EX-99.1 2 v467573_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

Yirendai Reports First Quarter 2017 Financial Results

 

BEIJING, May 22, 2017 – Yirendai Ltd. (NYSE: YRD) (“Yirendai” or the “Company”), a leading online consumer finance marketplace in China, today announced its unaudited financial results for the quarter ended March 31, 2017.

 

Starting from the second quarter of 2016, the Company changed its reporting currency from the U.S. dollar (“US$”) to the Renminbi (“RMB”), to reduce the impact of increased volatility of the RMB to US$ exchange rate on the Company’s reported operating results. The aligning of the reporting currency with the underlying operations will better depict the Company’s results of operations for each period. This release contains translations of certain RMB amounts into US$ for convenience1. Prior period numbers have been recast into the new reporting currency.

 

   For Three Months Ended 
in RMB million  March 31, 2017   December 31, 2016   March 31, 2016   QoQ Change   YoY Change 
Amount of Loans Facilitated   6,922.7    6,675.2    3,446.5    3.7%   100.9%
Total Net Revenue   1,021.6    1,071.1    556.4    -4.6%   83.6%
Total Fees Billed (non-GAAP)   1,583.5    1,630.4    847.4    -2.9%   86.9%
Net Income   350.9    379.8    131.7    -7.6%   166.4%
Adjusted EBITDA (non-GAAP)   400.3    401.1    206.6    -0.2%   93.7%

 

In the first quarter of 2017, Yirendai facilitated RMB 6,922.7 million (US$1,005.7 million) of loans to 124,953 qualified individual borrowers on its online marketplace, representing a 101% year-over-year growth; 69% of the borrowers were acquired from online channels; 51% of the loan volume was originated from online channels and 99.8% of the online volume was facilitated through the Yirendai mobile application.

 

In the first quarter of 2017, Yirendai facilitated 192,505 investors with total investment amount of RMB 7,150.0 million (US$1,038.8 million), 100% of which was facilitated through its online platform and 89.1% of which was facilitated through its mobile application.

 

For the first quarter of 2017, total net revenue was RMB 1,021.6 million (US$148.4 million), up by 84% from the same period in 2016; net income was RMB 350.9 million (US$51.0 million), representing an increase of 166% from the same period in 2016.

 

“Our business enjoyed strong momentum with loan origination volume growing sequentially despite the seasonally slow Chinese New Year holiday,” commented Ms. Yihan Fang, Chief Executive Officer of Yirendai. “More importantly, loans originating from online channels exceeded 50% this quarter as we drive further growth in our online customer acquisition channels. In addition, we continue to improve our end-to-end customer application and credit underwriting process to increase customer acquisition efficiency leveraging our technology and data analytics capabilities. We will continue to execute our sustainable business growth, consumer brand building and strong partnerships strategies.”

 

 

1 Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB 6.8832 to US$1.00, the effective noon buying rate on March 31, 2017 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

 1/11 

 

 

“We are pleased to deliver another quarter of strong topline and bottom-line growth,” commented Mr. Dennis Cong, Chief Financial Officer of Yirendai. “At the same time, the risk performance of our loan portfolio remained stable and well within our expectation. On the regulatory front, we continue to be in close communication with various regulatory bodies to ensure Yirendai’s registration process goes smoothly. We are committed to optimizing all aspects of our business operations to support long-term sustainable growth and profitability.”

 

First Quarter 2017 Financial Results

 

Total amount of loans facilitated in the first quarter of 2017 was RMB 6,922.7 million (US$1,005.7 million), increased by 101% year over year from RMB 3,446.5 million in the same period of 2016, reflecting strong demand for our products and services, especially from customers acquired from online channels. As of March 31, 2017, the Yirendai platform had facilitated approximately RMB 39.3 billion (US$5.7 billion) in loan principal since its inception.

 

Total net revenue in the first quarter of 2017 was RMB 1,021.6 million (US$148.4 million), increased by 84% from RMB 556.4 million in the same period of 2016. The increase of total net revenue was mainly attributable to the growth of loan origination volume, increased service fees billed to investors and increased monthly fees billed to borrowers as our remaining loan balance continued to expand.

 

Total fees billed (non-GAAP) in the first quarter of 2017 were RMB 1,583.5 million (US$230.1 million), increased by 87% from RMB 847.4 million in the same period of 2016, driven by the growth of loan origination volume. Upfront fees billed to borrowers in the first quarter of 2017 were RMB 1,334.7 million (US$193.9 million), increased by 73% from RMB 773.3 million in the same period of 2016. Monthly fees billed to borrowers in the first quarter of 2017 were RMB 173.1 million (US$25.1 million), increased by 172% from RMB 63.6 million in the same period of 2016. The significant year-over-year increase in monthly fees billed to borrowers was primarily attributable to the increase in loans generated from online channels, which features a fee collection schedule with monthly payments in addition to the upfront portion. Service fees billed to investors in the first quarter of 2017 were RMB 177.1 million (US$25.7 million), increased by 174% from RMB 64.6 million in the same period of 2016. The significant year-over-year increase in service fees billed to investors was primarily attributable to the increase in loan balance.

 

Operating costs and expenses in the first quarter of 2017 were RMB 628.7 million (US$91.3 million), decreased by 7% from RMB 674.3 million in the previous quarter and compared to RMB 348.3 million in the same period of 2016. The decrease in operating costs and expenses was mainly attributable to the decrease in sales and marketing expenses as percentage of amount of loans facilitated in this quarter.

 

 2/11 

 

 

Sales and marketing expenses in the first quarter of 2017 were RMB 469.4 million (US$68.2 million), decreased by 13% from RMB 538.0 million in the previous quarter and compared to RMB 254.8 million in the same period of 2016. Sales and marketing expenses in the first quarter of 2017 accounted for 6.8% of amount of loans facilitated, decreased from 8.1% in the previous quarter and 7.4% in the same period of 2016. The decrease in sales and marketing expenses was attributable to both reduced marketing activities during the Chinese New Year holiday and the gradually improved efficiency of borrower acquisition from online sources as we drive the optimization of customer acquisition and credit underwriting process.

 

Origination and servicing costs in the first quarter of 2017 were RMB 58.8 million (US$8.5 million), compared to RMB 56.7 million in the previous quarter and RMB 33.4 million in the same period of 2016. Origination and servicing costs in the first quarter of 2017 accounted for 0.8% of amount of loans facilitated, the same as 0.8% in the previous quarter and decreased from 1.0% in the same period of 2016.

 

General and administrative expenses in the first quarter of 2017 were RMB 100.5 million (US$14.6 million), compared to RMB 79.7 million in the previous quarter and RMB 60.1 million in the same period of 2016. General and administrative expenses in the first quarter of 2017 accounted for 9.8% of total net revenue, compared to 7.4% in the previous quarter and 10.8% in the same period of 2016. The increase in general and administrative expenses as percentage of total net revenue was primarily due to the deferred revenue recognition impact for loans facilitated from online channels, which features a fee collection schedule with monthly payments in addition to the upfront portion.

 

Income tax expense in the first quarter of 2017 was RMB 67.7 million (US$9.8 million). In the first quarter of 2017, Yi Ren Heng Ye Technology Development (Beijing) Co., Ltd., a subsidiary of the Company, enjoyed a favorable enterprise income tax rate of 12.5% since it became qualified as a software enterprise which is confirmed by local tax bureau in Q2 2016. This makes it eligible for an exemption of enterprise income tax for 2015 and 2016 and a favorable enterprise income tax rate of 12.5% for 2017, 2018 and 2019.

 

Net income in the first quarter of 2017 was RMB 350.9 million (US$51.0 million), increased by 166% from RMB 131.7 million in the same period of 2016.

 

Adjusted EBITDA (non-GAAP) in the first quarter of 2017 was RMB 400.3 million (US$58.2 million), compared to RMB 401.1 million in the previous quarter and increased by 94% from RMB 206.6 million in the same period of 2016. Adjusted EBITDA margin2 (non-GAAP) in the first quarter of 2017 was 39.2%, compared to 37.5% in the previous quarter and 37.1% in the same period of 2016.

 

Basic income per ADS in the first quarter of 2017 was RMB 5.87 (US$0.85), compared to RMB 6.36 in the previous quarter and increased by 161% from RMB 2.25 in the same period of 2016.

 

Diluted income per ADS in the first quarter of 2017 was RMB 5.81 (US$0.84), compared to RMB 6.28 in the previous quarter and increased by 158% from RMB 2.25 in the same period of 2016.

 

 

2Adjusted EBITDA margin is a non-GAAP financial measure calculated as adjusted EBITDA divided by total net revenue.

 3/11 

 

 

Net cash generated from operating activities3 in the first quarter of 2017 was RMB 564.5 million (US$82.0 million), compared to RMB 836.1 million in the previous quarter and increased by 30% from RMB 434.3 million in the same period of 2016. The sequential decrease in net cash generated from operating activities was primarily due to the increase in loans generated from online channels, which feature a fee collection schedule with monthly payments in addition to the upfront portion.

 

As of March 31, 2017, cash and cash equivalents was RMB 864.4 million (US$ 125.6 million), compared to RMB 968.2 million as of December 31, 2016. The decrease in cash and cash equivalents was primarily due to the Company’s increased investment in available-for-sale investments and held-to-maturity investments, to enhance its return from operating cash. As of March 31, 2017, balance of held-to-maturity investments was RMB 494.8 million (US$71.9 million), compared to RMB 98.9 million as of December 31, 2016. As of March 31, 2017, balance of available-for-sale investments was RMB 1,232.3 million (US$179.0 million), compared to RMB 1,158.0 million as of December 31, 2016.

 

Quality Assurance Program. In the first quarter of 2017, Yirendai accrued liabilities from quality assurance program of RMB 553.8 million (US$80.5 million), which is equal to 8% of the loans facilitated through its marketplace during the period. During the quarter, the Company released liabilities of RMB 323.3 million (US$ 47.0 million) to pay out the outstanding principal and accrued interest of default loans. As of March 31, 2017, liabilities from quality assurance program were RMB 1,701.5 million (US$247.2 million).

 

Delinquency rates. As of March 31, 2017, the delinquency rates for loans that are past due for 15-29 days, 30-59 days and 60-89 days were 0.4%, 0.8% and 0.6%, compared to 0.4%, 0.7% and 0.6% as of December 31, 2016.

 

Cumulative M3+ net charge-off rates4. As of March 31, 2017, the cumulative M3+ net charge-off rates for Grade A, B, C and D loans originated in 2015 were 5.5%, 7.3%, 9.3% and 7.7%, respectively, compared to 5.1%, 6.6%, 8.2%, and 6.7% as of December 31, 2016. As of March 31, 2017, the cumulative M3+ net charge-off rates for Grade A, B, C and D loans originated in 2016 were 0.7%, 1.5%, 2.4% and 2.0% respectively, compared to 0.2%, 0.6%, 1.0% and 0.9% as of December 31, 2016. As the 2015 and 2016 vintage loans continue to mature, the charge off level is consistent with our risk performance expectation.

 

 

3 Starting from the fourth quarter of 2016, the Company early adopted ASU 2016-18, that includes restricted cash in cash and cash equivalent balances in the statement of cash flows, and apply to all periods presented retrospectively.

4 Starting from the fourth quarter of 2016, the Company adjusted the calculation of M3+ net charge-off rate to better reflect the performance of loans. The related numbers reported in prior periods have been adjusted for comparison to the numbers as of December 31, 2016. The adjusted “M3+ net charge-off rate,” with respect to loans facilitated during a specified time period, which we refer to as a vintage, is defined as the difference between (i) the total balance of outstanding principal of loans that become over three months delinquent during a specified period and (ii) the total amount of recovered past due payments of principal and accrued interest in the same period with respect to all loans in the same vintage that have ever become over three months delinquent, divided by (iii) the total initial principal of the loans facilitated in such vintage.

 4/11 

 

 

Other Operating Metrics and Business Results

ŸAs of March 31, 2017, Yirendai had facilitated RMB 39.3 billion (US$5.7 billion) of loans on the Yirendai online marketplace since its inception in 2012.
ŸAs of March 31, 2017, remaining principal of performing loans totaled RMB 24.0 billion (US$3.5 billion), increased by 16% from RMB 20.8 billion as of December 31, 2016 and 118% from RMB 11.0 billion as of March 31, 2016.
ŸIn the first quarter of 2017, the Yirendai platform facilitated loans for 124,953 borrowers, 69% of whom were acquired from online channels.
ŸTotal amount of loans facilitated in the first quarter of 2017 was RMB 6.9 billion (US$1.0 billion); 51% of the loans were originated from online channel, and 99.8% of the online volume was facilitated through Yirendai’s mobile application.
ŸIn the first quarter of 2017, the Yirendai platform facilitated loans for 192,505 investors, 100% of whom were acquired from online channels, with annual rates of return ranging from 4.5% to 11.25%.
ŸIn the first quarter of 2017, loans made to Grade A, B, C and D borrowers represented 3.5%, 5.8%, 7.4%, and 83.3% of the Company’s product portfolio, respectively.

 

Business Outlook

Based on the information available as of the date of this press release, Yirendai provides the following outlook, which reflects the Company’s current and preliminary view and is subject to change. The following outlook does not take into consideration the impact of stock-based compensation expenses.

 

Second Quarter 2017

ŸTotal loans facilitated will be in the range of RMB 7,700 million to RMB 7,900 million.
ŸTotal net revenue will be in the range of RMB 1,070 million to RMB 1,090 million.
ŸAdjusted EBITDA margin (non-GAAP) will be in the range of 24% to 26%.

Full Year 2017

ŸTotal loans facilitated will be in the range of RMB 33,000 million to RMB 35,000 million.
ŸTotal net revenue will be in the range of RMB 4,400 million to RMB 4,600 million.
ŸAdjusted EBITDA margin (non-GAAP) will be in the range of 23% to 26%.

 

Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses several non-GAAP financial measures, such as fees billed and adjusted EBITDA as supplemental measures to review and assess operating performance. We believe that fees billed and adjusted EBITDA 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.

 

 5/11 

 

 

Currency Conversion

Effective April 1, 2016, the Company changed its reporting currency from US$ to RMB. The change in reporting currency is to reduce the impact of increased volatility of the RMB to the US$ exchange rate on the Company’s reported operating results. The aligning of the reporting currency with the underlying operations will better depict the Company’s results of operations for each period. Prior to April 1, 2016, the Company reported its annual and quarterly consolidated statement of operations, cash flow data and balance sheet in US$. In this announcement, the unaudited financial results for the quarter ended March 31, 2017 are stated in RMB. The related financial statements prior to April 1, 2016 have been recast to reflect RMB as the reporting currency for comparison to the financial results for the quarter and the year ended December 31, 2016.

 

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 RMB 6.8832 to US$1.00, the effective noon buying rate on March 31, 2017 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

Conference Call

Yirendai will host a conference call to discuss about its first quarter 2017 financial results at 8:00 AM U.S. Eastern Time on May 22, 2017, which corresponds to 8:00 PM Beijing/Hong Kong time on the same day.

 

The dial-in details for the live conference call are as follows:

International: 1-412-902-4272
U.S. Toll Free: 1-888-346-8982
Hong Kong Toll Free:    800-905945
China Toll Free: 4001-201203
Conference ID: Yirendai

 

A replay of the conference call will be available until May 29, 2017 by dialing:

International: 1-412-317-0088
U.S. Toll Free: 1-877-344-7529
Replay Access Code:   10106033

 

A live and archived webcast of the conference call will be available on Yirendai’s website at yirendai.investorroom.com.

 

 6/11 

 

 

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 Yirendai’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 Yirendai’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 Yirendai’s ability to meet the standards necessary to maintain 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 Yirendai’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 Yirendai 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 Yirendai

Yirendai Ltd. (NYSE: YRD) is a leading online consumer finance marketplace in China connecting investors and individual borrowers. The Company provides an effective solution to address largely underserved investor and individual borrower demand in China through an online platform that automates key aspects of its operations to efficiently match borrowers with investors and execute loan transactions. Yirendai deploys a proprietary risk management system, which enables the Company to effectively assess the creditworthiness of borrowers, appropriately price the risks associated with borrowers, and offer quality loan investment opportunities to investors. Yirendai’s online marketplace provides borrowers with quick and convenient access to consumer credit at competitive prices and investors with easy and quick access to an alternative asset class with attractive returns. For more information, please visit yirendai.investorroom.com.

 

For investor and media inquiries, please contact:

Yirendai

Hui (Matthew) Li

Director of Investor Relations

Email: matthewli@yirendai.com

 

Christensen IR

In China

Christian Arnell

Phone: +86 (0) 10-59001548

Email: carnell@christensenir.com

 

In U.S.

Linda Bergkamp

Phone: +1 (480) 614-3004
Email: lbergkamp@christensenir.com

 

 

 7/11 

 

 

Unaudited Condensed Consolidated Statements of Operations

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

 

   For the Three Months Ended 
   March 31,
2016		  

June 30,
2016

   September 30,
2016		   December 31,
2016		   March 31,
2017		   March 31,
2017		 
   RMB   RMB   RMB   RMB   RMB   USD 
Net revenue:                              
Loan facilitation services   535,087    713,383    848,322    1,036,630    976,398    141,852 
Post-origination services   18,397    17,232    23,487    25,039    33,312    4,840 
Others   2,895    3,176    4,902    9,441    11,889    1,727 
Total net revenue   556,379    733,791    876,711    1,071,110    1,021,599    148,419 
Operating costs and expenses:                              
Sales and marketing   254,836    355,246    423,003    537,953    469,380    68,192 
Origination and servicing   33,359    42,535    47,514    56,668    58,784    8,540 
General and administrative   60,106    73,330    188,961    79,714    100,498    14,600 
Total operating costs and expenses   348,301    471,111    659,478    674,335    628,662    91,332 
Interest income   5,034    7,253    9,778    14,778    24,149    3,508 
Fair value adjustments related to Consolidated ABFE   (3,395)   (118)   (14,935)   (1,287)   1,355    197 
Non-operating income, net   -    91    259    225    207    30 
Income before provision for income taxes   209,717    269,906    212,335    410,491    418,648    60,822 
Income tax expense/(benefit)   78,001    9,286    (131,946)   30,710    67,747    9,842 
Net income   131,716    260,620    344,281    379,781    350,901    50,980 
                               
Weighted average number of ordinary shares outstanding, basic   117,000,000    117,000,000    119,441,029    119,493,662    119,560,832    119,560,832 
Basic income per share   1.1258    2.2275    2.8824    3.1783    2.9349    0.4264 
Basic income per ADS   2.2516    4.4550    5.7648    6.3566    5.8698    0.8528 
                               
Weighted average number of ordinary shares outstanding, diluted   117,000,000    117,000,000    120,861,971    120,859,390    120,842,350    120,842,350 
Diluted income per share   1.1258    2.2275    2.8485    3.1423    2.9038    0.4219 
Diluted income per ADS   2.2516    4.4550    5.6970    6.2846    5.8076    0.8438 
                               
Unaudited Condensed Consolidated Balance Sheets                              
Cash and cash equivalents   1,109,991    1,336,329    1,106,262    968,225    864,361    125,575 
Restricted cash   650,167    792,637    974,345    1,218,286    1,410,348    204,897 
Loans at fair value   199,358    175,614    367,949    371,033    319,984    46,488 
Held-to-maturity investments   32,500    2,500    172,500    98,917    494,847    71,892 
Available-for-sale investments   -    -    298,000    1,158,000    1,232,260    179,024 
Other assets   643,207    734,263    1,111,946    968,927    1,055,039    153,278 
Total assets   2,635,223    3,041,343    4,031,002    4,783,388    5,376,839    781,154 
Liabilities from quality assurance program   720,861    928,166    1,238,689    1,471,000    1,701,519    247,199 
Payable to investors at fair value   257,354    166,193    355,340    418,686    380,048    55,214 
Other liabilities   550,242    566,865    695,907    753,783    806,609    117,185 
Total liabilities   1,528,457    1,661,224    2,289,936    2,643,469    2,888,176    419,598 
Total equity   1,106,766    1,380,119    1,741,066    2,139,919    2,488,663    361,556 
                               
Unaudited Condensed Consolidated Cash Flow Data                              
Net cash generated from operating activities   434,323    392,474    450,583    836,055    564,504    82,012 
Net cash provided by/(used in) investing activities   14,052    51,515    (679,486)   (807,744)   (427,686)   (62,135)
Net cash (used in)/provided by financing activities   (16,409)   (87,914)   179,221    60,400    (44,841)   (6,515)
Effect of foreign exchange rate changes   (1,893)   12,733    1,323    17,193    (3,779)   (549)
Net increase/(decrease) in cash and cash equivalents   430,073    368,808    (48,359)   105,904    88,198    12,813 
Cash, cash equivalents and restricted cash, beginning of period   1,330,085    1,760,158    2,128,966    2,080,607    2,186,511    317,659 
Cash, cash equivalents and restricted cash, end of period   1,760,158    2,128,966    2,080,607    2,186,511    2,274,709    330,472 
                               

 

 8/11 

 

 

Operating Highlights and Reconciliation of GAAP to Non-GAAP Measures

(in thousands, except for number of  borrowers, number of investors and percentages)

 

   For the Three Months Ended 
   March 31,
2016		   June 30,
2016		   September 30,
2016		   December 31,
2016		   March 31,
2017		   March 31,
2017		 
   RMB   RMB   RMB   RMB   RMB   USD 
Operating Highlights:                              
Amount of loans facilitated   3,446,516    4,538,687    5,617,485    6,675,240    6,922,678    1,005,735 
Loans generated from online channels   1,175,382    1,832,078    2,275,473    2,462,791    3,515,727    510,769 
Loans generated from offline channels   2,271,134    2,706,609    3,342,012    4,212,449    3,406,951    494,966 
Fees billed   847,413    1,110,849    1,322,598    1,630,358    1,583,537    230,058 
Remaining principal of performing loans   11,026,236    13,771,180    17,028,346    20,780,617    24,037,078    3,492,137 
Remaining principal of performing loans covered by quality assurance program   9,986,485    12,963,604    16,204,583    20,103,043    23,524,227    3,417,629 
Number of borrowers   50,542    68,882    92,479    110,785    124,953    124,953 
Borrowers from online channels   27,902    40,033    54,585    63,010    86,095    86,095 
Borrowers from offline channels   22,640    28,849    37,894    47,775    38,858    38,858 
Number of investors   212,318    206,706    177,499    194,505    192,505    192,505 
Investors from online channels   212,318    206,706    177,499    194,505    192,505    192,505 
Investors from offline channels   -    -    -    -    -    - 
Adjusted EBITDA   206,613    264,962    220,716    401,146    400,297    58,157 
Adjusted EBITDA margin   37.1%   36.1%   25.2%   37.5%   39.2%   39.2%
                               
Reconciliation of Net Revenues                              
Fees billed:                              
Transaction fees billed to borrowers   836,896    1,095,749    1,298,247    1,599,674    1,507,754    219,048 
Upfront fees billed to borrowers   773,292    1,016,393    1,192,449    1,468,330    1,334,688    193,905 
Monthly fees billed to borrowers   63,604    79,356    105,798    131,344    173,066    25,143 
Service fees billed to investors   64,552    88,068    110,943    135,747    177,132    25,734 
Others   3,069    3,366    5,196    10,007    12,602    1,831 
Value-added tax   (57,104)   (76,334)   (91,788)   (115,070)   (113,951)   (16,555)
Total fees billed   847,413    1,110,849    1,322,598    1,630,358    1,583,537    230,058 
Stand-ready liabilities associated with
quality assurance program		   (275,721)   (363,095)   (430,569)   (528,852)   (553,816)   (80,459)
Deferred revenue   (20,366)   (15,857)   (16,553)   (18,545)   (9,662)   (1,404)
Cash incentives   (11,707)   (19,556)   (24,074)   (42,836)   (30,355)   (4,410)
Value-added tax   16,760    21,450    25,309    30,985    31,895    4,634 
Net revenues   556,379    733,791    876,711    1,071,110    1,021,599    148,419 
                               
Reconciliation of EBITDA                              
Net income   131,716    260,620    344,281    379,781    350,901    50,980 
Interest income   (5,034)   (7,253)   (9,778)   (14,778)   (24,149)   (3,508)
Income tax expense   78,001    9,286    (131,946)   30,710    67,747    9,842 
Depreciation and amortization   1,930    2,309    2,816    3,554    4,176    607 
Share-based compensation   -    -    15,343    1,879    1,622    236 
Adjusted EBITDA   206,613    264,962    220,716    401,146    400,297    58,157 

 

 9/11 

 

 

Delinquency Rates 
   Delinquent for 
   15-29 days   30-59 days   60-89 days 
All Loans               
December 31, 2013   0.2%   0.4%   0.3%
December 31, 2014   0.3%   0.2%   0.2%
December 31, 2015   0.4%   0.5%   0.4%
December 31, 2016   0.4%   0.7%   0.6%
March 31, 2017   0.4%   0.8%   0.6%
                
Online Channels               
December 31, 2013   0.1%   0.9%   0.3%
December 31, 2014   0.4%   0.3%   0.2%
December 31, 2015   0.6%   0.8%   0.6%
December 31, 2016   0.6%   1.0%   0.8%
March 31, 2017   0.5%   1.0%   0.8%
                
Offline Channels               
December 31, 2013   0.3%   0.2%   0.2%
December 31, 2014   0.3%   0.2%   0.2%
December 31, 2015   0.3%   0.4%   0.3%
December 31, 2016   0.4%   0.6%   0.4%
March 31, 2017   0.4%   0.6%   0.5%

 

 

Net Charge-Off Rate
Loan issued
period		  Loan grade  Amount of loans facilitated
during the period		   Accumulated M3+ Net Charge-
Off as of March 31, 2017		   Total Net Charge-Off Rate
as of March 31, 2017		 
      (in RMB thousands)   (in RMB thousands)     
2014  A   1,917,542    93,895    4.9%
   B   303,030    19,883    6.6%
   C   -    -    - 
   D   7,989    501    6.3%
   Total   2,228,561    114,279    5.1%
2015  A   873,995    48,054    5.5%
   B   419,630    30,477    7.3%
   C   557,414    52,040    9.3%
   D   7,706,575    591,279    7.7%
   Total   9,557,614    721,850    7.6%
2016  A   1,109,094    7,418    0.7%
   B   745,508    11,189    1.5%
   C   1,398,721    34,263    2.4%
   D   16,919,079    342,364    2.0%
   Total   20,172,402    395,233    2.0%

 

 10/11 

 

 

M3+ Net Charge-Off Rate
Loan
issued
period		  Month on Book 
    4    7    10    13    16    19    22    25    28    31    34 
2013Q1   1.9%   3.2%   3.1%   2.3%   2.0%   0.9%   0.5%   0.5%   0.4%   0.4%   0.4%
2013Q2   1.8%   3.6%   4.5%   5.9%   6.4%   7.4%   6.1%   7.0%   7.5%   7.5%   7.8%
2013Q3   0.5%   2.8%   4.2%   5.5%   6.1%   6.5%   7.1%   7.1%   7.0%   6.9%   6.9%
2013Q4   0.7%   3.4%   4.8%   6.2%   6.8%   7.5%   8.3%   8.3%   8.2%   8.5%   8.3%
2014Q1   1.0%   4.2%   6.1%   7.0%   8.4%   9.3%   9.8%   9.7%   9.9%   9.8%   9.5%
2014Q2   0.5%   1.8%   2.6%   3.8%   4.3%   4.6%   4.6%   4.7%   4.7%   4.7%   4.8%
2014Q3   0.2%   0.8%   2.0%   2.8%   3.3%   3.7%   4.0%   4.2%   4.2%   4.1%     
2014Q4   0.3%   1.5%   2.7%   3.5%   4.1%   4.6%   5.1%   5.2%   5.2%          
2015Q1   0.6%   2.7%   4.4%   5.8%   7.1%   8.2%   9.1%   9.5%               
2015Q2   0.5%   2.1%   3.7%   5.3%   6.6%   7.7%   8.6%                    
2015Q3   0.2%   1.6%   3.4%   4.9%   6.4%   7.3%                         
2015Q4   0.2%   1.6%   3.2%   4.9%   6.2%                              
2016Q1   0.2%   1.3%   2.9%   4.2%                                   
2016Q2   0.2%   1.7%   3.4%                                        
2016Q3   0.1%   1.6%                                             
2016Q4   0.2%                                                  

 

 

 11/11