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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REPORT OF FOREIGN PRIVATE
ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Month of August 2023
Commission File Number: 001-38652
(Exact name of registrant as specified in its charter)
7-8F, Block A, Aerospace Science
and Technology Plaza
No. 168, Haide Third Avenue, Nanshan District
Shenzhen, 518067, the People’s Republic of China
(Address of principal executive offices)
check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F x
Form 40-F ¨
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation ST Rule 101(b)(1): Not Applicable
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation ST Rule 101(b)(7): Not Applicable
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: August 28, 2023
X Financial Reports
Second Quarter 2023 Unaudited Financial Results
China, August 28, 2023 /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, 2023.
2023 Operational Highlights
Represents the total amount of loans that the
Company facilitated and originated during the relevant period.
Represents borrowers who made at least one transaction on the Company’s platform during
the relevant period.
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 charged-off and are excluded in the
outstanding loan balance, except for Xiaoying Housing Loan. As Xiaoying Housing Loan 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 loan delinquent for more than 60
days in the outstanding loan balance.
Represents the balance of the outstanding principal and accrued outstanding interest for loans
that were 31 to 60 days past due as a percentage of the total balance of outstanding principal and accrued outstanding interest for loans
that the Company facilitated and originated as of a specific date. Loans that are delinquent for more than 60 days are charged-off and
excluded in the calculation of delinquency rate by balance. Xiaoying Housing Loan was launched in 2015 and ceased in 2019, and all the
outstanding loan balance of housing loan as of June 30, 2022, March 31, 2023 and June 30, 2023 were overdue more than 60 days. To make
the delinquency rate by balance comparable, the Company excludes Xiaoying Housing Loan in the calculation of delinquency rate.
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 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 loans that the Company
facilitated and originated as of a specific date. Loans that are delinquent for more than 180 days are excluded in the calculation of
delinquency rate by balance, except for Xiaoying Housing Loan. All the outstanding loan balance of housing loan as of June 30, 2022,
March 31, 2023 and June 30, 2023 were overdue more than 180 days. To make the delinquency rate by balance comparable, the Company excludes
Xiaoying Housing Loan in the calculation of delinquency rate.
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2023 Financial Highlights
Tang, the Founder, Chief Executive Officer and Chairman of the Company, commented, “We are
delighted to end the first half of 2023 with outstanding operational and financial performance in the second quarter. We continued to
execute our proven strategy and maintain our growth momentum. In the first half of the year, the total loan facilitation and origination
amount reached nearly RMB50 billion, an impressive increase of over 55% year-over-year. Our top line improved by 30%, while our bottom
line nearly doubled in the first half, underpinned by our proven business model, consistent asset quality and optimized operational efficiency.
Furthermore, our net income per basic ADS for the first half of the year grew more than 130% year-over-year, driven by our robust profitability
and dedication to rewarding shareholders through our share repurchase program.”
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, and (iii) adjusted net income (loss) per diluted ADS, 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.
Each American depositary share (“ADS”) represents six Class A ordinary shares.
2 / 8
the regulatory side, with the recent settlement of fines imposed on some large financial platforms by the government, the market believes
that the industry-wide rectification is expected to come to an end, and a more stable regulatory environment is expected. Financial
regulatory authorities are now shifting their focus towards regular supervision. As a highly responsible company, we always operate in
full compliance with regulations and laws and will continue to prioritize financial consumer protection.”
ahead to the second half of 2023, we are confident in our ability to achieve sustainable growth and enhance shareholder value. The normal
regulatory environment provides a solid foundation for our continued growth and success. We remain committed to executing our share repurchase
and dividend program to reward our valued shareholders.”
Li, President of the Company, added, “During the second quarter, our total loan amount facilitated and originated increased by
53% year-over-year and 7% quarter-over-quarter to RMB26 billion, in line with our expectations, with the total outstanding loan balance
reaching RMB45 billion at the end of June 2023. We continued to strengthen our risk management system to maintain healthy asset
quality, with the delinquency rate for all outstanding loans past due for 31-60 days remaining stable at 0.96% at the end of June 2023,
and the delinquency rate for all outstanding loans past due for 91-180 days at 2.50%, significantly improved from a year ago. We are
proud of our consistently high quality risk control and stable prime borrowers base, which have been well received and recognized by
our institutional funding partners. We will continue to work together to meet the financing needs of consumers and SMEs in support of
China's economic recovery.”
Fuya Zheng, Chief Financial Officer of the Company, added, “We are very pleased with our strong financial results for the second
quarter. Total net revenue increased by 48% year-over-year and 21% quarter-over-quarter to RMB1,220 million. Our relentless focus on
tightening cost control and improving operational efficiency enabled us to deliver revenue growth that outpaced cost and expense growth.
As a result, net income for the second quarter surged by 97% year-over-year and 29% quarter-over-quarter, reaffirming our commitment
to delivering substantial profits. The positive impact of our ongoing share repurchase program further contributed to our achievements,
resulting in a noteworthy improvement in net income per basic ADS, rising by 127% from RMB3.36 in
the same period last year to RMB7.62. To maximize shareholder value, our board of directors has also approved a special dividend of $0.17
per ADS, which is expected to be paid in October this year.”
stabilized regulatory environment, we expect to achieve steady growth in both operational and financial performance in the second half
of the year, further solidifying our position in the market.”
Second Quarter 2023 Financial Results
net revenue in the second quarter of 2023 increased by 48.0% to RMB1,220.4 million (US$168.3
million) from RMB824.3 million in the same period of 2022, primarily due to an increase in the total loan amount facilitated and originated
this quarter compared with the same period of 2022.
facilitation service fees in the second quarter of 2023 increased by 51.7% to RMB715.5 million
(US$98.7 million) from RMB471.5 million in the same period of 2022, primarily due to an increase in the total loan amount facilitated
this quarter compared with the same period of 2022.
3 / 8
service fees in the second quarter of 2023 increased by 70.5% to RMB140.3 million (US$19.4 million)
from RMB82.3 million in the same period of 2022, 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.
income in the second quarter of 2023 increased by 17.0% to RMB274.6 million (US$37.9 million)
from RMB234.8 million in the same period of 2022, primarily due to an increase in average loan balances compared with the same period
revenue in the second quarter of 2023 increased by 151.7% to RMB90.0 million (US$12.4 million),
compared with RMB35.7 million in the same period of 2022, primarily due to an increase in referral service fee for introducing borrowers
to other platforms.
and servicing expenses in the second quarter of 2023 increased by 25.6% to RMB669.7 million
(US$92.4 million) from RMB533.1 million in the same period of 2022, primarily due to the following factors: (i) an increase in commission
fees resulting from the increased in total loan amount facilitated and originated this quarter compared with the same period of 2022
and (ii) an increase in interest expenses as a result of an increase in payable to institutional funding partners and investors.
for loans receivable in the second quarter of 2023 was RMB55.4 million (US$7.6 million), compared
with RMB32.2 million in the same period of 2022, primarily due to an increase in loans receivable held by the Company as a result of
the increase in total loan amount facilitated and originated this quarter compared with the same period of 2022.
from operations in the second quarter of 2023 was
RMB444.7 million (US$61.3 million), compared with RMB193.8 million in the same period of 2022.
before income taxes and gain from equity in affiliates in the second quarter of 2023 was RMB443.9
million (US$61.2 million), compared with RMB220.2 million in the same period of 2022.
tax expense in the second quarter of 2023 was RMB87.0 million (US$12.0 million), compared with
RMB42.2 million in the same period of 2022.
income in the second quarter of 2023 was RMB366.3 million (US$50.5 million), compared with RMB185.7
million in the same period of 2022.
adjusted net income in the second quarter of 2023 was RMB364.9 million (US$50.3 million), compared
with RMB210.7 million in the same period of 2022.
income per basic and diluted ADS in the second quarter of 2023 was RMB7.62 (US$1.05), and RMB7.50
(US$1.03), compared with RMB3.36 and RMB3.30, respectively, in the same period of 2022.
4 / 8
adjusted net income per basic and diluted ADS in the second quarter of 2023 was RMB7.62 (US$1.05),
and RMB7.44 (US$1.03), compared with RMB3.78 and RMB3.72 respectively, in the same period of 2022.
and cash equivalents was RMB1,320.4 million (US$182.1 million) as of June 30, 2023, compared
with RMB921.2 million as of March 31, 2023.
the second quarter of 2023, the Company repurchased an aggregate of 405,845 ADSs for a total consideration of US$1.58 million. In 2022,
the Company had repurchased an aggregate of 266,882 ADSs and 46,487,276 Class A ordinary shares for a total consideration of US$21.1
November 16, 2022, the Company announced that the board of directors (the “Board”) authorized to increase its share
repurchase program to US$30 million from US$20 million, effective through September 2023. Under this plan, the Company has approximately
US$7.3 million remaining for potential repurchases. On August 28, 2023, the Board approved the
extension of the Company's existing share repurchase program for an additional twelve months, until the end of September 2024.
of Special Dividend
The Company today
announced the Company’s board of directors has approved the declaration and payment of a special dividend of US$0.17 per ADS (approximately
US$0.028 per ordinary share). The Special Dividend will be paid on or about October 18, 2023 to the holders of the Company’s
ordinary shares of record as of the close of business on September 19, 2023, being the record date for determination of entitlements
to the Special Dividend.
Company expects the total loan amount facilitated and originated for the third quarter of 2023 to be between RMB28.5 billion and RMB29.5
billion. The total loan amount facilitated and originated for 2023 is expected to be between RMB105
billion and RMB110 billion.
This forecast reflects
the Company’s current and preliminary views, which are subject to changes.
management team will host an earnings conference call at 7:00 AM U.S. Eastern Time on August 29, 2023 (7:00 PM Beijing / Hong Kong
Time on the same day).
5 / 8
for the earnings conference call are as follows:
Please dial in
ten minutes before the call is scheduled to begin and provide the passcode to join the call.
A replay of the
conference call may be accessed by phone at the following numbers until September 5, 2023:
a live and archived webcast of the conference call will be available at http://ir.xiaoyinggroup.com.
About X Financial
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.
more information, please visit: http://ir.xiaoyinggroup.com.
Use of Non-GAAP Financial Measures
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.
use in this press release the following non-GAAP financial measures: (i) adjusted net income,
(ii) adjusted net income per basic ADS, and (iii) adjusted net income per diluted ADS, 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.
6 / 8
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.
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.
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 7.2513 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 30, 2023.
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.
7 / 8
Use of Projections
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.
For more information, please contact:
Mr. Frank Fuya Zheng
Mr. Eric Yuan
Ms. Linda Bergkamp
8 / 8
Unaudited Condensed Consolidated Balance Sheets
Unaudited Condensed Consolidated Statements
of Comprehensive Income
Unaudited Reconciliations of
GAAP and Non-GAAP Results
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