Sino Fortune Holding Corp. Reports First Quarter 2017 Financial Results

SINO FORTUNE HOLDING CORPORATIN

2017-05-12 07:35 6175

Net revenue increased by 42% to $7.89 million as loans facilitated through our platform grew 39% to RMB 1.63 billion in the first quarter

SHANGHAI, May 12, 2017 /PRNewswire/ -- Sino Fortune Holding Corporation (OTCQB: SFHD) ("Sino Fortune" or the "Company"), a leading online financial credit facility solution provider servicing SME and individual borrowers in China, today announced its financial results for the three months ended March 31, 2017.

Bodang Liu, Chairman and Chief Executive Officer of Sino Fortune, commented, "The momentum we saw through our platform toward the end of last year carried into the first quarter, resulting in significantly better overall performance than a year ago. On the back of a 39% increase of loan volume, our net revenues and net income grew 42% and 36%, respectively, and both reached a record high since our inception, highlighting favorable trends and continuing momentum in our business."

First Quarter 2017 Financial Results

	For the Three Months Ended March 31,
($ millions, except per share data)	2017	2016	% Change
Revenue	$7.89	$5.56	41.8%
Service Fee	$5.18	$4.06	27.5%
Management fee	$2.71	$1.50	80.6%
Operating income	$2.61	$1.58	65.2%
Other income (expenses)	$0.03	$0.01	203.2%
Net income	$1.99	$1.47	36.0%
EPS - basic and diluted	$0.0055	$0.0043	26.9%

Total net revenue for the first quarter of 2017 increased by $2.33 million, or 41.8%, to $7.89 million from $5.56 million for the same period of last year. The increase of total net revenue was mainly attributable to the increase in the volume of loans facilitated through our platform which increased by 39.3% to RMB 1.63 billion for the first quarter of 2017 from RMB 1.17 billion for the same period of last year.

The service fee increased by $1.12 million, or 27.5%, to $5.18 million for the first quarter of 2017 from $4.06 million for the same period of last year. The management fee increased by $1.21 million, or 80.6%, to $2.71 million for the first quarter of 2017 from $1.50 million for the same period of last year. The service fee and management fee accounted for 65.6% and 34.4%, respectively, of total net revenue for the first quarter of 2017, compared to 73.0% and 27.0%, respectively, for the same period of last year.

Operating expenses increased by $1.30 million, or 32.6%, to $5.28 million for the first quarter of 2017 from $3.98 million for the same period of last year. The increase in operating expenses was mainly due to increases in sales and marketing expenses and partially offset by a decrease in general and administrative expenses. Sales and marketing expenses increased by $1.48 million, or 52.8%, to $4.27 million for the first quarter of 2017 from $2.80 million for the same period of last year. The increase in sales and marketing expenses was associated with heightened sales and marketing efforts and higher volume of loans facilitated through our platform. Our general and administrative expenses decreased $0.19 million, or 17.0%, to $0.93 million for the first quarter of 2017 from $1.13 million for the same period of last year, primarily due to the layoff of more than 1,000 off-line sales related personnel in April 2016 to comply with new industry regulatory measures.

Operating income increased by $1.03 million, or 65.2%, to $2.61 million for the first quarter of 2017 from $1.58 million for the same period of last year. The increase in operating income was primarily driven by increase in total net revenue. Operating profit margin was 33.1% for the first quarter of 2017, compared to 28.4% for the same period of last year.

Provision for income taxes was $0.64 million for the first quarter of 2017, compared to $0.12 million for the same period of last year.

Net income increased by $0.53 million, or 36.0%, to $1.99 million for the first quarter of 2017, from $1.47 million for the same period of last year.

Earnings per share increased by 26.9% to $0.0055 for the first quarter of 2017 from $0.0043 for the same period of last year.

Financial Condition

As of March 31, 2017, the Company had cash and cash equivalents of $12.18 million, compared to $8.56 million at the end of 2016. The cash balance included cash held in private loan risk reserve accounts of $8.89 million and $7.30 million as of March 31, 2017 and December 31, 2016, respectively. Short term investments were $8.44 million as of March 31, 2017, compared to $8.27 million at the end of 2016. As of March 31, 2017, we had $23.67 million in total current assets and $10.78 million in total current liabilities, representing a current ratio of 2.19. As of December 31, 2016, we had $19.99 million in total current assets and $9.05 million in total current liabilities, with a current ratio of 2.21.

Net cash provided by operating activities $3.79 million for the first quarter of 2017, compared to $1.28 million for the same period of last year. Net cash used in investing activities was $0.24 million for the first quarter of 2017, compared to $0.27 million for the same period of last year. Net cash provided by financing activities was $nil for the first quarter of 2017 and 2016.

Recent Developments

In March 2017, we engaged Jiangxi Bank to provide fund depository services for our marketplace, pursuant to which Jiangxi Bank will set up separate accounts for borrowers and investors, and assume fund depository functions including settlement, accounting and safeguarding online lending capital. Third-party payment agents operate as the payment channels and only transfer funds to and from fund depository accounts. Relevant Chinese regulations require us to enter into fund depository agreement with only one commercial bank to provide fund depository services.

About Sino Fortune Holding Corporation

Founded in 2013, Sino Fortune Holding Corporation ("Sino Fortune") is a leading online financial credit facility solution provider servicing under-served SME and individual borrowers in China. Through operating an electronic online financial platform, www.hyjf.com, the Company matches investors with SME and individual borrowers in China. The Company also sets aside risk reserve funds with the aim of limiting losses to investors from borrower defaults. In addition, the company provides investors with access to a liquid secondary market, giving them an opportunity to exit their investments before the underlying loans become due. For more information, please visit: www.hyjf.com.

Forward-Looking Statements

This press release may contain projections or other forward-looking statements regarding future events or our future financial performance. All statements other than present and historical facts and conditions contained in this release, including any statements regarding our future results of operations and financial positions, business strategy, plans and our objectives for future operations, are forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). These statements are only predictions and reflect our current beliefs and expectations with respect to future events and are based on assumptions and subject to risk and uncertainties and subject to change at any time. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Actual events or results may differ materially from those contained in the projections or forward-looking statements.

Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

For investors and media inquiries please contact:

At the Company:
Lexi Li
Email: linengchao@hyjf.com

Investor Relations:
Tony Tian, CFA
Weitian Group LLC
Email: tony.tian@weitian-ir.com
Phone: +1-732-910-9692

SINO FORTUNE HOLDING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2017		December 31, 2016
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	12,176,944	$	8,561,695
Short-term investments		8,440,659		8,274,306
Accounts receivable		131,196		281,038
Prepayments		2,143,443		2,078,926
Deposits and other receivables		776,944		792,849
Total current assets		23,669,186		19,988,814
Property and equipment - net		494,574		279,408
Intangible assets		16,093		17,745
Total assets	$	24,179,853	$	20,285,967
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	16,172	$	227,895
Taxes payable		1,570,572		1,285,160
Deferred tax liability		42,297		16,673
Other payable		9,154,388		7,517,034
Total current liabilities		10,783,429		9,046,762

Total liabilities		10,783,429		9,046,762

Stockholders' equity
Common stock, $0.001 par value, 2,990,000,000 shares authorized, 361,820,246 and 361,820,246 shares issued and outstanding, respectively		361,820		361,820
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued		-		-
Additional paid-in capital		9,237,870		9,237,870
Retained earnings		4,303,769		2,310,480
Accumulated other comprehensive loss		(507,035)		(670,965)
Total stockholders' equity		13,396,424		11,239,205
Total liabilities and stockholders' equity	$	24,179,853	$	20,285,967


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

SINO FORTUNE HOLDING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
(Unaudited)

	For The Three Months Ended March 31,
	2017		2016
Revenues	$	7,886,899	$	5,560,142

Operating expenses
Selling, general and administrative expenses		5,204,851		3,920,716
Business and related taxes		44,217		26,739
Depreciation		29,695		34,362
Total operating expenses		5,278,763		3,981,817
Income from Operations		2,608,136		1,578,325

Other income (expenses)
Interest income		30,852		32,684
Interest expense and bank charges		(1,747)		(4,826)
Other		(2,225)		(18,994)
Total other income		26,880		8,864
Income before provision for income taxes		2,635,016		1,587,189
Provision for income taxes		(641,728)		(121,489)
Net income		1,993,288		1,465,700

Other comprehensive income
Net unrealized gain on investments (net of tax effect)		76,872		-
Foreign currency translation adjustment		87,058		27,368
Total comprehensive income	$	2,157,218	$	1,493,068

Net income per common share - basic and diluted	$	0.01	$	0.00

Weighted average number of common shares outstanding - basic and diluted		361,820,246		337,500,000


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

SINO FORTUNE HOLDING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	For The Three Months Ended March 31,
	2017		2016
Cash flows from operating activities:
Net income	$	1,993,288	$	1,465,700
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		29,695		34,362
Changes in operating assets and liabilities:
Accounts receivable		152,074		-
Prepayments		(48,357)		58,549
Deposit and other receivables		22,080		(1,270,142)
Accounts payable and accrued liabilities		(212,965)		803,546
Taxes payable		275,494		171,716
Other payable		1,579,337		15,990
Net cash provided by operating activities		3,790,646		1,279,721

Cash flows from investing activities:
Purchases of property and equipment		(240,959)		(268,221)
Net cash used in investing activities		(240,959)		(268,221)

Cash flows from financing activities:		-		-
Effect of exchange rate change		65,562		54,460

Cash and cash equivalents:
Net increase		3,615,249		1,065,960
Balance at beginning of period		8,561,695		5,712,741
Balance at end of period	$	12,176,944	$	6,778,701

Supplemental Disclosures of Cash flow Information:
Cash received for interest income	$	30,852	$	32,780
Cash paid for interest	$	-	$	-
Cash paid for income taxes	$	170,144	$	-


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.