DigiTech, Inc. (NASDAQ: QFIN; HKEX: 3660) (“360 DigiTech” or the
“Company”), a leading Credit-Tech platform in China, today
announced its unaudited financial results for the fourth quarter
and full year ended December 31, 2022, and declared quarterly
dividend.
Fourth Quarter 2022 Business
Highlights
- As of December 31, 2022, our
platform has connected 143 financial institutional partners and
208.7 million consumers*1 with potential credit needs,
cumulatively, an increase of 10.9% from 188.2 million a year
ago.
- Cumulative users with approved
credit lines*2 were 44.5 million as of December 31, 2022, an
increase of 15.6% from 38.5 million as of December 31, 2021.
- Cumulative borrowers with
successful drawdown, including repeat borrowers was 27.0 million as
of December 31, 2022, an increase of 11.1% from 24.3 million as of
December 31, 2021.
- In the fourth quarter of 2022,
financial institutional partners originated 14,345,808 loans*3
through our platform. Total facilitation and origination loan
volume reached RMB104,572 million*4, an increase of 7.9% from
RMB96,910 million in the same period of 2021.
- Out of those loans originated by
financial institutions, RMB58,438 million was under capital-light
model, Intelligence Credit Engine (“ICE”) and other technology
solutions*5, representing 55.9% of the total, an increase of 12.7%
from RMB51,866 million in the same period of 2021.
- Total outstanding loan balance*6
was RMB163,465 million as of December 31, 2022, an increase of
15.1% from RMB141,987 million as of December 31, 2021.
- RMB96,558 million of such loan
balance was under capital-light model, “ICE” and other technology
solutions*7, an increase of 25.0% from RMB77,268 million as of
December 31, 2021.
- Financial institutions granted
approximately RMB0.8 billion credit lines to small and micro-sized
enterprises and their owners (collectively, SMEs)*8 through our
platform in the fourth quarter of 2022.
- The weighted average contractual
tenor of loans originated by financial institutions across our
platform in the fourth quarter of 2022 was approximately 11.38
months, compared with 10.33 months in the same period of 2021.
- 90 day+ delinquency rate*9 of loans
originated by financial institutions across our platform was 2.03%
as of December 31, 2022.
- Repeat borrower contribution*10 of
loans originated by financial institutions across our platform for
the fourth quarter of 2022 was 90.3%.
1 Refers to cumulative registered users across
our platform.2 “Users with approved credit lines” refers to the
total number of users who had submitted their credit applications
and were approved with a credit line at the end of each period.3
Including 5,012,906 loans across “V-pocket”, and 9,332,902 loans
across other products.4 Refers to the total principal amount of
loans facilitated and originated during the given period, including
loan volume facilitated through Intelligence Credit Engine (“ICE”)
and other technology solutions. 5 “ICE” is an open platform on our
“360 Jietiao” APP, we match borrowers and financial institutions
through big data and cloud computing technology on “ICE”, and
provide pre-loan investigation report of borrowers. For loans
facilitated through “ICE”, the Company does not bear principal
risk. Loan facilitation volume through “ICE” was RMB4,174 million
in the fourth quarter of 2022.Under other technology solutions, we
offer financial institutions on-premise deployed, modular risk
management SaaS, which helps financial institution partners improve
credit assessment results. Loan facilitation volume through other
technology solutions was RMB21,563 million in the fourth quarter of
2022.6 “Total outstanding loan balance” refers to the total amount
of principal outstanding for loans facilitated and originated at
the end of each period, including loan balance for “ICE” and other
technology solutions, excluding loans delinquent for more than 180
days.7 Outstanding loan balance for “ICE” and other technology
solutions were RMB7,294 million and RMB31,126 million,
respectively, as of December 31, 2022.8 SME loans are loans issued
to SMEs with e-commerce operations, with business sales receipt,
and/or with business taxation record.9 “90 day+ delinquency rate”
refers to the outstanding principal balance of on- and off-balance
sheet loans that were 91 to 180 calendar days past due as a
percentage of the total outstanding principal balance of on- and
off-balance sheet loans across our platform as of a specific date.
Loans that are charged-off and loans under “ICE” and other
technology solutions are not included in the delinquency rate
calculation.10 “Repeat borrower contribution” for a given period
refers to (i) the principal amount of loans borrowed during that
period by borrowers who had historically made at least one
successful drawdown, divided by (ii) the total loan facilitation
and origination volume through our platform during that period.
Fourth Quarter 2022 Financial
Highlights
- Total net revenue was RMB3,906.6
million (US$566.4 million), compared to RMB4,422.1 million in the
same period of 2021.
- Income from operations was RMB943.9
million (US$136.9 million), compared to RMB1,481.6 million in the
same period of 2021.
- Non-GAAP*11 income from operations
was RMB995.2 million (US$144.3 million), compared to RMB1,539.1
million in the same period of 2021.
- Operating margin was 24.2%.
Non-GAAP operating margin was 25.5%.
- Net income was RMB867.9 million
(US$125.8 million), compared to RMB1,305.3 million in the same
period of 2021.
- Non-GAAP net income was RMB919.3
million (US$133.3 million), compared to RMB1,362.9 million in the
same period of 2021.
- Net income attributed to the
Company was RMB872.0 million (US$126.4 million), compared to
RMB1,322.6 million in the same period of 2021.
- Net income margin was 22.2%.
Non-GAAP net income margin was 23.5%.
Full Year 2022 Operational
Highlights
- Total loan facilitation and
origination volume in 2022 was RMB412,361 million, representing an
increase of 15.5% from RMB357,103 million in 2021. Loan
facilitation volume under Platform Services was RMB231,131 million,
an increase of 19.0% from RMB194,225 million in 2021.
- The weighted average contractual
tenor of loans facilitated and originated was 11.69 months in full
year 2022, compared with 10.62 months in 2021.
- Repeat borrower contribution was
88.7% in full year 2022, compared with 88.1% in 2021.
Full Year 2022 Financial
Highlights
- Total net revenue was RMB16,553.9
million (US$2,400.1 million), compared to RMB16,635.6 million in
2021.
- Income from operations was
RMB4,472.2 million (US$648.4 million), compared to RMB6,786.2
million in 2021.
- Non-GAAP income from operations was
RMB4,671.9 million (US$677.4 million), compared to RMB7,040.1
million in 2021.
- Operating margin was 27.0%.
Non-GAAP operating margin was 28.2%.
- Net income was RMB4,005.6 million
(US$580.8 million), compared to RMB5,764.5 million in 2021.
- Net income margin was 24.2%.
Non-GAAP net income margin was 25.4%.
- Non-GAAP net income was RMB4,205.3
million (US$609.7 million), compared to RMB6,018.4 million in
2021.
- Net income attributed to the
Company was RMB4,024.2 million (US$583.5 million), compared to
RMB5,781.7 million in 2021.
11 Non-GAAP income from operations (Adjusted
Income from operations), Non-GAAP net income (Adjusted net income),
Non-GAAP operating margin and Non-GAAP net income margin are
non-GAAP financial measures. For more information on these non-GAAP
financial measures, 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.
Mr. Haisheng Wu, Chief Executive Officer and
Director of 360 DigiTech, commented, “We have experienced one of
the most volatile periods of time in our corporate history in terms
of macro uncertainties during this quarter as surges of COVID-19
cases added significant challenges on our operations. Yet we
managed to deliver another solid quarter and achieved our full year
operational and financial targets. For the year, the total loan
facilitation and origination volume was RMB412.4 billion, up
approximately 15.5% year-on-year. Over 56% of the volume was
facilitated under the capital-light model, ICE and other technology
solutions*12. The strong contribution from non-credit risk bearing
services helped us mitigate some risks in a very challenging
environment. In 2022, we significantly optimized our user base
aiming for lower overall credit risks and higher user retention.
Such process allowed us to continue improving risk metrics in an
otherwise difficult macro environment. With the optimization, we
were able to offer better priced products to satisfy users’ demand
and regulatory requirements. Furthermore, we continued to expand
our partnership with larger financial institutions throughout 2022.
With ample liquidity in the financial system, we meaningfully
lowered overall funding costs in 2022.
On the regulatory front, we have substantially
completed rectification measures to our operations in 2022 and the
regulators’ focus was shifted toward regular supervision from
rectification. With the social and economic reopening post
COVID-19, we note policy makers’ recent comments regarding a
recovery driven by consumption, which is expected to provide extra
support to the consumer credit market. We are also pleased to see
continued supportive statements for platform economy and private
enterprises by various government officials. In 2023, we expect to
re-focus ourselves on business expansion and technology
innovation.”“We are pleased to report another quarter of solid
financial results in a difficult macro environment. Total revenue
was RMB3.91 billion and non-GAAP net income was RMB919 million for
the fourth quarter, which brought full year non-GAAP net income to
RMB4.21 billion,” Mr. Alex Xu, Chief Financial Officer, commented.
“During the fourth quarter and throughout 2022, economic activities
were significantly impacted by COVID-19 outbreaks and restrictions.
Under such macro backdrop, we continued to take a prudent approach
to manage our business growth and risks. At the end of 2022, our
total cash and cash equivalent*13 was approximately RMB10.9
billion, and we generated approximately RMB1.8 billion cash from
operations. As our strong financial positions further strengthen
our capability to navigate through difficult times, we also look
forward to deploying our resources to drive additional growth in an
economic recovery.”Mr. Yan Zheng, Chief Risk Officer, added, “We
meaningfully lowered our risk exposure by optimizing our user base
to focus on relatively higher quality groups and by driving
Platform Services in 2022. Among key leading indicators, Day-1
delinquency*14 further improved to 4.3% in the fourth quarter, and
moves even lower in current quarter. While 30-day collection
rates*15 showed some volatility at the end of 2022 mainly due to a
temporary surge of COVID-19 cases in December, such metrics were
quickly back on an improving trend in the new year of 2023. As the
economic conditions improve, we will continue to strive to lower
our risk exposure and seek additional growth opportunities.”
12 We’ve mainly used data technology tools and
AI credit assessment systems in the process of providing such
services as loan facilitation, post-facilitation and borrowers’
referral to our customers. Revenues from these technology powered
services accounted for 38% of our total net revenue for the fourth
quarter 2022. 13 Including “Cash and cash equivalents”, “Restricted
cash”, and “Security deposit prepaid to third-party guarantee
companies”.14 “Day-1 delinquency rate” is defined as (i) the total
amount of principal that became overdue as of a specified date,
divided by (ii) the total amount of principal that was due for
repayment as of such specified date.15 “30 day collection rate” is
defined as (i) the amount of principal that was repaid in one month
among the total amount of principal that became overdue as of a
specified date, divided by (ii) the total amount of principal that
became overdue as of such specified date.
Fourth Quarter 2022 Financial
Results
Total net revenue was
RMB3,906.6 million (US$566.4 million), compared to RMB4,422.1
million in the same period of 2021, and RMB4,144.1 million in the
prior quarter.
Net revenue from Credit Driven
Services was RMB2,776.7 million (US$402.6 million),
compared to RMB2,713.2 million in the same period of 2021, and
RMB2,941.1 million in the prior quarter.
Loan facilitation and servicing fees-capital
heavy were RMB361.8 million (US$52.5 million), compared to RMB479.9
million in the same period of 2021 and RMB582.9 million in the
prior quarter. The year-over-year decrease was primarily due to a
decline in capital-heavy loan facilitation volume and a decline in
average IRR. The sequential decrease was primarily due to the
decline in capital-heavy loan facilitation volume and the shorter
average tenor of the loans and in part due to an adjustment related
to early repayment.
Financing income*16 was RMB1,002.1 million
(US$145.3 million), compared to RMB716.1 million in the same period
of 2021 and RMB877.1 million in the prior quarter. The
year-over-year and sequential increases were primarily due to the
growth in average outstanding balance of the on-balance-sheet
loans.
Revenue from releasing of guarantee liabilities
was RMB1,377.0 million (US$199.7 million), compared to RMB1,494.7
million in the same period of 2021, and RMB1,447.6 million in the
prior quarter. The year-over-year and sequential decreases were
mainly due to decreases in average outstanding balance of
off-balance-sheet capital-heavy loans during the period.
Other services fees were RMB35.8 million (US$5.2
million), compared to RMB22.5 million in the same period of 2021,
and RMB33.6 million in the prior quarter. The year-over-year and
sequential increases reflected the increases in late payment fees
under the capital-heavy model.
Net revenue from Platform
Services was RMB1,129.8 million (US$163.8 million),
compared to RMB1,708.9 million in the same period of 2021 and
RMB1,203.0 million in the prior quarter.
Loan facilitation and servicing fees-capital
light were RMB955.6 million (US$138.5 million), compared to
RMB1,485.3 million in the same period of 2021 and RMB1,040.2
million in the prior quarter. The year-over-year decline was
primarily due to a decrease in capital-light loan facilitation
volume as well as a decline in average IRR of the loans. The
sequential decline was mainly due to a decrease in the
capital-light loan facilitation volume.
Referral services fees were RMB93.3 million
(US$13.5 million), compared to RMB177.4 million in the same period
of 2021 and RMB85.4 million in the prior quarter. The
year-over-year decrease was mainly due to the decrease in the loan
facilitation volume through ICE, as well as a decline in average
IRR. The sequential increase was mainly due to the increase in the
loan facilitation volume through ICE.
Other services fees were RMB80.9 million
(US$11.7 million), compared to RMB46.2 million in the same period
of 2021 and RMB77.4 million in the prior quarter. The
year-over-year increase was mainly due to an increase in late
payment fees and the growth in other technology solutions.
Total operating costs and
expenses were RMB2,962.7 million (US$429.5 million),
compared to RMB2,940.5 million in the same period of 2021 and
RMB2,985.9 million in the prior quarter.
Facilitation, origination and servicing expenses
were RMB585.6 million (US$84.9 million), compared to RMB589.2
million in the same period of 2021 and RMB617.3 million in the
prior quarter. The year-over-year and sequential decreases were in
part due to lower credit search fees.
Funding costs were RMB138.3 million (US$20.1
million), compared to RMB91.4 million in the same period of 2021
and RMB138.5 million in the prior quarter. The year-over-year
increase was mainly due to the growth in funding from ABS and
trusts.
Sales and marketing expenses were RMB415.2
million (US$60.2 million), compared to RMB628.2 million in the same
period of 2021 and RMB624.1 million in the prior quarter. The
year-over-year and sequential decreases were mainly due to a more
prudent customer acquisition strategy adopted during the fourth
quarter.
General and administrative expenses were RMB93.9
million (US$13.6 million), compared to RMB140.5 million in the same
period of 2021 and RMB102.7 million in the prior quarter. The
year-over-year and sequential declines were mainly due to lower
professional service fees and our continued effort to improve
operational efficiency.
Provision for loans receivable was RMB481.4
million (US$69.8 million), compared to RMB223.1 million in the same
period of 2021 and RMB191.5 million in the prior quarter. The
year-over-year and sequential increases were mainly due to the
growth in loan origination volume of on-balance-sheet loans.
Provision for financial assets receivable was
RMB118.6 million (US$17.2 million), compared to RMB70.3 million in
the same period of 2021 and RMB115.1 million in the prior quarter.
The year-over-year and sequential changes reflected the Company’s
consistent approach in assessing provisions commensurate with its
underlying loan profile.
Provision for accounts receivable and contract
assets was RMB67.3 million (US$9.8 million), compared to RMB38.4
million in the same period of 2021 and RMB53.8 million in the prior
quarter. The year-over-year and sequential changes reflected the
Company’s consistent approach in assessing provisions commensurate
with its underlying loan profile.
Provision for contingent liability was
RMB1,062.3 million (US$154.0 million), compared to RMB1,159.3
million in the same period of 2021 and RMB1,142.8 million in the
prior quarter. The year-over-year and sequential decreases were
primarily due to a decrease in loan facilitation volume under the
capital-heavy model.
Income from operations was
RMB943.9 million (US$136.9 million), compared to RMB1,481.6 million
in the same period of 2021 and RMB1,158.3 million in the prior
quarter.
Non-GAAP income from operations
was RMB995.2 million (US$144.3 million), compared to RMB1,539.1
million in the same period of 2021 and RMB1,207.8 million in the
prior quarter.
Operating margin was 24.2%.
Non-GAAP operating margin was 25.5%.
Income before income tax
expense was RMB1,024.8 million (US$148.6 million),
compared to RMB1,541.5 million in the same period of 2021 and
RMB1,171.5 million in the prior quarter.
Net income was RMB867.9 million
(US$125.8 million), compared to RMB1,305.3 million in the same
period of 2021 and RMB988.4 million in the prior quarter.
Non-GAAP net income was
RMB919.3 million (US$133.3 million), compared to RMB1,362.9 million
in the same period of 2021 and RMB1,037.9 million in the prior
quarter.
Net income margin was 22.2%.
Non-GAAP net income margin was 23.5%.
Net income attributed to the
Company was RMB872.0 million (US$126.4 million), compared
to RMB1,322.6 million in the same period of 2021 and RMB992.8
million in the prior quarter.
Non-GAAP net income
attributed to the Company was RMB923.4 million
(US$133.9 million), compared to RMB1,380.1 million in the same
period of 2021 and RMB1,042.4 million in the prior quarter.
Net income per fully diluted
ADS was RMB5.38 (US$0.78).
Non-GAAP net income per fully diluted
ADS was RMB5.70 (US$0.83).
Weighted average basic ADS used in
calculating GAAP and non-GAAP net income per ADS was
157.82 million.
Weighted average diluted ADS used in
calculating GAAP and non-GAAP net income per ADS was
162.02 million.
16 “Financing income” is generated from loans
facilitated through the Company’s platform funded by the
consolidated trusts and Fuzhou Microcredit, which charge fees and
interests from borrowers.
Full Year 2022 Financial
Results
Total net revenue was
RMB16,553.9 million (US$2,400.1 million), compared to RMB16,635.6
million in 2021.
Net revenue from Credit Driven
Services was RMB11,586.3 million (US$1,679.8 million),
compared to RMB10,189.2 million in 2021.
Loan facilitation and servicing fees-capital
heavy were RMB2,086.4 million (US$302.5 million), compared to
RMB2,326.0 million in 2021. The year-over-year decrease was
primarily due to a lower take rate as a result of a decline in
average IRR of the loans.
Financing income was RMB3,488.0 million
(US$505.7 million), compared to RMB2,184.1 million in 2021. The
year-over-year increase was primarily due to the growth in average
outstanding on-balance-sheet loan balance.
Revenue from releasing of guarantee liabilities
was RMB5,899.2 million (US$855.3 million), compared to RMB5,583.1
million in 2021. The year-over-year change mainly reflected the
change in average outstanding balance of off-balance-sheet
capital-heavy loans during the period.
Other services fees were RMB112.7 million
(US$16.3 million), compared to RMB95.9 million in 2021. The
year-over-year increase reflected an increase in late payment fees
under the capital-heavy model.
Net revenue from Platform
Services was RMB4,967.7 million (US$720.2 million),
compared to RMB6,446.5 million in 2021.
Loan facilitation and servicing fees-capital
light were RMB4,124.7 million (US$598.0 million), compared to
RMB5,677.9 million in 2021. The year-over-year decrease was
primarily due to a decline in loan facilitation volume under the
capital-light model as well as a decline in average IRR of the
loans.
Referral services fees were RMB561.4 million
(US$81.4 million), compared to RMB620.3 million in 2021. The
year-over-year decline was primarily due to the decline in traffic
from the referral services.
Other services fees were RMB281.6 million
(US$40.8 million), compared to RMB148.2 million in 2021. The
year-over-year increase was mainly due to the growth in late
payment fees and contributions from other technology solutions.
Total operating costs and
expenses were RMB12,081.7 million (US$1,751.7 million),
compared to RMB9,849.4 million in 2021.
Facilitation, origination and servicing expenses
were RMB2,373.5 million (US$344.1 million), compared to RMB2,252.2
million in 2021. The year-over-year increase was primarily due to
an increase in collection fees and payment transaction costs.
Funding costs were RMB504.4 million (US$73.1
million), compared to RMB337.4 million in 2021. The year-over-year
increase was mainly due to the growth in funding from ABS and
trusts.
Sales and marketing expenses were RMB2,206.9
million (US$320.0 million), compared to RMB2,090.4 million in 2021.
The year-over-year increase was mainly due to a higher average
traffic cost throughout the challenging macro environment during
2022.
General and administrative expenses were
RMB412.8 million (US$59.9 million), compared to RMB557.3 million in
2021. The year-over-year decline was mainly due to lower
professional service fees and our continued effort to improve
operational efficiency.
Provision for loans receivable was RMB1,580.3
million (US$229.1 million), compared to RMB965.4 million in 2021.
The year-over-year increase was mainly due to the growth in
outstanding on-balance sheet loans.
Provision for financial assets receivable was
RMB398.0 million (US$57.7 million), compared to RMB243.9 million in
2021. The year-over-year change reflected the Company’s consistent
approach in assessing provisions commensurate with its underlying
loan profile.
Provision for accounts receivable and contract
assets was RMB238.1 million (US$34.5 million), compared to RMB324.6
million in 2021. The year-over-year decrease was mainly due to the
decrease in loan facilitation volume under the capital-light
model.
Provision for contingent liability was
RMB4,367.8 million (US$633.3 million), compared to RMB3,078.2
million in 2021. The year-over-year increase reflected challenging
macro environment factors which are consistently applied in the
estimation of default rate made as of December 31, 2022 for those
vintages of loans in prior periods and at the inception of such
loans.
Income from operations was
RMB4,472.2 million (US$648.4 million), compared to RMB6,786.2
million in 2021.
Non-GAAP income from operations
was RMB4,671.9 million (US$677.4 million), compared to RMB7,040.1
million in 2021.
Operating margin was 27.0%.
Non-GAAP operating margin was 28.2%.
Income before income tax
expense was RMB4,742.4 million (US$687.6 million),
compared to RMB7,022.7 million in 2021.
Income taxes expense was
RMB736.8 million (US$106.8 million). Effective tax rate was 14.9%,
compared to 17.3% in 2021.
Net income attributed to the
Company was RMB4,024.2 million (US$583.5 million),
compared to RMB5,781.7 million in 2021.
Non-GAAP net income
attributed to the Company was RMB4,223.9 million
(US$612.4 million), compared to RMB6,035.6 million in 2021.
Net income margin was 24.2%.
Non-GAAP net income margin was 25.4%.
Net income per fully diluted
ADS was RMB25.00 (US$3.62).
Non-GAAP net income per fully diluted
ADS was RMB26.23 (US$3.80).
Weighted average basic ADS used in
calculating GAAP and non-GAAP net income per ADS was
156.29 million.
Weighted average diluted ADS used in
calculating GAAP and non-GAAP net income per ADS was
161.01 million.
30 Day+ Delinquency Rate by Vintage and
180 Day+ Delinquency Rate by Vintage
The following charts and tables display the
historical cumulative 30 day+ delinquency rates by loan
facilitation and origination vintage and 180 day+ delinquency rates
by loan facilitation and origination vintage for all loans
facilitated and originated through the Company’s platform. Loans
under “ICE” and other technology solutions are not included in the
30 day+ charts and the 180 day+ charts:
http://ml.globenewswire.com/Resource/Download/7cb9d7c8-0cc6-45ac-90de-d1c29317c7db
http://ml.globenewswire.com/Resource/Download/5d79a2a8-8235-4b6f-9162-95faf2d6c2d2
Quarterly Dividend
The board of directors of the Company has
approved a dividend of US$0.08 per ordinary share, or US$0.16 per
ADS for the fourth fiscal quarter of 2022 to holders of record of
ordinary shares and ADSs as of the close of business on April 11,
2023 Hong Kong Time and New York Time, respectively, in accordance
with the Company’s dividend policy. For holder of Class A ordinary
shares, in order to qualify for the dividend, all valid documents
for the transfers of shares accompanied by the relevant share
certificates must be lodged for registration with the Company’s
Hong Kong branch share registrar, Computershare Hong Kong Investor
Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre,
183 Queen’s Road East, Hong Kong no later than 4:30 p.m. on April
11, 2023 (Hong Kong Time). The payment date is expected to be on
May 16, 2023 for holders of Class A ordinary shares and around May
19, 2023 for holders of ADSs.
Business Outlook
While the macro economy started to show
encouraging signs of recovery, the Company intends to continue to
take a prudent approach in its business planning. As such, the
Company expects loan facilitation and origination volume for 2023
to be between RMB455.0 billion and RMB495.0 billion, representing
year-on-year growth of 10% to 20%. This outlook reflects the
Company’s current and preliminary views, which is subject to
material changes.
Conference Call
Preregistration
360 DigiTech’s management team will host an
earnings conference call at 7:30 PM U.S. Eastern Time on Thursday,
March 9, 2023 (8:30 AM Beijing Time on Friday, March 10).
All participants wishing to join the conference
call must pre-register online using the link provided below.
Registration Link:
https://register.vevent.com/register/BI32e08695cf1644be8bb26556122263f7
Upon registration, each participant will receive
details for the conference call, including dial-in numbers and a
unique access PIN. Please dial in 10 minutes before the call is
scheduled to begin.
Additionally, a live and archived webcast of the
conference call will be available on the Investor Relations section
of the Company's website at ir.360shuke.com.
About 360 DigiTech
360 DigiTech is a Credit-Tech platform in China
that provides a comprehensive suite of technology services to
assist financial institutions and consumers and SMEs in the loan
lifecycle, ranging from borrower acquisition, preliminary credit
assessment, fund matching and post-facilitation services. The
Company is dedicated to making credit services more accessible and
personalized to consumers and SMEs through Credit-Tech services to
financial institutions.
For more information, please
visit: ir.360shuke.com
Use of Non-GAAP Financial Measures
Statement
To supplement our financial results presented in
accordance with U.S. GAAP, we use non-GAAP financial measure, which
is adjusted from results based on U.S. GAAP to exclude share-based
compensation expenses. Reconciliations of our non-GAAP financial
measures to our U.S. GAAP financial measures are set forth in
tables at the end of this earnings release, which provide more
details on the non-GAAP financial measures.
We use non-GAAP income from operation, non-GAAP
operation margin, non-GAAP net income, non-GAAP net income margin,
Non-GAAP net income attributed to the Company and Non-GAAP net
income per fully diluted ADS in evaluating our operating results
and for financial and operational decision-making purposes.
Non-GAAP income from operation represents income from operation
excluding share-based compensation expenses, non-GAAP net income
represents net income excluding share-based compensation expenses,
non-GAAP net income attributed to the Company represents net income
attributed to the Company excluding share-based compensation
expenses and non-GAAP net income per fully diluted ADS represents
net income per fully diluted ADS excluding share-based compensation
expenses. Such adjustments have no impact on income tax. We believe
that non-GAAP income from operation and non-GAAP net income help
identify underlying trends in our business that could otherwise be
distorted by the effect of certain expenses that we include in
results based on U.S. GAAP. We believe that non-GAAP income from
operation and non-GAAP net income provide useful information about
our 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. Our non-GAAP
financial information should be considered in addition to results
prepared in accordance with U.S. GAAP, but should not be considered
a substitute for or superior to U.S. GAAP results. In addition, our
calculation of non-GAAP financial information may be different from
the calculation used by other companies, and therefore
comparability may be limited.
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
RMB6.8972 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 December 30, 2022.
Safe Harbor Statement
Any forward-looking statements contained in this
announcement are made under the “safe harbor” provisions of the
U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by terminology such as
“will,” “expects,” “anticipates,” “future,” “intends,” “plans,”
“believes,” “estimates” and similar statements. Among other things,
the business outlook and quotations from management in this
announcement, as well as the Company’s strategic and operational
plans, contain forward-looking statements. 360 DigiTech may also
make written or oral forward-looking statements in its periodic
reports to the U.S. Securities and Exchange Commission (“SEC”), in
announcements made on the website of The Stock Exchange of Hong
Kong Limited (the “Hong Kong Stock Exchange”), 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. Statements that are not historical facts, including
the Company’s business outlook, beliefs and expectations, are
forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, which factors include but not limited to
the following: the Company’s growth strategies, the Company’s
cooperation with 360 Group, changes in laws, rules and regulatory
environments, the recognition of the Company’s brand, market
acceptance of the Company’s products and services, trends and
developments in the credit-tech industry, governmental policies
relating to the credit-tech industry, general economic conditions
in China and around the globe, and assumptions underlying or
related to any of the foregoing. Further information regarding
these and other risks and uncertainties is included in 360
DigiTech’s filings with the SEC and announcements on the website of
the Hong Kong Stock Exchange. All information provided in this
press release is as of the date of this press release, and 360
DigiTech does not undertake any obligation to update any
forward-looking statement, except as required under applicable
law.
For more information, please
contact:
360 DigiTech E-mail: ir@360shuke.com
Christensen
In ChinaMr. Eric YuanPhone:
+86-138-0111-0739E-mail: eric.yuan@christensencomms.com
In US Ms. Linda BergkampPhone:
+1-480-614-3004Email: linda.bergkamp@christensencomms.com
Unaudited Condensed Consolidated Balance
Sheets(Amounts in thousands of Renminbi (“RMB”) and U.S.
dollars (“USD”)except for number of shares and per share data, or
otherwise noted) |
|
|
|
|
|
|
|
|
|
December 31, |
December 31, |
December 31, |
|
2021 |
2022 |
2022 |
|
RMB |
RMB |
USD |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
6,116,360 |
7,165,584 |
1,038,912 |
Restricted cash |
2,643,587 |
3,346,779 |
485,237 |
Short term investments |
- |
57,000 |
8,264 |
Security deposit prepaid to third-party guarantee companies |
874,886 |
396,699 |
57,516 |
Funds receivable from third party payment service providers |
153,151 |
1,158,781 |
168,007 |
Accounts receivable and contract assets, net |
3,097,254 |
2,868,625 |
415,912 |
Financial assets receivable, net |
3,806,243 |
2,982,076 |
432,360 |
Amounts due from related parties |
837,324 |
394,872 |
57,251 |
Loans receivable, net |
9,844,481 |
15,347,662 |
2,225,202 |
Prepaid expenses and other assets |
383,937 |
379,388 |
55,006 |
Total current assets |
27,757,223 |
34,097,466 |
4,943,667 |
Non-current assets: |
|
|
|
Accounts receivable and contract assets, net-non current |
223,474 |
261,319 |
37,888 |
Financial assets receivable, net-non current |
597,965 |
688,843 |
99,873 |
Amounts due from related parties |
140,851 |
33,236 |
4,819 |
Loans receivable, net-non current |
2,859,349 |
3,136,994 |
454,821 |
Property and equipment, net |
24,941 |
47,602 |
6,902 |
Land use rights,net |
1,018,908 |
998,185 |
144,723 |
Intangible assets |
4,961 |
4,696 |
681 |
Deferred tax assets |
834,717 |
1,019,171 |
147,766 |
Other non-current assets |
42,606 |
55,658 |
8,070 |
Total non-current assets |
5,747,772 |
6,245,704 |
905,543 |
TOTAL ASSETS |
33,504,995 |
40,343,170 |
5,849,210 |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Payable to investors of the consolidated trusts-current |
2,304,518 |
6,099,520 |
884,347 |
Accrued expenses and other current liabilities |
2,258,329 |
2,004,551 |
290,633 |
Amounts due to related parties |
214,057 |
113,697 |
16,485 |
Short term loans |
397,576 |
150,000 |
21,748 |
Guarantee liabilities-stand ready |
4,818,144 |
4,120,346 |
597,394 |
Guarantee liabilities-contingent |
3,285,081 |
3,418,391 |
495,620 |
Income tax payable |
624,112 |
661,015 |
95,838 |
Other tax payable |
241,369 |
182,398 |
26,445 |
Total current liabilities |
14,143,186 |
16,749,918 |
2,428,510 |
Non-current liabilities: |
|
|
|
Deferred tax liabilities |
121,426 |
100,835 |
14,620 |
Payable to investors of the consolidated trusts-noncurrent |
4,010,597 |
4,521,600 |
655,570 |
Other long-term liabilities |
13,177 |
39,520 |
5,730 |
Total non-current liabilities |
4,145,200 |
4,661,955 |
675,920 |
TOTAL LIABILITIES |
18,288,386 |
21,411,873 |
3,104,430 |
TOTAL 360 DIGITECH INC EQUITY |
15,203,863 |
18,847,156 |
2,732,581 |
Noncontroling interests |
12,746 |
84,141 |
12,199 |
TOTAL EQUITY |
15,216,609 |
18,931,297 |
2,744,780 |
TOTAL LIABILITIES AND EQUITY |
33,504,995 |
40,343,170 |
5,849,210 |
|
|
|
|
Unaudited Condensed Consolidated Statements of
Operations(Amounts in thousands of Renminbi (“RMB”) and
U.S. dollars (“USD”)except for number of shares and per share data,
or otherwise noted) |
|
|
|
|
|
|
|
|
|
Three months ended December 31, |
|
Year ended December 31, |
|
2021 |
2022 |
2022 |
|
2021 |
2022 |
2022 |
|
RMB |
RMB |
USD |
|
RMB |
RMB |
USD |
Credit driven services |
2,713,161 |
|
2,776,748 |
|
402,591 |
|
|
10,189,167 |
|
11,586,251 |
|
1,679,849 |
|
Loan facilitation and servicing fees-capital heavy |
479,925 |
|
361,786 |
|
52,454 |
|
|
2,326,027 |
|
2,086,414 |
|
302,502 |
|
Financing income |
716,053 |
|
1,002,080 |
|
145,288 |
|
|
2,184,128 |
|
3,487,951 |
|
505,705 |
|
Revenue from releasing of guarantee liabilities |
1,494,682 |
|
1,377,046 |
|
199,653 |
|
|
5,583,135 |
|
5,899,153 |
|
855,297 |
|
Other services fees |
22,501 |
|
35,836 |
|
5,196 |
|
|
95,877 |
|
112,733 |
|
16,345 |
|
Platform services |
1,708,904 |
|
1,129,807 |
|
163,806 |
|
|
6,446,478 |
|
4,967,679 |
|
720,245 |
|
Loan facilitation and servicing fees-capital light |
1,485,268 |
|
955,561 |
|
138,543 |
|
|
5,677,941 |
|
4,124,726 |
|
598,029 |
|
Referral services fees |
177,428 |
|
93,341 |
|
13,533 |
|
|
620,317 |
|
561,372 |
|
81,391 |
|
Other services fees |
46,208 |
|
80,905 |
|
11,730 |
|
|
148,220 |
|
281,581 |
|
40,825 |
|
Total net revenue |
4,422,065 |
|
3,906,555 |
|
566,397 |
|
|
16,635,645 |
|
16,553,930 |
|
2,400,094 |
|
Facilitation, origination and servicing |
589,230 |
|
585,586 |
|
84,902 |
|
|
2,252,157 |
|
2,373,458 |
|
344,119 |
|
Funding costs |
91,431 |
|
138,343 |
|
20,058 |
|
|
337,426 |
|
504,448 |
|
73,138 |
|
Sales and marketing |
628,164 |
|
415,187 |
|
60,196 |
|
|
2,090,374 |
|
2,206,948 |
|
319,977 |
|
General and administrative |
140,518 |
|
93,925 |
|
13,618 |
|
|
557,295 |
|
412,794 |
|
59,850 |
|
Provision for loans receivable |
223,133 |
|
481,447 |
|
69,803 |
|
|
965,419 |
|
1,580,306 |
|
229,123 |
|
Provision for financial assets receivable |
70,285 |
|
118,590 |
|
17,194 |
|
|
243,946 |
|
397,951 |
|
57,697 |
|
Provision for accounts receivable and contract assets |
38,403 |
|
67,278 |
|
9,754 |
|
|
324,605 |
|
238,065 |
|
34,516 |
|
Provision for contingent liabilities |
1,159,325 |
|
1,062,318 |
|
154,022 |
|
|
3,078,224 |
|
4,367,776 |
|
633,268 |
|
Total operating costs and expenses |
2,940,489 |
|
2,962,674 |
|
429,547 |
|
|
9,849,446 |
|
12,081,746 |
|
1,751,688 |
|
Income from operations |
1,481,576 |
|
943,881 |
|
136,850 |
|
|
6,786,199 |
|
4,472,184 |
|
648,406 |
|
Interest income, net |
16,466 |
|
56,294 |
|
8,162 |
|
|
126,256 |
|
182,301 |
|
26,431 |
|
Foreign exchange gain (loss) |
17,652 |
|
(4,984 |
) |
(723 |
) |
|
35,549 |
|
(160,225 |
) |
(23,230 |
) |
Other income, net |
25,853 |
|
40,515 |
|
5,874 |
|
|
64,590 |
|
268,000 |
|
38,856 |
|
Investment gain (loss) |
- |
|
(10,892 |
) |
(1,579 |
) |
|
10,115 |
|
(19,888 |
) |
(2,883 |
) |
Income before income tax expense |
1,541,547 |
|
1,024,814 |
|
148,584 |
|
|
7,022,709 |
|
4,742,372 |
|
687,580 |
|
Income taxes expense |
(236,240 |
) |
(156,913 |
) |
(22,750 |
) |
|
(1,258,196 |
) |
(736,804 |
) |
(106,827 |
) |
Net income |
1,305,307 |
|
867,901 |
|
125,834 |
|
|
5,764,513 |
|
4,005,568 |
|
580,753 |
|
Net loss attributable to noncontrolling interests |
17,254 |
|
4,100 |
|
594 |
|
|
17,212 |
|
18,605 |
|
2,697 |
|
Net income attributable to ordinary shareholders of the
Company |
1,322,561 |
|
872,001 |
|
126,428 |
|
|
5,781,725 |
|
4,024,173 |
|
583,450 |
|
Net income per ordinary share attributable to ordinary shareholders
of 360 DigiTech, Inc. |
|
Basic |
4.28 |
|
2.76 |
|
0.40 |
|
|
18.82 |
|
12.87 |
|
1.87 |
|
Diluted |
4.11 |
|
2.69 |
|
0.39 |
|
|
17.99 |
|
12.50 |
|
1.81 |
|
|
|
|
|
|
|
|
|
Net income per ADS attributable to ordinary shareholders of 360
DigiTech, Inc. |
Basic |
8.56 |
|
5.52 |
|
0.80 |
|
|
37.64 |
|
25.74 |
|
3.74 |
|
Diluted |
8.22 |
|
5.38 |
|
0.78 |
|
|
35.98 |
|
25.00 |
|
3.62 |
|
|
|
|
|
|
|
|
|
Weighted average shares used in calculating net income per ordinary
share |
|
Basic |
309,132,813 |
|
315,631,310 |
|
315,631,310 |
|
|
307,265,600 |
|
312,589,273 |
|
312,589,273 |
|
Diluted |
321,634,368 |
|
324,039,615 |
|
324,039,615 |
|
|
321,397,753 |
|
322,018,510 |
|
322,018,510 |
|
|
|
|
|
|
|
|
|
Unaudited Condensed Consolidated Statements of Cash
Flows (Amounts in thousands of Renminbi (“RMB”) and U.S.
dollars (“USD”)except for number of shares and per share data, or
otherwise noted) |
|
|
|
|
|
|
|
|
|
Three months ended December 31, |
|
Year ended December 31, |
|
2021 |
2022 |
2022 |
|
2021 |
2022 |
2022 |
|
RMB |
RMB |
USD |
|
RMB |
RMB |
USD |
Net cash provided by operating activities |
2,011,384 |
|
1,792,477 |
|
259,885 |
|
|
5,789,700 |
|
5,922,515 |
|
858,683 |
|
Net cash used in investing activities |
(345,515 |
) |
(1,680,347 |
) |
(243,627 |
) |
|
(6,064,328 |
) |
(7,355,975 |
) |
(1,066,515 |
) |
Net cash provided by financing activities |
456,950 |
|
193,799 |
|
28,098 |
|
|
2,263,720 |
|
3,204,068 |
|
464,548 |
|
Effect of foreign exchange rate changes |
(702 |
) |
(22,896 |
) |
(3,320 |
) |
|
(3,411 |
) |
(18,192 |
) |
(2,640 |
) |
Net increase in cash and cash equivalents |
2,122,117 |
|
283,033 |
|
41,036 |
|
|
1,985,681 |
|
1,752,416 |
|
254,076 |
|
Cash, cash equivalents, and restricted cash, beginning of
year/period |
6,637,830 |
|
10,229,330 |
|
1,483,113 |
|
|
6,774,266 |
|
8,759,947 |
|
1,270,073 |
|
Cash, cash equivalents, and restricted cash, end of
year/period |
8,759,947 |
|
10,512,363 |
|
1,524,149 |
|
|
8,759,947 |
|
10,512,363 |
|
1,524,149 |
|
|
|
|
|
|
|
|
|
Unaudited Condensed Consolidated Statements of
Comprehensive Income(Amounts in thousands of Renminbi
(“RMB”) and U.S. dollars (“USD”)except for number of shares and per
share data, or otherwise noted) |
|
|
|
|
|
Three months ended December 31, |
|
2021 |
2022 |
2022 |
|
RMB |
RMB |
USD |
Net income |
1,305,307 |
|
867,901 |
|
125,834 |
|
Other comprehensive income, net of tax of nil: |
|
|
|
Foreign currency translation adjustment |
(16,314 |
) |
(21,113 |
) |
(3,061 |
) |
Other comprehensive loss |
(16,314 |
) |
(21,113 |
) |
(3,061 |
) |
Total comprehensive income |
1,288,993 |
|
846,788 |
|
122,773 |
|
Comprehensive loss attributable to noncontrolling interests |
17,254 |
|
4,100 |
|
594 |
|
Comprehensive income attributable to ordinary
shareholders |
1,306,247 |
|
850,888 |
|
123,367 |
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
2021 |
2022 |
2022 |
|
RMB |
RMB |
USD |
Net income |
5,764,513 |
|
4,005,568 |
|
580,753 |
|
Other comprehensive income, net of tax of nil: |
|
|
|
Foreign currency translation adjustment |
(36,541 |
) |
59,157 |
|
8,577 |
|
Other comprehensive (loss) income |
(36,541 |
) |
59,157 |
|
8,577 |
|
Total comprehensive income |
5,727,972 |
|
4,064,725 |
|
589,330 |
|
Comprehensive loss attributable to noncontrolling interests |
17,212 |
|
18,605 |
|
2,697 |
|
Comprehensive income attributable to ordinary
shareholders |
5,745,184 |
|
4,083,330 |
|
592,027 |
|
Unaudited Reconciliations of GAAP and Non-GAAP
Results(Amounts in thousands of Renminbi (“RMB”) and U.S.
dollars (“USD”)except for number of shares and per share data, or
otherwise noted) |
|
|
|
|
|
Three months ended December 31, |
|
2021 |
2022 |
2022 |
|
RMB |
RMB |
USD |
Reconciliation of Non-GAAP Net Income to Net
Income |
|
|
|
Net income |
1,305,307 |
|
867,901 |
|
125,834 |
Add: Share-based compensation expenses |
57,551 |
|
51,354 |
|
7,446 |
Non-GAAP net income |
1,362,858 |
|
919,255 |
|
133,280 |
GAAP net income margin |
29.5 |
% |
22.2 |
% |
|
Non-GAAP net income margin |
30.8 |
% |
23.5 |
% |
|
|
|
|
|
Net income attributable to shareholders of 360 DigiTech,
Inc |
1,322,561 |
|
872,001 |
|
126,428 |
Add: Share-based compensation expenses |
57,551 |
|
51,354 |
|
7,446 |
Non-GAAP net income attributable to shareholders of 360
DigiTech, Inc |
1,380,112 |
|
923,355 |
|
133,874 |
Weighted average ADS used in calculating net income per ordinary
share for both GAAP and non-GAAP EPS -diluted |
160,817,184 |
|
162,019,808 |
|
162,019,808 |
Net income per ADS attributable to ordinary shareholders of 360
DigiTech, Inc. -diluted |
8.22 |
|
5.38 |
|
0.78 |
Non-GAAP net income per ADS attributable to ordinary shareholders
of 360 DigiTech, Inc. -diluted |
8.58 |
|
5.70 |
|
0.83 |
|
|
|
|
Reconciliation of Non-GAAP Income from operations to Income
from operations |
|
|
|
Income from operations |
1,481,576 |
|
943,881 |
|
136,850 |
Add: Share-based compensation expenses |
57,551 |
|
51,354 |
|
7,446 |
Non-GAAP Income from operations |
1,539,127 |
|
995,235 |
|
144,296 |
GAAP operating margin |
33.5 |
% |
24.2 |
% |
|
Non-GAAP operating margin |
34.8 |
% |
25.5 |
% |
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
2021 |
2022 |
2022 |
|
RMB |
RMB |
USD |
Reconciliation of Non-GAAP Net Income to Net
Income |
|
|
|
Net income |
5,764,513 |
|
4,005,568 |
|
580,753 |
Add: Share-based compensation expenses |
253,922 |
|
199,737 |
|
28,959 |
Non-GAAP net income |
6,018,435 |
|
4,205,305 |
|
609,712 |
GAAP net income margin |
34.7 |
% |
24.2 |
% |
|
Non-GAAP net income margin |
36.2 |
% |
25.4 |
% |
|
|
|
|
|
Net income attributable to shareholders of 360 DigiTech,
Inc |
5,781,725 |
|
4,024,173 |
|
583,450 |
Add: Share-based compensation expenses |
253,922 |
|
199,737 |
|
28,959 |
Non-GAAP net income attributable to shareholders of 360
DigiTech, Inc |
6,035,647 |
|
4,223,910 |
|
612,409 |
Weighted average ADS used in calculating net income per ordinary
share for both GAAP and non-GAAP EPS -diluted |
160,698,877 |
|
161,009,255 |
|
161,009,255 |
Net income per ADS attributable to ordinary shareholders of 360
DigiTech, Inc. -diluted |
35.98 |
|
25.00 |
|
3.62 |
Non-GAAP net income per ADS attributable to ordinary shareholders
of 360 DigiTech, Inc. -diluted |
37.56 |
|
26.23 |
|
3.80 |
|
|
|
|
Reconciliation of Non-GAAP Income from operations to Income
from operations |
|
|
|
Income from operations |
6,786,199 |
|
4,472,184 |
|
648,406 |
Add: Share-based compensation expenses |
253,922 |
|
199,737 |
|
28,959 |
Non-GAAP Income from operations |
7,040,121 |
|
4,671,921 |
|
677,365 |
GAAP operating margin |
40.8 |
% |
27.0 |
% |
|
Non-GAAP operating margin |
42.3 |
% |
28.2 |
% |
|
Qifu Technology (NASDAQ:QFIN)
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Qifu Technology (NASDAQ:QFIN)
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