UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of March 2017

 

Commission File Number: 001-33768

 

 
FANHUA INC.

 

 

27/F, Pearl River Tower
No.15 West Zhujiang Road
Tianhe District, Guangzhou 510623
People’s Republic of China
(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F  ☒       Form 40-F  ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

 

 

SIGNATURE

 

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, thereunto duly authorized.

 

	Fanhua Inc.
Date: March 7, 2017	By:	/s/ Chunlin Wang
	Name:	Chunlin Wang
	Title:	Chief Executive Officer

 

 

Exhibit Index

 

Exhibit No.		Description.
Exhibit 99.1		Press Release
Exhibit 99.2		Press Release

 

 

3

 

Exhibit 99.1

 

 

Fanhua Reports Fourth Quarter and Fiscal Year 2016 Unaudited Financial Results

 

—

Quarterly and Annual Net Revenues Beat Guidance, Up 78.4% and 66.2%, Respectively

 

GUANGZHOU, March 6, 2017 (GLOBE NEWSWIRE) – Fanhua Inc., (Nasdaq: FANH), (the "Company" or "Fanhua"), a leading independent online-to-offline ("O2O") financial services provider in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2016¹.

 

Financial Highlights for the Fourth Quarter of 2016:

 

(In thousands, except per ADS)		2015 Q4 (RMB)				2016 Q4 (RMB)				2016 Q4 (US$)				Change %
Total net revenues			860,003				1,534,462				221,008				78.4
Operating income			32,827				34,696				4,997				5.7
Marketing expenses2			19,503				134,670				19,397				590.5
Net income attributable to the Company’s shareholders			55,089				74,594				10,743				35.4
Basic net income per ADS			0.96				1.28				0.18				34.1

 

Financial Highlights for 2016: 

 

(In thousands, except per ADS)		2015 (RMB)				2016 (RMB)				2016 (US$)				Change %
Total net revenues			2,828,308				4,700,622				677,031				66.2
Operating income			78,522				14,040				2,023				-82.1
Marketing expenses			20,712				415,492				59,843				1,906.0
Net income attributable to the Company’s shareholders			210,086				157,047				22,618				-25.2
Basic net income per ADS			3.65				2.71				0.39				-25.9

 

 

 

 

 

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 RMB6.943 to US$1.00, the effective noon buying rate as of December 30, 2016 in The City of New York for cable transfers of RMB as set forth in H.10 weekly statistical release of the Federal Reserve Board.

2

“Marketing expenses” are defined as expenses related to marketing activities aimed at promoting sales and gaining market share. Such expenses are included in selling expenses in the Company’s unaudited condensed consolidated statement of income and comprehensive income attached hereto. The marketing expenses were mainly related to P&C insurance business during 2016, which we expect to significantly decrease in 2017 while we intend to increase commisssions paid to sales agents for P&C insurance business in 2017.

 

 

 

  

Commenting on the fourth quarter and 2016 financial results, Mr. Chunlin Wang, Chief Executive Officer of Fanhua, stated, "We had exceptional growth in 2016, during which our insurance premiums increased by 49.7% year-over-year to RMB14.6 billion and net revenues increased by 66.2% year-over-year to RMB4.7 billion. We generated positive operating income for two consecutive quarters in the second half of 2016, which boosted total operating income in 2016 to RMB14.0 million. These positive results were primarily due to the significant growth of our life insurance business, effective cost controls and the substantial progress we have made in implementing multiple strategic initiatives, including the expansion of our sales network, enhanced cross-selling efforts, the upgrade and promotion of CNpad and the initiation of several marketing campaigns."

 

"The outstanding performance in 2016 shows the success of our business strategies. In 2017, we plan to further increase our profitability by investing more on our life insurance business. We remain optimistic about our growth momentum, and expect to generate no less than RMB180 million of operating income in 2017."

 

Financial Results for the Fourth quarter of 2016

 

Total net revenues were RMB1.5 billion (US$221.0 million) for the fourth quarter of 2016, representing an increase of 78.4% from RMB860.0 million for the corresponding period in 2015.

 

	●	Net revenues for the insurance agency business were RMB1.2 billion (US$175.7 million) for the fourth quarter of 2016, representing an increase of 82.5% from RMB668.4 million for the corresponding period in 2015. The increase was primarily driven by a 52.8% increase in net revenues derived from the P&C insurance agency business, from RMB561.1 million for the fourth quarter of 2015 to RMB857.4 million (US$123.5 million) for the fourth quarter of 2016, and a 237.9% increase in net revenues derived from the life insurance agency business, from RMB107.2 million for the fourth quarter of 2015 to RMB362.3 million (US$52.2 million) for the fourth quarter of 2016. The growth of the P&C insurance agency business was primarily due to a 38.6% growth in insurance premiums as a result of enhanced marketing efforts. The increase in net revenues generated from the life insurance agency business was primarily due to a 284.8% increase in commissions derived from new long-term life insurance policy sales, primarily driven by the successful implementation of our cross-selling strategy and industry growth. Revenues generated from the insurance agency business accounted for 79.5% of total net revenues in the fourth quarter of 2016.
	●	Net revenues for the insurance brokerage business were RMB211.1 million (US$30.4 million) for the fourth quarter of 2016, representing an increase of 122.1% from RMB95.0 million for the corresponding period in 2015. Revenues generated from the insurance brokerage business accounted for 13.8% of total net revenues in the fourth quarter of 2016.
	●	Net revenues for the claims adjusting business were RMB103.7 million (US$14.9 million) for the fourth quarter of 2016, representing an increase of 7.3% from RMB96.6 million for the corresponding period in 2015. Revenues generated from the claims adjusting business accounted for 6.7% of total net revenues in the fourth quarter of 2016.

 

 

 

 

Total operating costs and expenses were RMB1.5 billion (US$216.0 million) for the fourth quarter of 2016, representing an increase of 81.3% from RMB827.2 million for the corresponding period in 2015.

 

●

Total operating costs were RMB1.2 billion (US$168.4 million) for the fourth quarter of 2016, representing an increase of 81.9% from RMB642.7 million for the corresponding period in 2015. The increase was primarily due to sales growth.

 

	Ø	Costs of insurance agency business were RMB932.6 million (US$134.3 million) for the fourth quarter of 2016, representing an increase of 81.3% from RMB514.4 million for the corresponding period in 2015, primarily driven by a 53.4% increase in costs for the P&C insurance agency business to RMB687.5 million (US$99.0 million) for the fourth quarter of 2016, and a 269.9% increase in costs for the life insurance agency business to RMB245.1 million (US$35.3 million) for the fourth quarter of 2016. The increase in costs for the P&C insurance agency business was primarily driven by sales growth and increased commissions paid to sales agents in the highly competitive auto insurance market. The increase in the costs for the life insurance agency business was generally in line with the increase in revenues in that business in the fourth quarter of 2016. Costs incurred by the insurance agency business accounted for 79.8% of total operating costs in the fourth quarter of 2016.
	Ø	Costs of insurance brokerage business were RMB179.5 million (US$25.8 million) for the fourth quarter of 2016, representing an increase of 137.3% from RMB75.6 million for the corresponding period in 2016. The increase was primarily due to sales growth. Costs incurred by the insurance brokerage business accounted for 15.3% of total operating costs in the fourth quarter of 2016.
	Ø	Costs of claims adjusting business were RMB57.3 million (US$8.2 million) for the fourth quarter of 2016, representing an increase of 8.7% from RMB52.7 million for the corresponding period in 2015. Costs incurred by the claims adjusting business accounted for 4.9% of total operating costs in the fourth quarter of 2016.

 

	●	Selling expenses were RMB185.2 million (US$26.7 million) for the fourth quarter of 2016, representing an increase of 227.2% from RMB56.6 million for the corresponding period in 2015, primarily attributable to RMB134.7 million (US$19.4 million) in marketing expenses in the fourth quarter of the year.
	●	General and administrative expenses were RMB145.3 million (US$20.9 million) for the fourth quarter of 2016, representing an increase of 13.6% from RMB127.9 million for the corresponding period in 2015. The increase was primarily due to increases in payroll and rental expenses, partially offset by declines in share-based compensation expense and depreciation expenses.

 

 

 

 

As a result of the preceding factors, we had an operating income of RMB34.7 million (US$5.0 million) for the fourth quarter of 2016, representing an increase of 5.7% from RMB32.8 million for the corresponding period in 2015.

 

Operating margin was 2.3% for the fourth quarter of 2016, compared to 3.8% for the corresponding period in 2015. The decrease in operating margin for the fourth quarter of 2016 was mainly due to enhanced marketing efforts to develop market shares in 2016. 

 

Investment income was RMB53.8 million (US$7.8 million) for the fourth quarter of 2016, representing an increase of 157.8% from RMB20.9 million for the corresponding period in 2015. The investment income represented yields from short-term investments in financial products which mainly consist of inter-bank deposits or collective trust products with a term of half a year to two years, which pay interest on a quarterly, semi-annual or annual basis. Our investment income fluctuates from quarter to quarter because these investments are classified as available for sales and investment income is recognized when received.

 

Interest income was RMB0.4 million (US$0.1 million) for the fourth quarter of 2016, representing a decrease of 96.1% from RMB9.2 million for the corresponding period in 2015. The decrease in interest income was primarily due to decreases in term deposits as a result of an increase in short-term investments.

 

Income tax expense was RMB20.5 million (US$3.0 million) for the fourth quarter of 2016, representing an increase of 131.1% from RMB8.9 million for the corresponding period in 2015. The increase was primarily due to an increase in investment income. The effective tax rate for the fourth quarter of 2016 was 23.2% compared with 13.1% for the corresponding period in 2015.

 

Share of income of affiliates was RMB13.9 million (US$2.0 million) for the fourth quarter of 2016, representing an increase of 460.3% from RMB2.5 million for the corresponding period in 2015, mainly attributable to an increase of profits from Sincere Fame International Limited, in which the Company owns 20.6% of the equity interests.

 

Net income attributable to the Company’s shareholders was RMB74.6 million (US$10.7 million) for the fourth quarter of 2016, representing an increase of 35.4% from RMB55.1 million for the corresponding period in 2015.

 

Net margin was 4.9% for the fourth quarter of 2016 compared with 6.4% for the corresponding period in 2015. The decrease in net margin for the fourth quarter of 2016 was mainly due to enhanced marketing efforts to increase market shares in 2016. 

 

 

 

 

Basic and diluted net income per ADS were RMB1.28 (US$0.18) and RMB1.23 (US$0.18) for the fourth quarter of 2016, respectively, representing increases of 34.1% and 34.6% from RMB0.96 and RMB0.91 for the corresponding period in 2015.

 

Financial Results for the Year Ended December 31, 2016

 

Total net revenues were RMB4.7 billion (US$677.0 million) for fiscal year 2016, representing an increase of 66.2% from RMB2.8 billion in fiscal year 2015.

 

Net revenues of insurance agency business were RMB3.7 billion (US$539.6 million) for fiscal year 2016, representing an increase of 73.8% from RMB2.2 billion in fiscal year 2015. The increase was primarily driven by (i) a 50.2% increase in net revenues derived from the P&C insurance agency business, from RMB1.8 billion for 2015 to RMB2.8 billion (US$396.9 million) for the year of 2016, and (ii) a 209.6% increase in net revenues derived from the life insurance agency business, from RMB319.9 million for 2015 to RMB990.5 million (US$142.7 million) for 2016. The growth of the P&C insurance agency business was primarily due to a 41.4% growth in insurance premiums as a result of enhanced marketing efforts. The increase in net revenues generated from the life insurance agency business was primarily due to a 244.1% increase in commissions derived from new long-term life insurance policy sales, which was primarily driven by the successful implementation of our cross-selling strategy and overall industry growth. Revenues generated from the insurance agency business accounted for 79.7% of total net revenues in 2016.

 

Net revenues of insurance brokerage business were RMB617.7 million (US$89.0 million) for fiscal year 2016, representing an increase of 67.3% from RMB369.2 million in fiscal year 2015. Revenues generated from the insurance brokerage business accounted for 13.1% of total net revenues in 2016.

 

Net revenues of claims adjusting business were RMB336.4 million (US$48.5 million) for fiscal year 2016, representing an increase of 10.7% from RMB303.8 million in fiscal year 2015. Revenues generated from the claims adjusting business accounted for 7.2% of total net revenues in 2016.

 

Total operating costs and expenses were RMB4.7 billion (US$675.0 million) for fiscal year 2016, representing an increase of 70.4% from RMB2.7 billion in fiscal year 2015.

 

Total operating costs were RMB3.6 billion (US$520.0 million) for fiscal year 2016, representing an increase of 67.9% from RMB2.2 billion in fiscal year 2015.

 

Costs of insurance agency business were RMB2.9 billion (US$418.7 million) for fiscal year 2016, representing an increase of 73.5% from RMB1.7 billion in fiscal year 2015, primarily driven by an increase of 51.9% in costs for the P&C insurance agency business, and an increase of 227.9% in costs for the life insurance agency business, largely in line with the growth in net revenues of the P&C and life insurance agency businesses. Costs incurred by the insurance agency business accounted for 80.5% of total operating costs in 2016.

 

 

 

 

Costs of insurance brokerage business were RMB503.9 million (US$72.6 million) for fiscal year 2016, representing an increase of 71.5% from RMB293.9 million in fiscal year 2015. The increase was primarily due to sales growth. Costs incurred by the insurance brokerage business accounted for 14.0% of total operating costs in 2016.

 

Costs of claims adjusting business were RMB199.8 million (US$28.8 million) for fiscal year 2016, representing an increase of 10.2% from RMB181.4 million in fiscal year 2015. The increase was primarily attributable to sales growth and the increased average salaries for claims adjustors. Costs incurred by the claims adjusting business accounted for 5.5% of total operating costs in 2016.

 

Selling expenses were RMB588.8 million (US$84.8 million) for fiscal year 2016, representing an increase of 311.0% from RMB143.3 million in fiscal year 2015, primarily attributable to RMB415.5 million (US$59.8 million) of marketing expenses in the year.

 

General and administrative expenses were RMB487.2 million (US$70.2 million) for fiscal year 2016, representing an increase of 6.8% from RMB456.0 million in fiscal year 2015. The increase was primarily due to the increase in payroll and rental expenses, though partially offset by the decrease in share-based compensation expenses and depreciation expenses.

 

As a result of the preceding factors, operating income was RMB14.0 million (US$2.0 million) for fiscal year 2016, representing a decrease of 82.1% from RMB78.5 million in fiscal year 2015.

 

Operating margin was 0.3% for fiscal year 2016, compared with 2.8% in fiscal year 2015. The decrease in operating margin for fiscal year 2016 was mainly due to enhanced marketing efforts to increase market shares in 2016. 

 

Investment income was RMB118.4 million (US$17.1 million) for fiscal year 2016, representing an increase of 80.5% from RMB65.6 million in fiscal year 2015. The increase was primarily attributable to an increase in short term investment products.

 

Interest income was RMB6.9 million (US$1.0 million) for fiscal year 2016, representing a decrease of 87.9% from RMB57.2 million in fiscal year 2015. The decrease in interest income was primarily due to decreases in term deposits as a result of an increase in short-term investments.

 

Income tax expense was RMB28.4 million (US$4.1 million) for fiscal year 2016, representing an increase of 9.6% from RMB25.9 million in fiscal year 2015. The effective tax rate for fiscal year 2016 was 19.2% compared with 12.1% in fiscal year 2015. The increase in effective tax rate was primarily due to preferential tax treatment enjoyed by one of our subsidiaries in 2015, which was not available in 2016.

 

 

 

 

Share of income of affiliates was RMB48.3 million (US$7.0 million) for fiscal year 2016, representing an increase of 79.4% from RMB26.9 million in fiscal year 2015, mainly attributable to an increase of profits from Sincere Fame International Limited, in which the Company owns 20.6% of the equity interests.

 

Net income attributable to the Company’s shareholders was RMB157.0 million (US$22.6 million) for fiscal year 2016, representing a decrease of 25.2% from RMB210.1 million in fiscal year 2015.

 

Net margin was 3.3% for fiscal year 2016 compared with 7.4% in fiscal year 2015. The decrease in net margin for fiscal year 2016 was mainly due to enhanced marketing efforts to increase market shares in 2016. 

 

Basic and diluted net income per ADS was RMB2.71 (US$0.39) and RMB2.60 (US$0.37) for fiscal year 2016, respectively, representing decreases of 25.9% and 25.6% from RMB3.65 and RMB3.49 respectively in fiscal year 2015.

 

As of December 31, 2016, the Company had RMB240.2 million (US$34.6 million) in cash and cash equivalents.

 

Key Operational Metrics for Fanhua's Online Initiatives for Year 2016:

 

●

CNpad Mobile Application("CNpad App") - Our proprietary mobile sales support system:

 

	Ø	CNpad App has been downloaded and activated 212,317 times as of December 31, 2016, representing an increase of 93.4% from 109,784 times as of December 31, 2015;
	Ø	The number of active users3 of CNpad App was 78,216 in 2016, representing an increase of 23.0% 63,591 in 2015;
	Ø	Insurance premiums generated through CNpad App were RMB3.8 billion (US$547.6 million), representing an increase of 29.0% from RMB2.9 billion in 2015 and accounted for 26.0% of our total insurance premiums in 2016 as compared to 30.2% in 2015.

 

●

eHuzhu - Our online non-profit mutual aid platform:

 

Ø

The number of registered members was 1,352,084 as of December 31, 2016, representing an increase of 99.3% from 678,547 as of December 31, 2015.

 

●

Baoxian.com - Our online insurance platform:

 

	Ø	The number of active customer accounts4 was 158,683 in 2016, representing an increase of 118.1% from 72,745 in 2015;
	Ø	Insurance premiums generated on or through Baoxian.com RMB91.2 million (US$13.1 million) in 2016, representing an increase of 88.8% from RMB48.3 million in 2015.

 

 

 

 

3	Active users are defined as users who made at least one purchase through CNpad App during the specified period.
4	Active customer accounts are defined as customer accounts that made at least one purchase directly through www.baoxian.com or its mobile application during the specified period.

 

 

 

 

Recent Development

 

●	On December 28, 2016, Fanhua entered into a strategic partnership with Tian’an Property Insurance Co., Ltd ("Tian’an"), pursuant to which the two parties agreed to cooperate with each other closely on business areas such as insurance product innovation, insurance claims adjustment and internet insurance.
●	Fanhua had 231,592 sales agents and 1,304 professional claims adjustors as of December 31, 2016, compared with 116,164 sales agents, and 1,451 professional claims adjustors as of December 31, 2015. As of December 31, 2016, Fanhua’s distribution network consisted of 746 sales outlets operating in 21 provinces, compared with 412 sales outlets operating in 17 provinces as of December 31, 2015. Its claims adjusting service network covered 29 provinces with 161 service outlets as of December 31, 2016, compared with 162 service outlets in 27 provinces as of December 31, 2015.

 

Business Outlook

 

Fanhua expects its operating income to be no less than RMB40 million for the first quarter of 2017 and no less than RMB180 million for 2017. This forecast reflects Fanhua’s current view, which is subject to change.

 

Conference Call

 

The Company will host a conference call to discuss its fourth quarter and fiscal year 2016 financial results as per the following details.

 

Time: 8:00 PM Eastern Time on March 6, 2017 or 9:00 AM Beijing/Hong Kong Time on March 7, 2017

 

The toll free dial-in numbers:

United States	1-855-500-8701
United Kingdom	0800-015-9724
France	0800-918-648
Germany	0800-184-4876
Australia	1-300-713-759
Canada	1-855-757-1565
Taiwan	0080-665-1951
Hong Kong	800-906-606

 

 

 

 

The toll dial-in numbers:

 

China (Mainland)	400-120-0654
Singapore & Other Areas	+65-6713-5440

 

Conference ID #: 70494822

 

Additionally, a live and archived web cast of this call will be available at:

http://ir.fanhuaholdings.com/events.cfm

 

About Fanhua Inc.

 

Fanhua Inc. is a leading independent online-to-offline financial services provider. Through our online platforms and offline sales and service network, we offer a wide variety of financial products and services to individuals and businesses, including property and casualty and life insurance products. We also provide insurance claims adjusting services, such as damage assessments, surveys, authentications and loss estimations.

 

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; and (3) eHuzhu (www.ehuzhu.com), a non-profit online mutual aid platform in China. Our extensive distribution and service network covers 29 provinces in China, including most economically developed regions and cities.

 

For more information about Fanhua Inc., please visit http://ir.fanhuaholdings.com/.

 

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 and the industry. Potential risks and uncertainties include, but are not limited to, those relating to its ability to attract and retain productive agents, especially entrepreneurial agents, its ability to maintain existing and develop new business relationships with insurance companies, its ability to execute its growth strategy, its ability to adapt to the evolving regulatory environment in the Chinese insurance industry, its ability to compete effectively against its competitors, quarterly variations in its operating results caused by factors beyond its control and macroeconomic conditions in China and their potential impact on the sales of insurance products. All information provided in this press release is as of the date hereof, and Fanhua undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although Fanhua believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by Fanhua is included in Fanhua's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F.

 

 

 

 

FANHUA INC.
Unaudited Condensed Consolidated Balance Sheets
(In thousands)

 

		As of December 31,				As of December 31,				As of December 31,
		2015				2016				2016
		RMB				RMB				US$
ASSETS:
Current assets:
Cash and cash equivalents			1,115,266				240,242				34,602
Restricted cash			17,585				33,737				4,859
Short term investments			2,026,256				2,797,842				402,973
Accounts receivable, net			241,264				502,975				72,443
Insurance premium receivables			1,526				187				27
Other receivables			51,828				49,186				7,084
Amounts due from related parties			36,508				32,495				4,680
Other current assets			22,828				37,900				5,459
Total current assets			3,513,061				3,694,564				532,127
Non-current assets:
Property, plant, and equipment, net			34,145				31,414				4,525
Goodwill and intangible assets, net			153,182				181,549				26,149
Deferred tax assets			1,658				8,277				1,192
Investment in affiliates			284,194				294,576				42,427
Other non-current assets			28,188				28,188				4,060
Total non-current assets			501,367				544,004				78,353
Total assets			4,014,428				4,238,568				610,480

 

 

 

 

FANHUA INC.
Unaudited Condensed Consolidated Balance Sheets-(Continued)

(In thousands)

 

		As of December 31,				As of December 31,				As of December 31,
		2015				2016				2016
		RMB				RMB				US$
LIABILITIES AND EQUITY:
Current liabilities:
Accounts payable (including accounts payable of the consolidated variable interest entities ("VIEs") without recourse to Fanhua Inc. of RMB4,141 and nil as of December 31, 2015 and 2016, respectively)			160,891				278,188				40,067
Insurance premium payables (including insurance premium payables of the consolidated VIEs without recourse to Fanhua Inc. of RMB1,680 and  nil as of December 31, 2015 and 2016, respectively)			5,187				5,491				791
Other payables and accrued expenses (including other payables and accrued expense of the consolidated VIEs without recourse to Fanhua Inc. of RMB5,720 and  nil  as of December 31, 2015 and 2016, respectively)			213,562				314,051				45,233
Accrued payroll (including accrued payroll of the consolidated VIEs without recourse to Fanhua Inc. of RMB1,625 and  nil  as of December 31, 2015 and 2016, respectively)			48,150				59,201				8,527
Income tax payable (including income tax payable of the consolidated of VIEs without recourse to Fanhua Inc. of RMB1,152 and  nil  as of December 31, 2015 and 2016, respectively)			60,658				90,188				12,990
Total current liabilities			488,448				747,119				107,608

 

 

 

 

FANHUA INC.
Unaudited Condensed Consolidated Balance Sheets-(Continued)

(In thousands)

 

		As of December 31, 2015				As of December 31, 2016				As of December 31, 2016
		RMB				RMB				US$
Non-current liabilities:
Other tax liabilities			70,354				72,778				10,482
Deferred tax liabilities			22,057				14,577				2, 099
Total non-current liabilities			92,411				87,355				12,581
Total liabilities			580,859				834,474				120,189
Ordinary shares			8,592				8,658				1,247
Additional paid-in capital			2,454,244				2,301,655				331,507
Statutory reserves			302,115				311,590				44,878
Retained earnings			871,356				1,018,928				146,756
Accumulated other comprehensive loss			(50,048	)			(65,844	)			(9,483	)
Subscription receivables			(268,829	)			(288,135	)			(41,500	)
Total The Company's shareholders’ equity			3,317,430				3,286,852				473,405
Non-controlling interests			116,139				117,242				16,886
Total equity			3,433,569				3,404,094				490,291
Total liabilities and equity			4,014,428				4,238,568				610,480

 

 

 

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												For The Twelve Months Ended
		December 31,												December 31,
		2015				2016				2016				2015				2016				2016
		RMB				RMB				US$				RMB				RMB				US$
Net revenues:
Agency			668,356				1,219,704				175,674				2,155,264				3,746,471				539,604
Brokerage			95,034				211,084				30,402				369,198				617,738				88,973
Claims adjusting			96,613				103,674				14,932				303,846				336,413				48,454
Total net revenues			860,003				1,534,462				221,008				2,828,308				4,700,622				677,031
Operating costs and expenses:
Agency			(514,350	)			(932,564	)			(134,317	)			(1,675,261	)			(2,906,791	)			(418,665	)
Brokerage			(75,620	)			(179,451	)			(25,846	)			(293,875	)			(503,925	)			(72,580	)
Claims adjusting			(52,691	)			(57,273	)			(8,249	)			(181,370	)			(199,810	)			(28,779	)
Total operating costs			(642,661	)			(1,169,288	)			(168,412	)			(2,150,506	)			(3,610,526	)			(520,024	)
Selling expenses			(56,609	)			(185,210	)			(26,676	)			(143,279	)			(588,822	)			(84,808	)
General and administrative expenses			(127,906	)			(145,268	)			(20,923	)			(456,001	)			(487,234	)			(70,176	)
Total operating costs and expenses			(827,176	)			(1,499,766	)			(216,011	)			(2,749,786	)			(4,686,582	)			(675,008	)
Income from operations			32,827				34,696				4,997				78,522				14,040				2,023
Other income, net:
Investment income			20,886				53,837				7,754				65,624				118,421				17,056
Interest income			9,206				358				52				57,234				6,931				998
Others, net			5,033				(407	)			(59	)			13,042				8,306				1,196
Income before income taxes and income of affiliates			67,952				88,484				12,744				214,422				147,698				21,273
Income tax expense			(8,876	)			(20,511	)			(2,954	)			(25,865	)			(28,353	)			(4,084	)
Share of income of affiliates			2,480				13,895				2,001				26,924				48,293				6,955
Net income			61,556				81,868				11,791				215,481				167,638				24,144
less: net income attributable to noncontrolling interests			6,467				7,274				1,048				5,395				10,591				1,526
Net income attributable to the Company’s shareholders			55,089				74,594				10,743				210,086				157,047				22,618

 

 

 

 

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												For The Twelve Months Ended
		December 31,												December 31,
		2015				2016				2016				2015				2016				2016
		RMB				RMB				US$				RMB				RMB				US$
Net income per share:
Basic			0.05				0.06				0.01				0.18				0.14				0.02
Diluted			0.05				0.06				0.01				0.17				0.13				0.02
Net income per ADS:
Basic			0.96				1.28				0.18				3.65				2.71				0.39
Diluted			0.91				1.23				0.18				3.49				2.60				0.37
Shares used in calculating net income per share:
Basic			1,152,826,984				1,164,454,046				1,164,454,046				1,151,705,374				1,160,592,325				1,160,592,325
Diluted			1,206,237,783				1,213,598,234				1,213,598,234				1,203,323,521				1,208,821,796				1,208,821,796
Net income			61,556				81,868				11,791				215,481				167,638				24,144
Other comprehensive income (loss), net of tax: Foreign currency translation adjustments			1,010				(7,151	)			(1,030	)			6,153				2,177				314
Fair value changes			—				632				91				—				632				91
Share of other comprehensive gain (loss) of affiliates			37,567				(955	)			(138	)			37,567				(37,911	)			(5,460	)
Comprehensive income			100,113				74,394				10, 714				259,201				132,536				19,089
Less: Comprehensive income attributable to the noncontrolling interests			6,467				7,274				1,048				5,395				10,591				1,526
Comprehensive income attributable to the Company’s shareholders			93,666				67,120				9,666				253,806				121,945				17,563

 

 

 

 

FANHUA INC.

Unaudited Condensed Consolidated Statements of Cash Flow

(In thousands)

 

		For The Three Months Ended												For The Twelve Months Ended
		December 31,												December 31,
		2015				2016				2016				2015				2016				2016
		RMB				RMB				US$				RMB				RMB				US$
OPERATING ACTIVITIES
Net income			61,556				81,868				11,791				215,481				167,638				24,144
Adjustments to reconcile net income to net cash generated from operating activities:
Depreciation			4,075				3,288				474				18,383				13,492				1,943
Amortization of intangible assets			2,270				8,800				1,267				11,571				20,232				2,914
Allowance for doubtful receivables			4,694				1,839				265				7,597				2,381				343
Compensation expenses associated with stock option			2,829				—				—				17,653				4,937				711
Investment income			(1,352	)			(45,755	)			(6,590	)			(31,091	)			(83,681	)			(12,053	)
(Gain) loss on disposal of property, plant and equipment			(143	)			14				2				(126	)			115				17
Share of income of affiliates			(2,480	)			(13,895	)			(2,001	)			(26,924	)			(48,293	)			(6,955	)
Changes in operating assets and liabilities			101,951				77,357				11,142				68,760				11,025				1,588
Net cash generated from operating activities			173,400				113,516				16,350				281,304				87,846				12,652
Cash flows used in investing activities:
Purchase of property, plant and equipment			(2,845	)			(4,345	)			(626	)			(6,663	)			(11,885	)			(1,712	)
Proceeds from disposal of property and equipment			159				—				—				539				48				7
Purchase of short term investments			(1,353,956	)			(2,973,700	)			(428,302	)			(2,308,956	)			(9,515,500	)			(1,370,517	)
Proceeds from disposal of short term investments			704,052				2,878,955				414,656				994,839				8,825,355				1,271,116
Acquisition of subsidiaries, net of cash			—				—				—				—				(4,185	)			(603	)
Disposal of subsidiaries, net of cash			—				—				—				15,476				29,376				4,231
Increase in restricted cash			(1,771	)			(7,016	)			(1,011	)			(10,107	)			(16,152	)			(2,326	)
Decrease in other receivables			16,120				—				—				16,120				—				—
Purchase of intangible assets			—				—				—				—				(60,000	)			(8,642	)
Addition in investment in non-current assets			(3,980	)			—				—				(13,980	)			—				—
Decrease in amounts due from related parties			69,242				—				—				181,181				—				—
Net cash used in investing activities			(572,979	)			(106,106	)			(15,283	)			(1,131,551	)			(752,943	)			(108,446	)

 

 

 

 

FANHUA INC.

Unaudited Condensed Consolidated Statements of Cash Flow-(Continued)

(In thousands)

 

		For the Three Months Ended												For the Twelve Months Ended
		December 31,												December 31,
		2015				2016				2016				2015				2016				2016
		RMB				RMB				US$				RMB				RMB				US$
Cash flows generated from (used in) financing activities:
Acquisition of additional interest in subsidiaries			—				—				—				(153,500	)			(213,534	)			(30,755	)
Dividend distributed to noncontrolling interests			—				—				—				(2,450	)			—				—
Repurchase of ordinary shares			—				—				—				(6,276	)			—				—
Capital injection by noncontrolling interests			—				—				—				17,000				—				—
Proceeds on exercise of stock options			397				399				57				1,518				1,144				165
Net cash generated from (used in) financing activities			397				399				57				(143,708	)			(212,390	)			(30,590	)
Net (decrease) increase in cash and cash equivalents			(399,182	)			7,809				1,124				(993,955	)			(877,487	)			(126,384	)
Cash and cash equivalents at beginning of period			1,513,438				231,512				33,345				2,103,068				1,115,266				160,632
Effect of exchange rate changes on cash and cash equivalents			1,010				921				133				6,153				2,463				354
Cash and cash equivalents at end of period			1,115,266				240,242				34,602				1,115,266				240,242				34,602
Interest paid			—				—				—				—				—				—
Income taxes paid			534				589				85				4,383				4,133				595

  

For more information, please contact:

 

Oasis Qiu

Investor Relations Manager

Tel: +86 (20) 8388-3191

Email: qiusr@fanhuaholdings.com

Source: Fanhua Inc.

  

 

Page 16 of 16

 

Exhibit 99.2

 

 

Fanhua Board Approves Cash Dividend Policy

 

GUANGZHOU, China, March 6, 2017 (GLOBE NEWSWIRE) - Fanhua Inc. ( “Fanhua” or “the Company”) (Nasdaq: FANH), a leading independent online-to-offline ("O2O") financial services provider in China, today announced that its Board of Directors (the "Board") approved a cash dividend policy on February 28, 2017, which provides for an annual cash dividend to shareholders of up to 30% of the Company’s net income attributable to shareholders in the previous fiscal year. The Company expects to declare the first annual cash dividend by the end of April 2017 when the Company completes the annual audit of its 2016 financial results.

 

 This dividend policy will be reviewed and revised by the Board periodically in accordance with the Company’s business and financial circumstances, with the goal of sharing the Company’s success with its shareholders while reserving adequate funds for the Company’s business operations and expansion plans.

 

Mr. Chunlin Wang, Chief Executive Officer of the Company, commenting on the new dividend policy stated, "The approval by the Board of the cash dividend policy demonstrates the Board’s confidence in the Company’s growth and profitability. We experienced robust growth in 2016 and recorded positive operating income sooner than we expected. We are optimistic that we will generate strong operating profit in 2017 and continue to do so for the foreseeable future. We are committed to consistently delivering solid returns to our shareholders in various forms, including cash dividend. "

 

About Fanhua Inc.

 

Fanhua Inc. is a leading independent online-to-offline financial services provider. Through our online platforms and offline sales and service network, we offer a wide variety of financial products and services to individuals and businesses, including property and casualty and life insurance products. We also provide insurance claims adjusting services, such as damage assessments, surveys, authentications and loss estimations, as well as value-added services, such as emergency vehicle roadside assistance. Our online platforms include (1) Baoxian.com, an online entry portal for comparing and purchasing health, accident, travel and homeowner insurance products; (2) CNpad, a mobile sales support application and (3) eHuzhu (www.ehuzhu.com), a non-profit online mutual aid platform in China.

 

Our extensive distribution and service network covers 29 provinces in China, including most economically developed regions and cities.

 

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 and the industry. Potential risks and uncertainties include, but are not limited to, Fanhua’s ability to attract and retain key personnel and productive agents, its ability to maintain existing and develop new business relationships with insurance companies, its ability to execute its growth strategy, its ability to adapt to the evolving regulatory environment in the Chinese insurance industry, its ability to compete effectively against its competitors, quarterly variations in its operating results caused by factors beyond its control and macroeconomic conditions in China and their potential impact on the sales of insurance products. All information provided in this press release is as of the date hereof, and Fanhua undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although Fanhua believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by Fanhua is included in Fanhua's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F.

 

For more information about Fanhua Inc., please visit http://ir.fanhuaholdings.com/.

 

CONTACT: Oasis Qiu

Investor Relations Manager

Tel: (8620) 83883191

Email: qiusr@fanhuaholdings.com