Revenues increased by 88.4% to $46.5 million and loans facilitated through platform increased 59.9% to over $1.3 Billion
SHANGHAI, March 19, 2018 /PRNewswire/ -- Hui Ying Financial Holdings Corp. (OTCQB: SFHD) ("Hui Ying" or the "Company"), a leading online financial credit facility solution provider servicing Small-to-Medium Enterprises ("SMEs") and individual borrowers in China, today announced its financial results for the twelve months ended December 31, 2017*.
* financial statements for 2016 have been restated.
· Total loans facilitated through our platform increased by 59.9% to $1,308.7 million for the year ended 2017 from $818.5 million in 2016, as China's online peer-to-peer lending platform industry continued to grow significantly during 2017, coupled with an increased marketing campaign, promotion activities on our platform as well as increased brand awareness of our online marketplace. This led to accumulated value of loans facilitated through our platform in the aggregate amount of $2.87 billion since the launch of our marketplace in December 2013 through the end of 2017.
· We had 8,047 borrowers and 69,232 investors participated in an aggregate of 23,263 loans during 2017, compared to 1,067 borrowers, 39,999 investors and 8,739 loans during 2016. As of the end of 2017, we had 367, 893 registered investors and 24 cooperative partners who frequently serve as guarantors of loans on our platform.
· Total revenues increased by 88.4% to $46.50 million for the year ended 2017 from $24.68 million in 2016, as a result of an increase in loans facilitated through our platform and the contribution from the newly launched entrusted loan business. Revenues from loan origination service fees, loan repayment management fees and financing income from entrusted loans were $26.70 million, $18.21 million and $1.58 million, respectively, for the year ended 2017 compared to $17.49 million, $7.19 million and nil, respectively, in 2016.
· Net income increased by 344.1% to $15.27 million for the year ended 2017 from $3.44 million in 2016. Diluted earnings per share was $0.21 for the year ended 2017, compared to $0.05 for 2016.
Bodang Liu, Chairman and Chief Executive Officer of Hui Ying, commented, "We are very pleased to report strong 2017 financial results with revenues growing by 88.4% to $46.50 million and net income more than quadrupled to $15.27 million. We have benefitted from continuing growth and momentum in the peer-to-peer lending industry as well as the increasing awareness and reputation of our online marketplace."
"Looking ahead, despite uncertainties in the regulatory environment and challenges in quickly evolving market conditions and the competitive landscape, we are increasingly confident in our long-term prospects as we remain steadfast and determined to build and promote our online marketplace as a convenient, secure, and effective solution for under-served SMEs and individual borrowers who need access to financing."
Fiscal Year 2017 Financial Results
For the year ended 2017, total revenues increased by $21.82 million, or 88.4%, to $46.50 million from $24.68 million in 2016. The increase of total revenues was mainly attributable to the increase in the volume of loans facilitated through our platform as well as financing income generated through our entrusted loan business we launched in June 2017, which contributed 3.4% of total revenues in 2017. The total loan volume facilitated through our platform increased by $490.2 million or 59.9%, to $1,308.7 million for the year ended 2017 from $818.5 million in 2016.
The loan origination service fee increased by $9.21 million, or 52.7%, to $26.70 million for the year ended 2017 from $17.49 million in 2016. The loan repayment management fee increased in 2017 by $11.02 million, or 153.3%, to $18.21 million from $7.19 million in 2016. The financing income from entrusted loans was $1.58 million for 2017, compared to nil for 2016. The loan origination service fee, loan repayment management fee, and financing income from entrusted loans accounted for 57.4%, 39.2% and 3.4%, respectively, of total revenues for the year ended 2017, compared to 70.9%, 29.1% and nil, respectively, for 2016. The change is due to the shift in structuring our loan products towards longer duration loans. Since our loan repayment management fee is based on a certain percentage of the duration of a loan, the more loans with longer terms, the more loan repayment management fees we generate. We expect this trend will continue as the industry becomes more regulated and investors are getting more comfortable investing in loans with longer terms. We will continue to adjust our loan product offerings accordingly.
Operating expenses increased by $8.34 million, or 41.2%, to $28.55 million for the year ended 2017 from $20.21 million in 2016. Sales and marketing expenses increased by $6.10 million, or 37.7%, to $22.29 million for 2017 from $16.19 million for 2016. The increase in sales and marketing expenses was associated with sales and marketing efforts and promotion activities that led to a higher volume of loans facilitated through our platform. As a percentage of total revenues, sales and marketing expenses were 47.9% for the year ended 2017, compared to 65.6% for 2016. General and administrative expenses increased $2.78 million, or 88.0%, to $5.94 million from $3.16 million in 2016, primarily due to over $1.2 million in professional, consulting and related expenses associated with the Company's uplisting efforts onto Nasdaq. As a percentage of total revenues, general and administrative expenses were 12.8% in 2017, essentially unchanged from 2016.
Operating income increased by $13.48 million, or 301.6%, to $17.95 million in 2017 from $4.47 million in 2016. The increase in operating income was primarily driven by an increase in total revenues and partially offset by an increase in operating expenses. Operating margin was 38.6% for the year ended 2017, compared to 18.1% in 2016.
Income before Income Taxes
Total other expense, including interest income, interest expenses and bank charges, realized gain on investments and others, was $0.11 million for the year ended 2017, compared to total other income of $0.03 million in 2016. The change was primarily related to the increase in interest expense and bank changes and partially offset by the increase in realized gain on investments and interest income.
Income before provision for income taxes increased by $13.34 million, or 296.6%, to $17.84 million for the year ended 2017 from $4.50 million for the same period of last year
Provision for income taxes was $2.56 million in 2017, compared to $1.06 million in 2016.
Net income increased by $11.83 million, or 343.9%, to $15.27 million for 2017 from $3.44 million in 2016.
Earnings per Share
Basic and diluted earnings per share were $0.21 for the year ended 2017, compared to $0.05 for 2016.
For the year ended 2017, the Company facilitated 23,263 loans with an aggregate loan amount of $1,308.7 million. This compared to 8,739 loans with an aggregate loan amount of $818.5 million in 2016. During 2017, the company had 8,047 borrowers, of which 8% were repeat borrowers. This was compared to 1,067 borrowers with a 15% repeat borrower rate for the year ended 2016. During the year ended 2017, the company had 69,232 investors, of which 55% were repeat investors. This is compared to 39,999 investors with a 56% repeat investor rate in 2016.
As of December 31, 2017, we had an outstanding loan balances of $436.3 million, compared to $246.1 million at the end of 2016.
As of December 31, 2017, the Company had cash and cash equivalents of $12.68 million, compared to $8.56 million at the end of 2016. The cash held in private loan risk reserve accounts was $12.10 million and $7.30 million as of the end of 2017 and 2016, respectively. Short term investments were nil as of December 31, 2017, compared to $8.27 million at the end of 2016. As of December 31, 2017, we had $55.27 million in total current assets and $17.47 million in total current liabilities, representing a current ratio of 3.16. As a comparison, we had $19.95 million in total current assets and $9.14 million in total current liabilities, with a current ratio of 2.18 as of December 31, 2016.
Net cash provided by operating activities was $24.07 million for the year ended 2017, compared to $4.83 million for 2016. Net cash used in investing activities was $34.02 million for the year of 2017, compared to $9.16 million for 2016. Net cash provided by financing activities was $13.37 million in 2017 related to cash proceeds received from the issuance of senior convertible promissory notes in 2017, compared to $7.88 million in2016 as a result of private placement of common shares in 2016.
About Hui Ying Financial Holdings Corporation
Hui Ying Financial Holdings Corporation, previously known as Sino Fortune Holding Corporation, is a leading online financial credit facility solution provider servicing under-served SME and individual borrowers in China. Through operating an electronic online financial platform, www.hyjf.com, the Company matches investors with SME and individual borrowers in China. The Company also sets aside risk reserve funds with the aim of limiting losses to investors from borrower defaults. In addition, the company provides investors with access to a liquid secondary market, giving them an opportunity to exit their investments before the underlying loans become due. For more information, please visit: ir.hyjf.com.
This press release may contain projections or other forward-looking statements regarding future events or our future financial performance. All statements other than present and historical facts and conditions contained in this release, including any statements regarding our future results of operations and financial positions, business strategy, plans and our objectives for future operations, are forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). These statements are only predictions and reflect our current beliefs and expectations with respect to future events and are based on assumptions and subject to risk and uncertainties and subject to change at any time. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Actual events or results may differ materially from those contained in the projections or forward-looking statements.
Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.
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