finvolution-group-reports-third-quarter-2021-unaudited-financial-results

FinVolution Group Reports Third Quarter 2021 Unaudited Financial Results

 

FinVolution Group (“FinVolution,” or the “Company”) (NYSE: FINV), a leading fintech platform in China, today announced its unaudited financial results for the third quarter ended September 30, 2021.

For the Three Months Ended

YoY Change

September 30, 2020

September 30, 2021

Total No. of New Individual
Borrowers[3] 
(000)

408

1,184

190.2%

New Individual Borrowers China’s
Mainland (‘000)

207

827

299.5%

New Individual Borrowers International (‘000)

201

357

77.6%

No. of Small Business Owners served
in China’s Mainland  (
000)

98

488

398.0%

Total Transaction Volume[4]

17.3

38.1

120.2%

Transaction Volume China’s Mainland
(RMB in billion)

17.0

37.1

118.2%

Transaction Volume International
(RMB in billion)

0.3

1.0

233.3%

Third Quarter 2021 Operational Highlights

Third consecutive quarter with over 1 million new global borrowers

  • Total cumulative registered users[1] reached 135.6 million as of September 30, 2021.
  • Total number of unique borrowers[2] was 3.9 million as of September 30, 2021.
  • Total number of new borrowers[3] was 1.18 million, an increase of 190.2% compared to the same period of 2020.

Total Transaction Volume and outstanding loan balances continue record breaking momentum

  • Total Transaction Volume reached RMB38.1 billion, an increase of 120.2% compared to the same period of 2020.
  • Transaction volume facilitated for total new borrowers[5] was RMB7.2 billion, an increase of 287.8% compared to the same period of 2020.
  • Total outstanding principal of loans reached RMB45.0 billion, an increase of 100.9% compared to the same period of 2020.

Small business owner’s loans continue to scale up with steady growth

  • Transaction volume facilitated for small business owners was RMB7.9 billion, representing 20.7% of Total Transaction Volume.
  • Total number of small business owners served in the third quarter of 2021 was 488.0 thousand, an increase of 398.0% compared to the same period of 2020.

International expansion continues to accelerate with diversified business models

  • Number of new borrowers acquired in the International Markets reached 357.0 thousand, an increase of 77.6% compared to the same period of 2020.
  • Entered into a strategic cooperation with PT Bank Jago, increasing loan facilitation capabilities and broadening presence across different market segments in Indonesia.
  • Commenced Buy-Now-Pay-Later cooperation with e-commerce partners in Indonesia.
  • Transaction volume facilitated in the International Markets exceeded RMB1.0 billion, an increase of 233.3% compared to the same period of 2020.

More operational highlights

  • Executed initial issuance of RMB200 million asset-backed-securities (“ABS”) which was listed on and traded on China’s Shenzhen Stock Exchange.
  • 90 day+ delinquency ratio[6] was 1.04% as of September 30, 2021, compared to 3.4% in the same period of 2020.
  • Average loan size[7] was RMB5,102 for the third quarter of 2021, compared to RMB4,095 in the same period of 2020.
  • Average loan tenor[8] was 8.2 months for the third quarter of 2021.

Third Quarter 2021 Financial Highlights

Sustainable growth with progressive improvement

  • Net revenue was RMB2,525.1 million (US$391.9 million) for the third quarter of 2021, an increase of 40.8% from RMB1,793.3 million compared to the same period of 2020.
  • Operating profit was RMB729.9 million (US$113.3 million) for the third quarter of 2021, an increase of 5.9% from the same period of 2020.
  • Non-GAAP adjusted operating income[9], which excludes share-based compensation expenses before tax, was RMB751.3 million (US$116.6 million) for the third quarter of 2021, an increase of 7.7% from the same period of 2020.
  • Diluted net profit per American depositary share (“ADS”) was RMB2.15 (US$0.33) and diluted net profit per share was RMB0.43 (US$0.07) , an increase of 4.9% from the same period of 2020. Non-GAAP diluted net profit per ADS was RMB2.21 (US$0.34) and non-GAAP diluted net profit per share was RMB0.44 (US$0.07), an increase of 6.3% from the same period of 2020. Each ADS of the Company represents five ordinary shares of the Company.

[1] On a cumulative basis, total number of users registered on the Company’s platforms as of September 30, 2021.

[2] Represents the total number of borrowers whose transactions were facilitated on the Company’s platforms during the period presented.

[3] Represents the total number of new borrowers on the Company’s platforms during the period presented.

[4] Represents total transaction volume facilitated on the Company’s platforms during the period presented.

[5] Represents transaction volume facilitated for total number of new borrowers on the Company’s platforms during the period presented.

[6] “90 day+ delinquency ratio” refers to the outstanding principal balance of on- and off-balance sheet loans that were 90 to 179 calendar days past due as a percentage of the total outstanding principal balance of on- and off-balance sheet loans on the Company’s platform as of a specific date. Loans that originated outside China’s Mainland are not included in the calculation.

[7] Represents the average loan size on the Company’s platform in China’s Mainland during the period presented.

[8] Represents the average loan tenor period on the Company’s platform in China’s Mainland during the period presented.

[9] Please refer to “UNAUDITED Reconciliation of GAAP And Non-GAAP Results” for reconciliation between GAAP and Non-GAAP adjusted operating income.

Mr. Feng Zhang, the Chief Executive Officer of FinVolution, commented, “Given our stronger-than-expected results, greater confidence in business trends and successful strategy execution, we have raised our total transaction volume outlook for 2021. We now expect transaction volume for the year to reach between RMB130 billion and RMB135 billion, representing a year-over-year increase in the range of 102.8% to 110.6%, above our prior guidance of RMB100 billion to RMB120 billion.”

“Total transaction volume maintained its strong growth trajectory during the third quarter, reaching a new record high of RMB38.1 billion, representing an increase of 120.2% year over year and 14.1% sequentially.”

“Transaction volume for small business owners grew rapidly to RMB7.9 billion, accounting for 20.7% of total transaction volume for the period. The total number of small business owners we served in the third quarter grew to 488 thousand, representing a 19.6% increase from the previous quarter.”

“Our international expansion continues to flourish. During the third quarter, we strengthened our local partnerships and generated over RMB1 billion in transaction volume. Our strategic cooperation with PT Bank Jago increased our loan facilitation capabilities and broadened our presence across different market segments in Indonesia. We have also teamed up with local e-commerce partners to launch operations in the Buy-Now-Pay-Later sector. Looking ahead, we will continue to pursue premium quality growth in China while capturing massive growth opportunities in international markets,” concluded Mr. Zhang.

Mr. Jiayuan Xu, the Chief Financial Officer of FinVolution, commented, “We  successfully issued and listed our first ABS  on China’s Shenzhen Stock Exchange, marking an important milestone in our strategic transition towards better quality borrowers. With the diversification in funding sources through different avenues, we expect future improvement in funding efficiency. Our profitability also continued to improve with non-GAAP operating profit9 of RMB751.3 million, an increase of 7.7% year over year and a sequential increase of 3.5%. These results are a powerful testament to our effective business strategy and skillful execution,” concluded Mr. Xu.

Third Quarter 2021 Financial Results

Net revenue for the third quarter of 2021 increased by 40.8% to RMB2,525.1 million (US$391.9 million) from RMB1,793.3 million in the same period of 2020, primarily due to the increase in loan facilitation service fees and post facilitation service fees.

Loan facilitation service fees increased by 121.1% to RMB1,075.1 million (US$166.8 million) for the third quarter of 2021 from RMB486.3 million in the same period of 2020, primarily due to the increase in transaction volume.

Post-facilitation service fees increased by 123.8% to RMB361.2 million (US$56.1 million) for the third quarter of 2021 from RMB161.4 million in the same period of 2020, primarily due to the increase in outstanding loans serviced by the Company and the rolling impact of deferred transaction fees.

Guarantee income was RMB644.5 million (US$100.0 million) for the third quarter of 2021 compared to RMB747.1 million in the same period of 2020, as a result of improved asset quality. The fair value of quality assurance commitment upon loan origination is released as guarantee income systematically over the term of the loans subject to quality assurance commitment. As we transitioned our business towards better quality borrowers, the fair value of quality assurance commitment upon loan origination decreased due to better asset quality which resulted in the decrease in guarantee income.

Net interest income increased by 27.5% to RMB332.6 million (US$51.6 million) for the third quarter of 2021 from RMB260.9 million in the same period of 2020, primarily due to increase in transaction volume originated in the international markets.

Other revenue decreased by 18.8% to RMB111.7 million (US$17.3 million) for the third quarter of 2021 from RMB137.6 million in the same period of 2020, primarily due to the decrease in customer referral fees from other third-party platforms.

Origination and servicing expenses increased by 35.6% to RMB459.6 million (US$71.3 million) for the third quarter of 2021 from RMB338.9 million in the same period of 2020, primarily due to the increase in employees’ expenditure and fees paid to third party service providers.

Sales and marketing expenses increased by 236.1% to RMB387.5 million (US$60.1 million) for the third quarter of 2021 from RMB115.3 million in the same period of 2020, primarily due to the increase in online customer acquisition expenses as a result of increased efforts in acquiring new borrowers on the Company’s platform.

Research and development expenses increased by 12.4% to RMB104.5 million (US$16.2 million) for the third quarter of 2021 from RMB93.0 million in the same period of 2020, due to increased investments in technology development.

General and administrative expenses increased by 16.9% to RMB123.2 million (US$19.1 million) for the third quarter of 2021 from RMB105.4 million in the same period of 2020, due to increased expenditures in employees benefits.

Provision for accounts receivables and other receivables decreased by 6.3% to RMB32.9 million (US$5.1 million) for the third quarter of 2021, from RMB35.1 million in the same period of 2020 as a result of improved credit quality partially offset by the increase in outstanding loan balances.

Provision for loans receivables was RMB142.5 million (US$22.1 million) for the third quarter of 2021, compared with RMB90.0 million in the same period of 2020, and the increase was primarily due to the higher transaction volume originated in international markets.

Credit losses for quality assurance commitment were RMB545.1 million (US$84.6 million) for the third quarter of 2021 compared to RMB326.6 million in the same period of 2020, primarily due to the increase in outstanding loan balances partially offset by improved asset quality.

Operating profit increased by 5.9% to RMB729.9 million (US$113.3 million) for the third quarter of 2021 from RMB689.0 million in the same period of 2020.

Non-GAAP adjusted operating income, which excludes share-based compensation expenses before tax, was RMB751.3 million (US$116.6 million) for the third quarter of 2021, representing an increase of 7.7% from RMB697.6 million in the same period of 2020.

Other income decreased by 43.7% to RMB14.8 million (US$2.3 million) for the third quarter of 2021 from RMB26.3 million in the same period of 2020, mainly due to fair value change of investments.

Income tax expenses were RMB112.2 million (US$17.4 million) for the third quarter of 2021, compared with RMB118.4 million in the same period of 2020, and the decrease was mainly due to change in preferential tax rate for certain qualified subsidiaries, partially offset by the increase in pre-tax profit.

Net profit was RMB632.4 million (US$98.2 million) for the third quarter of 2021, compared to RMB596.9 million in the same period of 2020.

Diluted net profit per ADS was RMB2.15 (US$0.33) and diluted net profit per share was RMB0.43 (US$0.07), an increase of 4.9% year over year. Non-GAAP diluted net profit per ADS was RMB2.21 (US$0.34) and Non-GAAP diluted net profit per share was RMB0.44 (US$0.07), an increase of 6.3% year over year. Each ADS represents five Class A ordinary shares of the Company.

As of September 30, 2021, the Company had cash and cash equivalents of RMB3,349.8 million (US$519.9 million) and short-term investments, mainly in wealth management products, of RMB1,738.6 million (US$269.8 million).

The following table provides the delinquency rates for all outstanding loans on the Company’s platform in China’s Mainland as of the respective dates indicated.

As of

15-29
days

30-59
days

60-89
days

90-119 days

120-149 days

150-179 days

March 31, 2019

0.80%

1.61%

1.45%

1.29%

1.31%

1.20%

June 30, 2019

0.86%

1.42%

1.37%

1.19%

1.26%

1.21%

September 30, 2019

0.90%

1.50%

1.35%

1.31%

1.17%

1.20%

December 31, 2019              

1.34%

2.40%

1.86%

1.76%

1.62%

1.53%

March 31, 2020

1.34%

3.03%

2.33%

2.44%

2.64%

2.17%

June 30, 2020

0.71%

1.36%

1.70%

2.00%

2.75%

2.38%

September 30,2020

0.46%

0.72%

0.74%

0.90%

1.07%

1.43%

December 31, 2020

0.35%

0.55%

0.48%

0.52%

0.49%

0.55%

March 31, 2021

0.29%

0.52%

0.43%

0.39%

0.38%

0.36%

June 30, 2021

0.30%

0.45%

0.39%

0.32%

0.36%

0.33%

September 30, 2021

0.34%

0.51%

0.43%

0.39%

0.33%

0.32%

The following chart display the historical cumulative 30-day plus past due delinquency rates by loan origination vintage in China’s Mainland for all loan products facilitated through the Company’s online platform as of September 30, 2021:

Click here to view the chart.

Business Outlook

With the COVID-19 recent resurgence in China and other regions around the world, the Company will continue to closely monitor the pandemic situation and remain vigilant in its business operations. As such, the Company holds a cautious view on its operations and anticipates its transaction volume guidance for the full year 2021 to be in the range of RMB130 billion to RMB135 billion, representing a year-over-year increase of 102.8% to 110.6%, above its prior guidance of RMB100 billion to RMB120 billion.

The above forecast is based on current market conditions and reflects the Company’s current  preliminary views and expectations with respect to market and operational conditions, the regulatory and operating environment, as well as customer and institutional investor demands, all of which are subject to change.

Shares Repurchase Program Update

On November 17, 2021, the board of directors of the Company approved an extension of the Company’s existing US$60 million share repurchase program for another twelve months, effective January 1, 2022 through December 31, 2022. Since August 25, 2020, in accordance with the Company’s existing share repurchase program, the Company has repurchased its own Class A ordinary shares in the form of ADS in the amount of US$20.3 million. As such, the Company is authorized to repurchased its own Class A ordinary shares in the form of ADSs with an aggregate value of up to US$39.7 million through December 31, 2022.  The share repurchase program shall be subject to general business conditions and market conditions.

As of November 17, 2021, in combination with the Company’s previous repurchase programs, the Company had repurchased its own Class A ordinary shares in the form of ADSs with an total aggregate value of approximately US$131.4 million.

Conference Call

The Company’s management will host an earnings conference call at 7:00 AM U.S. Eastern Time on November 18, 2021 (8:00 PM Beijing/Hong Kong time on November 18, 2021).

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

United States (toll free):

1-888-346-8982

Canada (toll free):

1-855-669-9657

International:

1-412-902-4272

Hong Kong, China (toll free):

800-905-945

Hong Kong, China:

852-3018-4992

Mainland, China:

400-120-1203

Participants please dial-in at least five minutes before the scheduled start time and ask to be connected to the call for “FinVolution Group.”

Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at https://ir.finvgroup.com.

A replay of the conference call will be accessible approximately one hour after the conclusion of the live call until November 25, 2021, by dialing the following telephone numbers:

United States (toll free):

1-877-344-7529

Canada (toll free):                

1-855-669-9658

International:

1-412-317-0088

Replay Access Code:

10161823

About FinVolution Group

FinVolution Group is a leading fintech platform in China connecting underserved individual borrowers with financial institutions. Established in 2007, the Company is a pioneer in China’s online consumer finance industry and has developed innovative technologies and has accumulated in-depth experience in the core areas of credit risk assessment, fraud detection, big data and artificial intelligence. The Company’s platform, empowered by proprietary cutting-edge technologies, features a highly automated loan transaction process, which enables a superior user experience. As of September 30, 2021, the Company had over 135.6 million cumulative registered users.

For more information, please visit  https://ir.finvgroup.com

Use of Non-GAAP Financial Measures

We use Non-GAAP operating profit, Non-GAAP basic and diluted net profit per share and per ADS which are Non-GAAP financial measures, in evaluating our operating results and for financial and operational decision-making purposes. We believe that adjusted operating profit helps identify underlying trends in our business by excluding the impact of share-based compensation expenses and expected discretionary measures. We believe that adjusted operating profit provides useful information about our operating results, enhances the overall understanding of our past performance and future prospects and allows for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.

Non-GAAP adjusted operating profit, Non-GAAP basic and diluted net profit per share and per ADS are not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. These Non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, cash flows or our liquidity, investors should not consider them in isolation, or as a substitute for net (loss)/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 our 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.

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 RMB6.4434 to US$1.00, the rate in effect as of September 30, 2021 as certified for customs purposes by the Federal Reserve Bank of New York.

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 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 to, uncertainties as to the Company’s ability to attract and retain borrowers and investors on its marketplace, its ability to increase volume of loans facilitated through the Company’s marketplace, its ability to introduce new loan products and platform enhancements, its ability to compete effectively, laws, regulations and governmental policies relating to the online consumer finance industry in China, general economic conditions in China, and the Company’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 FinVolution 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:
FinVolution Group
Head of Investor Relations
Jimmy Tan
Tel: +86 (21) 8030-3200 Ext. 8601
E-mail: [email protected]

The Piacente Group, Inc.
Jenny Cai
Tel: +86 (10) 6508-0677
E-mail: [email protected]

In the United States:
The Piacente Group, Inc.  
Brandi Piacente
Tel: +1-212-481-2050
E-mail: [email protected]

FinVolution Group

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

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

As of December 31,

As of September 30,

2020

2021

RMB

RMB

USD

Assets

Cash and cash equivalents

2,632,174

3,349,759

519,874

Restricted cash

3,484,227

3,915,870

607,733

Short-term investments

1,970,958

1,738,575

269,823

Investments

950,515

972,277

150,895

Quality assurance  receivable, net of credit loss allowance for
quality assurance receivable of RMB223,514 and
RMB245,367 as of December 31, 2020 and September 30, 2021,
respectively 

1,121,554

977,564

151,716

Intangible assets

98,947

98,947

15,356

Property, equipment and software, net

93,876

114,142

17,715

Loans receivable, net of credit loss allowance for loans receivable
of RMB382,012 and RMB366,982 as of December 31, 2020 and
September 30, 2021, respectively

2,354,882

1,539,951

238,997

Accounts receivable,  net of credit loss allowance for accounts
receivable  of RMB188,725 and RMB255,354 as of December
31, 2020, and September 30, 2021, respectively 

863,906

1,589,293

246,654

Deferred tax assets

155,758

329,147

51,083

Right of use assets

54,968

33,967

5,272

Prepaid expenses and other assets

1,050,009

1,558,433

241,865

Goodwill

50,411

50,411

7,824

Total assets

14,882,185

16,268,336

2,524,807

Liabilities and Shareholders’ Equity

Payable to platform customers

103,453

83,947

13,028

Deferred guarantee income

1,259,396

1,129,076

175,230

Expected credit losses for quality assurance commitment

2,390,501

2,918,423

452,932

Payroll and welfare payable

220,989

190,656

29,589

Taxes payable

154,398

103,532

16,068

Funds payable to investors of consolidated trusts

1,661,841

1,023,251

158,806

Contract liability

3,447

2,085

324

Deferred tax liabilities

103,548

112,964

17,532

Accrued expenses and other liabilities

510,986

647,899

100,552

Leasing liabilities

43,296

19,971

3,099

Total liabilities

6,451,855

6,231,804

967,160

Commitments and contingencies

FinVolution Group Shareholders’ equity

Ordinary shares

103

103

16

Additional paid-in capital

5,659,990

5,676,879

881,038

Treasury stock

(401,621)

(342,761)

(53,196)

Statutory reserves

458,058

458,058

71,089

Accumulated other comprehensive income

(5,142)

(2,754)

(425)

Retained Earnings

2,651,918

4,187,442

649,881

Total FinVolution Group shareholders’ equity

8,363,306

9,976,967

1,548,403

Non-controlling interest

67,024

59,565

9,244

Total shareholders’ equity

8,430,330

10,036,532

1,557,647

Total liabilities and shareholders’ equity

14,882,185

16,268,336

2,524,807

FinVolution Group

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE

INCOME

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

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2020

2021

2020

2021

RMB

RMB

USD

RMB

RMB

USD

Operating revenue:

Loan facilitation service fees

486,291

1,075,070

166,848

1,265,565

2,789,100

432,862

Post-facilitation service fees

161,376

361,192

56,056

497,236

887,236

137,697

Guarantee income

747,143

644,520

100,028

2,718,598

1,969,407

305,647

      Net interest income

260,931

332,597

51,618

909,046

921,514

143,017

Other revenue

137,592

111,733

17,341

319,650

454,848

70,591

Net revenue

1,793,333

2,525,112

391,891

5,710,095

7,022,105

1,089,814

Operating expenses:

Origination and servicing expenses

(338,879)

(459,569)

(71,324)

(860,689)

(1,327,627)

(206,044)

Sales and marketing expenses

(115,305)

(387,468)

(60,134)

(273,254)

(1,194,878)

(185,442)

Research and development expenses

(92,988)

(104,505)

(16,219)

(263,941)

(302,936)

(47,015)

General and administrative expenses

(105,392)

(123,219)

(19,123)

(303,772)

(361,973)

(56,177)

Provision for accounts receivable and other receivable

(35,143)

(32,878)

(5,103)

(91,539)

(120,106)

(18,640)

Provision for loans receivable

(89,986)

(142,526)

(22,120)

(505,698)

(243,243)

(37,751)

Credit losses for quality assurance commitment

(326,610)

(545,095)

(84,597)

(1,699,231)

(1,381,087)

(214,341)

Total operating expenses

(1,104,303)

(1,795,260)

(278,620)

(3,998,124)

(4,931,850)

(765,410)

Operating profit

689,030

729,852

113,271

1,711,971

2,090,255

324,404

Other income, net

26,314

14,777

2,293

114,393

83,305

12,929

Profit before income tax expense

715,344

744,629

115,564

1,826,364

2,173,560

337,333

Income tax expenses

(118,398)

(112,181)

(17,410)

(355,045)

(327,926)

(50,893)

Net profit

596,946

632,448

98,154

1,471,319

1,845,634

286,440

Net profit attributable to non-controlling ,interest
shareholders

(5,719)

(3,892)

(604)

(7,442)

(7,459)

(1,158)

Net profit attributable to FinVolution Group

602,665

636,340

98,758

1,478,761

1,853,093

287,598

Foreign currency translation adjustment, net of nil tax

(37,082)

4,264

662

(34,820)

2,388

371

Total comprehensive income attributable
to FinVolution Group 

565,583

640,604

99,420

1,443,941

1,855,481

287,969

Weighted average number of ordinary shares used in                 

computing net income per share

Basic

1,453,795,176

1,424,864,643

1,424,864,643

1,496,832,088

1,417,509,224

1,417,509,224

Diluted

1,467,348,248

1,481,375,238

1,481,375,238

1,509,090,474

1,481,579,205

1,481,579,205

Net profit per share attributable to FinVolution

Group’s ordinary shareholders

Basic

0.41

0.45

0.07

0.99

1.31

0.21

Diluted

0.41

0.43

0.07

0.98

1.25

0.19

Net profit per ADS attributable to FinVolution

Group’s ordinary shareholders (one ADS equal

five ordinary shares)

Basic

2.07

2.23

0.35

4.94

6.54

1.01

Diluted

2.05

2.15

0.33

4.90

6.25

0.97

              

FinVolution Group 

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2021

2020

2021

RMB

RMB

USD

RMB

RMB

USD

Net cash provided by operating
activities

791,240

136,837

21,237

1,458,450

411,189

63,816

Net cash provided by/(used in)
investing activities

(175,887)

63,027

9,782

(389,740)

1,738,655

269,835

Net cash provided by/(used in)
financing activities

(602,873)

328,444

50,973

(2,035,703)

(996,113)

(154,594)

Effect of exchange rate changes on
cash and cash equivalents

(28,131)

4,161

645

(21,267)

(4,503)

(701)

Net increase/(decrease) in cash, cash
equivalent and restricted cash

(15,651)

532,469

82,637

(988,260)

1,149,228

178,356

Cash, cash equivalent and restricted
cash at beginning of period

5,038,136

6,733,160

1,044,970

6,010,745

6,116,401

949,251

Cash, cash equivalent and restricted
cash at end of period

5,022,485

7,265,629

1,127,607

5,022,485

7,265,629

1,127,607

                    

FinVolution Group

UNAUDITED Reconciliation of GAAP and Non-GAAP Results

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

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2020

2021

2020

2021

RMB

RMB

USD

RMB

RMB

USD

Net Revenues

1,793,333

2,525,112

391,891

5,710,095

7,022,105

1,089,814

Less: total operating expenses

(1,104,303)

(1,795,260)

(278,620)

(3,998,124)

(4,931,850)

(765,410)

Operating Income

689,030

729,852

113,271

1,711,971

2,090,255

324,404

Add: share-based compensation expenses

8,600

21,437

3,327

25,329

58,289

9,046

Non-GAAP adjusted operating income

697,630

751,289

116,598

1,737,300

2,148,544

333,450

Operating Margin

38.4%

28.9%

28.9%

30.0%

29.8%

29.8%

Non-GAAP operating margin

38.9%

29.8%

29.8%

30.4%

30.6%

30.6%

Non-GAAP adjusted operating income

697,630

751,289

116,598

1,737,300

2,148,544

333,450

Add: other income, net

26,314

14,777

2,293

114,393

83,305

12,929

Less: income tax expenses

(118,398)

(112,181)

(17,410)

(355,045)

(327,926)

(50,893)

Less: tax effects on non-GAAP

adjustments

(1,323)

(2,786)

(432)

(3,971)

(9,708)

(1,506)

Non-GAAP net profit

604,223

651,099

101,049

1,492,677

1,894,215

293,980

Net profit attributable to

non-controlling ,interest

shareholders

(5,719)

(3,892)

(604)

(7,442)

(7,459)

(1,158)

Non-GAAP net profit attributable

to FinVolution Group

609,942

654,991

101,653

1,500,119

1,901,674

295,138

Weighted average number of ordinary shares used in
computing net income per share

Basic

1,453,795,176

1,424,864,643

1,424,864,643

1,496,832,088

1,417,509,224

1,417,509,224

Diluted

1,467,348,248

1,481,375,238

1,481,375,238

1,509,090,474

1,481,579,205

1,481,579,205

Non-GAAP net profit per share

attributable to FinVolution

Group’s ordinary shareholders

Basic

0.42

0.46

0.07

1.00

1.34

0.21

Diluted

0.42

0.44

0.07

0.99

1.28

0.20

Non-GAAP net profit per ADS

attributable to FinVolution

Group’s ordinary shareholders

(one ADS equal five ordinary

shares)

Basic

2.10

2.30

0.36

5.01

6.71

1.04

Diluted

2.08

2.21

0.34

4.97

6.42

1.00

SOURCE FinVolution Group

finvolution-group-reports-third-quarter-2021-unaudited-financial-results

FinVolution Group Reports Third Quarter 2021 Unaudited Financial Results

 

FinVolution Group (“FinVolution,” or the “Company”) (NYSE: FINV), a leading fintech platform in China, today announced its unaudited financial results for the third quarter ended September 30, 2021.

For the Three Months Ended

YoY Change

September 30, 2020

September 30, 2021

Total No. of New Individual
Borrowers[3] 
(000)

408

1,184

190.2%

New Individual Borrowers China’s
Mainland (‘000)

207

827

299.5%

New Individual Borrowers International (‘000)

201

357

77.6%

No. of Small Business Owners served
in China’s Mainland  (
000)

98

488

398.0%

Total Transaction Volume[4]

17.3

38.1

120.2%

Transaction Volume China’s Mainland
(RMB in billion)

17.0

37.1

118.2%

Transaction Volume International
(RMB in billion)

0.3

1.0

233.3%

Third Quarter 2021 Operational Highlights

Third consecutive quarter with over 1 million new global borrowers

  • Total cumulative registered users[1] reached 135.6 million as of September 30, 2021.
  • Total number of unique borrowers[2] was 3.9 million as of September 30, 2021.
  • Total number of new borrowers[3] was 1.18 million, an increase of 190.2% compared to the same period of 2020.

Total Transaction Volume and outstanding loan balances continue record breaking momentum

  • Total Transaction Volume reached RMB38.1 billion, an increase of 120.2% compared to the same period of 2020.
  • Transaction volume facilitated for total new borrowers[5] was RMB7.2 billion, an increase of 287.8% compared to the same period of 2020.
  • Total outstanding principal of loans reached RMB45.0 billion, an increase of 100.9% compared to the same period of 2020.

Small business owner’s loans continue to scale up with steady growth

  • Transaction volume facilitated for small business owners was RMB7.9 billion, representing 20.7% of Total Transaction Volume.
  • Total number of small business owners served in the third quarter of 2021 was 488.0 thousand, an increase of 398.0% compared to the same period of 2020.

International expansion continues to accelerate with diversified business models

  • Number of new borrowers acquired in the International Markets reached 357.0 thousand, an increase of 77.6% compared to the same period of 2020.
  • Entered into a strategic cooperation with PT Bank Jago, increasing loan facilitation capabilities and broadening presence across different market segments in Indonesia.
  • Commenced Buy-Now-Pay-Later cooperation with e-commerce partners in Indonesia.
  • Transaction volume facilitated in the International Markets exceeded RMB1.0 billion, an increase of 233.3% compared to the same period of 2020.

More operational highlights

  • Executed initial issuance of RMB200 million asset-backed-securities (“ABS”) which was listed on and traded on China’s Shenzhen Stock Exchange.
  • 90 day+ delinquency ratio[6] was 1.04% as of September 30, 2021, compared to 3.4% in the same period of 2020.
  • Average loan size[7] was RMB5,102 for the third quarter of 2021, compared to RMB4,095 in the same period of 2020.
  • Average loan tenor[8] was 8.2 months for the third quarter of 2021.

Third Quarter 2021 Financial Highlights

Sustainable growth with progressive improvement

  • Net revenue was RMB2,525.1 million (US$391.9 million) for the third quarter of 2021, an increase of 40.8% from RMB1,793.3 million compared to the same period of 2020.
  • Operating profit was RMB729.9 million (US$113.3 million) for the third quarter of 2021, an increase of 5.9% from the same period of 2020.
  • Non-GAAP adjusted operating income[9], which excludes share-based compensation expenses before tax, was RMB751.3 million (US$116.6 million) for the third quarter of 2021, an increase of 7.7% from the same period of 2020.
  • Diluted net profit per American depositary share (“ADS”) was RMB2.15 (US$0.33) and diluted net profit per share was RMB0.43 (US$0.07) , an increase of 4.9% from the same period of 2020. Non-GAAP diluted net profit per ADS was RMB2.21 (US$0.34) and non-GAAP diluted net profit per share was RMB0.44 (US$0.07), an increase of 6.3% from the same period of 2020. Each ADS of the Company represents five ordinary shares of the Company.

[1] On a cumulative basis, total number of users registered on the Company’s platforms as of September 30, 2021.

[2] Represents the total number of borrowers whose transactions were facilitated on the Company’s platforms during the period presented.

[3] Represents the total number of new borrowers on the Company’s platforms during the period presented.

[4] Represents total transaction volume facilitated on the Company’s platforms during the period presented.

[5] Represents transaction volume facilitated for total number of new borrowers on the Company’s platforms during the period presented.

[6] “90 day+ delinquency ratio” refers to the outstanding principal balance of on- and off-balance sheet loans that were 90 to 179 calendar days past due as a percentage of the total outstanding principal balance of on- and off-balance sheet loans on the Company’s platform as of a specific date. Loans that originated outside China’s Mainland are not included in the calculation.

[7] Represents the average loan size on the Company’s platform in China’s Mainland during the period presented.

[8] Represents the average loan tenor period on the Company’s platform in China’s Mainland during the period presented.

[9] Please refer to “UNAUDITED Reconciliation of GAAP And Non-GAAP Results” for reconciliation between GAAP and Non-GAAP adjusted operating income.

Mr. Feng Zhang, the Chief Executive Officer of FinVolution, commented, “Given our stronger-than-expected results, greater confidence in business trends and successful strategy execution, we have raised our total transaction volume outlook for 2021. We now expect transaction volume for the year to reach between RMB130 billion and RMB135 billion, representing a year-over-year increase in the range of 102.8% to 110.6%, above our prior guidance of RMB100 billion to RMB120 billion.”

“Total transaction volume maintained its strong growth trajectory during the third quarter, reaching a new record high of RMB38.1 billion, representing an increase of 120.2% year over year and 14.1% sequentially.”

“Transaction volume for small business owners grew rapidly to RMB7.9 billion, accounting for 20.7% of total transaction volume for the period. The total number of small business owners we served in the third quarter grew to 488 thousand, representing a 19.6% increase from the previous quarter.”

“Our international expansion continues to flourish. During the third quarter, we strengthened our local partnerships and generated over RMB1 billion in transaction volume. Our strategic cooperation with PT Bank Jago increased our loan facilitation capabilities and broadened our presence across different market segments in Indonesia. We have also teamed up with local e-commerce partners to launch operations in the Buy-Now-Pay-Later sector. Looking ahead, we will continue to pursue premium quality growth in China while capturing massive growth opportunities in international markets,” concluded Mr. Zhang.

Mr. Jiayuan Xu, the Chief Financial Officer of FinVolution, commented, “We  successfully issued and listed our first ABS  on China’s Shenzhen Stock Exchange, marking an important milestone in our strategic transition towards better quality borrowers. With the diversification in funding sources through different avenues, we expect future improvement in funding efficiency. Our profitability also continued to improve with non-GAAP operating profit9 of RMB751.3 million, an increase of 7.7% year over year and a sequential increase of 3.5%. These results are a powerful testament to our effective business strategy and skillful execution,” concluded Mr. Xu.

Third Quarter 2021 Financial Results

Net revenue for the third quarter of 2021 increased by 40.8% to RMB2,525.1 million (US$391.9 million) from RMB1,793.3 million in the same period of 2020, primarily due to the increase in loan facilitation service fees and post facilitation service fees.

Loan facilitation service fees increased by 121.1% to RMB1,075.1 million (US$166.8 million) for the third quarter of 2021 from RMB486.3 million in the same period of 2020, primarily due to the increase in transaction volume.

Post-facilitation service fees increased by 123.8% to RMB361.2 million (US$56.1 million) for the third quarter of 2021 from RMB161.4 million in the same period of 2020, primarily due to the increase in outstanding loans serviced by the Company and the rolling impact of deferred transaction fees.

Guarantee income was RMB644.5 million (US$100.0 million) for the third quarter of 2021 compared to RMB747.1 million in the same period of 2020, as a result of improved asset quality. The fair value of quality assurance commitment upon loan origination is released as guarantee income systematically over the term of the loans subject to quality assurance commitment. As we transitioned our business towards better quality borrowers, the fair value of quality assurance commitment upon loan origination decreased due to better asset quality which resulted in the decrease in guarantee income.

Net interest income increased by 27.5% to RMB332.6 million (US$51.6 million) for the third quarter of 2021 from RMB260.9 million in the same period of 2020, primarily due to increase in transaction volume originated in the international markets.

Other revenue decreased by 18.8% to RMB111.7 million (US$17.3 million) for the third quarter of 2021 from RMB137.6 million in the same period of 2020, primarily due to the decrease in customer referral fees from other third-party platforms.

Origination and servicing expenses increased by 35.6% to RMB459.6 million (US$71.3 million) for the third quarter of 2021 from RMB338.9 million in the same period of 2020, primarily due to the increase in employees’ expenditure and fees paid to third party service providers.

Sales and marketing expenses increased by 236.1% to RMB387.5 million (US$60.1 million) for the third quarter of 2021 from RMB115.3 million in the same period of 2020, primarily due to the increase in online customer acquisition expenses as a result of increased efforts in acquiring new borrowers on the Company’s platform.

Research and development expenses increased by 12.4% to RMB104.5 million (US$16.2 million) for the third quarter of 2021 from RMB93.0 million in the same period of 2020, due to increased investments in technology development.

General and administrative expenses increased by 16.9% to RMB123.2 million (US$19.1 million) for the third quarter of 2021 from RMB105.4 million in the same period of 2020, due to increased expenditures in employees benefits.

Provision for accounts receivables and other receivables decreased by 6.3% to RMB32.9 million (US$5.1 million) for the third quarter of 2021, from RMB35.1 million in the same period of 2020 as a result of improved credit quality partially offset by the increase in outstanding loan balances.

Provision for loans receivables was RMB142.5 million (US$22.1 million) for the third quarter of 2021, compared with RMB90.0 million in the same period of 2020, and the increase was primarily due to the higher transaction volume originated in international markets.

Credit losses for quality assurance commitment were RMB545.1 million (US$84.6 million) for the third quarter of 2021 compared to RMB326.6 million in the same period of 2020, primarily due to the increase in outstanding loan balances partially offset by improved asset quality.

Operating profit increased by 5.9% to RMB729.9 million (US$113.3 million) for the third quarter of 2021 from RMB689.0 million in the same period of 2020.

Non-GAAP adjusted operating income, which excludes share-based compensation expenses before tax, was RMB751.3 million (US$116.6 million) for the third quarter of 2021, representing an increase of 7.7% from RMB697.6 million in the same period of 2020.

Other income decreased by 43.7% to RMB14.8 million (US$2.3 million) for the third quarter of 2021 from RMB26.3 million in the same period of 2020, mainly due to fair value change of investments.

Income tax expenses were RMB112.2 million (US$17.4 million) for the third quarter of 2021, compared with RMB118.4 million in the same period of 2020, and the decrease was mainly due to change in preferential tax rate for certain qualified subsidiaries, partially offset by the increase in pre-tax profit.

Net profit was RMB632.4 million (US$98.2 million) for the third quarter of 2021, compared to RMB596.9 million in the same period of 2020.

Diluted net profit per ADS was RMB2.15 (US$0.33) and diluted net profit per share was RMB0.43 (US$0.07), an increase of 4.9% year over year. Non-GAAP diluted net profit per ADS was RMB2.21 (US$0.34) and Non-GAAP diluted net profit per share was RMB0.44 (US$0.07), an increase of 6.3% year over year. Each ADS represents five Class A ordinary shares of the Company.

As of September 30, 2021, the Company had cash and cash equivalents of RMB3,349.8 million (US$519.9 million) and short-term investments, mainly in wealth management products, of RMB1,738.6 million (US$269.8 million).

The following table provides the delinquency rates for all outstanding loans on the Company’s platform in China’s Mainland as of the respective dates indicated.

As of

15-29
days

30-59
days

60-89
days

90-119 days

120-149 days

150-179 days

March 31, 2019

0.80%

1.61%

1.45%

1.29%

1.31%

1.20%

June 30, 2019

0.86%

1.42%

1.37%

1.19%

1.26%

1.21%

September 30, 2019

0.90%

1.50%

1.35%

1.31%

1.17%

1.20%

December 31, 2019              

1.34%

2.40%

1.86%

1.76%

1.62%

1.53%

March 31, 2020

1.34%

3.03%

2.33%

2.44%

2.64%

2.17%

June 30, 2020

0.71%

1.36%

1.70%

2.00%

2.75%

2.38%

September 30,2020

0.46%

0.72%

0.74%

0.90%

1.07%

1.43%

December 31, 2020

0.35%

0.55%

0.48%

0.52%

0.49%

0.55%

March 31, 2021

0.29%

0.52%

0.43%

0.39%

0.38%

0.36%

June 30, 2021

0.30%

0.45%

0.39%

0.32%

0.36%

0.33%

September 30, 2021

0.34%

0.51%

0.43%

0.39%

0.33%

0.32%

The following chart display the historical cumulative 30-day plus past due delinquency rates by loan origination vintage in China’s Mainland for all loan products facilitated through the Company’s online platform as of September 30, 2021:

Click here to view the chart.

Business Outlook

With the COVID-19 recent resurgence in China and other regions around the world, the Company will continue to closely monitor the pandemic situation and remain vigilant in its business operations. As such, the Company holds a cautious view on its operations and anticipates its transaction volume guidance for the full year 2021 to be in the range of RMB130 billion to RMB135 billion, representing a year-over-year increase of 102.8% to 110.6%, above its prior guidance of RMB100 billion to RMB120 billion.

The above forecast is based on current market conditions and reflects the Company’s current  preliminary views and expectations with respect to market and operational conditions, the regulatory and operating environment, as well as customer and institutional investor demands, all of which are subject to change.

Shares Repurchase Program Update

On November 17, 2021, the board of directors of the Company approved an extension of the Company’s existing US$60 million share repurchase program for another twelve months, effective January 1, 2022 through December 31, 2022. Since August 25, 2020, in accordance with the Company’s existing share repurchase program, the Company has repurchased its own Class A ordinary shares in the form of ADS in the amount of US$20.3 million. As such, the Company is authorized to repurchased its own Class A ordinary shares in the form of ADSs with an aggregate value of up to US$39.7 million through December 31, 2022.  The share repurchase program shall be subject to general business conditions and market conditions.

As of November 17, 2021, in combination with the Company’s previous repurchase programs, the Company had repurchased its own Class A ordinary shares in the form of ADSs with an total aggregate value of approximately US$131.4 million.

Conference Call

The Company’s management will host an earnings conference call at 7:00 AM U.S. Eastern Time on November 18, 2021 (8:00 PM Beijing/Hong Kong time on November 18, 2021).

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

United States (toll free):

1-888-346-8982

Canada (toll free):

1-855-669-9657

International:

1-412-902-4272

Hong Kong, China (toll free):

800-905-945

Hong Kong, China:

852-3018-4992

Mainland, China:

400-120-1203

Participants please dial-in at least five minutes before the scheduled start time and ask to be connected to the call for “FinVolution Group.”

Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at https://ir.finvgroup.com.

A replay of the conference call will be accessible approximately one hour after the conclusion of the live call until November 25, 2021, by dialing the following telephone numbers:

United States (toll free):

1-877-344-7529

Canada (toll free):                

1-855-669-9658

International:

1-412-317-0088

Replay Access Code:

10161823

About FinVolution Group

FinVolution Group is a leading fintech platform in China connecting underserved individual borrowers with financial institutions. Established in 2007, the Company is a pioneer in China’s online consumer finance industry and has developed innovative technologies and has accumulated in-depth experience in the core areas of credit risk assessment, fraud detection, big data and artificial intelligence. The Company’s platform, empowered by proprietary cutting-edge technologies, features a highly automated loan transaction process, which enables a superior user experience. As of September 30, 2021, the Company had over 135.6 million cumulative registered users.

For more information, please visit  https://ir.finvgroup.com

Use of Non-GAAP Financial Measures

We use Non-GAAP operating profit, Non-GAAP basic and diluted net profit per share and per ADS which are Non-GAAP financial measures, in evaluating our operating results and for financial and operational decision-making purposes. We believe that adjusted operating profit helps identify underlying trends in our business by excluding the impact of share-based compensation expenses and expected discretionary measures. We believe that adjusted operating profit provides useful information about our operating results, enhances the overall understanding of our past performance and future prospects and allows for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.

Non-GAAP adjusted operating profit, Non-GAAP basic and diluted net profit per share and per ADS are not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. These Non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, cash flows or our liquidity, investors should not consider them in isolation, or as a substitute for net (loss)/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 our 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.

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 RMB6.4434 to US$1.00, the rate in effect as of September 30, 2021 as certified for customs purposes by the Federal Reserve Bank of New York.

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 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 to, uncertainties as to the Company’s ability to attract and retain borrowers and investors on its marketplace, its ability to increase volume of loans facilitated through the Company’s marketplace, its ability to introduce new loan products and platform enhancements, its ability to compete effectively, laws, regulations and governmental policies relating to the online consumer finance industry in China, general economic conditions in China, and the Company’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 FinVolution 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:
FinVolution Group
Head of Investor Relations
Jimmy Tan
Tel: +86 (21) 8030-3200 Ext. 8601
E-mail: [email protected]

The Piacente Group, Inc.
Jenny Cai
Tel: +86 (10) 6508-0677
E-mail: [email protected]

In the United States:
The Piacente Group, Inc.  
Brandi Piacente
Tel: +1-212-481-2050
E-mail: [email protected]

FinVolution Group

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

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

As of December 31,

As of September 30,

2020

2021

RMB

RMB

USD

Assets

Cash and cash equivalents

2,632,174

3,349,759

519,874

Restricted cash

3,484,227

3,915,870

607,733

Short-term investments

1,970,958

1,738,575

269,823

Investments

950,515

972,277

150,895

Quality assurance  receivable, net of credit loss allowance for
quality assurance receivable of RMB223,514 and
RMB245,367 as of December 31, 2020 and September 30, 2021,
respectively 

1,121,554

977,564

151,716

Intangible assets

98,947

98,947

15,356

Property, equipment and software, net

93,876

114,142

17,715

Loans receivable, net of credit loss allowance for loans receivable
of RMB382,012 and RMB366,982 as of December 31, 2020 and
September 30, 2021, respectively

2,354,882

1,539,951

238,997

Accounts receivable,  net of credit loss allowance for accounts
receivable  of RMB188,725 and RMB255,354 as of December
31, 2020, and September 30, 2021, respectively 

863,906

1,589,293

246,654

Deferred tax assets

155,758

329,147

51,083

Right of use assets

54,968

33,967

5,272

Prepaid expenses and other assets

1,050,009

1,558,433

241,865

Goodwill

50,411

50,411

7,824

Total assets

14,882,185

16,268,336

2,524,807

Liabilities and Shareholders’ Equity

Payable to platform customers

103,453

83,947

13,028

Deferred guarantee income

1,259,396

1,129,076

175,230

Expected credit losses for quality assurance commitment

2,390,501

2,918,423

452,932

Payroll and welfare payable

220,989

190,656

29,589

Taxes payable

154,398

103,532

16,068

Funds payable to investors of consolidated trusts

1,661,841

1,023,251

158,806

Contract liability

3,447

2,085

324

Deferred tax liabilities

103,548

112,964

17,532

Accrued expenses and other liabilities

510,986

647,899

100,552

Leasing liabilities

43,296

19,971

3,099

Total liabilities

6,451,855

6,231,804

967,160

Commitments and contingencies

FinVolution Group Shareholders’ equity

Ordinary shares

103

103

16

Additional paid-in capital

5,659,990

5,676,879

881,038

Treasury stock

(401,621)

(342,761)

(53,196)

Statutory reserves

458,058

458,058

71,089

Accumulated other comprehensive income

(5,142)

(2,754)

(425)

Retained Earnings

2,651,918

4,187,442

649,881

Total FinVolution Group shareholders’ equity

8,363,306

9,976,967

1,548,403

Non-controlling interest

67,024

59,565

9,244

Total shareholders’ equity

8,430,330

10,036,532

1,557,647

Total liabilities and shareholders’ equity

14,882,185

16,268,336

2,524,807

FinVolution Group

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE

INCOME

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

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2020

2021

2020

2021

RMB

RMB

USD

RMB

RMB

USD

Operating revenue:

Loan facilitation service fees

486,291

1,075,070

166,848

1,265,565

2,789,100

432,862

Post-facilitation service fees

161,376

361,192

56,056

497,236

887,236

137,697

Guarantee income

747,143

644,520

100,028

2,718,598

1,969,407

305,647

      Net interest income

260,931

332,597

51,618

909,046

921,514

143,017

Other revenue

137,592

111,733

17,341

319,650

454,848

70,591

Net revenue

1,793,333

2,525,112

391,891

5,710,095

7,022,105

1,089,814

Operating expenses:

Origination and servicing expenses

(338,879)

(459,569)

(71,324)

(860,689)

(1,327,627)

(206,044)

Sales and marketing expenses

(115,305)

(387,468)

(60,134)

(273,254)

(1,194,878)

(185,442)

Research and development expenses

(92,988)

(104,505)

(16,219)

(263,941)

(302,936)

(47,015)

General and administrative expenses

(105,392)

(123,219)

(19,123)

(303,772)

(361,973)

(56,177)

Provision for accounts receivable and other receivable

(35,143)

(32,878)

(5,103)

(91,539)

(120,106)

(18,640)

Provision for loans receivable

(89,986)

(142,526)

(22,120)

(505,698)

(243,243)

(37,751)

Credit losses for quality assurance commitment

(326,610)

(545,095)

(84,597)

(1,699,231)

(1,381,087)

(214,341)

Total operating expenses

(1,104,303)

(1,795,260)

(278,620)

(3,998,124)

(4,931,850)

(765,410)

Operating profit

689,030

729,852

113,271

1,711,971

2,090,255

324,404

Other income, net

26,314

14,777

2,293

114,393

83,305

12,929

Profit before income tax expense

715,344

744,629

115,564

1,826,364

2,173,560

337,333

Income tax expenses

(118,398)

(112,181)

(17,410)

(355,045)

(327,926)

(50,893)

Net profit

596,946

632,448

98,154

1,471,319

1,845,634

286,440

Net profit attributable to non-controlling ,interest
shareholders

(5,719)

(3,892)

(604)

(7,442)

(7,459)

(1,158)

Net profit attributable to FinVolution Group

602,665

636,340

98,758

1,478,761

1,853,093

287,598

Foreign currency translation adjustment, net of nil tax

(37,082)

4,264

662

(34,820)

2,388

371

Total comprehensive income attributable
to FinVolution Group 

565,583

640,604

99,420

1,443,941

1,855,481

287,969

Weighted average number of ordinary shares used in                 

computing net income per share

Basic

1,453,795,176

1,424,864,643

1,424,864,643

1,496,832,088

1,417,509,224

1,417,509,224

Diluted

1,467,348,248

1,481,375,238

1,481,375,238

1,509,090,474

1,481,579,205

1,481,579,205

Net profit per share attributable to FinVolution

Group’s ordinary shareholders

Basic

0.41

0.45

0.07

0.99

1.31

0.21

Diluted

0.41

0.43

0.07

0.98

1.25

0.19

Net profit per ADS attributable to FinVolution

Group’s ordinary shareholders (one ADS equal

five ordinary shares)

Basic

2.07

2.23

0.35

4.94

6.54

1.01

Diluted

2.05

2.15

0.33

4.90

6.25

0.97

              

FinVolution Group 

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2021

2020

2021

RMB

RMB

USD

RMB

RMB

USD

Net cash provided by operating
activities

791,240

136,837

21,237

1,458,450

411,189

63,816

Net cash provided by/(used in)
investing activities

(175,887)

63,027

9,782

(389,740)

1,738,655

269,835

Net cash provided by/(used in)
financing activities

(602,873)

328,444

50,973

(2,035,703)

(996,113)

(154,594)

Effect of exchange rate changes on
cash and cash equivalents

(28,131)

4,161

645

(21,267)

(4,503)

(701)

Net increase/(decrease) in cash, cash
equivalent and restricted cash

(15,651)

532,469

82,637

(988,260)

1,149,228

178,356

Cash, cash equivalent and restricted
cash at beginning of period

5,038,136

6,733,160

1,044,970

6,010,745

6,116,401

949,251

Cash, cash equivalent and restricted
cash at end of period

5,022,485

7,265,629

1,127,607

5,022,485

7,265,629

1,127,607

                    

FinVolution Group

UNAUDITED Reconciliation of GAAP and Non-GAAP Results

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

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2020

2021

2020

2021

RMB

RMB

USD

RMB

RMB

USD

Net Revenues

1,793,333

2,525,112

391,891

5,710,095

7,022,105

1,089,814

Less: total operating expenses

(1,104,303)

(1,795,260)

(278,620)

(3,998,124)

(4,931,850)

(765,410)

Operating Income

689,030

729,852

113,271

1,711,971

2,090,255

324,404

Add: share-based compensation expenses

8,600

21,437

3,327

25,329

58,289

9,046

Non-GAAP adjusted operating income

697,630

751,289

116,598

1,737,300

2,148,544

333,450

Operating Margin

38.4%

28.9%

28.9%

30.0%

29.8%

29.8%

Non-GAAP operating margin

38.9%

29.8%

29.8%

30.4%

30.6%

30.6%

Non-GAAP adjusted operating income

697,630

751,289

116,598

1,737,300

2,148,544

333,450

Add: other income, net

26,314

14,777

2,293

114,393

83,305

12,929

Less: income tax expenses

(118,398)

(112,181)

(17,410)

(355,045)

(327,926)

(50,893)

Less: tax effects on non-GAAP

adjustments

(1,323)

(2,786)

(432)

(3,971)

(9,708)

(1,506)

Non-GAAP net profit

604,223

651,099

101,049

1,492,677

1,894,215

293,980

Net profit attributable to

non-controlling ,interest

shareholders

(5,719)

(3,892)

(604)

(7,442)

(7,459)

(1,158)

Non-GAAP net profit attributable

to FinVolution Group

609,942

654,991

101,653

1,500,119

1,901,674

295,138

Weighted average number of ordinary shares used in
computing net income per share

Basic

1,453,795,176

1,424,864,643

1,424,864,643

1,496,832,088

1,417,509,224

1,417,509,224

Diluted

1,467,348,248

1,481,375,238

1,481,375,238

1,509,090,474

1,481,579,205

1,481,579,205

Non-GAAP net profit per share

attributable to FinVolution

Group’s ordinary shareholders

Basic

0.42

0.46

0.07

1.00

1.34

0.21

Diluted

0.42

0.44

0.07

0.99

1.28

0.20

Non-GAAP net profit per ADS

attributable to FinVolution

Group’s ordinary shareholders

(one ADS equal five ordinary

shares)

Basic

2.10

2.30

0.36

5.01

6.71

1.04

Diluted

2.08

2.21

0.34

4.97

6.42

1.00

SOURCE FinVolution Group

finvolution-group-publishes-its-third-annual-esg-report

FinVolution Group Publishes its Third Annual ESG Report

 

FinVolution Group (FinVolution,” or the “Company”) (NYSE: FINV), a leading fintech platform in China, today announced it has released its 2020 Environmental, Social, and Governance (ESG) report, underscoring FinVolution’s commitment to environmental sustainability, social responsibility and corporate governance.

“At FinVolution, sustainable development has been an integral part of our corporate values and culture since day one. During 2020’s unprecedented turmoil, our global team adapted quickly and overcame new challenges by strengthening privacy protection, increasing our focus on information security, employee health and acting with a deeper sense of corporate social responsibility,” said Mr. Feng Zhang, Chief Executive Officer of FinVolution. “We have been committed to advancing ESG initiatives for years, identifying opportunities to leverage sustainability as our differentiator. This year’s report represents a step forward in our sustainability journey and our ESG reporting. We will continue to expand voluntary reporting on our ESG actions and impact, increasing transparency to make the financial services industry better for our employees, our society and our environment.”

Key highlights from FinVolution’s 2020 ESG report include the Company’s initiatives with respect to:

  • ESG management;
  • Comprehensive risk management;
  • Information security & privacy protection;
  • Responsible operations;
  • Access to finance;
  • Employee care and training & development mechanisms; and
  • Contribution to industry development.

These disclosures highlight the Company’s strategy to grow and innovate in a responsible and sustainable manner. The ESG report has been prepared in compliance with the core option of the Global Reporting Initiative’s Sustainability Reporting Standards (GRI Standards), and in accordance with MSCI ESG Rating Methodology. For more information regarding GRI Standard and MSCI ESG Rating Methodology, please visit;

https://www.globalreporting.org 
https://www.msci.com

To download FinVolution ESG reports, please visit:

https://ir.finvgroup.com/ESG-Sustainability

finvolution-group-announces-continued-purchase-of-shares-by-chairman

FinVolution Group Announces Continued Purchase of Shares by Chairman

 

FinVolution Group (“FinVolution”, or the “Company”) (NYSE: FINV), a leading fintech platform in China, today announced that Mr. Shaofeng Gu, Chairman and Chief Innovation Officer of the Company, has informed the Company that he purchased in his personal capacity approximately 0.53 million of the Company’s American Depositary Shares (“ADSs”) in the fourth quarter of 2020. During 2020, Mr. Gu purchased a total of 3.41 million ADSs. All the ADSs purchased made by Mr. Gu were independent of the Company’s share repurchase programs and were made during an open window period in full compliance with all the Company’s and legal guidelines.

Mr. Gu commented, “Despite a challenging start to the year, a large portion of the uncertainties appear to be behind us. Notably, credit risk performance on our platform by year end improved to the lower-end of our vintage delinquency range compared to the past 2-3 years. We are delighted to have successfully transitioned our platform from being primarily funded by individual investors to being fully funded by institutional funding partners. We continue to deeply believe that a technology-driven focus will enable the Company to better navigate market dynamics, capture opportunities and achieve sustainable growth in the long-term. I also believe the current share price undervalues the potential of the Company and serves as a highly attractive investment opportunity.”

As of December 31, 2020, Mr. Gu beneficially owned 416,928,560 ordinary shares, representing approximately 29.6% of ownership in the Company.

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 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 to, uncertainties as to the Company’s ability to attract and retain borrowers and investors on its marketplace, its ability to increase volume of loans facilitated through the Company’s marketplace, its ability to introduce new loan products and platform enhancements, its ability to compete effectively, laws, regulations and governmental policies relating to the online consumer finance industry in China, general economic conditions in China, and the Company’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 FinVolution 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.