Hexindai Inc. (NASDAQ: HX) ("Hexindai" or the "Company"), a
fast-growing consumer lending marketplace in China, today announced
its unaudited financial results for the fourth quarter and fiscal
year ended March 31, 2019.
Throughout the release, each ADS represents one
ordinary share. Fiscal year refers to the 12
months ended March 31.
Fourth Quarter of Fiscal Year 2019 Operational
Highlights
- Total loan volume facilitated
(1) was US$61.7 million (RMB0.4
billion) during the fourth quarter of fiscal year 2019, a decrease
of 84.3% from the fourth quarter of fiscal year 2018.
- Gross billing amount (net of
VAT) (2) was US$9.0
million during the fourth quarter of fiscal year 2019, a decrease
of 70.1% from the fourth quarter of fiscal year 2018.
- Gross billing ratio (net of
VAT) (3) for credit loans was 14.5%
during the fourth quarter of fiscal year 2019, an increase from
7.6% during the fourth quarter of fiscal year 2018.
- Number of borrowers
(4) was 51,958 during the fourth
quarter of fiscal year 2019, an increase of 55.9% from the fourth
quarter of fiscal year 2018.
- Number of investors (5) was
20,894 during the fourth quarter of fiscal year 2019, a decrease of
66.3% from the fourth quarter of fiscal year 2018.
Fourth Quarter of Fiscal Year 2019 Unaudited Financial
Highlights
- Net revenue was US$4.1 million during the
fourth quarter of fiscal year 2019, a decrease of 85.0% from the
fourth quarter of fiscal year 2018.
- Operating costs and expenses were US$6.5
million during the fourth quarter of fiscal year 2019, a decrease
of 21.6% from the fourth quarter of fiscal year 2018.
- Net income was US$2.8 million during the
fourth quarter of fiscal year 2019, a decrease of 83.3% from the
fourth quarter of fiscal year 2018.
- Basic earnings per common shares
(“EPS”)
in the fourth quarter of fiscal year 2019 was US$0.06 compared to
US$0.36 in the same period of fiscal year 2018.
- Diluted EPS in the fourth quarter of fiscal
year 2019 was US$0.05 compared to US$0.32 in the same period of
fiscal year 2018.
- Adjusted net income attributable to
Hexindai Inc.’s shareholders
(Non-GAAP) in
the fourth quarter of fiscal year 2019 was US$3.9 million,
decreased by 78.4% from US$18.2 million in the fourth quarter of
fiscal year 2018.
- Adjusted EBIT (Non-GAAP) in the fourth quarter
of fiscal year 2019 was (US$1.4 million), decreased by 107.0% from
US$20.4 million in the fourth quarter of fiscal year 2018.
Fiscal Year Ended March 31, 2019 Operational
Highlights
- Total loan volume facilitated was US$564.9
million (RMB3.8 billion) during the fiscal year ended March 31,
2019, a decrease of 54.5% from US$1,257.6 million (RMB8.3 billion)
during last fiscal year.
- Gross billing amount (net of VAT) was US$68.1
million during the fiscal year ended March 31, 2019, a decrease of
41.9% from last fiscal year.
- Gross billing ratio (net of VAT) for credit
loans was 12.1% during the fiscal year ended March 31, 2019, an
increase from 9.4% during last fiscal year.
- Number of borrowers was 84,891 during the
fiscal year ended March 31, 2019, a decrease of 16.1% from last
fiscal year.
- Number of investors was 118,247 during the
fiscal year ended March 31, 2019, a decrease of 14.3% from last
fiscal year.
- Delinquency rates
(6) As of March 31,
2019, the delinquency rates for loans that are past due for 15-29
days, 30-59 days and 60-89 days were 0.257%, 0.337% and 0.367%,
compared to 0.066%, 0.152% and 0.120%, as of March 31, 2018.
- M3+ Net Charge-Off Rates
(7)As of March 31, 2019, the cumulative
M3+ net charge-off rate for credit loans originated in the first
vintage, from the inception to March 31, 2016, was 5.99%, compared
to 5.81% as of December 31, 2018. As of March 31, 2019, the
cumulative M3+ net charge-off rate for credit loans originated in
the second vintage, for fiscal year 2017, was 4.94%, compared to
4.56% as of December 31, 2018. As of March 31, 2019, the cumulative
M3+ net charge-off rate for credit loans originated in the third
vintage, for fiscal year 2018, was 1.97%, compared to 1.35% as of
December 31, 2018. As of March 31, 2019, the cumulative M3+ net
charge-off rate for credit loans originated in the fourth vintage,
for fiscal year 2019, was 0.63% compared to 0.24% for loans
originated in the fourth vintage, for the period April 1, 2018 to
December 31, 2018 as of December 31, 2018.
(1) Total loan volume facilitated is defined as the total
principal amount of loans facilitated on our marketplace or
recommended to other thirty-parties during the relevant period.
(2)"Gross billing amount" is defined as the aggregated loan
facilitation fees and loan management fees charged to borrowers
before cash incentives, net of value added tax. It differs from the
revenue recognized at the time of recognition. For an individual
secured loan transaction, the gross billing amount equals the gross
accumulative loan management service revenue recognized over the
term of the secured loan. For the traditional individual credit
loan transaction, as the loan facilitation service fees are charged
upfront upon the release of funds to borrowers, the gross billing
amount equals the loan facilitation service revenue, while for the
newly introduced individual credit loan we launched from third
quarter of fiscal year 2018, the service fees are charged each
period, the gross billing amount equals the gross accumulative loan
management service revenue recognized over the estimated term of
the credit loan.
(3)"Gross billing ratio" is defined as the gross billing amount
divided by loan volume facilitated, presented in percentage. It is
an operation metric we believe is a more accurate indicator of
profitability.
(4) Refers to borrowers who recorded successful borrowing
activity on our online marketplace or recommended to other
third-parties during the relevant period.
(5) Refers to investors who made loan investments on our online
marketplace during the relevant period.
(6) We define the delinquency rates as of the end of the period
as the outstanding balance of principal and interest that were 15
to 29, 30 to 59 and 60 to 89 calendar days delinquent as a
percentage of the total outstanding balance of principal and
interest for the relevant group of loans during such period.
(7) We define ‘‘M3+ Net Charge-off Rates’’, with respect to
loans facilitated during a specified time period or the
‘‘vintage’’, as the total balance of outstanding principal of loans
that become delinquent for over three months during a specified
period and the remainder of the expected interest for the life of
such loans, divided by the total principal of the loans facilitated
in such vintage.
Through Hexindai’s platform, the total loan
volume facilitated was approximately US$3.1 billion (RMB20.5
billion) from the inception of its business in March 2014 through
March 31, 2019.
Fiscal Year Ended March 31, 2019 Unaudited Financial
Highlights
- Net revenue was US$61.3 million in the fiscal
year ended March 31, 2019, a decrease of 42.8% from last fiscal
year.
- Operating costs and expenses were US$56.2
million in the fiscal year ended March 31, 2019, an increase of
79.2% from last fiscal year.
- Net income was US$5.5 million in the fiscal
year ended March 31, 2019, a decrease of 91.6% from last fiscal
year.
- Basic EPS in the fiscal year ended March 31,
2019 was US$0.11 compared to US$1.46 in last fiscal year.
- Diluted EPS in the fiscal year ended March 31,
2019 was US$0.10 compared to US$1.37 in last fiscal year.
- Adjusted net income attributable to Hexindai Inc.’s
shareholders (Non-GAAP) in the fiscal year ended 2019 was
US$12.1 million, decreased by 82.0% from US$67.3 million in last
fiscal year.
- Adjusted EBIT (Non-GAAP) in the fiscal year
ended 2019 was US$13.2 million, decreased by 83.1% from US$78.0
million in last fiscal year.
Mr. Xiaobo An, Chairman and Chief Executive
Officer of Hexindai, commented, “We believe the worst is behind us
as the market environment continues to gradually improve and
investor confidence returns. Our outlook has remarkably improved
this quarter, especially on a sequential basis. Total loans
facilitated during the quarter doubled sequentially to US$61.7
million and net revenue increased to US$4.1 million. Gross billing
amount, net of VAT, more than tripled sequentially to US$9.0
million. More importantly, our default rate remained low which
demonstrated just how effective our cutting-edge risk management
systems have been at stabilizing our business in what was a very
unstable market environment. While our top line continues to feel
the impact, it is gradually improving as is our cost structure and
bottom line as we return our focus to new loan products as the
market rebuilds.”
“Having made more progress in the regulatory
compliance review process as the Beijing Local Financial
Supervision and Administration (formerly the Beijing Municipal
Bureau of Financial Work) concluded its field inspection work of
the company, we are awaiting further notice to begin the
registration process which we believe has already begun to rebuild
confidence in our platform. We continue to diversify our funding
sources with the addition of institutions and funding partners to
help us develop additional growth drivers going forward. In
addition to our core medium-sized credit loan business, we launched
an online microfinancing loan during the quarter for smaller-size
loans. Microfinancing forms a critical part of our strategy to
diversify revenue streams and expand our offerings vertically. With
a comprehensive strategy in place and market sentiment gradually
getting better, we expect to see both our loan volume and revenue
improve throughout the rest of this year. I am confident that we
are well positioned to take advantage of market opportunities as
the industry consolidates leveraging our strong financial resources
and operational capabilities, as well as experienced management
team.”
Fourth Quarter of
Fiscal Year 2019 Unaudited Financial Results
Net revenue
Net revenue during the fourth quarter of fiscal
year 2019 was US$4.1 million, a decrease of 85.0% compared to
US$27.6 million during the same quarter of fiscal year 2018. The
decrease was primarily due to the significant decrease in the
volume of credit loans facilitated through Hexindai’s marketplace,
which decreased from US$418.4 million (RMB2.7 billion) in the
fourth quarter of fiscal year 2018 to US$61.7 million (RMB0.4
billion) in the same quarter of fiscal year 2019. The decrease in
the volume of credit loans facilitated through the Company’s
marketplace was primarily due to the reduction in the amount of
investment available for credit loans. Such reduction in investment
resulted from tightened industry regulation causing the suspension
or shut down of some peers, which negatively impacted investors'
sentiment and confidence across the industry.
Operating costs and
expenses
Total operating costs and expenses during the
fourth quarter of fiscal year 2019 were US$6.5 million, a decrease
of 21.6% from US$8.4 million in the same quarter of last fiscal
year. The decrease was primarily due to decrease in sales and
marketing expenses and service and development expenses.
Sales and marketing expenses
Sales and marketing expenses during the fourth
quarter of fiscal year 2019 were US$1.7 million, a decrease of
50.5% from US$3.5 million during the same quarter of last fiscal
year. The decrease was primarily due to the decrease of advertising
expenses.
Service and development expenses
Service and development expenses during the
fourth quarter of fiscal year 2019 were US$1.6 million, a decrease
of 21.7% from US$2.1 million during the same quarter of last fiscal
year. The decrease was primarily attributable to the decrease in
custodian bank account management fees.
General and administrative expenses
General and administrative expenses during the
fourth quarter of fiscal year 2019 were US$2.1 million, an increase
of 25.6% from US$1.7 million during the same period of last fiscal
year. The increase was primarily attributable to an increase in
professional service fees.
Share-based compensation
Share-based compensation during the fourth
quarter of fiscal year 2019 was US$1.1 million, remained stable
when compared to the same period of last fiscal year.
Net income
As a result of the foregoing, a decrease of
83.3% in our net income, which decreased from US$17.0 million
during the fourth quarter of fiscal year 2018 to US$2.8 million
during the same quarter of fiscal year 2019.
Net income attributable to Hexindai
Inc.’s shareholders and EPS
Net income attributable to the Company’s shareholders decreased
by 83.3% to US$2.8 million in the fourth quarter of fiscal year
2019 from US$17.0 million in the same period of last fiscal year.
Accordingly, the basic EPS decreased to US$0.06 in the fourth
quarter of fiscal year 2019 from US$0.36 in the same period of
fiscal year 2018 and diluted EPS decreased to US$0.05 in the fourth
quarter of fiscal year 2019 from US$0.32 in the same period of
fiscal year 2018.
Adjusted net income attributable to
Hexindai Inc.’s shareholders and adjusted EPS
Adjusted net income attributable to the
Company’s shareholders, which excluded share-based compensation
expenses, decreased by 78.4% to US$3.9 million in the fourth
quarter of fiscal year 2019 from US$18.2 million in the same
quarter of fiscal year 2018. Accordingly, the adjusted basic EPS
decreased to US$0.08 in the fourth quarter of fiscal year 2019 from
US$0.38 in the same period of fiscal year 2018 and the adjusted
diluted EPS decreased to US$0.07 in the fourth quarter of fiscal
year 2019 from US$ 0.34 in the same quarter of fiscal year
2018.
Fiscal Year Ended
March
31, 2019 Unaudited
Financial Results
Net revenue
Net revenue during the fiscal year ended March
31, 2019 was US$61.3 million, a decrease of 42.8% from US$107.3
million in last fiscal year. The decrease was primarily due to the
decrease in the volume of credit loans facilitated through
Hexindai’s marketplace, which decreased from US$1,248.0 million
(RMB8.3 billion) in the fiscal year ended March 31, 2018 to
US$564.9 million (RMB3.8 billion) in the fiscal year ended March
31, 2019. The decrease in the volume of credit loans facilitated
through the Company’s marketplace was primarily due to the
reduction in the amount of investment available for credit loans.
Such reduction in investment resulted from tightened industry
regulation causing the suspension or shut down of some peers, which
negatively impacted investors' sentiment and confidence across the
industry.
Operating costs and
expenses
Total operating costs and expenses during the
fiscal year ended March 31, 2019 were US$56.2 million, an increase
of 79.2% from US$31.4 million in fiscal year ended March 31, 2018.
The increase was primarily due to increase in sales and marketing
expenses, general and administrative expenses and share-based
compensation.
Sales and marketing expenses
Sales and marketing expense during the fiscal
year ended March 31, 2019 were US$32.3 million, an increase of
112.1% from US$15.2 million from last fiscal year. The increase was
primarily due to an increase in employee expenses, expenses paid to
advertising vendors for online acquisition of borrowers and
investors, and a series of marketing and promotional campaigns
expenses in the first half of the fiscal year.
Service and development expenses
Service and development expenses during the
fiscal year ended March 31, 2019 were US$7.4 million, a decrease of
12.9% from US$8.5 million during last fiscal year. The decrease was
primarily attributable to the decrease in custodian bank account
management fees.
General and administrative expenses
General and administrative expenses during the
fiscal year ended March 31, 2019 were US$9.9 million, an increase
of 70.7% from US$5.8 million during last year. The increase was
primarily attributable to an increase in professional service fees
and rental and property fees.
Share-based compensation
Share-based compensation during the fiscal year 2019 was US$6.6
million, increased from US$1.8 million during last fiscal year. The
increase was attributable to awards granted under the 2016 Equity
Incentive Plan since November 3, 2017 on which date the Company
completed its IPO.
Net income
As a result of the foregoing, a decrease of
91.6% in our net income, which decreased from US$65.5 million
during the fiscal year ended March 31, 2018 to US$5.5 million
during this fiscal year.
Net income attributable to Hexindai
Inc.’s shareholders and EPS
Net income attributable to the Company’s shareholders decreased
by 91.6% to US$5.5 million in fiscal year 2019 from US$65.5 million
in last fiscal year. Accordingly, the basic EPS decreased to
US$0.11 in fiscal year 2019 from US$1.46 in fiscal year 2018 and
diluted EPS decreased to US$0.10 in fiscal year 2019 from US$1.37
in fiscal year 2018.
Adjusted net income attributable to
Hexindai Inc.’s shareholders and adjusted EPS
Adjusted net income attributable to the
Company’s shareholders, which excluded share-based compensation
expenses, decreased by 82.0% to US$12.1 million during the fiscal
year ended March 31, 2019 from US$67.3 million in the fiscal year
ended March 31 2018. Accordingly, the adjusted basic EPS decreased
to US$0.25 during the fiscal year ended March 31, 2019 from US$1.50
in last fiscal year and the adjusted diluted EPS decreased to
US$0.22 during the fiscal year ended March 31, 2019 from US$1.41 in
last fiscal year.
Cash and Cash Flow
As of March 31, 2019, the Company had cash and
cash equivalents of US$57.4 million. Net cash used in operating
activities for the fiscal year ended March 31, 2019 was US$1.7
million, compared to net cash provided by operating activities of
US$87.7 million in last fiscal year. The decrease in operating cash
flow was mainly due to decreased net income as well as increased
payouts of tax during fiscal year ended March 31, 2019. Net cash
used in investing activities for the fiscal year end March 31, 2019
was US$68.1 million, compared to US$27.6 million in last fiscal
year. The increase in investing cash flow was due to an increase in
loan principal originated through our microlending business and the
payment of long-term investment. Net cash used in financing
activities for the fiscal year ended March 31, 2019 was US$0.03
million, compared to net cash provided by financing activities of
US$47.5 million in the same period of last fiscal year. The
decrease in financing activities was mainly due to the net proceeds
from our IPO and repayment from related parties in fiscal year
2018.
Use of Non-GAAP Financial Measures
We used adjusted net (loss) income, adjusted EPS
and adjusted EBIT, non-GAAP financial measures, in evaluating our
operating results and for financial and operational decision-making
purposes. “Adjusted net (loss) income” is net income before
share-based compensation expenses. “Adjusted EBIT” is earnings
before interest, income taxes and share-based compensation. We
believed that the non-GAAP financial measures helped identify
underlying trends in our business by excluding the impact of
share-based compensation expenses, which were non-cash charges. We
believed that the adjusted net (loss) income, adjusted EPS and
adjusted EBIT provided useful information about our operating
results, enhance the overall understanding of our past performance
and prospects and allow for greater visibility with respect to key
metrics used by our management in its financial and operational
decision-making.
The non-GAAP measures were not defined under
U.S. GAAP and was not presented in accordance with U.S. GAAP. These
non-GAAP financial measures had 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 income, cash flows provided by operating
activities or other consolidated statements of operation and cash
flow data prepared in accordance with U.S. GAAP.
We mitigate these limitations by reconciling the
non-GAAP financial measures to the most comparable U.S. GAAP
performance measure, all of which should be considered when
evaluating our performance.
For more information on these non-GAAP financial
measures, please see the table captioned “Reconciliations of GAAP
and non-GAAP measures” set forth at the end of this press
release.
Exchange Rate Information
Our business was conducted in China, and our
financial records were maintained in RMB, our functional currency.
However, we used the U.S. dollar as our reporting currency;
therefore, periodic reports made to shareholders will include
current period amounts translated into U.S. dollars using the
then-current exchange rates, for the convenience of the readers.
The financial information was first prepared in RMB and then was
translated into U.S. dollars at period-end exchange rates in the
H.10 statistical release of the Federal Reserve Board as to assets
and liabilities and average exchange rates as to revenue and
expenses. Capital accounts were translated at their historical
exchange rates when the capital transactions occurred. The effects
of foreign currency translation adjustments were included as a
component of accumulated other comprehensive income (loss) in
shareholders' equity. We make no representation that any RMB or
U.S. dollar amounts could have been, or could be, converted into
U.S. dollars or RMB, as the case may be, at any particular rate, or
at all. The PRC government imposes control over its foreign
currency reserves in part through direct regulation of the
conversion of RMB into foreign exchange and through restrictions on
foreign trade.
Statement Regarding Preliminary
Unaudited Financial Information
The unaudited financial information set out in
this earnings release is preliminary and subject to potential
adjustments. Adjustments to the consolidated financial statements
may be identified when audit work has been performed for the
Company’s year-end audit, which could result in significant
differences from this preliminary unaudited financial
information.
Recent Developments
In March 2019, Hexindai issued a Senior
Unsecured Note (the "Note") to Majik Fund SPC, an exempted company
managed by a subsidiary of Yunfeng Financial Group Limited (HKSE
376), an innovative financial technology group, providing
comprehensive investing and financing services for individual and
institutional investors and enterprise customers. Hexindai issued
Majik Fund SPC a US$20 million three-year Senior Unsecured Note due
2022. The Note bears a fixed interest rate of 12.0% per annum, with
interest payable semi-annually in arrears.
In May 2019, Mr. Xinming Zhou resigned as
Hexindai’s Chief Executive Officer, effective immediately. Mr.
Xiaobo An, Hexindai's Founder and Chairman, assumed the role
of Chief Executive Officer, while Chief Operating Officer Ms. Lili
Hua replaced Mr. Zhou on the board as a Director.
In June 2019, the company completed a key
regulatory compliance milestone as the Beijing Local Financial
Supervision and Administration (formerly the Beijing Municipal
Bureau of Financial Work) concluded its field inspection work of
the company. The National P2P Rectification Office issued a notice
for regulatory compliance inspection in August 2018 and laid out
detailed criteria for self-examination and correction by P2P
platforms. Completing the compliance inspection is part of the
prerequisites for P2P platforms in China to file for registration
with authorities.
Conference Call
The Company will host a conference call to discuss the earnings
at 8:00 a.m. Eastern Time on Tuesday, June 18, 2019 (8:00 p.m.
Beijing/Hong Kong Time on the same day).
Dial-in numbers for the live conference call are as follows:
|
International |
|
+65 6713-5090 |
|
U.S. Toll Free |
|
+1 866-519-4004 |
|
Mainland China |
|
4006-208038 |
|
Hong Kong Toll Free |
|
8009-06601 |
|
Passcode: HX |
|
|
A telephone replay of the call will be available two hours after
the conclusion of the conference call through 9:59 p.m.
Beijing/Hong Kong Time, June 26, 2019.
Dial-in numbers for the replay are as follows:
| International
Dial-in |
|
+61
2-8199-0299 |
| U.S. Toll Free |
|
+1 855-452-5696 |
| Passcode: 1828707 |
|
|
A live and archived webcast of the conference call will be
available on the Investor Relations section of Hexindai’s website
at http://ir.hexindai.com/.
About Hexindai Inc.
Hexindai Inc. (NASDAQ: HX) (“Hexindai” or the “Company”) is a
fast-growing consumer lending marketplace based in Beijing, China
facilitating loans to meet the increasing consumption demand of the
emerging middle class in China. Hexindai provides borrowers with
convenient and ready access to credit through its online
marketplace. The Company offers borrowers a wide range of products
designed based on customer segmentation data and tailored to the
specific needs of the emerging middle class in China by matching
them with investors seeking various types of investment products
with appropriate risk levels and risk-adjusted returns. Hexindai’s
strong online and offline user acquisition capabilities combined
with an online platform with extensive offline networks, an
advanced risk management system, and strong strategic cooperative
relationships with a custodian bank and an insurance company to
safeguard investments, allows the Company to generate higher
customer satisfaction, reliance, and realize faster growth in
China.
Safe Harbor Statement
This announcement contains forward-looking
statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. These forward-looking statements
are made under the “safe harbor” provisions of the U.S. Private
Securities Litigation Reform Act of 1995. These statements can be
identified by terminology such as “will,” “expects,” “anticipates,”
“future,” “intends,” “plans,” “believes,” “estimates,” “potential,”
“continue,” “ongoing,” “targets,” “guidance” and similar
statements. The Company may also make written or oral
forward-looking statements in its periodic reports to the U.S.
Securities and Exchange Commission (the “SEC”), in its annual
report to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or
employees to third parties. Any statements that are not historical
facts, including statements about the Company’s beliefs and
expectations, are forward-looking statements that involve factors,
risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. Such
factors and risks include, but not limited to the following: the
Company’s goals and strategies; its future business development,
financial condition and results of operations; the expected growth
of the credit industry, and marketplace lending in particular, in
China; the demand for and market acceptance of its marketplace’s
products and services; its ability to attract and retain borrowers
and investors on its marketplace; its relationships with its
strategic cooperation partners; competition in its industry; and
relevant government policies and regulations relating to the
corporate structure, business and industry. Further information
regarding these and other risks, uncertainties or factors is
included in the Company’s filings with the SEC. All information
provided in this announcement is current as of the date of this
announcement, and the Company does not undertake any obligation to
update such information, except as required under applicable
law.
For more information, please visit
ir.hexindai.com
For investor inquiries, please contact:
Hexindai
Ms. Daisy WangTel: +86-10-5380-6196Email: ir@hexindai.com
Christensen
In ChinaMr. Christian ArnellPhone: +86-10- 5900-1548E-mail:
carnell@christensenir.com
In US
Mr. Tip FlemingPhone:
+1-917-412-3333Email: tfleming@Christensenir.com
| HEXINDAI
INC. |
| CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
(UNAUDITED) |
| |
|
March
31, |
|
March
31, |
| |
|
2019 |
|
2018 |
|
|
|
USD |
|
USD |
| ASSETS |
|
|
|
| CURRENT ASSETS: |
|
|
|
|
|
Cash |
|
57,372,128 |
|
|
132,622,467 |
| Receivables, contract assets, prepayments and other
assets |
|
3,753,604 |
|
|
1,248,562 |
| Loans receivable-current, net of provision for loan
losses |
|
36,554,913 |
|
|
28,696,234 |
| Interest receivable |
|
- |
|
|
555,502 |
| TOTAL CURRENT ASSETS |
|
97,680,645 |
|
|
163,122,765 |
| Loans receivable-non-current, net of provision for loan
losses |
|
39,810,461 |
|
|
- |
| Long term investments |
|
30,789,836 |
|
|
- |
| Property, equipment and software at cost, net |
|
1,253,723 |
|
|
767,087 |
| Deferred tax assets |
|
3,721,177 |
|
|
- |
| TOTAL ASSETS |
|
173,255,842 |
|
|
163,889,852 |
|
|
|
|
|
|
| CURRENT LIABILITIES: |
|
|
|
|
| Accrued expenses and other current liabilities |
|
2,791,099 |
|
|
3,786,955 |
| Consideration payable |
|
14,289,371 |
|
|
- |
| Deferred revenue-current |
|
110,726 |
|
|
- |
| Taxes payable |
|
9,371,530 |
|
|
20,059,828 |
| TOTAL CURRENT LIABILITIES |
|
26,562,726 |
|
|
23,846,783 |
|
Note payable |
|
20,000,000 |
|
|
- |
|
Deferred revenue-non-current |
|
189,958 |
|
|
- |
| TOTAL LIABILITIES |
|
46,752,684 |
|
|
23,846,783 |
| |
|
|
|
|
| EQUITY: |
|
|
|
|
| Ordinary shares ($0.0001 par value, 500,000,000 shares
authorized 49,625,303 and 47,958,550 shares issued as of March 31,
2019 and 2018;49,204,083 and 47,958,550 shares outstanding as of
March 31, 2019 and 2018, respectively) |
|
4,963 |
|
|
4,796 |
| Treasury stock (421,220 shares and nil as of March 31,
2019 and 2018, respectively) |
|
(1,320,468 |
) |
|
- |
| Additional paid-in capital |
|
66,159,813 |
|
|
58,417,971 |
| Retained earnings |
|
63,415,808 |
|
|
77,241,073 |
| Accumulated other comprehensive (loss) income |
|
(1,756,958 |
) |
|
4,379,229 |
| TOTAL EQUITY |
|
126,503,158 |
|
|
140,043,069 |
| TOTAL LIABILITIES AND EQUITY |
|
173,255,842 |
|
|
163,889,852 |
| HEXINDAI
INC. |
| CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME |
|
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
| |
|
For Three Months Ended March
31, |
|
For the Years Ended March
31, |
| |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
USD |
|
USD |
|
USD |
|
USD |
| REVENUE |
|
|
|
|
|
|
|
|
|
Loan facilitation, post-origination and other service, net |
|
4,251,156 |
|
|
27,991,650 |
|
|
62,103,886 |
|
|
108,148,255 |
|
|
Business and sales related taxes |
|
(104,536 |
) |
|
(377,792 |
) |
|
(773,382 |
) |
|
(890,414 |
) |
| NET REVENUE |
|
4,146,620 |
|
|
27,613,858 |
|
|
61,330,504 |
|
|
107,257,841 |
|
| |
|
|
|
|
|
|
|
|
| OPERATING COSTS AND EXPENSES |
|
|
|
|
|
|
|
|
| Sales and marketing |
|
1,731,520 |
|
|
3,496,941 |
|
|
32,322,003 |
|
|
15,241,637 |
|
| Service and development |
|
1,608,518 |
|
|
2,054,458 |
|
|
7,396,835 |
|
|
8,495,768 |
|
| General and administrative |
|
2,131,075 |
|
|
1,697,319 |
|
|
9,928,512 |
|
|
5,816,130 |
|
| Share-based compensation |
|
1,077,137 |
|
|
1,105,037 |
|
|
6,585,386 |
|
|
1,828,868 |
|
| Total operating costs and expenses |
|
6,548,250 |
|
|
8,353,755 |
|
|
56,232,736 |
|
|
31,382,403 |
|
| INCOME FROM OPERATIONS |
|
(2,401,630 |
) |
|
19,260,103 |
|
|
5,097,768 |
|
|
75,875,438 |
|
| OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
| Other income |
|
65,678 |
|
|
169,598 |
|
|
2,336,015 |
|
|
683,393 |
|
| Other expense |
|
(2,188 |
) |
|
(2,191 |
) |
|
(28,530 |
) |
|
(22,516 |
) |
| Total other income, net |
|
63,490 |
|
|
167,407 |
|
|
2,307,485 |
|
|
660,877 |
|
| (LOSS) INCOME BEFORE INCOME TAXES |
|
(2,338,140 |
) |
|
19,427,510 |
|
|
7,405,253 |
|
|
76,536,315 |
|
| INCOME TAXES (CREDIT) EXPENSES |
|
(5,185,470 |
) |
|
2,382,315 |
|
|
1,872,672 |
|
|
11,025,690 |
|
| NET INCOME |
|
2,847,330 |
|
|
17,045,195 |
|
|
5,532,581 |
|
|
65,510,625 |
|
| Less: net income attributable to non-controlling interest |
|
- |
|
|
- |
|
|
- |
|
|
28,652 |
|
| NET INCOME ATTRIBUTABLE TO HEXINDAI’S
SHAREHOLDERS |
|
2,847,330 |
|
|
17,045,195 |
|
|
5,532,581 |
|
|
65,481,973 |
|
|
|
|
|
|
|
|
|
|
|
| OTHER COMPREHENSIVE INCOME (LOSS) |
|
|
|
|
|
|
|
|
| Foreign currency translation adjustment |
|
4,589,150 |
|
|
3,419,954 |
|
|
(6,136,187 |
) |
|
6,028,143 |
|
| COMPREHENSIVE INCOME |
|
7,436,480 |
|
|
20,465,149 |
|
|
(603,606 |
) |
|
71,538,768 |
|
|
|
|
|
|
|
|
|
|
|
| Less: comprehensive income attributable to non-controlling
interest |
|
- |
|
|
- |
|
|
- |
|
|
132,814 |
|
| COMPREHENSIVE INCOME ATTRIBUTABLE TO HEXINDAI’S
SHAREHOLDERS |
|
7,436,480 |
|
|
20,465,149 |
|
|
(603,606 |
) |
|
71,405,954 |
|
|
|
|
|
|
|
|
|
|
|
| Earnings per common share-basic |
|
0.06 |
|
|
0.36 |
|
|
0.11 |
|
|
1.46 |
|
| Earnings per common share-diluted |
|
0.05 |
|
|
0.32 |
|
|
0.10 |
|
|
1.37 |
|
| Weighted average number of shares outstanding-basic |
|
49,104,693 |
|
|
47,958,550 |
|
|
48,693,162 |
|
|
44,977,780 |
|
| Weighted average number of shares outstanding-diluted |
|
52,438,134 |
|
|
53,269,615 |
|
|
52,912,826 |
|
|
47,656,263 |
|
| HEXINDAI
INC. |
|
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS |
|
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
| |
|
For Three Months Ended March 31, |
|
For the Years Ended March 31, |
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
USD |
|
USD |
|
USD |
|
USD |
| Net
income attributable to Hexindai Inc.’s shareholders |
|
2,847,330 |
|
|
17,045,195 |
|
|
5,532,581 |
|
|
65,481,973 |
|
| Add: Share-based compensation expenses* |
|
1,077,137 |
|
|
1,105,037 |
|
|
6,585,386 |
|
|
1,828,868 |
|
| Adjusted net income attributable to Hexindai Inc.’s
shareholders |
|
3,924,467 |
|
|
18,178,884 |
|
|
12,117,967 |
|
|
67,310,841 |
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of shares outstanding*-basic |
49,104,693 |
|
|
47,958,550 |
|
48,693,162 |
|
|
44,977,780 |
|
| Weighted average number of shares outstanding*-diluted |
|
52,438,134 |
|
|
53,269,615 |
|
|
52,912,826 |
|
|
47,656,263 |
|
| |
|
|
|
|
|
|
|
|
| Earnings per common share*-basic |
|
0.06 |
|
|
0.36 |
|
|
0.11 |
|
|
1.46 |
|
| Adjustment related to share based compensation
expenses*-basic |
|
0.02 |
|
|
0.02 |
|
|
0.14 |
|
|
0.04 |
|
| Adjusted earnings per common share*-basic |
|
0.08 |
|
|
0.38 |
|
|
0.25 |
|
|
1.50 |
|
| |
|
|
|
|
|
|
|
|
| Earnings per common share*-diluted |
|
0.05 |
|
|
0.32 |
|
|
0.10 |
|
|
1.37 |
|
| Adjustment related to share based compensation
expenses*-diluted |
|
0.02 |
|
|
0.02 |
|
|
0.12 |
|
|
0.04 |
|
| Adjusted earnings per common share*-diluted |
|
0.07 |
|
|
0.34 |
|
|
0.22 |
|
|
1.41 |
|
| |
|
|
|
|
|
|
|
|
| Net income attributable to Hexindai Inc.’s
shareholders |
|
2,847,330 |
|
|
17,045,195 |
|
|
5,532,581 |
|
|
65,481,973 |
|
| Less: Interest income |
|
(165,701 |
) |
|
(92,287 |
) |
|
(775,551 |
) |
|
(343,370 |
) |
| Add: Income tax (benefit) expense** |
|
(5,185,470 |
) |
|
2,382,315 |
|
|
1,872,672 |
|
|
11,025,690 |
|
| Share-based compensation expenses* |
|
1,077,137 |
|
|
1,105,037 |
|
|
6,585,386 |
|
|
1,828,868 |
|
| Adjusted EBIT |
|
(1,426,704 |
) |
|
20,440,260 |
|
|
13,215,088 |
|
|
77,993,161 |
|
* Share-based compensation expenses are not tax
deductible under relevant tax laws and regulations in our tax
jurisdiction.
** Income tax expenses include US$24,855, US$
13,843, US$ 116,333 and US$ 51,506 related to the current tax
expenses on interest income, which was recognized for the three
months period ended March 31, 2019 and 2018 and the fiscal years
ended March 31, 2019 and 2018, respectively.
The following table presents our summary
operating data for three months and fiscal year ended March 31,
2018 and 2019.
| |
For Three Months Ended March 31, |
|
For the Years Ended March 31, |
|
|
|
| |
2019 |
|
2018 |
|
2019 |
|
2018 |
|
Growth Rates (4) |
|
|
(RMB) |
(US$) |
|
(RMB) |
(US$) |
|
(RMB) |
(US$) |
|
(RMB) |
(US$) |
|
Three months
ended March 31, 2019 compared to March 31, 2018 |
For the
fiscal year ended March 31, 2019 compared to March 31,
2018 |
| Loan volume facilitated |
(in
thousands, except percentages and numbers) |
|
(in
thousands, except percentages and numbers) |
|
|
|
| Credit loan
principal |
416,302 |
|
61,723 |
|
|
2,658,495 |
|
418,427 |
|
|
3,788,185 |
|
564,895 |
|
|
8,268,844 |
|
1,248,033 |
|
|
-84.3 |
% |
-54.2 |
% |
| Secured loan principal |
- |
|
- |
|
|
- |
|
- |
|
|
- |
|
- |
|
|
63,220 |
|
9,542 |
|
|
- |
|
-100.0 |
% |
| Total |
416,302 |
|
61,723 |
|
|
2,658,495 |
|
418,427 |
|
|
3,788,185 |
|
564,895 |
|
|
8,332,064 |
|
1,257,575 |
|
|
-84.3 |
% |
-54.5 |
% |
| Number of transactions facilitated (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Credit loan transactions |
51,958 |
|
51,958 |
|
|
33,396 |
|
33,396 |
|
|
84,904 |
|
84,904 |
|
|
101,361 |
|
101,361 |
|
|
|
|
| Secured loan transactions |
- |
|
- |
|
|
- |
|
- |
|
|
- |
|
- |
|
|
49 |
|
49 |
|
|
|
|
| Total |
51,958 |
|
51,958 |
|
|
33,396 |
|
33,396 |
|
|
84,904 |
|
84,904 |
|
|
101,410 |
|
101,410 |
|
|
|
|
| Average individual transaction amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Credit loan transactions |
8 |
|
1 |
|
|
80 |
|
13 |
|
|
45 |
|
7 |
|
|
82 |
|
12 |
|
|
|
|
| Secured loan transactions |
- |
|
- |
|
|
- |
|
- |
|
|
- |
|
- |
|
|
1,290 |
|
195 |
|
|
|
|
| Overall average |
8 |
|
1 |
|
|
80 |
|
13 |
|
|
45 |
|
7 |
|
|
82 |
|
12 |
|
|
|
|
| Gross billing amount (net of VAT) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Credit loan |
60,455 |
|
8,963 |
|
|
202,246 |
|
31,832 |
|
|
456,526 |
|
68,077 |
|
|
784,355 |
|
118,384 |
|
|
-70.1 |
% |
-41.8 |
% |
| Secured loan |
- |
|
- |
|
|
- |
|
- |
|
|
- |
|
- |
|
|
1,458 |
|
220 |
|
|
- |
|
-100.0 |
% |
| Total |
60,455 |
|
8,963 |
|
|
202,246 |
|
31,832 |
|
|
456,526 |
|
68,077 |
|
|
785,813 |
|
118,604 |
|
|
-70.1 |
% |
-41.9 |
% |
| Gross billing ratio (net of VAT) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Credit loan |
14.5 |
% |
14.5 |
% |
|
7.6 |
% |
7.6 |
% |
|
12.1 |
% |
12.1 |
% |
|
9.5 |
% |
9.5 |
% |
|
|
|
| Secured loan |
- |
|
- |
|
|
- |
|
- |
|
|
- |
|
- |
|
|
2.3 |
% |
2.3 |
% |
|
|
|
| Total |
14.5 |
% |
14.5 |
% |
|
7.6 |
% |
7.6 |
% |
|
12.1 |
% |
12.1 |
% |
|
9.4 |
% |
9.4 |
% |
|
|
|
| Number of borrowers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Credit loan transactions |
51,958 |
|
51,958 |
|
|
33,322 |
|
33,322 |
|
|
84,891 |
|
84,891 |
|
|
101,137 |
|
101,137 |
|
|
|
|
| Secured loan transactions |
- |
|
- |
|
|
- |
|
- |
|
|
- |
|
- |
|
|
35 |
|
35 |
|
|
|
|
| Total |
51,958 |
|
51,958 |
|
|
33,322 |
|
33,322 |
|
|
84,891 |
|
84,891 |
|
|
101,172 |
|
101,172 |
|
|
55.9 |
% |
-16.1 |
% |
| Number of investors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Credit loan transactions (2) |
19,587 |
|
19,587 |
|
|
52,231 |
|
52,231 |
|
|
106,764 |
|
106,764 |
|
|
117,016 |
|
117,016 |
|
|
|
|
| Secured loan transactions (3) |
- |
|
- |
|
|
- |
|
- |
|
|
- |
|
- |
|
|
76 |
|
76 |
|
|
|
|
| Credit and secured loan transactions |
1,307 |
|
1,307 |
|
|
9,808 |
|
9,808 |
|
|
11,483 |
|
11,483 |
|
|
20,858 |
|
20,858 |
|
|
|
|
| Total |
20,894 |
|
20,894 |
|
|
62,039 |
|
62,039 |
|
|
118,247 |
|
118,247 |
|
|
137,950 |
|
137,950 |
|
|
-66.3 |
% |
-14.3 |
% |
(1) Number of transactions facilitated is
defined as the total number of loans facilitated on our marketplace
or recommended to third-parties during the relevant period.
(2) Refers to investors who exclusively invested
in credit loan transactions during the relevant period.
(3) Refers to investors who exclusively invested
in secured loan transactions during the relevant period.
(4) Growth rates are calculated by RMB and
exclude the impact from exchange rate in different reporting period
to reflect a real growth rate.
The following table sets forth our revenue
breakdown for the periods indicated:
| |
|
For the Three Months Ended March 31, |
|
For the Fiscal Years Ended March 31, |
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
US$ |
|
US$ |
|
US$ |
|
US$ |
| Revenue (1) |
|
|
|
|
|
|
|
|
| Loan
facilitation service |
|
5,349,487 |
|
|
30,929,552 |
|
|
66,782,312 |
|
|
117,984,295 |
|
| Loan management service |
|
- |
|
|
104,002 |
|
|
- |
|
|
508,948 |
|
| Post-origination service |
|
1,240,473 |
|
|
1,819,683 |
|
|
11,418,182 |
|
|
4,213,862 |
|
| Loan recommendation service |
|
858,796 |
|
|
- |
|
|
858,796 |
|
|
- |
|
| Interest income |
|
1,067,138 |
|
|
590,122 |
|
|
3,552,983 |
|
|
590,122 |
|
| Others |
|
(678 |
) |
|
(483 |
) |
|
1,491 |
|
|
21,434 |
|
| Business tax |
|
(104,536 |
) |
|
(377,792 |
) |
|
(773,382 |
) |
|
(890,414 |
) |
| Cash incentives |
|
(4,264,060 |
) |
|
(5,451,226 |
) |
|
(20,509,878 |
) |
|
(15,170,406 |
) |
| Net Revenue |
|
4,146,620 |
|
|
27,613,858 |
|
|
61,330,504 |
|
|
107,257,841 |
|
(1) Represents amounts net of VAT
The following tables set forth our delinquency
rates for all loans as of March 31, 2016, 2017, 2018 and 2019,
respectively:
|
Delinquency Rates (1) |
|
|
|
Delinquent for |
|
|
|
15 - 29 days |
|
30 - 59 days |
|
60 - 89 days |
| March 31,
2016 |
|
0.092 |
% |
|
0.074 |
% |
|
0.061 |
% |
| March 31, 2017 |
|
0.091 |
% |
|
0.138 |
% |
|
0.331 |
% |
| March 31, 2018 |
|
0.066 |
% |
|
0.152 |
% |
|
0.120 |
% |
| March 31, 2019 |
|
0.257 |
% |
|
0.337 |
% |
|
0.367 |
% |
(1) Loans that are delinquent for more than 89
days are counted towards the M3+ Net Charge-off Rates. See ‘‘—M3+
Net Charge-off Rates’’ .
The following table provides the amount of credit loans
generated through our marketplace or recommended to other
third-parties during each of the periods presented and the
corresponding accumulated M3+ Net Charge-off and M3+ Net Charge-off
Rates data as of December 31, 2018 and March 31, 2019 for the
credit loans facilitated during each of the periods presented.
|
M3+ Net Charge-off Rates |
|
|
Loan issued period |
|
Amount of loans facilitated during the period |
|
Accumulated M3+Net Charge-off as of March 31,
2019 |
|
Total M3+Net Charge-Off Rate as of March 31,
2019 |
|
| |
|
|
|
(RMB) |
|
(USD) |
|
(RMB) |
|
(USD) |
|
Percentage |
|
|
|
|
(in
thousands) |
|
(in
thousands) |
|
|
|
| Since
inception to March 31, 2016 |
|
678,849 |
|
107,466 |
|
40,693 |
|
6,337 |
|
5.99 |
% |
|
| From April 1, 2016 to March 31, 2017 |
|
2,264,421 |
|
336,727 |
|
111,774 |
|
16,239 |
|
4.94 |
% |
|
| From April 1, 2017 to March 31, 2018 |
|
8,268,844 |
|
1,248,033 |
|
162,931 |
|
25,975 |
|
1.97 |
% |
|
| From April 1, 2018 to March 31, 2019 |
|
3,788,185 |
|
564,895 |
|
24,020 |
|
3,579 |
|
0.63 |
% |
|
|
M3+ Net Charge-off Rates |
| Loan issued period |
|
Amount of loans facilitated during the period |
|
Accumulated M3+Net Charge-off as of December 31,
2018 |
|
Total M3+Net Charge-Off Rate as of December 31,
2018 |
|
|
|
(RMB) |
|
(USD) |
|
(RMB) |
|
(USD) |
|
Percentage |
|
|
|
(in
thousands) |
|
(in
thousands) |
|
|
| Since
inception to March 31, 2016 |
|
678,849 |
|
107,466 |
|
39,445 |
|
6,143 |
|
5.81 |
% |
| From April 1, 2016 to March 31, 2017 |
|
2,264,421 |
|
336,727 |
|
103,275 |
|
15,004 |
|
4.56 |
% |
| From April 1, 2017 to March 31, 2018 |
|
8,268,844 |
|
1,248,033 |
|
111,535 |
|
17,781 |
|
1.35 |
% |
| From April 1, 2018 to December 31, 2018 |
|
3,371,882 |
|
503,732 |
|
8,172 |
|
1,189 |
|
0.24 |
% |
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