Fanhua Reports First Quarter 2018 Unaudited Financial Results and Declares Quarterly Dividend of US$0.25 per ADS
— Quarterly Operating Income Up 63.3% YoY
— Quarterly Diluted Net Income Per ADS Up 73.9% YoY
The Company also announced that on
Financial Highlights for the First Quarter of 2018:
(In thousands, except per ADS) | 2017Q1 (RMB) |
2018Q1 (RMB) |
2018Q1 (US$) |
Change % |
Total net revenues | 1,333,587 | 843,263 | 134,436 | -36.8 |
Operating income | 55,214 | 90,181 | 14,376 | 63.3 |
Net income attributable to the Company’s shareholders2 | 69,740 | 130,218 | 20,758 | 86.7 |
Diluted net income per ADS | 1.15 | 2.00 | 0.32 | 73.9 |
Commenting on the first quarter 2018 financial results, Mr.
"The performance of our core business, life insurance business, was in line with our expectation. Our total life insurance premiums grew by 40.1% from a year ago, outpacing industry growth, primarily owing to strong year-over-year growth of 186.5% in renewal life insurance premiums during the quarter, reflecting the attractive business nature of the long-term life insurance business. i.e. the snowball effect created by the accumulation of renewal business. First year annualized premiums equivalent ("APEs") were down 12% year-over-year, consistent with our expectation, mainly affected by the continued adjustment in annuity products and the high base in the same period of last year. In the meantime, the fundamentals of our life insurance segment remain solid, as evidenced by the strong growth momentum in both registered sales agents and performing sales, and over 40% year-on-year growth in APEs of health insurance products for the first quarter of 2018.
"We are also happy to see positive operational and financial contributions from our various internet platforms which have demonstrated leading advantages in each of their respective areas and started to generate commercial value. These achievements have fully demonstrated the foresight and accuracy of the business strategies that we've implemented over the past few years. We believe our internet platforms will become a new driver for the continued growth of the company in the future.
"Looking ahead to the second quarter of 2018, we expect the life insurance industry will be on track for a healthier development, in view of current financial and insurance regulatory trends. But we firmly believe that the decoupling of manufacturing from distribution is an irreversible trend and the industry's transition towards protection-oriented business is favorable for
Financial Results for the First Quarter of 2018
Total net revenues were
- Net revenues for the life insurance business were
RMB 673.0 million (US$107.3 million ) for the first quarter of 2018, representing an increase of 9.7% fromRMB613.4 million for the corresponding period in 2017. The increase was primarily due to growth in the number of sales agents and the rapid growth of renewal commissions. Revenues generated from our life insurance business accounted for 79.8% of our total net revenues in the first quarter of 2018. - Net revenues for the P&C insurance business were
RMB 92.5 million (US$14.7 million ) for the first quarter of 2018, representing a decrease of 85.9% fromRMB655.6 million for the corresponding period in 2017. The decrease was primarily due to 1) the disposal of the equity interests of some entities in the P&C insurance division inOctober 2017 , and 2) the transition of our P&C insurance business from a commission-based business model towards a platform business model starting from the fourth quarter of 2017. The revenue for P&C insurance business mainly represent commission revenues generated from Baoxian.com and technology service fees based on the volume of insurance premiums transacted through CNpad. Revenues generated from the P&C insurance business accounted for 11.0% of our total net revenues in the first quarter of 2018. - Net revenues for the claims adjusting business were
RMB 77.8million (US$12.4 million ) for the first quarter of 2018, representing an increase of 20.4% fromRMB64.6 million for the corresponding period in 2017. Revenues generated from the claims adjusting business accounted for 9.2% of our total net revenues in the first quarter of 2018.
Total operating costs and expenses were
- Commission costs were
RMB597.4 million (US$95.2 million ) for the first quarter of 2018, representing a decrease of 45.3% fromRMB 1,092.8 million for the corresponding period in 2017. The decrease in commission cost was mainly due to the decrease in P&C insurance business, partially offset by the growth of our life insurance business.- Costs of the life insurance business were
RMB468.3 million (US$74.7 million ) for the first quarter of 2018, representing an increase of 7.6% fromRMB435.1 million for the corresponding period in 2017. The increase was in line with the growth in sales. Costs incurred by the life insurance business accounted for 78.4% of our total commission costs in the first quarter of 2018. - Costs of the P&C insurance business were
RMB80.2 million (US$12.8 million ) for the first quarter of 2018, representing a decrease of 86.8% fromRMB607.4 million for the corresponding period in 2017. The decrease was primarily due to 1) the disposal of the equity interests of some entities in the P&C insurance division inOctober 2017 , and 2) the transition of our P&C insurance business from a commission-based business model towards a platform business model starting from the fourth quarter of 2017. The cost of the P&C insurance business mainly represents the cost incurred for business on Baoxian.com. Costs incurred by the P&C insurance business accounted for 13.4% of our total commission costs in the first quarter of 2018. - Costs of claims adjusting business were
RMB49.0 million (US$7.8 million ) for the first quarter of 2018, representing a decrease of 2.6% fromRMB50.3 million for the corresponding period in 2017. Costs incurred by the claims adjusting business accounted for 8.2% of our total commission costs in the first quarter of 2018.
- Costs of the life insurance business were
- Selling expenses were
RMB48.7 million (US$7.8 million ) for the first quarter of 2018, representing a decrease of 6.9% fromRMB52.3 million for the corresponding period in 2017. The decrease was primarily due to the reduction in expenses related to P&C insurance agencies as a result of the disposal of most of our P&C insurance agency subsidiaries in the fourth quarter of 2017, as part of the implementation of a platform business model for our auto insurance business. - General and administrative expenses were
RMB107.0 million (US$17.1 million ) for the first quarter of 2018, representing a decrease of 19.7% fromRMB133.2 million for the corresponding period in 2017. The decrease was primarily due to the reduction in expenses related to P&C insurance agencies as a result of the disposal of most of our P&C insurance agency subsidiaries in the fourth quarter of 2017, as part of the implementation of a platform business model for our auto insurance business.
As a result of the preceding factors, we had an operating income of
Operating margin was 10.7% for the first quarter of 2018, compared to 4.1% for the corresponding period in 2017.
Investment income was
Interest income was
Income tax expense was
Share of income of affiliates was
Net income from continuing operations was
Net income from discontinued operations2 was nil for the first quarter of 2018. Net income from discontinued operation was
Net income attributable to the Company’s shareholders was
Net margin was 15.4% for the first quarter of 2018 compared with 4.7% for the corresponding period in 2017.
Basic and diluted net income per ADS were
As of
Key Operational Metrics for
- CNpad Auto Insurance Mobile Application ("CNpad Auto Insurance App") - Our proprietary mobile sales support system:
- CNpad Auto Insurance App had been downloaded and activated 418,342 times as of
March 31, 2018 , representing an increase of 66.1% from 251,819 times as ofMarch 31, 2017 ; - The number of active users of CNpad Auto Insurance App3 was 63,955 in the first quarter of 2018, representing an increase of 13.3% from 56,446 in the first quarter of 2017;
- Insurance premiums generated through
CNpad Auto Insurance App wereRMB 571.0 million (US$91.0 million ) in the first quarter of 2018, representing a decrease of 38.2% fromRMB924.0 million for the first quarter of 2017.
- CNpad Auto Insurance App had been downloaded and activated 418,342 times as of
- Lan Zhanggui - Our one-stop insurance service platform that integrates the key functions of both
CNpad Auto Insurance and CNpad Life Insurance App, which was launched inOctober 2017 . All CNpad Life Insurance App accounts have been converted to Lan Zhanggui.- Lan Zhanggui had been downloaded and activated 579,348 times as of
March 31, 2018 , representing an increase of 130.1% from 251,819 times of downloads of CNpad Life Insurance App as ofMarch 31, 2017 ; - The number of active users of Lan Zhanggui4 was 64,685 in the first quarter of 2018, representing an increase of 38.3% from 46,785 active users of CNpad Life Insurance App in the first quarter of 2017;
- Insurance premiums generated through Lan Zhanggui were
RMB513.0 million (US$81.8 million ) in the first quarter of 2018, representing a decrease of 22.3% fromRMB660.0 million generated through CNpad Life Insurance App for the first quarter of 2017.
- Lan Zhanggui had been downloaded and activated 579,348 times as of
- eHuzhu - Our online non-profit mutual aid platform:
- The number of registered members was 3.1 million as of
March 31, 2018 , representing an increase of 93.8% from 1.6 million as ofMarch 31, 2017 .
- The number of registered members was 3.1 million as of
- Baoxian.com - Our online insurance platform:
- The number of registered customer accounts was 1.6 million as of
March 31, 2018 , representing an increase of 87.1% from approximately 0.8 million as ofMarch 31 , 2017; - The number of active customer accounts5 was 62,100 in the first quarter of 2018, representing an increase of 29.3% from 48,046 in the first quarter of 2017;
- Insurance premiums generated on or through Baoxian.com was
RMB 605.0 million (US$96.5 million ) in the first quarter of 2018, representing an increase of 10.4 times fromRMB53.0 million in the first quarter of 2017.
- The number of registered customer accounts was 1.6 million as of
Recent Developments
- As of
March 31, 2018 ,Fanhua had 579,348 sales agents and 1,253 professional claims adjustors, compared with 280,916 sales agents and 1,241 claims adjustors as ofMarch 31, 2017 . As ofMarch 31, 2018 ,Fanhua's distribution network consisted of 541 sales outlets in 21 provinces and 142 services outlets in 30 provinces, compared with 810 sales outlets in 21 provinces and 149 service outlets in 29 provinces as ofMarch 31, 2017 .
Business Outlook
Conference Call
The Company will host a conference call to discuss its first quarter 2018 financial results as per the following details.
Time:
or
The toll free dial-in numbers:
United States United Kingdom France Germany Australia Canada Taiwan Hong Kong |
1-855-500-8701 0800-015-9724 0800-918-648 0800-184-4876 1-300-713-759 1-855-757-1565 0080-665-1951 800-906-606 |
The toll dial-in numbers:
China (Mainland) Singapore & Other Areas |
400-120-0654 +852-3018-6776 |
Conference ID #: 8473679
Additionally, a live and archived web cast of this call will be available at: http://ir.fanhuaholdings.com/events-and-presentations
About
Our online platforms include:(1) CNpad, a mobile sales support application; (2) Baoxian.com, an online entry portal for comparing and purchasing health, accident, travel and homeowner insurance products; (3) eHuzhu (www.ehuzhu.com), a non-profit online mutual aid platform in
As of
For more information about
Forward-looking Statements
This press release contains statements of a forward-looking nature. These statements, including the statements relating to the Company’s future financial and operating results, are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as “will,” “expects,” “believes,” “anticipates,” “intends,” “estimates” and similar statements. Among other things, management's quotations and the Business Outlook section contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about
FANHUA INC. Unaudited Condensed Consolidated Statement of Financial Position (In thousands) |
|||||
As of December 31, | As of March 31, | As of March 31, | |||
2017 | 2018 | 2018 | |||
RMB | RMB | US$ | |||
ASSETS: | |||||
Current assets: | |||||
Cash and cash equivalents | 363,746 | 190,030 | 30,295 | ||
Restricted cash | 75,287 | 79,717 | 12,709 | ||
Short term investments | 2,498,730 | 2,747,397 | 438,000 | ||
Accounts receivable, net | 515,194 | 582,750 | 92,904 | ||
Insurance premium receivables | 4,325 | 4,378 | 698 | ||
Other receivables | 631,381 | 634,665 | 101,181 | ||
Other current assets | 43,864 | 52,236 | 8,328 | ||
Total current assets | 4,132,527 | 4,291,173 | 684,115 | ||
Non-current assets: | |||||
Property, plant, and equipment, net | 26,075 | 27,717 | 4,419 | ||
Goodwill and intangible assets, net | 127,079 | 119,339 | 19,025 | ||
Deferred tax assets | 2,091 | 4,816 | 768 | ||
Investment in affiliates | 404,783 | 443,441 | 70,695 | ||
Other non-current assets | 45,187 | 45,186 | 7,203 | ||
Total non-current assets | 605,215 | 640,499 | 102,110 | ||
Total assets | 4,737,742 | 4,931,672 | 786,225 |
FANHUA INC. Unaudited Condensed Consolidated Statement of Financial Position-(Continued) (In thousands) |
|||||||
As of December 31, | As of March 31, | As of March 31, | |||||
2017 | 2018 | 2018 | |||||
RMB | RMB | US$ | |||||
Current liabilities: | |||||||
Accounts payable | 203,024 | 265,639 | 42,349 | ||||
Insurance premium payables | 9,553 | 16,726 | 2,667 | ||||
Other payables and accrued expenses... | 241,894 | 223,384 | 35,613 | ||||
Accrued payroll | 77,424 | 63,936 | 10,193 | ||||
Income tax payable | 129,965 | 136,632 | 21,782 | ||||
Dividend payable | — | 81,556 | 13,002 | ||||
Total current liabilities | 661,860 | 787,873 | 125,606 | ||||
Non-current liabilities: | |||||||
Other tax liabilities | 70,350 | 70,350 | 11,215 | ||||
Deferred tax liabilities | 17,139 | 27,085 | 4,318 | ||||
Total non-current liabilities | 87,489 | 97,435 | 15,533 | ||||
Total liabilities | 749,349 | 885,308 | 141,139 | ||||
Ordinary shares |
9,571 | 9,571 | 1,526 | ||||
Additional paid-in capital | 2,429,559 | 2,348,056 | 374,335 | ||||
Statutory reserves | 311,038 | 311,038 | 49,587 | ||||
Retained earnings | 1,468,708 | 1,598,926 | 254,907 | ||||
Accumulated other comprehensive loss | (93,108 | ) | (111,190 | ) | (17,726 | ) | |
Subscription receivables | (248,717 | ) | (215,770 | ) | (34,399 | ) | |
Total shareholders’ equity | 3,877,051 | 3,940,631 | 628,230 | ||||
Non-controlling interests | 111,342 | 105,733 | 16,856 | ||||
Total equity | 3,988,393 | 4,046,364 | 645,086 | ||||
Total liabilities and equity | 4,737,742 | 4,931,672 | 786,225 |
FANHUA INC. Unaudited Condensed Consolidated Statements of Income and Comprehensive Income (In thousands, except for shares and per share data) |
||||||
For The Three Months Ended | ||||||
March 31, | ||||||
2017 | 2018 | 2018 | ||||
RMB | RMB | US$ | ||||
Net revenues6: | ||||||
Agency | 1,269,002 | 765,426 | 122,027 | |||
Life insurance Business | 613,391 | 672,967 | 107,287 | |||
P&C insurance Business | 655,611 | 92,459 | 14,740 | |||
Claims adjusting | 64,585 | 77,837 | 12,409 | |||
Total net revenues | 1,333,587 | 843,263 | 134,436 | |||
Operating costs and expenses: | ||||||
Agency | (1,042,504 | ) | (548,420 | ) | (87,432 | ) |
Life insurance Business | (435,110 | ) | (468,253 | ) | (74,651 | ) |
P&C insurance Business | (607,394 | ) | (80,167 | ) | (12,781 | ) |
Claims adjusting | (50,303 | ) | (49,006 | ) | (7,813 | ) |
Total operating costs | (1,092,807 | ) | (597,426 | ) | (95,245 | ) |
Selling expenses | (52,339 | ) | (48,702 | ) | (7,764 | ) |
General and administrative expenses | (133,227 | ) | (106,954 | ) | (17,051 | ) |
Total operating costs and expenses | (1,278,373 | ) | (753,082 | ) | (120,060 | ) |
Incomefrom continuing operations | 55,214 | 90,181 | 14,376 | |||
Other income, net: | ||||||
Investment income | 10,288 | 33,111 | 5,279 | |||
Interest income | 559 | 10,757 | 1,715 | |||
Others, net | 1,611 | (1,120 | ) | (179 | ) | |
Income from continuing operations before income taxes and share of income of affiliates and discontinued operations | 67,672 | 132,929 | 21,191 | |||
Income tax expense | (27,294 | ) | (43,824 | ) | (6,987 | ) |
Share of income of affiliates | 17,669 | 40,484 | 6,454 | |||
Net income from continuing operations | 58,047 | 129,589 | 20,658 | |||
Net income from discontinued operations, net of tax | 6,765 | — | — | |||
Net income | 64,812 | 129,589 | 20,658 | |||
Less: net loss attributable to noncontrolling interests | (4,928 | ) | (629 | ) | (100 | ) |
Net income attributable to the Company’s shareholders | 69,740 | 130,218 | 20,758 |
FANHUA INC. Unaudited Condensed Consolidated Statements of Income and Comprehensive Income-(Continued) (In thousands, except for shares and per share data) |
|||||||
For The Three Months Ended | |||||||
March 31, | |||||||
2017 | 2018 | 2018 | |||||
RMB | RMB | US$ | |||||
Net income per share: Basic: Net income from continuing operations |
0.05 | 0.10 | 0.02 | ||||
Net income from discontinued operations | 0.01 | — | — | ||||
Net income | 0.06 | 0.10 | 0.02 | ||||
Diluted: | |||||||
Net income from continuing operations | 0.05 | 0.10 | 0.02 | ||||
Net income from discontinued operations | 0.01 | — | — | ||||
Net income | 0.06 | 0.10 | 0.02 | ||||
Net income per ADS: Basic: |
|||||||
Net income from continuing operations | 1.08 | 2.00 | 0.32 | ||||
Net income from discontinued operations | 0.12 | — | — | ||||
Net income | 1.20 | 2.00 | 0.32 | ||||
Diluted: | |||||||
Net income from continuing operations | 1.04 | 2.00 | 0.32 | ||||
Net income from discontinued operations | 0.11 | — | — | ||||
Net income | 1.15 | 2.00 | 0.32 | ||||
Shares used in calculating net income per share: Basic.................................................................. |
1,165,429,597 | 1,300,191,084 | 1,300,191,084 | ||||
Diluted................................................................. | 1,213,183,900 | 1,302,989,111 | 1,302,989,111 | ||||
Net income.................................................... | 64,812 | 129,589 | 20,658 | ||||
Other comprehensive income (loss), net of tax: Foreign currency translation adjustments......................................... | (159 | ) | (7,322 | ) | (1,167 | ) | |
Fair value changes................................................ | 264 | — | — | ||||
Share of other comprehensive loss of affiliates... | (1,457 | ) | (1,827 | ) | (291 | ) | |
Comprehensive income................................ | 63,460 | 120,440 | 19,200 | ||||
Less: Comprehensive lose attributable to the noncontrolling interests.............................................................. | (4,928 | ) | (629 | ) | (100 | ) | |
Comprehensive income attributable to the Company’s shareholders................................................ | 68,388 | 121,069 | 19,300 |
FANHUA INC. Unaudited Condensed Consolidated Statements of Cash Flow (In thousands) |
|||||||
For The Three Months Ended | |||||||
March 31, | |||||||
2017 | 2018 | 2018 | |||||
RMB | RMB | US$ | |||||
Net cash generated from operating activities | 9,095 | 30,554 | 4,871 | ||||
Net cash used in (generated from) investing activities | 117,719 | (211,604 | ) | (33,735 | ) | ||
Net cash generated from financing activities | 3,836 | 19,086 | 3,043 | ||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 130,650 | (161,964 | ) | (25,821 | ) | ||
Cash, cash equivalents and restricted cash at beginning of period | 273,979 | 439,033 | 69,992 | ||||
Effect of exchange rate changes on cash and cash equivalents | (194 | ) | (7,322 | ) | (1,167 | ) | |
Cash, cash equivalents and restricted cash at end of period | 404,435 | 269,747 | 43,004 |
1 This announcement contains currency conversions of certain Renminbi (RMB) amounts into U.S. dollars (US$) 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
2 Due to the disposal of
3 Active users of CNpad App included users who made at least one purchase of life insurance policy and/or P&C insurance policy through CNpad App (including both its mobile application or WeChat public account ) during the specific period.
4 Active users of Lan Zhanggui included users who made at least one purchase of life insurance policy through CNpad Life Insurance App in 2017 and Lan Zhanggui (including both its mobile application or WeChat public account) during the specific period.
5 Active customer accounts are defined as customer accounts that made at least one purchase directly through www.baoxian.com, its mobile application, or WeChat public account during the specified period.
6 In
For more information, please contact: Oasis Qiu Investor Relations Manager Tel: +86 (20) 8388-3191 Email: qiusr@fanhuaholdings.com Source:Fanhua Inc.
Source: Fanhua Inc.