omniture

Yintech Reports First Quarter 2020 Unaudited Financial Results

First Quarter 2020 Net Commissions and Fees Increased by 68.8% to RMB416.0 Million and Net Income Attributable to Yintech Increased by 28.0% to RMB88.6 Million Year-over-Year
Yintech Investment Holdings Ltd.
2020-05-27 17:30 8377

SHANGHAI, May 27, 2020 /PRNewswire/ -- Yintech Investment Holdings Limited (NASDAQ: YIN) ("Yintech" or the "Company"), a leading provider of investment and trading services for individual investors in China, today announced its unaudited financial results for the first quarter of 2020.

First Quarter 2020 Financial Highlights


For the quarter ended

(In RMB million, except
otherwise specified)

March 31,

2019


March 31,

2020

Q1'20 vs.

Q1'19

Total Revenues

454.3


490.9

8.1%

Revenue related to business

259.7


429.5

65.4%

Net commissions and fees

246.5


416.0

68.8%

Net commissions and fees
from commodities services

123.7


304.4

146.1%

Net commissions and fees
from securities services

122.8


111.6

(9.1%)

Net income/(loss) attributable to
Yintech

69.2


88.6

28.0%

Earnings/(loss) per ADS -
diluted (RMB)

0.92


1.18







 

Non-GAAP data (Refer to "Reconciliation of GAAP to Non-GAAP Results")

Non-GAAP net income/(loss)
attributable to Yintech

85.6


94.0

9.8%

Non-GAAP earnings/(loss)
per ADS - diluted (RMB)

1.14


1.25



"As COVID-19 began to spread globally in the first quarter of 2020, economies, businesses and investment encountered a great deal of uncertainty and financial markets experienced tremendous volatility as 2020 unfolded. Despite these negative impacts along with fewer trading days due to the Chinese Lunar New Year and the COVID-19 pandemic, we began this year on a strong note on our primary business. Our customer trading volume reached RMB846.5 billion, an increase of 134.7% year-over-year, and net commissions and fees were RMB416.0 million, an increase of 68.8% from the same period last year. The numbers of our active account and tradable account both grew," said Mr. Wenbin Chen, Chairman and CEO of Yintech.

"This growth was attributable to our keen insight on the Chinese financial market, our investment expertise and our deep understanding to the Chinese individual investors.  As estimated in the previous quarter, the overwhelming COVID-19 pandemic caused the unusual volatility of the financial market, which virtually presented more opportunities than risks to us. This was especially true in our stellar growth of spot gold trading business, which reached an all-time high in the quarter, demonstrating our strong operational capabilities. In addition, our pure online operation enabled us to grow further and stronger under the backdrop of offline shifting to online deem to be a tendency. Further, our flexible business model and our operational agility in adjusting our business to accommodate with the market dynamics is becoming more evident."

"As a result, our total revenues once again exceeded management's high-end guidance, reaching RMB490.9 million, representing a 8.1% increase year-over-year. Our net income attributable to shareholders increased by 28% to RMB88.6 million. If comparing net income generated by our primary business from commodities and securities, or if excluding the investment gains or loss, which to a large extent, was correlated to market conditions, our bottom line improved even further. We continued to build balance sheet strength. Our total cash and investment securities remained flattish at RMB2.08 billion, and our total shareholder's equity increased to RMB2.85 billion," Mr. Wenbin Chen concluded.

First Quarter 2020 Financial Results

Total revenues for the quarter were RMB490.9 million (US$69.3 million), compared with RMB454.3 million in the same quarter last year, representing an increase of 8.1% year-over-year. The increase was mainly due to increases in commissions and fees from commodities, in particular spot commodities trading services. Revenue related to business, which comprises mainly of net commissions and fees were RMB429.5 million (US$60.7 million), compared with RMB259.7 million in the same quarter last year, representing an increase of 65.4% year-over-year.

Net commissions and fees for the quarter were RMB416.0 million (US$58.7 million), representing an increase of 68.8% year-over-year, primarily due to the reason stated above.

Customer trading volume for the quarter was RMB846.5 billion (US$119.5 billion), representing an increase of 134.7% year-over-year primarily due to an increase in trading volume of spot commodities.

Customer trading volume for commodities (representing customer trading volume of spot and futures commodities) was RMB839.3 billion (US$118.5 billion) during the quarter, an increase of 166.2% year-over-year.

Net commissions and fees from commodities services for the quarter were RMB304.4 million (US$43.0 million), representing an increase of 146.1% year-over-year, primarily attributable to an increase in customer trading volume for commodities.

Effective fee rate for commodities (representing net commissions and fees from commodities services as a percentage of customer trading volume for commodities) for the quarter was 0.036%, compared with 0.039% in the same quarter last year.

Customer trading volume for securities (representing customer trading volume of overseas securities brokerage) was RMB7.2 billion (US$1.0 billion) during the quarter, representing a decrease of 84.1% year-over-year. The volatility in securities trading was mainly the result of the Company's strategy shift to accommodate the market and policy environment of the corresponding quarter on an ongoing basis.

Net commissions and fees from securities services for the quarter were RMB111.6 million (US$15.8 million), representing a decrease of 9.1% year-over-year due to the reason stated above.

Effective fee rate for securities (representing net commissions and fees from overseas securities brokerage services as a percentage of customer trading volume for overseas securities brokerage) for the quarter was 0.128%, compared with 0.056% in the same quarter last year.

Expenses for the quarter were RMB375.6 million (US$53.0 million), an increase of 22.6% year-over-year mainly because of increase in advertising and promotion expenses.

Net income for the quarter was RMB89.4 million (US$12.6 million), compared with net income of RMB75.1 million in the same quarter last year.

Net income attributable to Yintech for the quarter was RMB88.6 million (US$12.5 million), compared with RMB69.2 million in the same quarter last year.

Non-GAAP net income attributable to Yintech (Refer to "Reconciliation of GAAP to Non-GAAP Results") for the quarter was RMB94.0 million (US$13.3 million), compared with RMB85.6 million in the same quarter last year. 

Diluted earnings per ADS for the quarter was RMB1.18 (US$0.17), compared with RMB0.92 in the same quarter last year.

Non-GAAP diluted earnings per ADS (Refer to "Reconciliation of GAAP to Non-GAAP Results") for the quarter was RMB1.25 (US$0.18), compared with RMB1.14 in the same quarter last year.

As of March 31, 2020, the Company had RMB2,082.2 million (US$294.1 million) in cash and investment securities, compared with RMB2,105.4 million as of December 31, 2019.

As of March 31, 2020, total shareholders' equity of Yintech was RMB2,851.4 million (US$402.7 million), compared with RMB2,771.4 million as of December 31, 2019.

Share Repurchase Program

On May 30, 2019, the Company announced a share repurchase program whereby Yintech is authorized to repurchase up to US$20 million of its issued and outstanding ADSs during the following 12-month period. As of March 31, 2020, the Company had purchased an aggregate of 381,166 ADSs for a total amount slightly over US$1,962 thousand since June 1, 2019.

On May 26, 2020, Yintech's board of directors approved another share repurchase program ("2020-2021 Share Repurchase Program"), effective on June 2, 2020, which authorized the Company to repurchase up to US$20 million worth of its issued and outstanding American Depositary Shares over the course of 12 months. Yintech's proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means depending on market conditions and other factors as well as subject to relevant rules under United States securities regulations. All repurchased shares will be cancelled. The share repurchase program will be funded with Yintech's available cash balance. As of March 31, 2020, Yintech had cash and investment securities of approximately RMB2,082.2 million (US$294.1 million).

Second Quarter 2020 Guidance

Based on the information available as of the date of this press release, Yintech provides the following outlook, which reflects the Company's current and preliminary view and is subject to change:

  • Revenue related to business will be the range of RMB570 million to RMB590 million, representing an increase of 77.6% to 83.8% compared to the same period last year.
  • Total revenues will be in the range of RMB590 million to RMB610 million, representing an increase of 104.2% to 111.1% compared to the same period last year.

Impact of COVID-19

The drastic market fluctuations influenced by the COVID-19 pandemic brought a surge in our transaction volume in the first quarter of 2020. However, it might also cause instabilities of our customer's investment asset, hence might negatively affect our business in the future. In addition, the disposable income of certain of our customers may decrease or have decreased as a result of the impact of the COVID-19 outbreak, which may also adversely affect our operations. The extent of related impact on the Company's financial results and business outlook depends on the future developments of the global pandemic.

Discussion of Non-GAAP Financial Measures

In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company's earnings release contains non-GAAP financial measures that exclude the effects of all forms of share-based compensation, as well as impairment and amortization of intangible assets and/or goodwill in relation to the acquisition of Gold Master. The reconciliation of these non-GAAP financial measures to the nearest GAAP measures is set forth in the table captioned "Reconciliation of GAAP to Non-GAAP Results" below.

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for financial measures prepared in accordance with U.S. GAAP. The financial results reported in accordance with U.S. GAAP and reconciliation of GAAP to non-GAAP results should be carefully evaluated. The non-GAAP financial measure used by the Company may be prepared differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

When evaluating the Company's operating performance in the periods presented, management reviewed the non-GAAP net income and non-GAAP EPS results reflecting adjustments to exclude the impact of share-based compensation as well as impairment and amortization of intangible assets and/or goodwill in relation to the acquisition of Gold Master to supplement U.S. GAAP financial data. As such, the Company believes that the presentation of the non-GAAP net income and the diluted non-GAAP income per ADS provides important supplemental information to investors regarding financial and business trends relating to the Company's financial condition and results of operations in a manner consistent with that used by management. Pursuant to U.S. GAAP, the Company recognized significant amounts of expenses for the restricted shares and share options, as well as amortization of intangible assets in relation to the acquisition of Gold Master in the periods presented. The Company utilized the non-GAAP financial results to make financial results comparable period to period and to better understand its historical business operations.

Currency Conversion

This announcement contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars were made at the exchange rate of RMB7.0808 to US$1.00, as set forth in the H.10 statistical release of the Federal Reserve Board on March 31, 2020. No representation is intended to imply that these Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollar amounts at such rate, or at any other rate.

Conference Call Information

The Company will host a conference call to discuss the earnings at 8:00 a.m. U.S. Eastern Time on Wednesday, May 27, 2020 (8:00 p.m. Hong Kong Time on the same day).

Dial-in numbers for the live conference call are as follows:

International 

+1 412 902 4272

U.S. Toll Free 

+1 888 346 8982

Mainland China Toll Free

400 120 1203

Hong Kong 

+852 3018 4992

Hong Kong Toll Free

800 905 945

Passcode 

Yintech

A telephone replay of the call will be available after the conclusion of the conference call through 11:59 p.m. Hong Kong Time, June 03, 2020.

Dial-in numbers for the replay are as follows:

International Dial-in:

1 412 317 0088

U.S. Toll Free:

1 877 344 7529

Passcode:

10144198

A live and archived webcast will be available on the Investor Relations section of Yintech's website at http://ir.yintech.net/.

Safe Harbor Statement

All statements other than statements of historical fact contained in this release, including statements regarding future results of the operations of the Company are forward-looking statements, which are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: the Company's ability to effectively acquire and retain its customers; the Company's diversification of its business among different commodity exchanges; the adjustments in commissions and other fees set by relevant commodity exchanges; the Company's ability to constantly upgrade its technology platform and software; general market conditions of online spot commodity trading industry and stock market; intense competition among service providers in this industry; the Company's relatively short operating history; the price of the Company's ADSs and changing market conditions for its ADSs; acquisition-related risks, including unknown liabilities and integration risks; as well as those risks detailed from time to time under the caption "Risk Factors" and elsewhere in the Company's Securities and Exchange Commission filings and reports, including in the Company's annual report on Form 20-F for the year ended December 31, 2019. In addition, the Company operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for the management to predict all risks, nor can the Company assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements that the Company may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this release are inherently uncertain and may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, you should not rely upon forward-looking statements as predictions of future events. The Company does not undertake any obligation to update publicly or revise any forward-looking statements for any reason after the date of this release, nor to conform these statements to actual results, future events, or to changes in the Company's expectations.

About Yintech

Yintech (NASDAQ: YIN) is a leading provider of investment and trading services for individual investors in China. Yintech strives to provide best-in-class financial information, investment tools and services to its customers by leveraging financial technology and mobile platforms. Currently, Yintech is focused on the provision of gold and other commodities trading services, securities advisory services, securities information platform services, overseas securities trading services and asset management services.

 

 

 

Operational Highlights




For the three months ended


March 31,

2019

March 31,

2020

Customer trading volume (in RMB billion)[1]



Commodities services[2] 

315.3

839.3

Securities services[3]

45.3

7.2

Total

360.6

846.5

Net commissions and fees (in RMB million)



Commodities services[2] 

123.7

304.4

Securities services[3]

122.8

111.6

Total

246.5

416.0

Effective fee rate[4]

0.041%

0.037%

Commodities services[5]

Securities services[6]

0.039%

0.056%

0.036%

0.128%

Active accounts[7]

22,091

32,922

Tradable accounts[8]

134,793

160,762

 

Note

[1] Represents customer trading volume of spot and futures commodities as well as overseas securities, including
RMB846.5 billion in the First Quarter of 2020.

[2] Represents net commissions and fees earned from customer trading of spot and futures commodities contracts.

[3] Represents net commissions and fees earned by providing securities advisory services, securities information
platform services, overseas securities trading services and asset management services to customers.

[4] Represents net commissions and fees from commodities and overseas securities brokerage services as a
percentage of customer trading volume.

[5] Represent net commissions and fees from commodities services as a percentage of customer trading
volume for commodities.

[6] Represent net commissions and fees from overseas securities brokerage services as a percentage of customer
trading volume for securities brokerage.

[7] Refers to a regular customer account that executed at least one trade of spot and futures commodities
contracts or a customer account that executed at least one trade of overseas securities through us during the
period.

[8] Refers to a regular customer account that has been activated for trading of spot and futures commodities
contracts or a customer account that has been activated for trading of overseas securities and has remained
tradable as of the end of the given period.

 

Consolidated Statements of Comprehensive Income

In '000, except for per ADS data and otherwise specified




For the Three Months Ended


March 31,

2019

RMB

March 31,
2020

RMB

March 31,
2020

US$

Revenues




Net commissions and fees

246,490

415,973

58,747

Other revenue

13,171

13,561

1,915





Revenue related to business

259,661

429,534

60,662





Trading gains

187,090

54,836

7,744

Interest income

7,583

6,573

928


 

454,334

490,943

69,334

Expenses




Commission expense

(67)

(102)

(14)

Employee compensation and
benefits

(185,279)

(192,538)

(27,192)

Advertising and
promotion expenses

(64,039)

(119,633)

(16,895)

Information technology
and communications

(6,430)

(8,382)

(1,184)

Occupancy and
Equipment Expenses

(25,399)

(21,424)

(3,026)

Taxes and surcharges

(1,158)

(1,110)

(157)

Intangible asset
amortization

(6,995)

(6,481)

(915)

Current expected credit losses

-

(2,013)

(284)

Other expenses

(17,012)

(23,926)

(3,379)



(306,379)

(375,609)

(53,046)





Profit/(loss) before
income taxes

147,955

115,334

16,288

Income tax
(expenses)/benefit

(72,872)

(25,975)

(3,668)

Net income/(loss)

75,083

89,359

12,620

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

5,868

766

108

Net income/(loss)
attributable to Yintech

69,215

88,593

12,512

Other comprehensive
income/(loss)

(13,183)

(5,343)

(755)

Comprehensive
income/(loss)
attributable to Yintech

56,032

83,250

11,757






Earnings/(loss) per
ADS[9]




Basic

0.95

1.22

0.17

Diluted

0.92

1.18

0.17





Weighted average
number of shares
('000)




Basic

1,454,486

1,455,493

1,455,493

Diluted

1,505,934

1,507,787

1,507,787





Number of shares
outstanding at the
end of the period
('000)

1,428,667

1,460,832

1,460,832









Note

[9] Each ADS represents 20 ordinary shares.

 

 

Consolidated Balance Sheets

In '000, except otherwise specified



December 31,

2019

RMB

March 31,
2020

RMB

March 31,
2020

US$

Assets




Cash

209,507

241,610

34,122

Entrusted bank balances held on behalf of
customers

89,157

97,173

13,723

Investment securities

1,895,874

1,840,587

259,941

Deposits with clearing organizations

20,330

43,129

6,091

Amount due from related parties

20,000

20,000

2,825

Equipment and leasehold improvements

13,844

13,880

1,960

Deferred tax assets

27,206

20,973

2,962

Goodwill

637,835

637,835

90,080

Intangible assets

302,613

297,167

41,968

Accounts receivable

164,391

229,550

32,419

Operating lease right-of-use assets

34,476

22,106

3,122

Other assets

225,302

228,417

32,257

Equity method investments

24,845

24,858

3,511

Total assets

3,665,380

3,717,285

524,981





Liabilities and shareholders' equity




Amount due to related parties

4,426

9,240

1,305

Deferred tax liabilities

118,469

98,252

13,876

Income tax payable

171,793

188,453

26,615

Accounts payable

114,552

108,280

15,292

Accrued employee benefits

271,965

222,177

31,377

Operating lease liabilities

30,846

18,501

2,613

Deferred revenue

117,110

146,359

20,670

Other liabilities

64,773

74,594

10,534

Total liabilities

893,934

865,856

122,282





Equity attributable to Yintech's shareholder

2,618,550

2,704,650

381,970

Equity attributable to non-controlling

interests

152,896

146,779

20,729

Total shareholders' equity

2,771,446

2,851,429

402,699





Total liabilities and shareholders' equity

3,665,380

3,717,285

524,981

 

 

Reconciliation of GAAP to Non-GAAP Results

In '000, except for per ADS data and otherwise specified




For the three months ended


March 31,

2019

RMB

March 31,
2020

RMB

March 31,
2020

US$





Net income/(loss) attributable to Yintech

69,215

88,593

12,512

Add: Share-based compensation

11,668

671

94

Add: Amortization of intangible assets in

relation to the acquisition of Gold Master,
net of tax effect

4,737

4,737

669

Non-GAAP net income/(loss)
 attributable to Yintech

85,620

94,001

13,275





Non-GAAP earnings/(loss) per
ADS[9] (RMB)




Basic

1.18

1.29

0.18

Diluted

1.14

1.25

0.18



Note

[9] Each ADS represents 20 ordinary shares.

 

For investor and media inquiries, please contact:

Yintech

Yvonne Young
Phone: +86 21 2028 9009 ext 8270
E-mail: ir@yintech.cn

 

Cision View original content:http://www.prnewswire.com/news-releases/yintech-reports-first-quarter-2020-unaudited-financial-results-301065846.html

Source: Yintech Investment Holdings Ltd.
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