FinVolution Group Reports Fourth Quarter & Fiscal Year 2019 Unaudited Financial Results, and Announces Management Changes.

SHANGHAI: FinVolution Group (formerly known as "PPDAI," or the "Company") (NYSE: FINV), a leading fintech platform in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2019.

As of

December 31, 2018

September 30, 2019

December 31, 2019

Cumulative registered users[1] ('000)

88,930

102,847

105, 912

Cumulative number of borrowers[2] ('000)

14,440

17,445

17, 926

For Three Months Ended

For Twelve Months Ended

December

31, 2018

December

31, 2019

YoY

Change

December

31, 2018

December

31, 2019

YoY

Change

Number of unique borrowers [3]('000)

3,037

2,222

(26.8%)

6,806

6,678

(1.9%)

Loan origination volume [4]

(RMB, million)

17,617

16,896

(4.1%)

61,498

82,167

33.6%

Repeat borrowing rate [5] (%)

73.4%

81.2%

10.6%

73.6%

78.1%

6.1%

Average loan size [6] (RMB)

3,423

3,681

7.5%

3,281

3,267

(0.4%)

Fourth Quarter 2019 Financial and Operational Highlights

Operating revenues decreased by 4.4% to RMB1,232.8 million (US$177.1 million) in the fourth quarter of 2019, from RMB1,289.4 million in the same period of 2018.

Operating income was RMB435.1 million (US$62.5 million) for the fourth quarter of 2019, representing a decrease of 10.6% from RMB486.6 million in the same period of 2018.

Non-GAAP adjusted operating income[8], which excludes share-based compensation expenses before tax and a write-back of provision for expected discretionary payments to investors in investment programs protected by the Company's investor reserve funds which is only applicable to Q4 2018, was RMB444.5 million (US$63.9million) for the fourth quarter of 2019, representing a decrease of 5.8% from RMB472.1 million in the same period of 2018.

Cumulative registered users[1] reached approximately 105.9 million as of December 31, 2019.

Cumulative number of borrowers[2] was approximately 17.9 million as of December 31, 2019.

Number of unique borrowers[3] was approximately 2.2 million for the fourth quarter of 2019, representing a decrease of 26.8% from the same period of 2018.

Loan origination volume[4] was approximately RMB16.9 billion for the fourth quarter of 2019, representing a decrease of 4.1% from the same period of 2018.

The proportion of total loan origination volume facilitated by institutional partners in the fourth quarter of 2019 increased to 100% from 75.1% in the third quarter of 2019.

Average loan tenure[7] was 8.4 months for the fourth quarter of 2019.

Fiscal Year 2019 Financial and Operational Highlights:

Operating revenues in 2019 increased by 31.2% to RMB5,962.8 million (US$856.5 million), from RMB4,543.7 million in 2018.

Loan facilitation service fees increased by 13.4% to RMB3,310.9 million (US$475.6 million) in 2019, from RMB2,919.2 million in 2018.

Post-facilitation service fees increased by 30.1% to RMB1,200.4 million (US$172.4 million) in 2019, from RMB922.8 million in 2018.

Operating income was RMB2,646.4 million (US$380.1 million) in 2019, representing an increase of 43.3% from RMB1,846.6 million in 2018.

Non-GAAP adjusted operating income[8], which excludes share-based compensation expenses before tax and a write-back of provision for expected discretionary payments to investors in investment programs protected by the Company's investor reserve funds which is only applicable in 2018 increased by 47.1% to RMB2,688.7 million (US$386.2 million) from RMB1,828.3 million in 2018.

Net profit was RMB2,374.5 million (US$341.1million) in 2019, compared to RMB2,469.5 million in 2018.

Number of unique borrowers[3] was 6.7 million in 2019, representing a decrease of 1.9% from 2018.

Loan origination volume[4] was RMB82.2 billion in 2019, representing an increase of 33.6% from 2018.

Average loan tenure[7] was 8.7 months in 2019.

Mr. Feng Zhang, the Chief Executive Officer of FinVolution, commented, "Despite uncertainties and rapidly evolving market dynamics, we made numerous positive strides in 2019. During the year, we successfully repositioned our business by transitioning the funding sources on the platform from being primarily facilitated by individual investors to being fully funded through our institutional partners, while continuing to deliver solid business growth. Our loan origination volume for 2019 increased by 33.6% year-over-year to RMB82.2 billion, contributing to a 31.2% year-over-year growth in operating revenue to RMB6.0 billion and a 43.3% year-over-year increase in operating income to RMB2.6 billion for the year. This impressive performance demonstrates the resilience and flexibility of our business, the effectiveness of management execution, as well as our strong brand equity that enables us to rapidly expand our partnership with institution partners. With strong confidence in our capability to navigate through market dynamics, the number of active institutional funding partners on our platform has increased progressively throughout the year.

"Aside from our successful funding transition, we have at the same time, continued to deliver encouraging results on our strategic initiatives. In 2019, we completed an investment of a 4.99% stake in Fujian Haixia Bank and simultaneously entered into a strategic partnership with them. Our online micro lending subsidiary was approved to connect to the PBOC Credit Reference Center, demonstrating our ongoing contribution to a more transparent credit ecosystem while enhancing our risk assessment mechanisms. Our international expansion also achieved an important milestone with our subsidiary in Indonesia receiving the peer-to-peer lending license from the Financial Services Authority of Indonesia.

"In spite of a dynamic and volatile operating environment in 2019, our strong performance and steady progress in business initiatives , reaffirms the enormous underserved demand for consumer finance services in China. By leveraging our extensive proprietary technologies and market leadership, we are dedicated to strengthening our ability to provide a superior experience to both individual borrowers and financial institutions," Mr. Zhang concluded.

Mr. Simon Ho, Chief Financial Officer of FinVolution, commented, "We realized solid profitability amid rapidly changing market conditions in 2019. Despite the full transition of our funding sources, we delivered non-GAAP operating income of RMB 444.5 million and maintained a healthy non-GAAP operating margin[9] of 36.1% in the fourth quarter. Our balance sheet and liquidity remains strong with...

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