SHENZHEN, China, Aug. 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 June 30, 2023
Three Months Ended March 31, 2024
Three Months Ended 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 originated[1] 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 borrowers[2] 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 pastdue for 91-180 days
2.50 %
4.37 %
4.38 %
The total outstanding loan balance[3] 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 days[4] 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 days[5] 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.
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-GAAP[6] 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.
[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.
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."
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.
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 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.
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:
