EX-99.1 2 a18-40739_1ex99d1.htm EX-99.1

Exhibit 99.1

 

Yintech Reports Third Quarter 2018 Unaudited Financial Results

 

SHANGHAI, Nov. 27, 2018 /PRNewswire/ - Yintech Investment Holdings Limited (NASDAQ: YIN) (“Yintech” or the “Company”), a leading provider of investment and trading services for individual customers in China, today announced its unaudited financial results for the quarter ended September 30, 2018.

 

Third Quarter 2018 Financial Highlights

 

 

 

For the quarter ended

 

% Change

 

In RMB million, except otherwise specified

 

September
30, 2017

 

June 30,
2018

 

September
30, 2018

 

YoY

 

QoQ

 

Revenues

 

388.3

 

263.3

 

267.8

 

(31.0

)%

1.7

%

Net commissions and fees

 

337.9

 

217.9

 

208.0

 

(38.4

)%

(4.5

)%

Net commissions and fees from securities services

 

3.2

 

87.4

 

84.2

 

2,531.3

%

(3.7

)%

Net income/(loss) attributable to Yintech

 

68.6

 

(48.5

)

(36.6

)

(153.4

)%

24.5

%

EPS per ADS - diluted (RMB)

 

0.94

 

(0.64

)

(0.50

)

(153.2

)%

21.9

%

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP data (Refer to “Reconciliation of GAAP to Non-GAAP Results”)

 

Non-GAAP net income/(loss) attributable to Yintech

 

101.0

 

(31.0

)

(22.3

)

(122.1

)%

28.1

%

Non-GAAP EPS per ADS - diluted (RMB)

 

1.38

 

(0.41

)

(0.31

)

(122.5

)%

24.4

%

 

Mr. Wenbin Chen, Chairman and CEO of Yintech, commented, “Throughout the first nine months of this year we experienced increased macro-economic and capital markets volatility. During the third quarter, the major A-share indexes continued to face strong headwinds, significantly impacting investor sentiment beyond our initial expectations. As a result, lower trading volumes negatively affected our growth, in particular, our securities advisory and investor education services. At the same time, our commodities services business also continued to face unfavorable market conditions, as we previously anticipated. The volatility in the spot price of gold T+D hit another record low during the quarter, further reducing investors’ trading activity. Overall, the decline in gold T+D trading volume was in line with lower trading volumes on the Shanghai Gold Exchange.”

 

“Despite a challenging market environment, we still generated moderate top line growth sequentially, and improvements in operating efficiency and cost controls positively impacted our bottom line. Since the beginning of this year, we have posted narrower quarterly losses on a sequential basis. Net loss declined 23% sequentially in the third quarter following a 30% decline in the second quarter from the first.”

 

“Looking ahead, we remain fully committed to investing in client education, enhancing our professional capabilities, introducing more innovative new products and value-added services, as well as investing in new business initiatives to better serve our premium customers. We are realigning our resources with a focus on these key areas as part of our continuous efforts to streamline our business and position our company for rapid growth when market sentiment improves and investors become more active again.”

 

1


 

Third Quarter 2018 Financial Results

 

Revenues for the quarter were RMB267.8 million (US$39.0 million), compared with RMB388.3 million in the same quarter last year and RMB263.3 million in the previous quarter. Both year-over-year and sequential decreases were mainly due to a decrease in commissions and fees from spot commodities services, which were partially offset by an increase in net commissions and fees from securities services.

 

Net commissions and fees for the quarter were RMB208.0 million (US$30.3 million), compared with RMB337.9 million in the same quarter last year and RMB217.9 million in the previous quarter, primarily due to the reasons stated above.

 

Net commissions and fees from commodities services for the quarter were RMB123.8 million (US$18.0 million), a decrease of 5.1% from the previous quarter, primarily as a result of a decrease in customer trading volume for commodities. Customer trading volume for commodities was RMB403.2 billion (US$58.7 billion) during the quarter, a decrease of 0.6% from the previous quarter.

 

Net commissions and fees from securities services for the quarter were RMB84.2 million (US$12.3 million), a decrease of 3.7% from the previous quarter, primarily due to negative market conditions.

 

Effective fee rate (representing net commissions and fees from commodities services as a percentage of customer trading volume) for the quarter was 0.031%, compared with 0.04% in the same quarter last year and 0.032% in the previous quarter.

 

Expenses for the quarter were RMB302.1 million (US$44.0 million), a decrease of 4.2% from RMB315.3 million in the same quarter last year and a decrease of 4.0% from RMB314.6 million in the previous quarter. The year-over-year and sequential decreases were mainly due to cost control measures implemented on advertising and promotion expenses.

 

Net loss for the quarter was RMB33.9 million (US$4.9 million), compared with net income of RMB66.5 million in the same quarter last year and net loss of RMB44.2 million in the previous quarter.

 

Net loss attributable to Yintech for the quarter was RMB36.6 million (US$5.3 million), compared with net income of RMB68.6 million in the same quarter last year and net loss of RMB48.5 million in the previous quarter.

 

Diluted loss per ADS for the quarter was RMB0.50 (US$0.07), compared with diluted earnings per ADS of RMB0.94 in the same quarter last year and diluted loss per ADS of RMB0.64 in the previous quarter.

 

Non-GAAP net loss attributable to Yintech for the quarter was RMB22.3 million (US$3.2 million), compared with net income of RMB101.0 million in the same quarter last year and net loss of RMB31.0 million in the previous quarter.

 

2


 

Non-GAAP diluted loss per ADS for the quarter was RMB0.31 (US$0.05), compared with non-GAAP diluted earnings per ADS of RMB1.38 in the same quarter last year and non-GAAP diluted loss per ADS of RMB0.41 in the previous quarter.

 

As of September 30, 2018, the Company had cash of RMB210.3 million (US$30.6 million) and short-term investments of RMB1,599.4 million (US$232.9 million), compared with RMB381.6 million and RMB1,309.6 million as of June 30, 2018, respectively.

 

As of September 30, 2018, total shareholders’ equity was RMB3,362.5 million (US$489.6 million), compared with RMB3,385.3 million as of June 30, 2018.

 

Business Outlook

 

Based on the information available as of the date of this press release, Yintech provides the following outlook, which reflects the Company’s current and preliminary view and is subject to change:

 

2018 Fourth Quarter Guidance

 

·                  Revenues will be in the range of RMB280.0 million to RMB300.0 million.

 

Share Repurchase Program

 

On May 29, 2018, the Company announced a share repurchase program whereby Yintech is authorized to repurchase up to US$30 million of its issued and outstanding ADSs during the following 12-month period. As of September 30, 2018, the Company had purchased an aggregate of 523,377 ADSs.

 

Discussion of Non-GAAP Financial Measures

 

In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company’s earnings release contains non-GAAP financial measures that exclude the effects of all forms of share-based compensation, as well as amortization of intangible assets in relation to the acquisition of Gold Master. The reconciliation of these non-GAAP financial measures to the nearest GAAP measures is set forth in the table captioned “Reconciliation of GAAP to Non-GAAP Results” below.

 

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for financial measures prepared in accordance with U.S. GAAP. The financial results reported in accordance with U.S. GAAP and reconciliation of GAAP to non-GAAP results should be carefully evaluated. The non-GAAP financial measure used by the Company may be prepared differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

 

When evaluating the Company’s operating performance in the periods presented, management reviewed the non-GAAP net income and non-GAAP EPS results reflecting adjustments to exclude the impact of share-based compensation as well as amortization of intangible assets in relation to the acquisition of Gold Master to supplement U.S. GAAP financial data. As such, the Company believes that the presentation of the non-GAAP net income and the diluted non-GAAP income per ADS provides important supplemental information to investors regarding financial and business trends relating to the Company’s financial condition and results of operations in a manner consistent with that used by management. Pursuant to U.S. GAAP, the Company recognized significant amounts of expenses for the restricted shares and share options, as well as amortization of intangible assets in relation to the acquisition of Gold Master in the periods presented. The Company utilized the non-GAAP financial results to make financial results comparable period to period and to better understand its historical business operations.

 

3


 

Currency Conversion

 

This announcement contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars were made at the exchange rate of RMB6.868 to US$1.00, as set forth in the H.10 statistical release of the Federal Reserve Board on September 28, 2018. No representation is intended to imply that these Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollar amounts at such rate, or at any other rate.

 

Conference Call Information

 

The Company will host a conference call to discuss the earnings at 8:00 a.m. U.S. Eastern Time on Tuesday, November 27, 2018 (9:00 p.m. Hong Kong Time on the same day).

 

Dial-in numbers for the live conference call are as follows:

 

International

 

+1 412 902 4272

U.S. Toll Free

 

+1 888 346 8982

Mainland China Toll Free

 

400 120 1203

Hong Kong

 

+852 3018 4992

Hong Kong Toll Free

 

800 905 945

Passcode

 

Yintech

 

A telephone replay of the call will be available after the conclusion of the conference call through 11:59 p.m. Hong Kong Time, December 4, 2018.

 

Dial-in numbers for the replay are as follows:

 

International Dial-in

 

+1 412 317 0088

 

 

 

U.S. Toll Free

 

+1 877 344 7529

 

 

 

Passcode

 

10126448

 

A live and archived webcast will be available on the Investor Relations section of Yintech’s website at http://ir.yintech.net/.

 

4


 

Safe Harbor Statement

 

All statements other than statements of historical fact contained in this release, including statements regarding future results of the operations of the Company are forward-looking statements, which are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: the Company’s ability to effectively acquire and retain its customers; the Company’s diversification of its business among different commodity exchanges; the adjustments in commissions and other fees set by relevant commodity exchanges; the Company’s ability to constantly upgrade its technology platform and software; general market conditions of online spot commodity trading industry and stock market; intense competition among service providers in this industry; the Company’s relatively short operating history; the price of the Company’s ADSs and changing market conditions for its ADSs; acquisition-related risks, including unknown liabilities and integration risks; as well as those risks detailed from time to time under the caption “Risk Factors” and elsewhere in the Company’s Securities and Exchange Commission filings and reports, including in the Company’s annual report on Form 20-F for the year ended December 31, 2017. In addition, the Company operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for the management to predict all risks, nor can the Company assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements that the Company may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this release are inherently uncertain and may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, you should not rely upon forward-looking statements as predictions of future events. The Company does not undertake any obligation to update publicly or revise any forward-looking statements for any reason after the date of this release, nor to conform these statements to actual results, future events, or to changes in the Company’s expectations.

 

About Yintech

 

Yintech (NASDAQ: YIN) is a leading provider of investment and trading services for individual customers in China. Yintech strives to provide best-in-class financial information, investment tools and services to its customers by leveraging financial technology and mobile platforms. Currently, Yintech is focused on the provision of gold and other commodities trading services, securities advisory services, securities information platform services, overseas securities trading services and asset management services.

 

5


 

Operational Highlights

 

 

 

For the three months ended

 

 

 

30-Sep-17

 

30-Jun-18

 

30-Sep-18

 

Customer trading volume[1] (in RMB billion)

 

847.0

 

408.8

 

405.6

 

 

 

 

 

 

 

 

 

Net commissions and fees (in RMB million)

 

 

 

 

 

 

 

Commodities services[2]

 

334.7

 

130.5

 

123.8

 

Securities services[3]

 

3.2

 

87.4

 

84.2

 

Total

 

337.9

 

217.9

 

208.0

 

 

 

 

 

 

 

 

 

Effective fee rate[4]

 

0.040

%

0.032

%

0.031

%

 

 

 

 

 

 

 

 

Active accounts[5]

 

37,391

 

24,141

 

17,985

 

 

 

 

 

 

 

 

 

Tradable accounts[6]

 

151,908

 

119,282

 

121,969

 

 


Note:

[1]. Represents customer trading volume of spot and futures commodities as well as overseas securities, including RMB405.6 billion in trading volume of spot and futures commodities in the second quarter of 2018 and RMB403.2 billion in the third quarter of 2018.

[2]. Represents net commissions and fees earned from customer trading of spot and futures commodities contracts.

[3]. Represents net commissions and fees earned by providing securities advisory services, securities information platform services and asset management services to customers.

[4]. Represents net commissions and fees from commodities services as a percentage of customer trading volume.

[5]. Refers to a regular customer account that executed at least one trade of spot and futures commodities contracts or a customer account that executed at least one trade of overseas securities through us during the period.

[6]. Refers to a regular customer account that has been activated for trading of spot and futures commodities contracts or a customer account that has been activated for trading of overseas securities and has remained tradable as of the end of the given period.

 

6


 

Consolidated Statements of Comprehensive Income

In RMB ‘000, except otherwise specified

 

 

 

For the three months ended

 

 

 

September 30,

 

June 30,

 

September 30,

 

 

 

2017

 

2018

 

2018

 

Revenues

 

 

 

 

 

 

 

Commissions and fees, net

 

337,896

 

217,916

 

208,001

 

Trading gains, net

 

11,966

 

16,195

 

16,157

 

Interest and investment income

 

861

 

799

 

8,084

 

Other revenues

 

37,608

 

28,408

 

35,539

 

 

 

388,331

 

263,318

 

267,781

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

Employee compensation and benefits

 

(171,006

)

(194,004

)

(191,082

)

Advertising and promotion

 

(60,632

)

(52,312

)

(41,340

)

Information technology and communications

 

(12,498

)

(7,336

)

(13,101

)

Occupancy and equipment rental

 

(31,211

)

(30,815

)

(25,224

)

Taxes and surcharges

 

(4,228

)

(1,132

)

(2,221

)

Intangible assets amortization

 

(14,096

)

(15,393

)

(12,645

)

Other expenses

 

(21,641

)

(13,645

)

(16,522

)

 

 

(315,312

)

(314,637

)

(302,135

)

 

 

 

 

 

 

 

 

Income/(loss) before income taxes

 

73,019

 

(51,319

)

(34,354

)

Income tax(expense)/ benefit

 

(6,538

)

7,129

 

486

 

Net income/(loss)

 

66,481

 

(44,190

)

(33,868

)

Less: Net income/(loss) attributable to non-controlling interests

 

(2,137

)

4,330

 

2,732

 

Net income/(loss) attributable to Yintech

 

68,618

 

(48,520

)

(36,600

)

Other comprehensive income/(loss)

 

7,479

 

7,935

 

25,262

 

Comprehensive income/(loss) attributable to Yintech

 

76,097

 

(40,585

)

(11,338

)

 

 

 

 

 

 

 

 

Earnings/(loss) per ADS[7] (RMB)

 

 

 

 

 

 

 

Basic

 

0.96

 

(0.66

)

(0.52

)

Diluted

 

0.94

 

(0.64

)

(0.50

)

 

 

 

 

 

 

 

 

Weighted average number of shares (‘000)

 

 

 

 

 

 

 

Basic

 

1,428,139

 

1,460,962

 

1,406,124

 

Diluted

 

1,464,569

 

1,517,607

 

1,458,309

 

 

 

 

 

 

 

 

 

Number of shares outstanding at end of period (‘000)

 

1,398,224

 

1,410,544

 

1,404,479

 

 


[7]. Each ADS represents 20 ordinary shares.

 

7


 

Consolidated Balance Sheet

In RMB ‘000, except otherwise specified

 

 

 

June 30,

 

September 30,

 

 

 

2018

 

2018

 

Assets

 

 

 

 

 

Cash

 

381,598

 

210,266

 

Entrusted bank balances held on behalf of customers

 

83,259

 

106,492

 

Short term investments

 

1,309,566

 

1,599,432

 

Deposits with clearing organizations

 

1,154

 

1,258

 

Accounts receivable

 

321,095

 

169,123

 

Equipment and leasehold improvements

 

34,665

 

31,879

 

Deferred tax assets

 

28,544

 

33,517

 

Goodwill

 

1,096,985

 

1,097,015

 

Intangible assets

 

490,592

 

478,018

 

Equity method investment

 

24,494

 

24,491

 

Other assets

 

218,336

 

186,757

 

Total Assets

 

3,990,288

 

3,938,248

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Deferred tax liabilities

 

80,786

 

77,231

 

Income tax payable

 

70,229

 

78,779

 

Accounts payable

 

107,064

 

110,832

 

Accrued employee benefits

 

117,032

 

129,726

 

Short-term borrowings

 

126,501

 

 

Other liabilities

 

103,410

 

179,161

 

Total liabilities

 

605,022

 

575,729

 

 

 

 

 

 

 

Equity attributable to Yintech shareholders

 

3,275,681

 

3,250,202

 

Equity attributable to non-controlling interests

 

109,585

 

112,317

 

Total shareholders’ equity

 

3,385,266

 

3,362,519

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

3,990,288

 

3,938,248

 

 

8


 

Reconciliation of GAAP to Non-GAAP Results

In RMB ‘000, except otherwise specified

 

 

 

For the three months ended

 

 

 

September 30,

 

June 30,

 

September 30,

 

 

 

2017

 

2018

 

2018

 

 

 

 

 

 

 

 

 

Net income/(loss) attributable to Yintech

 

68,618

 

(48,520

)

(36,600

)

Add: Share-based compensation

 

22,073

 

7,180

 

3,965

 

Add: Amortization of intangible assets in relation to the acquisition of Gold Master, net of tax effect

 

10,303

 

10,303

 

10,303

 

Non-GAAP net income/(loss) attributable to Yintech

 

100,994

 

(31,037

)

(22,332

)

 

 

 

 

 

 

 

 

Non-GAAP earnings/(loss) per ADS[7] (RMB)

 

 

 

 

 

 

 

Basic

 

1.41

 

(0.42

)

(0.32

)

Diluted

 

1.38

 

(0.41

)

(0.31

)

 


[7]. Each ADS represents 20 ordinary shares.

 

For investor and media inquiries, please contact:

 

Yintech

 

Yvonne Young

Phone: +86 21 2028 9009 ext 8270
E-mail: ir@yintech.cn

 

Christensen

 

In China
Mr. Christian Arnell
Phone: +86-10-5900-1548
E-mail: carnell@christensenir.com

 

In US
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email:lbergkamp@christensenir.com

 

9