Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

 

 

 

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 November 2024

 

Commission File Number: 001-38652

 

X Financial

(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

[phone]

(Address of principal executive offices)

 

Indicate by 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 ¨

 

Indicate 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

 

 

 

 

 

 

EXHIBIT INDEX

 

Exhibit		Description
99.1		Press Release titled “X Financial Reports Third Quarter 2024 Unaudited Financial Results”

 

 

 

 

SIGNATURES

 

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.

 

	X Financial
	By:	/s/ Yue (Justin) Tang
	Name:	Yue (Justin) Tang
	Title:	Chairman and Chief Executive Officer

 

Date: November 26, 2024

 

 

 

 

Exhibit 99.1

 

X Financial Reports Third Quarter 2024 Unaudited Financial Results

 

SHENZHEN, China, November 26, 2024 /PRNewswire/ -- X Financial (NYSE: XYF) (the “Company” or “we”), a leading online personal finance company in China, today announced its unaudited financial results for the third quarter ended September 30, 2024.

 

Third Quarter 2024 Operational Highlights

 

		Three Months Ended September 30, 2023				Three Months Ended June 30, 2024				Three Months Ended September 30, 2024				QoQ				YoY
Total loan amount facilitated and originated (RMB in million)			29,462				22,749				28,338				24.6	%			(3.8)	%
Number of active borrowers			1,809,815				1,642,605				1,965,248				19.6	%			8.6	%

 

·

The total loan amount facilitated and originated1 in the third quarter of 2024 was RMB28,338 million, compared with RMB29,462 million in the same period of 2023.

·

Total number of active borrowers2 was 1,965,248 in the third quarter of 2024, compared with 1,809,815 in the same period of 2023.

 

		As of September 30, 2023				As of June 30, 2024				As of September 30, 2024
Total outstanding loan balance (RMB in million)			49,685				41,804				45,766
Delinquency rates for all outstanding loans that are past due for 31-60 days			1.11	%			1.29	%			1.02	%
Delinquency rates for all outstanding loans that are past due for 91-180 days			2.50	%			4.38	%			3.22	%

 

·

The total outstanding loan balance3 as of September 30, 2024 was RMB45,766 million, compared with RMB49,685 million as of September 30, 2023.

·

The delinquency rate for all outstanding loans that are past due for 31-60 days4 as of September 30, 2024 was 1.02%, compared with 1.11% as of September 30, 2023.

·

The delinquency rate for all outstanding loans that are past due for 91-180 days5 as of September 30, 2024 was 3.22%, compared with 2.50% as of September 30, 2023.

 

 

¹ Represents the total amount of loans that the Company facilitated and originated during the relevant period.

² Represents borrowers who made at least one transaction on the Company’s platform during the relevant period.

³ Represents the total amount of loans outstanding for loans that the Company facilitated and originated at the end of the relevant period. Loans that are delinquent for more than 60 days are excluded in the outstanding loan balance, except for Xiaoying Housing Loans. As Xiaoying Housing Loans is a secured loan product and the Company is entitled to payment by exercising its rights to the collateral, the Company does not exclude Xiaoying Housing Loans delinquent for more than 60 days in the outstanding loan balance.

⁴ Represents the balance of the outstanding principal and accrued outstanding interest for Xiaoying Credit Loans that were 31 to 60 days past due as a percentage of the total balance of outstanding principal and accrued outstanding interest for Xiaoying Credit Loans that the Company facilitated and originated as of a specific date. Xiaoying Credit Loans that are delinquent for more than 60 days are excluded when calculating the denominator. Starting from the first quarter of 2021, substantially all of the loans facilitated and originated by the Company have been Xiaoying Credit Loans.

⁵ To make the delinquency rate by balance comparable to the peers, the Company also defines the delinquency rate as the balance of the outstanding principal and accrued outstanding interest for Xiaoying Credit Loans that were 91 to 180 days past due as a percentage of the total balance of outstanding principal and accrued outstanding interest for the Xiaoying Credit Loans that the Company facilitated and originated as of a specific date. Xiaoying Credit Loans that are delinquent for more than 180 days are excluded when calculating the denominator.

 

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Third Quarter 2024 Financial Highlights

 

(In thousands, except for share and per share data)		Three Months Ended September 30, 2023				Three Months Ended June 30, 2024				Three Months Ended September 30, 2024				QoQ				YoY
			RMB				RMB				RMB
Total net revenue			1,396,864				1,372,588				1,582,497				15.3	%			13.3	%
Total operating costs and expenses			(961,852	)			(909,535	)			(1,073,533	)			18.0	%			11.6	%
Income from operations			435,012				463,053				508,964				9.9	%			17.0	%
Net income			347,190				415,303				375,840				(9.5)	%			8.3	%
Non-GAAP adjusted net income			374,507				374,661				433,625				15.7	%			15.8	%
Net income per ADS—basic			7.26				8.46				7.86				(7.1)	%			8.3	%
Net income per ADS—diluted			7.02				8.28				7.74				(6.5)	%			10.3	%
Non-GAAP adjusted net income per ADS—basic			7.80				7.62				9.12				19.7	%			16.9	%
Non-GAAP adjusted net income per ADS—diluted			7.56				7.50				8.88				18.4	%			17.5	%

 

·

Total net revenue in the third quarter of 2024 was RMB1,582.5 million (US$225.5 million), representing an increase of 13.3% from RMB1,396.9 million in the same period of 2023.

·

Income from operations in the third quarter of 2024 was RMB509.0 million (US$72.5 million), compared with RMB435.0 million in the same period of 2023.

·

Net income in the third quarter of 2024 was RMB375.8 million (US$53.6 million), compared with RMB347.2 million in the same period of 2023.

·

Non-GAAP6 adjusted net income in the third quarter of 2024 was RMB433.6 million (US$61.8 million), compared with RMB374.5 million in the same period of 2023.

·

Net income per basic and diluted American depositary share (“ADS”) 7 in the third quarter of 2024 was RMB7.86 (US$1.12) and RMB7.74 (US$1.10), compared with RMB7.26 and RMB7.02, respectively, in the same period of 2023.

·

Non-GAAP adjusted net income per basic and diluted ADS in the third quarter of 2024 was RMB9.12 (US$1.30) and RMB8.88 (US$1.27), compared with RMB7.80 and RMB7.56, respectively, in the same period of 2023.

 

Mr. Kent Li, President of the Company, commented, “We are pleased to report another strong quarter, with loan volumes exceeding our forecast and a significant sequential improvement in asset quality. In the third quarter, we continued to promptly adjust loan volumes based on risk levels. As asset quality improved, we further intensified our borrower acquisition efforts, which have yielded very positive results. Both the top and bottom lines continued to grow year-over-year. Non-GAAP adjusted net income reached a new record high.”

 

“Specifically on the operational front, our total loan amount facilitated and originated was down 4% year-on-year but up 25% sequentially to RMB28 billion, above the high end of our guidance. Delinquency rates for all outstanding loans past due for 31-60 days and 91-180 days were 1.02% and 3.22%, respectively, at the end of the quarter, compared to 1.29% and 4.38% a quarter ago and 1.11% and 2.50% a year ago. We are pleased with these improvements in asset quality and will continue to optimize our risk management system through advanced technology.”

 

 

⁶ The Company uses in this press release the following non-GAAP financial measures: (i) adjusted net income (loss), (ii) adjusted net income (loss) per basic ADS, (iii) adjusted net income (loss) per diluted ADS, (iv) adjusted net income per basic share, and (v) adjusted net income per diluted share, each of which excludes share-based compensation expense, impairment losses on financial investments, income (loss) from financial investments and impairment losses on long-term investments. For more information on non-GAAP financial measure, please see the section of “Use of Non-GAAP Financial Measures Statement” and the table captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release.

⁷ Each American depositary share (“ADS”) represents six Class A ordinary shares.

 

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“In September this year, the Chinese government unveiled a comprehensive stimulus package aimed at improving liquidity, boosting the property market, stabilizing financial markets and stimulating consumption. We expect this will provide a meaningful boost to the macroeconomic recovery. As an integral part of the economy, the personal finance market we serve should benefit from this upturn. We have already observed positive signs in the market and are committed to adjusting loan volumes in line with risk levels. As a result of this favorable environment, we are raising our guidance and expect our monthly loan volume to exceed RMB10 billion in the fourth quarter, setting a new record.”

 

Mr. Frank Fuya Zheng, Chief Financial Officer of the Company, added, “I'm pleased to report that our strategy of balancing business growth and profitability continued to pay off. Total net revenue was RMB1.6 billion, up 13% year-on-year and 15% sequentially, while non-GAAP adjusted net income reached a record high of RMB434 million, up 16% year-on-year and sequentially. As we continue to deliver strong profitability and execute on our proven strategy, we have full confidence in our future. We will continue to execute our semi-annual dividend policy and explore opportunities under our share repurchase program to return more value to our shareholders over the long term.”

 

Third Quarter 2024 Financial Results

 

Total net revenue in the third quarter of 2024 increased by 13.3% to RMB1,582.5 million (US$225.5 million) from RMB1,396.9 million in the same period of 2023, primarily due to growth in various disaggregated revenue items compared with the same period of 2023. Please refer to analysis of disaggregation of revenue below.

 

		Three Months Ended September 30,
(In thousands, except for share and per share data)		2023								2024								YoY
		RMB				% of Revenue				RMB				% of Revenue
Loan facilitation service			829,385				59.4	%			878,282				55.5	%			5.9	%
Post-origination service			168,186				12.0	%			186,109				11.8	%			10.7	%
Financing income			300,950				21.5	%			335,765				21.2	%			11.6	%
Guarantee income			7,920				0.6	%			53,576				3.4	%			576.5	%
Other revenue			90,423				6.5	%			128,765				8.1	%			42.4	%
Total net revenue			1,396,864				100.0	%			1,582,497				100.0	%			13.3	%

 

Loan facilitation service fees in the third quarter of 2024 increased by 5.9% to RMB878.3 million (US$125.2 million) from RMB829.4 million in the same period of 2023, primarily due to a decrease in the expected prepayment rates this quarter compared with the same period of 2023.

 

Post-origination service fees in the third quarter of 2024 increased by 10.7% to RMB186.1 million (US$26.5 million) from RMB168.2 million in the same period of 2023, primarily due to the cumulative effect of increased volume of loans facilitated in the previous quarters. Revenues from post-origination services are recognized on a straight-line basis over the term of the underlying loans as the services are being provided.

 

Financing income in the third quarter of 2024 increased by 11.6% to RMB335.8 million (US$47.8 million) from RMB301.0 million in the same period of 2023, primarily due to an increase in average loan receivables held by the Company compared with the same period of 2023.

 

Guarantee income in the third quarter of 2024 was RMB53.6 million (US$7.6 million), compared with RMB7.9 million in the same period of 2023, due to the cumulative effect of increased volume of loans facilitated covered by guarantee service in the previous quarters compared with the same period of 2023. Revenues from guarantee service are recognized systematically when the Company released from the underlying risk.

 

Other revenue in the third quarter of 2024 increased by 42.4% to RMB128.8 million (US$18.3 million), compared with RMB90.4 million in the same period of 2023, primarily due to an increase in referral service fee for introducing borrowers to other platforms.

 

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Origination and servicing expenses in the third quarter of 2024 increased by 13.6% to RMB457.5 million (US$65.2 million) from RMB402.9 million in the same period of 2023, primarily due to the increase in collection expenses resulting from the cumulative effect of increased volume of loans facilitated and originated in the previous quarters compared with the same period of 2023.

 

Borrower acquisitions and marketing expenses in the third quarter of 2024 increased by 20.7% to RMB506.8 million (US$72.2 million) from RMB419.9 million in the same period of 2023, primarily due to intensified efforts in borrower acquisitions compared with the same period of 2023.

 

Reversal of provision for loans receivable in the third quarter of 2024 was RMB35 thousand (US$5 thousand), compared with provision for loans receivable of RMB53.9 million in the same period of 2023, primarily due to a decrease in the average estimated default rate compared with the same period of 2023, and partially offset by an increase in loans receivable held by the Company as a result of the cumulative effect of increased volume of loans facilitated and originated in the previous quarters compared with the same period of 2023.

 

Provision for contingent guarantee liabilities in the third quarter of 2024 was RMB56.4 million (US$8.0 million), compared with RMB41.6 million in the same period of 2023, primarily due to an increase in guarantee liabilities held by the Company as a result of the increased volume of loans facilitated covered by the guarantee service this quarter compared with the same period of 2023.

 

Income from operations in the third quarter of 2024 was RMB509.0 million (US$72.5 million), compared with RMB435.0 million in the same period of 2023.

 

Income before income taxes and gain from equity in affiliates in the third quarter of 2024 was RMB473.5 million (US$67.5 million), compared with RMB417.5 million in the same period of 2023.

 

Income tax expense in the third quarter of 2024 was RMB100.3 million (US$14.3 million), compared with RMB74.2 million in the same period of 2023.

 

Net income in the third quarter of 2024 was RMB375.8 million (US$53.6 million), compared with RMB347.2 million in the same period of 2023.

 

Non-GAAP adjusted net income in the third quarter of 2024 was RMB433.6 million (US$61.8 million), compared with RMB374.5 million in the same period of 2023.

 

Net income per basic and diluted ADS in the third quarter of 2024 was RMB7.86 (US$1.12), and RMB7.74 (US$1.10), compared with RMB7.26 and RMB7.02, respectively, in the same period of 2023.

 

Non-GAAP adjusted net income per basic and diluted ADS in the third quarter of 2024 was RMB9.12 (US$1.30), and RMB8.88 (US$1.27), compared with RMB7.80 and RMB7.56 respectively, in the same period of 2023.

 

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Cash and cash equivalents was RMB1,044.1 million (US$148.8 million) as of September 30, 2024, compared with RMB1,612.2 million as of June 30, 2024.

 

Recent Development

 

Share Repurchase Plans

 

On September 4, 2024, the Company further extended the period of the US$30 million share repurchase program until March 31, 2026. In the third quarter of 2024, the Company repurchased an aggregate of 1,689,722 Class A ordinary shares with 10,038 Class A ordinary shares represented by ADSs for a total consideration of approximately US$1.3 million. The Company has approximately US$4.1 million remaining for potential repurchases under its US$30 million share repurchase plan.

 

As previously disclosed, on May 30, 2024, the Company announced that its board of directors authorized a new US$20 million share repurchase plan, effective through November 30, 2025. The Company completed a tender offer in July 2024 under the new share repurchase program, with a total repurchase amount of approximately US$9.2 million. The Company has approximately US$10.8 million remaining under its US$20 million plan.

 

Business Outlook

 

The Company expects the total loan amount facilitated and originated for the fourth quarter of 2024 to be between RMB30.0 billion and RMB31.0 billion. The total loan amount facilitated and originated for 2024 is expected to be between RMB102.6 billion and RMB103.6 billion.

 

This forecast reflects the Company’s current and preliminary views, which are subject to changes.

 

Conference Call

 

X Financial’s management team will host an earnings conference call at 7:00 AM U.S. Eastern Time on November 27, 2024 (8:00 PM Beijing / Hong Kong Time on November 27, 2024).

 

Dial-in details for the earnings conference call are as follows:

 

United States:	1-888-346-8982
Hong Kong:	852-301-84992
Mainland China:	4001-201203
International:	1-412-902-4272
Passcode:	X Financial

 

Please dial in ten minutes before the call is scheduled to begin and provide the passcode to join the call.

 

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A replay of the conference call may be accessed by phone at the following numbers until December 4, 2024:

 

United States:	1-877-344-7529
International:	1-412-317-0088
Passcode:	3088426

 

Additionally, a live and archived webcast of the conference call will be available at http://ir.xiaoyinggroup.com.

 

About X Financial

 

X 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.

 

For more information, please visit: http://ir.xiaoyinggroup.com.

 

Use of Non-GAAP Financial Measures Statement

 

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.

 

We use in this press release the following non-GAAP financial measures: (i) adjusted net income (loss), (ii) adjusted net income (loss) per basic ADS, (iii) adjusted net income (loss) per diluted ADS, (iv) adjusted net income per basic share, and (v) adjusted net income per diluted share, each of which excludes share-based compensation expense, impairment losses on financial investments, income (loss) from financial investments and impairment losses on long-term investments. 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.

 

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.

 

For 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.

 

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 RMB 7.0176 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 September 30, 2024.

 

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Disclaimer

 

Safe Harbor Statement

 

This announcement 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.

 

Use of Projections

 

This announcement 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 differ 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.

 

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For more information, please contact:

 

X Financial

Mr. Frank Fuya Zheng

E-mail: [e-mail]

 

Christensen IR

 

In China

Mr. Rene Vanguestaine

Phone: [phone]

E-mail: [e-mail]

 

In US

Ms. Linda Bergkamp

Phone: [phone]

Email: [e-mail]

 

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X Financial

Unaudited Condensed Consolidated Balance Sheets  

 

(In thousands, except for share and per share data)		As of December 31, 2023				As of September 30, 2024				As of September 30, 2024
		RMB				RMB				USD
ASSETS
Cash and cash equivalents			1,195,352				1,044,144				148,789
Restricted cash, net			749,070				489,372				69,735
Accounts receivable and contract assets, net			1,659,588				1,709,428				243,592
Loans receivable from Credit Loans and other loans, net			4,947,833				4,938,195				703,687
Deposits to institutional cooperators, net			1,702,472				1,739,539				247,882
Prepaid expenses and other current assets, net			48,767				40,824				5,817
Deferred tax assets, net			135,958				192,644				27,452
Long term investments			493,411				491,782				70,078
Property and equipment, net			8,642				11,566				1,648
Intangible assets, net			36,810				36,236				5,164
Loan receivable from Housing Loans, net			8,657				6,494				925
Financial investments			608,198				866,804				123,519
Other non-current assets			55,265				53,259				7,589
TOTAL ASSETS			11,650,023				11,620,287				1,655,877
LIABILITIES
Payable to investors and institutional funding partners at amortized cost			3,584,041				2,406,552				342,931
Guarantee liabilities			61,907				102,638				14,626
Deferred guarantee income			46,597				106,054				15,113
Short-term borrowings			565,000				433,500				61,773
Accrued payroll and welfare			86,771				93,047				13,259
Other tax payable			289,819				292,939				41,743
Income tax payable			446,500				496,489				70,749
Accrued expenses and other current liabilities			595,427				732,591				104,394
Dividend payable			59,226				-				-
Other non-current liabilities			37,571				30,915				4,405
Deferred tax liabilities			30,040				29,003				4,133
TOTAL LIABILITIES			5,802,899				4,723,728				673,126
Commitments and Contingencies
Equity:
Common shares			207				207				29
Treasury stock			(111,520	)			(155,007	)			(22,088	)
Additional paid-in capital			3,196,942				3,194,909				455,271
Retained earnings			2,692,018				3,788,885				539,912
Other comprehensive income			69,477				67,568				9,628
Total X Financial shareholders' equity			5,847,124				6,896,562				982,752
Non-controlling interests			-				-				-
TOTAL EQUITY			5,847,124				6,896,562				982,752
TOTAL LIABILITIES AND EQUITY			11,650,023				11,620,290				1,655,878

 

 

 

X Financial  

Unaudited Condensed Consolidated Statements of Comprehensive Income

 

		Three Months Ended September 30,												Nine Months Ended September 30,
(In thousands, except for share and per share data)		2023				2024				2024				2023				2024				2024
		RMB				RMB				USD				RMB				RMB				USD
Net revenues
Loan facilitation service			829,385				878,282				125,154				2,125,492				2,224,681				317,015
Post-origination service			168,186				186,109				26,520				429,775				493,520				70,326
Financing income			300,950				335,765				47,846				829,645				1,021,405				145,549
Guarantee income			7,920				53,576				7,635				7,920				132,067				18,819
Other revenue			90,423				128,765				18,349				229,388				291,387				41,522
Total net revenue			1,396,864				1,582,497				225,504				3,622,220				4,163,060				593,231
Operating costs and expenses:
Origination and servicing1			402,939				457,545				65,200				1,123,027				1,299,164				185,129
Borrower acquisitions and marketing1			419,887				506,758				72,212				1,023,948				1,078,768				153,723
General and administrative1			40,200				49,499				7,054				114,833				127,047				18,104
Provision for accounts receivable and contract assets			3,748				4,799				684				5,983				22,470				3,202
(Reversal of) provision for loans receivable			53,946				(35	)			(5	)			129,772				157,370				22,425
Provision for contingent guarantee liabilities			41,594				56,366				8,032				41,594				125,635				17,903
Change in fair value of financial guarantee derivative2			-				-				-				(24,966	)			-				-
Fair value adjustments related to Consolidated Trusts2			(268	)			-				-				531				-				-
(Reversal of) provision for credit losses for deposits and other financial assets			(194	)			(1,399	)			(199	)			(427	)			4,049				577
Total operating costs and expenses			961,852				1,073,533				152,978				2,414,295				2,814,503				401,063
Income from operations			435,012				508,964				72,526				1,207,925				1,348,557				192,168
Interest income (expenses), net			(7,322	)			1,211				173				(17,778	)			(4,898	)			(698	)
Foreign exchange (gain) loss			1,526				4,881				696				(7,255	)			(3,351	)			(478	)
Income (loss) from financial investments			(16,490	)			(47,635	)			(6,788	)			(13,911	)			53,887				7,679
Other income, net			4,742				6,048				862				23,005				9,437				1,345
Income before income taxes and gain from equity in affiliates			417,468				473,469				67,469				1,191,986				1,403,632				200,016
Income tax expense			(74,172	)			(100,331	)			(14,297	)			(213,779	)			(254,924	)			(36,326	)
Gain from equity in affiliates, net of tax			3,894				2,702				385				19,619				5,572				794
Net income			347,190				375,840				53,557				997,826				1,154,280				164,484
Less: net income attributable to non-controlling interests			-				-				-				-				-				-
Net income attributable to X Financial shareholders			347,190				375,840				53,557				997,826				1,154,280				164,484
Net income			347,190				375,840				53,557				997,826				1,154,280				164,484
Other comprehensive income, net of tax of nil:
Gain (loss) from equity in affiliates			4				(449	)			(64	)			45				(418	)			(60	)
Income from financial investments			-				1,580				225				-				6,100				869
Foreign currency translation adjustments			(6,301	)			(12,778	)			(1,821	)			13,624				(7,590	)			(1,082	)
Comprehensive income			340,893				364,193				51,897				1,011,495				1,152,372				164,211
Less: comprehensive income attributable to non-controlling interests			-				-				-				-				-				-
Comprehensive income attributable to X Financial shareholders			340,893				364,193				51,897				1,011,495				1,152,372				164,211
Net income per share—basic			1.21				1.31				0.19				3.47				3.96				0.56
Net income per share—diluted			1.17				1.29				0.18				3.43				3.87				0.55
Net income per ADS—basic			7.26				7.86				1.12				20.82				23.76				3.39
Net income per ADS—diluted			7.02				7.74				1.10				20.58				23.22				3.31
Weighted average number of ordinary shares outstanding—basic			287,806,370				285,857,203				285,857,203				287,412,729				291,622,784				291,622,784
Weighted average number of ordinary shares outstanding—diluted			297,114,127				292,339,641				292,339,641				291,209,263				298,036,305				298,036,305

 

 

 

 

¹ Starting in the first quarter of 2024, management has concluded to separate expenses related to borrower acquisitions from origination and servicing expenses and indirect expenses of the borrower acquisitions from general and administrative expenses to a single line item as theses expenses become more and more significant and thus deemed to be useful to financial statement users. Furtherly, management has determined to embed the sales and marketing expenses, which is not considered as material, in other line item. In conclusion, management has decided to combine these two line items into one captioned borrower acquisitions and marketing expenses. Management has correspondingly conformed prior period presentation to current period presentation to enhance comparability. This change in presentation does not affect any subtotal line on the face of consolidated statements of comprehensive income.

 

		Three Months Ended September 30, 2023
(In thousands, except for share and per share data)		before re-grouping				after re-grouping				Changes
		RMB				RMB				RMB
Origination and servicing			811,078				402,939				(408,139	)
Borrower acquisitions and marketing expenses			-				419,887				419,887
Sales and marketing			3,360				-				(3,360	)
General and administrative			48,588				40,200				(8,388	)

 

² Starting in the first quarter of 2024, management has considered the facts that fair value change related to financial guarantee services and Consolidated Trusts are generated from ordinary course of businesses, and has concluded to reclass the amount to captions above total operating costs and expenses. Prior to the reclassification, management classified all amount of fair value changes to captions below total operating costs and expenses. This reclassification does not have impact on net income for any prior periods presented.

 

 

 

X Financial  

Unaudited Reconciliations of GAAP and Non-GAAP Results

 

		Three Months Ended September 30,												Nine Months Ended September 30,
(In thousands, except for share and per share data)		2023				2024				2024				2023				2024				2024
		RMB				RMB				USD				RMB				RMB				USD
GAAP net income			347,190				375,840				53,557				997,826				1,154,280				164,484
Less: Income (loss) from financial investments (net of tax of nil)			(16,490	)			(47,635	)			(6,788	)			(13,911	)			53,887				7,679
Less: Impairment losses on financial investments (net of tax of nil)			-				-				-				-				-				-
Less: Impairment losses on long-term investments (net of tax)			-				-				-				-				-				-
Add: Share-based compensation expenses (net of tax of nil)			10,827				10,150				1,446				34,178				30,096				4,289
Non-GAAP adjusted net income			374,507				433,625				61,791				1,045,915				1,130,489				161,094
Non-GAAP adjusted net income per share—basic			1.30				1.52				0.22				3.64				3.88				0.55
Non-GAAP adjusted net income per share—diluted			1.26				1.48				0.21				3.59				3.79				0.54
Non-GAAP adjusted net income per ADS—basic			7.80				9.12				1.30				21.84				23.28				3.32
Non-GAAP adjusted net income per ADS—diluted			7.56				8.88				1.27				21.54				22.74				3.24
Weighted average number of ordinary shares outstanding—basic			287,806,370				285,857,203				285,857,203				287,412,729				291,622,784				291,622,784
Weighted average number of ordinary shares outstanding—diluted			297,114,127				292,339,641				292,339,641				291,209,263				298,036,305				298,036,305

 

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