6-K
Yiren Digital Ltd. (YRD)
UNITED STATES
SECURITIES AND EXCHANGECOMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATEISSUER
PURSUANT TO RULE 13a-16OR 15d-16 UNDER
THE SECURITIES EXCHANGEACT OF 1934
For the month of March 2024
Commission File Number: 001-37657
YIREN DIGITAL LTD.
28/F, China MerchantsBureau Building, 118 Jianguo Road
Chaoyang District,Beijing 100022
The People’sRepublic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
| Form 20-F x | Form 40-F ¨ |
|---|
Exhibit Index
| Exhibit No. | Description |
|---|---|
| 99.1 | Yiren Digital Reports Fourth Quarter and Fiscal Year 2023 Financial Results |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Yiren Digital Ltd. | ||
|---|---|---|
| By: | /s/ Na Mei | |
| Name: | Na Mei | |
| Title: | Chief Financial Officer |
Date: March 22, 2024
Exhibit 99.1
Yiren Digital ReportsFourth Quarter and Fiscal Year 2023 Financial Results
BEIJING – March 21, 2024 – Yiren Digital Ltd. (NYSE: YRD) (“Yiren Digital” or the “Company”), an AI-powered platform providing a comprehensive suite of financial and lifestyle services in China, today announced its unaudited financial results for the quarter ended December 31, 2023.
Fourth Quarter 2023 and Fiscal Year 2023 Operational Highlights
Financial Services Business
| ● | Total<br> loans facilitated in the fourth quarter of 2023 reached RMB11.6 billion (US$1.6 billion),<br> representing an increase of 18.7% from RMB9.8 billion in the third quarter of 2023 and compared<br> to RMB6.8 billion in the same period of 2022. For the fiscal year of 2023, total loans facilitated<br> reached RMB36.0 billion, compared to RMB22.6 billion in 2022. |
|---|---|
| ● | Cumulative<br> number of borrowers served reached 9,295,666 as of December 31, 2023, representing an<br> increase of 8.1% from 8,595,780 as of September 30, 2023 and compared to 7,277,627 as<br> of December 31, 2022. |
| --- | --- |
| ● | Number<br> of borrowers served in the fourth quarter of 2023 was 1,371,501, representing an increase<br> of 13.9% from 1,204,012 in the third quarter of 2023 and compared to 862,226 in the same<br> period of 2022. The increase was driven by the strong demand for our small revolving loan<br> products and the improvement of customer acquisition efficiency. For the fiscal year of 2023,<br> total number of borrowers served was 2,891,901, compared to 1,606,893 in 2022. |
| --- | --- |
| ● | Outstanding<br> balance of performing loans facilitated reached RMB18.3 billion (US$2.6 billion) as of December 31,<br> 2023, representing an increase of 20.9% from RMB15.1 billion as of September 30, 2023<br> and compared to RMB11.3 billion as of December 31, 2022. |
| --- | --- |
Insurance Brokerage Business
| ● | Cumulative<br> number of insurance clients served reached 1,283,102 as of December 31, 2023, representing<br> an increase of 2.1% from 1,256,762 as of September 30, 2023 and compared to 924,824<br> as of December 31, 2022. |
|---|---|
| ● | Number<br> of insurance clients served in the fourth quarter of 2023 was 102,556, representing a decrease<br> of 17.1% from 123,693 in the third quarter of 2023 and compared to 85,314 in the same period<br> of 2022. The decrease was primarily due to the decline in life insurance volume following<br> product changes under the new regulations. For the fiscal year of 2023, total number of insurance<br> clients served was 358,278, compared to 431,701 in 2022. |
| --- | --- |
| ● | Gross<br> written premiums in the fourth quarter of 2023 were RMB1,208.7 million (US$170.2 million),<br> representing a decrease of 15.4% from RMB1,428.5 million in the third quarter of 2023 and<br> compared to RMB1,335.5 million in the same period of 2022. The decrease was mainly attributed<br> to the declined life insurance volume following product changes under the new regulations.<br> For the fiscal year of 2023, total gross written premiums were RMB4,893.0 million, compared<br> to RMB3,936.6 million in 2022. |
| --- | --- |
Consumption and Lifestyle Business
| ● | Total<br> gross merchandise volume generated through our e-commerce platform and “Yiren Select”<br> channel reached RMB692.7 million (US$97.6 million) in the fourth quarter of 2023, representing<br> an increase of 23.0% from RMB563.2 million in the third quarter of 2023 and compared to RMB292.1<br> million in the same period of 2022. The increase was mainly due to the continuous growth<br> of paying customers on our e-commerce platform. For the fiscal year of 2023, total gross<br> merchandise volume was RMB1,960.3 million, compared to RMB687.8 million in 2022. |
|---|
“In a year of global economic uncertainties, we wrapped up 2023 stronger than ever, showcasing the strength and resilience of our business. The year also marked a pivotal moment for us as we firmly established ourselves as a pioneering AI-driven financial and lifestyle services platform,” said Mr. Ning Tang, Chairman and Chief Executive Officer. “Through our 'AI Lab' initiative, we have been training and fine-tuning our Large Language Models (LLM) and developing our own LLM Operations platform. This endeavor will, firstly, deepen AI integration across our operational spectrum, boosting efficiency and enhancing customer experience. Secondly, we aim to expand our AI expertise beyond the fintech verticals to more selected sectors, empowering both B2B and B2C clients and partners with advanced technological capabilities. Moreover, we have recently encountered high-quality AI companies and plan to expand our AI ecosystem through strategic partnerships and investments. The horizon is brimming with exciting prospects.”
“We are glad to report a solid full year of 2023, with both our top line and bottom line realizing double-digit annual growth, beating our previous guidance.” Ms. Na Mei, Chief Financial Officer commented. “Our balance sheet remains strong with total cash and cash equivalents of RMB5.8 billion by the end of the year, providing a sufficient buffer for us to respond to any business opportunities in institutional operations, international expansion, and strategic AI deployment.”
Fourth Quarter 2023 Financial Results
Totalnet revenue in the fourth quarter of 2023 was RMB1,274.3 million (US$179.5 million), representing an increase of 17.1% from RMB1,088.1 million in the fourth quarter of 2022. Particularly, in the fourth quarter of 2023, revenue from financial services business was RMB781.3 million (US$110.0 million), representing an increase of 22.2% from RMB639.2 million in the same period of 2022. The increase was attributed to the persistent and growing demand for our small revolving loan products. Revenue from insurance brokerage business was RMB98.2 million (US$13.8 million), representing a decrease of 50.7% from RMB199.0 million in the fourth quarter of 2022. The decrease was due to declined sales of life insurance attributed to product changes under the new regulations. Revenue from consumption and lifestyle business and others was RMB394.8 million (US$55.6 million), representing an increase of 58.0% from RMB249.9 million in the fourth quarter of 2022. The increase was primarily attributed to the continuous growth in gross merchandise volume generated through our e-commerce platform, driven by an expanding base of paying customers on the platform.
Salesand marketing expenses in the fourth quarter of 2023 were RMB205.7 million (US$29.0 million), compared to RMB103.4 million in the same period of 2022. The increase was primarily due to the growth of financial services business volume.
Origination,servicing and other operating costs in the fourth quarter of 2023 were RMB184.7 million (US$26.0 million), compared to RMB211.6 million in the same period of 2022. The decrease was due to the decline in sales of life insurance products attributed to product changes under the new regulations.
Researchand development expenses^1^ in the fourth quarter of 2023 were RMB47.6 million (US$6.7 million), compared to RMB32.9 million in the same period of 2022. The increase was mainly attributed to our ongoing investment in AI upgrades and technological innovations.
Generaland administrative expenses in the fourth quarter of 2023 were RMB50.5 million (US$7.1 million), which remained stable compared to RMB52.3 million in the same period of 2022.
Allowancefor contract assets, receivables and others in the fourth quarter of 2023 was RMB98.7 million (US$13.9 million), compared to RMB55.7 million in the same period of 2022. The increase was primarily attributed to the growing volume of loans facilitated on our platform.
Incometax expense in the fourth quarter of 2023 was RMB140.8 million (US$19.8 million).
Net incomein the fourth quarter of 2023 was RMB571.3 million (US$80.5 million), as compared to RMB485.2 million in the same period in 2022. The increase was primarily due to the recovery of business volume and optimization of our business structure.
AdjustedEBITDA^2^ (non-GAAP) in the fourth quarter of 2023 was RMB684.8 million (US$96.5 million), compared to RMB645.1 million in the same period of 2022.
^1^ Research and development expenses have been segregated from general and administrative expenses and restated for historical periods to better reflect the Company’s cost and expense structure.
^2^ “Adjusted EBITDA” is a non-GAAP financial measure. For more information on this non-GAAP financial measure, please see the section of “Operating Highlights and Reconciliations of GAAP to Non-GAAP Measures” and the table captioned “Reconciliations of Adjusted EBITDA” set forth at the end of this press release.
Basicand diluted income per ADS in the fourth quarter of 2023 were RMB6.5 (US$0.9) and RMB6.5 (US$0.9) respectively, compared to a basic per ADS of RMB5.4 and a diluted per ADS of RMB5.4 in the same period of 2022.
Net cashgenerated from operating activities in the fourth quarter of 2023 was RMB417.2 million (US$58.8 million), compared to RMB471.9 million in the same period of 2022.
Net cashused in investing activities in the fourth quarter of 2023 was RMB260.3 million (US$36.7 million), compared to RMB283.1 million provided by investing activities in the same period of 2022.
Net cashprovided by financing activities in the fourth quarter of 2023 was RMB332.3 million (US$46.8 million), compared to RMB54.6 million used in financing activities in the same period of 2022.
As of December 31, 2023, cash and cash equivalents were RMB5,791.3 million (US$815.7 million), compared to RMB5,438.0 million as of September 30, 2023. As of December 31, 2023, the balance of held-to-maturity investments was RMB10.4 million (US$1.5 million), compared to RMB4.8 million as of September 30, 2023. As of December 31, 2023, the balance of available-for-sale investments was RMB438.1 million (US$61.7 million), compared to RMB338.1 million as of September 30, 2023. As of December 31, 2023, the balance of trading securities was RMB76.1 million (US$10.7 million), compared to RMB74.2 million as of September 30, 2023.
Delinquencyrates. As of December 31, 2023, the delinquency rates for loans that are past due for 15-29 days, 30-59 days and 60-89 days were 0.9%, 1.4% and 1.2%, respectively, compared to 0.8%, 1.2% and 1.0%, respectively, as of September 30, 2023.
CumulativeM3+ net charge-off rates. As of December 31, 2023, the cumulative M3+ net charge-off rates for loans originated in 2020, 2021 and 2022 were 7.8%, 6.4% and 4.7%, respectively, as compared to 7.9%, 6.5% and 4.5%, respectively, as of September 30, 2023.
Fiscal Year 2023 Financial Results
Totalnet revenue in 2023 was RMB4,895.6 million (US$689.5 million), compared to RMB3,434.6 million in 2022. Specifically, revenue from financial services business in 2023 was RMB2,515.1 million (US$354.2 million), compared to RMB1,959.7 million in 2022. The increase was driven by the growing demand for our small revolving loan products. Revenue from insurance brokerage business in 2023 was RMB963.8 million (US$135.8 million), compared to RMB731.8 million in 2022. The increase was driven by our improved customer acquisition and serving capabilities. Revenue from consumption and lifestyle business and others was RMB1,416.7million (US$199.5 million), compared to RMB743.1 million in 2022. The increase was due to the continuous growth of paying customers on our e-commerce platform.
Salesand marketing expenses in 2023 was RMB656.6 million (US$92.5 million), compared to RMB574.0 million in 2022. The increase was primarily due to the growth of financial services business volume.
Origination,servicing and other operating costs in 2023 was RMB976.2 million (US$137.5 million), compared to RMB776.8 million in 2022. The increase was due to the rapid growth of our overall business scale compared to the year of 2022.
Researchand development expenses in 2023 was RMB148.8 million (US$21.0 million), which remained stable compared to RMB151.9 million in 2022.
Generaland administrative expenses in 2023 was RMB231.1 million (US$32.6 million), which remained stable compared to RMB271.8 million in 2022.
Allowancefor contract assets, receivables and others in 2023 was RMB288.2 million (US$40.6 million), compared to RMB188.2 million in 2022. The increase was primarily attributed to the growing volume of loans facilitated on our platform.
Incometax expense in 2023 was RMB565.2 million (US$79.6 million).
Net incomein 2023 was RMB2,080.2 million (US$293.0 million), compared to RMB1,194.9 million in 2022. The increase was driven by the growing of our business volume.
AdjustedEBITDA (non-GAAP) in 2023 was RMB2,578.5 million (US$363.2 million), compared to RMB1,570.3 million in 2022.
Basicand diluted income per ADS in 2023 were RMB23.5 (US$3.3) and RMB23.3 (US$3.3) respectively, compared to a basic per ADS of RMB13.7 and a diluted per ADS of RMB13.6 in 2022.
Net cashgenerated from operating activities in 2023 was RMB2,171.0 million (US$305.8 million), compared to RMB1,849.4 million in 2022.
Business Outlook
Based on the Company’s preliminary assessment of business and market conditions, the Company projects the total revenue in the full year of 2024 to be between RMB5.8 billion to RMB6.8 billion, with a healthy net profit margin.
This is the Company’s current and preliminary view, which is subject to changes and uncertainties.
Recent Development
In response to the recent SEC rules on cybersecurity risk management, strategy, governance, and incident disclosure, the board of directors has proactively adopted the Cybersecurity Incident Response Policy. This initiative, including the establishment of a cybersecurity risk management committee chaired by Mr. Ning Tang with members Mr. Sam Hanhui Sun and Mr. Hao Li, underscores the Company's dedication to not only adhering to but exceeding regulatory standards, thereby enhancing the overall efficiency and transparency of corporate governance. The Company's approach is rooted in a proactive stance towards risk management related to the use of information technology and data protection, reflecting a broader commitment to maintaining stakeholder trust by staying at the forefront of industry best practices. For more detailed information on the cybersecurity risk management committee and the committee's charter, please visit our website at https://ir.yiren.com/
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 RMB7.0999 to US$1.00, the effective noon buying rate on December 29, 2023, 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 a.m. U.S. Eastern Time on March 21, 2024 (or 8:00 p.m. Beijing/Hong Kong Time on March 21, 2024).
Participants who wish to join the call should register online in advance of the conference at: https://s1.c-conf.com/diamondpass/10037668-ghu76t.html
Once registration is completed, participants will receive the dial-in details for the conference call.
Additionally, a live and archived webcast of the conference call will be available at https://edge.media-server.com/mmc/p/rqq7rpic.
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 the 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. is an advanced, AI-powered platform providing a comprehensive suite of financial and lifestyle services in China. Our mission is to elevate customers' financial well-being and enhance their quality of life by delivering digital financial services, tailor-made insurance solutions, and premium lifestyle services. We support clients at various growth stages, addressing financing needs arising from consumption and production activities, while aiming to augment the overall well-being and security of individuals, families, and businesses.
For investor and media inquiries, please contact:
Yiren Digital
Investor Relations
Email: ir@Yirendai.com
UnauditedCondensed Consolidated Statements of Operations
(inthousands, except for share, per share and per ADS data, and percentages)
| **** | For the Three Months Ended | **** | For the Year Ended | **** | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| **** | December 31, 2022 | **** | September 30, 2023 | **** | December 31, 2023 | **** | December 31,<br> 2023 | **** | December 31, 2022 | **** | December 31, 2023 | **** | December 31,<br> 2023 | **** | |||||
| **** | RMB | **** | RMB | **** | RMB | **** | **** | RMB | **** | RMB | **** | **** | |||||||
| Net revenue: | |||||||||||||||||||
| Loan facilitation services | 525,137 | 586,883 | 722,451 | 1,362,685 | 2,240,852 | ||||||||||||||
| Post-origination services | 37,616 | 984 | 4,630 | 204,336 | 17,203 | ||||||||||||||
| Insurance<br> brokerage services | 199,027 | 264,611 | 98,158 | 731,797 | 963,822 | ||||||||||||||
| Financing services | 35,940 | 9,937 | 8,564 | 278,783 | 55,974 | ||||||||||||||
| Electronic<br> commerce services | 129,154 | 350,635 | 385,886 | 302,896 | 1,267,104 | ||||||||||||||
| Others | 161,202 | 97,724 | 54,621 | 554,123 | 350,678 | ||||||||||||||
| Total net revenue | 1,088,076 | 1,310,774 | 1,274,310 | 3,434,620 | 4,895,633 | ||||||||||||||
| Operating<br> costs and expenses: | |||||||||||||||||||
| Sales and<br> marketing | 103,427 | 195,714 | 205,730 | 573,974 | 656,603 | ||||||||||||||
| Origination,servicing<br> and other operating costs | 211,591 | 245,360 | 184,700 | 776,841 | 976,172 | ||||||||||||||
| Research<br> and development | 32,936 | 38,981 | 47,586 | 151,924 | 148,754 | ||||||||||||||
| General and<br> administrative | 52,323 | 53,519 | 50,512 | 271,794 | 231,135 | ||||||||||||||
| Allowance<br> for contract assets, receivables and others | 55,747 | 83,756 | 98,686 | 188,223 | 288,187 | ||||||||||||||
| Total<br> operating costs and expenses | 456,024 | 617,330 | 587,214 | 1,962,756 | 2,300,851 | ||||||||||||||
| Other income/(expenses): | |||||||||||||||||||
| Interest<br> income/(expense), net | 3,439 | 25,815 | 29,880 | (26,302 | ) | 80,749 | |||||||||||||
| Fair value<br> adjustments related to Consolidated ABFE | (2,962 | ) | (8,104 | ) | (13,394 | ) | ) | 18,900 | (50,171 | ) | ) | ||||||||
| Others, net | 11,991 | 5,177 | 8,504 | 30,921 | 20,000 | ||||||||||||||
| Total other income | 12,468 | 22,888 | 24,990 | 23,519 | 50,578 | ||||||||||||||
| Income<br> before provision for income taxes | 644,520 | 716,332 | 712,086 | 1,495,383 | 2,645,360 | ||||||||||||||
| Income tax expense | 159,285 | 161,917 | 140,818 | 300,512 | 565,163 | ||||||||||||||
| Net income | 485,235 | 554,415 | 571,268 | 1,194,871 | 2,080,197 | ||||||||||||||
| Weighted<br> average number of ordinary shares outstanding, basic | 179,211,437 | 176,866,653 | 175,445,539 | 174,695,959 | 176,749,706 | ||||||||||||||
| Basic income per share | 2.7076 | 3.1346 | 3.2561 | 6.8397 | 11.7692 | ||||||||||||||
| Basic income<br> per ADS | 5.4152 | 6.2692 | 6.5122 | 13.6794 | 23.5384 | ||||||||||||||
| Weighted<br> average number of ordinary shares outstanding, diluted | 179,628,555 | 178,366,565 | 177,106,305 | 175,391,332 | 178,688,319 | ||||||||||||||
| Diluted income per share | 2.7013 | 3.1083 | 3.2256 | 6.8126 | 11.6415 | ||||||||||||||
| Diluted<br> income per ADS | 5.4026 | 6.2166 | 6.4512 | 13.6252 | 23.2830 | ||||||||||||||
| Unaudited Condensed Consolidated Cash Flow Data | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | ||
| Net cash<br> generated from operating activities | 471,890 | 645,416 | 417,232 | 1,849,430 | 2,171,013 | ||||||||||||||
| Net cash provided<br> by/(used in) investing activities | 283,145 | (393,919 | ) | (260,331 | ) | ) | 52,559 | 100,045 | |||||||||||
| Net cash<br> (used in/)provided by financing activities | (54,551 | ) | (502,636 | ) | 332,309 | (489,123 | ) | (569,278 | ) | ) | |||||||||
| Effect of<br> foreign exchange rate changes | (1,107 | ) | 2,395 | (6,414 | ) | ) | 2,485 | (3,871 | ) | ) | |||||||||
| Net increase<br> in cash, cash equivalents and restricted cash | 699,377 | (248,744 | ) | 482,796 | 1,415,351 | 1,697,909 | |||||||||||||
| Cash,<br> cash equivalents and restricted cash, beginning of period | 3,661,318 | 5,824,552 | 5,575,808 | 2,945,344 | 4,360,695 | ||||||||||||||
| Cash,<br> cash equivalents and restricted cash, end of period | 4,360,695 | 5,575,808 | 6,058,604 | 4,360,695 | 6,058,604 |
All values are in US Dollars.
UnauditedCondensed Consolidated Balance Sheets
(inthousands)
| **** | As of | **** | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| **** | December 31, 2022 | **** | September 30, 2023 | **** | December 31, 2023 | **** | December 31,<br> 2023 | **** | |||
| **** | RMB | **** | RMB | **** | RMB | **** | **** | ||||
| Cash and cash equivalents | 4,271,899 | 5,437,972 | 5,791,333 | ||||||||
| Restricted cash | 88,796 | 137,836 | 267,271 | ||||||||
| Trading securities | - | 74,185 | 76,053 | ||||||||
| Accounts receivable | 221,004 | 432,824 | 499,027 | ||||||||
| Contract assets, net | 626,739 | 826,088 | 978,051 | ||||||||
| Contract cost | 787 | 271 | 32 | ||||||||
| Prepaid expenses and other assets | 321,411 | 272,577 | 426,511 | ||||||||
| Loans at fair value | 54,049 | 534,687 | 677,835 | ||||||||
| Financing receivables | 514,388 | 162,411 | 116,164 | ||||||||
| Amounts due from related parties | 1,266,232 | 940,472 | 820,181 | ||||||||
| Held-to-maturity investments | 2,700 | 4,820 | 10,420 | ||||||||
| Available-for-sale investments | 972,738 | 338,069 | 438,084 | ||||||||
| Property, equipment and software, net | 77,256 | 73,446 | 79,158 | ||||||||
| Deferred tax assets | 84,187 | 88,231 | 73,414 | ||||||||
| Right-of-use assets | 33,909 | 27,352 | 23,382 | ||||||||
| Total assets | 8,536,095 | 9,351,241 | 10,276,916 | ||||||||
| Accounts payable | 14,144 | 38,025 | 30,902 | ||||||||
| Amounts due to related parties | 227,724 | 27,664 | 14,414 | ||||||||
| Deferred revenue | 65,539 | 27,150 | 54,044 | ||||||||
| Payable to investors at fair value | - | 99,954 | 445,762 | ||||||||
| Accrued expenses and other liabilities | 1,315,006 | 1,483,190 | 1,500,522 | ||||||||
| Secured borrowings | 767,900 | - | - | ||||||||
| Deferred tax liabilities | 79,740 | 118,543 | 122,075 | ||||||||
| Lease liabilities | 35,229 | 27,709 | 23,648 | ||||||||
| Total liabilities | 2,505,282 | 1,822,235 | 2,191,367 | ||||||||
| Ordinary shares | 129 | 130 | 130 | ||||||||
| Additional paid-in capital | 5,160,783 | 5,169,821 | 5,171,232 | ||||||||
| Treasury stock | (46,734 | ) | (81,501 | ) | (94,851 | ) | ) | ||||
| Accumulated other comprehensive income | 7,765 | 25,873 | 23,669 | ||||||||
| Retained earnings | 908,870 | 2,414,683 | 2,985,369 | ||||||||
| Total equity | 6,030,813 | 7,529,006 | 8,085,549 | ||||||||
| Total liabilities and equity | 8,536,095 | 9,351,241 | 10,276,916 |
All values are in US Dollars.
OperatingHighlights and Reconciliation of GAAP to Non-GAAP Measures
(inthousands, except for number of borrowers, number of insurance clients, cumulative number of insurance clients and percentages)
| For the<br> Three Months Ended | For the<br> Year Ended | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31,<br> <br> 2022 | September 30,<br> <br> 2023 | December 31,<br> <br> 2023 | December 31,<br> 2023 | December 31,<br> <br> 2022 | December 31,<br> <br> 2023 | December 31,<br> 2023 | |||||||||||||
| RMB | RMB | RMB | RMB | RMB | |||||||||||||||
| Operating Highlights | |||||||||||||||||||
| Amount of loans facilitated | 6,783,523 | 9,814,359 | 11,645,528 | 22,623,101 | 36,036,301 | ||||||||||||||
| Number of borrowers | 862,226 | 1,204,012 | 1,371,501 | 1,606,893 | 2,891,901 | ||||||||||||||
| Remaining principal<br> of performing loans | 11,259,763 | 15,090,800 | 18,251,550 | 11,259,763 | 18,251,550 | ||||||||||||||
| Cumulative number<br> of insurance clients | 924,824 | 1,256,762 | 1,283,102 | 924,824 | 1,283,102 | ||||||||||||||
| Number of insurance<br> clients | 85,314 | 123,693 | 102,556 | 431,701 | 358,278 | ||||||||||||||
| Gross written premiums | 1,335,488 | 1,428,484 | 1,208,717 | 3,936,588 | 4,893,042 | ||||||||||||||
| First year premium | 665,452 | 914,839 | 536,252 | 2,737,062 | 3,180,334 | ||||||||||||||
| Renewal premium | 670,036 | 513,645 | 672,465 | 1,199,526 | 1,712,708 | ||||||||||||||
| Gross merchandise<br> volume | 292,086 | 563,224 | 692,733 | 687,848 | 1,960,344 | ||||||||||||||
| Segment Information | |||||||||||||||||||
| Financial services<br> business: | |||||||||||||||||||
| Revenue | 639,167 | 667,966 | 781,306 | 1,959,732 | 2,515,119 | ||||||||||||||
| Sales and marketing<br> expenses | 58,016 | 146,369 | 186,304 | 383,950 | 498,055 | ||||||||||||||
| Origination,<br> servicing and other operating costs | 38,085 | 59,300 | 77,598 | 151,539 | 223,468 | ||||||||||||||
| Insurance brokerage<br> business: | |||||||||||||||||||
| Revenue | 199,027 | 264,611 | 98,158 | 731,797 | 963,822 | ||||||||||||||
| Sales and marketing<br> expenses | 2,634 | 3,175 | 3,578 | 17,417 | 12,887 | ||||||||||||||
| Origination,<br> servicing and other operating costs | 137,256 | 176,182 | 98,019 | 524,767 | 697,669 | ||||||||||||||
| Consumption &<br> lifestyle business and others: | |||||||||||||||||||
| Revenue | 249,882 | 378,197 | 394,846 | 743,091 | 1,416,692 | ||||||||||||||
| Sales and marketing<br> expenses | 42,777 | 46,170 | 15,848 | 172,607 | 145,661 | ||||||||||||||
| Origination,<br> servicing and other operating costs | 36,250 | 9,878 | 9,083 | 100,535 | 55,035 | ||||||||||||||
| Reconciliation<br> of Adjusted EBITDA | |||||||||||||||||||
| Net income | 485,235 | 554,415 | 571,268 | 1,194,871 | 2,080,197 | ||||||||||||||
| Interest (income)/expense,<br> net | (3,439 | ) | (25,815 | ) | (29,880 | ) | ) | 26,302 | (80,749 | ) | ) | ||||||||
| Income tax expense | 159,285 | 161,917 | 140,818 | 300,512 | 565,163 | ||||||||||||||
| Depreciation<br> and amortization | 2,537 | 1,664 | 1,806 | 26,430 | 7,116 | ||||||||||||||
| Share-based<br> compensation | 1,494 | 513 | 828 | 22,136 | 6,751 | ||||||||||||||
| Adjusted EBITDA | 645,112 | 692,694 | 684,840 | 1,570,251 | 2,578,478 | ||||||||||||||
| Adjusted<br> EBITDA margin | 59.3 | % | 52.8 | % | 53.7 | % | % | 45.7 | % | 52.7 | % | % |
All values are in US Dollars.
| Delinquency<br> Rates | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 15-29 days | 30-59 days | 60-89 days | ||||||||||||||||||||
| December 31, 2019 | 0.8 | % | 1.3 | % | 1.0 | % | ||||||||||||||||
| December 31, 2020 | 0.5 | % | 0.7 | % | 0.6 | % | ||||||||||||||||
| December 31, 2021 | 0.9 | % | 1.5 | % | 1.2 | % | ||||||||||||||||
| December 31, 2022 | 0.7 | % | 1.3 | % | 1.1 | % | ||||||||||||||||
| March 31, 2023 | 0.6 | % | 1.2 | % | 1.2 | % | ||||||||||||||||
| June 30, 2023 | 0.7 | % | 1.1 | % | 1.1 | % | ||||||||||||||||
| September 30, 2023 | 0.8 | % | 1.2 | % | 1.0 | % | ||||||||||||||||
| December 31, 2023 | 0.9 | % | 1.4 | % | 1.2 | % | ||||||||||||||||
| Net Charge-Off<br> Rate | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||
| Loan Issued<br> Period | Amount<br> of Loans <br><br> Facilitated <br> During the Period | Accumulated<br> M3+ Net<br><br> Charge-Off <br> as of December 31, 2023 | Total Net<br> Charge-<br><br> Off Rate <br> as of December 31, 2023 | |||||||||||||||||||
| (in RMB thousands) | (in RMB thousands) | |||||||||||||||||||||
| 2019 | 3,431,443 | 387,239 | 11.3 | % | ||||||||||||||||||
| 2020 | 9,614,819 | 746,687 | 7.8 | % | ||||||||||||||||||
| 2021 | 23,195,224 | 1,481,751 | 6.4 | % | ||||||||||||||||||
| 2022 | 22,623,101 | 1,070,819 | 4.7 | % | ||||||||||||||||||
| 2023Q1-Q3 | 24,390,773 | 694,391 | 2.8 | % | ||||||||||||||||||
| M3+ Net Charge-Off Rate | **** | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Loan Issued<br><br> Period | Month on Book | |||||||||||||||||||||
| 4 | 7 | 10 | 13 | 16 | 19 | 22 | 25 | 28 | 31 | 34 | ||||||||||||
| 2019 Q1 | 0.0 | % | 0.8 | % | 2.0 | % | 3.4 | % | 5.3 | % | 5.9 | % | 6.3 | % | 6.3 | % | 6.3 | % | 6.3 | % | 6.3 | % |
| 2019 Q2 | 0.1 | % | 1.5 | % | 4.5 | % | 7.5 | % | 8.8 | % | 9.2 | % | 9.9 | % | 10.3 | % | 10.6 | % | 10.6 | % | 10.6 | % |
| 2019 Q3 | 0.2 | % | 2.9 | % | 6.8 | % | 9.0 | % | 10.4 | % | 12.0 | % | 13.2 | % | 13.8 | % | 14.4 | % | 14.6 | % | 14.6 | % |
| 2019 Q4 | 0.4 | % | 3.1 | % | 4.9 | % | 6.3 | % | 7.2 | % | 7.9 | % | 8.4 | % | 8.9 | % | 9.5 | % | 9.8 | % | 9.8 | % |
| 2020 Q1 | 0.6 | % | 2.3 | % | 4.1 | % | 5.2 | % | 6.0 | % | 6.2 | % | 6.6 | % | 7.3 | % | 7.8 | % | 7.9 | % | 7.9 | % |
| 2020 Q2 | 0.5 | % | 2.5 | % | 4.2 | % | 5.3 | % | 6.1 | % | 6.7 | % | 7.6 | % | 8.1 | % | 8.2 | % | 8.3 | % | 8.2 | % |
| 2020 Q3 | 1.1 | % | 3.3 | % | 5.1 | % | 6.3 | % | 7.1 | % | 8.1 | % | 8.7 | % | 8.9 | % | 8.9 | % | 8.8 | % | 8.7 | % |
| 2020 Q4 | 0.3 | % | 1.8 | % | 3.2 | % | 4.6 | % | 6.0 | % | 7.1 | % | 7.4 | % | 7.6 | % | 7.6 | % | 7.5 | % | 7.5 | % |
| 2021 Q1 | 0.4 | % | 2.3 | % | 3.9 | % | 5.5 | % | 6.7 | % | 7.0 | % | 7.2 | % | 7.3 | % | 7.2 | % | 7.1 | % | ||
| 2021 Q2 | 0.4 | % | 2.4 | % | 4.5 | % | 5.9 | % | 6.4 | % | 6.7 | % | 6.8 | % | 6.7 | % | 6.6 | % | ||||
| 2021 Q3 | 0.5 | % | 3.1 | % | 5.0 | % | 5.9 | % | 6.3 | % | 6.4 | % | 6.4 | % | 6.3 | % | ||||||
| 2021 Q4 | 0.6 | % | 3.2 | % | 4.6 | % | 5.3 | % | 5.4 | % | 5.4 | % | 5.3 | % | ||||||||
| 2022 Q1 | 0.6 | % | 2.5 | % | 3.8 | % | 4.5 | % | 4.5 | % | 4.4 | % | ||||||||||
| 2022 Q2 | 0.4 | % | 2.2 | % | 3.6 | % | 4.1 | % | 4.2 | % | ||||||||||||
| 2022 Q3 | 0.5 | % | 2.7 | % | 4.1 | % | 4.7 | % | ||||||||||||||
| 2022 Q4 | 0.6 | % | 3.0 | % | 4.6 | % | ||||||||||||||||
| 2023 Q1 | 0.5 | % | 3.1 | % | ||||||||||||||||||
| 2023 Q2 | 0.5 | % |