HANGZHOU, China, May 27, 2020 /PRNewswire/ -- Weidai Ltd. ("Weidai" or the "Company") (NYSE: WEI), a leading auto-backed financing solution provider in China, today announced its financial results for the full year ended December 31, 2019, which have not been audited or reviewed by the Company's independent registered accounting firm.
Full Year 2019 Financial Highlights:
[1] Adjusted net income, a non-GAAP financial measure, is defined as net income before share-based compensation expenses. |
Full Year 2019 Operational Highlights:
Loan volume
The following table sets forth the volume of loans the Company facilitated and originated (including loans funded by institutional funding partners) for the periods indicated:
For the year ended |
||||
December 31, 2018 |
December 31, 2019 |
|||
RMB |
% of total |
RMB |
% of total |
|
(in millions, except for percentages) |
||||
Total loan volume |
78,786 |
100.0 |
61,102 |
100.0 |
Including: |
||||
Loans funded by institutional funding partners |
3,231 |
4.1 |
3,372 |
5.5 |
Loan balance
Total loan balance was RMB13.7 billion (US$2.0 billion) as of December 31, 2019, compared to RMB19.9 billion as of December 31, 2018.
Full Year 2019 Financial Results
Net revenues decreased by 14.2% to RMB3,357.5 million (US$482.3 million) in 2019 from RMB3,913.5 million in 2018, primarily due to a decrease in loan service fee. The Company's take rate[2] increased to 24.5% in 2019 from 19.7% in 2018.
[2] "Take rate" is defined as dividing net revenue of a certain period by the period end loan balance. |
Provision for loans and advances was RMB1,240.0 million (US$178.1 million) in 2019, compared to RMB751.6 million in 2018. The increase was primarily due to (i) an increase in delinquency rates as a result of industry-wide turmoil, and macroeconomic headwinds that negatively impacted small and micro enterprises, and (ii) the significant deterioration of the general macroeconomic environment in China which resulted in the Company recording additional allowance for loans and advances after taking into consideration current economic factors. Provision for loans and advances as a percentage of net revenues increased to 36.9% in 2019 from 19.2% in 2018.
Operating costs and expenses decreased by 24.2% to RMB1,909.5 million (US$274.3 million) in 2019 from RMB2,519.5 million in 2018. Operating costs and expenses as a percentage of net revenues decreased from 64.4% in 2018 to 56.9% in 2019.
Share-based compensation expenses were RMB64.8 million (US$9.3 million) in 2019, compared to RMB106.6 million in 2018.
Income tax expenses were RMB105.2 million (US$15.1 million) in 2019, compared to RMB159.6 million in 2018.
Net income was RMB263.2 million (US$37.8 million) in 2019, compared to RMB604.6 million in 2018.
Net income attributable to ordinary shareholders was RMB253.6 million (US$36.4 million) in 2019, compared to RMB721.6 million in 2018.
Adjusted net income was RMB328.0 million (US$47.1 million) in 2019, compared to RMB711.2 million in 2018.
Change of Business Operations
The Company ceased offering new loans for online investors' subscription since February 2020, including its Premier Investment Program and X Investment Program. Investors of Company's then existing Investment Programs now directly fund the underlying loans they used to invest in through the Company's Investment Programs and will receive repayment of principal when the respective underlying loans become due.
In an effort to reinforce investor confidence and accelerate their investment return, in April 2020, the Company entered into collaboration arrangements with certain companies providing asset management services, pursuant to which the Company's online investors have the option to transfer their rights to loans on the Company's platform to those companies and receive repayment of principals and interests in 18 months. The Company and Mr. Hong Yao provide guarantees for online investors who opt to participate in the arrangement. The Company has informed all online investors on its platform of these changes in its business.
The Company is dedicated to ensuring a smooth and safe transition process for all of its existing online investors. After this change, the Company plans to use institutional funding partners as its primary funding source and will also facilitate loans through its micro credit company.
Impact of COVID-19
The recent coronavirus (COVID-19) outbreak has brought uncertainties and interruptions to the marketplace lending industry and the overall economy. Delinquency rates have risen across the industry. As a result, the Company's loan origination volume and outstanding balance of loans in the first quarter of 2020 was negatively affected. In response, the Company has adopted a more prudent approach towards managing its loan portfolio and is adjusting its business strategies to minimize the pandemic's impact on its operations. Given the extent of the disruption and the duration of COVID-19's impact on the Company's operations remain uncertain, the Company will continue to closely monitor the evolving situation and maintains an optimistic outlook on its future growth potential over the long term.
Change of Accounting Policy
In May 2014, the Financial Accounting Standards Board (FASB) issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)", which superseded the revenue recognition requirements in Topic 605. The core principle of Topic 606 is that an entity should recognize revenues to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted Topic 606 on January 1, 2019 using the modified retrospective transition method which applied to all contracts which were not completed as of January 1, 2019.
Due to the complexity of Topic 606, the Company continuously evaluated the impact of adopting Topic 606 on the Company's financial statements during the year of 2019. In preparing the consolidated financial statements for the year ended December 31, 2019, the Company finalized its evaluation, and noticed that certain adjustments should be made to the previously announced interim financial results for the three months ended March 31, 2019, June 30, 2019 and September 30, 2019 according to Topic 606, respectively. These adjustments resulted in a RMB8.6 million (US$1.2 million) decrease in total net revenue and a RMB6.5 million (US$0.9 million) decrease in total net income, for the first three quarters of 2019.
Resignation of Directors
Mr. Wei Ye and Ms. Yan Wang have resigned from the board of directors of the Company due to personal reasons. Mr. Ye's and Ms. Wang's resignation did not result from any disagreement with the Company.
Use of Non-GAAP Financial Measures
The Company uses adjusted net income, a non-GAAP financial measure, in evaluating its operating results and for financial and operational decision-making purposes. The Company believes that adjusted net income helps identify underlying trends in its business by excluding the impact of share-based compensation expenses. The Company believes that adjusted net income provides useful information about its operating results, enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision-making.
Adjusted net income is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. This non-GAAP financial measure has limitations as an analytical tool, and when assessing the Company's operating performance, cash flows or liquidity, investors should not consider it in isolation, or as a substitute for net income, cash flows provided by operating activities or other consolidated statements of operation and cash flow data prepared in accordance with U.S. GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.
For more information on this non-GAAP financial measure, please see the table captioned "Reconciliations of GAAP and Non-GAAP results" set forth at the end of this press release.
About Weidai Ltd.
Weidai Ltd. is a pioneer and leading auto-backed financing solution provider in China supported by sophisticated and effective risk management system and technology. The Company transforms used automobiles, a type of "non-standard" collateral, into investable assets, to provide accessible credit for China's small and micro enterprises, and connects the borrowers with institutional funding partners through its platform.
For more information, please visit http://weidai.investorroom.com/.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.9618 to US$1.00, the noon buying rate on December 31, 2019 set forth in the H.10 statistical release of the U.S. Federal Reserve Board.
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "confident" and similar statements. Weidai may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Weidai's beliefs and expectations, are forward-looking statements. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited the following: Weidai's goal and strategies; Weidai's expansion plans; Weidai's future business development, financial condition and results of operations; Weidai's expectations regarding demand for, and market acceptance of, its solutions and services; Weidai's expectations regarding keeping and strengthening its relationships with borrowers, investors and financial institutions and other platform participants; general economic and business conditions; the duration of COVID-19 and its impact on our business and financial performance; Weidai's assumptions underlying or related to any of the foregoing regulations and governmental policies relating to the online consumer finance industry in China; and Weidai's ability to meet the standards necessary to maintain listing of its ADSs on the NYSE, including its ability to cure any non-compliance with the NYSE's continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and Weidai does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
For investor and media inquiries, please contact:
In China:
Christensen
Mr. Christian Arnell
Tel: +86-10-5900-1548
E-mail: carnell@christensenir.com
In US:
Christensen
Ms. Linda Bergkamp
Tel: +1-480-614-3004
E-mail: lbergkamp@christensenir.com
WEIDAI LTD. |
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
(All amounts in thousands, except share data, or otherwise noted) |
|||
As of December 31, |
|||
2018 |
2019 |
||
RMB |
RMB |
US$ |
|
(in thousands) |
|||
ASSETS Current assets: |
|||
Cash and cash equivalents |
1,741,911 |
1,075,557 |
154,494 |
Restricted cash |
1,619,937 |
1,140,819 |
163,868 |
Loans and advances, net (net of allowance |
1,482,368 |
1,517,876 |
218,029 |
Short-term investments |
4,100 |
- |
- |
Prepaid expenses and other assets |
560,165 |
441,332 |
63,393 |
Amounts due from related parties |
21,797 |
24,052 |
3,455 |
Total current assets |
5,430,278 |
4,199,636 |
603,239 |
Non-current assets: |
|||
Restricted cash |
19,368 |
- |
- |
Long-term investments |
13,333 |
13,574 |
1,950 |
Loans and advances, net (net of allowance of RMB6,027 |
421,564 |
49,643 |
7,131 |
Prepaid expenses and other assets |
7,606 |
23,429 |
3,365 |
Property, equipment and software, net |
88,731 |
59,783 |
8,587 |
Goodwill |
5,812 |
5,812 |
835 |
Deferred tax assets |
329,796 |
675,089 |
96,970 |
Total non-current assets |
886,210 |
827,330 |
118,838 |
Total assets |
6,316,488 |
5,026,966 |
722,077 |
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||
Current liabilities (including current liabilities of the |
|||
Payable to institutional funding partners and online |
1,005,236 |
289,026 |
41,516 |
Current account with online investors and borrowers |
2,005,605 |
1,275,210 |
183,172 |
Income tax payable |
70,679 |
237,102 |
34,058 |
Accrued expenses and other liabilities |
501,439 |
397,406 |
57,083 |
Amounts due to related parties |
28,728 |
29,050 |
4,173 |
Deferred revenue |
11,962 |
- |
- |
Contract liabilities |
- |
271,741 |
39,033 |
Total current liabilities |
3,623,649 |
2,499,535 |
359,035 |
Non-current liabilities (including non-current liabilities |
|||
Payable to institutional funding partners and online |
450,160 |
51,444 |
7,389 |
Deferred revenue |
11,343 |
- |
- |
Contract liabilities |
- |
198,282 |
28,481 |
Other non-current liabilities |
14,110 |
- |
- |
Total non-current liabilities |
475,613 |
249,726 |
35,870 |
Total liabilities |
4,099,262 |
2,749,261 |
394,905 |
Shareholders' equity |
|||
Class A ordinary shares (par value of US$0.000002 per |
- |
- |
- |
Class B ordinary shares (par value of US$0.000002 per |
1 |
1 |
- |
Additional paid-in capital |
1,170,956 |
1,235,752 |
177,505 |
Accumulated other comprehensive loss |
(2,700) |
(2,510) |
(361) |
Retained earnings |
1,040,443 |
1,038,323 |
149,146 |
Total Weidai Ltd. shareholders' equity |
2,208,700 |
2,271,566 |
326,290 |
Noncontrolling interests |
8,526 |
6,139 |
882 |
Total shareholders' equity |
2,217,226 |
2,277,705 |
327,172 |
TOTAL LIABILITIES AND SHAREHOLDERS' |
6,316,488 |
5,026,966 |
722,077 |
Weidai Ltd. |
|||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
|||
(All amounts in thousands, except share data, or otherwise noted) |
|||
Year Ended December 31, |
|||
2018 |
2019 |
||
RMB |
RMB |
US$ |
|
(in thousands, except for share, per share and per ADS |
|||
Net revenues: |
|||
Loan facilitation services (including related |
3,155,721 |
- |
- |
Post facilitation services. |
342,052 |
- |
- |
Loan service fee (including related party |
- |
2,955,050 |
424,466 |
Other revenues (including related party |
189,712 |
273,433 |
39,276 |
Financing income |
402,750 |
195,364 |
28,062 |
Less: Funding costs |
(156,138) |
(50,610) |
(7,270) |
Net financing income |
246,612 |
144,754 |
20,792 |
Business related taxes and surcharges |
(20,623) |
(15,743) |
(2,261) |
Total net revenues |
3,913,474 |
3,357,494 |
482,273 |
Provision for loans and advances |
(751,572) |
(1,239,962) |
(178,109) |
Net revenues after provision for loans |
3,161,902 |
2,117,532 |
304,164 |
Operating costs and expenses: |
|||
Provision for financial guarantee liabilities |
(21,712) |
(19,206) |
(2,759) |
Origination and servicing expenses (including |
(1,757,935) |
(1,388,640) |
(199,466) |
Sales and marketing expenses (including |
(221,117) |
(138,068) |
(19,832) |
General and administrative expenses (including |
(379,415) |
(281,956) |
(40,500) |
Research and development expenses |
(139,318) |
(81,664) |
(11,730) |
Total operation costs and expenses |
(2,519,497) |
(1,909,534) |
(274,287) |
Income from operations |
642,405 |
207,998 |
29,877 |
Interest income, net |
66,791 |
39,616 |
5,690 |
Government subsidies |
70,351 |
106,873 |
15,351 |
Other (expenses) income, net |
(15,288) |
13,998 |
2,011 |
Net income before income taxe |
764,259 |
368,485 |
52,929 |
Income tax expenses |
(159,629) |
(105,243) |
(15,117) |
Net income |
604,630 |
263,242 |
37,812 |
Net income attributable to noncontrolling |
(3,011) |
(9,632) |
(1,384) |
Net income attributable to Weidai Ltd.'s |
601,619 |
253,610 |
36,428 |
Reversal of accretion on Series C preferred |
120,000 |
- |
- |
Net income attributable to Weidai Ltd.'s |
721,619 |
253,610 |
36,428 |
Earnings per share: |
|||
Basic |
10.93 |
3.60 |
0.52 |
Diluted |
10.93 |
3.60 |
0.52 |
Shares used in earnings per share |
|||
Basic |
50,954,061 |
70,449,524 |
70,449,524 |
Diluted |
50,954,061 |
70,449,524 |
70,449,524 |
Other comprehensive (loss) income |
|||
Foreign currency translation adjustment |
(2,700) |
190 |
27 |
Comprehensive income |
601,930 |
263,432 |
37,839 |
Comprehensive income attributable to |
(3,011) |
(9,632) |
(1,384) |
Comprehensive income attributable to |
598,919 |
253,800 |
36,455 |
Reversal of accretion on Series C preferred |
120,000 |
- |
- |
Comprehensive income attributable to |
718,919 |
253,800 |
36,455 |
Weidai Ltd. |
|||
UNAUDITED Reconciliation of GAAP And Non-GAAP Results |
|||
(All amounts in thousands, except share data, or otherwise noted) |
|||
Year Ended December, 31 |
|||
2018 |
2019 |
||
RMB |
RMB |
US$ |
|
(in thousands) |
|||
Net income |
604,630 |
263,242 |
37,812 |
Add: |
|||
Share-based compensation expenses |
106,571 |
64,796 |
9,307 |
Adjusted net income |
711,201 |
328,038 |
47,119 |
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