EX-99.1 2 tm2421996d1_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

X Financial Reports Second Quarter 2024 Unaudited Financial Results

 

SHENZHEN, China, August 21, 2024 /PRNewswire/ -- X Financial (NYSE: XYF) (the “Company” or “we”), a leading online personal finance company in China, today announced its unaudited financial results for the second quarter ended June 30, 2024.

 

Second Quarter 2024 Operational Highlights

 

   Three Months Ended   Three Months Ended   Three Months Ended         
   June 30, 2023   March 31, 2024   June 30, 2024   QoQ   YoY 
Total loan amount facilitated and originated (RMB in million)   25,874    21,505    22,749    5.8%   (12.1%)
Number of active borrowers   1,474,930    1,369,410    1,642,605    19.9%   11.4%

 

·The total loan amount facilitated and originated1 in the second quarter of 2024 was RMB22,749 million, compared with RMB25,874 million in the same period of 2023.

·Total number of active borrowers2 was 1,642,605 in the second quarter of 2024, compared with 1,474,930 in the same period of 2023.

 

   As of June 30, 2023   As of March 31, 2024   As of June 30, 2024 
Total outstanding loan balance (RMB in million)   45,071    43,812    41,804 
Delinquency rates for all outstanding loans that are past due for 31-60 days   0.96%    1.61%    1.29% 
Delinquency rates for all outstanding loans that are past due for 91-180 days   2.50%    4.37%    4.38% 

 

·The total outstanding loan balance3 as of June 30, 2024 was RMB41,804 million, compared with RMB45,071 million as of June 30, 2023.

·The delinquency rate for all outstanding loans that are past due for 31-60 days4 as of June 30, 2024 was 1.29%, compared with 0.96% as of June 30, 2023.

·The delinquency rate for all outstanding loans that are past due for 91-180 days5 as of June 30, 2024 was 4.38%, compared with 2.50% as of June 30, 2023.

 

 

1 Represents the total amount of loans that the Company facilitated and originated during the relevant period.

2 Represents borrowers who made at least one transaction on the Company’s platform during the relevant period.

3 Represents the total amount of loans outstanding for loans that the Company facilitated and originated at the end of the relevant period. Loans that are delinquent for more than 60 days are excluded in the outstanding loan balance, except for Xiaoying Housing Loans. As Xiaoying Housing Loans is a secured loan product and the Company is entitled to payment by exercising its rights to the collateral, the Company does not exclude Xiaoying Housing Loans delinquent for more than 60 days in the outstanding loan balance.

4 Represents the balance of the outstanding principal and accrued outstanding interest for Xiaoying Credit Loans that were 31 to 60 days past due as a percentage of the total balance of outstanding principal and accrued outstanding interest for Xiaoying Credit Loans that the Company facilitated and originated as of a specific date. Xiaoying Credit Loans that are delinquent for more than 60 days are excluded when calculating the denominator. Starting from the first quarter of 2021, substantially all of the loans facilitated and provided by the Company have been Xiaoying Credit Loans.

5 To make the delinquency rate by balance comparable to the peers, the Company also defines the delinquency rate as the balance of the outstanding principal and accrued outstanding interest for Xiaoying Credit Loans that were 91 to 180 days past due as a percentage of the total balance of outstanding principal and accrued outstanding interest for the Xiaoying Credit Loans that the Company facilitated and originated as of a specific date. Xiaoying Credit Loans that are delinquent for more than 180 days are excluded when calculating the denominator.

 

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Second Quarter 2024 Financial Highlights

 

(In thousands, except for share and per share data)  Three Months Ended
June 30, 2023		   Three Months Ended
March 31, 2024		   Three Months Ended
June 30, 2024		   QoQ   YoY 
   RMB   RMB   RMB         
Total net revenue   1,220,422    1,207,974    1,372,588    13.6%   12.5%
Total operating costs and expenses   (775,293)   (831,433)   (909,535)   9.4%   17.3%
Income from operations   445,129    376,541    463,053    23.0%   4.0%
Net income   366,292    363,139    415,303    14.4%   13.4%
Non-GAAP adjusted net income   364,885    322,205    374,661    16.3%   2.7%
                          
Net income per ADS—basic   7.62    7.44    8.46    13.7%   11.0%
Net income per ADS—diluted   7.50    7.32    8.28    13.1%   10.4%
                          
Non-GAAP adjusted net income per ADS—basic   7.62    6.60    7.62    15.5%   0.0%
Non-GAAP adjusted net income per ADS—diluted   7.44    6.54    7.50    14.7%   0.8%

 

·Total net revenue in the second quarter of 2024 was RMB1,372.6 million (US$188.9 million), representing an increase of 12.5% from RMB1,220.4 million in the same period of 2023.

·Income from operations in the second quarter of 2024 was RMB463.1 million (US$63.7 million), compared with RMB445.1 million in the same period of 2023.

·Net income in the second quarter of 2024 was RMB415.3 million (US$57.1 million), compared with RMB366.3 million in the same period of 2023.

·Non-GAAP6 adjusted net income in the second quarter of 2024 was RMB374.7 million (US$51.6 million), compared with RMB364.9 million in the same period of 2023.

·Net income per basic and diluted American depositary share (“ADS”) 7 in the second quarter of 2024 was RMB8.46 (US$1.16) and RMB8.28 (US$1.14), compared with RMB7.62 and RMB7.50, respectively, in the same period of 2023.

·Non-GAAP adjusted net income per basic and adjusted diluted ADS in the second quarter of 2024 was RMB7.62 (US$1.05) and RMB7.50 (US$1.03), compared with RMB7.62 and RMB7.44, respectively, in the same period of 2023.

 

Mr. Kent Li, President of the Company, commented, “We are very pleased to report another solid quarter as we made further progress in improving our profitability. Our proactive management of loan volumes based on asset quality dynamics continued to bear fruit in the second quarter. As a result, while loan volume declined year-on-year, our net income for the quarter grew significantly and reached a record high.”

 

“The total loan amount facilitated and originated decreased by 12% year-on-year but increased 6% sequentially to RMB23 billion. Our total outstanding loan balance was RMB42 billion at the end of June 2024. Delinquency rates for outstanding loans past due for 31-60 days and 91-180 days were 1.29% and 4.38%, respectively, at the end of the quarter, compared to 1.61% and 4.37% a quarter ago and 0.96% and 2.50% a year ago. As we have seen an improvement in our asset quality, we have decided to ease our strict controls on loan volumes, and we expect our loan volumes to gradually recover on a year-on-year basis in the second half of the year. Meanwhile, we will continue to strengthen and refine our risk management system to improve asset quality. Our focus remains on sustainable profitability, and we employ flexible tactics to adapt to evolving market conditions to achieve this and, as always, to increase shareholder value.”

 

 

6 The Company uses in this press release the following non-GAAP financial measures: (i) adjusted net income (loss), (ii) adjusted net income (loss) per basic ADS, (iii) adjusted net income (loss) per diluted ADS, (iv) adjusted net income per basic share, and (v) adjusted net income per diluted share, each of which excludes share-based compensation expense, impairment losses on financial investments, income (loss) from financial investments and impairment losses on long-term investments. For more information on non-GAAP financial measure, please see the section of “Use of Non-GAAP Financial Measures Statement” and the table captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release.

7 Each American depositary share (“ADS”) represents six Class A ordinary shares.

 

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Mr. Frank Fuya Zheng, Chief Financial Officer of the Company, added, “We delivered strong financial results this quarter. Total net revenue was RMB1.4 billion, up 12.5% year-on-year and 14% sequentially. We continued to focus on cost control and improved asset quality and, as a result, our net income grew 13% year-on-year and 14% sequentially to RMB415 million, a record high in our history. In May 2024, we announced a new US$20 million share repurchase program. In June 2024, we initiated a tender offer to purchase 2 million ADSs, which was completed in July 2024. We are pleased to have executed this ADS buyback, which provided liquidity to shareholders seeking an exit at a premium price and, at the same time, increased remaining shareholders’ stakes in the Company. We are committed to profitable growth while exploring various avenues to further increase returns for our shareholders.”

 

Second Quarter 2024 Financial Results

 

Total net revenue in the second quarter of 2024 increased by 12.5% to RMB1,372.6 million (US$188.9 million) from RMB1,220.4 million in the same period of 2023, primarily due to growth in various disaggregated revenue items compared with the same period of 2023. Please refer to the analysis of disaggregation of revenue below.

 

   Three Months Ended June 30,     
(In thousands, except for share and per share data)  2023   2024   YoY 
   RMB   % of Revenue   RMB   % of Revenue     
Loan facilitation service   715,503    58.6%   732,249    53.3%   2.3%
Post-origination service   140,317    11.5%   154,669    11.3%   10.2%
Financing income   274,639    22.5%   351,012    25.6%   27.8%
Guarantee income   -    0.0%   45,564    3.3%   100.0%
Other revenue   89,963    7.4%   89,094    6.5%   (1.0)%
Total net revenue   1,220,422    100.0%   1,372,588    100.0%   12.5%

 

Loan facilitation service fees in the second quarter of 2024 increased by 2.3% to RMB732.2 million (US$100.8 million) from RMB715.5 million in the same period of 2023, primarily due to a decrease in the expected prepayment rates this quarter compared with the same period of 2023.

 

Post-origination service fees in the second quarter of 2024 increased by 10.2% to RMB154.7 million (US$21.3 million) from RMB140.3 million in the same period of 2023, primarily due to the cumulative effect of increased volume of loans facilitated in the previous quarters. Revenues from post-origination services are recognized on a straight-line basis over the term of the underlying loans as the services are being provided.

 

Financing income in the second quarter of 2024 increased by 27.8% to RMB351.0 million (US$48.3 million) from RMB274.6 million in the same period of 2023, due to an increase in average loan balances held by the Company compared with the same period of 2023.

 

Guarantee income in the second quarter of 2024 was RMB45.6 million (US$6.3 million),  due to an increase in guarantee income arising from financing guarantee business operated by a subsidiary which holds the financing guarantee license and commenced the financing guarantee business in second half of 2023.

 

Other revenue in the second quarter of 2024 decreased by 1.0% to RMB89.1 million (US$12.3 million), compared with RMB90.0 million in the same period of 2023.

 

Origination and servicing expenses in the second quarter of 2024 increased by 19.1% to RMB415.1 million (US$57.1 million) from RMB348.6 million in the same period of 2023, primarily due to the increase in collection expenses resulting from the cumulative effect of increased volume of loans facilitated and provided in the previous quarters compared with the same period of 2023.

 

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Borrower acquisitions and marketing expenses in the second quarter of 2024 decreased by 2.6% to RMB323.6 million (US$44.5 million) from RMB332.1 million in the same period of 2023.

 

Provision for loans receivable in the second quarter of 2024 was RMB95.9 million (US$13.2 million), compared with RMB55.4 million in the same period of 2023, primarily due to an increase in loans receivable held by the Company as a result of the cumulative effect of increased volume of loans facilitated and provided in the previous quarters compared with the same period of 2023.

 

Provision for contingent guarantee liabilities in the second quarter of 2024 was RMB21.4 million (US$2.9 million), due to an increase in the guarantee liability arising from financing guarantee business operated by a subsidiary which holds the financing guarantee license and commenced the financing guarantee business in second half of 2023.

 

Income from operations in the second quarter of 2024 was RMB463.1 million (US$63.7 million), compared with RMB445.1 million in the same period of 2023.

 

Income before income taxes and gain from equity in affiliates in the second quarter of 2024 was RMB504.0 million (US$69.4 million), compared with RMB443.9 million in the same period of 2023.

 

Income tax expense in the second quarter of 2024 was RMB89.6 million (US$12.3 million), compared with RMB87.0 million in the same period of 2023.

 

Net income in the second quarter of 2024 was RMB415.3 million (US$57.1 million), compared with RMB366.3 million in the same period of 2023.

 

Non-GAAP adjusted net income in the second quarter of 2024 was RMB374.7 million (US$51.6 million), compared with RMB364.9 million in the same period of 2023.

 

Net income per basic and diluted ADS in the second quarter of 2024 was RMB8.46 (US$1.16), and RMB8.28 (US$1.14), compared with RMB7.62 and RMB7.50, respectively, in the same period of 2023.

 

Non-GAAP adjusted net income per basic and diluted ADS in the second quarter of 2024 was RMB7.62 (US$1.05), and RMB7.50 (US$1.03), compared with RMB7.62 and RMB7.44 respectively, in the same period of 2023.

 

Cash and cash equivalents was RMB1,612.2 million (US$221.8 million) as of June 30, 2024, compared with RMB1,413.1 million as of March 31, 2024.

 

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Recent Development

 

Share Repurchase Plan

 

On May 30, 2024, the Company announced that its board of directors authorized a new US$20 million share repurchase program, effective through November 30, 2025. On June 5, 2024, the Company announced that it had commenced a tender offer under the share repurchase program to purchase up to 2 million ADSs at a price of $4.52 per ADS. On July 15, 2024, the Company announced the results of the tender offer. A total of 2,026,640 ADSs were validly tendered and not withdrawn. The total repurchase amount of the tender offer was approximately US$9.2 million. Following the completion of the tender offer, the Company has about US$10.8 million left for potential repurchases under its new US$20 million plan. Additionally, approximately US$5.5 million remains under our US$30 million plan which is effective until the end of September 2024.

 

Declaration of Semi-Annual Dividend

 

In March 2024, the Company approved a semi-annual dividend policy. Pursuant to the semi-annual dividend policy, the Board today approved the declaration and payment of a semi-annual dividend of US$0.17 per ADS (approximately US$0.028 per ordinary share) for the first half of 2024. The holders of the Company’s ordinary shares shown on the Company’s record at the close of trading on September 4, 2024 (U.S. Eastern Daylight Time) will be entitled to the semi-annual dividend. These shareholders, including the Bank of New York Mellon, the depositary of our ADS program (the “Depositary”), will receive the payments of dividends on or about September 27, 2024. Dividends to the Company’s ADS holders will be paid by the Depositary on or after September 27, 2024, and the precise timing of receipt will vary based on the processing efficiency of the respective holding brokerage.

 

Business Outlook

 

The Company expects the total loan amount facilitated and originated for the third quarter of 2024 to be between RMB26.0 billion and RMB27.5 billion.

 

This forecast reflects the Company’s current and preliminary views, which are subject to changes.

 

Conference Call

 

X Financial’s management team will host an earnings conference call at 7:00 AM U.S. Eastern Time on August 22, 2024 (7:00 PM Beijing / Hong Kong Time on August 22, 2024).

 

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

 

United States: 1-888-346-8982
Hong Kong: 852-301-84992
Mainland China: 4001-201203
International: 1-412-902-4272
Passcode: X Financial

 

Please dial in ten minutes before the call is scheduled to begin and provide the passcode to join the call.

 

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A replay of the conference call may be accessed by phone at the following numbers until August 29, 2024:

 

United States: 1-877-344-7529
International: 1-412-317-0088
Passcode: 3590885

 

Additionally, a live and archived webcast of the conference call will be available at http://ir.xiaoyinggroup.com.

 

About X Financial

 

X Financial (NYSE: XYF) (the "Company") is a leading online personal finance company in China. The Company is committed to connecting borrowers on its platform with its institutional funding partners. With its proprietary big data-driven technology, the Company has established strategic partnerships with financial institutions across multiple areas of its business operations, enabling it to facilitate and originate loans to prime borrowers under a risk assessment and control system.

 

For more information, please visit: http://ir.xiaoyinggroup.com.

 

Use of Non-GAAP Financial Measures Statement

 

In evaluating our business, we consider and use non-GAAP measures as supplemental measures to review and assess our operating performance. We present the non-GAAP financial measures because they are used by our management to evaluate our operating performance and formulate business plans. We believe that the use of the non-GAAP financial measures facilitates investors’ assessment of our operating performance and help investors to identify underlying trends in our business that could otherwise be distorted by the effect of certain income or expenses that we include in income (loss) from operations and net income (loss). We also believe that the non-GAAP measures provide useful information about our core operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.

 

We use in this press release the following non-GAAP financial measures: (i) adjusted net income (loss), (ii) adjusted net income (loss) per basic ADS, (iii) adjusted net income (loss) per diluted ADS, (iv) adjusted net income per basic share, and (v) adjusted net income per diluted share, each of which excludes share-based compensation expense, impairment losses on financial investments, income (loss) from financial investments and impairment losses on long-term investments. These non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, investors should not consider them in isolation, or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP.

 

We mitigate these limitations by reconciling the non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures, which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure.

 

For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of GAAP and Non-GAAP results” set forth at the end of this press release.

 

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Exchange Rate Information

 

This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB 7.2672 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of June 28, 2024.

 

Disclaimer

 

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 followings: 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.

 

Use of Projections

 

This announcement also contains certain financial forecasts (or guidance) with respect to the Company’s projected financial results. The Company’s independent auditors have not audited, reviewed, compiled or performed any procedures with respect to the projections or guidance for the purpose of their inclusion in this announcement, and accordingly, they did not express an opinion or provide any other form assurance with respect thereto for the purpose of this announcement. This guidance should not be relied upon as being necessarily indicative of future results. The assumptions and estimates underlying the prospective financial information are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could actual results to differ materially from those contained in the prospective financial information. Accordingly, there can be no assurance that the prospective results are indicative of the future performance of the Company, or that actual results will not diff materially from those set forth in the prospective financial information. Inclusion of the prospective financial information in this announcement should not be regarded as a representation by any person that the results contained in the prospective financial information will actually be achieved. You should review this information together with the Company’s historical information.

 

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For more information, please contact:

 

X Financial

Mr. Frank Fuya Zheng

E-mail: ir@xiaoying.com

 

Christensen IR

 

In China

Mr. Rene Vanguestaine

Phone: +86-178-1749 0483

E-mail: rene.vanguestaine@christensencomms.com

 

In US

Ms. Linda Bergkamp

Phone: +1-480-614-3004

Email: linda.bergkamp@christensencomms.com

 

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X Financial            
Unaudited Condensed Consolidated Balance Sheets            
             
(In thousands, except for share and per share data)  As of December 31, 2023   As of June 30, 2024   As of June 30, 2024 
   RMB   RMB   USD 
ASSETS               
Cash and cash equivalents   1,195,352    1,612,200    221,846 
Restricted cash, net   749,070    590,210    81,216 
Accounts receivable and contract assets, net   1,659,588    1,510,866    207,902 
Loans receivable from Xiaoying Credit Loans and other loans, net   4,947,833    5,080,810    699,143 
Deposits to institutional cooperators, net   1,702,472    1,589,195    218,681 
Prepaid expenses and other current assets, net   48,767    34,878    4,799 
Deferred tax assets, net   135,958    192,391    26,474 
Long-term investments   493,411    497,278    68,428 
Property and equipment, net   8,642    10,423    1,434 
Intangible assets, net   36,810    36,504    5,023 
Loan receivable from Xiaoying Housing Loans, net   8,657    6,494    894 
Financial investments   608,198    756,323    104,074 
Other non-current assets   55,265    57,655    7,934 
TOTAL ASSETS   11,650,023    11,975,227    1,647,848 
                
LIABILITIES               
Payable to investors and institutional funding partners at amortized cost   3,584,041    3,134,236    431,285 
Guarantee liabilities   61,907    82,838    11,399 
Deferred guarantee income   46,597    84,566    11,637 
Short-term borrowings   565,000    474,500    65,293 
Accrued payroll and welfare   86,771    58,757    8,086 
Other tax payable   289,819    268,198    36,905 
Income tax payable   446,500    472,584    65,030 
Accrued expenses and other current liabilities   595,427    674,731    92,846 
Dividend payable   59,226    -    - 
Other non-current liabilities   37,571    35,359    4,866 
Deferred tax liabilities   30,040    35,137    4,835 
TOTAL LIABILITIES   5,802,899    5,320,906    732,182 
                
Commitments and Contingencies               
Equity:               
Common shares   207    207    28 
Treasury stock   (111,520)   (101,788)   (14,006)
Additional paid-in capital   3,196,942    3,206,740    441,262 
Retained earnings   2,692,018    3,469,948    477,481 
Other comprehensive income   69,477    79,214    10,901 
Total X Financial shareholders' equity   5,847,124    6,654,321    915,666 
Non-controlling interests   -    -    - 
TOTAL EQUITY   5,847,124    6,654,321    915,666 
                
TOTAL LIABILITIES AND EQUITY   11,650,023    11,975,227    1,647,848 

 

 

 

X Financial                        
Unaudited Condensed Consolidated Statements of Comprehensive Income
                         
   Three Months Ended June 30,   Six Months Ended June 30, 
(In thousands, except for share and per share data)  2023   2024   2024   2023   2024   2024 
   RMB   RMB   USD   RMB   RMB   USD 
Net revenues                              
Loan facilitation service   715,503    732,249    100,761    1,296,107    1,346,399    185,271 
Post-origination service   140,317    154,669    21,283    261,590    307,411    42,301 
Financing income   274,639    351,012    48,301    528,695    685,640    94,347 
Guarantee income   -    45,564    6,270    -    78,490    10,801 
Other revenue   89,963    89,094    12,260    138,964    162,622    22,378 
Total net revenue   1,220,422    1,372,588    188,875    2,225,356    2,580,562    355,098 
                               
Operating costs and expenses:                              
Origination and servicing1   348,604    415,071    57,116    720,088    841,618    115,811 
Borrower acquisitions and marketing1   332,119    323,636    44,534    604,061    572,010    78,711 
General and administrative1   36,566    39,073    5,377    74,633    77,547    10,671 
Provision for accounts receivable and contract assets   3,175    9,016    1,241    2,235    17,671    2,432 
Provision for loans receivable   55,449    95,865    13,192    75,826    157,405    21,660 
Provision for contingent guarantee liabilities   -    21,376    2,941    -    69,269    9,532 
Change in fair value of financial guarantee derivative2   (667)   -    -    (24,966)   -    - 
Fair value adjustments related to Consolidated Trusts2   247    -    -    800    -    - 
(Reversal of) provision for credit losses for deposits and other financial assets   (200)   5,498    757    (234)   5,448    750 
Total operating costs and expenses   775,293    909,535    125,158    1,452,443    1,740,968    239,567 
                               
Income from operations   445,129    463,053    63,717    772,913    839,594    115,531 
Interest expenses, net   (8,457)   (1,818)   (250)   (10,455)   (6,109)   (841)
Foreign exchange loss   (11,798)   (7,807)   (1,074)   (8,781)   (8,231)   (1,133)
Income from financial investments   12,093    51,276    7,056    2,579    101,522    13,970 
Other income (loss), net   6,932    (657)   (90)   18,263    3,388    466 
                               
Income before income taxes and gain from equity in affiliates   443,899    504,047    69,359    774,519    930,164    127,993 
                               
Income tax expense   (87,043)   (89,568)   (12,325)   (139,607)   (154,593)   (21,273)
Gain from equity in affiliates, net of tax   9,436    824    113    15,725    2,869    395 
Net income   366,292    415,303    57,147    650,637    778,440    107,115 
Less: net income attributable to non-controlling interests   -    -    -    -    -    - 
Net income attributable to X Financial shareholders   366,292    415,303    57,147    650,637    778,440    107,115 
                               
Net income   366,292    415,303    57,147    650,637    778,440    107,115 
Other comprehensive income, net of tax of nil:                              
Gain from equity in affiliates   40    -    -    42    30    4 
Income from financial investments   -    2,294    316    -    4,519    622 
Foreign currency translation adjustments   27,186    3,970    546    19,925    5,188    714 
Comprehensive income   393,518    421,567    58,009    670,604    788,177    108,455 
Less: comprehensive income attributable to non-controlling interests   -    -    -    -    -    - 
Comprehensive income attributable to X Financial shareholders   393,518    421,567    58,009    670,604    788,177    108,455 
                               
Net income per share—basic   1.27    1.41    0.19    2.26    2.65    0.36 
Net income per share—diluted   1.25    1.38    0.19    2.21    2.60    0.36 
                               
Net income per ADS—basic   7.62    8.46    1.16    13.56    15.90    2.19 
Net income per ADS—diluted   7.50    8.28    1.14    13.26    15.60    2.15 
                               
Weighted average number of ordinary shares outstanding—basic   287,607,857    293,914,248    293,914,248    287,955,066    294,224,447    294,224,447 
Weighted average number of ordinary shares outstanding—diluted   293,863,323    300,458,575    300,458,575    294,078,329    299,681,672    299,681,672 

 

 

 

 

1 Starting in the first quarter of 2024, management has concluded to separate expenses related to borrower acquisitions from origination and servicing expenses and indirect expenses of the borrower acquisitions from general and administrative expenses to a single line item as theses expenses become more and more significant and thus deemed to be useful to financial statement users. Furtherly, management has determined to embed the sales and marketing expenses, which is not considered as material, in other line item. In conclusion, management has decided to combine these two line items into one captioned borrower acquisitions and marketing expenses. Management has correspondingly conformed prior period presentation to current period presentation to enhance comparability. This change in presentation does not affect any subtotal line on the face of consolidated statements of comprehensive income.  

 

   Three Months Ended June 30, 2023     
(In thousands, except for share and per share data)  before re-grouping   after re-grouping   Changes 
   RMB   RMB   RMB 
Origination and servicing   669,720    348,604    (321,116)
Borrower acquisitions and marketing expenses   -    332,119    332,119 
Sales and marketing   3,431    -    (3,431)
General and administrative   44,138    36,566    (7,572)

 

2 Starting in the first quarter of 2024, management has considered the facts that fair value change related to financial guarantee services and Consolidated Trusts are generated from ordinary course of businesses, and has concluded to reclass the amount to captions above total operating costs and expenses. Prior to the reclassification, management classified all amount of fair value changes to captions below total operating costs and expenses. This reclassification does not have impact on net income for any prior periods presented.  

 

 

 

X Financial                        
Unaudited Reconciliations of GAAP and Non-GAAP Results                    
                         
   Three Months Ended June 30,   Six Months Ended June 30, 
(In thousands, except for share and per share data)  2023   2024   2024   2023   2024   2024 
   RMB   RMB   USD   RMB   RMB   USD 
GAAP net income   366,292    415,303    57,147    650,637    778,440    107,115 
Less: Income (loss) from financial investments (net of tax of nil)   12,093    51,276    7,056    2,579    101,522    13,970 
Less: Impairment losses on financial investments (net of tax of nil)   -    -    -    -    -    - 
Less: Impairment losses on long-term investments (net of tax)   -    -    -    -    -    - 
Add: Share-based compensation expenses (net of tax of nil)   10,686    10,634    1,463    23,351    19,946    2,745 
Non-GAAP adjusted net income   364,885    374,661    51,554    671,409    696,864    95,890 
                               
Non-GAAP adjusted net income per share—basic   1.27    1.27    0.17    2.33    2.37    0.33 
Non-GAAP adjusted net income per share—diluted   1.24    1.25    0.17    2.28    2.33    0.32 
                               
Non-GAAP adjusted net income per ADS—basic   7.62    7.62    1.05    13.98    14.22    1.96 
Non-GAAP adjusted net income per ADS—diluted   7.44    7.50    1.03    13.68    13.98    1.92 
                               
Weighted average number of ordinary shares outstanding—basic   287,607,857    293,914,248    293,914,248    287,955,066    294,224,447    294,224,447 
Weighted average number of ordinary shares outstanding—diluted   293,863,323    300,458,575    300,458,575    294,078,329    299,681,672    299,681,672