Weidai Ltd. Announces Third Quarter 2018 Financial Results

HANGZHOU, China, Dec. 11, 2018 /PRNewswire/ -- Weidai Ltd. ("Weidai" or the "Company") (NYSE: WEI), a leading auto-backed financing solution provider in China, today announced its unaudited financial results for the third quarter ended September 30, 2018.

Third Quarter 2018 Financial Highlights:

  • Net revenues were RMB1,036.7 million (US$150.9 million) in the third quarter of 2018, an increase of 9.3% from RMB948.4 million sequentially.
  • Loan facilitation service fees were RMB844.5 million (US$123.0million) in the third quarter of 2018, an increase of 12.3% from RMB752.2 million sequentially.
  • Post-facilitation service fees were RMB92.5 million (US$13.5 million) in the third quarter of 2018, an increase of 11.4% from RMB83.1 million sequentially.
  • Net income was RMB187.3 million (US$27.3 million) in the third quarter of 2018, compared to RMB182.7 million in the previous quarter.
  • Adjusted net income[1] was RMB215.1 million (US$31.3 million) in the third quarter of 2018, compared to RMB205.4 million in the previous quarter.

Third Quarter 2018 Operational Highlights:

Loan volume

The following table sets forth the volume of loans we facilitated and originated (including loans funded by institutional funding partners) for the periods indicated:


For the three months ended,


June 30, 2018

September 30, 2018


RMB

% of total loan
volume

RMB

% of total
loan volume


(in millions, except for percentages)






Total loan volume

19,994

100.0

17,030

100.0

Including:





Loans funded by institutional funding
    partners

564

2.8

733

4.3

Loan balance

Total loan balance decreased to RMB20.4 billion (US$3.0 billion) as of September 30, 2018 from RMB22.1 billion as of June 30, 2018.

Third Quarter 2018 Financial Results

Net revenues increased by 9.3% to RMB1,036.7 million (US$150.9 million) in the third quarter of 2018 from RMB948.4 million in the previous quarter, primarily due to an increase in loan facilitation service fees and post-facilitation service fees. The Company's take rate[2] increased to 5.1% in the third quarter of 2018 from 4.3% in the previous quarter.

  • Loan facilitation service fees increased by 12.3% to RMB844.5 million (US$123.0 million) in the third quarter of 2018, from RMB752.2 million in the previous quarter. The increase was primarily attributable to product mix changes that resulted in higher blended take rate.
  • Post-facilitation service fees increased by 11.4% to RMB92.5 million (US$13.5 million) in the third quarter of 2018, from RMB83.1 million in the previous quarter. The increase was primarily attributable to product mix changes that resulted in higher blended take rate.
  • Other revenues decreased by 15.9% to RMB35.8 million (US$5.2 million) in the third quarter of 2018, from RMB42.5 million in the previous quarter, primarily due to a decrease in loan collection fees.
  • Net financing income decreased by 9.2% to RMB68.9 million (US$10.0 million) in the third quarter of 2018, from RMB75.9 million in the previous quarter, primarily due to changes in the Company's collaboration arrangements with institutional funding partners, as a result of which a greater proportion of loans funded by institutional funding partners in the third quarter of 2018 were not recorded on the Company's balance sheet.

Provision for loans and advances were RMB186.1 million (US$27.1 million) in the third quarter of 2018, compared to RMB93.5 million in the previous quarter. The increase was primarily due to increase in delinquency rates as a result of industry-wide turmoil, and macroeconomic headwinds that negatively impacted small and micro enterprises. Provision for loans and advances as a percentage of net revenues increased to 17.9% in the third quarter of 2018 from 9.9% in the second quarter of 2018.

Operating costs and expenses increased by 1.1% to RMB640.7 million (US$93.3 million) in the third quarter of 2018, from RMB634.0 million in the previous quarter. Operating costs and expenses as a percentage of net revenues decreased from 66.9% in the second quarter of 2018 to 61.8% in the third quarter of 2018.

Origination and servicing expenses decreased by 5.1% to RMB428.0 million (US$62.3 million) for the third quarter of 2018 from RMB450.9 million in the previous quarter, primarily due to continued cost optimization efforts in anticipation of a subdued industry growth environment. Origination and servicing expenses as a percentage of net revenues decreased to 41.3% in the third quarter of 2018 from 47.5% in the second quarter of 2018.

Sales and marketing expenses increased by 27.1% to RMB77.0 million (US$11.2 million) for the third quarter of 2018 from RMB60.6 million in the previous quarter, which was primarily due to increased marketing activities in the third quarter of 2018.

General and administrative expenses increased by 14.0% to RMB101.4 million (US$14.8 million) for the third quarter of 2018 from RMB88.9 million in the previous quarter. The increase was primarily due to increases in staff salaries, benefits, and share-based compensation expenses. General and administrative expenses for the third quarter of 2018 also included RMB6.9 million (US$1.0 million) IPO-related expenses, compared to RMB5.2 million in the previous quarter.

Research and development expenses increased by 1.9% to RMB34.3 million (US$5.0 million) in the third quarter of 2018 from RMB33.7 million in the previous quarter, primarily due to an increase in staff salaries and benefits, and an increase in the number of the Company's technology personnel. 

Share-based compensation expenses were RMB27.8 million (US$4.0 million) in the third quarter of 2018, compared to RMB22.7 million in the previous quarter.

Income tax expenses were RMB79.1 million (US$11.5 million) for the third quarter of 2018, compared to RMB51.4 million in the previous quarter.

Net income was RMB187.3 million (US$27.3 million) for the third quarter of 2018, compared to RMB182.7 million in the previous quarter.

Net income and comprehensive income attributable to ordinary shareholders was RMB184.8 million (US$26.9 million) in the third quarter of 2018, compared to RMB183.0 million in the previous quarter.

Adjusted net income was RMB215.1 million (US$31.3 million) in the third quarter of 2018, compared to RMB205.4 million in the previous quarter.  

Selected Third Quarter 2018 Operational Results

The following table sets forth the delinquency rates for all outstanding loans as of September 30, 2018 (excluding (i) loans that were charged off and (ii) loan products that were discontinued[3]):


Delinquent for


1-30 days

31-60 days

61-90 days

Over 90
days

Total

As of June 30, 2018

0.60%

0.28%

0.18%

1.58%

2.64%

As of September 30, 2018

0.75%

0.29%

0.58%

1.48%

3.10%

The following table sets forth the delinquency rates for all outstanding loans as of September 30, 2018 (including loan products that were discontinued):


Delinquent for


1-30 days

31-60 days

61-90 days

Over 90

days

Total

As of June 30, 2018

0.80%

0.36%

0.25%

1.91%

3.32%

As of September 30, 2018

0.94%

0.58%

0.88%

2.18%

4.57%

The following chart displays the M3+ Delinquency Rates by Vintage[4] for all continuing loans facilitated through the Company's online marketplace:

Please click here to view our vintage curve:
https://photos.prnasia.com/prnh/20181211/2323067-1

Initial Public Offering

On November 19, 2018, the Company completed its initial public offering of 4,500,000 American depositary shares ("ADSs") at a price of US$10.00 per ADS for a total offering size of approximately US$45.0 million, assuming the underwriters do not exercise their over-allotment option. Each ADS represents one Class A ordinary share of the Company.

After the initial public offering, the Company has 69,990,750 ordinary shares outstanding, comprised of 34,919,350 Class A ordinary shares and 35,071,400 Class B ordinary shares, assuming the underwriters do not exercise their over-allotment option.  

The Company will provide updates on the exercise of underwriters' over-allotment option in the next earnings release.

Conference Call

The Company's management will host an earnings conference call at 7 AM U.S. Eastern Time on December 11, 2018 (8 PM Beijing/Hong Kong time on December 11, 2018).

Dial-in details for the earnings conference call are as follows:

United States:


1-888-346-8982

International:


1-412-902-4272

Hong Kong:


800-905945

China:


4001-201203

Participants should dial-in at least 5 minutes before the scheduled start time and ask to be connected to the call for "Weidai".

A replay of the conference call will be accessible approximately two hours after the conclusion of the live call until December 18, 2018, by dialing the following telephone numbers:

United States:


1-877-344-7529

International:


1-412-317-0088

Replay Passcode:


10126932

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.

[1] Adjusted net income, a non-GAAP financial measure, is defined as net income before share-based compensation expenses.

[2] "Take rate" is defined as dividing net revenue of a certain period by the period end loan balance.

[3] Loan products that were discontinued as of September 30, 2018 include home equity loans, certain types of consumption loans and unsecured auto-financing loans offered to those who have taken out auto-financing loans from certain commercial banks.

[4] "M3+ Delinquency Rate by Vintage" is defined as the total balance of outstanding principal of a vintage for which any payment of principal or interest is over 90 calendar days past due as of a particular date (adjusted to reflect total amount of past due payments for principal and interest that have been subsequently collected), divided by the total initial principal in such vintage.

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 both online investors and 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 RMB6.8680 to US$1.00, the noon buying rate on September 28, 2018 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; 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.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except share data, or otherwise noted)





As of December 31,

As of September 30,


2017

2018


RMB

RMB

US$


(in thousands)





ASSETS

Current assets:




Cash and cash equivalents

1,765,572

1,703,630

248,053

Restricted cash

1,092,921

1,072,591

156,172

Loans and advances, net

1,938,492

1,719,854

250,416

Short-term investments

8,500

57,600

8,387

Prepaid expenses and other assets

433,597

626,576

91,231

Amounts due from related parties

9,168

13,717

1,997

Total current assets

5,248,250

5,193,968

756,256

 

Non-current assets:




Restricted cash

4,000

9,000

1,310

Long-term investments

359,333

13,333

1,941

Loans and advances, net

390,171

480,526

69,966

Prepaid expenses and other assets

8,048

4,835

704

Property, equipment and software, net

99,433

99,686

14,515

Goodwill

-

5,812

846

Deferred tax assets

158,566

217,940

31,733

Total non-current assets

1,019,551

831,132

121,015

Total assets

6,267,801

6,025,100

877,271





LIABILITIES, MEZZANINE EQUITY AND
SHAREHOLDERS' EQUITY




Current liabilities (including current liabilities of
   the consolidated VIE and subsidiaries without 
   recourse to the primary beneficiary of
   RMB4,633,990 and RMB3,648,229 as of
   December 31, 2017 and September 30, 2018,
   respectively):




Short-term borrowings

200,000

-

-

Payable to institutional funding partners and
   online investors

1,770,681

1,318,416

191,965

Current account with online investors and 
   borrowers

1,883,446

1,838,635

267,710

Income tax payable

243,338

95,675

13,931

Accrued expenses and other liabilities

461,295

440,642

64,159

Amounts due to related parties

62,900

19,883

2,895

Deferred revenue

12,330

10,600

1,543

Total current liabilities

4,633,990

3,723,851

542,203

 

Non-current liabilities (including non-current
   liabilities of the consolidated VIE and
   subsidiaries without recourse to the primary
   beneficiary of RMB457,724 and RMB607,385 as
   of December 31, 2017 and September 30, 2018,
   respectively): 




Payable to institutional funding partners and
   online investors

416,118

515,624

75,077

Deferred revenue

887

9,830

1,431

Other non-current liabilities

40,719

81,931

11,929

Total non-current liabilities.

457,724

607,385

88,437

Total liabilities

5,091,714

4,331,236

630,640





Mezzanine equity:




Series A preferred shares (par value of
  US$0.000002 per share; 9,146,250 shares
  authorized, issued and outstanding as of
  December 31, 2017)

18,856

-

-

Series A+ preferred shares (par value of
  US$0.000002 per share; 1,829,250 shares
  authorized, issued and outstanding as of
  December 31, 2017 and September 30, 2018)

3,771

3,771

549

Series B preferred shares (par value of 
  US$0.000002 per share; 3,048,800 shares
  authorized, issued and outstanding as of
  December 31, 2017 and September 30, 2018)

6,283

6,283

915

Series C preferred shares (par value of
  US$0.000002 per share; 3,074,400 shares
  authorized, issued and outstanding as of
  December 31, 2017 and September 30, 2018)

360,000

240,000

34,945

Total mezzanine equity

388,910

250,054

36,409





Shareholders' equity




Ordinary shares (par value of US$0.000002 per 
  share; 24,982,901,300 shares authorized, 
  48,392,050 shares issued and outstanding as of
  December 31, 2017 and September 30, 2018)

1

1

-

Series A preferred shares (par value of 
  US$0.000002 per share; 9,146,250 shares
  authorized, issued and outstanding as of
  September 30, 2018)

-

18,856

2,745

Additional paid-in capital

468,352

485,962

70,757

Retained earnings

318,824

931,769

135,668

Total Weidai Ltd. shareholders' equity

787,177

1,436,588

209,170

Noncontrolling interests

-

7,222

1,052

Total shareholders' equity

787,177

1,443,810

210,222

TOTAL LIABILITIES, MEZZANINE
  EQUITY AND SHAREHOLDERS' EQUITY

6,267,801

6,025,100

877,271

 

 

 


Weidai Ltd.  

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE

INCOME

(All amounts in thousands, except share data, or otherwise noted)





Three Months Ended September
30,

Nine Months Ended
September 30,


2018

2018


RMB

US$

RMB

US$


(in thousands, except for share, per share and per ADS data)





Net revenues:





Loan facilitation service fees

844,467

122,957

2,310,986

336,486

Post facilitation service fees

92,487

13,466

257,878

37,548

Other revenues

35,770

5,208

140,818

20,503

Financing income

105,979

15,431

340,586

49,590

Less: Funding costs

(37,076)

(5,398)

(115,278)

(16,785)

Net financing income

68,903

10,033

225,308

32,805

Business related taxes and surcharges

(4,937)

(719)

(15,030)

(2,188)

Total net revenues

1,036,690

150,945

2,919,960

425,154

Provision for loan losses

(186,083)

(27,094)

(424,941)

(61,873)

Net revenues after provision for
   loans and advances

850,607

123,851

2,495,019

363,281






Operating costs and expenses:





Origination and servicing expenses

(428,025)

(62,322)

(1,344,185)

(195,717)

Sales and marketing expenses

(76,972)

(11,207)

(181,966)

(26,495)

General and administrative expenses

(101,361)

(14,758)

(266,509)

(38,804)

Research and development expenses

(34,333)

(4,999)

(101,547)

(14,786)

Total operation costs and expenses

(640,691)

(93,286)

(1,894,207)

(275,802)






Income from operations

209,916

30,565

600,812

87,479

Interest income, net

18,656

2,716

45,544

6,631

Government subsidies

37,019

5,390

37,924

5,522

Other income/(expenses), net

821

120

(8,503)

(1,238)

Net income before income taxes

266,412

38,791

675,777

98,394

Income tax expenses

(79,111)

(11,519)

(181,125)

(26,372)

Net income

187,301

27,272

494,652

72,022

Net income attributable to
   noncontrolling interests

(2,452)

(357)

(1,707)

(249)

Net income and comprehensive  
   income attributable to Weidai
   Ltd.' shareholders

184,849

26,915

492,945

71,773

Reversal of accretion on Series C
   preferred shares

-

-

120,000

17,472

Net income and comprehensive
   income attributable to Weidai
   Ltd.' ordinary shareholders

184,849

26,915

612,945

89,245

Earnings per share:





Basic

2.82

0.41

9.36

1.36

Diluted

2.82

0.41

7.53

1.10

Shares used in earnings per share
   computation:





Basic

48,392,050

48,392,050

48,392,050

48,392,050

Diluted

65,490,750

65,490,750

60,405,015

60,405,015

 

 

 

Weidai Ltd. 

UNAUDITED Reconciliation of GAAP And Non-GAAP Results 

(All amounts in thousands, except share data, or otherwise noted)





Three Months Ended September
30,

Nine Months Ended
September 30,


2018

2018


RMB

US$

RMB

US$


(in thousands, except for share, per share and per ADS data)





Net income

187,301

27,272

494,652

72,022

Add:





Share-based compensation expenses

27,760

4,042

83,355

12,137

Adjusted net income.

215,061

31,314

578,007

84,159

 

 

SOURCE Weidai Ltd.