report for complete planning assumptions)           

  • With current visibility Group financial targets for 2020 and 2022 are maintained.           
  • R&D investments in Digital Services are accelerated to capture additional business opportunities. In combination with lower sales, this will likely cause a delay of some quarters in reaching the 2020 financial target. 2022 operating margin target of 10-12% remains firm.

                                   

                                   

SEK b.

                                   

Q2
2020

                                   

Q2
2019

                                   

YoY
change

                                   

Q1
2020

                                   

QoQ
change

                                   

Jan-Jun
2020

                                   

Jan-Jun
2019

                                   

 

YoY
change                       

                                   

Net sales

 

55.6

 

54.8

 

1%

 

49.8

 

12%

 

105.3

 

103.7

 

 

2%

Sales growth adj. for comparable units and currency                        

Gross margin 

–

37.6%

–

36.6%

0%

–

 

39.8%

 

–

 

38.6%

 

37.5%

-1%

–

Operating income                            

Operating margin 

3.9

6.9%

3.7

6.8%

3%

–

4.3

8.7%

-11%

–

8.2

7.7%

8.6

8.3%

-6%

–

                                   

Net income 

 

2.6

 

1.8

 

40%

 

2.3

 

13%

 

4.9

 

4.3

 

14%

                                   


Measures excl. restructuring charges and other items affecting comparability1

                                   

Gross margin excluding restructuring charges 

 

38.2%

 

36.7%

 

–

 

40.4%

 

–

 

39.3%

 

37.5%

 

–

                                   

Operating income excl. restr. charges & items affecting comparability in 20192 

 

4.5

 

3.9

 

18%

 

4.6

 

-2%

 

9.1

 

7.4

 

 

24%

                                   

Operating margin excl. restr. charges & items affecting comparability in 20192 

 

8.2%

 

7.0%

 

–

 

9.3%

 

–

 

8.7%

 

7.1%

 

–

                                   

Free cash flow before M&A 

 

3.2

 

1.6

 

102%

 

2.3

 

40%

 

5.6

 

5.1

 

10%

                                   

Net cash, end of period 

 

37.5

 

33.8

 

11%

 

38.4

 

-2%

 

37.5

 

33.8

 

11%

1 Non-IFRS financial measures are reconciled to the most directly reconcilable line items in the financial statements at the end of this report.

2 Excludes restructuring charges in all periods. No other adjustments made in 2020. Jan-Jun 2019 excludes a capital gain related to the divestment of 51% of MediaKind (SEK 0.7 b.), divestment of certain assets in Red Bee Media (SEK 0.1 b.) and a reversal of an earlier provision for impairment of trade receivables following customer payment (SEK 0.7 b.).

Comments from Borje Ekholm, President and CEO of Ericsson (NASDAQ:ERIC)

The human toll caused by Covid-19, directly and indirectly through a weak economy, is increasingly clear. We continue to put safety of our people as first priority, and more than 80% of our employees are currently working from home. Despite the difficult environment we delivered a solid result. Q2 organic1 sales were flat and gross margin[2] improved to 38.2% (36.7%) YoY, including negative effects from strategic contracts. Free cash flow before M&A improved to SEK 3.2 (1.6) b. While the effects of Covid-19 create uncertainties, with current visibility we maintain the full-year targets for the Group.

Networks grew by 4% organically1 and the gross margin[2] was 40.5% (41.4%), absorbing a larger share of strategic contracts including 5G volumes in Mainland China where we also took an inventory write-down. The strengthened market position in Mainland China is strategically important as this market is expected to be a driver of critical future requirements and provide us with important scale. The Chinese 5G contracts are expected to be profitable over the life cycle, but had a negative contribution to gross margin in Q2.  

Investments in R&D have established us as a leader in 5G, with proven performance and cost of ownership benefits for our customers. We have continued to increase our market share in several markets by leveraging our competitive product portfolio. Profitability in earlier awarded strategic contracts has improved according to plan. We consider strategic contracts to be a natural part of the business and we will stop our forward looking commentary unless there is an extraordinary impact.  

Digital Services continues to execute on its turnaround plan with continuous improvements in the underlying business, and a Q2 gross margin2 reaching 43.6% (37.1%), supported by increased software sales. Sales is being impacted by the declining legacy portfolio and Covid-19-related market uncertainty and we expect this negative impact to continue throughout the year. There is however a strong demand for our cloud-native and 5G portfolio, and we have recorded several important tier 1 customer wins in 5G Core that will generate revenues in 2021 and beyond. Encouraged by the success of our offering, we have decided to accelerate R&D investments. These investments have a positive long-term value but will result in increased R&D costs. We are for this reason, in combination with the lower sales, likely to see a delay of some quarters in reaching the 2020 target of low single-digit margin for Digital Services, however, we are staying firm on our 2022 operating margin2 target of 10-12%.

Our patent licensing business continues to perform well due to our strong IPR portfolio. Licensing agreements are often multi-year and term-based and renewals normally require negotiations, particularly in conjunction with introducing new standards such as 5G. Next year, certain agreements are up for renewal and royalty payments can be temporarily affected. The inclusion of 5G patents is expected to strengthen our IPR business further. 

At Ericsson, we are committed to conducting business responsibly and with integrity. We continue our efforts to strengthen and improve our Ethics and Compliance program. In the quarter, the three-year term of the monitorship under the resolution with the U.S. authorities started. We look forward to working together with the independent compliance monitor and to benefit from his extensive experience. We fully believe this will help us reach our ambitions.

As we prepare to exit the crisis caused by Covid-19, there is a need to restart economies and make strategic, forward looking investments which we suggest must include the future digital infrastructure. We see many regions around the world increasing investments in this space and as a European company we are concerned that Europe will fall behind. As critical national infrastructure, 5G will be a key determinant for long-term competitiveness of the general economy, and act as a stimulant to accelerate economic growth, attract future investments and speed up technology innovation. I believe Europe must prioritize actions to incentivize investments in the digital infrastructure, to include lowering the cost and speeding up the availability of spectrum.

We are ready to deliver on the promises of 5G, based on our strong 5G portfolio and a resilient balance sheet. We remain positive on the longer-term outlook. Some customers are accelerating their investments while others are temporarily cautious. With current visibility we maintain the Group targets for 2020 and 2022.  

Stay healthy and well.

Borje Ekholm

President and CEO
 

1 Sales adjusted for comparable units and currency
2 Excluding restructuring charges

NOTES TO EDITORS

You find the complete report with tables in the attached PDF or by following this link https://www.ericsson.com/assets/local/investors/documents/financial-reports-and-filings/interim-reports-archive/2020/6month20-en.pdf or on www.ericsson.com/investors

Conference call for analysts, investors and journalists

President and CEO Borje Ekholm and CFO Carl Mellander will comment on the report and take questions. The conference call will begin at 9:00 AM CEST (8:00 AM BST London, 3:00 AM EDT New York).

To join the conference call, please phone one of the following numbers:

Sweden: +46 (0)8 566 426 51 (Toll-free Sweden: 0200 883 685)

International/UK: +44 (0)333 300 0804 (Toll-free UK: 0800 358 9473)

US: +1 631 913 1422 (Toll-free US: +1 855 85 70686)

PIN code: 72249899#

Please call in at least 15 minutes before the conference call starts.

A live audio webcast of the conference call will be available at www.ericsson.com/investors and https://www.ericsson.com/en/newsroom

A replay of the conference call will be available from about one hour after the conference call has ended until July 24, 2020.

Sweden replay number: +46 (0)8 519 993 85

International replay number: +44 (0)333 300 0819

US replay number: +1 (866) 931 1566

PIN code: 301328384# 

FOR FURTHER INFORMATION, PLEASE CONTACT

Contact person

Peter Nyquist, Head of Investor Relations
Phone: +46 10 714 64 99
E-mail: peter.nyquist@ericsson.com

Additional contacts

Stella Medlicott, Senior Vice President, Marketing and Corporate Relations
Phone: +46 10 713 65 39
E-mail: media.relations@ericsson.com

Investors

Lena Haggblom, Director, Investor Relations
Phone:  +46 10 713 27 78
E-mail:  lena.haggblom@ericsson.com

Stefan Jelvin, Director, Investor Relations
Phone: +46 10 714 20 39
E-mail: stefan.jelvin@ericsson.com

Rikard Tunedal, Director, Investor Relations
Phone: +46 10 714 54 00
E-mail: rikard.tunedal@ericsson.com

Media

Peter Olofsson, Head of Corporate Communications
Phone: +46 10 719 18 80
E-mail: media.relations@ericsson.com

Corporate Communications
Phone: +46 10 719 69 92
E-mail: media.relations@ericsson.com

This is information that Telefonaktiebolaget LM Ericsson is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 07:00 CEST on July 17, 2020.

This information was brought to you by Cision http://news.cision.com

https://news.cision.com/ericsson/r/ericsson-reports-second-quarter-results-2020,c3155629

The following files are available for download:

https://mb.cision.com/Main/15448/3155629/1280599.pdf

Ericsson second quarter report 2020
PR Newswire

Cyient reports PAT at INR 814 Mn for the First Quarter FY 21; growth of 8.0% QoQ

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HYDERABAD, India, July 17, 2020 — Cyient (Estd: 1991, NSE: CYIENT), a global engineering and technology solutions company, today reported its consolidated financial results for the First quarter (Q1) of FY 2021 ending June 30, 2020.

Photo – https://mma.prnewswire.com/media/1215812/Cyient_Krishna_Bodanapu.jpg

Financial Highlights

–      Consolidated revenue at $130.6 Mn (INR 9,917 Mn); degrowth of 12.5% QoQ (in $ terms) and de-growth of 16.6% YoY (in $ terms) and degrowth of 7.6% QoQ (in INR terms) and de-growth of 8.9% YoY (in INR terms)

–      Services revenue at $112.2 Mn; de-growth of 15.2% QoQ (-14.3% in CC) and de-growth of 18.6% YoY

–      DLM revenue at $18.4 Mn; growth of 8.5% QoQ, and de-growth of 1.4% YoY

–      Free cash flow to EBITDA conversion at 138.1%

–      EBIT margin for services at 6.7%, down 283 bps QoQ

–      EBIT margin for DLM at -4.6%, down 410 bps QoQ

–      Profit After Tax at INR 814 Mn for the quarter; growth of 8.0% QoQ

Business Highlights

  • Update on deal wins – Hitachi Rail:
    • Signed an agreement with Hitachi Rail to deliver project engineering services and accelerate the evolution of its signalling technology
    • Cyient will develop and operate a Central Delivery Centre for Hitachi Rail in India, and a Regional Centre in the US
    • Will be responsible for delivering engineering services for Hitachi’s global signalling projects that use proprietary interlocking platforms
  • Update on collaboration with Microsoft
    • Cyient loT Edge Gateway 5400, the flagship product in the company’s family of loT gateways, is Microsoft Azure Certified for loT
    • Cyient’s loT Edge Gateway 5400 provides diverse connectivity and communication protocol options, advanced data processing, and edge analytics capabilities for remote asset monitoring and predictive maintenance solutions
  • Diversifying our customer base
    • We have added 25 new customers in Q1 FY21
  • Commissioning of the Hyderabad factory
    • The new DLM factory in Hyderabad has been commissioned. This is one of the most advanced electronics manufacturing facilities in India, underpinned by the latest technologies in factory automation, Industry 4.0 and supply chain management
    • Strategic advantage to be located in a manufacturing hub in terms of proximity to probable customers, managing supply chains and co-ordination with the design teams

Message from the Management 
Commenting on the results, Mr. Krishna Bodanapu, Managing Director and Chief Executive Officer, said "Q1 FY21 results were better than our expectations, where we recorded a revenue of $130.6 Mn which was lower by 11.6% QoQ and 15.1% YoY in constant currency.  Services business was lower by 14.3 % QoQ in constant currency. The DLM business grew by 8.5% QoQ. We expect traction from top clients to return post Q2. The EBIT margin is lower by 328bps QoQ mainly due to lower business volume which was somewhat offset by lower SG&A spend. We generated Free Cash Flow of INR 2,163 Mn which was higher by 101% QoQ.

This quarter we had some significant wins in both new business and existing clients. This will help us strengthen our revenue outlook in the coming quarters. This quarter we also made significant investments in strengthening our business through strategic partnerships and alliances. We partnered with Microsoft for industry 4.0 offerings. The partnership will allow us take IoT solutions faster to market with hardware and software that has been pre-tested and verified to work with Microsoft Azure IoT services. We also signed a partnership with Fore Optics for joint Go to Market on taking asset tracking offering to the market. As part of this partnership Fore Optics brings in its IP in supply chain analytics and Cyient its IP in asset tracking IoT. We further strengthened the management team with the addition of Felice Gray-Kemp as the Global General Counsel and Meenu Bagla as the Chief Marketing Officer. The new DLM factory in Hyderabad has been commissioned and I am happy to say that this is one of the most advanced electronics manufacturing facilities in India, underpinned by the latest technologies in factory automation, Industry 4.0 and supply chain management.

Our Outlook for Q2 is positive and we expect growth to return in all industries except Aerospace, which will de-grow further in Q2. For the year, we expect a de-growth in revenue in double digits. We will also reiterate that H2 margin will be back to the steady state margin of H1 of last year. This will continue to be underpinned by strong free cash flow generation and prudent Capex spend."

Commenting on the results, Mr. Ajay Aggarwal, President & CFO, said, "The revenue for Q1FY21 stood at $130.6 Mn (INR 9,917 Mn) with EBIT of INR 511 Mn and PAT of INR 814 Mn. Our rigor on cash collections, close engagement with customers and initiatives on cash conservation has yielded results with FCF generation of INR 2,163 Mn and FCF to EBITDA conversion of 138.1%.

With significant efforts spent on efficiencies and cost optimisation in the last financial year, our focus on cost reduction and profit improvement continued in Q1 and well set to show results in the coming quarters. We are positive on realising benefits of our sustained initiatives on collections, working capital cycles, payables and discretionary cost control in FY21. 

In the current turbulent times, it is very difficult to predict future with a reasonable certainty. We are cognizant of the dynamic situation we are in, and are working with extreme agility in making decisions and taking corrective actions to manage business scenarios with special focus on cash and costs.

We remain strongly focused on growth, improvement in operating efficiencies and cash generation and thus maximizing the value for our shareholders."

Business performance and outlook

Aerospace & Defense
Aerospace & Defence business unit witnessed a decline of 15.6% QoQ and 21.5% YoY. The services business from commercial aviation clients witnessed significant challenges across geographies. The defence business remained resilient and we expect the traction to continue through the year. The manufacturing business grew driven by new wins and stable defence accounts.

We expect to witness decline in Q2 driven by poor market demand for passenger travel. We are actively engaged with key clients to strengthen our relationship and retain our market share. We expect manufacturing business to witness strong growth through Q2. The digital offerings are seeing momentum in this vertical. We expect the demand to be driven by digital, defence and DLM in the near term.

Communications
Communications business unit witnessed a decline of 10.8% QoQ and growth of 0.6% YoY. The services business witnessed increased demand in key clients driven by demand for increased network bandwidth both from consumer & enterprise segments. Also, 5G rollouts across various geographies are gaining traction. However, closure on major programs, field access and new client acquisition remained a challenge.

We expect strong growth in Q2 driven by growth in key clients. 5G rollouts, wireless and fiber rollout, digital technologies will continue to drive growth through next few quarters.

Transportation
Transportation business unit witnessed a decline of 10.9% QoQ and 23.9% YoY, primarily driven by change in revenue complexion and lower momentum in one of our key clients. 

Our outlook for Q2 continues to remain positive driven by growth in key client accounts and new wins in mobility business. We expect momentum in signaling business to return through the quarter.

E&U
Energy and Utilities business unit witnessed a decline of 19.4% QoQ and 30.0% YoY driven by temporary stoppage in field work for the Utilities business and decline in demand for the manufacturing business.

We expect strong growth in Q2 driven by growth across services. We expect traction in Energy segment to return post Q2

Medtech and Healthcare
Medical technology and Healthcare business unit witnessed a growth of 18.2% QoQ and 32.7% YoY driven by growth in key client in the services business and manufacturing business.

Our outlook for Q2 stands positive driven by growth in key client in the manufacturing business. We expect growth in Covid related equipment’s like IVD and hospital equipment’s to drive growth through the quarter.

SIA (Semiconductor, Semiconductor, IoT and Analytics)
Semiconductor, IoT and Analytics business unit witnessed a growth of 15.6% QoQ and decline of 18.7% YoY. The growth was driven by growth in key clients in semiconductor as well as embedded automotive services. We also completed ASIC IC shipments for a high precision GPS chip leveraging our new test infrastructure in Europe. Asides this, our facilities in Leuven (Belgium) and Duisburg (Germany) will be fully equipped to perform test development for high volume production for complex analog mixed signal ASICs through the year.

We expect growth through Q2 driven by ramp up in new turnkey ASIC projects and IC shipments.

DLM (Design Led manufacturing)
Design Led manufacturing business unit witnessed a growth of 8.4% QoQ and decline of 1.4% YoY driven by growth across Aerospace and Medical segments. Our strong focus on inventory reduction through the quarter resulted in increased cash flow for the business.

We expect strong growth through Q2 driven by key clients in Aerospace & Defence and Medical segment. We will continue to focus on better inventory management and operational excellence to improve our cash position.

About Cyient
Cyient (Estd: 1991, NSE: CYIENT) is a global engineering and technology solutions company.  As a Design, Build, and Maintain partner for leading organizations worldwide, Cyient takes solution ownership across the value chain to help customers focus on their core, innovate, and stay ahead of the curve. The company leverages digital technologies, advanced analytics capabilities, domain knowledge, and technical expertise to solve complex business problems.

Cyient partners with customers to operate as part of their extended team in ways that best suit their organization’s culture and requirements. Cyient’s industry focus includes aerospace and defense, healthcare, telecommunications, rail transportation, semiconductor, geospatial, industrial, and energy.

For more information, please visit www.cyient.com.

Follow news about the company at @Cyient.

Media Relations
Perfect Relations
Vishal Thapa
Mobile: +91 9701834446
Email: vthapa@perfectrelations.com 

Disclaimer

This document contains certain forward-looking statements on our future prospects. Although Cyient believes that expectations contained in these statements are reasonable, their nature involves a number of risks and uncertainties that may lead to different results. These forward-looking statements represent only the current expectations and beliefs, and the company provides no assurance that such expectations will prove correct.

All the references to Cyient’s financial results in this update pertain to the company’s consolidated operations comprising wholly-owned and Step-down subsidiaries Cyient Europe Limited; Cyient Inc.; Cyient GmbH; Cyient Australia Pty Ltd; Cyient Singapore Private Limited; Cyient KK; Cyient Israel India Limited; Cyient Insights Private Limited; Cyient Canada Inc.; Cyient Defense Services Inc.; Certon Software Inc.; Certon Instruments Inc.; B&F Design Inc.; New Technology Precision Machining Co. Inc.; Cyient Insights LLC; Cyient Benelux BV; Cyient Schweiz GmbH; Cyient SRO; AnSem NV; AnSem B.V.; Cyient AB; partly owned subsidiaries Cyient Solutions and Systems Private Limited; Cyient DLM Private Limited; joint venture Infotech HAL Ltd (HAL JV) & associate company Infotech Aerospace Services Inc. (IASI) until 8th December 2017.

The income statement and cash flow provided is in the internal MIS format. MIS format is different from the income statement published as part of the financial results, which is as per the statutory requirement.

 

 

Related Links :

http://www.cyient.com

PR Newswire

ChipMOS REPORTS 10.7% YEAR-OVER-YEAR INCREASE IN 2Q20 REVENUE; JUNE MONTHLY REVENUE INCREASES 9.0% YEAR-OVER-YEAR

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HSINCHU, July 10, 2020 /PRNewswire-FirstCall/ — ChipMOS TECHNOLOGIES INC. (“ChipMOS” or the “Company”) (Taiwan Stock Exchange: 8150 and NASDAQ: IMOS), an industry leading provider of outsourced semiconductor assembly and test services (“OSAT”), today reported its unaudited consolidated revenue for the month of June 2020 and for the second quarter ended June 30, 2020. All U.S. dollar figures cited in this press release are based on the exchange rate of NT$29.44 to US$1.00 as of June 30, 2020.

Revenue for the second quarter of 2020 was NT$5,428.1 million or US$184.4 million, representing an increase of 10.7% from the second quarter of 2019, and a decrease of 2.8% from the first quarter of 2020.

Revenue for the month of June 2020 was NT$1,784.5 million or US$60.6 million, representing an increase of 9.0% from June 2019, and a decrease of 0.3% from May 2020.  

The Company noted this represents a six year record high for its second quarter revenue. ChipMOS continues to benefit from growth in its memory business, led by DRAM and NOR flash demand in support of cloud-based storage services and applications, ongoing 5G network buildouts worldwide, and higher demand from the gaming market and in support of increased work and school from home needs.  Within its DRAM business, commodity DRAM was stronger in the second quarter 2020 than niche DRAM.  DDIC revenue was impacted by continued softness in smartphones and TVs, both of which are positioned for a potential rebound in growth in the second half of 2020 due to rationalized inventory in the supply chain along with an expected demand recovery.

Consolidated Monthly Revenues (Unaudited)
 

June 2020

May 2020

June 2019

MoM Change

YoY Change

Revenues

(NT$ million)

1,784.5

1,789.3

1,636.7

-0.3%

9.0%

Revenues

(US$ million)

60.6

60.8

55.6

-0.3%

9.0%

Consolidated Quarterly Revenues (Unaudited)
 

Second Quarter 2020

First Quarter

2020

Second Quarter 2019

QoQ Change

YoY Change

Revenues

(NT$ million)

5,428.1

5,586.8

4,905.3

-2.8%

10.7%

Revenues

(US$ million)

184.4

189.8

166.6

-2.8%

10.7%

About ChipMOS TECHNOLOGIES INC.:

ChipMOS TECHNOLOGIES INC. (“ChipMOS” or the “Company”) (Taiwan Stock Exchange: 8150 and NASDAQ: IMOS) (https://www.chipmos.com) is an industry leading provider of outsourced semiconductor assembly and test services. With advanced facilities in Hsinchu Science Park, Hsinchu Industrial Park and Southern Taiwan Science Park in Taiwan, ChipMOS provide assembly and test services to a broad range of customers, including leading fabless semiconductor companies, integrated device manufacturers and independent semiconductor foundries. 

Forward-Looking Statements

This press release may contain certain forward-looking statements. These forward-looking statements may be identified by words such as ‘believes,’ ‘expects,’ ‘anticipates,’ ‘projects,’ ‘intends,’ ‘should,’ ‘seeks,’ ‘estimates,’ ‘future’ or similar expressions or by discussion of, among other things, strategy, goals, plans or intentions. These statements may include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Actual results may differ materially in the future from those reflected in forward-looking statements contained in this document, due to various factors, including the potential impact of COVID-19.  Further information regarding these risks, uncertainties and other factors are included in the Company’s most recent Annual Report on Form 20-F filed with the U.S. Securities and Exchange commission (the “SEC”) and in the Company’s other filings with the SEC.

Contacts:

In Taiwan

Jesse Huang

ChipMOS TECHNOLOGIES INC.

+886-6-5052388 ext. 7715

IR@chipmos.com

In the U.S.

David Pasquale

Global IR Partners

+1-914-337-8801

dpasquale@globalirpartners.com

Related Links :

https://www.chipmos.com
PR Newswire

X Financial Reports First Quarter 2020 Unaudited Financial Results

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SHENZHEN, China, June 30, 2020 — X Financial (NYSE: XYF) (the “Company” or “we”), a leading technology-driven personal finance company in China, today announced its unaudited financial results for the first quarter ended March 31, 2020.

First Quarter 2020 Financial Highlights

  • Net revenues decreased by 31.9% to RMB529.0 million (US$74.5 million) from RMB776.4 million in the same period of 2019.
  • Loss from operations was RMB130.0 million (US$18.3 million), compared with income from operations of RMB279.1 million in the same period of 2019.
  • Net loss attributable to X Financial shareholders was RMB196.3 million (US$27.7 million), compared with net income attributable to X Financial shareholders of RMB209.0 million in the same period of 2019.
  • Non-GAAP[1] adjusted net loss attributable to X Financial shareholders was RMB159.9 million (US$22.5 million), compared with non-GAAP adjusted net income attributable to X Financial shareholders of RMB251.2 million in the same period of 2019.
  • Net loss per basic and diluted American depositary share (“ADS”)[2] were RMB1.22 (US$0.17) and RMB1.22 (US$0.17) respectively, compared with net income per basic and diluted American depositary share (“ADS”) of RMB1.36 and RMB1.30, respectively, in the same period of 2019.
  • Non-GAAP adjusted net loss per basic and adjusted diluted ADS were RMB1.00 (US$0.14) and RMB1.00 (US$0.14), respectively, compared with non-GAAP adjusted net income per basic and adjusted diluted ADS of RMB1.64 and RMB1.56, respectively, in the same period of 2019.

First Quarter 2020 Operational Highlights

  • The total loan facilitation amount[3] was RMB6,823 million, representing a decrease of 29.1% from RMB9,629 million in the same period of 2019 and a decrease of 23.2% from RMB8,890 million in the fourth quarter of 2019.
  • The loan facilitation amount of Xiaoying Credit Loan[4] was RMB4,631 million, representing a decrease of 41.6% from RMB7,932 million in the same period of 2019 and a decrease of 25.1% from RMB6,185 million in the fourth quarter of 2019. Xiaoying Credit Loan accounted for 67.9% of the Company’s total loan facilitation amount, compared with 82.4% in the same period of 2019.
  • The total outstanding loan balance[5] as of March 31, 2020 was RMB14,370 million, compared with RMB20,187 million as of March 31, 2019 and RMB17,267 million as of December 31, 2019.
  • The average loan amount per transaction[6] of Xiaoying Term Loan[7] was RMB15,745, representing an increase of 37.7% from RMB11,434 in the same period of 2019 and an increase of 7.8% from RMB14,611 for the fourth quarter of 2019.
  • The average consumption amount per user[8] of Xiaoying Revolving Loan[9] was RMB 8,582, representing an increase of 3.8% from RMB8,268 for the fourth quarter of 2019.
  • The delinquency rates for all outstanding loans that are past due for 31-90 days and 91–180 days as of March 31, 2020 were 6.71% and 7.12%, respectively, compared with 4.05% and 5.11%, respectively, as of December 31, 2019, and 3.56% and 5.21%, respectively, as of March 31, 2019.
  • The number of cumulative borrowers, each of whom made at least one transaction on the Company’s lending platform, as of March 31, 2020 was 5,732,385.
  • Total cumulative registered users reached 42.6 million as of March 31, 2020.
  • Institutional funding accounted for 81.7% of the total loan facilitation amount, compared with 50.2% in the fourth quarter of 2019.
  • The Gross Merchandise Value (“GMV”)[10] of Xiaoying Online Mall[11] was RMB60.8 million, representing a decrease of 62.2% from RMB160.9 million in the fourth quarter of 2019.

Mr. Justin Tang, the Founder, Chief Executive Officer and Chairman of the Company, commented, “Despite challenges created by the Coronavirus Disease (the “COVID-19”) pandemic adversely impacting our operating environment, we made meaningful progress in expanding institutional funding for all new loan products originated on our platform during the quarter. Institutional funding accounted for 81.7% of the loans facilitated through our platform in the first quarter, representing an increase from 50.2% in the previous quarter. We rapidly built upon this with institutional funding which accounts for 100% of funding for the loans facilitated through our platform now.”

“Maintaining full compliance with current regulations and adapting to the ever changing macroeconomic environment have been critical to our success so far. We continued to diversify our institutional funding sources and deepen our relationships with financial partners. Building our platform out to scale and strengthening the confidence our funding partners have in us is an important part of our long-term strategy as we continue to provide the most user-friendly and convenient financial services to borrowers all over China.

“As of March 31, 2020, the total credit lines provided by our institutional partners expanded to RMB58.6 billion from RMB46.7 billion as of December 31, 2019. Given the current uncertainties in the market, this further proves that our asset quality and risk management capabilities continue to be well recognized by our institutional partners despite the impact from the pandemic. We are currently in discussions with a number of our partners about further reducing our funding costs.”

“We continue to adopt a strategic and disciplined approach to risk management and have implemented stricter criteria when assessing borrowers because we believe it is even more important now for the sustainability of our business. An adjustment period is therefore expected and is reflected in the lower number of active borrowers during the quarter. The number of active borrowers this quarter was 428,366, representing a decrease of 29.7% from 609,368 in the fourth quarter of 2019. Evaluating borrowers with stricter criteria is critical to reducing loan default rates at their later stages and strengthening our ability to generate stronger results when the market is expected to rebound during the second half of 2020”.

“In conclusion, there is no doubt that economic disruption from the COVID-19 pandemic will force all businesses that rely on consumption to once again adjust their strategies rapidly. Most importantly, the fundamental drivers underpinning the enormous growth opportunities in China’s personal finance industry have not changed. As we continue to evolve from a pure financial services provider to a more comprehensive business services provider, we are confident that we are well positioned to not just survive these challenging market conditions, but thrive when the market rebounds. We are committed to providing our customers the most user-friendly, convenient and comprehensive financial services, in addition to the best loan solutions on the market.”

Mr. Simon Cheng, President of the Company, added, “Over the past few quarters, we continued to ramp up our technology-driven risk infrastructure and strengthened customer acquisition. This solid foundation allowed us to successfully manage a rise in delinquency rates during the peak of the pandemic and has positioned us to emerge even stronger. The downturn in economic activity created by the pandemic has begun to gradually improve. While restrictions put in place to contain the pandemic continue to ease and life returns to normal, we have seen an improvement in delinquency rates in April 2020. We also saw a significant rebound of both loan facilitation amount and number of active borrowers of Xiaoying Credit Loan in April, which strengthens our confidence in the gradual recovery taking place in China.”

“Overall, the evolving health crisis and growing impact from COVID-19 have been weighing heavily on consumer sentiment in China, which is reflected in the performance of Yaoqianhua and Xiaoying Online Mall during the quarter. In order to control the impact of COVID-19, we have taken a more stringent risk policy. The GMV of Xiaoying Online Mall declined 62.2% from the fourth quarter of 2019 to RMB60.8 million. The number of active users of Yaoqianhua reached around 463,000 as of March 31,2020 as compared to approximately 408,000 as of December 31, 2019. Transaction volumes for Yaoqianhua, our revolving loan product previously known as Xiaoying Wallet, declined slightly to RMB2,192 million from RMB2,204 million last quarter. Yaoqianhua’s outstanding loan balance increased to RMB1,801 million as of March 31, 2020 from RMB1,503 million as of December 31, 2019 and now has an approved cumulative credit line of RMB11 billion with a credit utilization rate of around 28.0% as of March 31, 2020.”

“We believe the pandemic has significantly affected consumer behavior and at the same time created many more new opportunities for us to drive future growth. In addition, China’s central and local governments have recently begun rolling out a series of policies to guide businesses as they resume production and jump-start domestic consumption once again. Driven by supportive government policies in place and with consumer sentiment steadily recovering, we anticipate a strong but gradual recovery in Yaoqianhua and Xiaoying Online Mall.”

“We have also hit 100% of our institutional funding target. We remain in active negotiations with funding partners to further decrease funding costs and are in talks with other prospective financial partners which should bring down funding costs even further. At present, we have ample funding sources to meet growing demand as consumer sentiment improves.”  

Mr. Kevin Zhang, Chief Financial Officer of the Company, added, “We delivered solid results in the first quarter relative to guidance as we anticipated that it would be a challenging quarter. The total loan facilitation amount was RMB6,823 million, representing a decline compared with our previously announced guidance.”

“We are taking decisive action to streamline expenses against weaker top-line growth, but remain confident that demand for our highly-customized personal finance solutions will once again strengthen as the recovery from the pandemic unfolds. Our revenue and net income decreased both quarter-over-quarter and year-over-year. Even though the total number of loans facilitated[12] of Xiaoying Term Loan in the first quarter decreased year-over-year, the average loan amount per transaction was RMB15,745, an increase of 37.7% from the same period of 2019 and an increase of 7.8% sequentially. The average consumption amount per user of Xiaoying Revolving Loan also increased 3.8% from the fourth quarter of 2019 to RMB8,582.”

“We are also pleased to see total cumulative registered users on the platform reach 42.6 million as of March 31, 2020, demonstrating the continued value that we are able to offer borrowers, even during such challenging market conditions. The number of active borrowers during the quarter decreased by 29.7%. The delinquency rates for all outstanding loans that are past due for 31-90 days and 91–180 days as of March 31, 2020 were 6.71% and 7.12% respectively, compared with 4.05% and 5.11%, respectively as of December 31, 2019.

“The percentage of loan products we facilitated that were covered by ZhongAn Insurance decreased further to 67.7% during the quarter as we continue to reduce our insurance coverage rate to lower our customer borrowing costs. In its place, we have expanded our partnerships with additional third-party, high-quality financial guarantee companies to strengthen trust in the quality of our underlying assets and risk management systems.”

“We are squarely focused on our mission to create more value for our customers and shareholders. After successfully adapting to the regulatory changes in 2019, we are now navigating the ongoing impact of the health crisis is having on the industry in 2020. While regulatory and capital requirements continue to put pressure on the sustainability of the sector this year, we remain in full compliance with current regulations and are confident in our ability to stand out among our peers by capitalizing on market consolidation and increasing protection for our investors. We will continue to prioritize operational efficiency in driving long-term value for our shareholders.”

[1] The Company uses in this press release the following non-GAAP financial measures: (i) adjusted net income, (ii) adjusted net income attributable to X Financial shareholders, (iii) adjusted net income per basic ADS, and (iv) adjusted net income per diluted ADS, each of which excludes share-based compensation expense. For more information on non-GAAP financial measure, please see the section of “Use of Non-GAAP Financial Measures Statement” and the table captioned “Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release.

[2] Each American depositary share (“ADS”) represents two Class A ordinary shares.

[3] Represents the total amount of loans that X Financial facilitated during the relevant period.

[4] X Financial integrated Xiaoying Card Loan and Xiaoying Preferred Loan into one general product category, Xiaoying Credit Loan, in 2018.

[5] Represents the total amount of loans outstanding for loans X Financial facilitated at the end of the relevant period. Loans that are delinquent for more than 180 days are charged-off and are excluded in the calculation of delinquency rate by balance, except for Xiaoying Housing Loan. Xiaoying Housing Loan is a secured loan product and the Company is entitled to payment by exercising its rights to the collateral. X Financial does not charge off the loans delinquent for more 180 days and such loans are included in the calculation of delinquency rate by balance.

[6] Calculated by dividing the total loan facilitation amount by the number of loans facilitated during the relevant period.

[7] Xiaoying Term Loan refers to the loan’s with fixed repayment periods including Xiaoying Credit Loan, Xiaoying Housing Loan, Internet Channel.

[8] Calculated by dividing the total amount of consumption by the number of active users during the relevant period.

[9] Xiaoying Revolving Loan refers to the loans with revolving credit, including Yaoqianhua which was previously named as Xiaoying Wallet.

[10] Gross Merchandise Volume (“GMV”) refers a total sales value for merchandise sold through Xiaoying Online Mall.

[11] Xiaoying Online Mall was launched in March 2019 and is a product that provides loan installments to our individual customers enabling them to purchase goods online

[12] Represents the total number of transactions of loan facilitation during the relevant period.

First Quarter 2020 Financial Results

Net revenues decreased by 31.9% to RMB529.0 million (US$74.5 million) from RMB776.4 million in the same period of 2019, primarily due to a decrease in transaction volumes as a more stringent risk policy been taken to address COVID-19 impact, which was also partially offset by an increase in the proportion of net revenue generated by the loans facilitated through the Consolidated Trusts which was recorded over the life of the underlying financing using the effective interest method.

Loan facilitation service fees under the direct model decreased by 60.7% to RMB246.0 million (US$34.6 million) from RMB626.4 million in the same period of 2019, primarily due to a decrease in the total transaction volumes under the direct model compared with the same period of 2019.

Loan facilitation service fees under the intermediary model increased by 5.3% to RMB37.0 million (US$5.2 million) from RMB35.2 million in the same period of 2019, primarily due to an increase in the total volume of products offered through the intermediary model as the Company continuing the main strategy to attract more institutional investors throughout 2020.

Post-origination service fees decreased by 12.2% to RMB64.1 million (US$9.0 million) from RMB73.0 million in the same period of 2019, as a result of the cumulative effect of decreased 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 increased by 880.9% to RMB174.6 million (US$24.6 million) from RMB17.8 million in the same period of 2019, which was consistent with the increase of average loan balances held by the Consolidated Trusts due to the establishment of new trusts since the second half of 2019.

Other revenue decreased by 69.7% to RMB7.3 million (US$1.0 million) from RMB24.1 million in the same period of 2019, primarily due to a decrease in penalty fees.

Origination and servicing expenses increased by 26.2% to RMB424.9 million (US$59.9 million) from RMB336.5 million in the same period of 2019, primarily due to the following factors: (i) an increase in customer acquisition costs for the revolving credit product, Yaoqianhua, and (ii) an increase in interest expense related to loans facilitated through the Consolidated Trusts.

General and administrative expenses increased by 24.3% to RMB69.9 million (US$9.9 million) from RMB56.3 million in the same period of 2019, primarily due to an increase in management fee paid to third-party trusts companies compared with the same period of 2019.

Sales and marketing expenses decreased by 61.5% to RMB11.8 million (US$1.7 million) from RMB30.7 million in the same period of 2019, primarily due to a reduction in promotional and advertising expenses since the outbreak of COVID-19. 

Provision for contingent guarantee liabilities was RMB17.9 million (US$2.5 million), primarily attributable to the increase, caused by the pandemic, in estimated default rate of the loans subject to guarantee liabilities facilitated in prior periods.

Provision for accounts receivable and contract assets increased by 23.7% to RMB82.1 million (US$11.6 million) from RMB66.4 million in the same period of 2019, primarily due to a combined effect of (a) the new current expected credit loss model that took into account the deterioration in the economic outlook caused by the COVID-19 pandemic, and (b) an increase in the estimated default rates since the COVID-19 outbreak.

Provision for loans receivable was RMB42.8 million (US$6.0 million), compared with RMB7.5 million in the same period of 2019, primarily due to the increase of expected credit loss for revolving loan product when compared with the first quarter of 2019.

Loss from operation was RMB130.0 million (US$18.3 million), compared with income from operation of RMB279.1 million in the same period of 2019.

Loss before income taxes and gain from equity in affiliates was RMB228.3 million (US$32.2 million), compared with income before income taxes and gain from equity in affiliates of RMB259.0 million in the same period of 2019.

Income tax benefit was RMB31.2 million (US$4.4 million), compared with income tax expense of RMB53.6 million in the same period of 2019, primarily arose from the net operating loss.

Net loss attributable to X Financial shareholders was RMB196.3 million (US$27.7 million), compared with net income attributable to X Financial shareholders of RMB209.0 million in the same period of 2019.

Non-GAAP adjusted net loss attributable to X Financial shareholders was RMB159.9 million (US$22.5 million), compared with non-GAAP adjusted net income attributable to X Financial shareholders of RMB251.2 million in the same period of 2019.

Net loss per basic and diluted ADS were RMB1.22 (US$0.17) and RMB1.22 (US$0.17), respectively, compared with net income per basic and diluted ADS of RMB1.36 and RMB1.30, respectively, in the same period of 2019.

Non-GAAP adjusted net loss per basic and diluted ADS were RMB1.00 (US$0.14) and RMB1.00 (US$0.14), respectively, compared with non-GAAP adjusted net income per basic and diluted ADS of RMB1.64 and RMB1.56, respectively, in the same period of 2019.

Cash and cash equivalents was RMB611.6 million (US$86.2 million) as of March 31, 2020, compared with RMB1,006.0 million as of December 31, 2019.

Business Outlook

As the Company continues to assess the impact of the COVID-19 outbreak and market indicators around the recovery in the first half of 2020, it is anticipated that the Company’s total loan facilitation amount for the second quarter of 2020 will also be negatively impacted and the Company expects a second-quarter loss with drop in revenue. The Company plans to provide a business update in the second quarter 2020 Earnings Release. This forecast reflects the Company’s current and preliminary views, which are subject to change.

Conference Call

X Financial’s management team will host an earnings conference call at 8:00 AM U.S. Eastern Time on Tuesday, June 30, 2020 (8:00 PM Beijing / Hong Kong Time on the same day).

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 July 7, 2020:

United States:

1-877-344-7529

International:

1-412-317-0088

Passcode:

10145375

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 technology-driven personal finance company in China focused on meeting the huge demand for credit from individuals and small-to-medium-sized enterprise owners. The Company’s proprietary big data-driven risk control system, WinSAFE, builds risk profiles of prospective borrowers using a variety data-driven credit assessment methodology to accurately evaluate a borrower’s value, payment capability, payment attitude and overall creditworthiness. X Financial has established a strategic partnership with ZhongAn Online P&C Insurance Co., Ltd. in multiple areas of its business operations to directly complement its cutting-edge risk management and credit assessment capabilities. ZhongAn Online P&C Insurance Co., Ltd. provides credit insurance on X Financial’s investment products which significantly enhances investor confidence and allows the Company to attract a diversified and low-cost funding base from individuals, enterprises and financial institutions to support its growth. X Financial leverages financial technology to provide convenient, efficient, and secure investment services to a wide range of high-quality borrowers and mass affluent investors which complements traditional financial institutions and helps to promote the development of inclusive finance in China.

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 also believe that the use of the non-GAAP financial measures facilitates investors’ assessment of our operating performance.

We use in this press release the following non-GAAP financial measures: (i) adjusted net income, (ii) adjusted net income attributable to X Financial shareholders, (iii) adjusted net income per basic ADS, and (iv) adjusted net income per diluted ADS, each of which excludes share-based compensation expense. These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. 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.

New Accounting Pronouncements

In June 2016, the FASB issued Accounting Standard Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of the Group’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. The Company have adopted the new standard effective January 1, 2020, using a modified retrospective basis under which prior comparative periods are not restated. The impact of the adoption of this guidance on the Group’s consolidated statements of comprehensive income after tax amounts to RMB17.2 million as of January 1, 2020.

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 RMB7.0989 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 March 31, 2020.

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 following: 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.

For more information, please contact:

X Financial
Mr. Kevin Zhang
E-mail: ir@xiaoying.com

Christensen

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

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

X Financial

      

Unaudited Condensed Consolidated Balance Sheets

      
       

(In thousands, except for share and per share data)

As of December 31, 2019

As of March 31, 2020
 

 RMB

RMB

USD

 ASSETS

     

 Cash and cash equivalents

1,005,980

611,598

86,154

 Restricted cash

514,323

964,185

135,822

 Accounts receivable and contract assets, net of
allowance for doubtful accounts

771,154

441,168

62,146

 Loans receivable from Xiaoying Credit Loans and
Revolving Loans, net

289,553

222,356

31,323

 Loans at fair value

2,782,333

2,197,569

309,565

 Prepaid expenses and other current assets

1,226,170

2,013,654

283,658

 Financial guarantee derivative

719,962

498,980

70,290

 Deferred tax assets, net

465,441

520,232

73,283

 Long term investments

292,142

295,630

41,644

 Property and equipment, net

20,139

18,027

2,539

 Intangible assets, net

35,127

34,869

4,912

 Loan receivable from Xiaoying Housing Loans, net

89,536

91,460

12,884

 Other non-current assets

68,772

48,121

6,779

 TOTAL ASSETS

8,280,632

7,957,849

1,120,999
       

 LIABILITIES

     

 Payable to investors at fair value of the Consolidated
Trusts

3,006,349

2,510,839

353,694

 Guarantee liabilities

17,475

32,305

4,551

 Short-term bank borrowings

–

341,495

48,105

 Accrued payroll and welfare

63,649

37,145

5,233

 Other tax payable

58,086

68,675

9,674

 Income tax payable

340,996

321,845

45,337

 Deposit payable to channel cooperators

108,923

58,293

8,212

 Accrued expenses and other liabilities

274,440

339,343

47,803

 Other non-current liabilities

42,300

27,690

3,901

 Deferred tax liabilities

1,309

649

91

 TOTAL LIABILITIES

3,913,527

3,738,279

526,601
       

 Commitments and Contingencies

     

 Equity:

     

 Common shares

201

201

28

 Additional paid-in capital

2,987,363

3,024,054

425,989

 Retained earnings

1,311,194

1,114,853

157,046

 Other comprehensive income

67,101

79,216

11,159

 Total X Financial shareholders’ equity

4,365,859

4,218,324

594,222

 Non-controlling interests

1,246

1,246

176

 TOTAL EQUITY

4,367,105

4,219,570

594,398
       

 TOTAL LIABILITIES AND EQUITY

8,280,632

7,957,849

1,120,999

X Financial

Unaudited Condensed Consolidated Statements of Comprehensive Income
         
 

Three Months Ended March 31,

(In thousands, except for share and per share data)

2019

2020

  

2020
 

RMB

RMB

  

USD

 Net revenues 

        

 Loan facilitation service-Direct Model 

626,382

245,960

  

34,648

 Loan facilitation service-Intermediary Model 

35,162

37,012

  

5,214

 Post-origination service 

73,007

64,113

  

9,031

 Financing income 

17,801

174,617

  

24,598

 Other revenue 

24,066

7,290

  

1,027

 Total net revenue 

776,418

528,992

  

74,518
         

 Operating costs and expenses: 

        

 Origination and servicing 

336,539

424,875

  

59,851

 General and administrative 

56,268

69,929

  

9,851

 Sales and marketing 

30,685

11,813

  

1,664

 Provision for contingent guarantee liabilities

–

17,876

  

2,518

 Provision for accounts receivable and contract assets 

66,404

82,116

  

11,567

 Provision for loans receivable 

7,460

42,831

  

6,033

 Credit losses for other financial assets 

–

9,597

  

1,352

 Total operating costs and expenses 

497,356

659,037

  

92,836
         

 Income (loss) from operations 

279,062

(130,045)

  

(18,318)

 Interest income, net 

763

6,453

  

909

 Foreign exchange gain (loss) 

(873)

(84)

  

(12)

 Change in fair value of financial guarantee derivative 

(52,991)

(77,522)

  

(10,920)

 Fair value adjustments related to Consolidated Trusts 

32,556

(32,352)

  

(4,557)

 Other income (loss), net 

456

5,236

  

738
         

 Income (loss) before income taxes and gain from
equity in affiliates 

258,973

(228,314)

  

(32,160)
         

 Income tax benefit (expense)  

(53,605)

31,153

  

4,388

 Gain from equity in affiliates 

3,796

820

  

116

 Net income (loss) 

209,164

(196,341)

  

(27,656)

 Less: net income (loss) attributable to non-controlling
interests 

200

–

  

–

 Net income (loss) attributable to X Financial
shareholders 

208,964

(196,341)

  

(27,656)
         

Net income (loss)

209,164

(196,341)

  

(27,656)

Other comprehensive income, net of tax of nil:

        

Foreign currency translation adjustments

(18,883)

12,115

  

1,707

Comprehensive income (loss)

190,281

(184,226)

  

(25,949)

Less: comprehensive income (loss) attributable to non
controlling interests

200

–

  

–

Comprehensive income (loss) attributable to X
Financial shareholders

190,081

(184,226)

  

(25,949)
         

 Net income per share—basic 

0.68

(0.61)

  

(0.09)

 Net income per share—diluted  

0.65

(0.61)

  

(0.09)
         

 Net income per ADS—basic 

1.36

(1.22)

  

(0.17)

 Net income per ADS—diluted  

1.30

(1.22)

  

(0.17)
         

 Weighted average number of ordinary shares
outstanding—basic 

306,025,409

320,667,943

  

320,667,943

 Weighted average number of ordinary shares
outstanding—diluted 

322,662,503

326,872,712

  

326,872,712

X Financial

Unaudited Reconciliations of GAAP and Non-GAAP Results
   
 

Three Months Ended March 31,

(In thousands, except for share and per share data)

2019

2020

2020
 

RMB

RMB

USD

GAAP net income (loss)

209,164

(196,341)

(27,656)

Add: Share-based compensation expenses (net of tax of nil)

42,199

36,402

5,128

Non-GAAP adjusted net income (loss)

251,363

(159,939)

(22,528)
       

Net income (loss) attributable to X Financial shareholders

208,964

(196,341)

(27,656)

Add: Share-based compensation expenses (net of tax of nil)

42,199

36,402

5,128

Non-GAAP adjusted net income (loss) attributable to X
Financial shareholders

251,163

(159,939)

(22,528)
       

 Non-GAAP adjusted net income (loss) per share—basic 

0.82

(0.50)

(0.07)

 Non-GAAP adjusted net income (loss) per share—diluted  

0.78

(0.50)

(0.07)
       

 Non-GAAP adjusted net income (loss) per ADS—basic 

1.64

(1.00)

(0.14)

 Non-GAAP adjusted net income (loss) per ADS—diluted  

1.56

(1.00)

(0.14)
       

 Weighted average number of ordinary shares outstanding—basic 

306,025,409

320,667,943

320,667,943

 Weighted average number of ordinary shares outstanding—diluted 

322,662,503

326,872,712

326,872,712

Related Links :

http://www.xiaoyinggroup.com

PR Newswire

58.com Reports First Quarter 2020 Unaudited Financial Results

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BEIJING, June 26, 2020 — 58.com Inc. (NYSE: WUBA) ("58.com" or the "Company"), China’s largest online classifieds marketplace, today reported its unaudited financial results for the first quarter ended March 31, 2020.

First Quarter 2020 Highlights

  • Total revenues were RMB2,560.3 million (US$361.4 million[1]), a 15.5% decrease from RMB3,028.3 million in the same quarter of 2019.
  • Total number of paying business users[2] was approximately 2.7 million in the first quarter of 2020, a 20.7% decrease from the same quarter of 2019.
  • Gross margin was 87.9% compared with 90.2% in the same quarter of 2019.
  • Loss from operations was RMB55.8 million (US$7.9 million), compared with income from operations of RMB281.3 million in the same quarter of 2019.
  • Non-GAAP income from operations[3] was RMB144.0 million (US$20.3 million), a 69.0% decrease from RMB465.1 million in the same quarter of 2019.
  • Net income attributable to 58.com Inc. ordinary shareholders was RMB1,638.6 million (US$231.3 million), a 134.7% increase from RMB698.2 million in the same quarter of 2019. This includes a net gain picked up from 58 Home of RMB2,683.2 million.
  • Non-GAAP net income attributable to 58.com Inc. ordinary shareholders [4] was RMB2,243.6 million (US$316.7 million), a 414.7% increase from RMB435.9 million in the same quarter of 2019. This includes a net gain picked up from 58 Home of RMB2,683.2 million.
  • Basic and diluted earnings per ADS attributable to ordinary shareholders were RMB10.95 (US$1.54) and RMB10.82 (US$1.53), respectively, representing 132.6% and 132.6% increases from RMB4.71 and RMB4.65, respectively, in the same quarter of 2019. One ADS represents two Class A ordinary shares.
  • Non-GAAP basic and diluted earnings per ADS[5] attributable to ordinary shareholders were RMB14.99 (US$2.12) and RMB14.81 (US$2.09), respectively, representing 410.0% and 410.1% increases from RMB2.94 and RMB2.90, respectively, in the same quarter of 2019.

First Quarter 2020 Financial Results

Revenues

Total revenues were RMB2,560.3 million (US$361.4 million), representing a decrease of 15.5% from RMB3,028.3 million in the same quarter of 2019.

Membership revenues were RMB815.6 million (US$115.1 million), a decrease of 16.9% from RMB982.0 million in the same quarter of 2019.

Online marketing services revenues were RMB1,595.4 million (US$225.2 million), a decrease of 17.8% from RMB1,940.9 million in the same quarter of 2019.

The decreases were mainly due to the adverse impact from the outbreak of COVID-19. To control the spread of COVID-19, the PRC government implemented a series of strict measures, including travel restrictions, quarantines, and a temporary shutdown of businesses which resulted in a decrease in activity level among paying business users. In particular, paying business users that require in-person meetings to conduct their business, including those in the secondary housing and rental real estate sector, used auto dealers, local service providers, and recruiters, have been adversely and materially affected by these interruptions and delayed business resumption. The Company’s revenues are generated primarily from these paying business users, most of whom are small and medium-sized local businesses, and the outbreak of COVID-19 and subsequent prevention and control measures have adversely affected their business operations and financial conditions in the first quarter of 2020. As a result, the Company’s revenues during the first quarter of 2020 declined significantly when compared with the same period in 2019.

Cost of Revenues

Cost of revenues was RMB309.3 million (US$43.7 million), an increase of 4.2% from RMB296.9 million in the same quarter of 2019.

The year-over-year increase was primarily driven by increases in the costs associated with "Premium Home Services" (到家精选), enhanced services that focus on partnering with high quality providers to further standardize their service quality and integrate service protection plans while establishing closed-loop transactions through the Company’s platforms, and an increase in the costs of goods sold and services provided on the Zhuan Zhuan platform which were partially offset by a decrease in traffic acquisition cost paid to advertising union partners.

Gross Profit and Gross Margin

Gross profit was RMB2,251.0 million (US$317.7 million), a decrease of 17.6% from RMB2,731.4 million during the same quarter of 2019.

Gross margin was 87.9% in the first quarter of 2020, compared with 90.2% during the same quarter of 2019.

Operating Expenses

Operating expenses were RMB2,306.8 million (US$325.6 million), a decrease of 5.8% from RMB2,450.1 million in the same quarter of 2019.

Sales and marketing expenses in the first quarter of 2020 were RMB1,577.5 million (US$222.7 million), a decrease of 12.0% from RMB1,793.0 million in the same quarter of 2019.

Within sales and marketing expenses, advertising expenses in the first quarter of 2020 were RMB712.2 million (US$100.5 million), a decrease of 19.7% from RMB886.5 million in the same quarter of 2019 as a result of the spread of COVID-19 which caused a decrease in advertising activities.

Non-advertising sales and marketing expenses in the first quarter of 2020 were RMB865.3 million (US$122.1 million), a decrease of 4.5% from RMB906.5 million in the same quarter of 2019.

Non-advertising sales and marketing expenses include salaries and benefits, commissions and share-based compensation expenses for the Company’s sales, sales support, customer service, marketing dealer management personnel, online and offline promotional expenses, and other operating expenses that are associated with sales and marketing activities.

Research and development expenses in the first quarter of 2020 were RMB497.0 million (US$70.1 million), essentially flat with RMB495.0 million in the same quarter of 2019.

General and administrative expenses in the first quarter of 2020 were RMB232.4 million (US$32.8 million), an increase of 43.3% from RMB162.2 million in the same quarter of 2019. The increase was mainly due to the adoption of the current expected credit losses methodology in estimating allowances for credit losses in the first quarter of 2020.

Income/(Loss) from Operations

Loss from operations was RMB55.8 million (US$7.9 million) in the first quarter of 2020, compared with income from operations of RMB281.3 million in the same quarter of 2019.

Operating margin, defined as income/(loss) from operations divided by total revenues, was negative 2.2% in the first quarter of 2020, compared with 9.3% in the same quarter of 2019.

Non-GAAP income from operations was RMB144.0 million (US$20.3 million) in the first quarter of 2020, a decrease of 69.0% from RMB465.1 million in the same quarter of 2019.

Non-GAAP operating margin, defined as non-GAAP income from operations divided by total revenues, was 5.6% in the first quarter of 2020, compared with 15.4% in the same quarter of 2019.

Other Income/(Expenses), net

Net other income in the first quarter of 2020 was RMB1,680.7 million (US$237.2 million), compared with net other income of RMB554.3 million in the same quarter of 2019.

Net other income in the first quarter of 2020 was primarily comprised of a RMB2,654.8 million gain in share of results of equity investees and RMB30.9 million in tax refunds and other government subsidies, offset by RMB1,054.3 million in a net investment loss.

Share of results of equity investees in the first quarter of 2020 was mainly attributed to RMB2,683.2 million net gain pick-up from 58 Home, which was mainly due to the Company’s proportionate share of one-time non-cash gain recognized by 58 Home for its deconsolidation of 58 Daojia Limited, a majority owned subsidiary of 58 Home, which was partially offset by the Company’s proportionate share of net loss attributable to 58 Home’s ordinary shareholders. 58 Home lost its control over 58 Daojia Limited and started to deconsolidate its financial statements when 58 Daojia Limited completed its Series B round of equity financing in February 2020, as certain Series B investors have substantive participating rights in the operational decision making of 58 Daojia Limited.

Net investment loss mainly included RMB683.3 million in impairment losses in long-term investments and RMB446.1 million losses in change in fair value of long-term investments and investments in convertible notes as the market value of certain fair value measured investments suffered downward adjustments in the first quarter of 2020.

There would have been net other expenses of RMB1,002.5 million (US$141.5 million) in the first quarter of 2020 if the RMB2,683.2 million net gain picked up from 58 Home was excluded.

Net Income Attributable to 58.com Inc. Ordinary Shareholders

Net income attributable to 58.com Inc. ordinary shareholders was RMB1,638.6 million (US$231.3 million) in the first quarter of 2020, an increase of 134.7% from RMB698.2 million in the same quarter of 2019. Excluding the RMB2,683.2 million net gain picked up from 58 Home, net loss attributable to 58.com Inc. ordinary shareholders in the first quarter of 2020 was RMB1,044.5 million (US$147.4 million).

Net margin, defined as net income attributable to 58.com Inc. ordinary shareholders divided by total revenues, was 64.0% in the first quarter of 2020, compared with 23.1% in the same quarter of 2019. Excluding the net gain picked up from 58 Home, net margin in the first quarter of 2020 was negative 40.8%.

Non-GAAP net income attributable to 58.com Inc. ordinary shareholders was RMB2,243.6 million (US$316.7 million) in the first quarter of 2020, an increase of 414.7% from RMB435.9 million in the same quarter of 2019. Excluding the net gain picked up from 58 Home, non-GAAP net loss attributable to 58.com Inc. ordinary shareholders in the first quarter of 2020 was RMB439.6 million (US$62.0 million).

Non-GAAP net margin, defined as non-GAAP net income attributable to 58.com Inc. ordinary shareholders divided by total revenues, was 87.6% in the first quarter of 2020, compared with 14.4% in the same quarter of 2019. Excluding the net gain picked up from 58 Home, non-GAAP net margin in the first quarter of 2020 was negative 17.2%.

Basic and Diluted Earnings per ADS

Basic and diluted earnings per ADS attributable to ordinary shareholders in the first quarter of 2020 were RMB10.95 (US$1.54) and RMB10.82 (US$1.53), respectively, representing 132.6% and 132.6% increases from RMB4.71 and RMB4.65, respectively, in the same quarter of 2019.

Non-GAAP basic and diluted earnings per ADS attributable to ordinary shareholders in the first quarter of 2020 were RMB14.99 (US$2.12) and RMB14.81 (US$2.09), respectively, representing 410.0% and 410.1% increases from RMB2.94 and RMB2.90, respectively, in the same quarter of 2019.

Cash Flow

Net cash used in operating activities was RMB379.4 million (US$53.6 million) in the first quarter of 2020, compared to net cash provided by operating activities of RMB564.9 million in the same quarter of 2019.

Cash and Cash Equivalents, Term Deposits, Restricted Cash and Short-term Investments 

As of March 31, 2020, the Company had cash and cash equivalents, term deposits, restricted cash and short-term investments of RMB12,547.3 million (US$1,770.9 million).

Shares Outstanding

As of March 31, 2020, the Company had a total of 299,728,769 ordinary shares (including 254,496,649 Class A and 45,232,120 Class B ordinary shares) issued and outstanding.

Non-GAAP Financial Measures     

To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States, or GAAP, this press release presents non-GAAP income/(loss) from operations, non-GAAP operating margin, non-GAAP net income/(loss) attributable to 58.com Inc. ordinary shareholders, non-GAAP net margin and non-GAAP basic and diluted earnings/(loss) per share and per ADS by excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, change in fair value of long-term investments and investments in convertible notes, share-based compensation expenses included in share of results of equity investees, income tax effects of above GAAP to non-GAAP reconciling items. The Company believes these non-GAAP financial measures are important to help investors understand the Company’s operating and financial performance, compare business trends among different reporting periods on a consistent basis and assess the Company’s core operating results, as they exclude certain expenses/gains that are not expected to result in cash payments/receipts. The use of the above non-GAAP financial measures has certain limitations. Share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, non-cash gain or loss and income tax effects resulting from GAAP to non-GAAP reconciling items have been and will continue to be incurred in the future and are not reflected in the presentation of the non-GAAP financial measures, but should be considered in the overall evaluation of the Company’s results. The Company compensates for these limitations by providing the relevant disclosure of its share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, change in fair value of long-term investments and investments in convertible notes, share-based compensation expenses included in share of results of equity investees, income tax effects of above GAAP to non-GAAP reconciling items, all of which should be considered when evaluating the Company’s performance. These non-GAAP financial measures should be considered in addition to financial measures prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP. Reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP financial measure is set forth at the end of this release.

[1] This press release contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) solely for the convenience of the readers. Unless otherwise specified, all translations of Renminbi amounts into US$ amounts in this press release are made at RMB7.0851 to US$1.00, which was the U.S. dollars middle rate announced by the PRC State Administration of Foreign Exchange on March 31, 2020. The percentages stated in this press release are calculated based on the Renminbi amounts. On June 24, 2020, such exchange rate was RMB7.0555 to US$1.00.

[2] Paying business users refer to users who are identified as business users with unique identity information such as business licenses or personal identification information and who used the Company’s subscription-based membership services or purchased at least one type of online marketing services in a given period. One paying business user can open up several paying user accounts on one or multiple online platforms. The number and the percentage calculation does not include paying business users on Ganji as the Company stopped selling stand-alone Ganji subscription-based membership services in 2018 or earlier in all of its content categories.

[3] Non-GAAP income from operations is defined as income from operations excluding share-based compensation expenses and amortization of intangible assets resulting from business acquisitions. See "Reconciliation of GAAP and Non-GAAP Results" at the end of this press release.

[4] Non-GAAP net income attributable to 58.com Inc. ordinary shareholders is defined as net income attributable to 58.com Inc. ordinary shareholders excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, change in fair value of long-term investments and investments in convertible notes, share-based compensation expenses included in share of results of equity investees, and income tax effects of GAAP to non-GAAP reconciling items. See "Reconciliation of GAAP and Non-GAAP Results" at the end of this press release. 

[5] Non-GAAP basic and diluted earnings per ADS is defined as non-GAAP net income attributable to 58.com Inc. ordinary shareholders divided by weighted average number of basic and diluted ADSs.

About 58.com Inc.

58.com Inc. (NYSE: WUBA) operates China’s largest online classifieds marketplace, as measured by monthly unique visitors on both its www.58.com website and mobile applications. The Company’s online marketplace enables local business users and consumer users to connect, share information and conduct business. 58.com’s broad, in-depth and high quality local information, combined with its easy-to-use website and mobile applications, has made it a trusted marketplace for consumers. 58.com’s strong brand recognition, large and growing user base, merchant network and massive database of local information create a powerful network effect. For more information on 58.com, please visit http://www.58.com.

Safe Harbor Statements

This press release contains forward-looking statements made under the "safe harbor" provisions of 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," "confident" and similar statements. 58.com may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, 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 58.com’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 following: 58.com’s goals and strategies; its future business development, financial condition and results of operations; its ability to retain and grow its user base and network of local merchants for its online marketplace; the growth of, and trends in, the markets for its services in China; the outbreak of COVID-19 or other health epidemics in China or globally; the demand for and market acceptance of its brand and services; competition in its industry in China; its ability to maintain the network infrastructure necessary to operate its website and mobile applications; relevant government policies and regulations relating to the corporate structure, business and industry; and its ability to protect its users’ information and adequately address privacy concerns. 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 current as of the date of the press release, and 58.com does not undertake any obligation to update such information, except as required under applicable law.

For more information, please contact:

58.com Inc.
ir@58.com

Christensen

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

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

 

58.com Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data, unless otherwise)

As of

December 31, 2019

March 31, 2020

March 31, 2020

RMB

RMB

US$

ASSETS

Current assets:

Cash and cash equivalents…………………………………………………………………………………………………………………………………..

5,293,206

4,876,057

688,213

Restricted cash-current……………………………………………………………………………………………………………………………………….

477,099

538,724

76,036

Term deposits……………………………………………………………………………………………………………………………………………………

70,000

70,000

9,880

Short-term investments……………………………………………………………………………………………………………………………………….

8,414,348

7,062,554

996,818

Accounts receivable, net……………………………………………………………………………………………………………………………………..

1,209,251

1,105,326

156,007

Prepayments and other current assets……………………………………………………………………………………………………………………

2,326,920

2,830,994

399,570

Total current assets………………………………………………………………………………………………………………………………………….

17,790,824

16,483,655

2,326,524

Non-current assets:

Property and equipment, net………………………………………………………………………………………………………………………………..

1,305,793

1,285,024

181,369

Intangible assets, net…………………………………………………………………………………………………………………………………………..

886,565

840,901

118,686

Right-of-use assets, net………………………………………………………………………………………………………………………………………

275,459

253,408

35,766

Land use rights, net……………………………………………………………………………………………………………………………………………

3,532

3,512

496

Goodwill………………………………………………………………………………………………………………………………………………………….

15,874,220

15,874,220

2,240,508

Long-term investments……………………………………………………………………………………………………………………………………….

6,086,511

8,249,490

1,164,343

Investments in convertible notes…………………………………………………………………………………………………………………………..

669,715

817,270

115,351

Long-term prepayments and other non-current assets……………………………………………………………………………………………..

469,592

803,450

113,400

Total non-current assets…………………………………………………………………………………………………………………………………..

25,571,387

28,127,275

3,969,919

Total assets……………………………………………………………………………………………………………………………………………………..

43,362,211

44,610,930

6,296,443

LIABILITIES, MEZZANINE EQUITY AND
SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable………………………………………………………………………………………………………………………………………………

1,042,697

1,387,244

195,797

Deferred revenues……………………………………………………………………………………………………………………………………………..

2,154,920

1,691,080

238,681

Customer advances…………………………………………………………………………………………………………………………………………….

1,986,108

1,970,655

278,141

Taxes payable……………………………………………………………………………………………………………………………………………………

698,104

362,025

51,097

Salary and welfare payable………………………………………………………………………………………………………………………………….

753,267

560,843

79,158

Operating lease liabilities, current…………………………………………………………………………………………………………………………

137,310

114,304

16,133

Accrued expenses and other current liabilities………………………………………………………………………………………………………..

1,053,007

1,082,811

152,829

Total current liabilities……………………………………………………………………………………………………………………………………..

7,825,413

7,168,962

1,011,836

Non-current liabilities:

Deferred tax liabilities…………………………………………………………………………………………………………………………………………

389,719

324,514

45,802

Operating lease liabilities, non-current…………………………………………………………………………………………………………………..

138,554

157,195

22,187

Total non-current liabilities………………………………………………………………………………………………………………………………

528,273

481,709

67,989

Total liabilities…………………………………………………………………………………………………………………………………………………

8,353,686

7,650,671

1,079,825

Mezzanine equity:

Mezzanine classified noncontrolling interests…………………………………………………………

3,668,876

3,815,512

538,526

Total mezzanine equity…………………………………………………………………………………………………………………………………….

3,668,876

3,815,512

538,526

Shareholders’ equity:

58.com Inc. shareholders’ equity:

Ordinary shares (US$0.00001 par value, 4,800,000,000 Class A and
    200,000,000 Class B shares authorized, 254,045,293 Class A and
    45,232,120 Class B shares issued and outstanding as of December 31,
    2019 and 254,496,649 Class A and 45,232,120 Class B shares issued
    and outstanding as of March 31, 2020, respectively)

 

 

 

19

 

 

 

19

 

 

 

3

Additional paid-in capital…………………………………………………………………………………………………………………………………….

21,942,829

22,026,581

3,108,860

Retained earnings………………………………………………………………………………………………………………………………………………

8,892,773

10,529,706

1,486,176

Accumulated other comprehensive income…………………………………………………………………………………………………………….

95,903

178,710

25,223

Total 58.com Inc. shareholders’ equity……………………………………………………………………………………………………………..

30,931,524

32,735,016

4,620,262

Noncontrolling interests…………………………………………………………………………………………………………………………………..

408,125

409,731

57,830

Total shareholders’ equity……………………………………………………………………………………………………………………………….

31,339,649

33,144,747

4,678,092

Total liabilities, mezzanine equity and shareholders’ equity

43,362,211

44,610,930

6,296,443

 

58.com Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share, per share and per ADS data, unless otherwise noted)

For the Three Months Ended

March 31,

2019

December 31,

2019

March 31,

2020

March 31,

2020

RMB

RMB

RMB

US$

Revenues:

Membership……………………………………………………………………………..

982,028

1,112,362

815,624

115,118

Online marketing services…………………………………………………………

1,940,900

2,713,807

1,595,421

225,180

E-commerce services………………………………………………………………..

28,023

53,722

8,744

1,234

Other revenues………………………………………………………………………….

77,302

275,643

140,553

19,838

Total revenues……………………………………………………………………………..

3,028,253

4,155,534

2,560,342

361,370

Cost of revenues(1)………………………………………………………………………..

(296,851)

(565,985)

(309,344)

(43,661)

Gross profit………………………………………………………………………………….

2,731,402

3,589,549

2,250,998

317,709

Operating expenses(1):

Sales and marketing expenses(2)……………………………………………….

(1,792,950)

(2,023,502)

(1,577,510)

(222,652)

Research and development expenses……………………………………….

(494,977)

(560,746)

(496,970)

(70,143)

General and administrative expenses……………………………………….

(162,168)

(264,172)

(232,361)

(32,796)

Total operating expenses…………………………………………………………….

(2,450,095)

(2,848,420)

(2,306,841)

(325,591)

Income/(loss) from operations……………………………………………………

281,307

741,129

(55,843)

(7,882)

Other income/(expenses):

Interest income, net…………………………………………………………………..

8,462

27,841

31,783

4,486

Investment income/(loss), net…………………………………………………..

544,570

1,924,195

(1,054,274)

(148,802)

Share of results of equity investees…………………………………………..

(10,571)

9,806

2,654,755

374,695

Foreign currency exchange gain/(loss), net……………………………….

2,949

(8,601)

9,900

1,397

Others, net…………………………………………………………………………………

8,928

134,871

38,488

5,432

Income before tax………………………………………………………………………..

835,645

2,829,241

1,624,809

229,326

Income tax benefit/(expenses)…………………………………………………

(106,109)

(158,122)

75,700

10,684

Net income……………………………………………………………………………………

729,536

2,671,119

1,700,509

240,010

Net loss attributable to noncontrolling interests………………………..

2,314

4,075

4,069

574

Net income attributable to 58.com Inc.………………………………………

731,850

2,675,194

1,704,578

240,584

Deemed dividend to mezzanine classified
noncontrolling interests……………………………………………………………………………………..

(33,700)

 

(65,428)

(65,955)

(9,309)

Net income attributable to 58.com Inc. ordinary
shareholders..

698,150

2,609,766

1,638,623

231,275

Net earnings per ordinary share attributable to
ordinary shareholders – basic……………………………………………………………………….

2.35

8.72

5.47

0.77

Net earnings per ordinary share attributable to
ordinary shareholders – diluted…………………………………………………………………….

2.33

8.64

5.41

0.76

Net earnings per ADS attributable to ordinary
shareholders – basic (1 ADS represents 2 Class A
ordinary shares)……………………………….

4.71

17.45

10.95

1.54

Net earnings per ADS attributable to ordinary
shareholders – diluted (1 ADS represents 2 Class A
ordinary shares)……………………………….

4.65

17.28

10.82

1.53

Weighted average number of ordinary shares used in
computing basic earnings per share………………………………………………………………..

296,690,552

 

 

299,155,358

299,427,404

299,427,404

Weighted average number of ordinary shares used in
computing diluted earnings per share……………………………………………………………..

300,250,567

 

302,001,274

302,932,654

302,932,654

 

Note:

(1)  Share–based compensation expenses were allocated in cost of revenues and operating expenses as follows:

Cost of revenues……………………………………………………………………….

1,833

2,895

3,322

469

Sales and marketing expenses……………………………………………………..

28,520

31,612

29,909

4,221

Research and development expenses……………………………………………

51,220

62,520

65,681

9,270

General and administrative expenses……………………………………………

51,732

61,935

59,567

8,407

(2)  Amortization of intangible assets resulting from business acquisitions were allocated in operating expenses as follows:

Sales and marketing expenses………………………………………………..

42,954

43,087

42,954

6,063

Research and development expenses……………………………………….

11,997

12,015

2,433

343

(3)  Breakdown of sales and marketing expenses was as follows:

Advertising expenses……………………………………………………………

886,470

865,144

712,239

100,526

Non-advertising sales and marketing expenses…………………………

906,480

1,158,358

865,271

122,126

 

58.com Inc.

Reconciliation of GAAP and Non-GAAP Results

(in thousands, except share, ADS, per share and per ADS data, unless otherwise noted)

For the Three Months Ended

March 31,

2019

December 31,

2019

March 31,

2020

March 31,

2020

RMB

RMB

RMB

US$

GAAP income/(loss) from operations…………………………………………

281,307

741,129

(55,843)

(7,882)

Share-based compensation expenses[6]………………………………………

128,875

154,244

154,451

21,799

        Amortization of intangible assets resulting from
        business acquisitions………………………………………………………………………………..

 

54,951

 

55,102

 

45,387

 

6,406

Non-GAAP income from operations…………………………………………..

465,133

950,475

143,995

20,323

GAAP net income attributable to 58.com Inc.…………………………….

698,150

2,609,766

1,638,623

231,275

Share-based compensation expenses………………………………………..

128,875

154,244

154,451

21,799

        Amortization of intangible assets resulting from
        business acquisitions………………………………………………………………………………..

 

54,951

 

55,102

 

45,387

 

6,406

Change in fair value of long-term investments and
investments in convertible notes[7]…………………………………………………………………..

(508,950)

2,258,544

446,081

62,960

        Share-based compensation expenses included in share
        of results of equity investees…………………………………………………………………….

 

9

–

 

–

 

–

        Income tax effects of GAAP to non-GAAP reconciling
        items[8]…..

 

62,878

 

(200,057)

 

(40,949)

 

(5,780)

Non-GAAP net income attributable to 58.com Inc.…………………….

435,913

4,877,599

2,243,593

316,660

GAAP operating margin……………………………………………………………..

9.3%

17.8%

(2.2)%

(2.2)%

    Share-based compensation expenses………………………………………..

4.3%

3.7%

6.0%

6.0%

        Amortization of intangible assets resulting from
        business acquisitions………………………………………………………………………………..

 

1.8%

 

1.4%

 

1.8%

 

1.8%

Non-GAAP operating margin……………………………………………………..

15.4%

22.9%

5.6%

5.6%

GAAP net margin…………………………………………………………………………

23.1%

62.8%

64.0%

64.0%

    Share-based compensation expenses………………………………………..

4.3%

3.7%

6.0%

6.0%

        Amortization of intangible assets resulting from
        business acquisitions………………………………………………………………………………..

1.8%

1.4%

1.8%

1.8%

        Change in fair value of long-term investments and
        investments in convertible notes……………………………………………………………………

(16.8)%

54.4%

17.4%

17.4%

        Share-based compensation expenses included in share
        of results of equity investees…………………………………………………………………….

0.0%

0.0%

0.0%

0.0%

        Income tax effects of GAAP to non-GAAP reconciling
        items……

2.0%

(4.9)%

(1.6)%

(1.6)%

Non-GAAP net margin…………………………………………………………………

14.4%

117.4%

87.6%

87.6%

Weighted average number of ordinary shares used in
computing non-GAAP basic earnings per share………………………..

296,690,552

 

299,155,358

299,427,404

299,427,404

Weighted average number of ordinary shares used in
computing non-GAAP diluted earnings per share……………………..

300,250,567

 

302,001,274

302,932,654

302,932,654

Weighted average number of ADS used in computing
non-GAAP basic earnings per ADS…………………………………………………..

148,345,276

149,577,679

149,713,702

149,713,702

Weighted average number of ADS used in computing
non-GAAP diluted earnings per ADS………………………………………………..

150,125,284

151,000,637

151,466,327

151,466,327

Non-GAAP net earnings per ordinary share
attributable to ordinary shareholders – basic…………………………………………………….

1.47

16.30

7.49

1.06

Non-GAAP net earnings per ordinary share
attributable to ordinary shareholders – diluted………………………………………………….

1.45

16.15

7.41

1.05

Non-GAAP net earnings per ADS attributable to
ordinary shareholders – basic……………………………………………………………………

2.94

32.61

14.99

2.12

Non-GAAP net earnings per ADS attributable to
ordinary shareholders – diluted…………………………………………………………………

2.90

32.30

14.81

2.09

 

[6] Since the third quarter of 2017, certain share-based awards with redemption features granted to the Company’s employees were expected to be settled in cash and were classified as liabilities. The share-based compensation expenses recognized for this type of awards amounted to RMB4.4 million, RMB4.7 million and RMB4.0 million for the first and fourth quarter of 2019 and the first quarter of 2020, respectively, which were excluded from the GAAP to non-GAAP reconciliation accordingly.

[7] The purpose of this reconciliation is to exclude the unrealized gain or loss relating to changes in fair value of long-term investments and investments in convertible notes. The amount of realization of any previously recognized unrealized gain or loss in a given period is also included in this line item so that the non-GAAP net income would only include cumulative realized gain or loss.

[8] This is to exclude the income tax effects related to amortization of intangible assets resulting from business acquisitions and change in fair value of long-term investments and investments in convertible notes. Other GAAP to non-GAAP reconciling items have no income tax effect.

 

Related Links :

http://www.58.com

PR Newswire

Yiren Digital Reports First Quarter 2020 Financial Results

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BEIJING, June 24, 2020 — Yiren Digital Ltd. (NYSE: YRD) (“Yiren Digital” or the “Company”), a leading fintech company in China, today announced its unaudited financial results for the first quarter ended March 31, 2020.

First Quarter 2020 Operational Highlights

Wealth Management—Yiren Wealth

  • Cumulative number of investors served reached 2,218,181 as of March 31, 2020, representing an increase of 0.3% from 2,210,530 as of December 31, 2019 and compared to 2,159,771 as of March 31, 2019.
  • Number of current investors was 220,568 as of March 31, 2020, representing a decrease of 10.5% from 246, 561 as of December 31, 2019.
  • Number of current non-P2P investors was 26,346 as of March 31, 2020, representing an increase of 23.3% from 21,360 as of December 31, 2019 and compared to 19,236 as of March 31, 2019.
  • Total assets under administration (“AUA”) for P2P products on Yiren Wealth was RMB 30,536.4 million (US$ 4,312.6 million) as of March 31, 2020, representing a decrease of 10.9% from RMB 34,264.8 million as of December 31, 2019, and compared to RMB 46,236.7 million as of March 31, 2019. 
  • Total AUA for non-P2P products on Yiren Wealth was RMB 1,713.1 million (US$241.9 million) as of March 31, 2020, representing an increase of 66.8% from RMB 1,026.9 million as of December 31, 2019 and compared to RMB 424.9 million as of March 31, 2019.
  • Sales volume of non-P2P products amounted to RMB 2,163.3 million (US$ 305.5 million) in the first quarter of 2020, representing a decrease of 15.1% from RMB 2,548.4 million in the fourth quarter of 2019 and compared to RMB 328.7 million in the same period of 2019.

Consumer Credit—Yiren Credit

  • Total loan originations in the first quarter of 2020 reached RMB 1.8 billion (US$0.3 billion), representing a decrease of 77.0% from RMB 8.0 billion in the fourth quarter of 2019 and compared to RMB 10.9 billion in the first quarter of 2019.
  • Cumulative number of borrowers served reached 4,810,184 as of March 31, 2020, representing an increase of 2.4% from 4,695,487 as of December 31, 2019 and compared to 4,405,115 as of March 31, 2019.
  • Number of borrowers served in the first quarter of 2020 was 115,420, representing a decrease of 8.1% from 125,622 in the fourth quarter of 2019 and compared to 149,715 in the first quarter of 2019.
  • The percentage of loan volume generated by repeat borrowers was 4.9% in the first quarter of 2020.
  • 51.4% of loan originations were generated online in the first quarter of 2020.
  • Total outstanding principal balance of performing loans reached RMB 42,063.0 million (US$ 5,940.4 million) as of March 31,2020, representing a decrease of 17.8% from RMB 51,157.3 million as of December 31, 2019.

“During this unprecedented time, our core businesses remained stable while we made substantial progress to diversify and enrich our business lines as we continue our business transformation into China’s leading digital financial service platforms for consumers.” said Mr. Ning Tang, Chairman and Chief Executive Officer of Yiren Digital. “We are making good progress in expanding our creditech business with new products and services and through rapidly ramping up institutional funding. Meanwhile, our wealth management has seen strong growth despite the pandemic situation, especially for non-P2P wealth management products and services.

“For credit business, we have rolled out a series of new products to provide a full spectrum of credit services and meet broader needs for mainstream consumers’ daily financing, including small-ticket-shorter-tenor loans, auto loans and SME loans. For the micro and small loans, we launched our products and services partnering with online consumption platforms. To fully leverage our nationwide service network coverage, we have rolled out auto loans targeted at second-handed cars, and the business has shown encouraging early growth momentum.”

“On the wealth management front, non-P2P products are increasingly popular among investors and have seen strong growth. As of March 31, 2020, the total AUA for non-P2P products on Yiren Wealth grew to RMB 1,713.1 million, representing a 66.8% quarter-over-quarter growth and 303.2% year-over-year growth. Particularly we see strong demand of our fund products during the first quarter, with a 56.8% quarter-over-quarter growth of AUA driven by our new product offerings and also customers’ strong demand, we expect this growth trends to continue through the year.”

“Under the challenging operating environment amid the pandemic in the first quarter of 2020, we maintained strong liquidity and profitability,” said Mr. Zhong Bi, Chief Financial Officer of Yiren Digital. “Despite significant business volume drop during the quarter, our strong cost control and operation efficiency efforts have kept our business at a profit and good cash position. Our cash and cash equivalents remained stable at RMB 3.2 billion. Our usable cash maintained at a healthy level at RMB 3.6 billion and we believe we are on solid footing in the dynamic environment.”

“For credit performance and the risk management, overall, early delinquencies increased in the first quarter and reached its peak at the end of March due to the pandemic situation before it quickly declined in April and returned to near pre-pandemic level in May.” said Mr. Michael Ji, Chief Risk Officer of Yiren Digital. “Visible progress has been made in prioritizing our business toward higher-quality customers, which was reflected in risk performance and we are glad to see essential improvement trend in 2019 and we expect a more substantially improved trend in 2020.”

First Quarter 2020 Financial Results

Total amount of loans facilitated in the first quarter of 2020 was RMB 1,839.5 million (US$259.8 million), compared to RMB 10,934.9 million in the same period last year. As of March 31, 2020, the total outstanding principal amount of the performing loans was RMB 42.1 billion (US$5.9 billion), decreased by 17.8% from RMB 51.2 billion as of December 31 2019.

Total net revenue in the first quarter of 2020 was RMB 1,023.7 million (US$144.6 million), compared to RMB 1,980.4 million in the same period last year. Revenue from Yiren Credit reached RMB 607.8 million (US$ 85.8 million), representing a decrease of 58.3% from RMB 1,459.0 million in the first quarter of 2019. Revenue from Yiren Wealth reached RMB 415.9 million (US$58.7 million), representing a decrease of 20.2% from RMB 521.4 million in the first quarter of 2019.

Sales and marketing expenses in the first quarter of 2020 were RMB 616.4 million (US$87.1 million), compared to RMB 1,127.9 million in the same period last year. Sales and marketing expenses in the first quarter of 2020 accounted for 33.5% of the total amount of loans facilitated, as compared to 10.3% in the same period last year mainly due to the decline of loan volume.

Origination and servicing costs in the first quarter of 2020 were RMB 102.9 million (US$14.5 million), compared to RMB 172.1 million in the same period last year. Origination and servicing costs in the first quarter of 2020 accounted for 5.6% of the total amount of loans facilitated, compared to 1.6% in the same period last year due to the decline of loan volume.

General and administrative expenses in the first quarter of 2020 were RMB 149.0 million (US$21.0 million), compared to RMB 257.7 million in the same period last year. General and administrative expenses in the first quarter of 2020 accounted for 14.6% of the total net revenue, compared to 13.0% in the same period last year.

Allowance for contract assets and receivables in the first quarter of 2020 were RMB 143.4 million (US$20.3 million), compared to RMB 191.1 million in the same period last year.

Income tax expense in the first quarter of 2020 was RMB 3.9 million (US$0.6 million).

Net income in the first quarter of 2020 was RMB 19.2 million (US$2.7 million), compared to RMB 369.1 million in the same period last year. 

Adjusted EBITDA (non-GAAP) in the first quarter of 2020 was RMB 29.8 million (US$4.2 million), compared to an adjusted EBITDA of RMB 469.0 million in the same period last year. Adjusted EBITDA margin[1] (non-GAAP) in the first quarter of 2020 was 2.9%, compared to 23.7% in the same period last year.

Basic income per ADS in the first quarter of 2020 was RMB 0.21 (US$0.03), compared to a basic income per ADS of RMB 3.99 in the same period last year.

Diluted income per ADS in the first quarter of 2020 was RMB 0.21 (US$0.03), compared to a diluted income per ADS of RMB 3.96 in the same period last year.

Net cash generated from operating activities in the first quarter of 2020 was RMB 557.8 million (US$78.8 million), compared to net cash used in operating activities of RMB 658.4 million in the same period last year.

Net cash used in investing activities in the first quarter of 2020 was RMB 524.5 million (US$74.1 million), compared to RMB 249.9 million in the same period last year.

As of March 31, 2020, cash and cash equivalents was RMB 3,195.0 million (US$451.2 million), compared to RMB 3,198.1 million as of December 31, 2019. As of March 31, 2020, the balance of held-to-maturity investments was RMB 4.4 million (US$0.6 million), compared to RMB 6.6 million as of December 31, 2019. As of March 31, 2020, the balance of available-for-sale investments was RMB 456.1 million (US$64.4 million), compared to RMB 461.0 million as of December 31, 2019.

Delinquency rates. As of March 31, 2020, the delinquency rates for loans that are past due for 15-29 days, 30-59 days and 60-89 days were 1.6%, 4.1%, and 3.2%, respectively compared to 1.2%, 2.0%, and 1.7%,as of December 31, 2019. 

Cumulative M3+ net charge–off rates. As of March 31, 2020, the cumulative M3+ net charge-off rate for loans originated in 2017 was 16.5%, compared to 16.0% as of December 31, 2019. As of March 31, 2020, the cumulative M3+ net charge-off rate for loans originated in 2018 was 15.8%, compared to 13.8% as of December 31, 2019. As of March 31, 2020, the cumulative M3+ net charge-off rate for loans originated in 2019 was 5.2%, compared to 3.1% as of December 31, 2019.

[1] Adjusted EBITDA margin is a non-GAAP financial measure calculated as adjusted EBITDA divided by total net revenue.

Accounting Policy Change

Effective January 1, 2020, the Company adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This guidance replaces the existing “incurred loss” methodology, and introduces a forward-looking expected loss approach referred to as a current expected credit losses (“CECL”) methodology. Under the incurred loss methodology, credit losses are recognized only when the losses are probable of having been incurred. The CECL methodology requires that the full amount of expected credit losses for the lifetime be recorded at the time the financial asset is originated or acquired, and adjusted for changes in expected lifetime credit losses subsequently, which requires earlier recognition of credit losses.

The CECL methodology is applicable to estimation of credit losses of financial assets measured at amortized cost, primarily including accounts receivable, contract assets, financing receivables and other receivables. As a result, the Company recognized the cumulative effect as a decrease of approximately RMB 26.1 million to the opening balances of accumulated deficit on January 1, 2020.

Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses several non-GAAP financial measures, such as adjusted EBITDA and adjusted EBITDA margin as supplemental measures to review and assess operating performance. We believe these non-GAAP measures provide useful information about our core operating results, enhance the overall understanding of our past performance and prospects and allow for greater visibility with respect to key metrics used by our management in our financial and operational decision-making. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The non-GAAP financial measures have limitations as analytical tools. Other companies, including peer companies in the industry, may calculate these non-GAAP measures differently, which may reduce their usefulness as a comparative measure. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. See “Operating Highlights and Reconciliation of GAAP to Non-GAAP measures” at the end of this press release.

Currency Conversion

This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB 7.0808 to US$1.00, the effective noon buying rate on March 31, 2020, as set forth in the H.10 statistical release of the Federal Reserve Board.

Conference Call

Yiren Digital’s management will host an earnings conference call at 8:00 p.m. U.S. Eastern Time on June 23, 2020 (or 8:00 a.m. Beijing/Hong Kong Time on June 24, 2020).

Participants who wish to join the call should register online in advance of the conference at:

http://apac.directeventreg.com/registration/event/2773237

Please note the Conference ID number of 2773237

Once registration is completed, participants will receive the dial-in information for the conference call, an event passcode, and a unique registrant ID number. 

Participants joining the conference call should dial-in at least 10 minutes before the scheduled start time.

A replay of the conference call may be accessed by phone at the following numbers until July 1, 2020:

International

+61 2-8199-0299

U.S.

+1 646-254-3697

Replay Access Code:

2773237

Additionally, a live and archived webcast of the conference call will be available at ir.yirendai.com.

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. 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 Yiren Digital’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 to, uncertainties as to Yiren Digital’s ability to attract and retain borrowers and investors on its marketplace, its ability to introduce new loan products and platform enhancements, its ability to compete effectively, PRC regulations and policies relating to the peer-to-peer lending service industry in China, general economic conditions in China, and Yiren Digital’s ability to meet the standards necessary to maintain listing of its ADSs on the NYSE or other stock exchange, 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 Yiren Digital’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 Yiren Digital 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.

About Yiren Digital

Yiren Digital Ltd. (NYSE: YRD) is a leading fintech company in China, providing both credit and wealth management services. For its credit business, the Company provides an effective solution to address largely underserved investor and individual borrower demand in China through online and offline channels to efficiently match borrowers with investors and execute loan transactions. Yiren Digital deploys a proprietary risk management system, which enables the Company to effectively assess the creditworthiness of borrowers, appropriately price the risks associated with borrowers, and offer quality loan investment opportunities to investors. Yiren Digital’s marketplace provides borrowers with quick and convenient access to consumer credit at competitive prices and investors with easy and quick access to an alternative asset class with attractive returns. For its wealth management business, the Company targets China’s mass affluent population and strives to provide customized wealth management services, with a combination of long-term and short-term targets as well as different types of investments, ranging from cash and fixed-income assets, to funds and insurance. For more information, please visit ir.Yirendai.com.

Unaudited Condensed Consolidated Statements of Operations

 (in thousands, except for share, per share and per ADS data, and percentages)
 

For the Three Months Ended 
 

March 31, 2019

  

March 31, 2020

  

March 31, 2020
 

RMB

  

RMB

  

USD

Net revenue:

          

Loan facilitation services

1,055,046

  

358,541

  

50,636

Post-origination services

296,279

  

146,520

  

20,693

Account management services

488,340

  

413,166

  

58,350

Others

140,743

  

105,433

  

14,890

Total net revenue

1,980,408

  

1,023,660

  

144,569

Operating costs and expenses:

          

Sales and marketing

1,127,945

  

616,441

  

87,058

Origination and servicing

172,123

  

102,918

  

14,535

General and administrative

257,707

  

149,041

  

21,049

Allowance for contract assets and receivables

191,104

  

143,385

  

20,250

Total operating costs and expenses

1,748,879

  

1,011,785

  

142,892

Other income/(expenses):

          

Interest income, net

23,875

  

25,116

  

3,547

Fair value adjustments related to Consolidated ABFE

34,998

  

(26,020)

  

(3,675)

Others, net

160,223

  

12,184

  

1,721

Total other income/(expenses)

219,096

  

11,280

  

1,593

Income before provision for income taxes

450,625

  

23,155

  

3,270

Share of results of equity investees

(4,957)

  

–

  

–

Income tax expense

76,534

  

3,936

  

556

Net income

369,134

  

19,219

  

2,714
           

Weighted average number of ordinary shares outstanding, basic

185,126,457

  

185,600,961

  

185,600,961

Basic income per share

1.9940

  

0.1036

  

0.0146

Basic income per ADS

3.9880

  

0.2072

  

0.0292
           

Weighted average number of ordinary shares outstanding, diluted

186,578,885

  

186,166,429

  

186,166,429

Diluted income per share

1.9784

  

0.1032

  

0.0146

Diluted income per ADS

3.9568

  

0.2064

  

0.0292
           

Unaudited Condensed Consolidated Cash Flow Data

          

Net cash (used in)/ generated from operating activities

(658,435)

  

557,762

  

78,771

Net cash used in investing activities

(249,931)

  

(524,479)

  

(74,070)

Net cash provided by/ (used in) financing activities

493,389

  

(65,637)

  

(9,270)

Effect of foreign exchange rate changes

(2,196)

  

1,206

  

170

Net decrease in cash, cash equivalents and restricted cash

(417,173)

  

(31,148)

  

(4,399)

Cash, cash equivalents and restricted cash, beginning of period

3,034,484

  

3,269,142

  

461,691

Cash, cash equivalents and restricted cash, end of period

2,617,311

  

3,237,994

  

457,292

Unaudited Condensed Consolidated Balance Sheets

 (in thousands)
 

As of
   

December 31, 2019

  

March 31, 2020

  

March 31, 2020
   

RMB

  

RMB

  

USD
             

        Cash and cash equivalents

  

3,198,086

  

3,194,993

  

451,219

        Restricted cash

  

71,056

  

43,001

  

6,073

        Accounts receivable

  

3,398

  

33,902

  

4,788

        Contract assets, net

  

2,398,685

  

1,873,548

  

264,596

        Contract cost

  

160,003

  

149,917

  

21,172

        Prepaid expenses and other assets

  

1,333,221

  

868,462

  

122,651

        Loans at fair value

  

418,492

  

313,267

  

44,242

        Financing receivables

  

29,612

  

33,381

  

4,714

        Amounts due from related parties

  

988,853

  

1,583,859

  

223,684

        Held-to-maturity investments

  

6,627

  

4,399

  

621

        Available-for-sale investments

  

460,991

  

456,061

  

64,408

        Property, equipment and software, net

  

195,855

  

188,880

  

26,675

        Deferred tax assets

  

45,407

  

42,084

  

5,943

        Right-of-use assets

  

334,134

  

291,028

  

41,101

Total assets

  

9,644,420

  

9,076,782

  

1,281,887

        Accounts payable

  

43,583

  

39,068

  

5,517

        Amounts due to related parties

  

106,645

  

112,034

  

15,822

        Liabilities from quality assurance program and guarantee

  

4,397

  

3,487

  

492

        Deferred revenue

  

358,203

  

254,933

  

36,003

        Accrued expenses and other liabilities

  

2,338,745

  

1,946,205

  

274,858

        Refund liability

  

1,801,535

  

1,760,942

  

248,692

        Deferred tax liabilities

  

218,888

  

216,304

  

30,549

        Lease liabilities

  

282,334

  

259,197

  

36,606

Total liabilities

  

5,154,330

  

4,592,170

  

648,539

        Ordinary shares

  

121

  

121

  

17

        Additional paid-in capital

  

5,038,691

  

5,045,268

  

712,528

        Treasury stock

  

(37,097)

  

(37,097)

  

(5,239)

        Accumulated other comprehensive income

  

21,855

  

18,671

  

2,637

        Accumulated deficit

  

(533,480)

  

(542,351)

  

(76,595)

Total (deficit)/ equity

  

4,490,090

  

4,484,612

  

633,348

Total liabilities and equity

  

9,644,420

  

9,076,782

  

1,281,887

Operating Highlights and Reconciliation of GAAP to Non-GAAP Measures

(in thousands, except for number of  borrowers, number of investors and percentages)
 

For the Three Months Ended 
   

March 31, 2019

  

March 31, 2020

  

March 31, 2020
   

RMB

  

RMB

  

USD

Operating Highlights

            

Amount of p2p investment

  

11,435,588

  

5,203,747

  

734,909

Number of p2p investors

  

200,780

  

78,256

  

78,256

Amount of non-p2p investment

  

328,708

  

2,163,313

  

305,518

Number of non-p2p investors

  

14,022

  

18,809

  

18,809

Amount of loans facilitated

  

10,934,923

  

1,839,454

  

259,781

Number of borrowers

  

149,715

  

115,420

  

115,420

Remaining principal of performing loans

  

63,213,843

  

42,063,039

  

5,940,436
             

Segment Information

            

Wealth management:

            

Revenue

  

521,434

  

415,876

  

58,733

Sales and marketing expenses

  

143,904

  

67,326

  

9,508
             

Consumer credit:

            

Revenue

  

1,458,974

  

607,784

  

85,836

Sales and marketing expenses

  

984,041

  

549,115

  

77,550
             

Reconciliation of Adjusted EBITDA

            

Net income

  

369,134

  

19,219

  

2,714

Interest income, net

  

(23,875)

  

(25,116)

  

(3,547)

Income tax expense

  

76,534

  

3,936

  

556

Depreciation and amortization

  

32,502

  

27,171

  

3,837

Share-based compensation

  

14,699

  

4,541

  

641

Adjusted EBITDA

  

468,994

  

29,751

  

4,201

Adjusted EBITDA margin

  

23.7%

  

2.9%

  

2.9%

Delinquency Rates
   

Delinquent for
   

15-29 days

  

30-59 days

  

60-89 days

All Loans

            

December 31, 2015

0.7%

  

1.2%

  

0.9%

December 31, 2016

0.6%

  

0.9%

  

0.8%

December 31, 2017

0.8%

  

1.0%

  

0.8%

December 31, 2018

1.0%

  

1.8%

  

1.7%

December 31, 2019

1.2%

  

2.0%

  

1.7%

March 31, 2020

  

1.6%

  

4.1%

  

3.2%
             

Online Channels

            

December 31, 2015

0.5%

  

0.8%

  

0.6%

December 31, 2016

0.5%

  

0.9%

  

0.8%

December 31, 2017

1.1%

  

1.1%

  

0.9%

December 31, 2018

1.2%

  

2.3%

  

2.2%

December 31, 2019

1.6%

  

2.9%

  

2.5%

March 31, 2020

  

1.9%

  

5.2%

  

3.8%
             

Offline Channels

            

December 31, 2015

0.7%

  

1.2%

  

1.0%

December 31, 2016

0.6%

  

0.9%

  

0.8%

December 31, 2017

0.6%

  

0.9%

  

0.7%

December 31, 2018

0.9%

  

1.6%

  

1.5%

December 31, 2019

1.0%

  

1.7%

  

1.5%

March 31, 2020

  

1.6%

  

3.7%

  

3.1%

M3+ Net Charge-Off Rate

Loan Issued Period

  

Amount of Loans Facilitated
During the Period

  

Accumulated M3+ Net Charge-Off
as of March 31, 2020

  

Total Net Charge-Off Rate
as of March 31, 2020
   

(in RMB thousands)

  

(in RMB thousands)

    

2015

  

53,143,029

  

4,455,505

  

8.4%

2016

  

53,805,112

  

5,071,489

  

9.4%

2017

  

69,883,293

  

11,506,013

  

16.5%

2018

  

63,176,149

  

9,989,880

  

15.8%

2019

  

39,103,048

  

2,018,636

  

5.2%

M3+ Net Charge-Off Rate

Loan
Issued
Period

  

Month on Book
   

4

7

10

13

16

19

22

25

28

31

34

2015Q1

  

0.8%

2.0%

3.4%

4.7%

5.7%

6.5%

7.1%

7.5%

7.7%

7.8%

7.8%

2015Q2

  

0.8%

2.3%

3.8%

5.2%

6.4%

7.3%

7.9%

8.3%

8.5%

8.7%

8.8%

2015Q3

  

0.4%

1.6%

3.1%

4.4%

5.6%

6.5%

7.1%

7.6%

7.9%

8.1%

8.4%

2015Q4

  

0.4%

1.6%

3.1%

4.4%

5.5%

6.3%

6.9%

7.4%

7.9%

8.3%

8.5%

2016Q1

  

0.3%

1.2%

2.5%

3.6%

4.5%

5.2%

5.8%

6.4%

7.0%

7.4%

7.6%

2016Q2

  

0.4%

1.6%

3.1%

4.3%

5.2%

6.0%

6.8%

7.6%

8.1%

8.4%

8.7%

2016Q3

  

0.3%

1.6%

3.1%

4.3%

5.4%

6.6%

7.8%

8.6%

9.2%

9.5%

9.8%

2016Q4

  

0.2%

1.5%

2.9%

4.4%

5.9%

7.4%

8.4%

9.3%

10.0%

10.4%

10.7%

2017Q1

  

0.3%

1.5%

3.2%

5.1%

7.1%

8.6%

9.8%

10.8%

11.5%

12.0%

12.2%

2017Q2

  

1.1%

2.9%

5.6%

8.4%

10.4%

12.1%

13.5%

14.5%

15.3%

15.8%

  

2017Q3

  

0.3%

2.9%

6.4%

9.1%

11.6%

13.6%

15.0%

16.2%

16.9%

    

2017Q4

  

0.5%

3.9%

7.3%

10.5%

13.2%

15.3%

16.9%

18.0%

      

2018Q1

  

0.4%

3.0%

6.6%

10.1%

12.9%

15.2%

16.9%

        

2018Q2

  

0.5%

3.6%

7.4%

10.8%

13.6%

15.8%

          

2018Q3

  

0.4%

3.0%

6.2%

9.1%

11.7%

            

2018Q4

  

0.3%

2.5%

5.6%

8.6%

              

2019Q1

  

0.2%

2.5%

5.6%

                

2019Q2

  

0.3%

2.9%

                  

2019Q3

  

0.3%

                    

Related Links :

http://ir.yirendai.com/

PR Newswire

LightInTheBox Reports First Quarter 2020 Financial Results

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BEIJING, June 19, 2020 — LightInTheBox Holding Co., Ltd. (NYSE: LITB) (“LightInTheBox” or the “Company”), a cross-border e-commerce platform that delivers products directly to consumers around the world, today announced its unaudited financial results for the first quarter ended March 31, 2020.

First Quarter 2020 Highlights

  • Total revenues increased 1.3% year-over-year to $51.5 million.
  • Gross margin expanded further to 46.4% from 40.4% last quarter and 34.8% in the same quarter of 2019.
  • Third consecutive quarter of GAAP profitability despite impact from COVID-19 pandemic with net income of $0.7 million, compared with a net loss of $14.1 million in the same quarter of 2019.
  • Adjusted EBITDA improved significantly, increasing to earnings of $1.4 million, compared with a loss of $7.9 million in the same quarter of 2019.

Mr. Jian He, Chief Executive Officer of LightInTheBox, commented, “We responded quickly and decisively to the outbreak of COVID-19 by implementing a number of strategic initiatives to provide us with the flexibility needed to adapt to a challenging global economic environment. Seasonally, the first quarter is generally the slowest quarter of the year, so the COVID-19 induced economic disruption made the operating environment even more difficult. We took advantage of the temporary slowdown to deepen relationships with high-quality suppliers, optimize our product portfolio and category mix, and improve order fulfillment speed. We also prioritized the health and safety of our employees to ensure business continuity and adequately prepare for the resumption of normal operations while demonstrating our commitment to corporate social responsibility by including free medical face masks in numerous orders shipped to markets that were being impacted heavily by the pandemic. Despite the challenging operational environment, our financial results this quarter are a reflection of our ability to adapt and is highlighted by our third and consecutive quarter of GAAP profitability which I believe demonstrates the long-term growth trajectory we are on. We remain focused on executing our strategy and are very encouraged by our improvements to date. We are already starting to see certain product categories regain strong growth momentum towards the end of the second quarter as global markets begin re-opening and expect that both our operating and financial results will continue to improve going forward.”

First Quarter 2020 Financial Results

Total revenues increased by 1.3% year-over-year to $51.5 million from $50.9 million in the same quarter of 2019. Revenues generated from product sales were $49.9 million, compared with $49.8 million in the same quarter of 2019. Revenues from service and others were $1.6 million, compared with $1.1 million in the same quarter of 2019.

The number of orders for product sales was 1.0 million in the first quarter of 2020, compared with 1.2 million in the same quarter of 2019. The number of customers for product sales was 0.8 million for the first quarter of 2020, compared with 0.6 million in the same quarter of 2019.

Revenues generated from product sales in the apparel category were $13.4 million in the first quarter of 2020, compared with $14.4 million in the same quarter of 2019. As a percentage of product sales, apparel revenues accounted for 26.8% in the first quarter of 2020, compared with 28.9% in the same quarter of 2019. Revenues generated from product sales from other general merchandise were $36.5 million in the first quarter of 2020.

Total cost of revenues was $27.6 million in the first quarter of 2020, compared with $33.2 million in the same quarter of 2019. Cost for product sales was $26.9 million in the first quarter of 2020, compared with $32.8 million in the same quarter of 2019. Cost for service and others was $0.7 million in the first quarter of 2020, compared with $0.4 million in the same quarter of 2019.

Gross profit in the first quarter of 2020 was $23.9 million, compared with $17.7 million in the same quarter of 2019. Gross margin was 46.4% in the first quarter of 2020, compared with 34.8% in the same quarter of 2019. The increase in gross margin was a result of the Company’s continuous efforts to drive revenues from categories with higher margins.

Total operating expenses in the first quarter of 2020 were $27.1 million, compared with $26.5 million in the same quarter of 2019.

  • Fulfillment expenses in the first quarter of 2020 were $5.0 million, compared with $5.2 million in the same quarter of 2019. As a percentage of total revenues, fulfillment expenses were 9.8% in the first quarter of 2020, compared with 10.2% in the same quarter of 2019 and 10.7% in the fourth quarter of 2019.
  • Selling and marketing expenses in the first quarter of 2020 were $14.8 million, compared with $9.3 million in the same quarter of 2019. As a percentage of total revenues, selling and marketing expenses were 28.7% for the first quarter of 2020, compared with 18.3% in the same quarter of 2019 and 23.9% in the fourth quarter of 2019.
  • G&A expenses in the first quarter of 2020 were $7.3 million, compared with $12.0 million in the same quarter of 2019. As a percentage of total revenues, G&A expenses were 14.1% for the first quarter of 2020, compared with 23.6% in the same quarter of 2019 and 11.8% in the fourth quarter of 2019. Included in G&A expenses, R&D expenses in the first quarter of 2020 were $3.5 million, compared with $4.2 million in the same quarter of 2019.

Net income was $0.7 million in the first quarter of 2020, compared with a net loss of $14.1 million in the same quarter of 2019.

Net income per American Depository Share (“ADS”) was $0.01 in the first quarter of 2020, compared with net loss per ADS of $0.21 in the same quarter of 2019. Each ADS represents two ordinary shares. The diluted net income per ADS was $0.01 in the first quarter of 2020, compared with the diluted net loss per ADS of $0.21 in the same quarter of 2019.

In the first quarter of 2020, the Company’s basic weighted average number of ADSs used in computing the net income per ADS was 102,240,901 and the diluted weighted average number of ADSs was 112,122,548.

Adjusted EBITDA, which represents gain  / (loss) from operations before share-based compensation expense, change in fair value of convertible promissory notes, interest income, interest expense, income tax expense and depreciation and amortization expenses, was earnings of $1.4 million in the first quarter of 2020, compared with a loss of  $7.9 million in the same quarter of 2019.

As of March 31, 2020, the Company had cash and cash equivalents and restricted cash of $35.6 million, compared with $40.4 million as of December 31, 2019.

Business Outlook

For the second quarter of 2020, based on current information available to the Company and business seasonality, the Company expects net revenues to be between $105 million and $120 million.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use the following non-GAAP financial measures to help evaluate our operating performance:

“Adjusted EBITDA” represents gain /(loss) from operations before share-based compensation expense, change in fair value of convertible promissory notes, interest income, interest expense, income tax expense and depreciation and amortization expenses. Although other companies may calculate adjusted EBITDA differently or not present it at all, we believe that the adjusted EBITDA helps to identify underlying trends in our operating results, enhancing their understanding of the past performance and future prospects.

Conference Call

The Company will hold a conference call to discuss the results at 7:00 a.m. Eastern Time on June 19, 2020 (7:00 p.m. Beijing Time on the same day).

Preregistration Information

Participants can register for the conference call by navigating to http://apac.directeventreg.com/registration/event/8893322. Once preregistration has been complete, participants will receive dial-in numbers, an event passcode, and a unique registrant ID.

To join the conference, simply dial the number in the calendar invite you receive after preregistering, enter the event passcode followed by your unique registrant ID, and you will be joined to the conference instantly.

A telephone replay will be available two hours after the conclusion of the conference call through June 26, 2020. The dial-in details are:

US/Canada:

+1-855-452-5696

Hong Kong:

800-963-117

International:

+61-2-8199-0299

Passcode:

8893322

Additionally, a live and archived webcast of the conference call will be available on the Company’s Investor Relations website at http://ir.lightinthebox.com.

About LightInTheBox Holding Co., Ltd.

LightInTheBox is a cross-border e-commerce platform that delivers products directly to consumers around the world. The Company offers customers a convenient way to shop for a wide selection of products at attractive prices through its www.lightinthebox.com, www.miniinthebox.com, www.ezbuy.com and other websites and mobile applications, which are available in 23 major languages and cover more than 140 countries.

For more information, please visit www.lightinthebox.com.

Investor Relations Contact

Christensen
Ms. Xiaoyan Su
Tel: +86 (10) 5900 3429
Email:  ir@lightinthebox.com

OR
Christensen
Ms. Linda Bergkamp
Tel: +1-480-614-3004
Email: lbergkamp@ChristensenIR.com

Forward-Looking Statements

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of 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,” “potential,” “continue,” “ongoing,” “targets” and similar statements. Among other things, statements that are not historical facts, including statements about LightInTheBox’s beliefs and expectations, the business outlook and quotations from management in this announcement, as well as LightInTheBox’s strategic and operational plans, are or contain forward-looking statements.

LightInTheBox may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in press releases and other written materials and in oral statements made by its officers, directors or employees to fourth parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward- looking statement, including but not limited to the following: LightInTheBox’s goals and strategies; LightInTheBox’s future business development, results of operations and financial condition; the expected growth of the global online retail market; LightInTheBox’s ability to attract customers and further enhance customer experience and product offerings; LightInTheBox’s ability to strengthen its supply chain efficiency and optimize its logistics network; LightInTheBox’s expectations regarding demand for and market acceptance of its products; competition; fluctuations in general economic and business conditions and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in LightInTheBox’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and LightInTheBox does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

LightInTheBox Holding Co., Ltd.

  

Unaudited Condensed Consolidated Balance Sheets

  

(U.S. dollars in thousands, or otherwise noted)

  
   
           
   

As of December 31,

  

As of March 31,

  
   

2019

  

2020

  

ASSETS

          

Current Assets

          

Cash and cash equivalents

  

37,736

  

33,902

  

Restricted cash

  

2,709

  

1,684

  

Accounts receivable, net of allowance for doubtful accounts

  

1,356

  

1,411

  

Amounts due from related parties

  

4,600

  

2,802

  

Inventories

  

7,357

  

7,316

  

Prepaid expenses and other current assets

  

3,619

  

4,121

  

Total current assets

  

57,377

  

51,236

  

Property and equipment, net

  

3,502

  

3,245

  

Intangible assets, net

  

8,516

  

8,350

  

Goodwill

  

27,922

  

27,465

  

Operating lease right-of-use assets

  

12,233

  

13,504

  

Long-term rental deposits

  

778

  

723

  

Long-term investments

  

2,873

  

6,634

  

TOTAL ASSETS

  

113,201

  

111,157

  
           

LIABILITIES AND EQUITY

          

Current Liabilities

          

Accounts payable

  

17,643

  

11,957

  

Amounts due to related parties

  

186

  

167

  

Advance from customers

  

21,731

  

28,921

  

Operating lease liabilities

  

3,470

  

4,642

  

Accrued expenses and other current liabilities

  

28,642

  

24,273

  

Total current liabilities

  

71,672

  

69,960

  
           

Operating lease liabilities

  

8,801

  

9,173

  

Long-term payable

  

847

  

726

  

TOTAL LIABILITIES

  

81,320

  

79,859

  
           

EQUITY

          

Ordinary shares

  

14

  

17

  

Additional paid-in capital

  

262,888

  

278,804

  

Forward contracts

  

15,769

  

—

  

Treasury shares, at cost

  

(27,512)

  

(28,268)

  

Accumulated other comprehensive loss

  

(1,444)

  

(2,165)

  

Accumulated deficit

  

(217,888)

  

(217,267)

  

Non-controlling interests

  

54

  

177

  

TOTAL EQUITY

  

31,881

  

31,298

  

TOTAL LIABILITIES AND EQUITY

  

113,201

  

111,157

  

LightInTheBox Holding Co., Ltd.

  

Unaudited Condensed Consolidated Statements of Operations

  

(U.S. dollars in thousands, except per share data, or otherwise noted)

  
   
   

Three-month Period Ended

  
   

March 31,

  

March 31,

  
   

2019

  

2020

  

Revenues

          

Product sales

  

49,789

  

49,936

  

Services and others

  

1,084

  

1,582

  

Total revenues

  

50,873

  

51,518

  

Cost of revenues

          

Product sales

  

(32,785)

  

(26,905)

  

Services and others

  

(357)

  

(712)

  

Total Cost of revenues

  

(33,142)

  

(27,617)

  

Gross profit

  

17,731

  

23,901

  

Operating expenses

          

Fulfillment

  

(5,265)

  

(5,049)

  

Selling and marketing

  

(9,269)

  

(14,780)

  

General and administrative

  

(11,984)

  

(7,268)

  

Other operating income

  

—

  

13

  

Total operating expenses

  

(26,518)

  

(27,084)

  

Loss from operations

  

(8,787)

  

(3,183)

  

Interest income

  

123

  

47

  

Interest expense

  

(20)

  

(30)

  

Change in fair value of convertible promissory notes

  

(5,337)

  

—

  

Other Income,net

  

—

  

3,913

  

Total other (loss) / income

  

(5,234)

  

3,930

  

(Loss) / Income before income taxes and gain from an equity method investment

  

(14,021)

  

747

  

Income tax expense

  

(216)

  

(3)

  

Gain from an equity method investment

  

127

  

—

  

Net (loss) / income

  

(14,110)

  

744

  

Less: Net income attributable to non-controlling interests

  

32

  

123

  

Net (loss) /income attributable to LightInTheBox Holding Co., Ltd.

  

(14,142)

  

621

  
           

Weighted average numbers of shares used in calculating (loss) / income per ordinary share

          

—Basic

  

134,458,170

  

204,481,801

  

—Diluted

  

134,458,170

  

224,245,096

  
           

Net (loss) / income per ordinary share

          

—Basic

  

(0.11)

  

0.00

  

—Diluted

  

(0.11)

  

0.00

  
           

Net (loss) / income per ADS (2 ordinary shares equal to 1 ADS)

          

—Basic

  

(0.21)

  

0.01

  

—Diluted

  

(0.21)

  

0.01

  

LightInTheBox Holding Co., Ltd.

  

Unaudited Reconciliations of GAAP and Non-GAAP Results

  

(U.S. dollars in thousands, or otherwise noted)

  
   
   
   

Three-month Period Ended

  
   

March 31,

  

March 31,

  
   

2019

  

2020

  
           

Net (loss) / income

  

(14,110)

  

744

  
           

Less: Interest income

  

123

  

47

  

Interest expense

  

(20)

  

(30)

  

Income tax expense

  

(216)

  

(3)

  

Depreciation and amortization

  

(628)

  

(551)

  

EBITDA

  

(13,369)

  

1,281

  
           

Less: Share-based compensation

  

(157)

  

(149)

  

Change in fair value of convertible promissory notes

  

(5,337)

  

—

  

Adjusted EBITDA*

  

(7,875)

  

1,430

  
   
   

* Adjusted EBITDA represents gain /(loss) from operations before share-based compensation expense, change in fair value of
convertible promissory notes, interest income, interest expense, income tax expense and depreciation and amortization expenses.

Related Links :

http://ir.lightinthebox.com/

PR Newswire

ChipMOS REPORTS MAY 2020 REVENUE

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HSINCHU, June 8, 2020 /PRNewswire-FirstCall/ — ChipMOS TECHNOLOGIES INC. (“ChipMOS” or the “Company”) (Taiwan Stock Exchange: 8150 and NASDAQ: IMOS), an industry leading provider of outsourced semiconductor assembly and test services (“OSAT”), today reported its unaudited consolidated revenue for the month of May 2020. All U.S. dollar figures cited in this press release are based on the exchange rate of NT$30.01 to US$1.00 as of May 29, 2020.

Revenue for the month of May 2020 was NT$1,789.3 million or US$59.6 million. This represents an increase of 4.7% as compared to May 2019 and a decrease of 3.5% from April 2020. The Company noted that it maintained stable utilization, with healthy memory demand, including DRAM and NOR flash, offset by TV and smartphone related DDIC demand softness.

Consolidated Monthly Revenues (Unaudited)

May 2020

April 2020

May 2019

MoM Change

YoY Change

Revenues

(NT$ million)

1,789.3

1,854.3

1,709.1

-3.5%

4.7%

Revenues

(US$ million)

59.6

61.8

57.0

-3.5%

4.7%

About ChipMOS TECHNOLOGIES INC.:

ChipMOS TECHNOLOGIES INC. (“ChipMOS” or the “Company”) (Taiwan Stock Exchange: 8150 and NASDAQ: IMOS) (https://www.chipmos.com) is an industry leading provider of outsourced semiconductor assembly and test services. With advanced facilities in Hsinchu Science Park, Hsinchu Industrial Park and Southern Taiwan Science Park in Taiwan, ChipMOS provide assembly and test services to a broad range of customers, including leading fabless semiconductor companies, integrated device manufacturers and independent semiconductor foundries. 

Forward-Looking Statements

This press release may contain certain forward-looking statements. These forward-looking statements may be identified by words such as ‘believes,’ ‘expects,’ ‘anticipates,’ ‘projects,’ ‘intends,’ ‘should,’ ‘seeks,’ ‘estimates,’ ‘future’ or similar expressions or by discussion of, among other things, strategy, goals, plans or intentions. These statements may include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Actual results may differ materially in the future from those reflected in forward-looking statements contained in this document, due to various factors, including the potential impact of COVID-19.  Further information regarding these risks, uncertainties and other factors are included in the Company’s most recent Annual Report on Form 20-F filed with the U.S. Securities and Exchange commission (the “SEC”) and in the Company’s other filings with the SEC.

Contacts:

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Source: ChipMOS TECHNOLOGIES INC.

PR Newswire

Euro Tech Holdings Company Limited Reports 2019 Year-End Results

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HONG KONG, June 6, 2020 /PRNewswire/ — Euro Tech Holdings Company Limited (Nasdaq: CLWT) today reported financial results for the 12-month period ended December 31, 2019 (“Fiscal 2019”).

The Company’s revenues for Fiscal 2019 were approximately US$17,399,000, an approximate 13.5% decrease compared to approximately US$20,104,000 in the Company’s fiscal year ended December 31, 2018 (“Fiscal 2018”). Revenues from trading and manufacturing activities, and engineering activities decreased by US$1,893,000 and US$812,000, respectively.

Gross profits increased by 19.4% to approximately US$4,417,000 for Fiscal 2019 as compared to approximately US$3,699,000 for Fiscal 2018. The increase was primarily due to the drop in contracts of low profit margin.

Selling and administrative expenses increased by 2.1% to approximately US$4,853,000 for Fiscal 2019 as compared to approximately US$4,751,000 for Fiscal 2018 as a result of general inflation.

Operating loss decreased by 41.5% to approximately US$440,000 for Fiscal 2019 as compared to approximately US$1,059,000 for Fiscal 2018. This was primarily due to the increase in gross profits.

The profit contribution from the affiliates was approximately US$137,000 for Fiscal 2019, as compared to negative contribution of approximately (US$932,000) for Fiscal 2018.  The result for Fiscal 2018 included a loss contribution from Zhejiang Tianlan Environmental Protection Technology Co. Ltd. (“Blue Sky”) of approximately (US$786,000) principally caused by a decrease in sales revenue as a result of the filing for bankruptcy liquidation of one of Blue Sky’s major customers.

The Company had net loss of approximately US$146,000 in Fiscal 2019, as compared to net income of approximately US$88,000 in Fiscal 2018. This was primarily due to there was a non-recurrent net gain on disposal of an affiliate of approximately US$1,522,000 in Fiscal 2018.

The Company’s operating results in Fiscal 2019 was adversely affected by the economic slowdown in China and Hong Kong resulting from the China-US escalating trade war and technology tensions, and the ongoing social unrest in Hong Kong. The outbreak of coronavirus since December 2019 also has further material adverse impact on the Company’s business, operating results and financial condition in year 2020.

The Company is still positive about the future Ballast Water Treatment Systems (“BWTS”) business from port services and commercial ships. The development of the ballast water port solution prototype is now completed and under system and operation tests in various ports. The port solution system is a system installed in port to offer ballast water treatment services for ocean going ships without their own BWTS and for those with damaged BWTS. The Company is now embarking on promotion activities for port solution systems in China and South East Asia. The International Maritime Organization (“IMO”) convention stipulates that type approval for revised G8 requirements must be obtained for all BWTS installed on or after October 28, 2020. To comply with these requirements, the Company is going to start the land based test for our BWTS to obtain such type approval certification in China.

About Blue Sky

Zhejiang Tianlan Environmental Protection Technology Co. Ltd., (“Blue Sky”),  found in 2000, is a fast growing company which provides a comprehensive service for design, general contract, equipment manufacturing, installation, testing and operation management of the treatment of waste gases emitted from various boilers and industrial furnaces of power plants, steel works and chemical plants. It has listed its shares on the New Third Board in the People’s Republic of China (“PRC”) since November 17, 2015. The New Third Board is a national over-the-counter market in the PRC regulated by China Securities Regulatory Commission, and managed by the National Equities Exchange and Quotations, which serves as a platform for the sale of existing shares or directed share placements for small and medium-sized enterprises.

About BWTS

BWTS are an imminent requirement by The International Maritime Organization (“IMO”) to prevent the biological unbalance caused by the estimated 12 billion tons of ballast water transported across the seas by ocean-going vessels when their ballast water tanks are emptied or refilled. In 2012, ballast water discharge standard became a law in the US. Any vessel constructed in December 2013 or later will need to comply when entering US waters, and existing vessels will follow shortly after. IMO’s Ballast Water Management Convention entered into force for new-built vessels on September 8, 2017 after ratification by 52 States, representing 35.1441% of world merchant shipping tonnage. In July 2017, IMO decided that the phase-in period for ballast water system retrofits started on 8 September 2019. 

The company obtained type approval certificate from China’s Classification Society for its 200, 300, 500, 750, 1200 and 1250 Cubic Meters per hour BWTS and Alternate Management Systems (‘AMS”) acceptance for its full range BWTS in 2016.

About AMS

AMS acceptance by the U.S. Coast Guard is a temporary designation given to BWTS approved by a foreign administration. It enables BWTS to be used on vessels for a period of up to 5 years, while the treatment system undergoes approval testing to U.S. Coast Guard standards.

Forward Looking Statements

Certain statements in this news release regarding the Company’s expectations, estimates, present view of circumstances or events, and statements containing words such as estimates, anticipates, intends, or expects, or words of similar import, constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements indicate uncertainty and the Company can give no assurance with regard to actual outcomes. Specific risk factors may include, without limitation, having the Company’s offices and operations situated in Hong Kong and China, doing business in China, competing with Chinese manufactured products, competing with the Company’s own suppliers, dependence on vendors, and lack of long term written agreements with suppliers and customers, development of new products, entering new markets, possible downturns in business conditions, increased competition, loss of significant customers, availability of qualified personnel, negotiating definitive agreements, new marketing efforts and the timely development of resources. See the “Risk Factor” discussions in the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 20-F for its fiscal year ended December 31, 2019.

CONDENSED STATEMENTS OF OPERATIONS

(Dollar amounts in US$ thousands, except share and per share data)

Year Ended December 31,

2019

2018

Revenues

17,399

20,104

Net (Loss) / Income Attributable to the
    Company

(146)

88

Net (Loss) / Income Per Ordinary Share –
    Basic

$(0.06)

$0.04

 

Weighted Average Number of

    Ordinary Shares Outstanding –Basic

 

 

2,301,993

 

 

2,061,909

SELECTED BALANCE SHEET DATA

As of December 31,

2019

2018

Cash and Cash Equivalents

5,991

5,267

Total Current Assets

12,010

13,533

Total Assets

22,213

23,065

Total Current Liabilities

6,660

7,520

Total Liabilities

6,876

7,520

Total Euro Tech Shareholders’ Equity

14,459

14,589

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PR Newswire

2020 Q1: Huami Ranked the Top 5 in both Global Watch Shipment and Market Share[1]

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SHENZHEN, China, June 5, 2020 /PRNewswire/ — Huami (NYSE: HMI) with its self-owned brand Amazfit, ranked the Top 5 in terms of global watch shipment and market share in the first quarter of 2020, according to data from the International Data Corporation (IDC) Worldwide Quarterly Wearable Device Tracker. With a year-on-year growth of 80.2%, Huami greatly surpassed the overall growth rate of the adult watch market.

2020 Q1 Huami Ranked the Top 5 in both Global Watch Shipment and Market Share
2020 Q1 Huami Ranked the Top 5 in both Global Watch Shipment and Market Share

Despite challenging market conditions that have impacted the consumer electronics industry,

Huami ranked No,1 by market share (excluding kids’ products) in Indonesia, Italy, Spain and India. Furthermore, Huami takes a record 58% share in Indonesia; 38% share in Italy; 24% share in Spain; 23% share in India. Huami also entered the top five for the first time in the US, the world’s largest single watch market. Besides, Huami entered the top 3 by shipment (excluding kids’ products) in Thailand; the top 4 in Russis and the top 5 in Brazil, France, Germany, Poland and China[2].

Unaudited financial results for the first quarter ended March 31, 2020 showed that Huami revenues reached RMB1,088.5 million (US$153.7 million), representing an increase of 36.1% from the first quarter of 2019. Total units shipped reached 7.6 million, compared with 5.6 million in the first quarter of 2019.

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