Fanhua Reports Fourth Quarter and Fiscal Year 2019 Unaudited Financial Results
- Quarterly Operating Income RMB114.1 million Up 36.9% YoY
- Annual Operating Income
Financial Highlights for the fourth quarter of 2019: | |||||||
(In thousands, except per ADS) | 2018Q4 (RMB) |
2019Q4 (RMB) |
2019Q4 (US$) |
Change % | |||
Total net revenues | 871,936 | 1,012,579 | 145,448 | 16.1 | |||
Operating income | 83,392 | 114,130 | 16,395 | 36.9 | |||
Non-GAAP operating income2 | 83,392 | 111,043 | 15,950 | 33.2 | |||
Impairment on investment in an affiliate | — | (322,654 | ) | (46,346 | ) | * | |
Net income (loss) attributable to the Company’s shareholders |
112,607 | (224,677 | ) | (32,273 | ) | (299.5 | ) |
Non-GAAP net income attributable to the Company’s shareholders3 | 112,607 | 94,890 | 13,630 | (15.7 | ) | ||
Diluted net income (loss) per ADS | 1.99 | (4.18 | ) | (0.60 | ) | * | |
Non-GAAP diluted net income per ADS4 | 1.99 | 1.77 | 0.25 | (11.1 | ) | ||
Cash, cash equivalents and short- term investments (As of December, 31, 2018 and 2019) | 2,326,883 | 1,782,004 | 255,969 | (23.4 | ) |
Financial Highlights for Year 2019: | |||||||
(In thousands, except per ADS) | 2018 (RMB) |
2019 (RMB) |
2019 (US$) |
Change % | |||
Total net revenues | 3,471,263 | 3,706,003 | 532,334 | 6.8 | |||
Operating income | 425,743 | 469,363 | 67,420 | 10.2 | |||
Non-GAAP operating income2 | 425,743 | 469,757 | 67,476 | 10.3 | |||
Impairment on investment in affiliates | — | (322,654 | ) | (46,346 | ) | * | |
Net income attributable to the Company’s shareholders |
609,915 | 188,932 | 27,139 | (69.0 | ) | ||
Non-GAAP net income attributable to the Company’s shareholders3 | 609,915 | 511,980 | 73,541 | (16.1 | ) | ||
Diluted net income per ADS | 9.83 | 3.46 | 0.50 | (64.8 | ) | ||
Non-GAAP diluted net income per ADS4 | 9.83 | 9.37 | 1.35 | (4.7 | ) |
Commenting on the financial results of the fourth quarter and full year of 2019, Mr.
“In 2019, net revenues from our life insurance business segment, which consisted solely of long-term regular life and health insurance business, continued to grow as a percentage of our total net revenues, reflecting the accelerating snowball effect as our renewal business continued to scale up. Our life insurance business segment recorded robust growth of 39.3% year-over-year in total gross written premiums (“GWP”) to
“In the fourth quarter of 2019, our life insurance GWP grew by 37.4% year-over-year to
“In the fourth quarter of 2019, we recognized an impairment on investment in an affiliate to reflect the change in its fair value as measured by its stock price as of the end of 2019, which was the primary reason for net loss attributable to shareholders during the quarter. As the impairment was a non-cash item which did not affect the company’s cash flow, we still recorded positive operating cash flow for the fourth quarter and full year of 2019.
“The COVID-19 outbreak has rattled numerous industries across
“In the past six years, we have adopted an integrated offline-to-online (“O2O”) operating model. We firmly believe such an O2O operating model is the most effective and efficient model for distributing insurance products and services, which has been further proven during the COVID-19 outbreak. Any model that operates solely online or offline will face challenges in maintaining competitiveness and sustainability.
“In response to the COVID-19 outbreak, we have mobilized all human resources from top to bottom and taken swift and targeted measures to cope with the situations. Leveraging our strength in digital technologies and extensive offline distribution and service network, we further integrated our offline resources with online technologies to conduct all of our operational activities, including training and marketing activities, agent recruitment, customer acquisition and interaction as well as completion of transactions, in order to minimize the impact of the COVID-19 outbreak to the greatest extent possible. We are pleased that such measures have started to produce positive results. We expect our business to resume to normal level in the second quarter of 2020.
“Based on the aforementioned assessment, we expect life insurance APE to be no less than
“As approved by our board of directors, our regular dividend policy will remain unchanged. Based on our expectation on operating income for 2020, annual dividend for 2020 will be
Cash Spent on Share Repurchase and Dividends in 2019
In 2019, the Company spent a total of
Financial Results for the Fourth Quarter of 2019
Total net revenues were
- Net revenues for the life insurance business were
RMB866.9 million (US$124.5 million ) for the fourth quarter of 2019, representing an increase of 17.9% fromRMB735.0 million for the corresponding period in 2018. The increase was mainly driven by (i) a 35.8% year-over-year growth in renewal commissions toRMB194.4 million and (ii) a 13.5% year-over-year growth in first year commissions toRMB672.5 million . Revenues generated from our life insurance business accounted for 85.6% of our total net revenues in the fourth quarter of 2019. - Net revenues for the P&C insurance business were
RMB29.3 million (US$4.2 million ) for the fourth quarter of 2019, representing a decrease of 25.4% fromRMB39.4 million for the corresponding period in 2018. Revenues for the P&C insurance business in the fourth quarter of 2019 primarily consisted of commissions generated from Baowang (www.baoxian.com). The decrease was mainly due to the cessation by certain insurance companies in underwriting several popular insurance products on Baowang and the decline in platform fees derived from our auto insurance business. Revenues generated from the P&C insurance business accounted for 2.9% of our total net revenues in the fourth quarter of 2019. - Net revenues for the claims adjusting business were
RMB116.4 million (US$16.7 million ) for the fourth quarter of 2019, representing an increase of 19.3% fromRMB97.6 million for the corresponding period in 2018. The increase was mainly due to the strong growth of our medical insurance-related claims adjusting business. Revenues generated from the claims adjusting business accounted for 11.5% of our total net revenues in the fourth quarter of 2019.
Total operating costs and expenses were
- Commission costs were
RMB693.5 million (US$99.6 million ) for the fourth quarter of 2019, representing an increase of 16.4% fromRMB595.6 million for the corresponding period in 2018.
- Costs of the life insurance business were
RMB601.3 million (US$86.4 million ) for the fourth quarter of 2019, representing an increase of 16.4% fromRMB516.7 million for the corresponding period in 2018. The increase was in line with the increase in net revenues generated from our life insurance business. Costs incurred by the life insurance business accounted for 86.7% of our total commission costs in the fourth quarter of 2019. - Costs of the P&C insurance business were
RMB23.2 million (US$3.3 million ) for the fourth quarter of 2019, representing an increase of 0.4% fromRMB23.1 million for the corresponding period in 2018. The costs of the P&C insurance business mainly represent commission costs we incurred for operating Baowang (www.baoxian.com). Costs as a percentage of net revenues for the P&C insurance business was 79.0% for the fourth quarter of 2019 as compared to 58.7% for the corresponding period in 2018. The increase was mainly due to the higher percentage of lower-margin products sold on Baowang and the decrease in technology service fees based on the volume of insurance premiums transacted through CNpad in 2019. Costs incurred by the P&C insurance business accounted for 3.3% of our total commission costs in the fourth quarter of 2019. - Costs of claims adjusting business were
RMB69.0 million (US$9.9 million ) for the fourth quarter of 2019, representing an increase of 23.7% fromRMB55.8 million for the corresponding period in 2018. The increase was in line with the increase in net revenues generated from our claims adjusting business. Costs incurred by the claims adjusting business accounted for 10.0% of our total commission costs in the fourth quarter of 2019.
- Costs of the life insurance business were
- Selling expenses were
RMB77.1 million (US$11.1 million ) for the fourth quarter of 2019, representing an increase of 7.8% fromRMB71.5 million for the corresponding period in 2018. Adjusted selling expenses excluding share-based compensation expenses wereRMB79.3 million (US$11.4 million ) for the fourth quarter of 2019, representing an increase of 10.9% fromRMB71.5 million for the corresponding period of 2018. The increase was in line with sales growth. - General and administrative expenses were
RMB127.8 million (US$18.4 million ) for the fourth quarter of 2019, representing an increase of 5.2% fromRMB121.5 million for the corresponding period in 2018. Adjusted general and administrative expenses excluding share-based compensation expenses wereRMB128.7 million (US$18.5 million ) for the fourth quarter of 2019, representing an increase of 6.0% fromRMB121.5 million for the corresponding period of 2018. The increase was in line with sales growth.
As a result of the preceding factors, we had an operating income of
Non-GAAP operating income2, which excluded share-based compensation expenses, was
Operating margin was 11.3% for the fourth quarter of 2019, as compared to 9.6% for the corresponding period in 2018.
Non-GAAP operating margin5 was 11.0% for the fourth quarter of 2019, as compared to 9.6% for the corresponding period in 2018.
Investment income was
Interest income was
Income tax expense was
Share of loss of affiliates was
Primarily as a result of the share of loss of affiliates and decrease in investment income, we had net loss of
Net loss attributable to the Company’s shareholders was
Non-GAAP net income attributable to the Company’s shareholders3, which excluded share-based compensation expenses and impairment on investment in
Net margin was -22.2% for the fourth quarter of 2019 as compared to 12.9% for the corresponding period in 2018.
Non-GAAP net margin6 was 9.4% for the fourth quarter of 2019 as compared to 12.9% for the corresponding period in 2018.
Basic and diluted net loss per ADS were
Non-GAAP basic7 and diluted4 net income per ADS were
Financial Results for Year 2019
Total net revenues were
- Net revenues for the life insurance business were
RMB3,193.6 million (US$458.7 million ) for 2019, representing an increase of 11.2% fromRMB2,870.8 million in 2018. The increase was mainly driven by (i) a 3.1% year-over-year growth in first year commissions toRMB2,390.8 million and (ii) a 45.4% year-over-year growth in renewal commissions toRMB802.8 million . Revenues generated from our life insurance business accounted for 86.2% of our total net revenues in 2019. - Net revenues for the P&C insurance business were
RMB141.8 million (US$20.4 million ) for 2019, representing a decrease of 48.1% fromRMB273.1 million in 2018. The decrease was primarily due to (i) the decline of sales on Baowang (www.baoxian.com) mainly resulting from the decision by certain insurance companies to cease underwriting certain popular insurance products and (ii) the decline in platform fees received for the auto insurance business. Revenues for the P&C insurance business were mainly derived from commissions generated from Baowang and the technology service fees we charged based on the volume of insurance premiums transacted through CNpad. Revenue generated from our P&C insurance business accounted for 3.8% of our total net revenue in 2019. - Net revenues for the claims adjusting business were
RMB370.6 million (US$53.2 million ) for 2019, representing an increase of 13.2% fromRMB327.4 million in 2018. Revenues generated from the claims adjusting business accounted for 10.0% of our total net revenues in 2019.
Total operating costs and expenses were
- Commission costs were
RMB2,483.4 million (US$356.7 million ) for 2019, representing an increase of 5.9% fromRMB2,346.0 million in 2018. The increase in commission cost was largely in line with revenue growth.
- Costs of the life insurance business were
RMB2,166.1 million (US$311.1 million ) for 2019, representing an increase of 11.5% fromRMB1,943.1 million in 2018. The increase was in line with the increase in net revenues generated from our life insurance business. Costs incurred by the life insurance business accounted for 87.2% of our total commission costs in 2019. - Costs of the P&C insurance business were
RMB97.8 million (US$14.1 million ) for 2019, representing a decrease of 53.2% fromRMB208.8 million in 2018. The decrease was in line with the decrease in revenue. Costs incurred by the P&C insurance business accounted for 3.9% of our total commission costs in 2019. - Costs of claims adjusting business were
RMB219.5 million (US$31.5 million ) for 2019, representing an increase of 13.0% fromRMB194.2 million in 2018. Costs incurred by the claims adjusting business accounted for 8.9% of our total commission costs in 2019.
- Costs of the life insurance business were
- Selling expenses were
RMB278.1 million (US$39.9 million ) for 2019, representing an increase of 20.3% fromRMB231.1 million in 2018. The increase was primarily due to an increase in the number of sales outlets in 2019. Adjusted selling expenses excluding share-based compensation expenses wereRMB277.8 million (US$39.9 million ) for 2019, representing an increase of 20.2% fromRMB231.1 million in 2018. - General and administrative expenses were
RMB475.1 million (US$68.2 million ) for 2019, representing an increase of 1.4% fromRMB468.4 million in 2018. Adjusted general and administrative expenses excluding share-based compensation expenses wereRMB475.0 million (US$68.2 million ) for 2019, representing an increase of 1.4% fromRMB468.4 million for 2018.
As a result of the preceding factors, we had an operating income of
Non-GAAP operating income2, which excluded share-based compensation expenses, was
Operating margin was 12.7% for 2019, as compared to 12.3% in 2018.
Non-GAAP operating margin5 was 12.7% for 2019, as compared to 12.3% in 2018.
Investment income was
Interest income was
Income tax expense was
Share of loss of affiliates was
Net income was
Net income attributable to the Company’s shareholders was
Non-GAAP net income attributable to the Company’s shareholders3, which excluded share-based compensation expenses and impairment on investment in
Net margin was 5.1% for 2019 as compared to 17.6% in 2018.
Non-GAAP net margin6 was 13.8% for 2019 as compared to 17.6% in 2018.
Basic and diluted net income per ADS were
Non-GAAP basic7 and diluted4 net income per ADS were
As of
Key Operational Metrics for
- Lan Zhanggui - Our one-stop insurance service platform that integrates the key functions of both the
CNpad Auto Insurance and CNpad Life Insurance Apps.
- The number of registered users of Lan Zhanggui was 1.1 million as of
December 31, 2019 , representing an increase of 37.5% from 807,858 as ofDecember 31, 2018 ; - The number of active users of Lan Zhanggui8 was 152,029 in 2019, as compared to 150,761 in 2018. The number of active users of Lan Zhanggui who have sold at least one life insurance policy was 131,326 in 2019, as compared to 150,761 in 2018;
- Insurance premiums generated through Lan Zhanggui were
RMB3,205.5 million (US$460.4 million ) in 2019, consisting of life insurance premiums ofRMB3,110.7 million (US$446.8 million ) and non-life insurance premiums ofRMB94.8 million (US$13.6 million ). Insurance premiums generated through Lan Zhanggui wereRMB2,496.4 million in 2018, consisting of life insurance premiums ofRMB2,333.7 million and non-life insurance premiums ofRMB162.7 million .
- The number of registered users of Lan Zhanggui was 1.1 million as of
- CNpad Auto Insurance Mobile Application (“CNpad Auto Insurance App”) - Our proprietary mobile sales support system for auto insurance.
- CNpad Auto Insurance App had been downloaded and activated 625,342 times as of
December 31, 2019 , representing an increase of 16.3% from 537,588 times as ofDecember 31, 2018 ; - The number of active users of CNpad Auto Insurance App9 was 87,844 in 2019, representing a decrease of 32.4% from 129,871 in 2018;
- Insurance premiums generated through
CNpad Auto Insurance App wereRMB1.5 billion (US$211.7 million ) in 2019, representing a decrease of 31.8% fromRMB2.2 billion in 2018.
- CNpad Auto Insurance App had been downloaded and activated 625,342 times as of
- eHuzhu - Our online non-profit mutual aid platform:
- The number of paying members was 3.4 million as of
December 31, 2019 , as compared to 3.3 million as ofDecember 31, 2018 .
- The number of paying members was 3.4 million as of
- Baowang (www.baoxian.com) - Our online insurance platform:
- The number of registered customer accounts was 2.7 million as of
December 31, 2019 , representing an increase of 22.7% from approximately 2.2 million as ofDecember 31, 2018 ; - The number of active customer accounts10 was 341,657 in 2019, representing an increase of 8.5% from 315,000 in 2018;
- Insurance premiums generated through Baowang (www.baoxian.com) was
RMB343.9 million (US$49.4 million ) in 2019, representing a decrease of 73.5% fromRMB1.3 billion in 2018.
- The number of registered customer accounts was 2.7 million as of
Recent Developments
- As of
December 31, 2019 ,Fanhua had 670,104 sales agents and 1,627 professional claims adjustors, as compared to 807,858 sales agents and 1,246 professional claims adjustors as ofDecember 31, 2018 . The number of performing agents11 was 394,327 in 2019, among which approximately 131,326 were performing agents who have sold life insurance products. As ofDecember 31, 2019 ,Fanhua's distribution network consisted of 758 sales outlets in 22 provinces and 159 services outlets in 31 provinces, as compared to 682 sales outlets in 21 provinces and 115 services outlets in 29 provinces as ofDecember 31, 2018 .
Business Outlook
Conference Call
The Company will host a conference call to discuss its fourth quarter and fiscal year 2019 financial results as per the following details.
Time: |
|
or |
|
The toll free dial-in numbers: | |
United States | 1-866-519-4004 |
0808-234-6646 | |
0800-912-761 | |
0800-182-0671 | |
1-300-717-205 | |
1-866-386-1016 | |
800-906-601 | |
0120-925-376 | |
080-850-0474 | |
The toll dial-in numbers: | |
400-620-8038 | |
+852 30186771 | |
Conference ID #:5064948
Additionally, a live and archived web cast of this call will be available at:
http://ir.fanhuaholdings.com/events-and-presentations
About
Our online platforms include: (1) Lan Zhanggui, an all-in-one platform which allows our agents to access and purchase a wide variety of insurance products, including life insurance, auto insurance, accident insurance, travel insurance and standard health insurance products from multiple insurance companies on their mobile devices; (2) CNpad, a mobile sales support application for auto insurance; (3) Baowang (www.baoxian.com), an online entry portal for comparing and purchasing health, accident, travel and homeowner insurance products and (4) eHuzhu (www.ehuzhu.com), a non-profit online mutual aid platform in China.
As of
For more information about
Forward-looking Statements
This press release contains statements of a forward-looking nature. These statements, including the statements relating to the Company’s future financial and operating results, are made under the “safe harbor” provisions of the
About Non-GAAP Financial Measures
In addition to the Company’s consolidated financial results under GAAP, the Company also provides non-GAAP operating income, non-GAAP operating margin, non-GAAP net income attributable to the Company’s shareholders, non-GAAP net margin and non-GAAP basic and diluted net income per ADS, all of which are non-GAAP financial measures. Non-GAAP operating income is defined as operating income before share-based compensation expenses which are solely associated with the Company’s 521 Plan. Non-GAAP operating margin is defined as non-GAAP operating income as a percentage of net revenues. Non-GAAP net income attributable to the Company’s shareholders is defined as net income attributable to the Company’s shareholders before share-based compensation expenses which are solely associated with the Company’s 521 Plan and impairment on investment in
In light of these limitations, 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 GAAP. We encourage investors and other interested persons to review our financial information in its entirety and not rely on a single financial measure. For more information on these non-GAAP financial measures, please see the tables captioned “Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures” set forth at the end of this release.
Unaudited Condensed Consolidated Balance Sheets |
||||||||
(In thousands) | ||||||||
As of |
As of |
As of |
||||||
2018 | 2019 | 2019 | ||||||
RMB | RMB | US$ | ||||||
ASSETS: | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 772,823 | 169,653 | 24,369 | |||||
Restricted cash | 75,343 | 95,952 | 13,783 | |||||
Short term investments | 1,554,060 | 1,612,351 | 231,600 | |||||
Accounts receivable, net | 508,474 | 682,171 | 97,988 | |||||
Insurance premium receivables | 5,267 | 5,067 | 728 | |||||
Other receivables | 86,150 | 61,570 | 8,844 | |||||
Other current assets | 58,990 | 54,987 | 7,898 | |||||
Total current assets | 3,061,107 | 2,681,751 | 385,210 | |||||
Non-current assets: | ||||||||
Property, plant, and equipment, net | 37,934 | 40,806 | 5,862 | |||||
111,133 | 110,191 | 15,828 | ||||||
Deferred tax assets | 9,320 | 7,327 | 1,052 | |||||
Investment in affiliates | 587,517 | 363,414 | 52,201 | |||||
Other non-current assets | 59,600 | 46,917 | 6,739 | |||||
Right of use assets12 | — | 190,437 | 27,354 | |||||
Total non-current assets | 805,504 | 759,092 | 109,036 | |||||
Total assets | 3,866,611 | 3,440,843 | 494,246 | |||||
Current liabilities: | ||||||||
Accounts payable | 332,685 | 382,882 | 54,998 | |||||
Insurance premium payables | 15,248 | 7,901 | 1,135 | |||||
Other payables and accrued expenses | 254,824 | 220,290 | 31,643 | |||||
Accrued payroll | 97,637 | 101,664 | 14,603 | |||||
Income tax payable | 205,189 | 155,251 | 22,300 | |||||
Current operating lease liability | — | 79,986 | 11,489 | |||||
Total current liabilities | 905,583 | 947,974 | 136,168 | |||||
Non-current liabilities: | ||||||||
Refundable share rights deposits | 138,328 | 266,901 | 38,338 | |||||
Other tax liabilities | 70,350 | 70,350 | 10,105 | |||||
Deferred tax liabilities | 5,624 | 7,898 | 1,134 | |||||
Non-current operating lease liability | — | 103,252 | 14,831 | |||||
Total non-current liabilities | 214,302 | 448,401 | 64,408 | |||||
Total liabilities | 1,119,885 | 1,396,375 | 200,576 | |||||
Ordinary shares | 9,583 | 9,235 | 1,327 | |||||
(1,156 | ) | (1,146 | ) | (165 | ) | |||
Additional paid-in capital | 437,176 | 393 | 56 | |||||
Statutory reserves | 480,881 | 508,739 | 73,076 | |||||
Retained earnings | 1,799,989 | 1,479,494 | 212,516 | |||||
Accumulated other comprehensive loss | (93,290 | ) | (65,429 | ) | (9,398 | ) | ||
Total shareholders’ equity | 2,633,183 | 1,931,286 | 277,412 | |||||
Non-controlling interests | 113,543 | 113,182 | 16,258 | |||||
Total equity | 2,746,726 | 2,044,468 | 293,670 | |||||
Total liabilities and equity | 3,866,611 | 3,440,843 | 494,246 | |||||
Unaudited Condensed Consolidated Statements of Income and Comprehensive Income | |||||||||||||||||
(In thousands, except for shares and per share data) |
|||||||||||||||||
For The Three Months Ended |
For The Twelve Months Ended | ||||||||||||||||
2018 |
2019 | 2019 | 2018 | 2019 | 2019 | ||||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||
Net revenues: | |||||||||||||||||
Agency . | 774,303 | 896,209 | 128,732 | 3,143,873 | 3,335,397 | 479,100 | |||||||||||
Life insurance business | 734,988 | 866,879 | 124,519 | 2,870,776 | 3,193,625 | 458,736 | |||||||||||
P&C insurance business | 39,315 | 29,330 | 4,213 | 273,097 | 141,772 | 20,364 | |||||||||||
Claims adjusting | 97,633 | 116,370 | 16,716 | 327,390 | 370,606 | 53,234 | |||||||||||
Total net revenues | 871,936 | 1,012,579 | 145,448 | 3,471,263 | 3,706,003 | 532,334 | |||||||||||
Operating costs and expenses: | |||||||||||||||||
Agency | (539,719 | ) | (624,496 | ) | (89,703 | ) | (2,151,856 | ) | (2,263,952 | ) | (325,196 | ) | |||||
Life insurance business | (516,657 | ) | (601,311 | ) | (86,373 | ) | (1,943,053 | ) | (2,166,126 | ) | (311,144 | ) | |||||
P&C insurance business | (23,062 | ) | (23,185 | ) | (3,330 | ) | (208,803 | ) | (97,826 | ) | (14,052 | ) | |||||
Claims adjusting | (55,840 | ) | (69,035 | ) | (9,916 | ) | (194,159 | ) | (219,496 | ) | (31,529 | ) | |||||
Total operating costs | (595,559 | ) | (693,531 | ) | (99,619 | ) | (2,346,015 | ) | (2,483,448 | ) | (356,725 | ) | |||||
Selling expenses (including share-based compensation expenses of months ended respectively, and nil and nil in the three months and twelve months ended December 31, 2018) |
(71,519 | ) | (77,097 | ) | (11,074 | ) | (231,075 | ) | (278,085 | ) | (39,944 | ) | |||||
General and administrative expenses (including share-based compensation of months and twelve months ended nil and nil in the three months and twelve months ended 2018) |
(121,466 | ) | (127,821 | ) | (18,360 | ) | (468,430 | ) | (475,107 | ) | (68,245 | ) | |||||
Total operating costs and expenses | (788,544 | ) | (898,449 | ) | (129,053 | ) | (3,045,520 | ) | (3,236,640 | ) | (464,914 | ) | |||||
Income from operations | 83,392 | 114,130 | 16,395 | 425,743 | 469,363 | 67,420 | |||||||||||
Other income, net: | |||||||||||||||||
Investment income | 42,946 | 9,386 | 1,348 | 195,456 | 79,070 | 11,358 | |||||||||||
Interest income | 821 | 238 | 34 | 34,207 | 2,828 | 406 | |||||||||||
Others, net | 11,881 | (1,202 | ) | (173 | ) | 11,807 | 9,664 | 1,388 | |||||||||
Income before income taxes and income of affiliates | 139,040 | 122,552 | 17,604 | 667,213 | 560,925 | 80,572 | |||||||||||
Income tax expense | (57,075 | ) | (33,847 | ) | (4,862 | ) | (224,586 | ) | (143,816 | ) | (20,658 | ) | |||||
Share of income and impairment of affiliates, net | 36,047 | (311,394 | ) | (44,729 | ) | 174,468 | (224,555 | ) | (32,255 | ) | |||||||
Net income (loss) | 118,012 | (222,689 | ) | (31,987 | ) | 617,095 | 192,554 | 27,659 | |||||||||
less: net income attributable to noncontrolling interests | 5,405 |
1,988 | 286 | 7,180 | 3,622 | 520 | |||||||||||
Net income (loss) attributable to the Company’s shareholders | 112,607 | (224,677 | ) | (32,273 | ) | 609,915 | 188,932 | 27,139 |
Net income per share: | |||||||||||||
Basic | 0.10 | (0.21 | ) | (0.03 | ) | 0.49 | 0.17 | 0.02 | |||||
Diluted | 0.10 | (0.21 | ) | (0.03 | ) | 0.49 | 0.17 | 0.02 | |||||
Net income per ADS: | |||||||||||||
Basic | 1.99 | (4.18 | ) | (0.60 | ) | 9.84 | 3.46 | 0.50 | |||||
Diluted | 1.99 | (4.18 | ) | (0.60 | ) | 9.83 | 3.46 | 0.50 | |||||
Shares used in calculating net income per share: | 1,131,722,922 | 1,073,891,784 | 1,073,891,784 | 1,239,264,464 | 1,092,601,338 | 1,092,601,338 | |||||||
Basic | |||||||||||||
Diluted | 1,132,884,871 | 1,074,291,474 | 1,074,291,474 | 1,240,854,034 | 1,093,229,436 | 1,093,229,436 | |||||||
118,012 | (222,689 | ) | (31,987 | ) | 617,095 | 192,554 | 27,659 | ||||||
Net income (loss) | |||||||||||||
Other comprehensive income (loss), net of tax: Foreign currency translation adjustments | 7,288 | 4,157 | 597 | (10,194 | ) | 10,178 | 1,462 | ||||||
Share of other comprehensive gain (loss) of affiliates | 4,629 | (819 | ) | (118 | ) | (1,763) | 451 | 65 | |||||
Unrealized net gains on available-for-sale investments | — | 13,267 | 1,906 | — | 17,231 | 2,475 | |||||||
Comprehensive income (loss) | 129,929 | (206,084 | ) | (29,602 | ) | 605,138 | 220,414 | 31,661 | |||||
Less: Comprehensive income attributable to the noncontrolling interests | 5,405 | 1,988 | 286 | 7,180 | 3,622 | 520 | |||||||
Comprehensive income (loss) attributable to the Company’s shareholders | 124,524 | (208,072 | ) | (29,888 | ) | 597,958 | 216,792 | 31,141 | |||||
FANHUA INC. Unaudited Condensed Consolidated Statements of Cash Flow (In thousands) |
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For The Three Months Ended |
For The Twelve Months Ended | ||||||||||||||||
2018 | 2019 | 2019 | 2018 | 2019 | 2019 | ||||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||
OPERATING ACTIVITIES | |||||||||||||||||
Net income (loss) | 118,012 | (222,689 | ) | (31,987 | ) | 617,095 | 192,554 | 27,659 | |||||||||
Adjustments to reconcile net income to net cash generated from operating activities: | |||||||||||||||||
Investment income | (31,969 | ) | (8,961 | ) | (1,287 | ) | (156,047 | ) | (65,616 | ) | (9,425 | ) | |||||
Share of income and impairment of affiliates, net | (36,047 | ) | 311,394 | 44,729 | (174,468 | ) | 224,555 | 32,255 | |||||||||
Other non-cash adjustments | (628 | ) | 8,383 | 1,205 | 14,693 | 106,328 | 15,273 | ||||||||||
Changes in operating assets and liabilities: | 120,318 | 36,587 | 5,255 | 222,554 | (279,497 | ) | (40,147 | ) | |||||||||
Net cash generated from operating activities | 169,686 | 124,714 | 17,915 | 523,827 | 178,324 | 25,615 | |||||||||||
Purchase of short term investments | (1,525,581 | ) | (1,549,800 | ) | (222,615 | ) | (11,380,198 | ) | (7,498,701 | ) | (1,077,121 | ) | |||||
Proceeds from disposal of short term investments | 1,684,050 | 1,560,651 | 224,173 | 12,488,495 | 7,523,257 | 1,080,648 | |||||||||||
Others | 25,648 | (5,548 | ) | (796 | ) | 459,288 | (12,597 | ) | (1,810 | ) | |||||||
Net cash generated from investing activities | 184,117 | 5,303 | 762 | 1,567,585 | 11,959 | 1,717 | |||||||||||
Dividends paid | (29,716 | ) | (113,252 | ) | (16,268 | ) | (326,725 | ) | (435,072 | ) | (62,494 | ) | |||||
Repurchase of shares | (358,046 | ) | — | — | (1,569,831 | ) | (484,016 | ) | (69,525 | ) | |||||||
Others | 153,617 | — | — | 232,050 | 126,982 | 18,241 | |||||||||||
Net cash used in financing activities | (234,145 | ) | (113,252 | ) | (16,268 | ) | (1,664,506 | ) | (792,106 | ) | (113,778 | ) | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 119,658 | 16,765 | 2,409 | 426,906 | (601,823 | ) | (86,446 | ) | |||||||||
Cash, cash equivalents and restricted cash at beginning of period. | 741,608 | 252,033 | 36,202 | 439,033 | 848,166 | 121,831 | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | (13,100 | ) | (3,193 | ) | (459 | ) | (17,773 | ) | 19,262 | 2,767 | |||||||
Cash, cash equivalents and restricted cash at end of period | 848,166 | 265,605 | 38,152 | 848,166 | 265,605 | 38,152 | |||||||||||
FANHUA INC. Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures (In RMB in thousands, except shares and per share data) |
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For The Three Months Ended |
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2018 | 2019 | |||||||||||||||
GAAP | GAAP | Share-based compensation expenses |
Impairment on investment in affiliates |
Non-GAAP | Change% | |||||||||||
Net revenues | 871,936 | 1,012,579 | — | — | 1,012,579 | 16.1 | ||||||||||
Selling expenses | (71,519 | ) | (77,097 | ) | 2,205 | — | (79,302 | ) | 10.9 | |||||||
General and administrative expenses | (121,466 | ) | (127,821 | ) | 882 | — | (128,703 | ) | 6.0 | |||||||
Income from operations | 83,392 | 114,130 | 3,087 | — | 111,043 | 33.2 | ||||||||||
Operating margin | 9.6 | % | 11.3 | % | — | — | 11.0 | % | 14.6 | |||||||
Share of income and impairment of affiliates, net | 36,047 | (311,394 | ) | — | (322,654 | ) | 11,260 | (68.8 | ) | |||||||
Net income (loss) attributable to the Company’s shareholders | 112,607 | (224,677 | ) | 3,087 | (322,654 | ) | 94,890 | (15.7 | ) | |||||||
Net margin | 12.9 | % | (22.2 | %) | — | — | 9.4 | % | (27.1 | ) | ||||||
Net income per share: | ||||||||||||||||
Basic | 0.10 | (0.21 | ) | — | — | 0.09 | (10.0 | ) | ||||||||
Diluted | 0.10 | (0.21 | ) | — | — | 0.09 | (10.0 | ) | ||||||||
Net income per ADS | ||||||||||||||||
Basic | 1.99 | (4.18 | ) | — | — | 1.77 | (11.1 | ) | ||||||||
Diluted | 1.99 | (4.18 | ) | — | — | 1.77 | (11.1 | ) | ||||||||
Shares used in calculating net income per share: | ||||||||||||||||
Basic | 1,131,722,922 | 1,073,891,784 | — | — | 1,073,891,784 | — | ||||||||||
Diluted | 1,132,884,871 | 1,074,291,474 | — | — | 1,074,291,474 | — |
For The Twelve Months Ended |
|||||||||||||||||
2018 | 2019 | ||||||||||||||||
GAAP | GAAP |
Share-based compensation expenses |
Impairment on investment in affiliates |
Non-GAAP | Change% | ||||||||||||
Net revenues | 3,471,263 | 3,706,003 | — | — | 3,706,003 | 6.8 | |||||||||||
Selling expenses | (231,075 | ) | (278,085 | ) | (281 | ) | — | (277,804 | ) | 20.2 | |||||||
General and administrative expenses | (468,430 | ) | (475,107 | ) | (113 | ) | — | (474,994 | ) | 1.4 | |||||||
Income from operations | 425,743 | 469,363 | (394 | ) | — | 469,757 | 10.3 | ||||||||||
Operating margin | 12.3 | % | 12.7 | % | 12.7 | % | 3.3 | ||||||||||
Share of income and impairment of affiliates, net | 174,468 | (224,555 | ) | — | (322, 654 | ) | 98,099 | (43.8 | ) | ||||||||
Net income (loss) attributable to the Company’s shareholders | 609,915 | 188,932 | (394 | ) | (322, 654 | ) | 511,980 | (16.1 | ) | ||||||||
Net margin | 17.6 | % | 5.1 | % | — | 13.8 | % | (21.6 | ) | ||||||||
Net income per share: | |||||||||||||||||
Basic | 0.49 | 0.17 | — | — | 0. 47 | (4.1 | ) | ||||||||||
Diluted | 0.49 | 0.17 | — | — | 0. 47 | (4.1 | ) | ||||||||||
Net income per ADS | — | ||||||||||||||||
Basic | 9.84 | 3.46 | — | — | 9.37 | (4.8 | ) | ||||||||||
Diluted | 9.83 | 3.46 | — | — | 9.37 | (4.7 | ) | ||||||||||
Shares used in calculating net income per share: | |||||||||||||||||
Basic | 1,239,264,464 | 1,092,601,338 | — | — | 1,092,601,338 | — | |||||||||||
Diluted | 1,240,854,034 | 1,093,229,436 | — | — | 1,093,229,436 | — |
____________________________
1 This announcement contains currency conversions of certain Renminbi (RMB) amounts into
2 Non-GAAP operating income is defined as operating income before share-based compensation expenses.
3 Non-GAAP net income attributable to the Company’s shareholders is defined as net income attributable to the Company’s shareholders before share-based compensation expenses and impairment on investment in an affiliate.
4 Non-GAAP diluted net income per ADS is defined as non-GAAP net income attributable to the Company’s shareholders divided by total weighted average number of diluted ADSs of the Company outstanding during the period.
5 Non-GAAP operating margin is defined as Non-GAAP operating income as a percentage of net revenues.
6 Non-GAAP net margin is defined as non-GAAP net income attributable to the Company's shareholders as a percentage of net revenues.
7 Non-GAAP basic net income per ADS is defined as non-GAAP net income attributable to the Company’s shareholders divided by total weighted average number of ADSs of the Company outstanding during the period.
8 Active users of Lan Zhanggui included users who sold at least one insurance policy through Lan Zhanggui (through either its mobile application or WeChat public account) during the specified period.
9 Active users of CNpad Auto Insurance App included users who made at least one purchase of auto insurance policy through CNpad Auto Insurance App (through either its mobile application or WeChat public account) during the specified period.
10 Active customer accounts of Baowang are defined as customer accounts that made at least one purchase directly through www.baoxian.com, its mobile application, or WeChat public account during the specified period.
11 Performing agents are defined as agents who have sold at least one insurance policy during the specified period.
12 In
For more information, please contact:
Investor Relations Manager
Tel: +86 (20) 8388-3191
Email: qiusr@fanhuaholdings.com
Source:
Source: Fanhua Inc.