Weidai Ltd. Announces Third Quarter 2019 Financial Results

HANGZHOU, China, Dec. 31, 2019 /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, 2019.

Third quarter 2019 Financial Highlights:

  • Net revenues were RMB765.9 million (US$107.1 million) in the third quarter of 2019, compared to RMB1,036.7 million in the same period of 2018 and RMB906.7 million in the second quarter of 2019.
  • Loan facilitation service fees were RMB595.8 million (US$83.4 million) in the third quarter of 2019, compared to RMB844.5 million in the same period of 2018 and RMB758.5 million in the second quarter of 2019.
  • Post-facilitation service fees were RMB84.8 million (US$11.9 million) in the third quarter of 2019, compared to RMB92.5 million in the same period of 2018 and RMB89.0 million in the second quarter of 2019.
  • Net income was RMB144.9 million (US$20.3 million) in the third quarter of 2019, compared to RMB187.3 million in the same period of 2018 and RMB106.9 million in the second quarter of 2019.
  • Adjusted net income[1] was RMB144.3 million (US$20.2 million) in the third quarter of 2019, compared to RMB215.1 million in the same period of 2018 and RMB130.1 million in the second quarter of 2019.

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

Third quarter 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 three months ended,


June 30, 2019

September 30, 2019


RMB

% of total
loan volume

RMB

% of total
loan volume


(in millions, except for percentages)






Total loan volume

17,603

100.0

15,971

100.0

Including:





Loans funded by institutional funding
     partners

749

4.3

503

3.2

Loan balance

Total loan balance decreased to RMB16.6 billion (US$2.3 billion) as of September 30, 2019 from RMB18.2 billion as of June 30, 2019.

Third quarter 2019 Financial Results

Net revenues decreased by 15.5% to RMB765.9 million (US$107.1 million) in the third quarter of 2019 from RMB906.7 million in the previous quarter, primarily due to decreases in loan facilitation service fees. The decrease was partially offset by the increase in other revenues. The Company's take rate[2] decreased to 4.6% in the third quarter of 2019 from 5.0% in the previous quarter.  

  • Loan facilitation service fees decreased by 21.5% to RMB595.8 million (US$83.4 million) in the third quarter of 2019, compared to RMB758.5 million in the previous quarter, primarily due to a decrease in loan volume. In the third quarter of 2019, the impact of applying ASC 606 resulted in a decrease in loan facilitation service fees of RMB133.3 million (US$18.6 million).
  • Post-facilitation service fees decreased by 4.7% to RMB84.8 million (US$11.9 million) in the third quarter of 2019, from RMB89.0 million in the previous quarter.
  • Other revenues increased by 188.3% to RMB61.7 million (US$8.6 million) in the third quarter of 2019, from RMB21.4 million in the previous quarter, primarily due to increase in loan collection fees.
  • Net financing income decreased by 37.8% to RMB23.5 million (US$3.3 million) in the third quarter of 2019, from RMB37.8 million in the previous quarter, primarily due to a decrease in loan balance of the Company's on-balance sheet loans.

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

Provision for loans and advances decreased by 66.7% to RMB84.1 million (US$11.8 million) in the third quarter of 2019, from RMB252.3 million in the previous quarter. The decrease was primarily because of a decrease in loss rates resulted from the Company's optimization efforts in loan collection as well as a decrease in loan volume.  Provision for loans and advances as a percentage of net revenue decreased to 11.0% in the third quarter of 2019 from 27.8% in the previous quarter.

Operating costs and expenses decreased by 5.0% to RMB538.1 million (US$75.3 million) in the third quarter of 2019, from RMB566.7 million in the previous quarter. Operating costs and expenses as a percentage of net revenues increased to 70.3% in the third quarter of 2019 from 62.5% in the previous quarter.

  • Provision for financial guarantee liabilities decreased by 60.3% to RMB32.8 million (US$4.6 million) in the third quarter of 2019, from RMB82.7 million in the previous quarter, primarily because of decreases in loss rates and loan volume, as well as the Company's discontinuation of providing financial guarantees to online investors for consumption loans since July 1, 2019.
  • Origination and servicing expenses increased by 5.2% to RMB335.6 million (US$46.9 million) for the third quarter of 2019 from RMB319.1 million in the previous quarter, primarily due to increased one-off compensation costs due to the termination of certain employees and the acquisition of a new subsidiary.
  • Sales and marketing expenses decreased by 11.9% to RMB67.3 million (US$9.4 million) for the third quarter of 2019 from RMB76.4 million in the previous quarter, primarily due to cost optimization efforts.
  • General and administrative expenses increased by 31.3% to RMB76.4 million (US$10.7 million) for the third quarter of 2019 from RMB58.2 million in the previous quarter. The increase was primarily due to increased one-off compensation costs, which was as a result of the termination of certain employees and the acquisition of a new subsidiary.
  • Research and development expenses decreased by 13.6% to RMB26.1 million (US$3.7 million) in the third quarter of 2019 from RMB30.2 million in the previous quarter, primarily due to cost optimization efforts.

Share-based compensation benefits was RMB0.6 million (US$0.1 million) in the third quarter of 2019, compared to share-based compensation expenses of RMB23.2 million in the previous quarter due to the termination of certain employees.

Income tax expenses increased to RMB33.4 million (US$4.7 million) in the third quarter of 2019, from RMB13.4 million in the previous quarter.

Net income increased by 35.5% to RMB144.9 million (US$20.3 million) in the third quarter of 2019, from RMB106.9 million in the previous quarter.

Net income and comprehensive income attributable to ordinary shareholders increased by 39.6% to RMB144.2 million (US$20.2 million) in the third quarter of 2019, from RMB103.3 million in the previous quarter.

Adjusted net income increased by 10.9% to RMB144.3 million (US$20.2 million) in the third quarter of 2019, from RMB130.1 million in the previous quarter.

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 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 RMB7.1477 to US$1.00, the noon buying rate on September 30, 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; 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 June 30,

As of September 30,


2019

2019


RMB

RMB

US$


(in thousands)





ASSETS

Current assets:




Cash and cash equivalents

862,841

1,217,479

170,332

Restricted cash

806,203

858,748

120,143

Loans and advances, net

1,676,616

1,493,982

209,016

Contract assets

840,125

685,121

95,852

Short-term investments

336,192

336,919

47,137

Prepaid expenses and other assets

562,560

589,063

82,409

Amounts due from related parties

38,746

31,604

4,422

Total current assets

5,123,283

5,212,916

729,311

Non-current assets:




Restricted cash

31,547

31,547

4,414

Long-term investments

13,333

13,574

1,899

Loans and advances, net

211,829

114,177

15,974

Prepaid expenses and other assets

9,606

9,608

1,344

Property, equipment and software, net

74,156

67,448

9,436

Goodwill

5,812

5,812

813

Contract assets

343,982

365,725

51,167

Deferred tax assets

388,404

418,110

58,496

Total non-current assets

1,078,669

1,026,001

143,543

Total assets

6,201,952

6,238,917

872,854





LIABILITIES AND SHAREHOLDERS'
EQUITY




Current liabilities (including current liabilities of
     the consolidated VIE and subsidiaries without
     recourse to the primary beneficiary of
     RMB2,195,061 and RMB2,163,463
     (US$302,680) as of June 30, 2019 and September
     30, 2019, respectively):




Payable to institutional funding partners and
     online investors

456,764

352,542

49,322

Current account with online investors and
     borrowers

1,187,500

1,236,390

172,977

Income tax payable

117,644

185,467

25,948

Accrued expenses and other liabilities

431,344

444,812

62,231

Amounts due to related parties

21,142

13,926

1,948

Contract liabilities

19,573

20,165

2,821

Total current liabilities

2,233,967

2,253,302

315,247

Non-current liabilities (including non-current
     liabilities of the consolidated VIE and
     subsidiaries without recourse to the primary
     beneficiary of RMB497,732 and RMB361,574
     (US$50,586) as of June 30, 2019 and September
     30, 2019, respectively): 




Payable to institutional funding partners and online
     investors

222,906

118,314

16,553

Contract liabilities

18,637

16,360

2,289

Other non-current liabilities

22,459

24,633

3,446

Deferred tax liabilities

233,730

202,267

28,298

Total non-current liabilities

497,732

361,574

50,586

Total liabilities

2,731,699

2,614,876

365,833





Shareholders' equity




Class A voting ordinary shares (par value of
     US$0.000002 per share; 35,375,777 shares
     issued and outstanding as of June 30, 2019 and
     September 30, 2019)

-

-

-

Class B voting ordinary shares (par value of
     US$0.000002 per share; 35,071,400 shares
     issued and outstanding as of June 30, 2019 and
     September 30, 2019)

1

1

-

Additional paid-in capital

1,219,767

1,219,172

170,568

Accumulated other comprehensive (loss)/income

(2,984)

7,078

990

Retained earnings

2,248,289

2,392,492

334,722

Total Weidai Ltd. shareholders' equity

3,465,073

3,618,743

506,280

Noncontrolling interests

5,180

5,298

741

Total shareholders' equity

3,470,253

3,624,041

507,021

TOTAL LIABILITIES AND
     SHAREHOLDERS' EQUITY

6,201,952

6,238,917

872,854



WEIDAI LTD.  

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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



Three Months Ended

June 30, 2019

Three Months Ended

September 30, 2019


RMB

RMB

US$


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



Net revenues:




Loan facilitation service fees

758,463

595,838

83,361

Post facilitation service fees

89,011

84,790

11,863

Other revenues

21,436

61,714

8,634

Financing income

68,664

43,272

6,054

Less: Funding costs

(30,865)

(19,747)

(2,763)

Net financing income

37,799

23,525

3,291

Total net revenues

906,709

765,867

107,149

Provision for loans and advances

(252,293)

(84,097)

(11,766)

Net revenues after provision for 
   loans and advances

654,416

681,770

95,383





Operating costs and expenses:




Provision for financial guarantee
   liabilities

(82,710)

(32,794)

(4,588)

Origination and servicing expenses

(319,082)

(335,550)

(46,945)

Sales and marketing expenses

(76,429)

(67,259)

(9,410)

General and administrative expenses

(58,237)

(76,398)

(10,688)

Research and development expenses

(30,219)

(26,100)

(3,652)

Total operation costs and expenses

(566,677)

(538,101)

(75,283)





Income from operations

87,739

143,669

20,100

Interest income, net

9,584

10,720

1,500

Government subsidies

10,513

16,093

2,251

Other expenses, net

12,494

7,784

1,089

Net income before income taxes

120,330

178,266

24,940

Income tax expenses

(13,438)

(33,376)

(4,669)

Net income

106,892

144,890

20,271

Net income attributable to
   noncontrolling interests

(3,571)

(687)

(96)

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

103,321

144,203

20,175

Earnings per share:




Basic

1.47

2.05

0.29

Diluted

1.46

2.05

0.29

Shares used in earnings per share
   computation:




Basic

70,447,177

70,447,177

70,447,177

Diluted

70,662,869

70,472,073

70,472,073



WEIDAI LTD. 

UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS 

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



Three Months Ended 

Three Months Ended 


June 30, 2019

September 30, 2019


RMB

RMB

US$


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





Net income 

106,892

144,890

20,271

Add:




Share-based compensation




     expenses/(benefits)

23,187

(595)

(83)

Adjusted net income

130,079

144,295

20,188


 

SOURCE Weidai Ltd.