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Second Quarter 2018 Operational Highlights:
- Total loan originations in the second quarter of 2018 reached
RMB16.6 billion , representing an increase of 68.4% fromRMB9.8 billion in the second quarter of 2017.
- Total outstanding principal balance of loans reached
RMB24.7 billion as ofJune 30, 2018 , representing an increase of 97.9% fromRMB12.5 billion as ofJune 30, 2017 .
- The weighted average tenor of loans originated on our platform in the second quarter of 2018 was approximately 12.8 months. The effective APR1 was 25.7% for the second quarter of 2018.
- The GMV2 of our e-commerce channel amounted to
RMB1.5 billion , representing an increase of 53.8% fromRMB1.0 billion in the second quarter of 2017.
- Customer acquisition cost3 amounted to
RMB138 in the second quarter of 2018, compared toRMB134 in the second quarter of 2017.
- Total number of registered users reached 29.2 million as of
June 30, 2018 , representing an increase of 82.9% from 16.0 million as ofJune 30, 2017 ; and users with credit line reached 8.9 million as ofJune 30, 2018 , up by 58.8% from 5.6 million as ofJune 30, 2017 .
- Number of active customers who used our loan products in the second quarter of 2018 reached 2.7 million, representing an increase of 28.8% from 2.1 million in the second quarter of 2017. Number of new active customers who used our loan products in the second quarter of 2018 was 514 thousand.
- 90 day+ delinquency ratio4 were 1.39% as of
June 30, 2018 .
1 The Effective APR refers to the percentage equal to the annualized actual amount of finance charges, including interest and service fees, generated from a customer loan, divided by the average outstanding principal balance for the loan.
2“GMV” refers to the total value of transactions completed for products purchased on the e-commerce channel of our platform, net of returns.
3 Customer acquisition cost refers to the amount of total costs we incur in connection with acquiring customers divided by the number of new active customers during a given time period.
4 90 day+ delinquency ratio refers to outstanding principal balance of on- and off-balance sheet loans that were 90 to 179 calendar days past due as a percentage of the total outstanding principal balance of on- and off-balance sheet loans on our platform as of a specific date. Loans that are charged off are not included in the delinquency rate calculation.
Second Quarter 2018 Financial Highlights:
- Total operating revenue reached
RMB1.8 billion . Financial services income reachedRMB1.2 billion , representing an increase of 64.9% from the second quarter of 2017. Loan facilitation and servicing fees reachedRMB232 million , representing an increase of 339% from the second quarter of 2017.
- Gross profit reached
RMB619 million , representing an increase of 123% from the second quarter of 2017.
- Net income was
RMB465 million , representing an increase of 2,905% from the second quarter of 2017.
- Non-GAAP EBIT5 was
RMB353 million , representing an increase of 343% from the second quarter of 2017.
- Adjusted net income5 was
RMB502 million , representing an increase of 776% from the second quarter of 2017.
“Our continuous investment in financial technology over the past five years has started to pay off, enabling us to increase our operating leverage and improve profitability,” said Mr.
“We continue to see strong growth in our business in the second quarter,” said Mr.
“Our increasing profitability is also a reflection of our increasing operating leverage, as we continue to scale our business.” continued Mr. Zeng. “And as our business continues to grow and expand, we can expect the trend to continue.”
“In the second quarter, we have made some adjustments to our business model for new loans funded by individual investors on Juzi Licai.” continued Mr. Zeng. “After assessing the accounting impact in respect of the updated business model, we have concluded that all loans funded by individual investors on Juzi Licai under this business model from late
“Our credit quality continues to be stable – which is a reflection of the stability of our educated young adult customers” said Mr. Ryan Huanian Liu, Lexin’s chief risk officer. “Our vintage charge-off rate6 continues to be approximately 2.0%. At the end of the second quarter of 2018, our 90+ delinquency rate was 1.39%, a slight improvement from the first quarter.”
5 Non-GAAP EBIT and adjusted net income are non-GAAP financial measures. For more information on non-GAAP financial measures, please see the section of “Use of Non-GAAP Financial Measures Statement” and the table captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release.
6 “Vintage charge-off rate” refers to, with respect to on- and off-balance sheet loans originated during a specified time period, which we refer to as a vintage, the total outstanding principal balance of the loans that are charged off during a specified period, divided by the total initial principal of the loans originated in such vintage.
Second Quarter 2018 Financial Results:
Operating revenue increased from
Financial services income increased by 64.9% from
Loan facilitation and servicing fees increased by 339% from
Funding cost increased by 43.8% from
Processing and servicing cost increased by 38.2% from
Provision for credit losses increased by 55.7% from
Gross profit increased by 123% from
Sales and marketing expenses increased by 39.3% from
Research and development expenses increased by 37.7% from
General and administrative expenses increased by 35.9% from
Loss on guarantee liabilities of
Income tax benefit for the second quarter of 2018 was
Net income for the second quarter of 2018 was
Adjusted net income for the second quarter of 2018 was
Please click here to view our vintage curve: http://resource.globenewswire.com/Resource/Download/f27d9d37-3fb0-4a68-8b8c-1d05828a99ae
Outlook
The Chinese government's recent actions to reduce financial risks have tightened liquidity in the P2P market, which has led to smaller players’ exiting from the industry. The Company believes that this is a positive evolution of the industry towards a more mature regulatory environment that will foster a healthy and stable market in the future. Noticing that the government has issued new policies to encourage the development of consumer finance and based on the latest market conditions, the Company remains positive in terms of outlook and has adjusted its estimate for the total loan origination for fiscal year 2018 to a range from
Conference Call
The Company’s management will host an earnings conference call at
Dial-in details for the earnings conference call are as follows: | ||
United States (toll free): | 1 845 675 0437 or 1 866 519 4004 | |
International: | 65 6713 5090 | |
Hong Kong (toll free): | 800 906 601 or 852 3018 6771 | |
China: | 400 6208 038 or 800 8190 121 |
Participants should dial-in at least 5 minutes before the scheduled start time and use the following passcode: 6173307.
Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at http://ir.lexinfintech.com.
A replay of the conference call will be accessible approximately two hours after the conclusion of the live call until August 31, 2018, by dialing the following telephone numbers: | ||
United States (toll free): | 1 855 452 5696 or 1 646 254 3697 | |
International: | 61 2 8199 0299 | |
Replay Access Code: | 6173307 |
About
For more information, please visit http://ir.lexinfintech.com
To follow us on Twitter, please go to: https://twitter.com/LexinFintech
Use of Non-GAAP Financial Measures Statement
In evaluating our business, we consider and use adjusted net income and non-GAAP EBIT, two non-GAAP measures, as supplemental measures to review and assess our operating performance. The presentation of the 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 U.S. GAAP. We define adjusted net income as net income excluding share-based compensation expenses, interest expense associated with convertible loans and investment-related impairment and we define non-GAAP EBIT as net income excluding income tax expense/(benefit), share-based compensation expenses, interest expense, net and investment-related impairment.
We present these non-GAAP financial measures because it is used by our management to evaluate our operating performance and formulate business plans. Adjusted net income enables our management to assess our operating results without considering the impact of share-based compensation expenses, interest expense associated with convertible loans and investment-related impairment. Non-GAAP EBIT, on the other hand, enables our management to assess our operating results without considering the impact of income tax expense/(benefit), share-based compensation expenses, interest expense, net and investment-related impairment. We also believe that the use of these non-GAAP financial measures facilitate investors’ assessment of our operating performance. 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 an analytical tool. One of the key limitations of using adjusted net income and non-GAAP EBIT is that they do not reflect all items of income and expense that affect our operations. Share-based compensation expenses, interest expense associated with convertible loans, income tax expense/(benefit), interest expense, net and investment-related impairment have been and may continue to be incurred in our business and are not reflected in the presentation of adjusted net income and non-GAAP EBIT. Further, these non-GAAP financial measures may differ from the non-GAAP financial information used by other companies, including peer companies, and therefore their comparability may be limited.
We compensate for these limitations by reconciling the non-GAAP financial measure to the most directly comparable U.S. GAAP financial measure, 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.
Exchange Rate Information Statement
This announcement contains translations of certain RMB amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of
Safe Harbor Statement
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,” “confident” and similar statements. Among other things, the expectation of its collection efficiency and delinquency, business outlook and quotations from management in this announcement, contain forward-looking statements. Lexin may also make written or oral forward-looking statements in its periodic reports to the
For investor and media inquiries, please contact:
IR inquiries:
Tel: +86 (755) 3637-8888 ext. 6258
E-mail: IR@lexinfintech.com
Media inquiries:
Tel: +86 (755) 3367-8888 ext. 6993
E-mail: liminchen@lexinfintech.com
SOURCE
LexinFintech Holdings Ltd. | ||||||||
Unaudited Condensed Consolidated Balance Sheets | ||||||||
(In thousands, except for share and per share data) | As of | |||||||
December 31, 2017 |
June 30, 2018 |
|||||||
RMB | RMB | US$ | ||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | 1,126,475 | 439,829 | 66,469 | |||||
Restricted cash | 561,922 | 750,351 | 113,396 | |||||
Restricted time deposits | 6,750 | 248,306 | 37,525 | |||||
Short‑term financing receivables, net | 9,857,209 | 9,788,744 | 1,479,310 | |||||
Accrued interest receivable | 129,622 | 145,037 | 21,919 | |||||
Prepaid expenses and other current assets | 945,258 | 1,046,605 | 158,167 | |||||
Amounts due from related parties | 9,447 | 125 | 19 | |||||
Inventories, net | 101,653 | 75,982 | 11,483 | |||||
Total current assets | 12,738,336 | 12,494,979 | 1,888,288 | |||||
Non‑current assets | ||||||||
Restricted cash | 46,889 | 40,097 | 6,060 | |||||
Restricted time deposits | 600 | - | - | |||||
Long‑term financing receivables, net | 1,785,045 | 2,231,009 | 337,158 | |||||
Property, equipment and software, net | 63,125 | 76,606 | 11,577 | |||||
Long‑term investments | 23,485 | 18,821 | 2,844 | |||||
Deferred tax assets | 38,841 | 213,277 | 32,231 | |||||
Other assets | 33,263 | 23,688 | 3,580 | |||||
Total non‑current assets | 1,991,248 | 2,603,498 | 393,450 | |||||
TOTAL ASSETS | 14,729,584 | 15,098,477 | 2,281,738 | |||||
LIABILITIES | ||||||||
Current liabilities | ||||||||
Accounts payable | 198,177 | 193,421 | 29,230 | |||||
Amounts due to related parties | 67,510 | 24,893 | 3,762 | |||||
Short‑term borrowings | 168,844 | 439,069 | 66,354 | |||||
Short‑term funding debts | 10,525,134 | 9,579,317 | 1,447,661 | |||||
Accrued interest payable | 290,446 | 367,033 | 55,467 | |||||
Accrued expenses and other current liabilities | 1,611,029 | 1,706,734 | 257,930 | |||||
Total current liabilities | 12,861,140 | 12,310,467 | 1,860,404 | |||||
Non‑current liabilities | ||||||||
Long‑term funding debts | 166,629 | 337,980 | 51,077 | |||||
Long‑term borrowings | 289 | - | - | |||||
Total non‑current liabilities | 166,918 | 337,980 | 51,077 | |||||
TOTAL LIABILITIES | 13,028,058 | 12,648,447 | 1,911,481 | |||||
SHAREHOLDERS’ EQUITY | ||||||||
Class A Ordinary Shares | 142 | 149 | 23 | |||||
Class B Ordinary Shares | 68 | 68 | 10 | |||||
Additional paid‑in capital | 2,110,957 | 2,265,640 | 342,391 | |||||
Statutory reserves | 55,861 | 55,861 | 8,442 | |||||
Accumulated other comprehensive loss | (14,951 | ) | (32,774 | ) | (4,953 | ) | ||
(Accumulated deficit)/Retained earnings | (450,551 | ) | 161,086 | 24,344 | ||||
TOTAL SHAREHOLDERS’ EQUITY | 1,701,526 | 2,450,030 | 370,257 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 14,729,584 | 15,098,477 | 2,281,738 | |||||
LexinFintech Holdings Ltd. | ||||||||||||||||||||
Unaudited Condensed Consolidated Statements of Operations | ||||||||||||||||||||
(In thousands, except for share and per share data) | For the Three Months Ended | For the Six Months Ended June 30, | ||||||||||||||||||
June 30, 2017 | March 31, 2018 |
June 30, 2018 |
2017 |
2018 |
||||||||||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||||||
Operating revenue: | ||||||||||||||||||||
Online direct sales | 614,780 | 542,899 | 582,906 | 88,091 | 1,193,959 | 1,125,805 | 170,136 | |||||||||||||
Services and others | 3,479 | 30,094 | 47,452 | 7,171 | 6,095 | 77,546 | 11,719 | |||||||||||||
Online direct sales and services income | 618,259 | 572,993 | 630,358 | 95,262 | 1,200,054 | 1,203,351 | 181,855 | |||||||||||||
Interest and financial services income | 599,900 | 782,989 | 873,719 | 132,040 | 1,131,609 | 1,656,708 | 250,368 | |||||||||||||
Loan facilitation and servicing fees | 52,920 | 164,377 | 232,461 | 35,130 | 106,981 | 396,838 | 59,972 | |||||||||||||
Other revenue | 46,044 | 50,302 | 46,558 | 7,036 | 97,077 | 96,860 | 14,638 | |||||||||||||
Financial services income | 698,864 | 997,668 | 1,152,738 | 174,206 | 1,335,667 | 2,150,406 | 324,978 | |||||||||||||
Total operating revenue | 1,317,123 | 1,570,661 | 1,783,096 | 269,468 | 2,535,721 | 3,353,757 | 506,833 | |||||||||||||
Operating cost: | ||||||||||||||||||||
Cost of sales | (655,546 | ) | (548,723 | ) | (597,737 | ) | (90,332 | ) | (1,261,266 | ) | (1,146,460 | ) | (173,257 | ) | ||||||
Funding cost | (183,139 | ) | (257,026 | ) | (263,311 | ) | (39,793 | ) | (359,059 | ) | (520,337 | ) | (78,635 | ) | ||||||
Processing and servicing cost | (51,476 | ) | (65,934 | ) | (71,161 | ) | (10,754 | ) | (95,610 | ) | (137,095 | ) | (20,718 | ) | ||||||
Provision for credit losses | (149,131 | ) | (286,791 | ) | (232,125 | ) | (35,080 | ) | (271,215 | ) | (518,916 | ) | (78,420 | ) | ||||||
Total operating cost | (1,039,292 | ) | (1,158,474 | ) | (1,164,334 | ) | (175,959 | ) | (1,987,150 | ) | (2,322,808 | ) | (351,030 | ) | ||||||
Gross profit | 277,831 | 412,187 | 618,762 | 93,509 | 548,571 | 1,030,949 | 155,803 | |||||||||||||
Operating expenses: | ||||||||||||||||||||
Sales and marketing expenses | (103,613 | ) | (101,510 | ) | (144,339 | ) | (21,813 | ) | (190,018 | ) | (245,849 | ) | (37,154 | ) | ||||||
Research and development expenses | (57,007 | ) | (68,093 | ) | (78,518 | ) | (11,866 | ) | (101,216 | ) | (146,611 | ) | (22,156 | ) | ||||||
General and administrative expenses | (51,257 | ) | (58,641 | ) | (69,638 | ) | (10,524 | ) | (94,200 | ) | (128,279 | ) | (19,386 | ) | ||||||
Total operating expenses | (211,877 | ) | (228,244 | ) | (292,495 | ) | (44,203 | ) | (385,434 | ) | (520,739 | ) | (78,696 | ) | ||||||
Loss on guarantee liabilities | - | - | (20,128 | ) | (3,042 | ) | - | (20,128 | ) | (3,042 | ) | |||||||||
Interest expense, net | (22,543 | ) | (3,639 | ) | (6,793 | ) | (1,027 | ) | (44,262 | ) | (10,432 | ) | (1,577 | ) | ||||||
Investment-related impairment | - | - | (4,841 | ) | (732 | ) | - | (4,841 | ) | (732 | ) | |||||||||
Change in fair value of financial guarantee derivatives | (1,976 | ) | (8,075 | ) | 21,249 | 3,211 | 14,762 | 13,174 | 1,991 | |||||||||||
Others, net | (4,033 | ) | 7,625 | (6,285 | ) | (950 | ) | (6,456 | ) | 1,340 | 203 | |||||||||
Income before income tax expense | 37,402 | 179,854 | 309,469 | 46,766 | 127,181 | 489,323 | 73,950 | |||||||||||||
Income tax (expense)/benefit | (21,920 | ) | (33,441 | ) | 155,755 | 23,538 | (55,442 | ) | 122,314 | 18,485 | ||||||||||
Net income | 15,482 | 146,413 | 465,224 | 70,304 | 71,739 | 611,637 | 92,435 | |||||||||||||
Pre-IPO Preferred Shares redemption value accretion | (16,957 | ) | - | - | - | (33,404 | ) | - | - | |||||||||||
Income allocation to participating preferred shares | - | - | - | - | (38,335 | ) | - | - | ||||||||||||
Net (loss)/income attributable to ordinary shareholders | (1,475 | ) | 146,413 | 465,224 | 70,304 | - | 611,637 | 92,435 | ||||||||||||
Net (loss)/income per ordinary share | ||||||||||||||||||||
Basic | (0.01 | ) | 0.44 | 1.40 | 0.21 | - | 1.84 | 0.28 | ||||||||||||
Diluted | (0.01 | ) | 0.41 | 1.28 | 0.19 | - | 1.69 | 0.26 | ||||||||||||
Net income per ADS | ||||||||||||||||||||
Basic | - | 0.88 | 2.80 | 0.42 | - | 3.69 | 0.56 | |||||||||||||
Diluted | - | 0.81 | 2.57 | 0.39 | - | 3.38 | 0.51 | |||||||||||||
Weighted average number of ordinary shares outstanding | ||||||||||||||||||||
Basic | 110,647,199 | 331,158,139 | 332,208,249 | 332,208,249 | 110,647,199 | 331,686,095 | 331,686,095 | |||||||||||||
Diluted | 110,647,199 | 361,428,816 | 362,162,094 | 362,162,094 | 110,647,199 | 361,798,356 | 361,798,356 | |||||||||||||
LexinFintech Holdings Ltd. | ||||||||||||||||
Unaudited Condensed Consolidated Statements of Comprehensive Income | ||||||||||||||||
(In thousands, except for share and per share data) | For the Three Months Ended | For the Six Months Ended June 30, | ||||||||||||||
June 30, 2017 | March 31, 2018 | June 30, 2018 | 2017 | 2018 | ||||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||
Net income | 15,482 | 146,413 | 465,224 | 70,304 | 71,739 | 611,637 | 92,435 | |||||||||
Other comprehensive income/(loss) | ||||||||||||||||
Foreign currency translation adjustments, net of nil tax | 1,306 | (43,249 | ) | 25,426 | 3,842 | 322 | (17,823 | ) | (2,693 | ) | ||||||
Total comprehensive income | 16,788 | 103,164 | 490,650 | 74,146 | 72,061 | 593,814 | 89,742 | |||||||||
LexinFintech Holdings Ltd. | |||||||||||||
Unaudited Reconciliations of GAAP and Non-GAAP Results | |||||||||||||
(In thousands) | |||||||||||||
For the Three Months Ended | For the Six Months Ended June 30, | ||||||||||||
June 30, 2017 | March 31, 2018 | June 30, 2018 | 2017 | 2018 | |||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | |||||||
Reconciliation of Adjusted Net Income to Net Income | |||||||||||||
Net income | 15,482 | 146,413 | 465,224 | 70,304 | 71,739 | 611,637 | 92,435 | ||||||
Add: Share-based compensation expenses | 19,822 | 27,311 | 32,249 | 4,874 | 34,690 | 59,560 | 9,001 | ||||||
Interest expense associated with convertible loans | 22,010 | - | - | - | 43,152 | - | - | ||||||
Investment-related impairment | - | - | 4,841 | 732 | - | 4,841 | 732 | ||||||
Adjusted net income | 57,314 | 173,724 | 502,314 | 75,910 | 149,581 | 676,038 | 102,168 | ||||||
For the Three Months Ended | For the Six Months Ended June 30, | ||||||||||||||||
June 30, 2017 | March 31, 2018 | June 30, 2018 | 2017 | 2018 | |||||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||
Reconciliations of Non-GAAP EBIT to Net Income | |||||||||||||||||
Net income | 15,482 | 146,413 | 465,224 | 70,304 | 71,739 | 611,637 | 92,435 | ||||||||||
Add: Income tax expense/(benefit) | 21,920 | 33,441 | (155,755 | ) | (23,538 | ) | 55,442 | (122,314 | ) | (18,485 | ) | ||||||
Share-based compensation expenses | 19,822 | 27,311 | 32,249 | 4,874 | 34,690 | 59,560 | 9,001 | ||||||||||
Interest expense, net | 22,543 | 3,639 | 6,793 | 1,027 | 44,262 | 10,432 | 1,577 | ||||||||||
Investment-related impairment | - | - | 4,841 | 732 | - | 4,841 | 732 | ||||||||||
Non-GAAP EBIT | 79,767 | 210,804 | 353,352 | 53,399 | 206,133 | 564,156 | 85,260 | ||||||||||