Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2020shares | |
Document and Entity Information | |
Document Type | 20-F |
Entity Registrant Name | Yiren Digital Ltd. |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity Central Index Key | 0001631761 |
Document Period End Date | Dec. 31, 2020 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 167,965,710 |
Entity Interactive Data Current | Yes |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | true |
Entity Shell Company | false |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) |
Assets including amounts of the consolidated variable interest entities (the "VIEs") and consolidated assets backed financing entities ("ABFE") (Note 2): | |||
Cash and cash equivalents | $ 378,530 | ¥ 2,469,909 | ¥ 3,198,086 |
Restricted cash | 36,358 | 237,239 | 71,056 |
Accounts receivable (net of allowance of RMB2,461 and RMB7,361 as of December 31, 2019 and 2020, respectively) | 18,811 | 122,742 | 3,398 |
Contract assets, net (net of allowance of RMB1,515,627 and RMB467,306 as of December 31, 2019 and 2020, respectively) | 114,969 | 750,174 | 2,398,685 |
Contract cost | 10,043 | 65,529 | 160,003 |
Prepaid expenses and other assets | 42,697 | 278,591 | 1,333,221 |
Loans at fair value | 29,449 | 192,156 | 418,492 |
Financing receivables (net of allowance of nil and RMB32,975 as of December 31, 2019 and 2020, respectively) | 192,106 | 1,253,494 | 29,612 |
Amounts due from related parties | 135,480 | 884,006 | 988,853 |
Held-to-maturity investments | 504 | 3,286 | 6,627 |
Available-for-sale investments | 26,899 | 175,515 | 460,991 |
Property, equipment and software, net | 22,558 | 147,193 | 195,855 |
Deferred tax assets | 2,566 | 16,745 | 45,407 |
Right-of-use assets | 16,195 | 105,674 | 334,134 |
Total assets | 1,027,165 | 6,702,253 | 9,644,420 |
Liabilities including amounts of the consolidated variable interest entities (the "VIEs") and the consolidated ABFE without recourse to the Company (Note 2): | |||
Accounts payable | 1,517 | 9,903 | 43,583 |
Amounts due to related parties | 148,706 | 970,309 | 106,645 |
Deferred revenue | 7,801 | 50,899 | 358,203 |
Payable to investors at fair value | 8,065 | 52,623 | |
Accrued expenses and other liabilities | 185,275 | 1,208,915 | 2,324,552 |
Secured borrowings | 76,705 | 500,500 | 18,590 |
Refund liabilities | 1,662 | 10,845 | 1,801,535 |
Deferred tax liabilities | 5,937 | 38,741 | 218,888 |
Lease liabilities | 12,545 | 81,854 | 282,334 |
Total liabilities | 448,213 | 2,924,589 | 5,154,330 |
Commitments and Contingencies (Note 18) | |||
Equity: | |||
Ordinary shares (US$0.0001 par value; 500,000,000 shares authorized; 186,332,444 and 187,569,640 shares issued as of December 31, 2019 and 2020, respectively; 185,595,072 and 167,965,710 shares outstanding as of December 31, 2019 and 2020, respectively) | 19 | 121 | 121 |
Treasury stock (737,372 and 1,043,930 shares as of December 31, 2019 and 2020, respectively) | (6,153) | (40,147) | (37,097) |
Additional paid-in capital | 775,199 | 5,058,176 | 5,038,691 |
Accumulated other comprehensive income | 2,622 | 17,108 | 21,855 |
Accumulated deficit | (192,735) | (1,257,594) | (533,480) |
Total equity | 578,952 | 3,777,664 | 4,490,090 |
Total liabilities and equity | $ 1,027,165 | ¥ 6,702,253 | ¥ 9,644,420 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands | Dec. 31, 2020CNY (¥)shares | Dec. 31, 2019CNY (¥)shares |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance | ¥ | ¥ 7,361 | ¥ 2,461 |
Contract assets, allowance | ¥ | 467,306 | 1,515,627 |
Financing receivables, allowance | ¥ | ¥ 32,975 | ¥ 0 |
Ordinary shares: | ||
Ordinary shares, authorized (in shares) | 500,000,000 | 500,000,000 |
Ordinary shares, issued (in shares) | 187,569,640 | 186,332,444 |
Ordinary shares, outstanding (in shares) | 167,965,710 | 185,595,072 |
Treasury stock, issued (in shares) | 1,043,930 | 737,372 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2020CNY (¥)¥ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | [1] | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
Net revenue(including revenue from related parties of RMB177,341, RMB142,477 and RMB145,442 for the years ended December 31,2018, 2019 and 2020, respectively) | $ 607,199 | ¥ 3,961,962 | ¥ 8,616,784 | ¥ 11,244,114 | |
Operating costs and expenses: | |||||
Sales and marketing(including expenses from related parties of RMB997,203, RMB434,875 and RMB111,550 for the years ended December 31,2018, 2019 and 2020, respectively) | (291,969) | (1,905,095) | (4,457,353) | (6,658,270) | |
Origination, servicing and other operating costs (including costs from related parties of RMB559,724, RMB409,287 and RMB718,734 for the years ended December 31,2018, 2019 and 2020, respectively) | (169,300) | (1,104,682) | (665,083) | (1,061,289) | |
General and administrative (including expenses from related parties of RMB584,426, RMB122,338 and RMB192,934 for the years ended December 31,2018, 2019 and 2020, respectively) | (96,149) | (627,368) | (731,806) | (1,336,247) | |
Provision for contingent liability | (488) | (3,187) | (9,462) | (419,581) | |
Allowance for contract assets, receivables and others | (56,955) | (371,629) | (1,625,051) | (992,581) | |
Loss of disposal | (100,512) | (655,839) | |||
Total operating costs and expenses | (715,373) | (4,667,800) | (7,488,755) | (10,467,968) | |
Other income/(expenses): | |||||
Interest income, net | 9,444 | 61,623 | 73,367 | 73,917 | |
Fair value adjustments related to the consolidated ABFE | (22,067) | (143,988) | 3,866 | 243,122 | |
Gain on disposal of loan receivables and other beneficial rights | ¥ | 159,392 | 663,884 | |||
Other income, net | 2,275 | 14,844 | 32,365 | 26,323 | |
Total other income/(expenses), net | (10,348) | (67,521) | 268,990 | 1,007,246 | |
Income/(loss) before provision for income taxes | (118,522) | (773,359) | 1,397,019 | 1,783,392 | |
Income tax (expenses)/benefits | 12,354 | 80,611 | (239,228) | (194,287) | |
Share of results of equity investees | ¥ | (2,180) | (9,295) | |||
Net income/(loss) | $ (106,168) | ¥ (692,748) | ¥ 1,155,611 | ¥ 1,579,810 | |
Basic net income/(loss) per share | (per share) | $ (0.5888) | ¥ (3.8422) | ¥ 6.2391 | ¥ 8.5754 | |
Weighted average number of ordinary shares outstanding, basic | shares | 180,301,898 | 180,301,898 | 185,219,586 | 184,225,643 | |
Diluted net income/(loss) per share | (per share) | $ (0.5888) | ¥ (3.8422) | ¥ 6.1951 | ¥ 8.4813 | |
Weighted average number of ordinary shares outstanding, diluted | shares | 180,301,898 | 180,301,898 | 186,535,464 | 186,270,515 | |
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
Revenue from Related Parties | ¥ 145,442 | ¥ 142,477 | ¥ 177,341 |
Sales and marketing expenses from related party | 111,550 | 434,875 | 997,203 |
Origination and servicing expenses from related party | 718,734 | 409,287 | 559,724 |
General and administrative expenses from related party | ¥ 192,934 | ¥ 122,338 | ¥ 584,426 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | [1] | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME | |||||
Net income/(loss) | $ (106,168) | ¥ (692,748) | ¥ 1,155,611 | ¥ 1,579,810 | |
Other comprehensive income/(losses), net of tax of nil: | |||||
Foreign currency translation adjustments | (1,271) | (8,293) | 1,626 | 7,737 | |
Unrealized (losses)/gains on available-for-sale investments | 543 | 3,546 | 3,839 | (2,414) | |
Comprehensive income/(loss) | $ (106,896) | ¥ (697,495) | ¥ 1,161,076 | ¥ 1,585,133 | |
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME | |||
Other comprehensive income/(losses), tax | ¥ 0 | ¥ 0 | ¥ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY ¥ in Thousands, $ in Thousands | Ordinary sharesCNY (¥)shares | Treasury stockCNY (¥)shares | Additional paid-in capitalCNY (¥) | Accumulated other comprehensive incomeCNY (¥) | Accumulated deficitCNY (¥) | USD ($)shares | CNY (¥)shares | ||
Increase (Decrease) in Stockholders' Equity | |||||||||
Cumulative effect of changes in accounting standards | [1] | ¥ 76 | ¥ 1,123,854 | ¥ 11,067 | ¥ (9,024,730) | ¥ (7,889,733) | |||
Beginning balance at Dec. 31, 2017 | [1] | ¥ 76 | 1,123,854 | 11,067 | (9,024,730) | (7,889,733) | |||
Beginning balance, issued (in shares) at Dec. 31, 2017 | shares | [1] | 121,343,424 | |||||||
Beginning balance, Outstanding (in shares) at Dec. 31, 2017 | shares | [1] | 121,343,424 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Cumulative effect of changes in accounting standards | ASU 2014-09 | 5,928,069 | 5,928,069 | |||||||
Cumulative effect of changes in accounting standards | [1] | ¥ 77 | ¥ (254) | 1,293,968 | 16,390 | (1,673,594) | (363,413) | ||
Share-based awards provided to employees | ¥ 1 | 119,997 | 119,998 | ||||||
Share-based awards provided to employees, issued (in shares) | shares | 1,130,708 | ||||||||
Share-based awards provided to employees, Outstanding (in shares) | shares | 1,130,708 | ||||||||
Share-based awards provided to employees of consolidated group of CreditEase | 50,117 | (50,117) | |||||||
Share-based awards provided to employees of consolidated group of CreditEase, issued (in shares) | shares | 658,710 | ||||||||
Share-based awards provided to employees of consolidated group of CreditEase, Outstanding (in shares) | shares | 658,710 | ||||||||
Dividends to shareholders | (106,626) | (106,626) | |||||||
Repurchase of ordinary shares | ¥ (254) | (254) | |||||||
Repurchase of ordinary shares (in shares) | shares | (4,000) | 4,000 | |||||||
Foreign currency translation adjustments | 7,737 | 7,737 | [1] | ||||||
Unrealized (losses)/gains on available-for-sale investments | (2,414) | (2,414) | [1] | ||||||
Net income/(loss) | 1,579,810 | 1,579,810 | [1] | ||||||
Ending balance (ASU 2014-09) at Dec. 31, 2018 | 5,928,069 | 5,928,069 | |||||||
Ending balance at Dec. 31, 2018 | [1] | ¥ 77 | ¥ (254) | 1,293,968 | 16,390 | (1,673,594) | (363,413) | ||
Ending balance, issued (in shares) at Dec. 31, 2018 | shares | [1] | 123,132,842 | 4,000 | ||||||
Ending balance, Outstanding (in shares) at Dec. 31, 2018 | shares | [1] | 123,128,842 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Cumulative effect of changes in accounting standards | ASU 2014-09 | 5,928,069 | 5,928,069 | |||||||
Cumulative effect of changes in accounting standards | [1] | ¥ 77 | ¥ (254) | 1,293,968 | 16,390 | (1,673,594) | (363,413) | ||
Cumulative effect of changes in accounting standards | ASU 2014-09 | 5,928,069 | 5,928,069 | |||||||
Cumulative effect of changes in accounting standards | 121 | (37,097) | 5,038,691 | 21,855 | (533,480) | 4,490,090 | |||
Acquisition under common control (Note 1) | ¥ 43 | 2,521,491 | 2,521,534 | ||||||
Acquisition under common control (in shares) | shares | 61,981,412 | ||||||||
Contribution from CreditEase (Note 1) | 1,216,734 | 1,216,734 | |||||||
Disposal under common control (Note 1) | (54,706) | (54,706) | |||||||
Purchase of non-controlling interest | 1,767 | 1,767 | |||||||
Share-based awards provided to employees | ¥ 1 | 43,940 | 43,941 | ||||||
Share-based awards provided to employees, issued (in shares) | shares | 803,880 | ||||||||
Share-based awards provided to employees, Outstanding (in shares) | shares | 803,880 | ||||||||
Share-based awards provided to employees of consolidated group of CreditEase | 15,497 | (15,497) | |||||||
Share-based awards provided to employees of consolidated group of CreditEase, issued (in shares) | shares | 414,310 | ||||||||
Share-based awards provided to employees of consolidated group of CreditEase, Outstanding (in shares) | shares | 414,310 | ||||||||
Repurchase of ordinary shares | ¥ (36,843) | (36,843) | |||||||
Repurchase of ordinary shares (in shares) | shares | (733,372) | 733,372 | |||||||
Foreign currency translation adjustments | 1,626 | 1,626 | |||||||
Unrealized (losses)/gains on available-for-sale investments | 3,839 | 3,839 | |||||||
Net income/(loss) | 1,155,611 | 1,155,611 | |||||||
Ending balance at Dec. 31, 2019 | ¥ 121 | ¥ (37,097) | 5,038,691 | 21,855 | (533,480) | ¥ 4,490,090 | |||
Ending balance, issued (in shares) at Dec. 31, 2019 | shares | 186,332,444 | 737,372 | 186,332,444 | 186,332,444 | |||||
Ending balance, Outstanding (in shares) at Dec. 31, 2019 | shares | 185,595,072 | 185,595,072 | 185,595,072 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Cumulative effect of changes in accounting standards | ¥ 121 | ¥ (37,097) | 5,038,691 | 21,855 | (533,480) | ¥ 4,490,090 | |||
Cumulative effect of changes in accounting standards | ASU 2016-13 | (26,054) | (26,054) | |||||||
Cumulative effect of changes in accounting standards | ¥ 121 | (40,147) | 5,058,176 | 17,108 | (1,257,594) | $ 578,952 | 3,777,664 | ||
Share-based awards provided to employees | 14,173 | 14,173 | |||||||
Share-based awards provided to employees, issued (in shares) | shares | 940,736 | ||||||||
Share-based awards provided to employees, Outstanding (in shares) | shares | 940,736 | ||||||||
Share-based awards provided to employees of consolidated group of CreditEase | 5,312 | (5,312) | |||||||
Share-based awards provided to employees of consolidated group of CreditEase, issued (in shares) | shares | 296,460 | ||||||||
Share-based awards provided to employees of consolidated group of CreditEase, Outstanding (in shares) | shares | 296,460 | ||||||||
Surrender and cancellation of ordinary shares (in shares) | shares | (18,560,000) | ||||||||
Repurchase of ordinary shares | ¥ (3,050) | (3,050) | |||||||
Repurchase of ordinary shares (in shares) | shares | (306,558) | 306,558 | |||||||
Foreign currency translation adjustments | (8,293) | (1,271) | (8,293) | ||||||
Unrealized (losses)/gains on available-for-sale investments | 3,546 | 543 | 3,546 | ||||||
Net income/(loss) | (692,748) | (106,168) | (692,748) | ||||||
Ending balance (ASU 2016-13) at Dec. 31, 2020 | (26,054) | (26,054) | |||||||
Ending balance at Dec. 31, 2020 | ¥ 121 | ¥ (40,147) | 5,058,176 | 17,108 | (1,257,594) | $ 578,952 | ¥ 3,777,664 | ||
Ending balance, issued (in shares) at Dec. 31, 2020 | shares | 187,569,640 | 1,043,930 | 187,569,640 | 187,569,640 | |||||
Ending balance, Outstanding (in shares) at Dec. 31, 2020 | shares | 167,965,710 | 167,965,710 | 167,965,710 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Cumulative effect of changes in accounting standards | ASU 2016-13 | (26,054) | ¥ (26,054) | |||||||
Cumulative effect of changes in accounting standards | ¥ 121 | ¥ (40,147) | ¥ 5,058,176 | ¥ 17,108 | ¥ (1,257,594) | $ 578,952 | ¥ 3,777,664 | ||
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) | 12 Months Ended |
Dec. 31, 2020shares | |
CreditEase | |
Surrendered, ordinary shares | 18,560,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | ||||
Cash Flows from Operating Activities: | |||||||
Net income/(loss) | $ (106,168) | ¥ (692,748) | ¥ 1,155,611 | ¥ 1,579,810 | [1] | ||
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: | |||||||
Depreciation and amortization | 14,065 | 91,772 | 125,850 | 147,992 | [1] | ||
Amortization of right-of-use assets | 36,121 | 235,691 | 268,758 | ||||
Disposal of property, equipment and software | 1,131 | 7,382 | 4,266 | (36,332) | [1] | ||
Share of results of equity investees | 2,180 | 9,295 | [1] | ||||
Fair value adjustments related to Consolidated ABFE | 22,067 | 143,988 | (3,866) | (243,122) | [1] | ||
Share-based compensation | 2,172 | 14,173 | 43,941 | 119,998 | [1] | ||
Provision for contingent liability | 488 | 3,187 | 9,462 | 419,581 | [1] | ||
Allowance for contract assets, receivables and others | 56,955 | 371,629 | 1,625,051 | 992,581 | [1] | ||
Gain on disposal of loan receivables and other beneficial rights | (159,392) | (663,884) | [1] | ||||
Gain recognized on remeasurement of previously held equity interest in the acquiree as of its acquisition date fair value | (4,534) | ||||||
Loss of disposal | 100,512 | 655,839 | |||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (20,797) | (135,700) | (1,828) | 3,038 | [1] | ||
Contract assets | 125,282 | 817,463 | (112,444) | (2,067,058) | [1] | ||
Contract cost | 9,916 | 64,705 | (14,542) | (76,368) | [1] | ||
Prepaid expenses and other assets | 42,758 | 278,999 | (164,276) | 105,149 | [1] | ||
Change in Consolidated ABFE related asset/liability | 6,444 | 42,045 | (197,544) | 198,766 | [1] | ||
Financing receivables | (1,666) | (10,868) | 3,088 | ||||
Amounts due from/to related parties | 11,518 | 75,155 | (1,548,225) | (369,174) | [1] | ||
Deferred tax assets/liabilities | (23,242) | (151,654) | (131,718) | 669,763 | [1] | ||
Accounts payable | 190 | 1,239 | 6,609 | 232,838 | [1] | ||
Deferred revenue | (37,742) | (246,268) | (135,865) | (253,537) | [1] | ||
Accrued expenses and other liabilities | (70,198) | (458,039) | 115,654 | (4,200,913) | [1] | ||
Refund liabilities | (96,229) | (627,897) | (344,213) | (527,517) | [1] | ||
Lease liabilities | (30,355) | (198,065) | (267,855) | ||||
Net cash (used in)/provided by operating activities | 43,222 | 282,028 | 274,168 | (3,959,094) | [1] | ||
Cash Flows from Investing Activities: | |||||||
Purchase of property, equipment and software | (2,103) | (13,722) | (48,005) | (140,729) | [1] | ||
Disposal of property, equipment and software | 197 | 1,283 | 78 | 646 | [1] | ||
Purchase of held-to-maturity investments | (337) | (2,200) | (612,501) | [1] | |||
Redemption of held-to-maturity investments | 849 | 5,541 | 322,970 | 306,998 | [1] | ||
Purchase of available-for-sale investments | (64,828) | (423,000) | (653,150) | (1,270,341) | [1] | ||
Proceeds from disposal of available-for-sale investments | 108,300 | 706,655 | 1,050,443 | 1,398,500 | [1] | ||
Acquisition of subsidiaries, net of cash acquired of nil, RMB23,871 and RMB9,307 for the years ended December 31, 2018, 2019 and 2020, respectively | (2,325) | (15,172) | (4,929) | ||||
Prepayment of investments | (111,202) | (725,593) | (373,032) | ||||
Return of prepayment of investments | 111,202 | 725,593 | 368,182 | ||||
Acquisition of subsidiaries under common control | (258,895) | ||||||
Disposal of subsidiaries, net of cash disposed of nil, RMB306,555 and RMB1,307,982 for the years ended December 31, 2018, 2019 and 2020, respectively | (181,500) | (1,184,286) | 18,445 | ||||
Purchase of other long-term investments | [1] | (10,000) | |||||
Proceeds from disposal of other long-term investments | 189,546 | ||||||
Investment in loans at fair value | (23,563) | (153,750) | (1,149,731) | [1] | |||
Collection of principal of loans at fair value | 29,716 | 193,898 | 593,350 | 1,226,602 | [1] | ||
Disposal of financing receivables | 117 | ||||||
Proceeds from disposal of loan receivables and other beneficial rights | 144,389 | 703,963 | [1] | ||||
Loan to related parties | (710,000) | (722,953) | [1] | ||||
Collection of principal of loans to related parties | 814,500 | 3,739,265 | [1] | ||||
Origination of financing receivables | (207,874) | (1,356,379) | |||||
Repayments of financing receivables | 16,918 | 110,390 | |||||
Loans to third parties | (23,295) | (152,000) | (484,100) | (277,000) | [1] | ||
Collection of principal of loans to third parties | 74,494 | 486,079 | 140,092 | 104,929 | [1] | ||
Net cash provided by/(used in) investing activities | (275,351) | (1,796,663) | 1,110,001 | 3,297,648 | [1] | ||
Cash Flows from Financing Activities: | |||||||
Cash contribution from owner | [1] | 120,000 | |||||
Deferred payment of acquisition of subsidiaries under common control | (7,210) | (47,046) | |||||
Principal payments to the Consolidated ABFE | (1,819) | (11,866) | (121,296) | (553,002) | [1] | ||
Contribution from investors of the consolidated ABFE | 26,667 | 174,000 | |||||
Dividends paid to shareholders | [1] | (106,626) | |||||
Principal payments to financial assets sold under repurchase agreement | (30,000) | (20,000) | [1] | ||||
Loans from related parties | 55,402 | 361,500 | 747,737 | 6,363,462 | [1] | ||
Principal payments of loans from related parties | (108,487) | (6,784,021) | [1] | ||||
Loan from a third party | 76,705 | 500,500 | 324,000 | [1] | |||
Repayment of loan to a third party | (2,849) | (18,590) | (173,829) | (131,581) | [1] | ||
Repurchase of ordinary shares | (467) | (3,050) | (36,843) | (254) | [1] | ||
Purchase of non-controlling interest | (16,987) | ||||||
Deferred payment of contingent consideration | (1,410,000) | ||||||
Net cash (used in)/provided by financing activities | 146,429 | 955,448 | (1,149,705) | (788,022) | [1] | ||
Effect of foreign exchange rate changes | (430) | (2,807) | 193 | 3,631 | [1] | ||
Net (decrease) / increase in cash, cash equivalents and restricted cash | (86,130) | (561,994) | 234,657 | (1,445,837) | [1] | ||
Cash, cash equivalents and restricted cash, beginning of year | 501,018 | 3,269,142 | 3,034,485 | [1] | 4,480,322 | [1] | |
Cash, cash equivalents and restricted cash, end of year | 414,888 | 2,707,148 | 3,269,142 | 3,034,485 | [1] | ||
Supplemental disclosures of cash flow information: | |||||||
Cash paid for income taxes | 15,897 | 103,731 | 178,112 | 334,096 | [1] | ||
Cash paid for interest | $ 251 | ¥ 1,641 | 11,419 | ¥ 15,388 | [1] | ||
Forgiveness of amount due from/(due to) related parties, and other receivable from a third party in relation to the acquisition under common control | ¥ 5,147,163 | ||||||
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS - Reconciliation to Amounts on Consolidated Balance Sheets ¥ in Thousands, $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | [1] | Dec. 31, 2017CNY (¥) | [1] |
Reconciliation to amounts on the consolidated balance sheets: | ||||||||
Cash and cash equivalents | $ 378,530 | ¥ 2,469,909 | ¥ 3,198,086 | ¥ 2,606,939 | ||||
Restricted cash | 36,358 | 237,239 | 71,056 | 427,546 | ||||
Total cash, cash equivalents, and restricted cash | $ 414,888 | ¥ 2,707,148 | $ 501,018 | ¥ 3,269,142 | ¥ 3,034,485 | ¥ 4,480,322 | ||
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
CONSOLIDATED STATEMENTS OF CA_3
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
Cash acquired in acquisition | ¥ 9,307 | ¥ 23,871 | ¥ 0 |
Cash disposed in divestiture | ¥ 1,307,982 | ¥ 306,555 | ¥ 0 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2020 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES Yiren Digital Ltd. (the “Company” or “Yiren Digital” or the “Parent Company”) was incorporated under the laws of the Cayman Islands in September 2014 by CreditEase Holdings (Cayman) Limited (“CreditEase”). The Company, its subsidiaries, the consolidated VIEs and the consolidated VIEs’ subsidiaries (collectively referred to as the “Group”) have been operating one of China’s online financial service platforms by leveraging technology to seamlessly deliver individual borrowers an easy access to credit and investors attractive investment opportunities. The Group started its online consumer finance marketplace business in March 2012 as a business unit under the Group’s parent company, CreditEase, which remains the Group’s parent company and controlling shareholder. CreditEase incorporated the Company in the Cayman Islands to be the Group’s holding company in September 2014.The Company established a wholly owned subsidiary in Hong Kong, YouRace Digital Holdings HK Limited (formerly known as Yiren Digital Hong Kong Limited), or YouRace HK, in October 2014, and YouRace HK further established YouRace Hengchuang Technology Development (Beijing) Co., Ltd. (formerly known as Yiren Hengye Technology Development (Beijing) Co., Ltd.), or YouRace Hengchuang, its wholly owned subsidiary in China, in January 2015. YouRace HK further established Chongqing Hengyuda Technology Co., Ltd., or Hengyuda, its wholly owned subsidiary in China, in March 2016. As the PRC laws and regulations prohibit or restrict foreign ownership of the companies where the PRC operating licenses are required, the Company, via its wholly-owned subsidiaries in the PRC, YouRace Hengchuang and Hengyuda, entered into a series of agreements with Hengcheng Technology Development (Beijing) Co., Ltd (“Hengcheng”), Yiren Financial Information Service (Beijing) Co., Ltd.(“Yiren Wealth Management”) and CreditEase Puhui Information Consultant (Beijing) Co., Ltd. (“Creditease Puhui”) and their shareholders. Consequently, YouRace Hengchuang and Hengyuda became the primary beneficiary of Hengcheng, Yiren Wealth Management and CreditEase Puhui and consolidate Hengcheng, Yiren Wealth Management and CreditEase Puhui (see VIE arrangements in Note 2). Starting from 2015, the Group began to expand its investor base from individual investors to institutional investors, who invest in the loans from the Group’s platform through a series of arrangements among assets backed financial entities. The Group consolidated such assets backed financial entities if the Group is considered as their primary beneficiary. Refer to Note 2 for further details. During the year of 2019, the Group acquired several subsidiaries from CreditEase to expand its service lines. On December 31, 2020, as a result of a business restructuring, the Group disposed its online consumer lending platform targeting individual investors as the funding source to CreditEase. Refer to below for further details. Acquisitions of subsidiaries under common control On March 25, 2019, CreditEase entered into definitive agreements, which contemplated the separation and transfer of its online wealth management targeting the mass affluent investors, unsecured and secured consumer lending and other related services or businesses to the Group. As of March 31, 2019, the business of unsecured and secured consumer lending, operated by CreditEase Puhui, CreditEase Huimin Investment Management (Beijing) Co., Ltd. (“Huimin”) and its subsidiaries, as well as the Zhiwang wealth management business operated by CreditEase Zhuoyue Wealth Investment Management (Beijing) Co., Ltd. (“Zhuoyue”) (collectively referred to as the “Acquired Businesses”) have been transferred to the Group for an aggregated consideration comprising of RMB233 million in cash, RMB2,627 million in contingent consideration and 61,981,412 shares of the Company. As part of the transaction, the related parties’ receivables and payables from/to the Acquired Businesses, and Tianda Xinan (Beijing) Guarantee Co., Ltd. (“Tianda Xinan”)’s payable to the Acquired Businesses were transferred to Zhuoyue. Zhuoyue subsequently unconditionally waived a net receivables amounting to RMB5,147 million from the Acquired Businesses. In May 2019, the Company also acquired Dekai Yichuang Asset Management (Shenzhen) Co., Ltd. (“Dekai Yichuang”, a consolidated VIE of CreditEase) and its subsidiaries from CreditEase for a consideration of RMB29 million. Cash consideration of RMB230 million and RMB29 million were paid in March and May, respectively, for the aforementioned acquisitions. At the closing of the business transactions with CreditEase on July 11, 2019, the Company issued a total of 61,981,412 ordinary shares with a total fair value of RMB2,754 million. The contingent consideration is to be paid by monthly installments in an 18-month period after the closing with each payment contingent upon the Acquired Businesses achieving certain pre-agreed performance targets which are based on the total monthly loan volume facilitated by CreditEase Puhui. The Group made contingent payments to CreditEase amounting to RMB1,410 million until November 2019 as the pre-agreed performance targets were met. In December 2019, CreditEase waived the remaining contingent consideration, amounting to RMB1,217 million, which was accounted for as a contribution from CreditEase. As the Company and the acquired entities were under common control of CreditEase for all the periods presented, the above acquisitions have been accounted for in a manner akin to a pooling-of-interests as if the Company had owned the acquired entities from the time they were incorporated. Accordingly, the Company retrospectively adjusted its consolidated financial statements to include the transferred net assets of the acquired entities and any related operations for all periods presented. Any difference between the net book value of the acquirees and the amounts paid by the Company has been accounted for as a capital contribution in the consolidated statements of changes in equity. Disposal transactions On November 30, 2019, Hengcheng, one of the Group's VIEs, acquired Huimin’s services to connect borrowers and investors. Subsequently, the Group sold Huimin to Puxin Hengye Technology Development (Beijing) Co., Ltd. (“Puxin”), a subsidiary of CreditEase, for an aggregated consideration of RMB47 million. The difference between the consideration and the carrying value of the net assets, amounting to RMB55 million was recorded in additional paid-in capital. The disposal of Huimin under common control was not retrospectively reflected in the consolidated financial statements In September 2020, following recent changes in the industry and regulatory environment, the Group ceased to facilitate new loans to individual investors. The remaining outstanding loans continued to be serviced by the Company. On December 31, 2020, to further streamline its service lines and reposition itself as a comprehensive personal financial service platform, the Group completed a business restructuring with CreditEase to dispose Hengcheng to CreditEase (the "Disposal"). Hengcheng provided loan facilitation and post origination services to borrowers under the consumer credit segment and provided account management services to individual investors under the wealth management segment. Hengcheng's pre-tax (loss)/income prior to the disposal amounted to RMB(2,048) million during the year ended December 31, 2020 and RMB373 million and RMB292 million during the years ended December 31, 2019 and 2018. Prior to the Disposal, Hengcheng operated its online consumer lending platform targeting individual investors as the funding source. As part of the Disposal, all the remaining net asset associated with the disposed operations of Hengcheng mainly consisting of financial assets and contract assets associated with the completed performance obligations related to the online consumer lending platform operated by Hengcheng were disposed to CreditEase. In addition, control over continuing services activities related to the outstanding loans balances of the online consumer lending platform operated by Hengcheng were transferred to CreditEase as well. In exchange for the Disposal, CreditEase paid the Company cash consideration amounting to RMB67 million, which represented the fair value of Hengcheng at the time of Disposal determined by the Company with the assistance of a fairness opinion report provided by an independent financial advisor. The fair value was determined based on the underlying value of the assets of Hengcheng, net of the liabilities and taking into account future cash inflows and cash outflows related to the remaining operations of Hengcheng. Cash outflows are mainly relate to the service activities of the outstanding loan balances that required to continue to provide, including expected operating costs related to loan collections, payment processing, labor cost and other post origination expenses. Cash inflows are related to service fee expected to be collected from the remaining outstanding loans.. Subsequent to the Disposal, CreditEase also become responsible to ensure the winding-down of the outstanding loan collection activities occur in an orderly manner in accordance with the related rules and regulations. After the Disposal, by entering contracts with the Company, CreditEase has outsourced certain services to the Company relating to the servicing of the outstanding loans transferred as part of the Disposal. The Company determined that the Disposal did not represent a strategic shift mainly because the Group (1) will continue to facilitate and service loans between borrowers and institutional funding partners other than individual investors subsequent to the Disposal and (2) will continue to perform some portion of the servicing of the outstanding loans subsequent to the Disposal. Further, the Company concluded that the Disposal had economic substance as it reflects the Group’s decision to avoid the obligations to continue to service the outstanding loans required in the winding-down of the online consumer lending platform operated by Hengcheng. Additionally, the Company determined that the cash consideration received represents the fair value of Hengcheng at the time of Disposal and the loss related to the Disposal is substantially attributable to the existing customer vendor relationship associated to servicing the outstanding loans. Accordingly, the Company recorded the difference between the cash consideration received and the carrying value of the net assets (RMB723 million) of Hengcheng, amounting to RMB 656 million, as loss of disposal on the consolidated statements of operations. As of December 31, 2020, the Company’s principal subsidiaries, the consolidated VIEs and the consolidated VIEs’ subsidiaries are as follows: Date of Place of Percentage incorporation/ incorporation/ of legal establishment establishment ownership Principal activities Wholly owned subsidiaries YouRace HK October 8, 2014 Hong Kong 100 % Investment holding YouRace Hengchuang January 8, 2015 PRC 100 % Provision of consultancy service, information technology support and technology-enabled borrower acquisition and facilitation services Hengyuda March 21, 2016 PRC 100 % Provision of services relating to IT, system maintenance and customer support Yiren Information Consulting (Beijing) Co., Ltd.(“Yiren Information”) August 10, 2017 PRC 100 % Provision of borrower acquisition and referral services to institutional funding providers Variable interest entities and its subsidiaries Yiren Wealth Management October 13, 2016 PRC Wealth management consulting service CreditEase Puhui March 3, 2011 PRC Provision of borrower acquisition and borrowers related customer maintenance services Haijin Yichuang Financial Leasing Co., Ltd. (“Yichuang Financial Leasing”) March 22, 2017 PRC Provision of services for financing lease business Hexiang Insurance Brokerage Co. Ltd September 28, 2011 PRC Provision of services for insurance brokerage business |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Basis of consolidation The consolidated financial statements include the financial statements of the Company, its wholly-owned subsidiaries, and the consolidated VIEs and the consolidated VIEs’ subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation. VIEs The VIE arrangements In order to comply with the PRC laws and regulations which prohibit or restrict foreign control of companies involved in provision of value-added telecommunication services and other restricted businesses, the Company operates substantially all of its business through its VIEs. The Company through its wholly owned subsidiaries (Foreign Owned Subsidiaries, the “FOS”) located in the PRC entered into a series of contractual agreements with the VIEs and their shareholders. Through the contractual agreements below, the Company has (1) the power to direct the activities that most significantly affect the economic performance of the VIEs, and (2) the right to receive the economic benefit of the VIEs that could potentially be significant to the VIEs. As a result, the shareholders of the VIEs lack the power to direct the activities of the VIEs that most significantly impact the entity's economic performance, the obligation to absorb the expected losses, and the right to receive the expected residual returns of the entity. Accordingly, the Company is considered as the primary beneficiary of the VIEs, and the Company has consolidated the financial results of the VIEs and their subsidiaries in its consolidated financial statements. The Group's VIEs that are material to the Group’s business and operations are Hengcheng and Yiren Wealth Management as of December 31, 2019, and are Yiren Wealth Management and CreditEase Puhui as of December 31, 2020. In concluding that the Company is the primary beneficiary of the VIEs, the Company believes that the FOS’s rights under the terms of the exclusive option agreements provide it with a substantive kick out right. More specifically, the Company believes the terms of the exclusive option agreements are valid, binding and enforceable under the PRC laws and regulations currently in effect. A simple majority vote of the Company’s board of directors is required to pass a resolution to exercise the FOS’s rights under the exclusive option agreements, for which consent of the shareholders of the VIEs is not required. The FOS’s rights under the exclusive option agreements give the Company the power to control the shareholders of the VIEs and thus the power to direct the activities that most significantly impact the VIEs’ economic performance. In addition, the FOS’s rights under the powers of attorney also reinforce the Company’s abilities to direct the activities that most significantly impact the VIEs’ economic performance. The Company also believes that this ability to exercise control ensures that the VIEs will continue to execute and renew service agreements and pay service fees to the Company. The exclusive business cooperation agreements will be terminated upon the expiration of the operation term of either party if the application for renewal of its operation term is not approved by the relevant government authorities. As a result, the Company believes that it has the rights to receive substantially all of the economic benefits from the VIEs. · Agreements that provide the FOS effective control over the VIEs Power of Attorney The shareholders of the VIEs have executed an irrevocable power of attorney in favor of the FOS, or entity or individual designated by the FOS. Pursuant to this powers of attorney, the FOS or their designees have full power and authority to exercise all of such shareholder’s rights with respect to his equity interest in the VIEs. The power of attorney will remain in force for so long as the shareholder remains a shareholder of the VIEs. Exclusive Option Agreements The VIEs and their shareholders have also entered into exclusive option agreements with the FOS. Pursuant to this agreements, the shareholders of the VIEs have granted an exclusive option to the FOS or their designees to purchase all or part of such shareholders’ equity interest, at a purchase price equal to the higher of the amount of loan extended by the FOS to each shareholder of the VIEs under the respective loan agreements or the minimum price required by the PRC law at the time of such purchase. Equity Interest Pledge Agreements The shareholders of the VIEs have also entered into equity pledge agreements with the FOS, pursuant to which each shareholder pledged his/her interest in the VIEs to guarantee the performance of obligations of the VIEs and their shareholders under the exclusive business cooperation agreements, loan agreements, exclusive option agreements and power of attorney. The Company is in the process to register some of the equity pledge with the competent government authorities. · Agreements that transfer economic benefits to the FOS Exclusive Business Cooperation Agreements The FOS have entered into exclusive business cooperation agreements with the VIEs. Pursuant to this exclusive business cooperation agreements, the FOS provide comprehensive technical support, consulting services and other services to the VIEs in exchange for service fees. The FOS have the sole discretion to determine the amounts of the service fees. During the term of exclusive business cooperation agreements, both the FOS and the VIEs shall renew their operation terms prior to the expiration thereof so as to enable the exclusive business cooperation agreements to remain effective. The exclusive business cooperation agreements shall be terminated upon the expiration of the operation term of either the FOS or the VIEs, if the application for renewal of their operation terms is not approved by relevant government authorities. In addition, the shareholders of the VIEs have granted an irrevocable and exclusive option to the FOS to purchase any or all of the assets and businesses of the VIEs at the lowest price permitted under the PRC law. The agreements may be terminated only at the option of the FOS and the VIEs have no authority to terminate the exclusive business cooperation agreements. · Agreements that provide the FOS with the option to purchase the equity interest in the VIEs Loan Agreements Under the loan agreements between the FOS and each of the shareholders of the respective VIEs, the FOS made interest-free loans to the shareholders for the exclusive purpose of the initial capitalization and the subsequent financial needs of the VIEs. The loans can only be repaid with the proceeds derived from the sale of all of the equity interests in the VIEs to the FOS or its designated representatives pursuant to the exclusive option agreements. The shareholders must pay all of the proceeds from sale of such equity interests to the FOS. The loans must be repaid immediately under certain circumstances, including, among others, if a foreign investor is permitted to hold majority or 100% equity interest in the VIEs and the FOS elected to exercise their exclusive equity purchase option. The term of the loans is ten years and can be extended upon mutual written consent of the parties. Risks in relation to the VIE structure The Company believes that the contractual arrangements with the VIEs and their current shareholders are in compliance with the PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of the PRC laws and regulations, the PRC government could: · Revoke the business and operating licenses of the FOS and the VIEs; · Discontinue or restrict the operations of any related-party transactions among the FOS and the VIEs; · Impose fines or other requirements on the FOS and the VIEs; · Require the Company or the FOS and the VIEs to revise the relevant ownership structure or restructure operations; · Restrict or prohibit the Company’s use of the proceeds of the additional public offering to finance the Company’s business and operations in the PRC; · Shut down the Company’s servers or block the Company’s online platform; · Discontinue or place restrictions or onerous conditions on the Company’s operations; and/or · Require the Company to undergo a costly and disruptive restructuring. The Company’s ability to conduct its business may be negatively affected if the PRC government were to carry out any of the aforementioned actions. As a result, the Company may not be able to consolidate the VIEs in its consolidated financial statements as it may lose the ability to exert effective control over the VIEs and their shareholders, and it may lose the ability to receive economic benefits from the VIEs. The interests of the shareholders of the VIEs may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing the VIEs not to pay the service fees when required to do so. The Company cannot assure that when conflicts of interest arise, the shareholders of the VIEs will act in the best interests of the Company or that conflicts of interests will be resolved in the Company’s favor. Currently, the Company does not have existing arrangements to address potential conflicts of interest the shareholders of the VIEs may encounter in its capacity as beneficial owners and directors of the VIEs, on the one hand, and as beneficial owners and directors of the Company, on the other hand. The Company believes the shareholders of the VIEs will not act contrary to any of the contractual arrangements and the exclusive option agreements provide the Company with a mechanism to remove the current shareholders of the VIEs should they act to the detriment of the Company. The Company relies on certain current shareholders of the VIEs to fulfill their fiduciary duties and abide by laws of the PRC and act in the best interest of the Company. If the Company cannot resolve any conflicts of interest or disputes between the Company and the shareholders of the VIEs, the Company would have to rely on legal proceedings, which could result in disruption of its business, and there is substantial uncertainty as to the outcome of any such legal proceedings. The following financial statement amounts and balances of the consolidated VIEs and the consolidated VIEs’ subsidiaries were included in the consolidated financial statements after elimination of intercompany transactions and balances: December 31, December 31, 2019 2020 RMB RMB Assets Cash and cash equivalents 1,331,668 999,774 Accounts receivable 2,130 100,250 Contract assets, net 2,191,277 541,969 Contract cost 61,528 64,099 Prepaid expenses and other assets 897,187 228,094 Financing receivables 29,612 1,253,494 Amounts due from related parties 700,186 261,937 Available-for-sale investments 333,900 10,000 Property, equipment and software, net 11,496 109,061 Deferred tax assets 29,829 16,379 Right-of-use assets 16,454 96,861 Total assets 5,605,267 3,681,918 Liabilities Accounts payable 39,019 9,026 Amounts due to related parties 35,708 775,655 Deferred revenue 349,677 43,607 Accrued expenses and other liabilities 1,390,341 1,054,259 Secured borrowing — 500,500 Refund liabilities 1,681,906 — Deferred tax liabilities 209,747 13,985 Lease liabilities 15,734 73,537 Total liabilities 3,722,132 2,470,569 Year ended December 31, 2018 2019 2020 RMB RMB RMB Net revenue 11,121,168 8,303,900 2,549,869 Net income 2,069,678 1,503,455 235,360 Year ended December 31, 2018 2019 2020 RMB RMB RMB Net cash (used in) /provided by operating activities (3,565,383) 846,367 974,840 Net cash provided/(used in) by investing activities 3,631,615 441,983 (1,202,842) Net cash (used in)/provided by financing activities (300,559) (787,737) 862,000 In accordance with the VIE contractual arrangements, the FOS have the power to direct activities of the VIEs, and can have assets transferred out of the VIEs. There are no consolidated VIEs’ assets that are collateral for the VIEs’ obligations and can only be used to settle the VIEs’ obligations. There are no creditors (or beneficial interest holders) of the VIEs that have recourse to the general credit of the Company. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests, which require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to the shareholders of the VIEs or entrustment loans to the VIEs. Relevant PRC laws and regulations restrict the VIEs from transferring a portion of their net assets, equivalent to the balance of their paid-in capital, capital reserve and statutory reserves, to the Company in the form of loans and advances or cash dividends. Please refer to Note 17 for disclosure of restricted net assets. Consolidated ABFE As part of the Group’s strategy to expand its investor base from individual investors to institutional investors, the Group established a business relationship with certain trusts or Asset Backed Special Plan (“ABS plan”), collectively referred to as consolidated assets backed financing entities or ABFE, which were administered by third-party trust companies. The ABFE were set up to invest solely in the loans facilitated by the Group on its platform to provide returns to the beneficiaries of the trusts through interest payments made by the borrowers. The Group provides loan facilitation and post-origination services to the ABFE. The Group also has power to direct the activities that have most significant impact on the economic performance of the ABFE by providing the loan servicing and default loan collection services of the ABFE. Through the transaction fees charged, guarantee deposit, and direct investment, the Group has the right to receive benefits or bear losses from the ABFE that could potentially be significant to the ABFE. The Group holds significant variable interest in the ABFE through the transaction fees charged, guarantee provided in the form of guarantee deposit, or direct investment. Accordingly, the Company is considered the primary beneficiary of the ABFE and has consolidated the ABFE’s assets, liabilities, results of operations, and cash flows in the consolidated financial statements. The assets of the ABFE are not available to creditors of the Company. In addition, the investors of the ABFE have no recourse against the assets of the Company. During the year ended December 31, 2018, the Group disposed the delinquent loans repurchased by the Group from the consolidated ABFE upon the liquidation of the consolidated ABFE to related parties. Additionally, in March 2019, the Group also disposed its beneficial rights of several trusts to related parties (see Note 8). The disposal of the delinquent loans and the disposal of the beneficial rights of the several trusts is accounted for as a true sales under Accounting Standards Codification 860 ("ASC Topic 860") with any gains and losses recorded as “gain on disposal of loan receivables and other beneficial rights” in the consolidated statements of operations. Refer to the accounting policy of “Sales and Transfers of Financial Instruments” for further details. The following financial statement amounts and balances of the consolidated ABFE were included in the consolidated financial statements after elimination of intercompany transactions and balances: December 31, December 31, 2019 2020 RMB RMB Assets Restricted cash 43,833 213,033 Prepaid expenses and other assets 8,974 169 Loans at fair value 382,125 192,156 Held-to-maturity investments 6,627 3,286 Total assets 441,559 408,644 Liabilities Accounts payable 72 421 Amount due to related party — 109,502 Payable to investors at fair value — 52,623 Accrued expenses and other liabilities 7,378 896 Total liabilities 7,450 163,442 Year ended December 31, 2018 2019 2020 RMB RMB RMB Net income/(loss) 260,568 41,723 (117,969) Year ended December 31, 2018 2019 2020 RMB RMB RMB Net cash provided by operating activities 208,621 134,848 44,843 Net cash provided by investing activities 110,849 639,717 33,160 Net cash (used in)/provided by in financing activities (553,002) (121,296) 162,134 All assets of the consolidated ABFE are collateral for the consolidated ABFE’s obligations and can only be used to settle the consolidated ABFE’s obligations. Use of estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates. Significant accounting estimates are used for, but not limited to, revenue recognition and its related accounts, allowance for accounts receivable and contract assets, allowance for financing receivable, liabilities from quality assurance program and guarantee, fair value measurement of loans at fair value, payable to investors at fair value, available-for-sale investments, depreciable lives of property, equipment and software, the discount rate for leases, consolidation of the VIEs, share-based compensation and income tax. Actual results may differ materially from those estimates. Revenue All of the Group’s revenue for the years ended December 31, 2019 and 2020 were generated from the PRC. The following table illustrates the disaggregation of revenue in 2018, 2019 and 2020 under ASC606: 2018 2019 2020 RMB RMB RMB Consumer Credit Segment: Loan facilitation services 7,647,804 5,182,028 1,329,720 Post origination services 1,173,108 757,783 670,440 Others 436,242 500,758 529,438 Subtotal 9,257,154 6,440,569 2,529,598 Wealth Management Segment: Account management services 1,806,732 2,016,678 921,779 Insurance brokerage services — — 430,830 Others 180,228 159,537 79,755 Subtotal 1,986,960 2,176,215 1,432,364 Total net revenue 11,244,114 8,616,784 3,961,962 (a) Consumer credit business: Revenue from loan facilitation and post-origination services The Group provides services as an online marketplace connecting borrowers and investors. The investors consist of individual investors and institutional investors. In 2020, the Group ceased to facilitate new loans to individual investors. The Group provides loan facilitation services, guarantee services until May 2018 (e.g. quality assurance programs to individual investors) and post-origination services (e.g. cash processing, collection for some lenders and SMS services). The Group has determined that it is not the legal lender or borrower in the loan origination and repayment process, but acts as an intermediary to bring the lender and the borrower together. Except for loans and payable to investors in the consolidated ABFE, loans and lease receivables arising from direct financing leases issued by the Group, the Group does not record the loans receivable or payable arising from the loans facilitated between the investors and borrowers on its platform. The Group charges fees upfront or on a monthly basis. The Group also receives service fees contingent on future events (e.g., penalty fees for loan prepayment and late payment and other service fees, and etc.). For the loans facilitated on the Hengcheng’s platform before May 2018, the Group also provided guarantee services to investors whereas in the event of default, the investors are entitled to receive unpaid interest and principal from the Group. Given that the Group effectively took on all of the credit risk of the borrowers and were compensated by the service fees charged, the guarantee was deemed as a service and the guarantee exposure was recognized as a stand-ready obligation in accordance with ASC Topic 460, Guarantees. The Group stopped providing guarantee services to individual investors in May 2018. The Group determines its customers to be both the investors and borrowers. The Group assesses ability and intention to pay the service fees of both borrowers and investors when they become due and determines if the collection of the service fees is probable, based on historical experiences as well as the credit due diligence performed on each borrower prior to loan origination. While the post-origination services are within the scope of ASC Topic 860, ASC Topic 606 revenue recognition model is applied due to the lack of definitive guidance in ASC Topic 860. The loan facilitation services and post-origination services are two separate performance obligations under ASC 606, as these two deliverables are distinct in that customers can benefit from each services on its own and the Group’s promises to deliver the services are separately identifiable from each other in the contract. The Group determines the transaction price of loan facilitation services and post-origination services to be the service fees chargeable from the borrowers, net of value-added tax. The transaction price includes variable consideration in the form of prepayment risk of the borrowers. The Group reflects, in the transaction price, the borrower prepayment risk and estimates variable consideration for these contracts using the expected value approach on the basis of historical information and current trends of the prepayment percentage of the borrowers. The transaction price is allocated amongst the guarantee services (until May 2018), if any, and the two performance obligations described above. The Group first allocates the transaction price to the guarantee liabilities, if any, in accordance with ASC Topic 460, Guarantees, which requires the guarantee to be measured initially at fair value based on the stand ready obligation. The remaining considerations are then allocated to the loan facilitation services and post-origination services using their relative standalone selling prices consistent with the guidance in Topic 606. The Group does not have observable standalone selling price information for the loan facilitation services or post-origination services because it does not provide loan facilitation services or post-origination services on a standalone basis. There is no direct observable standalone selling price for similar services in the market that is reasonably available to the Group. As a result, the estimation of standalone selling price involves significant judgments. The Group uses expected cost plus margin approach to estimate the standalone selling prices of loan facilitation services as the basis of revenue allocation. In estimating its standalone selling price for the loan facilitation services, the Group considers the cost incurred to deliver such services, profit margin for similar arrangements, customer demand, effect of competitors on the Group’s services, and other market factors. However, for post-origination services, given the main services are about loan collecting and cash processing, the Group can refer to other companies performing the same services, therefore a direct observable standalone selling price for similar services in the market is available to the Group. For each type of the services, the Group recognizes revenue when (or as) the entity satisfies the service/performance obligation by transferring a promised service to a customer. Revenues from loan facilitation are recognized at the time a loan is originated between the investor and the borrower and the loan principal is transferred to the borrower, at which time the facilitation service is considered completed. Revenues from post-origination services are recognized on a straight-line basis over the term of the underlying loans as the services are provided. Revenues from guarantee services, if any, are recognized amortized during the guarantee term. Remaining performance obligations represents the amount of the transaction price for which services have not been performed under post-origination services. The Group collects service fees upfront, monthly or both. For upfront fees that are partially refundable to the borrowers, the Group estimates the refund based on historical prepayment probability and the corresponding predetermined refundable amount, and records corresponding refund liabilities upon receiving such fees. The aggregate amounts of the transaction price allocated to performance obligations that are unsatisfied pertaining to post-origination services were RMB787.1 million and RMB99.8 million as of December 31, 2019 and 2020, respectively, among which approximately 67% and 74% of the remaining performance obligations will be recognized over the following 12 months, respectively and with the remainder recognized thereafter. During the year ended December 31, 2020, the Group repaid RMB595.3 million on behalf of its borrowers to its investors. The Group considered this as cash incentive to its customers and recorded it as a reduction of revenue. Other revenue of consumer credit business Other revenue included in consumer credit business includes penalty fees for loan prepayment and late payment, fees charged for early repayment and referral service fees. The penalty fees, which are fees paid to the investors that are assigned to the Group by the investors, will be received as a certain percentage of past due amounts in case of late payment or a certain percentage of interest over the prepaid amount of loan principal in case of prepayment. The Group also refers potential borrowers to third-party companies and related parties and charges them fixed rate fees. Referral services revenue is recognized when successful referrals were completed by the Group. (b) Wealth management business: Revenue from account management services The Group charged account management services fees to individual investor for using the automated investment tool equal to the entire excess of actual return over the expected return. The Group determined that the automated investment tool service represents one performance obligation. The account management service fees were initially estimated based on historical experience of returns on similar investment products and current trends and is due at the end of the investment period, which is the period of time when the individual investor's investment are matched with loans. The expected actual return of the loan was estimated on a portfolio basis using the expected value approval based on current loan portfolio and interest rates. The expected return rates offered have been relatively stable during the historical periods presented. Because all loans matched with individual investors' investments have been covered by third party credit guarantees, the estimated service fee is not affected by the fluctuations of default rates of the underlying loans. The Group believes the estimates of variable consideration is not constrained as it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The account management service fees were recognized on a straight-line basis over the term of the investment period, as the Group stand ready to provide the automated investment tool service while the individual investors simultaneously receives and consumes the benefits of such service throughout the investment period. The weighted average investment period was 18 months and 20.8 months for the years ended December 31, 2019 and 2020, respectively. The aggregate amount of the transaction price allocated to performance obligations that are unsatisfied pertaining to account management services were RMB919.7 million and nil as of December 31, 2019 and 2020, respectively, among which approximately 98% and nil of the remaining performance obligations will be recognized over the following 12 months, respectively, with the remainder recognized thereafter. As the Group ceased to facilitate new loans to individual investors, and disposed the Hengcheng as discussed in Note 1, there won't be revenue from account management services starting from January 2021. Customer incentives To expand its market presence, the Group provides cash incentives to investors from time to time. Each individual incentive program only lasts between a week and a few weeks. During the relevant incentive program period, the Group sets certain thresholds for the investor to qualify to enjoy the cash incentive. When a qualified investment is made, the cash payment is provided to the investor as a percentage of the investment amount. The Group also distributed interest plus coupons and renewal reward coupons to investors free of charge. The cash incentives, interest plus coupons and renewal reward coupons provided are accounted for as reduction of the contract price. The Group has established a membership reward program wherein investors can earn Yiren coins when purchases are made on the Group’s platforms reached a certain amount. Yiren coins earned by investors represent a material right to free or discounted goods or services in the future, which are accounted for as a separate performance obligation. For the transactions that granted Yiren coins to the investors, a portion of transaction price is deferred for the obligation related to the Yiren coins, which are allocated based on the relative standalone selling prices. The standalone selling price of Yiren coins is calculated by taking the estimated value of Yiren coins that are expected to be used incorporating estimated breakage based on historical redemption patterns. The revenue associated with Yiren coins is deferred until the points are redeemed. As of December 31, 2019 and 2020, the liabilities related to Yiren coins were immaterial. Revenue from Insurance brokerage services The Group provides insurance brokerage services distributing various health, life and property insurance products on behalf of insurance companies. As an agent of the insurance company, the Group sells insurance policies on behalf of the insurance company and earns brokerage commissions determined as a percentage of premiums paid by the insured. The Group has identified its promise to sell insurance policies on behalf of an insurance company as the performance obligation in its contracts with the insurance companies. The Group's performance obligation to the insurance company is satisfied and commission revenue is recognized at the point in time when an insurance policy becomes effective. The terms for health and life insurance products sold by the Group are mainly 5 and 10 years, while the term for property insurance products is one year. The insurance company pays the Group a commission annually based on the underlying cash flows of the insurance policy. The Group's contract terms can give rise to variable consideration due to the nature of its commission structure (e.g. policy changes or cancellations). The Group determines the transaction price of its contracts by estimating commissions that the entity expects to be entitled to over the premium collection term of the policy based on assumption about future customer behavior and market conditions. Such estimates are 'constrained' in accordance with ASC606. That is, the Group uses the expected value method and only includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized for such transactions will not occur. Other revenue of wealth management business Other revenue of wealth management business mainly includes referral service fee. Referral services revenue is recognized when successful referrals are completed by the Group. Contract assets Under ASC 606, contract assets represent the Group’s rights to consideration in exchange for services that the Group has transferred to the customer before payment is due. For the consumer credit business, the Group’s rights to consideration for the monthly fees related to facilitation services are conditional on the borrowers’ actual payment, as the borrowers have the rights to early terminate the loan contracts prior to the loan maturity and are not obligated to pay the remaining monthly fees. As such, the Group records a corresponding c |
PREPAID EXPENSES AND OTHER ASSE
PREPAID EXPENSES AND OTHER ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
PREPAID EXPENSES AND OTHER ASSETS | |
PREPAID EXPENSES AND OTHER ASSETS | 3. PREPAID EXPENSES AND OTHER ASSETS December 31, December 31, 2019 2020 RMB RMB Loans to third parties (i) 516,079 — Funds receivable from external payment network providers (ii) 331,534 105,741 Funds receivable from insurance and guarantee companies (iii) 289,752 — Prepaid expenses 64,923 34,789 Receivable from Tianda Xinan (Beijing) Guarantee Co.,Ltd ("Tianda Xinan") 16,891 24,851 Deposits 76,994 54,298 Interest receivable 8,194 14,660 Prepaid VAT and surcharge tax 889 — Guarantee receivable — 20,244 Others 27,965 24,008 Total 1,333,221 278,591 (i) The balance represents the outstanding balance of loans to an asset management company and loans made to a third-party guarantee company. The loans balance to an asset management company amounted to RMB272 million, with annual interest of 4.35%, as of December 31, 2019. The loans balance to a third-party guarantee is free of interest and amounted to RMB241 million as of December 31, 2019. The terms of the loans ranged from one to three years. As of December 31, 2020, the balance became nil due to the disposal of Hengcheng as described in Note 1. (ii) The Group opened accounts with external online payment service providers to collect and transfer loan funds and interest to investors or borrowers, repay and collect the default loan principal and interest. The Group also uses such accounts to collect the transaction fees and service fees. The balance of funds receivable from external payment network providers mainly includes accumulated amounts of transaction fees, service fees received at the balance sheet date, which was collected subsequently. (iii) The balance represents deposits made to the insurance and guarantee companies' account associated with credit assurance program as disclosed in Note 2. As of December 31, 2020, the balance became nil due to the disposal of Hengcheng as described in Note 1. |
FAIR VALUE OF ASSETS AND LIABIL
FAIR VALUE OF ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
FAIR VALUE OF ASSETS AND LIABILITIES | |
FAIR VALUE OF ASSETS AND LIABILITIES | 4. Fair Value of Assets and Liabilities Assets and Liabilities Recorded at Fair Value The Group does not have assets or liabilities measured at fair value on a non-recurring basis. The fair value hierarchy for assets and liabilities measured at fair value on a recurring basis subsequent to initial recognition is as follows: December 31, 2019 Level 1 Inputs Level 2 Inputs Level 3 Inputs Balance at Fair Value RMB RMB RMB RMB Assets Cash and cash equivalents 3,198,086 — — 3,198,086 Restricted cash 71,056 — — 71,056 Loans at fair value — — 418,492 418,492 Available-for-sale investments 85,129 333,900 41,962 460,991 Total Assets 3,354,271 333,900 460,454 4,148,625 December 31, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Balance at Fair Value RMB RMB RMB RMB Assets Cash and cash equivalents 2,469,909 — — 2,469,909 Restricted cash 237,239 — — 237,239 Loans at fair value — — 192,156 192,156 Available-for-sale investments 73,990 60,000 41,525 175,515 Total Assets 2,781,138 60,000 233,681 3,074,819 Payable to investors at fair value — — 161,996 161,996 Total Liabilities — — 161,996 161,996 As the Group’s loans and related payable to investors do not trade in an active market with readily observable prices, the Group uses discounted cash flow methodology involving significant unobservable inputs to measure the fair value of these assets and liabilities, including discount rates, net cumulative expected loss rates, and cumulative prepayment rates. Financial instruments are categorized as Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. The Group did not transfer any assets or liabilities in or out of Level 3 during the years ended December 31, 2019 and 2020. Significant Unobservable Inputs December 31, 2019 December 31, 2020 Range of Inputs Range of Inputs Financial Instrument Unobservable Input Weighted- Average Weighted- Average Loans at fair value Discount rates 12.0%-16.4 % 12.0%-36.0 % Net cumulative expected loss rates (1) 14.4%-16.6 % 7.7%-31.7 % Cumulative prepayment rates (2) 11.9 % 7.5%-27.0 % Payable to investors at fair value Discount rates N/A 6.8%-8.7 % (1) Expressed as a percentage of the loan volume. (2) Expressed as a percentage of remaining principal of loans. The above inputs in isolation can cause significant increases or decreases in fair value. Specifically, increases in the discount rate can significantly lower the fair value of loans; conversely a decrease in the discount rate can significantly increase the fair value of loans. The discount rate is determined based on the market rates. Changes in fair value of loans and payable to investors are reported net as “Fair value adjustments related to the consolidated ABFE” in the consolidated statements of operations. The additional information about Level 3 loans and payable to investors measured at fair value on a recurring basis for the years ended December 31, 2019 and 2020 is as follows: Loans At Fair Value RMB Balance as of December 31, 2018 1,375,221 Collection of principals (593,350) Change in fair value (126,109) Decrease due to disposal of the beneficial rights of the consolidated ABFE (237,270) Balance as of December 31, 2019 418,492 Changes in fair value related to balance outstanding as of December 31, 2019 (120,015) Loans At Fair Value RMB Balance as of December 31, 2019 418,492 Origination of loans 153,750 Collection of principals (193,916) Change in fair value (186,170) Balance as of December 31, 2020 192,156 Changes in fair value related to balance outstanding as of December 31, 2020 (133,501) Payable to investors At Fair Value RMB Balance as of December 31, 2018 626,207 Interest and penalties received 151,603 Deductible expenses associated with the consolidated ABFE operation (9,766) Principal and interest payments to investors of the consolidated ABFE (139,033) Changes in fair value (129,975) Decrease due to disposal of the beneficial rights of the consolidated ABFE (499,036) Balance as of December 31, 2019 — Changes in fair value related to balance outstanding as of December 31, 2019 — Payable to investors At Fair Value RMB Balance as of December 31, 2019 — Contribution from investors of the consolidated ABFE 174,000 Interest and penalties received 49,702 Deductible expenses associated with the consolidated ABFE operation (4,650) Principal and interest payments to investors of the consolidated ABFE (14,874) Changes in fair value (42,182) Amount due to related parties(Note 1) (109,373) Balance as of December 31, 2020 Changes in fair value related to balance outstanding as of December 31, 2020 (42,182) Note 1: Among the investors of the ABFE, RMB109,373 are recorded as amount due to related parties as of December 31, 2020. Financial Instruments Not Recorded at Fair Value Financial instruments, including accounts receivable, other receivables, financing receivables, loans to third parties, prepaid expenses and other assets, held-to-maturity investments and amounts due from/to related parties, accounts payable, accrued expenses and other liabilities are not recorded at fair value. The fair values of these financial instruments are approximate their carrying value reported in the consolidated balance sheets due to the short-term nature of these assets and liabilities. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2020 | |
INVESTMENTS | |
INVESTMENTS | 5. INVESTMENTS Held-to-maturity investments As of December 31, 2020, the Group’s held-to-maturity investments mainly consisted of principal-guaranteed products that have stated maturity within one year. While these fixed-income financial products are not publicly traded, the Group estimated that their fair value approximated their amortized costs considering their short-term maturities and high credit quality. No allowance for credit loss was recognized for the years ended December 31, 2018, 2019 and 2020. Interest income of held-to-maturity investments of RMB7,022, RMB5,833 and RMB73 was recognized in the consolidated statements of operations for the years ended December 31, 2018, 2019 and 2020, respectively. Available-for-sale investments As of December 31, 2020, the Group’s available-for-sale investments mainly consisted of investments in debt securities. The Group measured the available-for-sale investments at fair value, with changes in fair value deferred in other comprehensive income/(loss). Changes in fair value of available-for-sale investments, net of tax, for the years ended December 31, 2018, 2019 and 2020 were RMB2,414, RMB3,839 and RMB3,546, respectively, recorded in other comprehensive income/(loss). No impairment loss was recognized for the years ended December 31, 2018, 2019 and 2020. Interest income of available-for-sale investments of RMB28,989, RMB24,394 and RMB11,454 was recognized in the consolidated statements of operations for the years ended December 31, 2018, 2019 and 2020, respectively. The additional information about cost and fair value of available-for-sale investments as of December 31, 2019 and 2020 is as follows: Unrealized gains in accumulated other comprehensive Impact of Cost income exchange rate Fair value RMB RMB RMB RMB Available-for-sale investments: Debt securities 460,027 1,014 (50) 460,991 Unrealized gains in accumulated other comprehensive Impact of Cost income exchange rate Fair value RMB RMB RMB RMB Available-for-sale investments: Debt securities 171,189 4,559 (233) 175,515 |
PROPERTY, EQUIPMENT AND SOFTWAR
PROPERTY, EQUIPMENT AND SOFTWARE, NET | 12 Months Ended |
Dec. 31, 2020 | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | 6. PROPERTY, EQUIPMENT AND SOFTWARE, NET December 31, December 31, 2019 2020 RMB RMB Building 38,464 38,464 Computer and transmission equipment 168,711 156,991 Furniture and office equipment 75,499 54,117 Leasehold improvements 140,872 70,276 Software 43,348 75,718 Total property, equipment and software 466,894 395,566 Accumulated depreciation and amortization 271,039 248,373 Property, equipment and software, net 195,855 147,193 Depreciation and amortization expenses on property, equipment and software for the years ended December 31, 2018, 2019 and 2020 were RMB147,992, RMB125,850 and RMB91,772, respectively. |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
ACCRUED EXPENSES AND OTHER LIABILITIES | |
ACCRUED EXPENSES AND OTHER LIABILITIES | 7. ACCRUED EXPENSES AND OTHER LIABILITIES December 31, December 31, 2019 2020 RMB RMB Accrued payroll and welfare 772,590 668,197 Tax payable 803,116 194,406 Funds collected on behalf of third-party guarantee companies (i) 425,920 27,925 Accrued customer incentives 81,297 54,703 Accrued advertisement expenses 62,472 15,467 Payable to investors (ii) 68,011 110,227 Liabilities from quality assurance program and guarantee 4,397 22,783 Others 106,749 115,207 Total accrued expenses and other liabilities 2,324,552 1,208,915 (i) Funds collected on behalf of third-party guarantee companies include the guarantee fees and guarantee funds under the credit assurance program as disclosed in Note 2. The guarantee fees amounted to RMB107 million and nil as of December 31, 2019 and 2020, respectively. The guarantee funds amounted to RMB314 million and nil as of December 31, 2019 and 2020, respectively. (ii) Payable to investor represents interest and principal collected by the Group on behalf of lenders. |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
RELATED PARTY BALANCES AND TRANSACTIONS | 8. RELATED PARTY BALANCES AND TRANSACTIONS The Group accounts for related party transactions based on various service agreements and reflects for all periods presented herein. The major related parties and their relationships with the Group, and the nature of their services provided to the Group are summarized as follows: Relationship with the Major transaction with the Company name Group Group Pucheng Credit Assessment and Management (Beijing) Co., Ltd. (“Pucheng Credit”) Consolidated VIE of CreditEase Credit assessment and collection services, management consulting services, customers acquisition and referral services and related party loans Puxin Subsidiary of CreditEase System support services and related party loans Beijing Zhicheng Credit Service Co., Ltd. (“Beijing Zhicheng”) Consolidated VIE of CreditEase Identity verification services and system support services Hainan CreditEase Puhui Small Loan Co., Ltd. (“Hainan CreditEase”) Subsidiary of Consolidated VIE of CreditEase Collection of fees from customers on behalf of the Group and customers acquisition and referral services CreditEase Bocheng Insurance Sales and Service Co., Ltd. (“Bocheng”) Subsidiary of Consolidated VIE of CreditEase Customers acquisition and referral services Huichuang Financial Leasing (Shanghai) Co., Ltd. Subsidiary of CreditEase Customers acquisition and referral services Zhuoyue Consolidated VIE of CreditEase Customers acquisition and referral services, management consulting services and related party loans Toumi Technology Development (Beijing) Co., Ltd. Consolidated VIE of CreditEase Customers acquisition and referral services Xinda Hongtao Technology Development (Beijing) Co., Ltd. (“Xinda Hongtao”) Consolidated VIE of CreditEase Customers acquisition and referral services Zhehao Asset Management (Shanghai)Co., Ltd. (“Zhehao”) Consolidated VIE of CreditEase Fund distribution services Shenzhen CreditEase Factoring Co., Ltd. (“Shenzhen CreditEase”) Subsidiary of CreditEase Customers acquisition and referral services Xiaozhi Technology Co., Ltd. Subsidiary of Consolidated VIE of CreditEase Customers acquisition and referral services Shenzhen Tengda Yingyi Asset Management Co., Ltd. (“Shenzhen Tengda”) Subsidiary of Consolidated VIE of CreditEase (until July 2019) Disposal of loan receivables and the beneficial rights in the consolidated ABFE Beijing Hanfu Asset Management Co., Ltd. (“Hanfu”) Consolidated VIE of CreditEase Fund distribution services CreditEase Qixiang Technology (Beijing) Co., Ltd. (“CreditEase Qixiang”) Consolidated VIE of CreditEase Purchase of property and equipment and rental of equipment, disposal of loan receivables and the beneficial rights in the consolidated ABFE Shanghai CreditEase Qixin Factoring Co., Ltd. Subsidiary of Consolidated VIE of CreditEase Customers acquisition and referral services CreditEase Huicong International Financial Leasing Co., Ltd. Subsidiary of CreditEase Customers acquisition and referral services Beijing Yuying Asset Management Co., Ltd. Consolidated VIE of CreditEase Fund distribution services Shenzhen Puze Zhongfu Asset Management Co., Ltd. (“Puze Zhongfu”) Subsidiary of CreditEase Fund distribution services and disposal of loan receivables Hengda Hongyuan International Technology Development (Beijing) Co., Ltd. Subsidiary of CreditEase Financing services through transfer of financial lease receivables Huimin Consolidated VIE of CreditEase (from November 2019) Customer hotline services The information about costs and expenses incurred for services provided by CreditEase, its subsidiaries and affiliates for the years ended December 31, 2018, 2019 and 2020 is as follows: Year ended December 31, 2018 2019 2020 RMB RMB RMB Customer calling center services (note a) — — 40,287 Management consulting services — 3,000 669 Rental of equipment 52,606 4,384 — Credit assessment services 38,203 19,025 8,022 System support services 657,206 179,458 164,671 Collection services 327,917 296,493 421,726 Customers acquisition and referral services (note b) 1,065,421 464,140 387,843 Total costs and expenses 2,141,353 966,500 1,023,218 Note a: The customer calling center service fees charged by Huimin include the cost of calling center service starting from January 1, 2020. Note b: For the year ended December 31, 2018 the customer acquisition and referral service fees charged by Zhuoyue include the cost of guarantee services to investors provided by Zhuoyue in 2017 and until March 2018. Revenue derived from services provided by the Group to CreditEase, its subsidiaries and affiliates for the years ended December 31, 2018, 2019 and 2020 is recorded as other revenue and is as follows: Year ended December 31, 2018 2019 2020 RMB RMB RMB Fund distribution services 113,748 113,930 7,004 Customers acquisition and referral service 63,593 28,547 138,438 Total revenue 177,341 142,477 145,442 During the year ended December 31, 2018, Huimin disposed the delinquent loans repurchased from the consolidated ABFE upon the liquidation of the consolidated ABFE to Puze Zhongfu and Shenzhen Tengda. The total consideration from those disposal amounted to RMB607,461. In addition, Huimin disposed its beneficiary rights of several trusts to Shenzhen Tengda and CreditEase Qixiang for a total consideration of RMB144,389 during the year ended December 31, 2019. Since July 2019, Shenzhen Tengda is no longer a related party of the Group. Huimin purchased software from Zhuoyue in 2018. The purchase costs of software amounted to RMB12,275. The information about loans collected from/(issued to) CreditEase, its subsidiaries and affiliates recorded in investing activities of the Company’s consolidated statements of cash flows for the years ended December 31, 2018, 2019 and 2020 is as follows: Year ended December 31, 2018 2019 2020 RMB RMB RMB Puxin 3,238,919 — — Pucheng Credit 441,667 100,000 — Zhuoyue (663,463) 4,500 — Other related parties (811) — — Total 3,016,312 104,500 — The information about loans received from/(repaid to) CreditEase, its subsidiaries and affiliates recorded in financing activities of the Company’s consolidated statements of cash flows for the years ended December 31, 2018, 2019 and 2020 is as follows: Year ended December 31, 2018 2019 2020 RMB RMB RMB Zhuoyue (435,193) 706,250 — Pucheng Credit (816) 1,000 — Fuan Yida — (68,000) — Hengda Hongyuan (a) — — 361,500 Other related parties 15,450 — — Total (420,559) 639,250 361,500 (a) Amounts related to transfer financial receivable to related party which only include principal, as discussed in Note 9 Details of related party balances as of December 31, 2019 and 2020 are as follows: (i) Amounts due from related parties December 31, December 31, 2019 2020 RMB RMB Huimin (Note a) 407,240 — Xinda Hongtao (Note b) 213,624 — Zhuoyue (Note b) 202,724 90,814 Puxin (Note c) 150,743 65,542 Hengcheng (Note d) — 579,633 Huichuang (Note e) — 105,130 Others 14,522 42,887 Total 988,853 884,006 (ii) Amounts due to related parties December 31, December 31, 2019 2020 RMB RMB Puxin (Note a and c) 47,046 9,540 Pucheng Credit (Note c) 33,486 34,834 Hengda Hongyuan (Note f) — 367,134 Hengcheng(Note d) — 379,202 Zhuoyue (Note c) — 75,017 Huizong International(Note c) 20 51,798 Others 26,093 52,784 Total 106,645 970,309 (a) On November 30, 2019, Hengcheng, acquired Huimin’s services connecting borrowers and investors, and sold its remaining unrelated business to Puxin for an aggregated consideration of RMB47 million. Amounts due from Huimin and amounts due to Puxin as of December 31,2019 were related to such transaction and settled during the year ended December 31, 2020. (b) Amounts relate to the prepayment of referral services provided by the related parties and referral services provided to related party as of December 31, 2019 and 2020, respectively. (c) Amounts relate to the provision of credit assessment, collection, system support, identity verification, referral services and trust investment provided by the related parties. (d) Amounts due from and due to Hengcheng were related to the disposal of Huimin as discussed in Note 1 and customer services provided. (e) Amounts related to the referral services provided to the related parties. (f) In 2020, based on the financing arrangement with Haijin Yichuang, RMB367,134 related to financing receivables was transferred to related party, which includes the principal and interests. Non-competition arrangement The Group entered into a non-competition agreement with CreditEase, under which they agreed not to compete with each other’s core business. The non-competition agreement was amended and restated on December 31, 2020. CreditEase agreed not to compete with the Group in a business that is of the same nature as (i) the online wealth management business targeting the mass affluent(which refers to individuals with RMB1million to RMB10 million investable financial assets), unsecured and secured consumer lending, financing leasing, small and medium enterprise lending and other related services and businesses ("Yiren Digital Business"), and (ii) other businesses that the Group and CreditEase may mutually agree from time to time. The Group agreed not to compete with CreditEase in the business conducted by CreditEase, other than (i) the Yiren Digital Business and (ii) other businesses that the Group and CreditEase may mutually agree from time to time. |
SECURED BORROWINGS
SECURED BORROWINGS | 12 Months Ended |
Dec. 31, 2020 | |
SECURED BORROWINGS | |
SECURED BORROWINGS | 9. SECURED BORROWINGS In 2020, Yichuang Financial Leasing entered into several financing arrangements, with a principal amount of RMB862 million. According to the arrangements, Yichuang Financial Leasing transferred its creditor's right of certain financial receivables totaling RMB909 million with remaining lease terms ranging from 1 to 3 years originating from its finance leasing services business to external creditors. As the transfer of creditor's right of financial receivables does not constitute a real asset transformation under PRC law, the proceeds from the external creditors were considered as secured borrowings. The Groups’s secured borrowings have maturities ranging from 1 to 3 years. As of December 31, 2020, RMB361.5 million secured borrowings is included in "Amount due to related parties", refer to Note 8. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES | |
INCOME TAXES | 10 . INCOME TAXES Yiren Digital is a company incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, Yiren Digital is not subject to tax on either income or capital gain. Under the current Hong Kong Inland Revenue Ordinance, YouRace HK is subject to 8.25% Profits Tax rate on assessable profits up to HK$2 million, and 16.5% on any part of assessable profits over HK$2 million. Under the PRC Enterprise Income Tax Law (the “EIT Law”), the standard enterprise income tax rate for domestic enterprises and foreign invested enterprises is 25%. YouRace Hengchuang was recognized as a Software Enterprise and thereby entitled to full exemption from EIT for two years beginning with its first profitable year, i.e., 2015 and 2016, and a 50% reduction for the subsequent three years. In 2020, YouRace Hengchuang qualified as "high and new technology enterprise strongly supported by the State" ("HNTE") under the EIT Law and was entitled to preferential income tax rate of 15%. Yi Ren Heng Sheng Technology Development (Beijing) Co., Ltd. ("Yi Ren Heng Sheng" ) obtained the software enterprise certificate in March 2021, and was qualified as a Software Enterprise and thereby entitled to full exemption from EIT for two years beginning with its first profitable year, i.e., 2020 and 2021, and a 50% reduction for the subsequent three years. In addition, Hengyuda has been recognized as within encouraged industries in the Western Regions of China and enjoyed a preferential income tax rate of 15%. Yiding Technology was a small low-profit enterprise, whose taxable income not exceed RMB1 million is computed at a reduced rate of 25%, taxable income from RMB1 million to RMB3 million at a reduced rate of 50%, and subject to income tax of 20%. Yiren Digital’s other subsidiaries, the consolidated VIEs and the consolidated VIEs’ subsidiaries established in the PRC are subject to income tax rate of 25%, according to the EIT Law. The consolidated ABFE are not subject to income tax. Under the EIT Law and its implementation rules which became effective on January 1, 2008, dividends generated after January 1, 2008 and payable by foreign-invested enterprise in the PRC to its foreign investors who are non-resident enterprises are subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with the PRC that provides for a different withholding arrangement. Under the taxation arrangement between the PRC and Hong Kong, a qualified Hong Kong tax resident which is the “beneficial owner” and directly holds 25% or more of the equity interest in a PRC resident enterprise is entitled to a reduced withholding tax rate of 5%. The Cayman Islands, where the Company is incorporated, does not have a tax treaty with the PRC. Since January 1, 2014, the relevant tax authorities of the Group’s subsidiaries have not conducted a tax examination on the Group’s PRC entities. In accordance with relevant PRC tax administration laws, tax years from 2015 of the Group’s PRC subsidiaries and VIEs, remain subject to tax audits as of December 31, 2020, at the tax authority’s discretion. Income tax expenses are comprised of the following: December 31, December 31, December 31, 2018 2019 2020 RMB RMB RMB Current tax (i) (474,874) 370,946 77,274 Deferred tax (i) 669,161 (131,718) (157,885) Total 194,287 239,228 (80,611) Reconciliation between the income tax at the PRC statutory tax rate and income tax expenses is as follows: Year ended December 31, 2018 2019 2020 RMB RMB RMB Income before provision for income taxes 1,783,392 1,397,019 (773,359) Statutory tax rate in the PRC 25 % 25 % 25 % Income tax expense / (benefit) at statutory tax rate 445,848 349,255 (193,340) Non-deductible expenses 71,387 22,077 9,126 Research and development super deduction (7,246) (10,820) (5,460) Effect of income not taxable (192,501) (12,786) — Effect of tax holiday and preferential tax rate (93,121) (126,577) (178,938) Adjustment on current income tax of the prior periods 127 (384) 6 Effect of different tax rates of subsidiaries operating in other jurisdictions 23,190 14,518 13,641 Effect of accrual / reversal of withholding income tax 8,723 — (20,000) Debt relief income (ii) — 1,286,791 — Utilization of tax losses from the prior period (ii) — (1,452,828) — Change in valuation allowance (62,120) 169,982 294,354 Income tax expenses/ (benefits) 194,287 239,228 (80,611) The aggregate amount and per share effect of the tax holiday and preferential tax rate are as follows: Year ended December 31, 2018 2019 2020 RMB RMB RMB The aggregate amount of tax holiday and preferential tax rate (93,121) (126,577) (178,938) The aggregate effect on basic and diluted net income per share: - Basic (0.5055) (0.6834) (0.9924) - Diluted (0.4999) (0.6786) (0.9924) (i) As discussed in Note 2, starting from May 2018, the Group no longer provides quality assurance services to investors and related assurance program liabilities were derecognized. The reversal of deferred tax assets associated with quality assurance program liabilities resulted in a decrease in deferred tax assets with a corresponding decrease in income tax expense. As a result, the current tax portion of income tax expenses for the year ended December 31, 2018 was a net income tax benefit. (ii) As discussed in Note 1, Zhuoyue unconditionally waived a net receivables amounting to RMB5,147 million from the Acquired Businesses, which resulted in an increase of income tax expenses amounting to RMB1,287 million. The carried over accumulated loss from prior periods were utilized during the year and resulted in a decrease of income tax expenses amounting to RMB1,453 million. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the deferred tax assets are as follows: December 31, December 31, 2019 2020 RMB RMB Deferred tax assets: Liabilities from quality assurance program and guarantee 659 294 Deferred revenue 44,804 12,725 Refund liabilities 95,067 1,627 Accrued expenses and other liabilities 30,618 22,263 Fair value changes 11,609 18,114 Allowance for uncollectible receivables 95,989 107,994 Amortization difference of long-term assets 28,079 19,841 Accumulated losses carry over 152,341 32,683 Valuation allowance (i) (252,660) (39,516) Total 206,506 176,025 Deferred tax liabilities: Contract assets, net 318,543 167,949 Contract cost 58,882 21,110 Intangible assets 2,562 8,962 Total 379,987 198,021 Net deferred tax liabilities (173,481) (21,996) (i) The valuation allowance is considered on an individual entity basis. As of December 31, 2019 and 2020, the Company had tax operating loss carry forwards of RMB609,363 and RMB130,732 , respectively, which can be carried forward to offset taxable income. The net operating losses will expire in the years from 2021 to 2024 if not utilized. The Group has recognized a valuation allowance against deferred tax assets of RMB252,660 and RMB39,516 for the years ended December 31, 2019 and 2020, respectively. The authoritative guidance requires that the Group recognizes the impact of a tax position in the financial statements if that position is more likely than not of being sustained upon audit by the tax authority, based on the technical merits of the position. Under the PRC laws and regulations, arrangements and transactions among related parties may be subject to examination by the PRC tax authorities. If the PRC tax authorities determine that the contractual arrangements among related companies do not represent a price under normal commercial terms, they may make adjustments to the companies’ income and expenses. A transfer pricing adjustment could result in additional tax liabilities. Uncertainties exist with respect to how the current income tax law in the PRC applies to the Group’s overall operations, and more specifically, with regard to tax residency status. The EIT Law includes a provision specifying that legal entities organized outside of the PRC will be considered residents for Chinese income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the EIT Law provide that non-resident legal entities will be considered PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc., occurs within the PRC. Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Group does not believe that the legal entities organized outside of the PRC within the Group should be treated as residents for the EIT law purposes. If the PRC tax authorities subsequently determine that the Company and its subsidiaries registered outside the PRC should be deemed resident enterprises, the Company and its subsidiaries registered outside the PRC will be subject to the PRC income taxes, at a rate of 25%. The Group did not identify significant unrecognized tax benefits for the years ended December 31, 2018, 2019 and 2020. The Group did not incur any interest related to unrecognized tax benefits, did not recognize any penalties as income tax expenses and also does not anticipate any significant change in unrecognized tax benefits within 12 months from December 31, 2020. Under the EIT Law and its implementation rules, a withholding tax at 10%, unless reduced by a tax treaty or arrangement, is applied on dividends received by non-PRC-resident corporate investors from the PRC-resident enterprises, such as the Company’s PRC subsidiaries. Under the China-HK Tax Arrangement and the relevant regulations, a qualified Hong Kong tax resident which is the “beneficial owner” and holds 25% equity interests or more of a PRC enterprise is entitled to a reduced withholding rate of 5%. The Company believes that YouRace HK will apply the 10% withholding tax rate. On July 29, 2017, the Board also approved a semi-annual dividend policy. Under this policy, semi-annual dividends are set at an amount equivalent to approximately 15% of the Company’s anticipated net income after tax in each half year commencing from the second half of 2017, which are derived from the earnings of the Group’s PRC companies. On August 14, 2018, the Board decided to terminate the semi-annual dividend policy going forward. Aggregate undistributed earnings of the Company’s PRC subsidiaries and the consolidated VIEs that are available for distribution were approximately RMB5,138 million and RMB3,300 million as of December 31, 2019 and 2020, respectively. A deferred tax liability should be recorded for taxable temporary differences attributable to the excess of financial reporting amounts over tax basis amount in the PRC subsidiaries and the consolidated VIEs. However, the aggregate undistributed earnings of the Company’s subsidiaries and the consolidated VIEs and its subsidiaries located in the PRC that are available for distribution as of December 31, 2020 are considered to be indefinitely reinvested and accordingly, no provision has been made for the Chinese dividend withholding taxes that would be payable upon the distribution of those amounts to any entity within the Group that is outside the PRC. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 11. SHARE-BASED COMPENSATION Share incentive plan In September 2015, the Company adopted the 2015 Share Incentive Plan (the “2015 Plan”), In July 2017, the Company adopted the 2017 Share Incentive Plan (the “2017 Plan”), In June 2020, the Company adopted the 2020 Share Incentive Plan (the “2020 Plan”) which permits the grant of three types of awards: options, restricted shares and restricted share units (“RSUs”). Persons eligible to participate in the 2015 Plan, the 2017 Plan and 2020 Plan include employees (including part-time employees) and the directors of the Company or any of affiliates, which include CreditEase, its subsidiaries and any entities in which CreditEase or a subsidiary of the Company holds a substantial ownership interest. According to the resolutions of the Board and the shareholders of the Company in July 2017, the 2015 Plan was amended. Under the amended 2015 plan, the maximum ordinary shares available for issuance were decreased to 3,939,100. Under the 2017 Plan, the maximum of 6,060,900 ordinary shares were reserved for issuance. Under the 2020 Plan, the maximum of 18,560,000 ordinary shares were reserved for issuance. The Company approved six grants of RSUs to directors and employees of the Group and CreditEase and its consolidated subsidiaries and VIEs. On July 1, 2016, 4,034,100 RSUs were granted under the 2015 Plan. On July 1, 2017, 2018 and 2019, 3,744,782, 2,488,540 and 43,386 RSUs were granted under the 2017 Plan, respectively. Approximately 59.9%, 34.1%, 31.9% and 20.0% of the share awards were immediately vested and the rest is expected to be vested in various days up to four and five years, respectively. The grant date fair value of the awards was US$7.25, US$12.50, US$10.61 and US$6.92 per ordinary share, which was determined based on the closing price of the Company’s ADSs on The NewYork Stock Exchange on July 1, 2016, 2017, 2018 and 2019, respectively. On June 30 and December 31, 2020, 2,592,140 and 143,560 RSUs were granted under the 2020 Plan, and expected to be vested in various days up to three years, respectively. The grant date fair value of the awards is US$2.07 and US$1.67, which was determined based on the closing price of the Company's ADSs on The NewYork Stock Exchange on June 30 and December 31, 2020. Out of all the RSUs granted, 1,298,000 RSUs were granted to directors and employees of the Group under the 2015 Plan on July 1, 2016, 2,816,702, 1,600,540 and 43,386 RSUs under the 2017 Plan on July 1,2017, 2018 and 2019, respectively. 2,089,724 and 139,912 RSU were granted under the 2020 Plan on June 30 and December 31, 2020 respectively. The awards granted to the employees of the Group are recognized as share-based compensation expenses, and measured based on the fair value as of the grant date. The Company recognized compensation expenses in general and administrative expense of RMB119,998, RMB43,941 and RMB14,173 for the years ended December 31, 2018, 2019 and 2020, respectively. The remaining 2,736,100 RSUs were granted to employees of CreditEase and its consolidated subsidiaries and VIEs under the 2015 Plan on July 1, 2016, 928,080 and 888,000 RSUs under the 2017 Plan on July 1, 2017, and 2018, respectively. Additionally, 502,416 and 3,648 RSUs were granted under the 2020 Plan on June 30 and December 31, 2020 respectively. The awards granted to employees of CreditEase and its consolidated subsidiaries and VIEs were recognized as deemed dividend from the Company to CreditEase as the employees of CreditEase do not provide services directly related to the Company. The awards are measured based on the fair value as of the grant date. The amount recognized as deemed dividend were RMB50,117, RMB15,497 and RMB5,312 for the years ended December 31, 2018 ,2019 and 2020 respectively. The total fair value of RSUs vested for the years ended on December 31, 2018,2019 and 2020 were RMB125,477, RMB88,446 and RMB66,797 respectively. RSUs A summary of RSUs activities for the year ended December 31 2020 is as follows: Weighted-Average Grant-Date Number of RSUs Fair Value US$ Outstanding as of December 31, 2019 1,918,446 10.96 Granted 2,735,700 2.04 Vested (1,237,196) 7.82 Forfeited (807,006) 7.07 Outstanding as of December 31, 2020 2,609,944 4.31 As of December 31, 2020, unrecognized compensation cost related to unvested awards granted to employees of the Group, adjusted for estimated forfeitures, was RMB18,763. This cost is expected to be recognized over 2 years on an accelerated basis. As of December 31, 2020, unrecognized deemed dividend related to unvested awards granted to employees of CreditEase and its consolidated subsidiaries and VIEs, adjusted for estimated forfeitures, was RMB5,462. Such deemed dividend will be recorded over 2 years on an accelerated basis. |
SHARE REPURCHASE PROGRAM
SHARE REPURCHASE PROGRAM | 12 Months Ended |
Dec. 31, 2020 | |
SHARE REPURCHASE PROGRAM | |
SHARE REPURCHASE PROGRAM | 12. SHARE REPURCHASE PROGRAM In June 2018, the Board authorized a share repurchase program under which the Company may repurchase up to US$20 million worth of its ADSs. The share repurchases may be made in accordance with applicable laws and regulations through open market transactions, privately negotiated transactions or other legally permissible means as determined by the management. During the years ended December 31, 2019 and 2020, the Company had repurchased 366,686 ADSs for RMB36,843 (US$5,292) and 153,279 ADSs for RMB3,050 (US$467) on the open market, at a weighted average price of US$14.87 per ADS and US$2.92 per ADS, respectively. The Company accounts for the repurchased ordinary shares under the cost method and includes such treasury stock as a component of the shareholders’ equity. |
NET INCOME PER SHARE AND NET IN
NET INCOME PER SHARE AND NET INCOME ATTRIBUTABLE TO ORDINARY SHAREHOLDERS | 12 Months Ended |
Dec. 31, 2020 | |
NET INCOME/(LOSS) PER SHARE AND NET (LOSS)/INCOME ATTRIBUTABLE TO ORDINARY SHAREHOLDERS | |
NET INCOME/(LOSS) PER SHARE AND NET (LOSS)/INCOME ATTRIBUTABLE TO ORDINARY SHAREHOLDERS | 13. NET INCOME/(LOSS) PER SHARE AND NET (LOSS)/INCOME ATTRIBUTABLE TO ORDINARY SHAREHOLDERS As described in Note 1, Yiren Digital acquired the Acquired Businesses which were accounted for as an acquisition under common control. Part of the transaction price included issuance of 61,981,412 ordinary shares by the Group. For purposes of calculating net income/(loss) per share, the weighted average shares prior to the acquisitions have been retroactively adjusted to give effect to the acquisitions for all historical periods presented. The basic and diluted net income/(loss) per share for each of the years presented are calculated as follows: Year ended December 31, 2018 2019 2020 RMB RMB RMB Numerator: Net income/(loss) 1,579,810 1,155,611 (692,748) Denominator: Weighted average number of ordinary shares outstanding, basic 184,225,643 185,219,586 180,301,898 Plus incremental weighted average ordinary shares from assumed vesting of RSUs using the treasury stock method(i) 2,044,872 1,315,878 — Weighted average number of ordinary shares outstanding, diluted 186,270,515 186,535,464 180,301,898 Basic net income/(loss) per share 8.5754 6.2391 (3.8422) Diluted net income/(loss) per share 8.4813 6.1951 (3.8422) (i) As of December 31, 2020, there were 592,249 RSUs, which were excluded from the computation of diluted net income/(loss) per share because their effect was anti-dilutive. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
LEASES | |
LEASES | 14. LEASES The Group leases certain office premises to support its core business under non-cancelable leases. The Group determines if an arrangement is a lease at inception. Some lease agreements contain lease and non-lease components, which the Group chooses not to account for as separate components as the Group has elected the practical expedient. As of December 31, 2020, the Group had no long-term leases that were classified as a financing lease. As of December 31, 2020, the Group had no significant lease contract that has been entered into but not yet commenced. A summary of supplemental information related to operating leases as of December 31, 2020 is as follows: Year ended Year ended December 31, 2019 December 31, 2020 Operating lease ROU assets 334,134 105,674 Operating lease liabilities 282,334 81,854 Operating leases - Weighted average remaining lease term 1.88 years 1.47 years Operating leases - Weighted average discount rate 4.19 % 3.3 % A summary of lease cost recognized and recorded in sales and marketing and general and administrative expenses in the consolidated statements of operations and supplemental cash information related to operating leases is as follows: Year ended Year ended December 31, 2019 December 31, 2020 Operating lease cost 244,855 Short-term lease cost 808 Total 245,663 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases 218,878 Non-cash ROU assets in exchange for new lease liabilities: Operating leases 63,749 As of December 31, 2020, the maturity of operating lease liabilities under the Group’s non-cancelable operating leases is as follows: As of December 31, As of December 31, 2019 2020 RMB RMB 2020 193,478 — 2021 82,128 62,414 2022 17,944 20,947 2023 454 872 2024 — — 2025 and thereafter — — Subtotal 294,004 84,233 Less: imputed interest 11,670 2,379 Present value of operating lease liabilities 282,334 81,854 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 15. SEGMENT INFORMATION The Group’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer who reviews the consolidated results of operations when making decisions about allocating resources and assessing performance of the Group. As a result of the acquisition under common control during 2019, the Group changed its internal organization structure and changed its reportable segments from one to two: Yiren Wealth and Yiren Credit. Yiren Wealth conducts wealth management business and Yiren Credit focuses on consumer credit business. The corresponding segment information for the years ended December 31, 2018 was restated to reflect such change. The summary of each segment’s operating results for the years ended December 31, 2018, 2019 and 2020 is as follows: Year ended December 31, 2018 2019 2020 RMB RMB RMB Net revenue: Wealth management 1,986,960 2,176,215 1,432,364 Consumer credit 9,257,154 6,440,569 2,529,598 Total net revenue 11,244,114 8,616,784 3,961,962 Operating costs and expenses: Wealth management (1,561,310) (915,202) (760,180) Consumer credit (8,561,264) (6,194,071) (3,703,031) Income/(loss) from operations: Wealth management 425,650 1,261,013 672,184 Consumer credit 695,890 246,498 (1,173,433) Total segment income/(loss) from operations 1,121,540 1,507,511 (501,249) Unallocated expenses (345,394) (379,482) (204,589) Other income/(expenses) 1,007,246 268,990 (67,521) Income/(loss) before provision for income taxes 1,783,392 1,397,019 (773,359) All of the Group’s revenue were generated from the PRC and all of long-lived assets of the Group were located in the PRC. Depreciation and amortization expenses of Wealth management for the years ended December 31, 2018, 2019 and 2020 were RMB3,018, RMB2,690 and RMB1,888 , respectively, while such expenses of Consumer credit for the years ended December 31, 2018, 2019 and 2020 were RMB107,920, RMB89,912 and RMB78,751, respectively. |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2020 | |
EMPLOYEE BENEFIT PLAN | |
EMPLOYEE BENEFIT PLAN | 16. EMPLOYEE BENEFIT PLAN Full time employees of the Group in the PRC participate in a government-mandated defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. The Group accrues for these benefits based on certain percentages of the employees’ salaries. The total contribution for such employee benefits were RMB810,275, RMB682,006 and RMB233,917 for the years ended December 31, 2018, 2019 and 2020, respectively. |
STATUTORY RESERVES AND RESTRICT
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 17. STATUTORY RESERVES AND RESTRICTED NET ASSETS In accordance with the PRC laws and regulations, the Company’s PRC subsidiaries, the consolidated VIEs and the consolidated VIEs’ subsidiaries are required to make appropriation to certain statutory reserves, namely general reserve, enterprise expansion reserve, and staff welfare and bonus reserve, all of which are appropriated from net profit as reported in their PRC statutory accounts. The Group’s PRC entities are required to appropriate at least 10% of their after-tax profits to the general reserve until such reserve has reached 50% of their respective registered capital. Appropriations to the enterprise expansion reserve and the staff welfare and bonus reserve are to be made at the discretion of the board of directors of each of the Group’s PRC entities. There were no appropriations to these reserves by the Group’s PRC entities for the years ended December 31, 2018, 2019 and 2020. As a result of the PRC laws and regulations and the requirement that distributions by the PRC entity can only be paid out of distributable profits computed in accordance with the PRC GAAP, the PRC entity is restricted from transferring a portion of its net assets to the Company. Amounts restricted include paid-in capital, capital reserve and statutory reserves of the Company’s PRC entities. As of December 31, 2019 and 2020, the aggregated amounts of paid-in capital, capital reserve and statutory reserves represented the amount of net assets of the relevant entities of the Group not available for distribution amounted to RMB7,342,556 and RMB7,840,922 respectively (including the statutory reserve fund of RMB499,675 and RMB600,100 as of December 31, 2019 and 2020, respectively). |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 18. COMMITMENTS AND CONTINGENCIES Contingencies The Group is subject to periodic legal or administrative proceedings in the ordinary course of business. The Group does not believe that any legal or administrative proceeding to which the Group is a party will have a material effect on its business or financial condition. |
SCHEDULE 1 - CONDENSED FINANCIA
SCHEDULE 1 - CONDENSED FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
SCHEDULE I-CONDENSED FINANCIAL INFORMATION | |
SCHEDULE 1 - CONDENSED FINANCIAL INFORMATION | YIREN DIGITAL LTD. SCHEDULE I-CONDENSED BALANCE SHEETS (Amounts in thousands, except for share and per share data, or otherwise noted) December 31, December 31, December 31, 2019 2020 2020 RMB RMB US$ Assets: Cash and cash equivalents 68,438 51,013 7,818 Prepaid expenses and other assets 2,639 2,319 355 Amounts due from its subsidiaries and the consolidated VIEs 905,015 820,329 125,722 Amounts due from related parties — 575,537 88,205 Available-for-sale investments 85,129 73,990 11,339 Investments in its subsidiaries and the consolidated VIEs 3,682,743 2,263,159 346,844 Total assets 4,743,964 3,786,347 580,283 Liabilities: Accrued expenses and other liabilities 6,497 8,683 1,331 Amounts due to its subsidiaries and the consolidated VIEs 200,331 — — Amounts due to related parties 47,046 — — Total liabilities 253,874 8,683 1,331 Equity: Ordinary shares (US$0.0001 par value; 500,000,000 shares authorized; 186,332,444 and 187,569,640 shares issued as of December 31, 2019 and 2020, respectively; 185,595,072 and 167,965,710 shares outstanding as of December 31, 2019 and 2020, respectively) 121 121 19 Treasury stock (737,372 and 1,043,930 shares as of December 31, 2019 and 2020, respectively) (37,097) (40,147) (6,153) Additional paid-in capital 5,038,691 5,058,176 775,199 Accumulated other comprehensive income 21,855 17,108 2,622 Accumulated deficit (533,480) (1,257,594) (192,735) Total equity 4,490,090 3,777,664 578,952 Total liabilities and equity 4,743,964 3,786,347 580,283 YIREN DIGITAL LTD. SCHEDULE I-CONDENSED STATEMENTS OF OPERATIONS (Amounts in thousands, except for share and per share data, or otherwise noted) Year ended December 31, 2018 2019 2020 2020 RMB RMB RMB US$ Operating expenses (129,942) (62,789) (31,359) (4,806) Interest income 5,362 5,280 665 102 Non-operating income, net 761 795 1,041 159 Share of income/(loss) of its subsidiaries and the consolidated VIEs 1,703,629 1,212,325 (663,095) (101,623) Net income/(loss) 1,579,810 1,155,611 (692,748) (106,168) YIREN DIGITAL LTD. SCHEDULE I-CONDENSED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (Amounts in thousands, except for share and per share data, or otherwise noted) Year ended December 31, 2018 2019 2020 2020 RMB RMB RMB US$ Net income/(loss) 1,579,810 1,155,611 (692,748) (106,168) Other comprehensive income/(loss), net of tax of nil: Foreign currency translation adjustment 7,737 1,626 (8,293) (1,271) Unrealized (loss)/gain on available-for-sale investments (2,414) 3,839 3,546 543 Comprehensive income/(loss) 1,585,133 1,161,076 (697,495) (106,896) YIREN DIGITAL LTD. SCHEDULE I-CONDENSED STATEMENTS OF CASH FLOWS (Amounts in thousands, except for share and per share data, or otherwise noted) Year ended December 31, 2018 2019 2020 2020 RMB RMB RMB US$ Cash Flows from Operating Activities: Net cash used in operating activities (12,170) (15,001) (13,393) (2,053) Cash Flows from Investing Activities: Amounts due from/to its subsidiaries, the consolidated VIEs and related parties (6,678) (13,867) (9,561) (1,465) Redemption of available-for-sale investments — — 9,755 1,495 Purchase of available-for-sale investments (46,379) (91,050) — — Proceeds on disposal of available-for-sale investments — 93,343 — — Net cash (used in)/provided by investing activities (53,057) (11,574) 194 30 Cash Flows from Financing Activities: Dividends paid to shareholders (106,626) — — — Repurchase of ordinary shares (254) (36,843) (3,050) (467) Net cash used in financing activities (106,880) (36,843) (3,050) (467) Effect of foreign exchange rate changes 3,423 322 (1,176) (181) Net decrease in cash and cash equivalents (168,684) (63,096) (17,425) (2,671) Cash and cash equivalents, beginning of year 300,218 131,534 68,438 10,489 Cash and cash equivalents, end of year 131,534 68,438 51,013 7,818 YIREN DIGITAL LTD. SCHEDULE I-NOTES TO THE CONDENSED FINANCIAL INFORMATION 1. BASIS FOR PREPARATION The condensed financial information of the Parent Company has been prepared using the same accounting policies as set out in the Group’s consolidated financial statements, except that the Parent Company used the equity method to account for investments in its subsidiaries and the consolidated VIEs and the consolidated VIEs’ subsidiaries. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The footnote disclosures contain supplemental information relating to the operations of the Group and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements. 2. INVESTMENTS IN SUBSIDIARIES AND VIES The Company, its subsidiaries, the consolidated VIEs and the consolidated VIEs’ subsidiaries are included in the consolidated financial statements where the inter-company balances and transactions are eliminated upon consolidation. For the purpose of the Parent Company’s stand-alone financial statements, its investments in its subsidiaries and the consolidated VIEs and the consolidated VIEs’ subsidiaries are reported using the equity method of accounting. The Parent Company’s share of income and losses of its subsidiaries and the consolidated VIEs and the consolidated VIEs’ subsidiaries are reported as shares of income/(loss) of its subsidiaries and the consolidated VIEs and the consolidated VIEs’ subsidiaries in the condensed financial information to the Parent Company. 3. AMOUNTS DUE FROM/TO ITS SUBSIDIARIES AND THE CONSOLIDATED VIES As of December 31,2019, amounts due from its subsidiaries and the consolidated VIEs represent an interest-free, unsecured and repayable on demand loan provided to YouRace HK and Hengcheng,dividend receivable from YouRace HK. Amounts due to its subsidiaries and the consolidated VIEs represent amounts paid by its subsidiaries on behalf of the Parent Company. As of December 31,2020, the amounts mainly represent an interest-free, unsecured and repayable on demand loan provided to YouRace Hengchuang. 4. AMOUNTS DUE TO RELATED PARTIES As of December 31, 2019, the amounts due to related parties represents the amount payable to Puxin for the disposal of Huimin. 5. AMOUNTS DUE FROM RELATED PARTIES As of December 31, 2020, the amount due from related parties mainly represent the amounts receivable from HengCheng. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | Basis of presentation The consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). |
Basis of consolidation | Basis of consolidation The consolidated financial statements include the financial statements of the Company, its wholly-owned subsidiaries, and the consolidated VIEs and the consolidated VIEs’ subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation. |
VIEs | VIEs The VIE arrangements In order to comply with the PRC laws and regulations which prohibit or restrict foreign control of companies involved in provision of value-added telecommunication services and other restricted businesses, the Company operates substantially all of its business through its VIEs. The Company through its wholly owned subsidiaries (Foreign Owned Subsidiaries, the “FOS”) located in the PRC entered into a series of contractual agreements with the VIEs and their shareholders. Through the contractual agreements below, the Company has (1) the power to direct the activities that most significantly affect the economic performance of the VIEs, and (2) the right to receive the economic benefit of the VIEs that could potentially be significant to the VIEs. As a result, the shareholders of the VIEs lack the power to direct the activities of the VIEs that most significantly impact the entity's economic performance, the obligation to absorb the expected losses, and the right to receive the expected residual returns of the entity. Accordingly, the Company is considered as the primary beneficiary of the VIEs, and the Company has consolidated the financial results of the VIEs and their subsidiaries in its consolidated financial statements. The Group's VIEs that are material to the Group’s business and operations are Hengcheng and Yiren Wealth Management as of December 31, 2019, and are Yiren Wealth Management and CreditEase Puhui as of December 31, 2020. In concluding that the Company is the primary beneficiary of the VIEs, the Company believes that the FOS’s rights under the terms of the exclusive option agreements provide it with a substantive kick out right. More specifically, the Company believes the terms of the exclusive option agreements are valid, binding and enforceable under the PRC laws and regulations currently in effect. A simple majority vote of the Company’s board of directors is required to pass a resolution to exercise the FOS’s rights under the exclusive option agreements, for which consent of the shareholders of the VIEs is not required. The FOS’s rights under the exclusive option agreements give the Company the power to control the shareholders of the VIEs and thus the power to direct the activities that most significantly impact the VIEs’ economic performance. In addition, the FOS’s rights under the powers of attorney also reinforce the Company’s abilities to direct the activities that most significantly impact the VIEs’ economic performance. The Company also believes that this ability to exercise control ensures that the VIEs will continue to execute and renew service agreements and pay service fees to the Company. The exclusive business cooperation agreements will be terminated upon the expiration of the operation term of either party if the application for renewal of its operation term is not approved by the relevant government authorities. As a result, the Company believes that it has the rights to receive substantially all of the economic benefits from the VIEs. · Agreements that provide the FOS effective control over the VIEs Power of Attorney The shareholders of the VIEs have executed an irrevocable power of attorney in favor of the FOS, or entity or individual designated by the FOS. Pursuant to this powers of attorney, the FOS or their designees have full power and authority to exercise all of such shareholder’s rights with respect to his equity interest in the VIEs. The power of attorney will remain in force for so long as the shareholder remains a shareholder of the VIEs. Exclusive Option Agreements The VIEs and their shareholders have also entered into exclusive option agreements with the FOS. Pursuant to this agreements, the shareholders of the VIEs have granted an exclusive option to the FOS or their designees to purchase all or part of such shareholders’ equity interest, at a purchase price equal to the higher of the amount of loan extended by the FOS to each shareholder of the VIEs under the respective loan agreements or the minimum price required by the PRC law at the time of such purchase. Equity Interest Pledge Agreements The shareholders of the VIEs have also entered into equity pledge agreements with the FOS, pursuant to which each shareholder pledged his/her interest in the VIEs to guarantee the performance of obligations of the VIEs and their shareholders under the exclusive business cooperation agreements, loan agreements, exclusive option agreements and power of attorney. The Company is in the process to register some of the equity pledge with the competent government authorities. · Agreements that transfer economic benefits to the FOS Exclusive Business Cooperation Agreements The FOS have entered into exclusive business cooperation agreements with the VIEs. Pursuant to this exclusive business cooperation agreements, the FOS provide comprehensive technical support, consulting services and other services to the VIEs in exchange for service fees. The FOS have the sole discretion to determine the amounts of the service fees. During the term of exclusive business cooperation agreements, both the FOS and the VIEs shall renew their operation terms prior to the expiration thereof so as to enable the exclusive business cooperation agreements to remain effective. The exclusive business cooperation agreements shall be terminated upon the expiration of the operation term of either the FOS or the VIEs, if the application for renewal of their operation terms is not approved by relevant government authorities. In addition, the shareholders of the VIEs have granted an irrevocable and exclusive option to the FOS to purchase any or all of the assets and businesses of the VIEs at the lowest price permitted under the PRC law. The agreements may be terminated only at the option of the FOS and the VIEs have no authority to terminate the exclusive business cooperation agreements. · Agreements that provide the FOS with the option to purchase the equity interest in the VIEs Loan Agreements Under the loan agreements between the FOS and each of the shareholders of the respective VIEs, the FOS made interest-free loans to the shareholders for the exclusive purpose of the initial capitalization and the subsequent financial needs of the VIEs. The loans can only be repaid with the proceeds derived from the sale of all of the equity interests in the VIEs to the FOS or its designated representatives pursuant to the exclusive option agreements. The shareholders must pay all of the proceeds from sale of such equity interests to the FOS. The loans must be repaid immediately under certain circumstances, including, among others, if a foreign investor is permitted to hold majority or 100% equity interest in the VIEs and the FOS elected to exercise their exclusive equity purchase option. The term of the loans is ten years and can be extended upon mutual written consent of the parties. Risks in relation to the VIE structure The Company believes that the contractual arrangements with the VIEs and their current shareholders are in compliance with the PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of the PRC laws and regulations, the PRC government could: · Revoke the business and operating licenses of the FOS and the VIEs; · Discontinue or restrict the operations of any related-party transactions among the FOS and the VIEs; · Impose fines or other requirements on the FOS and the VIEs; · Require the Company or the FOS and the VIEs to revise the relevant ownership structure or restructure operations; · Restrict or prohibit the Company’s use of the proceeds of the additional public offering to finance the Company’s business and operations in the PRC; · Shut down the Company’s servers or block the Company’s online platform; · Discontinue or place restrictions or onerous conditions on the Company’s operations; and/or · Require the Company to undergo a costly and disruptive restructuring. The Company’s ability to conduct its business may be negatively affected if the PRC government were to carry out any of the aforementioned actions. As a result, the Company may not be able to consolidate the VIEs in its consolidated financial statements as it may lose the ability to exert effective control over the VIEs and their shareholders, and it may lose the ability to receive economic benefits from the VIEs. The interests of the shareholders of the VIEs may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing the VIEs not to pay the service fees when required to do so. The Company cannot assure that when conflicts of interest arise, the shareholders of the VIEs will act in the best interests of the Company or that conflicts of interests will be resolved in the Company’s favor. Currently, the Company does not have existing arrangements to address potential conflicts of interest the shareholders of the VIEs may encounter in its capacity as beneficial owners and directors of the VIEs, on the one hand, and as beneficial owners and directors of the Company, on the other hand. The Company believes the shareholders of the VIEs will not act contrary to any of the contractual arrangements and the exclusive option agreements provide the Company with a mechanism to remove the current shareholders of the VIEs should they act to the detriment of the Company. The Company relies on certain current shareholders of the VIEs to fulfill their fiduciary duties and abide by laws of the PRC and act in the best interest of the Company. If the Company cannot resolve any conflicts of interest or disputes between the Company and the shareholders of the VIEs, the Company would have to rely on legal proceedings, which could result in disruption of its business, and there is substantial uncertainty as to the outcome of any such legal proceedings. The following financial statement amounts and balances of the consolidated VIEs and the consolidated VIEs’ subsidiaries were included in the consolidated financial statements after elimination of intercompany transactions and balances: December 31, December 31, 2019 2020 RMB RMB Assets Cash and cash equivalents 1,331,668 999,774 Accounts receivable 2,130 100,250 Contract assets, net 2,191,277 541,969 Contract cost 61,528 64,099 Prepaid expenses and other assets 897,187 228,094 Financing receivables 29,612 1,253,494 Amounts due from related parties 700,186 261,937 Available-for-sale investments 333,900 10,000 Property, equipment and software, net 11,496 109,061 Deferred tax assets 29,829 16,379 Right-of-use assets 16,454 96,861 Total assets 5,605,267 3,681,918 Liabilities Accounts payable 39,019 9,026 Amounts due to related parties 35,708 775,655 Deferred revenue 349,677 43,607 Accrued expenses and other liabilities 1,390,341 1,054,259 Secured borrowing — 500,500 Refund liabilities 1,681,906 — Deferred tax liabilities 209,747 13,985 Lease liabilities 15,734 73,537 Total liabilities 3,722,132 2,470,569 Year ended December 31, 2018 2019 2020 RMB RMB RMB Net revenue 11,121,168 8,303,900 2,549,869 Net income 2,069,678 1,503,455 235,360 Year ended December 31, 2018 2019 2020 RMB RMB RMB Net cash (used in) /provided by operating activities (3,565,383) 846,367 974,840 Net cash provided/(used in) by investing activities 3,631,615 441,983 (1,202,842) Net cash (used in)/provided by financing activities (300,559) (787,737) 862,000 In accordance with the VIE contractual arrangements, the FOS have the power to direct activities of the VIEs, and can have assets transferred out of the VIEs. There are no consolidated VIEs’ assets that are collateral for the VIEs’ obligations and can only be used to settle the VIEs’ obligations. There are no creditors (or beneficial interest holders) of the VIEs that have recourse to the general credit of the Company. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests, which require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to the shareholders of the VIEs or entrustment loans to the VIEs. Relevant PRC laws and regulations restrict the VIEs from transferring a portion of their net assets, equivalent to the balance of their paid-in capital, capital reserve and statutory reserves, to the Company in the form of loans and advances or cash dividends. Please refer to Note 17 for disclosure of restricted net assets. |
Consolidated ABFE | Consolidated ABFE As part of the Group’s strategy to expand its investor base from individual investors to institutional investors, the Group established a business relationship with certain trusts or Asset Backed Special Plan (“ABS plan”), collectively referred to as consolidated assets backed financing entities or ABFE, which were administered by third-party trust companies. The ABFE were set up to invest solely in the loans facilitated by the Group on its platform to provide returns to the beneficiaries of the trusts through interest payments made by the borrowers. The Group provides loan facilitation and post-origination services to the ABFE. The Group also has power to direct the activities that have most significant impact on the economic performance of the ABFE by providing the loan servicing and default loan collection services of the ABFE. Through the transaction fees charged, guarantee deposit, and direct investment, the Group has the right to receive benefits or bear losses from the ABFE that could potentially be significant to the ABFE. The Group holds significant variable interest in the ABFE through the transaction fees charged, guarantee provided in the form of guarantee deposit, or direct investment. Accordingly, the Company is considered the primary beneficiary of the ABFE and has consolidated the ABFE’s assets, liabilities, results of operations, and cash flows in the consolidated financial statements. The assets of the ABFE are not available to creditors of the Company. In addition, the investors of the ABFE have no recourse against the assets of the Company. During the year ended December 31, 2018, the Group disposed the delinquent loans repurchased by the Group from the consolidated ABFE upon the liquidation of the consolidated ABFE to related parties. Additionally, in March 2019, the Group also disposed its beneficial rights of several trusts to related parties (see Note 8). The disposal of the delinquent loans and the disposal of the beneficial rights of the several trusts is accounted for as a true sales under Accounting Standards Codification 860 ("ASC Topic 860") with any gains and losses recorded as “gain on disposal of loan receivables and other beneficial rights” in the consolidated statements of operations. Refer to the accounting policy of “Sales and Transfers of Financial Instruments” for further details. The following financial statement amounts and balances of the consolidated ABFE were included in the consolidated financial statements after elimination of intercompany transactions and balances: December 31, December 31, 2019 2020 RMB RMB Assets Restricted cash 43,833 213,033 Prepaid expenses and other assets 8,974 169 Loans at fair value 382,125 192,156 Held-to-maturity investments 6,627 3,286 Total assets 441,559 408,644 Liabilities Accounts payable 72 421 Amount due to related party — 109,502 Payable to investors at fair value — 52,623 Accrued expenses and other liabilities 7,378 896 Total liabilities 7,450 163,442 Year ended December 31, 2018 2019 2020 RMB RMB RMB Net income/(loss) 260,568 41,723 (117,969) Year ended December 31, 2018 2019 2020 RMB RMB RMB Net cash provided by operating activities 208,621 134,848 44,843 Net cash provided by investing activities 110,849 639,717 33,160 Net cash (used in)/provided by in financing activities (553,002) (121,296) 162,134 All assets of the consolidated ABFE are collateral for the consolidated ABFE’s obligations and can only be used to settle the consolidated ABFE’s obligations. |
Use of estimates | Use of estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates. Significant accounting estimates are used for, but not limited to, revenue recognition and its related accounts, allowance for accounts receivable and contract assets, allowance for financing receivable, liabilities from quality assurance program and guarantee, fair value measurement of loans at fair value, payable to investors at fair value, available-for-sale investments, depreciable lives of property, equipment and software, the discount rate for leases, consolidation of the VIEs, share-based compensation and income tax. Actual results may differ materially from those estimates. |
Revenue | Revenue All of the Group’s revenue for the years ended December 31, 2019 and 2020 were generated from the PRC. The following table illustrates the disaggregation of revenue in 2018, 2019 and 2020 under ASC606: 2018 2019 2020 RMB RMB RMB Consumer Credit Segment: Loan facilitation services 7,647,804 5,182,028 1,329,720 Post origination services 1,173,108 757,783 670,440 Others 436,242 500,758 529,438 Subtotal 9,257,154 6,440,569 2,529,598 Wealth Management Segment: Account management services 1,806,732 2,016,678 921,779 Insurance brokerage services — — 430,830 Others 180,228 159,537 79,755 Subtotal 1,986,960 2,176,215 1,432,364 Total net revenue 11,244,114 8,616,784 3,961,962 (a) Consumer credit business: Revenue from loan facilitation and post-origination services The Group provides services as an online marketplace connecting borrowers and investors. The investors consist of individual investors and institutional investors. In 2020, the Group ceased to facilitate new loans to individual investors. The Group provides loan facilitation services, guarantee services until May 2018 (e.g. quality assurance programs to individual investors) and post-origination services (e.g. cash processing, collection for some lenders and SMS services). The Group has determined that it is not the legal lender or borrower in the loan origination and repayment process, but acts as an intermediary to bring the lender and the borrower together. Except for loans and payable to investors in the consolidated ABFE, loans and lease receivables arising from direct financing leases issued by the Group, the Group does not record the loans receivable or payable arising from the loans facilitated between the investors and borrowers on its platform. The Group charges fees upfront or on a monthly basis. The Group also receives service fees contingent on future events (e.g., penalty fees for loan prepayment and late payment and other service fees, and etc.). For the loans facilitated on the Hengcheng’s platform before May 2018, the Group also provided guarantee services to investors whereas in the event of default, the investors are entitled to receive unpaid interest and principal from the Group. Given that the Group effectively took on all of the credit risk of the borrowers and were compensated by the service fees charged, the guarantee was deemed as a service and the guarantee exposure was recognized as a stand-ready obligation in accordance with ASC Topic 460, Guarantees. The Group stopped providing guarantee services to individual investors in May 2018. The Group determines its customers to be both the investors and borrowers. The Group assesses ability and intention to pay the service fees of both borrowers and investors when they become due and determines if the collection of the service fees is probable, based on historical experiences as well as the credit due diligence performed on each borrower prior to loan origination. While the post-origination services are within the scope of ASC Topic 860, ASC Topic 606 revenue recognition model is applied due to the lack of definitive guidance in ASC Topic 860. The loan facilitation services and post-origination services are two separate performance obligations under ASC 606, as these two deliverables are distinct in that customers can benefit from each services on its own and the Group’s promises to deliver the services are separately identifiable from each other in the contract. The Group determines the transaction price of loan facilitation services and post-origination services to be the service fees chargeable from the borrowers, net of value-added tax. The transaction price includes variable consideration in the form of prepayment risk of the borrowers. The Group reflects, in the transaction price, the borrower prepayment risk and estimates variable consideration for these contracts using the expected value approach on the basis of historical information and current trends of the prepayment percentage of the borrowers. The transaction price is allocated amongst the guarantee services (until May 2018), if any, and the two performance obligations described above. The Group first allocates the transaction price to the guarantee liabilities, if any, in accordance with ASC Topic 460, Guarantees, which requires the guarantee to be measured initially at fair value based on the stand ready obligation. The remaining considerations are then allocated to the loan facilitation services and post-origination services using their relative standalone selling prices consistent with the guidance in Topic 606. The Group does not have observable standalone selling price information for the loan facilitation services or post-origination services because it does not provide loan facilitation services or post-origination services on a standalone basis. There is no direct observable standalone selling price for similar services in the market that is reasonably available to the Group. As a result, the estimation of standalone selling price involves significant judgments. The Group uses expected cost plus margin approach to estimate the standalone selling prices of loan facilitation services as the basis of revenue allocation. In estimating its standalone selling price for the loan facilitation services, the Group considers the cost incurred to deliver such services, profit margin for similar arrangements, customer demand, effect of competitors on the Group’s services, and other market factors. However, for post-origination services, given the main services are about loan collecting and cash processing, the Group can refer to other companies performing the same services, therefore a direct observable standalone selling price for similar services in the market is available to the Group. For each type of the services, the Group recognizes revenue when (or as) the entity satisfies the service/performance obligation by transferring a promised service to a customer. Revenues from loan facilitation are recognized at the time a loan is originated between the investor and the borrower and the loan principal is transferred to the borrower, at which time the facilitation service is considered completed. Revenues from post-origination services are recognized on a straight-line basis over the term of the underlying loans as the services are provided. Revenues from guarantee services, if any, are recognized amortized during the guarantee term. Remaining performance obligations represents the amount of the transaction price for which services have not been performed under post-origination services. The Group collects service fees upfront, monthly or both. For upfront fees that are partially refundable to the borrowers, the Group estimates the refund based on historical prepayment probability and the corresponding predetermined refundable amount, and records corresponding refund liabilities upon receiving such fees. The aggregate amounts of the transaction price allocated to performance obligations that are unsatisfied pertaining to post-origination services were RMB787.1 million and RMB99.8 million as of December 31, 2019 and 2020, respectively, among which approximately 67% and 74% of the remaining performance obligations will be recognized over the following 12 months, respectively and with the remainder recognized thereafter. During the year ended December 31, 2020, the Group repaid RMB595.3 million on behalf of its borrowers to its investors. The Group considered this as cash incentive to its customers and recorded it as a reduction of revenue. Other revenue of consumer credit business Other revenue included in consumer credit business includes penalty fees for loan prepayment and late payment, fees charged for early repayment and referral service fees. The penalty fees, which are fees paid to the investors that are assigned to the Group by the investors, will be received as a certain percentage of past due amounts in case of late payment or a certain percentage of interest over the prepaid amount of loan principal in case of prepayment. The Group also refers potential borrowers to third-party companies and related parties and charges them fixed rate fees. Referral services revenue is recognized when successful referrals were completed by the Group. (b) Wealth management business: Revenue from account management services The Group charged account management services fees to individual investor for using the automated investment tool equal to the entire excess of actual return over the expected return. The Group determined that the automated investment tool service represents one performance obligation. The account management service fees were initially estimated based on historical experience of returns on similar investment products and current trends and is due at the end of the investment period, which is the period of time when the individual investor's investment are matched with loans. The expected actual return of the loan was estimated on a portfolio basis using the expected value approval based on current loan portfolio and interest rates. The expected return rates offered have been relatively stable during the historical periods presented. Because all loans matched with individual investors' investments have been covered by third party credit guarantees, the estimated service fee is not affected by the fluctuations of default rates of the underlying loans. The Group believes the estimates of variable consideration is not constrained as it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The account management service fees were recognized on a straight-line basis over the term of the investment period, as the Group stand ready to provide the automated investment tool service while the individual investors simultaneously receives and consumes the benefits of such service throughout the investment period. The weighted average investment period was 18 months and 20.8 months for the years ended December 31, 2019 and 2020, respectively. The aggregate amount of the transaction price allocated to performance obligations that are unsatisfied pertaining to account management services were RMB919.7 million and nil as of December 31, 2019 and 2020, respectively, among which approximately 98% and nil of the remaining performance obligations will be recognized over the following 12 months, respectively, with the remainder recognized thereafter. As the Group ceased to facilitate new loans to individual investors, and disposed the Hengcheng as discussed in Note 1, there won't be revenue from account management services starting from January 2021. Customer incentives To expand its market presence, the Group provides cash incentives to investors from time to time. Each individual incentive program only lasts between a week and a few weeks. During the relevant incentive program period, the Group sets certain thresholds for the investor to qualify to enjoy the cash incentive. When a qualified investment is made, the cash payment is provided to the investor as a percentage of the investment amount. The Group also distributed interest plus coupons and renewal reward coupons to investors free of charge. The cash incentives, interest plus coupons and renewal reward coupons provided are accounted for as reduction of the contract price. The Group has established a membership reward program wherein investors can earn Yiren coins when purchases are made on the Group’s platforms reached a certain amount. Yiren coins earned by investors represent a material right to free or discounted goods or services in the future, which are accounted for as a separate performance obligation. For the transactions that granted Yiren coins to the investors, a portion of transaction price is deferred for the obligation related to the Yiren coins, which are allocated based on the relative standalone selling prices. The standalone selling price of Yiren coins is calculated by taking the estimated value of Yiren coins that are expected to be used incorporating estimated breakage based on historical redemption patterns. The revenue associated with Yiren coins is deferred until the points are redeemed. As of December 31, 2019 and 2020, the liabilities related to Yiren coins were immaterial. Revenue from Insurance brokerage services The Group provides insurance brokerage services distributing various health, life and property insurance products on behalf of insurance companies. As an agent of the insurance company, the Group sells insurance policies on behalf of the insurance company and earns brokerage commissions determined as a percentage of premiums paid by the insured. The Group has identified its promise to sell insurance policies on behalf of an insurance company as the performance obligation in its contracts with the insurance companies. The Group's performance obligation to the insurance company is satisfied and commission revenue is recognized at the point in time when an insurance policy becomes effective. The terms for health and life insurance products sold by the Group are mainly 5 and 10 years, while the term for property insurance products is one year. The insurance company pays the Group a commission annually based on the underlying cash flows of the insurance policy. The Group's contract terms can give rise to variable consideration due to the nature of its commission structure (e.g. policy changes or cancellations). The Group determines the transaction price of its contracts by estimating commissions that the entity expects to be entitled to over the premium collection term of the policy based on assumption about future customer behavior and market conditions. Such estimates are 'constrained' in accordance with ASC606. That is, the Group uses the expected value method and only includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized for such transactions will not occur. Other revenue of wealth management business Other revenue of wealth management business mainly includes referral service fee. Referral services revenue is recognized when successful referrals are completed by the Group. Contract assets Under ASC 606, contract assets represent the Group’s rights to consideration in exchange for services that the Group has transferred to the customer before payment is due. For the consumer credit business, the Group’s rights to consideration for the monthly fees related to facilitation services are conditional on the borrowers’ actual payment, as the borrowers have the rights to early terminate the loan contracts prior to the loan maturity and are not obligated to pay the remaining monthly fees. As such, the Group records a corresponding contract assets for the monthly service fees allocated to loan facilitation services and post-origination services that have already been delivered in relation to loans facilitated on the Group’s platform when recognizing revenue from loan facilitation services and post-origination services. For insurance brokerage services, contract assets are recorded for arrangements when the Group has provided the services but for which the related payments are not yet due. Contract assets are attributable to the brokerage commission that is contingent upon the future premium payment of the policy holders. Contract assets represent the Group’s rights to consideration in exchange for services that the Group has transferred to the customer before payment is due. The facilitation service monthly fee that are past the payment due date but have not been paid are reclassified to accounts receivable. The Group only recognizes contract assets to the extent that the Group believes it is probable that it will collect substantially all of the consideration to which it will be entitled in exchange for the services transferred to the customer. The contract assets, net of allowance are RMB2,398,685 and RMB750,174 as of December 31, 2019 and 2020, respectively. Per ASC 606-10-45-3, an entity shall assess a contract asset for impairment in accordance with Topic 310 on receivables. Contract assets are stated at the historical carrying amount net of write offs and allowance for uncollectible accounts. In determining whether an impairment loss should be recorded in the financial statements, the Group makes judgements as to whether there is any observable data indicating that there is a measureable decrease in the estimated future cash flows from contract assets. This evidence may include observable data indicating that there has been an adverse change in the borrower’s credit risk, or national or local economic conditions that correlate with defaults on loans. When contract assets are assessed for impairment, the Group uses estimates based on the historical borrower’s credit risk. The historical borrower’s credit risk is adjusted on the basis of the relevant observable data that reflects current economic conditions. The Group regularly reviews the methodology and assumptions used for estimating the amount of collectable contract assets. Contract assets are identified as uncollectible if any repayment of the underlying loan is 90 days past due, and no other factor evidences the possibility of collecting the delinquent amounts. The Group will write off contract assets and corresponding allowance if any repayment of the underlying loan is 90 days past due. Contract assets as of December 31, 2019 and 2020 are as follows: As of December 31, 2019 As of December 31, 2020 RMB RMB Contract assets 3,914,312 1,217,480 Allowance (1,515,627) (467,306) Contract assets, net 2,398,685 750,174 The following table presents the movement of allowance for contract assets for the year ended December 31, 2019 and 2020: Year ended December 31, 2019 Year ended December 31, 2020 RMB RMB Balance at beginning of the year 992,049 1,515,627 Allowance for contract assets 1,623,022 298,200 Write-off (1,099,444) (984,472) Disposal of Hengcheng (Note 1) — (362,049) Balance at end of the year 1,515,627 467,306 Contract cost The Group pays commissions for successful referring of borrowers or investors and insurance customers to the Group. The commissions paid based on successful referrals are considered as contract acquisition cost, and are capitalized when the commission becomes payable. The amount of amortization for the years ended December 31, 2019 and 2020 are RMB107.3 million and RMB116.3 million, respectively. Amortization of the capitalized contract cost is charged to the consolidated statements of operations when the revenue to which the asset relates is recognized. Contract cost is recognized as an expense when incurred if the amortization period of the asset that the Group otherwise would have recognized is one year or less. The Group recorded nil and RMB29,769 impairment loss for contract cost as of December 31, 2019 and 2020, respectively. Deferred revenue Deferred revenue consists of post-origination service fees received from borrowers upfront for which services have not yet been provided. Deferred revenue is recognized ratably as revenue when the post-origination services are delivered over the loan period. The amounts of revenue recognized during the years ended December 31, 2019 and 2020 that were included in the opening deferred revenue were RMB391.2 million and RMB263.8million, respectively. Refund liabilities Refund liabilities are recognized for the estimated amounts of service fees which are received but are expected to be refunded. It represents the consideration received that the Group does not expect to be entitled to earn and thus is not included in the transaction price because it will be refunded to customers. The refund liabilities are remeasured at each reporting date to reflect changes in the estimate, with a corresponding adjustment to revenue. The Group’s refund liabilities are the expected refund of service fees to borrowers in the case of early repayment of loans. The refund liabilities as of December 31, 2019 and 2020 amounted to RMB1,801,535 and RMB10,845, respectively. The following table sets forth the movement of refund liabilities: RMB As of January 1, 2019 2,145,748 Addition 709,401 Payouts during the year (1,053,614) As of December 31, 2019 1,801,535 Addition 15,935 Payouts during the year (643,832) Disposal of Hengcheng (as discussed in Note 1) (1,162,793) As of December 31, 2020 10,845 |
Liabilities from quality assurance program and guarantee | Liabilities from quality assurance program and guarantee Until May 2018, for loans facilitated on the Group’s credit-tech platform, the Group provided investors with protection service in the form of a financial guarantee called the quality assurance program, where the Group guaranteed the principal and accrued interest repayment of the defaulted loan up to the balance of the quality assurance program on a portfolio basis. The quality assurance program being set aside equals a fixed percentage of the total loan facilitation amount. The Group reserves the rights to revise the percentage upwards or downwards as a result of the Group’s continuing evaluation of factors such as market dynamics as well as its product lines, profitability and cash position. Under the quality assurance program model, at the inception of each loan, the Group recognizes a stand-ready liability as the fair value of the quality assurance program in accordance with ASC 460. Subsequent to the inception of the loan, the stand-ready liability initially recognized would typically be reduced (by a credit to earnings) as the Group is released from the risk under the guarantee either through expiry or performance. The Group also recognizes a contingent liability under ASC 450 on a portfolio basis, which results in the recognition of expenses in earnings. The Group tracks its stand-ready liability on a loan-by-loan basis to monitor the expiration. When the Group releases the stand-ready liability through performance of the guarantee (by making payments on defaulted loans), it recognizes revenue along with the loss on defaulted loans. Revenue from releasing the stand-ready liability and expenses from recognition of the contingent liability related to the quality assurance program are presented on a net basis in the consolidated statements of operations. On a portfolio basis, when the aggregate contingent liability required to be recognized under ASC 450 exceeds the quality assurance program liability balance, the Group records the excess as expense. The fair value of the stand-ready liability associated with the quality assurance program recorded at the inception of the loan was estimated using a discounted cash flow model to its expected net payouts from the quality assurance program, and also by incorporating a markup margin. The Group estimates its expected future net payouts based on its current product mix as well as its estimates of expected net charge-off rates, expected collection rates and a discount rate. The Group estimated the expected net charge-off rates of the loan facilitated based on the weighted average of the expected net charge-off rates of loans based on the Group’s historical experience. The expected future net payouts are capped at the restricted cash balance of the quality assurance program. The Group discontinued the operation of its quality assurance programs in May 2018 and transferred all of its liabilities associated with the quality assurance program and paid cash to third party guarantee companies based on the estimated fair value of the liabilities transferred. Subsequent May 2018, the Group no longer bears any guarantee obligations and therefore does not record any guarantee liability on its consolidated financial statements. Since then, all loans facilitated on the Group’s platform are matched with individual investors' investments and the majority of loans matched with institutional investors are either covered by the credit assurance program operated by the guarantee companies or a third-party insurance company. The loans invested by trusts, certain micro-lending companies or certain financial leasing companies are not covered by a third-party credit guarantee and amounted to 4.1% and 27.6% of the outstanding loans as of December 31, 2019 and 2020. On January 1, 2020, the Group adopted ASC 326, Financial Instruments—Credit Losses, which requires gross accounting for guarantee liability. As a result, at inception of the guarantee, the Group will recognize both a stand-ready guarantee liability under ASC 460 with an associated financial assets receivable, and a contingent guarantee liability with an allowance for credit losses under Current expected credit loss ("CECL") model. Subsequent to the initial recognition, the ASC 460 stand-ready guarantee is released into guarantee revenue on a straight-line basis over the term of the guarantee, while the contingent guarantee is reduced by the payouts made by the Group to compensate the investors upon borrowers' default. The impact of adoption to the Company's financial statements is not material. |
Fair value | Fair value Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: · Level 1-inputs are based upon unadjusted quoted prices for identical assets or liabilities traded in active markets. · Level 2-inputs are based upon quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3-inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair value are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. Fair value option The Group has elected the fair value option for the assets and liabilities of the consolidated ABFE that otherwise would not have been carried at fair value. Such election is irrevocable and is applied to financial instruments on an individual basis at initial recognition. See Note 4 for the disclosure on financial instruments of the consolidated ABFE for which the fair value option has been elected. Fair value of loans and payable to investors at fair value The Group has elected the fair value option for loans and related payable to investors of the consolidated ABFE and loans repurchased from the consolidated ABFE that otherwise would not have been carried at fair value. Such election is irrevocable and is applied to financial instruments on an individual basis at initial recognition. The Group estimates the fair value of loans and payable using a discounted cash flow valuation methodology by discounting the estimated future net cash flows using an appropriate discount rate. The future net cash flows are estimated based on the contractual cash flows, taking into consideration of projected prepayments and net charge off to project future losses and net cash flows on loans. Changes in fair value of loans and payable to investors are reported net and recorded in “Fair value adjustments related to the consolidated ABFE” in the consolidated statements of operations. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include the Group’s unrestricted deposits with financial institutions in checking, money market and short-term certificate of deposit accounts. The Group considers all highly liquid investments with stated maturity dates of three months or less from the date of purchase to be cash equivalents. |
Restricted cash | Restricted cash Restricted cash represents cash held by the consolidated ABFE through segregated bank accounts which is not available to fund the general liquidity needs of the Group and guarantee deposit in restricted bank account. |
Accounts receivable and allowance for uncollectible accounts | Accounts receivable and allowance for uncollectible accounts Accounts receivable are stated at the historical carrying amount net of write-offs and allowance for uncollectible accounts. The Group establishes an allowance for uncollectible accounts receivable and other receivables based on estimates, historical experience and other factors surrounding the credit risk of specific customers. Uncollectible receivables are written off when a settlement is reached for an amount that is less than the outstanding historical balance or when the Group has determined the balance will not be collected. |
Financing receivables | Financing receivables Financing receivables represent loans and lease receivables arising from direct financing leases issued by the Group. Financing receivables are measured at amortized cost and reported on the consolidated balance sheets based on the outstanding principal adjusted for any write-off, and the allowance for credit losses. Amortized cost of a financing receivables is equal to the unpaid principal balance, plus net deferred origination cost if any. The Group recognizes interest and financial service income over the terms of the financing receivables using the effective interest rate method. The Company applied a consistent credit risk management framework to the entire portfolio of financing receivables. The allowance for financing receivables is calculated based on expected loss using probability of default. The Group's financing receivable as of December 31, 2019 and 2020 are as follows: As of December 31, 2019 As of December 31, 2020 RMB RMB Financing receivable 29,612 1,286,469 Allowance — (32,975) Financing receivable, net 29,612 1,253,494 The movement of allowance for financing receivable for the years ended December 31, 2019 and 2020 is as follows: Year ended December 31, 2019 Year ended December 31, 2020 RMB RMB Balance at beginning of the year 303 — Adjustment related to ASC 326 adoption — 776 Adjusted opening balance as of January 1, 2020 303 776 Current year net provision 187 32,689 Write-off (490) (490) Balance at end of the year — 32,975 The Group has provided financing that are secured by pledged assets, which value is in excess of the financing granted to clients. As of December 31, 2020, the loan term of the majority of financing receivables are over 24 months. The Group has not recorded any financing income on an accrual basis for the loans that are overdue for more than 90 days in 2020. For the years ended December 31, 2019 and 2020, the Group has written-off loans receivable of RMB0.5 million and RMB0.5 million, respectively. As of December 31, 2019 and 2020, the balance of overdue loans are RMB2.5 million and RMB12.5 million, respectively, among which RMB0.8 million and RMB5.2 million are overdue for more than 90 days. |
Investments | Investments The Group’s investments consist of held-to-maturity investments and available-for-sale investments. Held-to-maturity investments Investments are classified as held-to-maturity when the Group has the positive intent and ability to hold the security to maturity, and are recorded at amortized cost. The Group reviews its investments in held-to-maturity investments for impairment periodically, recognizing an allowance, if any, by applying an estimated loss rate. The Group considers available quantitative and qualitative evidence in evaluating the potential impairment of its investments in held-to-maturity investments. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net carrying value at the amount expected to be collected on the held-to-maturity investments. Available-for-sale investments Investments that do not meet the criteria of held-to-maturity or trading securities are classified as available-for-sale, and are reported at fair value with unrealized gains and losses recorded in the consolidated statements of comprehensive income/(loss). Realized gains or losses are included in the consolidated statements of operations during the period in which the gains or losses are realized. The Group evaluates each individual investment periodically for impairment. For investments where the Group does not intend to sell, the Company evaluates whether a decline in fair value is due to deterioration in credit risk. Credit-related impairment losses, not to exceed the amount that fair value is less than the amortized cost basis, are recognized through an allowance for credit losses on the consolidated balance sheet with corresponding adjustment in the consolidated statements of operations and comprehensive income. Subsequent increases in fair value due to credit improvement are recognized through reversal of the credit loss and corresponding reduction in the allowance for credit loss. Any decline in fair value that is non-credit related is recorded in accumulated other comprehensive income as a component of shareholder's equity. As of December 31, 2020, there were no investments held by the Group that had been in continuous unrealized loss position. |
Business Acquisition | Business Acquisition Business combinations are recorded using the acquisition method of accounting. The assets acquired, the liabilities assumed and any noncontrolling interests of the acquiree at the acquisition date, if any, are measured at their fair values as of the acquisition date. Goodwill is recognized and measured as the excess of the total consideration transferred plus the fair value of any noncontrolling interests of the acquiree and fair value of previously held equity interest in the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Common forms of the consideration made in acquisitions include cash and common equity instruments. Consideration transferred in a business acquisition is measured at the fair value as of the date of acquisition In April 2020, the Group acquired an insurance brokerage licensee company for total consideration of RMB15.5 million. The purchase price allocated to the fair value of assets acquired and liabilities assumed were RMB53.8 million and RMB38.3 million, respectively. RMB4.8 million of goodwill was recognized in this acquisition. |
Asset Acquisition | Asset Acquisition If the transaction involves the acquisition of an asset or group of assets that does not meet the definition of a business, it is accounted for as an asset acquisition. An asset acquisition is recorded at cost, which includes capitalized transaction costs, and does not result in the recognition of goodwill. The cost of the acquisition is allocated to the assets acquired on the basis of relative fair values. In January 2020, the Group acquired a securities dealer company registered with Hong Kong Securities and Future Commission possessing Type 1 and Type 2 License for a total consideration of RMB13.2 million. The Group considered it an asset acquisition as substantially all of the fair value of the gross assets acquired was concentrated in the license as a single identifiable asset. |
Property, equipment and software, net | Property, equipment and software, net Property, equipment and software consists of building, computer and transmission equipment, furniture and office equipment, software, and leasehold improvements, which are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight-line basis over the following estimated useful lives, while the estimate residual value of the building and furniture and office equipment are 5%. Building 50 years Computer and transmission equipment 3 years Furniture and office equipment 5 years Software 1 -5 years Leasehold improvements Over the shorter of the lease term or expected useful lives |
Impairment of long-lived assets | Impairment of long-lived assets The Group reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group recognizes an impairment loss based on the fair value of the assets. The Group did not record any impairment losses on its long-lived assets during the years ended December 31, 2018, 2019 and 2020. |
Origination, servicing and other operating costs | Origination, servicing and other operating costs Origination and servicing expenses consist primarily of variable expenses and vendor costs, including costs related to credit assessment, customer and system support, payment processing services and collection associated with facilitating and servicing loans. It also consists of costs in connection with the distribution of insurance products, including payroll and related expenses for insurance agents and transaction fee charged by third-party payment platform. |
Leases | Leases Before January 1, 2019, the Group adopted ASC Topic 840 (“ASC 840”), Leases. Each lease was classified at the inception date as either a capital lease or an operating lease. On January 1, 2019, the Group adopted the new lease accounting standard, ASC Topic 842, Leases (“ASC 842”), using the modified retrospective transition approach through a cumulative-effect adjustment in the period of adoption rather than retrospectively adjusting prior periods and the package of practical expedients. The Group categorizes leases with contractual terms longer than twelve months as either operating or finance lease. The Group has no finance leases for any of the periods presented. Right-of-use (“ROU”) assets represent the Group’s rights to use underlying assets for the lease term and lease liabilities represent the Group’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term, reduced by lease incentives received, plus any initial direct costs, using the discount rate for the lease at the commencement date. As the implicit rate in lease is not readily determinable for the Group’s operating leases, the Group uses the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. Lease expenses for lease payments are recognized on a straight-line basis over the lease term. The Group estimates its incremental borrowing rate based on an analysis of publicly traded debt securities of companies with credit and financial profiles similar to its own. The Group begins recognizing lease expenses when the lessor makes the underlying assets available to the Group. The Group’s leases have remaining lease terms of up to four years, some of which include options to extend the leases for an additional period which has to be agreed with the lessors based on mutual negotiation. After considering the factors that create an economic incentive, the Group did not include renewal option periods in the lease term for which it is not reasonably certain to exercise. The Company elected not to record a ROU assets for short-term leases that have a term of 12 months or less. The cost of short-term leases was recognized in the consolidated statements of operations on a straight-line basis over the lease term. |
Share-based compensation | Share-based compensation All share-based awards to employees and directors, such as stock options and restricted share units, are measured at the grant date based on the fair value of the awards. Share-based compensation, net of forfeitures, is recognized as expenses on an accelerated basis during the vesting period with a corresponding impact reflected in the additional paid-in capital. Share-based compensation expenses are classified in the consolidated statements of operations based upon the job functions of the grantees. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ, or are expected to differ, from those estimates. Changes in estimated forfeiture rate are recognized through a cumulative catch-up adjustment in the period of change and also impact the amount of share-based compensation expenses to be recognized in future periods. The Group uses historical data to estimate pre-vesting option and records share-based compensation expenses only for those awards that are expected to vest. According to Issue 21 of EITF Issue 00-23 1 , the awards granted to employees of CreditEase, and other subsidiaries in the consolidated group of CreditEase, should be recognized as a deemed dividend from the Group to the parent company at the fair value as of the grant date. Share-based compensation, net of forfeitures, is recognized as a deemed dividend to CreditEase on an accelerated basis during the vesting period with a corresponding impact reflected in the additional paid-in capital. Share-based awards to non-employees are measured based on the fair value at grant date. The Group recognizes the compensation cost using the graded vesting attribution method. |
Income taxes | Income taxes Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are provided using assets and liabilities method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to be reversed. Deferred tax assets are recognized to the extent that these assets are more likely than not to be realized. In making such a determination, the management considers all positive and negative evidence, including future reversals of projected future taxable income and results of recent operation. The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes are classified as a component of the provisions for income taxes. The Group did not recognize any income tax due to uncertain tax position or incur any interest and penalties related to potential underpaid income tax expenses for the years ended December 31, 2018, 2019 and 2020, respectively. |
Value added taxes ("VAT") | Value added taxes (“VAT”) The Group is subject to VAT at the rate of 3% or 6%, depending on whether the entity is a general tax payer or small-scale taxpayer, and related surcharges on revenue generated from providing services. VAT are reported as a deduction to revenue when incurred and amounted to RMB1,215,821, RMB916,316 and RMB1,493,717 for the years ended December 31, 2018, 2019 and 2020, respectively. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded as accrued expenses, and other liabilities on the consolidated balance sheets. |
Net income/loss per share | Net income/loss per share Basic net income per share is computed by dividing net income attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net income per share is calculated by dividing net income attributable to the ordinary shareholders by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares include shares issuable upon the vesting of restricted share units using the treasury stock method. Ordinary equivalent shares are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be antidilutive. As described in Note 1, during the year ended December 31, 2019, the Group completed a number of acquisitions that were accounted for as acquisitions under common control and issued 61,981,412 ordinary shares as part of the total consideration. For purposes of calculating net income/(loss) per share, weighted average shares prior to this acquisition have been retroactively adjusted to give effect to this transaction for all historical periods presented in the consolidated financial statements. 1Although Issue 00-23 has also been nullified, the guidance in Issue 21 of EITF Issue 00-23 remains applicable by analogy since it is the only available guidance on accounting for these awards. |
Comprehensive income/(loss) | Comprehensive income/(loss) Comprehensive income/(loss) is defined as the changes in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments from shareholders and distributions to shareholders. Comprehensive income/(loss) for the periods presented includes net income/(loss), change in unrealized (loss)/gains on available-for-sale investments, and foreign currency translation adjustment. |
Sales and transfers of financial instruments | Sales and transfers of financial instruments Sales and transfers of financial instruments are accounted under authoritative guidance for the transfers and servicing of financial assets and extinguishment of liabilities. Specifically, a transfer of a financial asset, a group of financial assets, or a participating interest in a financial asset is accounted for as a sale only if all the following conditions are met: · The financial assets are isolated from the transferor and its consolidated affiliates as well as its creditors; · The transferee or beneficial interest holders have the right to pledge or exchange the transferred financial assets; and · The transferor does not maintain effective control of the transferred asset. The Group provides loan facilitation and post-origination services to the trusts. Upon the liquidation of the trusts, the Group purchased the delinquent loans from the trusts and subsequently disposed the loans to related parties. When the loan (including the creditor rights) is transferred, the transferee becomes the direct counterparty to the borrower and the legal record holder of the loan upon the transfer. The transfer is accounted for as a sale as (1) the transferred loans are considered legally isolated from the assets of the Group and its creditors even in bankruptcies under the PRC laws and regulations, (2) the investors (transferees) can freely pledge or exchange the transferred loans, and (3) the Group does not maintain effective control over the transferred loans. The difference between the proceeds received from related parties and the fair value of the loans and other beneficial rights is recognized as “Gain on disposal of loan receivables and other beneficial rights” in the consolidated statements of operations. The Group extended loans with automobiles as collaterals and transferred its financing receivables to other assets management companies (Note 9). As the transfer of financial assets does not qualify for sale accounting, the transaction was accounted for as a borrowings. Accordingly, the related financing receivables remain on the Company’s consolidated balance sheets and continue to be reported and accounted for as if the transfer had not occurred. Cash proceeds from these transfers are reported as liabilities, with attributable interest expense recognized over the life of the related transactions. |
Foreign currency translation | Foreign currency translation The reporting currency of the Company is the Renminbi (“RMB”). The functional currency of the Company is the US dollar (“US$”). The functional currency of the Group’s subsidiaries and VIEs in the PRC is the RMB. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date. Exchange gains and losses are included in earnings as a component of other income. The financial statements of the Group are translated from the functional currency into the reporting currency. Assets and liabilities denominated in foreign currencies are translated using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated at the appropriate historical rates. Revenues, expenses, gains and losses are translated using the periodic average exchange rates. The resulting foreign currency translation adjustment are recorded in other comprehensive (loss)/income. Translations of amounts from RMB into US$ are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB6.5250 on December 31, 2020, the last business day in the fiscal year 2020, representing the certificated exchange rate published by the Federal Reserve Board. No representation is intended to imply that the RMB amounts could have been, or could be, converted, realized or settled into US$ at such rate, or at any other rate. |
Significant risks and uncertainties | Significant risks and uncertainties Foreign currency risk RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. The Group’s cash and cash equivalents denominated in RMB amounted to RMB3,117,993 and RMB2,408,924 as of December 31, 2019 and 2020, respectively. Concentration of credit risk Financial instrument that potentially exposes the Group to significant concentration of credit risk primarily includes cash and cash equivalents, restricted cash, accounts receivable, contract assets, prepaid expenses and other assets, loans at fair value, and amounts due from related parties. As of December 31, 2020, substantially all of the Group’s cash and cash equivalents and restricted cash were deposited in financial institutions located in the PRC. According to the China Bank Deposit Insurance Ordinance, the deposits at each bank are covered by insurance with an upper limit of RMB500 thousands at each bank. Accounts receivable and contract assets are typically unsecured and are derived from revenue earned from customers in the PRC. The credit risk from prepaid expenses and other assets arises from loans to third parties. The risk with respect to accounts receivable, contract assets and loans to third parties is mitigated by credit evaluations the Group performs on its customers or third parties and its ongoing monitoring process of outstanding balances. The Group believes that there is no significant credit risk associated with amounts due from related parties. Credit of loans at fair value is controlled by the application of credit approval, limit and monitoring procedures. There are no revenues from customers which individually represent greater than 10% of the total net revenues for any year of the three years ended December 31, 2020. One customer of the Group accounts for 46% of the Group's account receivables as of December 31, 2020. There was no such customer as of December 31, 2019. |
Reclassification | Reclassification Certain prior period amount recorded in accrued expenses and other liabilities was reclassified to secured borrowings to conform to the current period presentation and had no effect on previously reported consolidated net income (loss) or accumulated deficit. In addition, certain prior period amount recorded in and liabilities from quality assurance program and guarantee was reclassified to accrued expenses and other liabilities and had no effect on previously reported consolidated net income (loss) or accumulated deficit. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements Accounting for Credit Losses In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326)”, which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Group adopted the new standard beginning January 1, 2020 using a modified retrospective approach. Under this approach, the cumulative effect of initially applying the standard is recognized as adjustment to the opening balance of retained earnings on the date of initial application. The cumulative effect adjustment related to the adoption of this standard reduced the Group's accumulated deficit by RMB26,054. |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Schedule of the Company's subsidiaries and consolidated VIEs | Date of Place of Percentage incorporation/ incorporation/ of legal establishment establishment ownership Principal activities Wholly owned subsidiaries YouRace HK October 8, 2014 Hong Kong 100 % Investment holding YouRace Hengchuang January 8, 2015 PRC 100 % Provision of consultancy service, information technology support and technology-enabled borrower acquisition and facilitation services Hengyuda March 21, 2016 PRC 100 % Provision of services relating to IT, system maintenance and customer support Yiren Information Consulting (Beijing) Co., Ltd.(“Yiren Information”) August 10, 2017 PRC 100 % Provision of borrower acquisition and referral services to institutional funding providers Variable interest entities and its subsidiaries Yiren Wealth Management October 13, 2016 PRC Wealth management consulting service CreditEase Puhui March 3, 2011 PRC Provision of borrower acquisition and borrowers related customer maintenance services Haijin Yichuang Financial Leasing Co., Ltd. (“Yichuang Financial Leasing”) March 22, 2017 PRC Provision of services for financing lease business Hexiang Insurance Brokerage Co. Ltd September 28, 2011 PRC Provision of services for insurance brokerage business |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
VIE arrangements | |
Schedule of disaggregation of revenue | 2018 2019 2020 RMB RMB RMB Consumer Credit Segment: Loan facilitation services 7,647,804 5,182,028 1,329,720 Post origination services 1,173,108 757,783 670,440 Others 436,242 500,758 529,438 Subtotal 9,257,154 6,440,569 2,529,598 Wealth Management Segment: Account management services 1,806,732 2,016,678 921,779 Insurance brokerage services — — 430,830 Others 180,228 159,537 79,755 Subtotal 1,986,960 2,176,215 1,432,364 Total net revenue 11,244,114 8,616,784 3,961,962 |
Schedule of contract assets | As of December 31, 2019 As of December 31, 2020 RMB RMB Contract assets 3,914,312 1,217,480 Allowance (1,515,627) (467,306) Contract assets, net 2,398,685 750,174 |
Schedule of movement of allowance for contract assets | Year ended December 31, 2019 Year ended December 31, 2020 RMB RMB Balance at beginning of the year 992,049 1,515,627 Allowance for contract assets 1,623,022 298,200 Write-off (1,099,444) (984,472) Disposal of Hengcheng (Note 1) — (362,049) Balance at end of the year 1,515,627 467,306 |
Schedule of Movement of refund liabilities | RMB As of January 1, 2019 2,145,748 Addition 709,401 Payouts during the year (1,053,614) As of December 31, 2019 1,801,535 Addition 15,935 Payouts during the year (643,832) Disposal of Hengcheng (as discussed in Note 1) (1,162,793) As of December 31, 2020 10,845 |
Schedule of estimated useful lives | Building 50 years Computer and transmission equipment 3 years Furniture and office equipment 5 years Software 1 -5 years Leasehold improvements Over the shorter of the lease term or expected useful lives |
Summary of financing receivable | As of December 31, 2019 As of December 31, 2020 RMB RMB Financing receivable 29,612 1,286,469 Allowance — (32,975) Financing receivable, net 29,612 1,253,494 |
Summary of movement of allowance for financing receivable | Year ended December 31, 2019 Year ended December 31, 2020 RMB RMB Balance at beginning of the year 303 — Adjustment related to ASC 326 adoption — 776 Adjusted opening balance as of January 1, 2020 303 776 Current year net provision 187 32,689 Write-off (490) (490) Balance at end of the year — 32,975 |
VIE's | |
VIE arrangements | |
Schedule of amounts and balances included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances | December 31, December 31, 2019 2020 RMB RMB Assets Cash and cash equivalents 1,331,668 999,774 Accounts receivable 2,130 100,250 Contract assets, net 2,191,277 541,969 Contract cost 61,528 64,099 Prepaid expenses and other assets 897,187 228,094 Financing receivables 29,612 1,253,494 Amounts due from related parties 700,186 261,937 Available-for-sale investments 333,900 10,000 Property, equipment and software, net 11,496 109,061 Deferred tax assets 29,829 16,379 Right-of-use assets 16,454 96,861 Total assets 5,605,267 3,681,918 Liabilities Accounts payable 39,019 9,026 Amounts due to related parties 35,708 775,655 Deferred revenue 349,677 43,607 Accrued expenses and other liabilities 1,390,341 1,054,259 Secured borrowing — 500,500 Refund liabilities 1,681,906 — Deferred tax liabilities 209,747 13,985 Lease liabilities 15,734 73,537 Total liabilities 3,722,132 2,470,569 Year ended December 31, 2018 2019 2020 RMB RMB RMB Net revenue 11,121,168 8,303,900 2,549,869 Net income 2,069,678 1,503,455 235,360 Year ended December 31, 2018 2019 2020 RMB RMB RMB Net cash (used in) /provided by operating activities (3,565,383) 846,367 974,840 Net cash provided/(used in) by investing activities 3,631,615 441,983 (1,202,842) Net cash (used in)/provided by financing activities (300,559) (787,737) 862,000 |
ABFE | |
VIE arrangements | |
Schedule of amounts and balances included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances | December 31, December 31, 2019 2020 RMB RMB Assets Restricted cash 43,833 213,033 Prepaid expenses and other assets 8,974 169 Loans at fair value 382,125 192,156 Held-to-maturity investments 6,627 3,286 Total assets 441,559 408,644 Liabilities Accounts payable 72 421 Amount due to related party — 109,502 Payable to investors at fair value — 52,623 Accrued expenses and other liabilities 7,378 896 Total liabilities 7,450 163,442 Year ended December 31, 2018 2019 2020 RMB RMB RMB Net income/(loss) 260,568 41,723 (117,969) Year ended December 31, 2018 2019 2020 RMB RMB RMB Net cash provided by operating activities 208,621 134,848 44,843 Net cash provided by investing activities 110,849 639,717 33,160 Net cash (used in)/provided by in financing activities (553,002) (121,296) 162,134 |
PREPAID EXPENSES AND OTHER AS_2
PREPAID EXPENSES AND OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
PREPAID EXPENSES AND OTHER ASSETS | |
Schedule of prepaid expenses and other assets | December 31, December 31, 2019 2020 RMB RMB Loans to third parties (i) 516,079 — Funds receivable from external payment network providers (ii) 331,534 105,741 Funds receivable from insurance and guarantee companies (iii) 289,752 — Prepaid expenses 64,923 34,789 Receivable from Tianda Xinan (Beijing) Guarantee Co.,Ltd ("Tianda Xinan") 16,891 24,851 Deposits 76,994 54,298 Interest receivable 8,194 14,660 Prepaid VAT and surcharge tax 889 — Guarantee receivable — 20,244 Others 27,965 24,008 Total 1,333,221 278,591 (i) The balance represents the outstanding balance of loans to an asset management company and loans made to a third-party guarantee company. The loans balance to an asset management company amounted to RMB272 million, with annual interest of 4.35%, as of December 31, 2019. The loans balance to a third-party guarantee is free of interest and amounted to RMB241 million as of December 31, 2019. The terms of the loans ranged from one to three years. As of December 31, 2020, the balance became nil due to the disposal of Hengcheng as described in Note 1. (ii) The Group opened accounts with external online payment service providers to collect and transfer loan funds and interest to investors or borrowers, repay and collect the default loan principal and interest. The Group also uses such accounts to collect the transaction fees and service fees. The balance of funds receivable from external payment network providers mainly includes accumulated amounts of transaction fees, service fees received at the balance sheet date, which was collected subsequently. (iii) The balance represents deposits made to the insurance and guarantee companies' account associated with credit assurance program as disclosed in Note 2. As of December 31, 2020, the balance became nil due to the disposal of Hengcheng as described in Note 1. |
FAIR VALUE OF ASSETS AND LIAB_2
FAIR VALUE OF ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
FAIR VALUE OF ASSETS AND LIABILITIES | |
Schedule of fair value hierarchy for assets and liabilities measured at fair value on a recurring basis subsequent to initial recognition | December 31, 2019 Level 1 Inputs Level 2 Inputs Level 3 Inputs Balance at Fair Value RMB RMB RMB RMB Assets Cash and cash equivalents 3,198,086 — — 3,198,086 Restricted cash 71,056 — — 71,056 Loans at fair value — — 418,492 418,492 Available-for-sale investments 85,129 333,900 41,962 460,991 Total Assets 3,354,271 333,900 460,454 4,148,625 December 31, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Balance at Fair Value RMB RMB RMB RMB Assets Cash and cash equivalents 2,469,909 — — 2,469,909 Restricted cash 237,239 — — 237,239 Loans at fair value — — 192,156 192,156 Available-for-sale investments 73,990 60,000 41,525 175,515 Total Assets 2,781,138 60,000 233,681 3,074,819 Payable to investors at fair value — — 161,996 161,996 Total Liabilities — — 161,996 161,996 |
Summary of significant unobservable inputs | December 31, 2019 December 31, 2020 Range of Inputs Range of Inputs Financial Instrument Unobservable Input Weighted- Average Weighted- Average Loans at fair value Discount rates 12.0%-16.4 % 12.0%-36.0 % Net cumulative expected loss rates (1) 14.4%-16.6 % 7.7%-31.7 % Cumulative prepayment rates (2) 11.9 % 7.5%-27.0 % Payable to investors at fair value Discount rates N/A 6.8%-8.7 % (1) Expressed as a percentage of the loan volume. (2) Expressed as a percentage of remaining principal of loans. |
Schedule of additional information about Level 3 loans, payable to investors measured at fair value on a recurring basis | Loans At Fair Value RMB Balance as of December 31, 2018 1,375,221 Collection of principals (593,350) Change in fair value (126,109) Decrease due to disposal of the beneficial rights of the consolidated ABFE (237,270) Balance as of December 31, 2019 418,492 Changes in fair value related to balance outstanding as of December 31, 2019 (120,015) Loans At Fair Value RMB Balance as of December 31, 2019 418,492 Origination of loans 153,750 Collection of principals (193,916) Change in fair value (186,170) Balance as of December 31, 2020 192,156 Changes in fair value related to balance outstanding as of December 31, 2020 (133,501) Payable to investors At Fair Value RMB Balance as of December 31, 2018 626,207 Interest and penalties received 151,603 Deductible expenses associated with the consolidated ABFE operation (9,766) Principal and interest payments to investors of the consolidated ABFE (139,033) Changes in fair value (129,975) Decrease due to disposal of the beneficial rights of the consolidated ABFE (499,036) Balance as of December 31, 2019 — Changes in fair value related to balance outstanding as of December 31, 2019 — Payable to investors At Fair Value RMB Balance as of December 31, 2019 — Contribution from investors of the consolidated ABFE 174,000 Interest and penalties received 49,702 Deductible expenses associated with the consolidated ABFE operation (4,650) Principal and interest payments to investors of the consolidated ABFE (14,874) Changes in fair value (42,182) Amount due to related parties(Note 1) (109,373) Balance as of December 31, 2020 Changes in fair value related to balance outstanding as of December 31, 2020 (42,182) Note 1: Among the investors of the ABFE, RMB109,373 are recorded as amount due to related parties as of December 31, 2020. |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INVESTMENTS | |
Schedule of information about cost and fair value of available-for-sale investments | Unrealized gains in accumulated other comprehensive Impact of Cost income exchange rate Fair value RMB RMB RMB RMB Available-for-sale investments: Debt securities 460,027 1,014 (50) 460,991 Unrealized gains in accumulated other comprehensive Impact of Cost income exchange rate Fair value RMB RMB RMB RMB Available-for-sale investments: Debt securities 171,189 4,559 (233) 175,515 |
PROPERTY, EQUIPMENT AND SOFTW_2
PROPERTY, EQUIPMENT AND SOFTWARE, NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |
Schedule of property, equipment and software, net | December 31, December 31, 2019 2020 RMB RMB Building 38,464 38,464 Computer and transmission equipment 168,711 156,991 Furniture and office equipment 75,499 54,117 Leasehold improvements 140,872 70,276 Software 43,348 75,718 Total property, equipment and software 466,894 395,566 Accumulated depreciation and amortization 271,039 248,373 Property, equipment and software, net 195,855 147,193 |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
ACCRUED EXPENSES AND OTHER LIABILITIES | |
Schedule of accrued expenses and other liabilities | December 31, December 31, 2019 2020 RMB RMB Accrued payroll and welfare 772,590 668,197 Tax payable 803,116 194,406 Funds collected on behalf of third-party guarantee companies (i) 425,920 27,925 Accrued customer incentives 81,297 54,703 Accrued advertisement expenses 62,472 15,467 Payable to investors (ii) 68,011 110,227 Liabilities from quality assurance program and guarantee 4,397 22,783 Others 106,749 115,207 Total accrued expenses and other liabilities 2,324,552 1,208,915 (i) Funds collected on behalf of third-party guarantee companies include the guarantee fees and guarantee funds under the credit assurance program as disclosed in Note 2. The guarantee fees amounted to RMB107 million and nil as of December 31, 2019 and 2020, respectively. The guarantee funds amounted to RMB314 million and nil as of December 31, 2019 and 2020, respectively. Payable to investor represents interest and principal collected by the Group on behalf of lenders. |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
Schedule of major related parties and their relationship with the Group | Group are summarized as follows: Relationship with the Major transaction with the Company name Group Group Pucheng Credit Assessment and Management (Beijing) Co., Ltd. (“Pucheng Credit”) Consolidated VIE of CreditEase Credit assessment and collection services, management consulting services, customers acquisition and referral services and related party loans Puxin Subsidiary of CreditEase System support services and related party loans Beijing Zhicheng Credit Service Co., Ltd. (“Beijing Zhicheng”) Consolidated VIE of CreditEase Identity verification services and system support services Hainan CreditEase Puhui Small Loan Co., Ltd. (“Hainan CreditEase”) Subsidiary of Consolidated VIE of CreditEase Collection of fees from customers on behalf of the Group and customers acquisition and referral services CreditEase Bocheng Insurance Sales and Service Co., Ltd. (“Bocheng”) Subsidiary of Consolidated VIE of CreditEase Customers acquisition and referral services Huichuang Financial Leasing (Shanghai) Co., Ltd. Subsidiary of CreditEase Customers acquisition and referral services Zhuoyue Consolidated VIE of CreditEase Customers acquisition and referral services, management consulting services and related party loans Toumi Technology Development (Beijing) Co., Ltd. Consolidated VIE of CreditEase Customers acquisition and referral services Xinda Hongtao Technology Development (Beijing) Co., Ltd. (“Xinda Hongtao”) Consolidated VIE of CreditEase Customers acquisition and referral services Zhehao Asset Management (Shanghai)Co., Ltd. (“Zhehao”) Consolidated VIE of CreditEase Fund distribution services Shenzhen CreditEase Factoring Co., Ltd. (“Shenzhen CreditEase”) Subsidiary of CreditEase Customers acquisition and referral services Xiaozhi Technology Co., Ltd. Subsidiary of Consolidated VIE of CreditEase Customers acquisition and referral services Shenzhen Tengda Yingyi Asset Management Co., Ltd. (“Shenzhen Tengda”) Subsidiary of Consolidated VIE of CreditEase (until July 2019) Disposal of loan receivables and the beneficial rights in the consolidated ABFE Beijing Hanfu Asset Management Co., Ltd. (“Hanfu”) Consolidated VIE of CreditEase Fund distribution services CreditEase Qixiang Technology (Beijing) Co., Ltd. (“CreditEase Qixiang”) Consolidated VIE of CreditEase Purchase of property and equipment and rental of equipment, disposal of loan receivables and the beneficial rights in the consolidated ABFE Shanghai CreditEase Qixin Factoring Co., Ltd. Subsidiary of Consolidated VIE of CreditEase Customers acquisition and referral services CreditEase Huicong International Financial Leasing Co., Ltd. Subsidiary of CreditEase Customers acquisition and referral services Beijing Yuying Asset Management Co., Ltd. Consolidated VIE of CreditEase Fund distribution services Shenzhen Puze Zhongfu Asset Management Co., Ltd. (“Puze Zhongfu”) Subsidiary of CreditEase Fund distribution services and disposal of loan receivables Hengda Hongyuan International Technology Development (Beijing) Co., Ltd. Subsidiary of CreditEase Financing services through transfer of financial lease receivables Huimin Consolidated VIE of CreditEase (from November 2019) Customer hotline services |
Schedule of cost and expense incurred for services provided by CreditEase, its subsidiaries and affiliates | Year ended December 31, 2018 2019 2020 RMB RMB RMB Customer calling center services (note a) — — 40,287 Management consulting services — 3,000 669 Rental of equipment 52,606 4,384 — Credit assessment services 38,203 19,025 8,022 System support services 657,206 179,458 164,671 Collection services 327,917 296,493 421,726 Customers acquisition and referral services (note b) 1,065,421 464,140 387,843 Total costs and expenses 2,141,353 966,500 1,023,218 Note a: The customer calling center service fees charged by Huimin include the cost of calling center service starting from January 1, 2020. Note b: For the year ended December 31, 2018 the customer acquisition and referral service fees charged by Zhuoyue include the cost of guarantee services to investors provided by Zhuoyue in 2017 and until March 2018. |
Schedule of revenue derived from services provided by CreditEase, its subsidiaries and affiliates | Revenue derived from services provided by the Group to CreditEase, its subsidiaries and affiliates for the years ended December 31, 2018, 2019 and 2020 is recorded as other revenue and is as follows: Year ended December 31, 2018 2019 2020 RMB RMB RMB Fund distribution services 113,748 113,930 7,004 Customers acquisition and referral service 63,593 28,547 138,438 Total revenue 177,341 142,477 145,442 |
Schedule of amount of loans collected from/(issued to) related party | Year ended December 31, 2018 2019 2020 RMB RMB RMB Puxin 3,238,919 — — Pucheng Credit 441,667 100,000 — Zhuoyue (663,463) 4,500 — Other related parties (811) — — Total 3,016,312 104,500 — |
Schedule of amount of loans received from/ (repaid to) related party | The information about loans received from/(repaid to) CreditEase, its subsidiaries and affiliates recorded in financing activities of the Company’s consolidated statements of cash flows for the years ended December 31, 2018, 2019 and 2020 is as follows: Year ended December 31, 2018 2019 2020 RMB RMB RMB Zhuoyue (435,193) 706,250 — Pucheng Credit (816) 1,000 — Fuan Yida — (68,000) — Hengda Hongyuan (a) — — 361,500 Other related parties 15,450 — — Total (420,559) 639,250 361,500 (a) Amounts related to transfer financial receivable to related party which only include principal, as discussed in Note 9 |
Schedule of related party balances | (i) Amounts due from related parties December 31, December 31, 2019 2020 RMB RMB Huimin (Note a) 407,240 — Xinda Hongtao (Note b) 213,624 — Zhuoyue (Note b) 202,724 90,814 Puxin (Note c) 150,743 65,542 Hengcheng (Note d) — 579,633 Huichuang (Note e) — 105,130 Others 14,522 42,887 Total 988,853 884,006 (ii) Amounts due to related parties December 31, December 31, 2019 2020 RMB RMB Puxin (Note a and c) 47,046 9,540 Pucheng Credit (Note c) 33,486 34,834 Hengda Hongyuan (Note f) — 367,134 Hengcheng(Note d) — 379,202 Zhuoyue (Note c) — 75,017 Huizong International(Note c) 20 51,798 Others 26,093 52,784 Total 106,645 970,309 (a) On November 30, 2019, Hengcheng, acquired Huimin’s services connecting borrowers and investors, and sold its remaining unrelated business to Puxin for an aggregated consideration of RMB47 million. Amounts due from Huimin and amounts due to Puxin as of December 31,2019 were related to such transaction and settled during the year ended December 31, 2020. (b) Amounts relate to the prepayment of referral services provided by the related parties and referral services provided to related party as of December 31, 2019 and 2020, respectively. (c) Amounts relate to the provision of credit assessment, collection, system support, identity verification, referral services and trust investment provided by the related parties. (d) Amounts due from and due to Hengcheng were related to the disposal of Huimin as discussed in Note 1 and customer services provided. (e) Amounts related to the referral services provided to the related parties. (f) In 2020, based on the financing arrangement with Haijin Yichuang, RMB367,134 related to financing receivables was transferred to related party, which includes the principal and interests. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES | |
Schedule of income tax expense/ (benefit) | December 31, December 31, December 31, 2018 2019 2020 RMB RMB RMB Current tax (i) (474,874) 370,946 77,274 Deferred tax (i) 669,161 (131,718) (157,885) Total 194,287 239,228 (80,611) |
Schedule of reconciliation between the income tax at PRC statutory tax rate and income tax expense | Year ended December 31, 2018 2019 2020 RMB RMB RMB Income before provision for income taxes 1,783,392 1,397,019 (773,359) Statutory tax rate in the PRC 25 % 25 % 25 % Income tax expense / (benefit) at statutory tax rate 445,848 349,255 (193,340) Non-deductible expenses 71,387 22,077 9,126 Research and development super deduction (7,246) (10,820) (5,460) Effect of income not taxable (192,501) (12,786) — Effect of tax holiday and preferential tax rate (93,121) (126,577) (178,938) Adjustment on current income tax of the prior periods 127 (384) 6 Effect of different tax rates of subsidiaries operating in other jurisdictions 23,190 14,518 13,641 Effect of accrual / reversal of withholding income tax 8,723 — (20,000) Debt relief income (ii) — 1,286,791 — Utilization of tax losses from the prior period (ii) — (1,452,828) — Change in valuation allowance (62,120) 169,982 294,354 Income tax expenses/ (benefits) 194,287 239,228 (80,611) |
Schedule of aggregate amount and per share effect of the tax holiday and preferential tax rate | Year ended December 31, 2018 2019 2020 RMB RMB RMB The aggregate amount of tax holiday and preferential tax rate (93,121) (126,577) (178,938) The aggregate effect on basic and diluted net income per share: - Basic (0.5055) (0.6834) (0.9924) - Diluted (0.4999) (0.6786) (0.9924) (i) As discussed in Note 2, starting from May 2018, the Group no longer provides quality assurance services to investors and related assurance program liabilities were derecognized. The reversal of deferred tax assets associated with quality assurance program liabilities resulted in a decrease in deferred tax assets with a corresponding decrease in income tax expense. As a result, the current tax portion of income tax expenses for the year ended December 31, 2018 was a net income tax benefit. (ii) As discussed in Note 1, Zhuoyue unconditionally waived a net receivables amounting to RMB5,147 million from the Acquired Businesses, which resulted in an increase of income tax expenses amounting to RMB1,287 million. The carried over accumulated loss from prior periods were utilized during the year and resulted in a decrease of income tax expenses amounting to RMB1,453 million. |
Schedule of deferred tax assets and liabilities | December 31, December 31, 2019 2020 RMB RMB Deferred tax assets: Liabilities from quality assurance program and guarantee 659 294 Deferred revenue 44,804 12,725 Refund liabilities 95,067 1,627 Accrued expenses and other liabilities 30,618 22,263 Fair value changes 11,609 18,114 Allowance for uncollectible receivables 95,989 107,994 Amortization difference of long-term assets 28,079 19,841 Accumulated losses carry over 152,341 32,683 Valuation allowance (i) (252,660) (39,516) Total 206,506 176,025 Deferred tax liabilities: Contract assets, net 318,543 167,949 Contract cost 58,882 21,110 Intangible assets 2,562 8,962 Total 379,987 198,021 Net deferred tax liabilities (173,481) (21,996) (i) The valuation allowance is considered on an individual entity basis. As of December 31, 2019 and 2020, the Company had tax operating loss carry forwards of RMB609,363 and RMB130,732 , respectively, which can be carried forward to offset taxable income. The net operating losses will expire in the years from 2021 to 2024 if not utilized. The Group has recognized a valuation allowance against deferred tax assets of RMB252,660 and RMB39,516 for the years ended December 31, 2019 and 2020, respectively. |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SHARE-BASED COMPENSATION | |
Summary of restricted share units activities | Weighted-Average Grant-Date Number of RSUs Fair Value US$ Outstanding as of December 31, 2019 1,918,446 10.96 Granted 2,735,700 2.04 Vested (1,237,196) 7.82 Forfeited (807,006) 7.07 Outstanding as of December 31, 2020 2,609,944 4.31 |
NET INCOME PER SHARE AND NET _2
NET INCOME PER SHARE AND NET INCOME ATTRIBUTABLE TO ORDINARY SHAREHOLDERS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
NET INCOME/(LOSS) PER SHARE AND NET (LOSS)/INCOME ATTRIBUTABLE TO ORDINARY SHAREHOLDERS | |
Schedule of the computation of the basic and diluted net income per share | Year ended December 31, 2018 2019 2020 RMB RMB RMB Numerator: Net income/(loss) 1,579,810 1,155,611 (692,748) Denominator: Weighted average number of ordinary shares outstanding, basic 184,225,643 185,219,586 180,301,898 Plus incremental weighted average ordinary shares from assumed vesting of RSUs using the treasury stock method(i) 2,044,872 1,315,878 — Weighted average number of ordinary shares outstanding, diluted 186,270,515 186,535,464 180,301,898 Basic net income/(loss) per share 8.5754 6.2391 (3.8422) Diluted net income/(loss) per share 8.4813 6.1951 (3.8422) (i) As of December 31, 2020, there were 592,249 RSUs, which were excluded from the computation of diluted net income/(loss) per share because their effect was anti-dilutive. |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
LEASES | |
Summary of supplemental information related to operating leases | Year ended Year ended December 31, 2019 December 31, 2020 Operating lease ROU assets 334,134 105,674 Operating lease liabilities 282,334 81,854 Operating leases - Weighted average remaining lease term 1.88 years 1.47 years Operating leases - Weighted average discount rate 4.19 % 3.3 % |
Summary of least cost | Year ended Year ended December 31, 2019 December 31, 2020 Operating lease cost 244,855 Short-term lease cost 808 Total 245,663 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases 218,878 Non-cash ROU assets in exchange for new lease liabilities: Operating leases 63,749 |
Summary of maturity of operating lease liabilities | As of December 31, As of December 31, 2019 2020 RMB RMB 2020 193,478 — 2021 82,128 62,414 2022 17,944 20,947 2023 454 872 2024 — — 2025 and thereafter — — Subtotal 294,004 84,233 Less: imputed interest 11,670 2,379 Present value of operating lease liabilities 282,334 81,854 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SEGMENT INFORMATION | |
Schedule of summery of segment reporting information by segments | Year ended December 31, 2018 2019 2020 RMB RMB RMB Net revenue: Wealth management 1,986,960 2,176,215 1,432,364 Consumer credit 9,257,154 6,440,569 2,529,598 Total net revenue 11,244,114 8,616,784 3,961,962 Operating costs and expenses: Wealth management (1,561,310) (915,202) (760,180) Consumer credit (8,561,264) (6,194,071) (3,703,031) Income/(loss) from operations: Wealth management 425,650 1,261,013 672,184 Consumer credit 695,890 246,498 (1,173,433) Total segment income/(loss) from operations 1,121,540 1,507,511 (501,249) Unallocated expenses (345,394) (379,482) (204,589) Other income/(expenses) 1,007,246 268,990 (67,521) Income/(loss) before provision for income taxes 1,783,392 1,397,019 (773,359) |
ORGANIZATION AND PRINCIPAL AC_3
ORGANIZATION AND PRINCIPAL ACTIVITIES - Summary of Major Subsidiaries (Details) | Dec. 31, 2020 |
YouRace HK | |
Subsidiaries ownership: | |
Percentage of legal ownership | 100.00% |
YouRace Hengchuang | |
Subsidiaries ownership: | |
Percentage of legal ownership | 100.00% |
Heng Yu Da | |
Subsidiaries ownership: | |
Percentage of legal ownership | 100.00% |
Yi Ren Information C | |
Subsidiaries ownership: | |
Percentage of legal ownership | 100.00% |
ORGANIZATION AND PRINCIPAL AC_4
ORGANIZATION AND PRINCIPAL ACTIVITIES - Acquisitions of subsidiaries under common control (Details) - CNY (¥) ¥ in Millions | Jul. 11, 2019 | Mar. 31, 2019 | Mar. 25, 2019 | Dec. 31, 2019 | May 31, 2019 | Mar. 31, 2019 | Nov. 30, 2019 | Dec. 31, 2019 |
Acquired Businesses | ||||||||
Acquisition of subsidiaries accounted for as business combination under common control | ||||||||
Number of shares transferred | 61,981,412 | 61,981,412 | ||||||
Zhuoyue | Acquired Businesses | ||||||||
Acquisition of subsidiaries accounted for as business combination under common control | ||||||||
Cash paid for acquisition | ¥ 233 | |||||||
Contingent consideration | 2,627 | ¥ 2,627 | ||||||
Receivable waived | ¥ 5,147 | |||||||
Number of shares transferred | 61,981,412 | |||||||
CreditEase | Dekai Yichuang | ||||||||
Acquisition of subsidiaries accounted for as business combination under common control | ||||||||
Cash paid for acquisition | ¥ 230 | ¥ 29 | ||||||
Purchase consideration | ¥ 29 | |||||||
Number of shares transferred | 61,981,412 | |||||||
Fair value of shares issued | ¥ 2,754 | |||||||
Payment of contingent consideration | ¥ 1,410 | |||||||
Waiver of contingent consideration | ¥ 1,217 |
ORGANIZATION AND PRINCIPAL AC_5
ORGANIZATION AND PRINCIPAL ACTIVITIES - Disposal of subsidiaries under common control (Details) - CNY (¥) ¥ in Millions | Nov. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Puxin | ||||
Disposal of subsidiaries under common control | ||||
Aggregated consideration | ¥ 47 | |||
Difference between the consideration and the carrying value of the net assets | ¥ 55 | |||
Hengcheng | ||||
Disposal of subsidiaries under common control | ||||
Pre-tax (loss)/income | ¥ (2,048) | ¥ 373 | ¥ 292 | |
Aggregated consideration | 67 | |||
Carrying value of net assets | 723 | |||
Difference between the consideration and the carrying value of the net assets | ¥ 656 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Consolidated VIE (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2020CNY (¥) | ||
Assets including amounts of the consolidated variable interest entities (the "VIEs") and consolidated assets backed financing entities ("ABFE") (Note 2): | ||||||
Cash and cash equivalents | $ 378,530 | ¥ 3,198,086 | ¥ 2,606,939 | [1] | ¥ 2,469,909 | |
Restricted cash | 36,358 | 71,056 | 427,546 | [1] | 237,239 | |
Accounts receivable | 18,811 | 3,398 | 122,742 | |||
Contract assets, net | 114,969 | 2,398,685 | 750,174 | |||
Contract cost | 10,043 | 160,003 | 65,529 | |||
Prepaid expenses and other assets | 42,697 | 1,333,221 | 278,591 | |||
Financing receivables | 192,106 | 29,612 | 1,253,494 | |||
Amounts due from related parties | 135,480 | 988,853 | 884,006 | |||
Available-for-sale investments | 26,899 | 460,991 | 175,515 | |||
Property, equipment and software, net | 22,558 | 195,855 | 147,193 | |||
Deferred tax assets | 2,566 | 45,407 | 16,745 | |||
Total assets | 1,027,165 | 9,644,420 | 6,702,253 | |||
Liabilities: | ||||||
Accounts payable | 1,517 | 43,583 | 9,903 | |||
Amounts due to related parties | 148,706 | 106,645 | 970,309 | |||
Deferred revenue | 7,801 | 358,203 | 50,899 | |||
Accrued expenses and other liabilities | 185,275 | 2,324,552 | 1,208,915 | |||
Secured borrowing | 76,705 | 18,590 | 500,500 | |||
Refund liabilities | 1,662 | 1,801,535 | 2,145,748 | 10,845 | ||
Deferred tax liabilities | 5,937 | 218,888 | 38,741 | |||
Lease liabilities | 12,545 | 282,334 | 81,854 | |||
Total liabilities | 448,213 | 5,154,330 | 2,924,589 | |||
Net revenue | 607,199 | ¥ 3,961,962 | 8,616,784 | 11,244,114 | [1] | |
Net income | (106,168) | (692,748) | 1,155,611 | 1,579,810 | [1] | |
Net cash (used in) /provided by operating activities | 43,222 | 282,028 | 274,168 | (3,959,094) | [1] | |
Net cash provided/(used in) by investing activities | (275,351) | (1,796,663) | 1,110,001 | 3,297,648 | [1] | |
Net cash (used in)/provided by financing activities | $ 146,429 | 955,448 | (1,149,705) | (788,022) | [1] | |
VIE's | ||||||
Assets including amounts of the consolidated variable interest entities (the "VIEs") and consolidated assets backed financing entities ("ABFE") (Note 2): | ||||||
Cash and cash equivalents | 1,331,668 | 999,774 | ||||
Accounts receivable | 2,130 | 100,250 | ||||
Contract assets, net | 2,191,277 | 541,969 | ||||
Contract cost | 61,528 | 64,099 | ||||
Prepaid expenses and other assets | 897,187 | 228,094 | ||||
Financing receivables | 29,612 | 1,253,494 | ||||
Amounts due from related parties | 700,186 | 261,937 | ||||
Available-for-sale investments | 333,900 | 10,000 | ||||
Property, equipment and software, net | 11,496 | 109,061 | ||||
Deferred tax assets | 29,829 | 16,379 | ||||
Right-of-use assets | 16,454 | 96,861 | ||||
Total assets | 5,605,267 | 3,681,918 | ||||
Liabilities: | ||||||
Accounts payable | 39,019 | 9,026 | ||||
Amounts due to related parties | 35,708 | 775,655 | ||||
Deferred revenue | 349,677 | 43,607 | ||||
Accrued expenses and other liabilities | 1,390,341 | 1,054,259 | ||||
Secured borrowing | 500,500 | |||||
Refund liabilities | 1,681,906 | |||||
Deferred tax liabilities | 209,747 | 13,985 | ||||
Lease liabilities | 15,734 | 73,537 | ||||
Total liabilities | 3,722,132 | 2,470,569 | ||||
Net revenue | 2,549,869 | 8,303,900 | 11,121,168 | |||
Net income | 235,360 | 1,503,455 | 2,069,678 | |||
Net cash (used in) /provided by operating activities | 974,840 | 846,367 | (3,565,383) | |||
Net cash provided/(used in) by investing activities | (1,202,842) | 441,983 | 3,631,615 | |||
Net cash (used in)/provided by financing activities | ¥ 862,000 | ¥ (787,737) | ¥ (300,559) | |||
VIE's | Asset pledged as collateral | ||||||
Assets including amounts of the consolidated variable interest entities (the "VIEs") and consolidated assets backed financing entities ("ABFE") (Note 2): | ||||||
Total assets | ¥ 0 | |||||
Loan agreements | ||||||
VIE arrangements | ||||||
Threshold of foreign interest in VIE (as a percent) | 100.00% | 100.00% | ||||
Term of loans (years) | 10 years | 10 years | ||||
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Consolidated Assets Backed Financing Entities (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2020CNY (¥) | ||
Assets including amounts of the consolidated variable interest entities (the "VIEs") and consolidated assets backed financing entities ("ABFE") (Note 2): | ||||||
Restricted cash | $ 36,358 | ¥ 71,056 | ¥ 427,546 | [1] | ¥ 237,239 | |
Prepaid expenses and other assets | 42,697 | 1,333,221 | 278,591 | |||
Loans at fair value | 29,449 | 418,492 | 192,156 | |||
Held-to-maturity investments | 504 | 6,627 | 3,286 | |||
Total assets | 1,027,165 | 9,644,420 | 6,702,253 | |||
Liabilities: | ||||||
Accounts payable | 1,517 | 43,583 | 9,903 | |||
Payable to investors at fair value | 8,065 | 52,623 | ||||
Accrued expenses and other liabilities | 185,275 | 2,324,552 | 1,208,915 | |||
Total liabilities | 448,213 | 5,154,330 | 2,924,589 | |||
Net income/(loss) | (106,168) | ¥ (692,748) | 1,155,611 | 1,579,810 | [1] | |
Net cash provided by operating activities | 43,222 | 282,028 | 274,168 | (3,959,094) | [1] | |
Net cash provided by investing activities | (275,351) | (1,796,663) | 1,110,001 | 3,297,648 | [1] | |
Net cash (used in)/provided by in financing activities | $ 146,429 | 955,448 | (1,149,705) | (788,022) | [1] | |
ABFE | ||||||
Assets including amounts of the consolidated variable interest entities (the "VIEs") and consolidated assets backed financing entities ("ABFE") (Note 2): | ||||||
Restricted cash | 43,833 | 213,033 | ||||
Prepaid expenses and other assets | 8,974 | 169 | ||||
Loans at fair value | 382,125 | 192,156 | ||||
Held-to-maturity investments | 6,627 | 3,286 | ||||
Total assets | 441,559 | 408,644 | ||||
Liabilities: | ||||||
Accounts payable | 72 | 421 | ||||
Amount due to related parties | 109,502 | |||||
Payable to investors at fair value | 52,623 | |||||
Accrued expenses and other liabilities | 7,378 | 896 | ||||
Total liabilities | 7,450 | 163,442 | ||||
Net income/(loss) | (117,969) | 41,723 | 260,568 | |||
Net cash provided by operating activities | 44,843 | 134,848 | 208,621 | |||
Net cash provided by investing activities | 33,160 | 639,717 | 110,849 | |||
Net cash (used in)/provided by in financing activities | ¥ 162,134 | ¥ (121,296) | ¥ (553,002) | |||
Asset pledged as collateral | ABFE | ||||||
Assets including amounts of the consolidated variable interest entities (the "VIEs") and consolidated assets backed financing entities ("ABFE") (Note 2): | ||||||
Total assets | ¥ 0 | |||||
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Disaggregation (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | ||
Net revenue | |||||
Net revenue | $ 607,199 | ¥ 3,961,962 | ¥ 8,616,784 | ¥ 11,244,114 | [1] |
Consumer Credit Segment | |||||
Net revenue | |||||
Net revenue | 2,529,598 | 6,440,569 | 9,257,154 | ||
Wealth Management Segment | |||||
Net revenue | |||||
Net revenue | 1,432,364 | 2,176,215 | 1,986,960 | ||
Loan facilitation service | Consumer Credit Segment | |||||
Net revenue | |||||
Net revenue | 1,329,720 | 5,182,028 | 7,647,804 | ||
Post origination services | Consumer Credit Segment | |||||
Net revenue | |||||
Net revenue | 670,440 | 757,783 | 1,173,108 | ||
Account management service | Wealth Management Segment | |||||
Net revenue | |||||
Net revenue | 921,779 | 2,016,678 | 1,806,732 | ||
Insurance brokerage services | Wealth Management Segment | |||||
Net revenue | |||||
Net revenue | 430,830 | ||||
Others | Consumer Credit Segment | |||||
Net revenue | |||||
Net revenue | 529,438 | 500,758 | 436,242 | ||
Others | Wealth Management Segment | |||||
Net revenue | |||||
Net revenue | ¥ 79,755 | ¥ 159,537 | ¥ 180,228 | ||
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue on the remaining performance obligations (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | [1] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Net revenue | $ 607,199 | ¥ 3,961,962 | ¥ 8,616,784 | ¥ 11,244,114 | |
Cash incentives paid | 595,300 | ||||
Post origination services | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenue on the remaining performance obligations | ¥ 99,800 | ¥ 787,100 | |||
Account management service | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Weighted average investment period | 0 months | 0 months | 18 months | ||
Revenue on the remaining performance obligations | ¥ 0 | ¥ 919,700 | |||
Health and life insurance | Minimum | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Insurance policy term | 5 years | 5 years | |||
Health and life insurance | Maximum | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Insurance policy term | 10 years | 10 years | |||
Property insurance | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Insurance policy term | 1 year | 1 year | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Post origination services | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Percentage of remaining performance obligation expected to be recognized | 67.00% | ||||
Revenue on the remaining performance obligation, Period | 12 months | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Account management service | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Percentage of remaining performance obligation expected to be recognized | 98.00% | ||||
Revenue on the remaining performance obligation, Period | 12 months | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | Post origination services | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Percentage of remaining performance obligation expected to be recognized | 74.00% | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | Account management service | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Percentage of remaining performance obligation expected to be recognized | 0.00% | ||||
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contract Assets, Contract Liabilities and Refund liability (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | |
Amortization | ¥ 116,300 | ¥ 107,300 | ||||
Impairment loss on contract costs | 29,769,000 | 0 | ||||
Contract assets | ||||||
Contract assets | ¥ 1,217,480 | ¥ 3,914,312 | ||||
Allowance | (467,306) | (1,515,627) | ¥ (992,049) | (467,306) | (1,515,627) | |
Contract assets, net | $ 114,969 | ¥ 750,174 | ¥ 2,398,685 | |||
Movement of allowance for contract assets | ||||||
Balance at beginning of the year | 1,515,627 | 992,049 | ||||
Allowance for contract assets and receivables | 298,200 | 1,623,022 | ||||
Write-off | (984,472) | (1,099,444) | ||||
Disposal of Hengcheng | (362,049) | |||||
Balance at end of the year | 467,306 | 1,515,627 | 992,049 | |||
Deferred revenue | ||||||
Revenue recognized that was included in opening deferred revenue | 263,800 | 391,200 | ||||
Movement of the balances of refund liability | ||||||
Beginning balance | 1,801,535 | 2,145,748 | ||||
Addition | 15,935 | 709,401 | ||||
Payouts during the year | (643,832) | (1,053,614) | ||||
Disposal of Hengcheng | (1,162,793) | |||||
Ending balance | $ 1,662 | ¥ 10,845 | ¥ 1,801,535 | ¥ 2,145,748 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Liabilities from Quality Assurance Program (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Percent of outstanding loans | 27.60% | 4.10% |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Equipment and Software, Net (Details) - CNY (¥) ¥ in Millions | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2020 | Jan. 31, 2020 | Dec. 31, 2020 | |
Asset Acquisition | |||
Total consideration for Type 1 and Type 2 License | ¥ 13.2 | ||
An insurance brokerage licensee company | |||
Business Acquisition | |||
Cash paid for acquisition | ¥ 15.5 | ||
Fair value of assets acquired | 53.8 | ||
Liabilities assumed | 38.3 | ||
Goodwill | ¥ 4.8 | ||
Building | |||
Property, equipment and software, net | |||
Useful life (in years) | 50 years | ||
Computer and transmission equipment | |||
Property, equipment and software, net | |||
Useful life (in years) | 3 years | ||
Furniture and office equipment | |||
Property, equipment and software, net | |||
Useful life (in years) | 5 years | ||
Software | Minimum | |||
Property, equipment and software, net | |||
Useful life (in years) | 1 year | ||
Software | Maximum | |||
Property, equipment and software, net | |||
Useful life (in years) | 5 years |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Financing Receivable (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
FINANCING RECEIVABLES | ||
Financing receivable | ¥ 1,286,469 | ¥ 29,612 |
Allowance | (32,975) | |
Financing receivable, net | ¥ 1,253,494 | ¥ 29,612 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Movement of Allowance for Financing Receivable (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance at beginning of the year | ¥ 303 | |||
Adjustment related to ASC 326 adoption | ¥ 32,975 | 303 | ¥ 32,975 | |
Adjusted opening balance as of January 1, 2020 | 32,975 | 303 | 32,975 | |
Current year net provision | 32,689 | 187 | ||
Write-off | (490) | (490) | ||
Balance at end of the year | ¥ 32,975 | |||
Loan term of financing receivables | 24 months | |||
Overdue for more than 90 days | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Loans receivable written-off | ¥ 500 | 500 | ||
Loans overdue | 12,500 | ¥ 2,500 | ||
Loans overdue for more than 90 days | 5,200 | 800 | ||
ASU 2016-13 | Adjusted balance | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance at beginning of the year | 303 | |||
Adjustment related to ASC 326 adoption | 776 | 303 | 776 | 303 |
Adjusted opening balance as of January 1, 2020 | 776 | 303 | 776 | ¥ 303 |
Balance at end of the year | 776 | ¥ 303 | ||
ASU 2016-13 | Adjustment | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Adjustment related to ASC 326 adoption | 776 | 776 | ||
Adjusted opening balance as of January 1, 2020 | 776 | ¥ 776 | ||
Balance at end of the year | ¥ 776 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts receivable and allowance for uncollectible accounts receivable and Value added taxes (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Allowance was recorded for uncollectible financing receivables | ¥ 32,975 | ¥ 0 | |
VAT percent, one | 3.00% | ||
VAT percent, two | 6.00% | ||
VAT tax | ¥ 1,493,717 | ¥ 916,316 | ¥ 1,215,821 |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Leases (Details) | 12 Months Ended |
Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Remaining lease terms | 4 years |
Option to extend | true |
SUMMARY OF SIGNIFICANT ACCOU_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign Currency Translation and change in reporting currency (Details) | Dec. 31, 2020 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Exchange rate | 6.5250 |
SUMMARY OF SIGNIFICANT ACCOU_16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Significant Risks and Uncertainties (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | 36 Months Ended | |||||
Dec. 31, 2020USD ($)customer | Dec. 31, 2020CNY (¥)customer | Dec. 31, 2019CNY (¥)customer | Dec. 31, 2018CNY (¥) | [1] | Dec. 31, 2020CNY (¥) | Dec. 31, 2020CNY (¥) | |
Significant Risks and Uncertainties | |||||||
Cash and cash equivalents | $ 378,530 | ¥ 3,198,086 | ¥ 2,606,939 | ¥ 2,469,909 | |||
Net revenue | $ 607,199 | ¥ 3,961,962 | 8,616,784 | ¥ 11,244,114 | |||
Customer concentration risk | |||||||
Significant Risks and Uncertainties | |||||||
Insurance limit covering deposits at each bank | 500 | ||||||
Cash and cash equivalents | Foreign currency risk | RMB | |||||||
Significant Risks and Uncertainties | |||||||
Cash and cash equivalents | ¥ 3,117,993 | ¥ 2,408,924 | |||||
Individual customer greater than 10% of revenue | Customer concentration risk | |||||||
Significant Risks and Uncertainties | |||||||
Net revenue | ¥ 0 | ||||||
Customer greater than 10% of accounts receivable | Customer concentration risk | |||||||
Significant Risks and Uncertainties | |||||||
Number of customers | customer | 1 | 1 | 0 | ||||
Concentration risk (as a percent) | 46.00% | 46.00% | |||||
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
SUMMARY OF SIGNIFICANT ACCOU_17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net income per share (Details) - shares | Mar. 25, 2019 | Dec. 31, 2019 |
Acquired Businesses | ||
Business Acquisition [Line Items] | ||
Consideration of ordinary shares | 61,981,412 | 61,981,412 |
SUMMARY OF SIGNIFICANT ACCOU_18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recently adopted accounting pronouncements (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Jan. 01, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Remaining lease terms | 4 years | |||
Right-of-use assets | $ 16,195 | ¥ 105,674 | ¥ 334,134 | |
Lease liabilities | 12,545 | 81,854 | 282,334 | |
Accumulated deficit | $ 192,735 | ¥ 1,257,594 | ¥ 26,054 | ¥ 533,480 |
PREPAID EXPENSES AND OTHER AS_3
PREPAID EXPENSES AND OTHER ASSETS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) |
Related Party Transaction [Line Items] | |||
Loans to third parties | ¥ 516,079 | ||
Funds receivable from external payment network providers | ¥ 105,741 | 331,534 | |
Funds receivable from insurance and guarantee companies | 289,752 | ||
Prepaid expense | 34,789 | 64,923 | |
Prepaid VAT and surcharge tax | 54,298 | 76,994 | |
Deposits | 14,660 | 8,194 | |
Guarantee receivable | 889 | ||
Interest receivable | 20,244 | ||
Others | 24,008 | 27,965 | |
Prepaid expenses and other assets | $ 42,697 | 278,591 | 1,333,221 |
Tianda Xinan | |||
Related Party Transaction [Line Items] | |||
Prepaid expense | ¥ 24,851 | ¥ 16,891 |
PREPAID EXPENSES AND OTHER AS_4
PREPAID EXPENSES AND OTHER ASSETS - Additional information (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Prepaid expenses and other assets: | ||
Loans to third parties | ¥ 1,253,494 | ¥ 29,612 |
Minimum | ||
Prepaid expenses and other assets: | ||
Term of loans (years) | 1 year | |
Maximum | ||
Prepaid expenses and other assets: | ||
Term of loans (years) | 3 years | |
Asset management company | ||
Prepaid expenses and other assets: | ||
Loans to third parties | ¥ 272,000 | |
Annual interest rate (as a percent) | 4.35% | |
Third party guarantee company | ||
Prepaid expenses and other assets: | ||
Loans to third parties | ¥ 0 | ¥ 241,000 |
FAIR VALUE OF ASSETS AND LIAB_3
FAIR VALUE OF ASSETS AND LIABILITIES (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
FAIR VALUE OF ASSETS AND LIABILITIES | ||
Assets transferred into Level 3 | ¥ 0 | ¥ 0 |
Assets transferred out of Level 3 | 0 | 0 |
Liabilities transferred into Level 3 | 0 | |
Liabilities transferred out of Level 3 | ¥ 0 | ¥ 0 |
FAIR VALUE OF ASSETS AND LIAB_4
FAIR VALUE OF ASSETS AND LIABILITIES -Schedule of the Fair Value Hierarchy (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) |
Assets | |||
Loans at fair value | $ 29,449 | ¥ 192,156 | ¥ 418,492 |
Available-for-sale investments | 26,899 | 175,515 | 460,991 |
Liabilities | |||
Payable to investors at fair value | $ 8,065 | 52,623 | |
Recurring | |||
Assets | |||
Cash and cash equivalents | 2,469,909 | 3,198,086 | |
Restricted cash | 237,239 | 71,056 | |
Loans at fair value | 192,156 | 418,492 | |
Available-for-sale investments | 175,515 | 460,991 | |
Total Assets | 3,074,819 | 4,148,625 | |
Liabilities | |||
Payable to investors at fair value | 161,996 | ||
Total Liabilities | 161,996 | ||
Recurring | Level 1 Inputs | |||
Assets | |||
Cash and cash equivalents | 2,469,909 | 3,198,086 | |
Restricted cash | 237,239 | 71,056 | |
Available-for-sale investments | 73,990 | 85,129 | |
Total Assets | 2,781,138 | 3,354,271 | |
Recurring | Level 2 Inputs | |||
Assets | |||
Available-for-sale investments | 60,000 | 333,900 | |
Total Assets | 60,000 | 333,900 | |
Recurring | Level 3 Inputs | |||
Assets | |||
Loans at fair value | 192,156 | 418,492 | |
Available-for-sale investments | 41,525 | 41,962 | |
Total Assets | 233,681 | ¥ 460,454 | |
Liabilities | |||
Payable to investors at fair value | 161,996 | ||
Total Liabilities | ¥ 161,996 |
FAIR VALUE OF ASSETS AND LIAB_5
FAIR VALUE OF ASSETS AND LIABILITIES - Summary of Significant Unobservable Inputs (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cumulative prepayment rates | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans at fair value | 11.9 | |
Minimum | Discount rates | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans at fair value | 12 | 12 |
Payable to investors at fair value | 6.8 | |
Minimum | Net cumulative expected loss rates | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans at fair value | 7.7 | 14.4 |
Minimum | Cumulative prepayment rates | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans at fair value | 7.5 | |
Maximum | Discount rates | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans at fair value | 36 | 16.4 |
Payable to investors at fair value | 8.7 | |
Maximum | Net cumulative expected loss rates | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans at fair value | 31.7 | 16.6 |
Maximum | Cumulative prepayment rates | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans at fair value | 27 |
FAIR VALUE OF ASSETS AND LIAB_6
FAIR VALUE OF ASSETS AND LIABILITIES - Additional Information about Level 3 Loans and Payable to Investors (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Loans At Fair Value | ||
Beginning balance | ¥ 418,492 | ¥ 1,375,221 |
Origination of loans | 153,750 | |
Collection of principals | (193,916) | (593,350) |
Change in fair value | (186,170) | (126,109) |
Decrease due to disposal of the beneficial rights of the Consolidated ABFE | (237,270) | |
Ending balance | 192,156 | 418,492 |
Changes in fair value related to balance outstanding at the end of the year | (133,501) | (120,015) |
Payable to investors At Fair Value | ||
Beginning balance | 0 | 626,207 |
Contribution from investors of the consolidated ABFE | 174,000 | |
Interest and penalties received | 49,702 | 151,603 |
Deductible expenses associated with the consolidated ABFE operation | (4,650) | (9,766) |
Principal and interest payments to investors of Consolidated ABFE | (14,874) | (139,033) |
Change in fair value | (42,182) | (129,975) |
Decrease due to disposal of the beneficial rights of the consolidated ABFE | (499,036) | |
Amount due to related parties(Note 1) | (109,373) | |
Ending balance | 52,623 | ¥ 0 |
Changes in fair value related to balance outstanding at the end of the year | ¥ (42,182) |
INVESTMENTS (Details)
INVESTMENTS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | |
INVESTMENTS | |||||
Held-to-maturity investments, allowance for credit loss | ¥ 0 | ¥ 0 | ¥ 0 | ||
Interest income | ¥ 11,454 | 24,394 | 28,989 | ||
Available-for-sale investments | |||||
Changes in fair value of the available-for-sale investments, net of tax | 3,546 | 3,839 | 2,414 | ||
Impairment loss | 0 | 0 | 0 | ||
Fair value | 460,991 | $ 26,899 | 175,515 | ||
Debt securities | |||||
Available-for-sale investments | |||||
Cost | 460,027 | 171,189 | |||
Unrealized gains in accumulated other comprehensive (loss)/income | 1,014 | 4,559 | |||
Impact of exchange rate | (50) | (233) | |||
Fair value | 460,991 | ¥ 175,515 | |||
Equity securities | |||||
INVESTMENTS | |||||
Interest income | ¥ 73 | ¥ 5,833 | ¥ 7,022 |
PROPERTY, EQUIPMENT AND SOFTW_3
PROPERTY, EQUIPMENT AND SOFTWARE, NET (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | [1] | Dec. 31, 2020CNY (¥) | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | ||||||
Total property, equipment and software | ¥ 466,894 | ¥ 395,566 | ||||
Accumulated depreciation and amortization | 271,039 | 248,373 | ||||
Property, equipment and software, net | $ 22,558 | 195,855 | 147,193 | |||
Depreciation and amortization expenses | $ 14,065 | ¥ 91,772 | 125,850 | ¥ 147,992 | ||
Building | ||||||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | ||||||
Total property, equipment and software | 38,464 | 38,464 | ||||
Computer and transmission equipment | ||||||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | ||||||
Total property, equipment and software | 168,711 | 156,991 | ||||
Furniture and office equipment | ||||||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | ||||||
Total property, equipment and software | 75,499 | 54,117 | ||||
Leasehold improvements | ||||||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | ||||||
Total property, equipment and software | 140,872 | 70,276 | ||||
Software | ||||||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | ||||||
Total property, equipment and software | ¥ 43,348 | ¥ 75,718 | ||||
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
ACCRUED EXPENSES AND OTHER LI_3
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) |
ACCRUED EXPENSES AND OTHER LIABILITIES | |||
Accrued payroll and welfare | ¥ 668,197 | ¥ 772,590 | |
Tax payable | 194,406 | 803,116 | |
Funds collected on behalf of third-party guarantee companies (i) | 27,925 | 425,920 | |
Accrued customer incentives | 54,703 | 81,297 | |
Accrued advertisement expenses | 15,467 | 62,472 | |
Payable to investors | 110,227 | 68,011 | |
Liabilities from quality assurance program and guarantee | 22,783 | 4,397 | |
Others | 115,207 | 106,749 | |
Total accrued expenses and other liabilities | $ 185,275 | 1,208,915 | 2,324,552 |
Guarantee fee | 0 | 107,000 | |
Guarantee funds | ¥ 0 | ¥ 314,000 |
RELATED PARTY BALANCES AND TR_3
RELATED PARTY BALANCES AND TRANSACTIONS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | |
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Revenue | ¥ 145,442 | ¥ 142,477 | ¥ 177,341 | ||
Amounts due from related parties | 988,853 | $ 135,480 | ¥ 884,006 | ||
Amounts due to related parties | 106,645 | $ 148,706 | 970,309 | ||
Fund distribution services | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Revenue | 7,004 | 113,930 | 113,748 | ||
Customers acquisition and referral services | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Revenue | 138,438 | 28,547 | 63,593 | ||
CreditEase Huimin | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Amounts due from related parties | 407,240 | ||||
Xinda Hongtao | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Amounts due from related parties | 213,624 | ||||
Zhuoyue | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Amounts due from related parties | 202,724 | 90,814 | |||
Amounts due to related parties | 75,017 | ||||
Puxin | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Amounts due from related parties | 150,743 | 65,542 | |||
Amounts due to related parties | 47,046 | 9,540 | |||
Pucheng Credit | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Amounts due to related parties | 33,486 | 34,834 | |||
Hengda Hongyuan | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Amounts due to related parties | 367,134 | ||||
Hengcheng | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Amounts due from related parties | 579,633 | ||||
Amounts due to related parties | 379,202 | ||||
Huichuang | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Amounts due from related parties | 105,130 | ||||
Huizong International | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Amounts due to related parties | 20 | 51,798 | |||
CreditEase | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Total costs and expenses | 1,023,218 | 966,500 | 2,141,353 | ||
CreditEase | Customer calling center services | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Total costs and expenses | 40,287 | ||||
CreditEase | Management consulting service | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Total costs and expenses | 669 | 3,000 | |||
CreditEase | Rental of equipment | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Total costs and expenses | 4,384 | 52,606 | |||
CreditEase | Credit assessment service | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Total costs and expenses | 8,022 | 19,025 | 38,203 | ||
CreditEase | System support service | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Total costs and expenses | 164,671 | 179,458 | 657,206 | ||
CreditEase | Collection services | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Total costs and expenses | 421,726 | 296,493 | 327,917 | ||
CreditEase | Customers acquisition and referral services | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Total costs and expenses | ¥ 387,843 | 464,140 | ¥ 1,065,421 | ||
Other related parties | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Amounts due from related parties | 14,522 | 42,887 | |||
Amounts due to related parties | ¥ 26,093 | 52,784 | |||
Haijin Yichuang | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Amounts due to related parties | ¥ 367,134 |
RELATED PARTY BALANCES AND TR_4
RELATED PARTY BALANCES AND TRANSACTIONS (Details 2) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2019 | |
Shenzhen Tengda | ||
Total consideration | ¥ 607,461 | ¥ 144,389 |
Zhuoyue | ||
Purchase of software from related parties | ¥ 12,275 |
RELATED PARTY BALANCES AND TR_5
RELATED PARTY BALANCES AND TRANSACTIONS (Details 3) - CNY (¥) ¥ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | |||
Loans collected from/(issued to) related party | ¥ 104,500 | ¥ 3,016,312 | |
Loans received from/ (repaid to) related party | ¥ 361,500 | 639,250 | (420,559) |
Puxin | |||
Related Party Transaction [Line Items] | |||
Loans collected from/(issued to) related party | 3,238,919 | ||
Zhuoyue | |||
Related Party Transaction [Line Items] | |||
Loans collected from/(issued to) related party | 4,500 | (663,463) | |
Loans received from/ (repaid to) related party | 706,250 | (435,193) | |
Pucheng Credit | |||
Related Party Transaction [Line Items] | |||
Loans collected from/(issued to) related party | 100,000 | 441,667 | |
Loans received from/ (repaid to) related party | 1,000 | (816) | |
Fuan Yida | |||
Related Party Transaction [Line Items] | |||
Loans received from/ (repaid to) related party | ¥ (68,000) | ||
Hengda Hongyuan | |||
Related Party Transaction [Line Items] | |||
Loans received from/ (repaid to) related party | ¥ 361,500 | ||
Other related parties | |||
Related Party Transaction [Line Items] | |||
Loans collected from/(issued to) related party | (811) | ||
Loans received from/ (repaid to) related party | ¥ 15,450 |
RELATED PARTY BALANCES AND TR_6
RELATED PARTY BALANCES AND TRANSACTIONS - Non-competition arrangement (Details) ¥ in Millions | Dec. 31, 2020CNY (¥) |
RELATED PARTY BALANCES AND TRANSACTIONS | |
Non-competition agreement, investable financial assets | ¥ 10 |
SECURED BORROWINGS (Details)
SECURED BORROWINGS (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||
Secured borrowings is included in "Amount due to related parties" | ¥ 361,500 | ¥ 639,250 | ¥ (420,559) |
Yichuang Financial Leasing | |||
Debt Instrument [Line Items] | |||
Principal amount | 862,000 | ||
Creditor's right of certain financial receivables transferred | ¥ 909,000 | ||
Minimum | |||
Debt Instrument [Line Items] | |||
Term of debt | 1 year | ||
Minimum | Yichuang Financial Leasing | |||
Debt Instrument [Line Items] | |||
Remaining lease terms | 1 year | ||
Term of debt | 1 year | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Term of debt | 3 years | ||
Maximum | Yichuang Financial Leasing | |||
Debt Instrument [Line Items] | |||
Remaining lease terms | 3 years | ||
Term of debt | 3 years |
INCOME TAXES (Details)
INCOME TAXES (Details) ¥ in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2020HKD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019 | Dec. 31, 2018 | |
INCOME TAXES | ||||
Effect of different tax rates of subsidiaries operating in other jurisdictions | 25.00% | 25.00% | 25.00% | 25.00% |
Foreign invested enterprise tax withholding rate | 10.00% | 10.00% | ||
Minimum threshold percentage of equity interest in PRC will be entitled to reduced withholding tax rate | 25.00% | 25.00% | ||
Reduced withholding tax rate for qualified tax residents | 5.00% | 5.00% | ||
Increase (Decrease) in income tax expenses | ¥ 1,453 | |||
Taxable income from RMB1 million to RMB3 million | ||||
INCOME TAXES | ||||
Preferential tax rate (as a percent) | 25.00% | 25.00% | ||
Zhuoyue | ||||
INCOME TAXES | ||||
Waiver of net receivables | ¥ 5,147 | |||
Increase (Decrease) in income tax expenses | ¥ 1,287 | |||
Yirendai HK | HONG KONG | Assessable profits up to HK$2 | ||||
INCOME TAXES | ||||
Foreign corporate income tax rate | 8.25% | 8.25% | ||
Base Assessable Profits | $ | $ 2 | |||
Yirendai HK | HONG KONG | Assessable profits over HK$2 | ||||
INCOME TAXES | ||||
Foreign corporate income tax rate | 16.50% | 16.50% | ||
Base Assessable Profits | $ | $ 2 | |||
YouRace Hengchuang | ||||
INCOME TAXES | ||||
Period of full exemption from income tax | 2 years | 2 years | ||
Reduction in preferential tax rate during subsequent three years (as a percent) | 50.00% | 50.00% | ||
Period of 50% reduction to income tax rate | 3 years | 3 years | ||
Preferential tax rate (as a percent) | 15.00% | 15.00% | ||
Heng Yu Da | Taxable income not exceed RMB1 million | ||||
INCOME TAXES | ||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | ||
Yiding Technology [Member] | ||||
INCOME TAXES | ||||
Effect of different tax rates of subsidiaries operating in other jurisdictions | 20.00% | 20.00% | ||
Yi Ren Heng Sheng | ||||
INCOME TAXES | ||||
Period of full exemption from income tax | 2 years | 2 years | ||
Reduction in preferential tax rate during subsequent three years (as a percent) | 50.00% | 50.00% | ||
Period of 50% reduction to income tax rate | 3 years | 3 years |
INCOME TAXES - Schedule of Inco
INCOME TAXES - Schedule of Income Tax Expense (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | ||
INCOME TAXES | |||||
Current tax | ¥ 77,274 | ¥ 370,946 | ¥ (474,874) | ||
Deferred tax | (157,885) | (131,718) | 669,161 | ||
Income tax expenses/ (benefits) | $ (12,354) | ¥ (80,611) | ¥ 239,228 | ¥ 194,287 | [1] |
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of the Statutory Income Tax Rate to Income Tax Expense (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | ||
INCOME TAXES | |||||
Income before provision for income taxes | $ (118,522) | ¥ (773,359) | ¥ 1,397,019 | ¥ 1,783,392 | [1] |
Statutory tax rate in the PRC (as a percent) | 25.00% | 25.00% | 25.00% | 25.00% | |
Income tax expense / (benefit) at statutory tax rate | ¥ (193,340) | ¥ 349,255 | ¥ 445,848 | ||
Non-deductible expenses | 9,126 | 22,077 | 71,387 | ||
Research and development Super deduction | (5,460) | (10,820) | (7,246) | ||
Effect of income not taxable | (12,786) | (192,501) | |||
Effect of tax holiday and preferential tax rate | (178,938) | (126,577) | (93,121) | ||
Adjustment on current income tax of the prior periods | 6 | (384) | 127 | ||
Effect of different tax rates of subsidiaries operating in other jurisdictions | 13,641 | 14,518 | 23,190 | ||
Effect of accrual / reversal of withholding income tax | (20,000) | 8,723 | |||
Debt relief income (ii) | 1,286,791 | ||||
Utilization of tax losses from the prior period (ii) | (1,452,828) | ||||
Change in valuation allowance | 294,354 | 169,982 | (62,120) | ||
Income tax expenses/ (benefits) | $ (12,354) | ¥ (80,611) | ¥ 239,228 | ¥ 194,287 | [1] |
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
INCOME TAXES - Aggregate amount
INCOME TAXES - Aggregate amount and per share effect of the tax holiday and preferential tax rate (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Aggregate amount and per share effect of the tax holiday and preferential tax rate | |||
The aggregate amount of tax holiday and preferential tax rate | ¥ (178,938) | ¥ (126,577) | ¥ (93,121) |
The aggregate effect on basic and diluted net income per share: | |||
- Basic | ¥ (0.9924) | ¥ (0.6834) | ¥ (0.5055) |
- Diluted | ¥ (0.9924) | ¥ (0.6786) | ¥ (0.4999) |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Tax Assets (Details) ¥ in Thousands, $ in Thousands | Jul. 29, 2017 | Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) |
Deferred tax assets: | |||||
Liabilities from quality assurance program and guarantee | ¥ 294 | ¥ 659 | |||
Deferred revenue | 12,725 | 44,804 | |||
Refund liabilities | 1,627 | 95,067 | |||
Accrued expenses and other liabilities | 22,263 | 30,618 | |||
Fair value changes | 18,114 | 11,609 | |||
Allowance for uncollectible receivables | 107,994 | 95,989 | |||
Amortization difference of long-term assets | 19,841 | 28,079 | |||
Accumulated losses carry over | 32,683 | 152,341 | |||
Valuation allowance | (39,516) | (252,660) | |||
Total | 176,025 | 206,506 | |||
Deferred tax liabilities: | |||||
Contract assets, net | 167,949 | 318,543 | |||
Contract cost | 21,110 | 58,882 | |||
Intangible assets | 8,962 | 2,562 | |||
Total | 198,021 | 379,987 | |||
Deferred tax assets | $ 2,566 | 16,745 | 45,407 | ||
Deferred tax liabilities | (5,937) | (38,741) | (218,888) | ||
Net deferred tax liabilities | (21,996) | (173,481) | |||
Operating loss carry forwards | 130,732 | 609,363 | |||
Valuation allowance | 39,516 | 252,660 | |||
Foreign invested enterprise tax withholding rate | 10.00% | ||||
Minimum threshold percentage of equity interest in PRC will be entitled to reduced withholding tax rate | 25.00% | ||||
Reduced withholding tax rate for qualified tax residents | 5.00% | ||||
Percentage of semi annual dividends | 15.00% | ||||
Deferred tax liabilities | $ 5,937 | 38,741 | 218,888 | ||
Undistributed earnings of the company's PRC subsidiaries and the consolidated VIEs | ¥ 3,300,000 | ¥ 5,138,000 | |||
Provision for PRC dividend withholding tax | ¥ 0 | ||||
HONG KONG | |||||
Deferred tax liabilities: | |||||
Withholding tax rate | 10.00% |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) ¥ in Thousands | Jul. 01, 2019$ / sharesshares | Jul. 01, 2018$ / sharesshares | Jul. 01, 2017$ / sharesshares | Jul. 01, 2016$ / sharesshares | Jun. 30, 2020shares | Jun. 30, 2020$ / sharesshares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2020CNY (¥)itemshares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018CNY (¥) | Jul. 31, 2019shares | Jul. 31, 2017shares |
Maximum | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Vesting period | 5 years | |||||||||||
Minimum | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Vesting period | 4 years | |||||||||||
CreditEase and its consolidated subsidiaries and VIEs | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Recognized deemed dividend | ¥ | ¥ 5,312 | ¥ 15,497 | ¥ 50,117 | |||||||||
Employees | General and administrative expenses | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Recognized compensation expenses | ¥ | ¥ 14,173 | ¥ 43,941 | ¥ 119,998 | |||||||||
Directors and employee | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Number of approved grants | item | 6 | |||||||||||
Employee and Non-employee RSUs | ||||||||||||
Number of Restricted Shares | ||||||||||||
Outstanding at beginning of the period (in shares) | 1,918,446 | 1,918,446 | ||||||||||
Granted (in shares) | 2,735,700 | |||||||||||
Vested (in shares) | (1,237,196) | |||||||||||
Forfeited (in shares) | (807,006) | |||||||||||
Outstanding at end of the period (in shares) | 2,609,944 | 1,918,446 | ||||||||||
Weighted-Average Grant-Date Fair Value | ||||||||||||
Unvested at beginning of the period (in dollars per share) | $ / shares | $ 10.96 | $ 10.96 | ||||||||||
Granted (in dollars per share) | $ / shares | 2.04 | |||||||||||
Vested (in dollars per share) | $ / shares | 7.82 | |||||||||||
Forfeited (in dollars per share) | $ / shares | 7.07 | |||||||||||
Unvested at end of the period (in dollars per share) | $ / shares | $ 4.31 | |||||||||||
The 2015 Share Incentive Plan | Employee and Non-employee RSUs | Directors and employee | ||||||||||||
Number of Restricted Shares | ||||||||||||
Granted (in shares) | 1,298,000 | |||||||||||
The 2015 Share Incentive Plan | Employee and Non-employee RSUs | Directors and employee | Group and CreditEase and its consolidated subsidiaries and VIEs | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Ordinary shares were reserved for issuance | 3,939,100 | |||||||||||
Number of authorized shares | 4,034,100 | |||||||||||
Weighted-Average Grant-Date Fair Value | ||||||||||||
Granted (in dollars per share) | $ / shares | $ 7.25 | |||||||||||
The 2015 Share Incentive Plan | Employee and Non-employee RSUs | Directors and employee | CreditEase and its consolidated subsidiaries and VIEs | ||||||||||||
Number of Restricted Shares | ||||||||||||
Granted (in shares) | 2,736,100 | |||||||||||
The 2015 Share Incentive Plan | Employee and Non-employee RSUs | Directors and employee | Tranche One | Group and CreditEase and its consolidated subsidiaries and VIEs | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Approximate percentage of vested shares | 59.90% | |||||||||||
The 2017 Share Incentive Plan | Maximum | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Ordinary shares were reserved for issuance | 6,060,900 | |||||||||||
The 2017 Share Incentive Plan | Employee and Non-employee RSUs | Directors and employee | ||||||||||||
Number of Restricted Shares | ||||||||||||
Granted (in shares) | 43,386 | 1,600,540 | 2,816,702 | |||||||||
The 2017 Share Incentive Plan | Employee and Non-employee RSUs | Directors and employee | Group and CreditEase and its consolidated subsidiaries and VIEs | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Number of authorized shares | 2,488,540 | 3,744,782 | 43,386 | |||||||||
Weighted-Average Grant-Date Fair Value | ||||||||||||
Granted (in dollars per share) | $ / shares | $ 6.92 | $ 10.61 | $ 12.50 | |||||||||
The 2017 Share Incentive Plan | Employee and Non-employee RSUs | Directors and employee | CreditEase and its consolidated subsidiaries and VIEs | ||||||||||||
Number of Restricted Shares | ||||||||||||
Granted (in shares) | 888,000 | 928,080 | ||||||||||
The 2017 Share Incentive Plan | Employee and Non-employee RSUs | Directors and employee | Tranche One | Group and CreditEase and its consolidated subsidiaries and VIEs | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Approximate percentage of vested shares | 20.00% | 31.90% | 34.10% | |||||||||
The 2020 Share Incentive Plan | Maximum | ||||||||||||
SHARE-BASED COMPENSATION | ||||||||||||
Ordinary shares were reserved for issuance | 18,560,000 | 18,560,000 | ||||||||||
The 2020 Share Incentive Plan | Employee and Non-employee RSUs | ||||||||||||
Number of Restricted Shares | ||||||||||||
Granted (in shares) | 2,592,140 | 143,560 | ||||||||||
Weighted-Average Grant-Date Fair Value | ||||||||||||
Granted (in dollars per share) | $ / shares | $ 2.07 | $ 1.67 | ||||||||||
The 2020 Share Incentive Plan | Employee and Non-employee RSUs | Directors and employee | ||||||||||||
Number of Restricted Shares | ||||||||||||
Granted (in shares) | 2,089,724 | 139,912 | ||||||||||
The 2020 Share Incentive Plan | Employee and Non-employee RSUs | Directors and employee | CreditEase and its consolidated subsidiaries and VIEs | ||||||||||||
Number of Restricted Shares | ||||||||||||
Granted (in shares) | 502,416 | 3,648 |
SHARE-BASED COMPENSATION Additi
SHARE-BASED COMPENSATION Additional information (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Employees | |||
Additional information | |||
Unrecognized share-based compensation expenses | ¥ 18,763 | ||
Recording period for unrecognized deemed dividends | 2 years | ||
Employees | CreditEase and its consolidated subsidiaries and VIEs | |||
Additional information | |||
Unrecognized deemed dividend | ¥ 5,462 | ||
Recording period for unrecognized deemed dividends | 2 years | ||
Employee and Non-employee RSUs | |||
Additional information | |||
Fair value of RSUs vested | ¥ 66,797 | ¥ 88,446 | ¥ 125,477 |
SHARE REPURCHASE PROGRAM (Detai
SHARE REPURCHASE PROGRAM (Details) - ADS $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2020CNY (¥)shares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)shares | Jun. 30, 2018USD ($) | |
Authorized amount | $ | $ 20,000 | ||||
Shares repurchased during the year (in ADS shares) | shares | 153,279 | 153,279 | 366,686 | 366,686 | |
Repurchase of shares cost | $ 467 | ¥ 3,050 | $ 5,292 | ¥ 36,843 | |
Average price per share (in dollars per share) | $ / shares | $ 2.92 | $ 14.87 |
NET INCOME_(LOSS) PER SHARE AND
NET INCOME/(LOSS) PER SHARE AND NET (LOSS)/INCOME ATTRIBUTABLE TO ORDINARY SHAREHOLDERS (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | Mar. 25, 2019shares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2020CNY (¥)¥ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | |
Numerator: | ||||||
Net income/(loss) | $ (106,168) | ¥ (692,748) | ¥ 1,155,611 | ¥ 1,579,810 | [1] | |
Denominator: | ||||||
Weighted average number of ordinary shares outstanding, basic | 180,301,898 | 180,301,898 | 185,219,586 | 184,225,643 | [1] | |
Plus incremental weighted average ordinary shares from assumed vesting of RSUs using the treasury stock method(i) | 1,315,878 | 2,044,872 | ||||
Weighted average number of ordinary shares outstanding, diluted | 180,301,898 | 180,301,898 | 186,535,464 | 186,270,515 | [1] | |
Basic net income/(loss) per share | (per share) | $ (0.5888) | ¥ (3.8422) | ¥ 6.2391 | ¥ 8.5754 | [1] | |
Diluted net income/(loss) per share | (per share) | $ (0.5888) | ¥ (3.8422) | ¥ 6.1951 | ¥ 8.4813 | [1] | |
Acquired Businesses | ||||||
Acquired Businesses | ||||||
Number of shares transferred | 61,981,412 | 61,981,412 | ||||
RSUs | ||||||
Denominator: | ||||||
Plus incremental weighted average ordinary shares from assumed vesting of RSUs using the treasury stock method(i) | 592,249 | 592,249 | ||||
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | |
LEASES | ||||
Operating lease cost | ¥ 244,855 | ¥ 283,834 | ||
Short-term lease cost | 808 | 9,724 | ||
Total | 245,663 | 293,558 | ||
Operating cash flows for operating leases | 218,878 | 281,425 | ||
Operating lease expenses | ¥ 63,749 | 157,120 | ||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Right-of-use assets | 334,134 | $ 16,195 | ¥ 105,674 | |
Operating lease liabilities | ¥ 282,334 | $ 12,545 | ¥ 81,854 | |
Operating leases - Weighted average remaining lease term | 1 year 10 months 17 days | 1 year 5 months 19 days | 1 year 5 months 19 days | |
Operating leases - Weighted average discount rate | 4.19% | 3.30% | 3.30% |
LEASES - Operating Lease Liabil
LEASES - Operating Lease Liabilities Payments Due (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) |
Maturity of operating lease liabilities on December 2019 | |||
2020 | ¥ 193,478 | ||
2021 | ¥ 62,414 | 82,128 | |
2022 | 20,947 | 17,944 | |
2023 | 872 | 454 | |
Subtotal | 84,233 | 294,004 | |
Less imputed interest | (2,379) | (11,670) | |
Present value of operating lease liabilities | $ 12,545 | ¥ 81,854 | ¥ 282,334 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) ¥ in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 24, 2019segment | Dec. 31, 2019segment | Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | ||
Segment Reporting Information [Line Items] | |||||||
Number of reportable segments | segment | 1 | 2 | |||||
Net revenue | $ 607,199 | ¥ 3,961,962 | ¥ 8,616,784 | ¥ 11,244,114 | [1] | ||
Other income/(expenses) | (10,348) | (67,521) | 268,990 | 1,007,246 | [1] | ||
Income/(loss) before provision for income taxes | (118,522) | (773,359) | 1,397,019 | 1,783,392 | [1] | ||
Depreciation and amortization | $ 14,065 | 91,772 | 125,850 | 147,992 | [1] | ||
Operating segments | |||||||
Segment Reporting Information [Line Items] | |||||||
Net revenue | 3,961,962 | 8,616,784 | 11,244,114 | ||||
Total segment income/(loss) from operations | (501,249) | 1,507,511 | 1,121,540 | ||||
Other income/(expenses) | (67,521) | 268,990 | 1,007,246 | ||||
Wealth Management Segment | |||||||
Segment Reporting Information [Line Items] | |||||||
Net revenue | 1,432,364 | 2,176,215 | 1,986,960 | ||||
Depreciation and amortization | 1,888 | 2,690 | 3,018 | ||||
Wealth Management Segment | Operating segments | |||||||
Segment Reporting Information [Line Items] | |||||||
Net revenue | 1,432,364 | 2,176,215 | 1,986,960 | ||||
Operating costs and expenses | (760,180) | (915,202) | (1,561,310) | ||||
Total segment income/(loss) from operations | 672,184 | 1,261,013 | 425,650 | ||||
Consumer Credit Segment | |||||||
Segment Reporting Information [Line Items] | |||||||
Net revenue | 2,529,598 | 6,440,569 | 9,257,154 | ||||
Depreciation and amortization | 78,751 | 89,912 | 107,920 | ||||
Consumer Credit Segment | Operating segments | |||||||
Segment Reporting Information [Line Items] | |||||||
Net revenue | 2,529,598 | 6,440,569 | 9,257,154 | ||||
Operating costs and expenses | (3,703,031) | (6,194,071) | (8,561,264) | ||||
Total segment income/(loss) from operations | (1,173,433) | 246,498 | 695,890 | ||||
Unallocated expenses | (204,589) | (379,482) | (345,394) | ||||
Income/(loss) before provision for income taxes | ¥ (773,359) | ¥ 1,397,019 | ¥ 1,783,392 | ||||
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
EMPLOYEE BENEFIT PLAN (Details)
EMPLOYEE BENEFIT PLAN (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
EMPLOYEE BENEFIT PLAN | |||
Contribution for employee benefits | ¥ 233,917 | ¥ 682,006 | ¥ 810,275 |
STATUTORY RESERVES AND RESTRI_2
STATUTORY RESERVES AND RESTRICTED NET ASSETS (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | |||
Required minimum percentage of appropriations | 10.00% | ||
Statutory threshold percentage of the reserve fund to the registered capital of the respective company, above which the appropriation is not required | 50.00% | ||
Appropriations to the enterprise expansion reserve and staff welfare and bonus reserve | ¥ 0 | ¥ 0 | ¥ 0 |
Amount of net assets of the relevant entity in the Group not available for distribution | 7,840,922 | 7,342,556 | |
Statutory reserve fund | ¥ 600,100 | ¥ 499,675 |
SCHEDULE I-CONDENSED BALANCE SH
SCHEDULE I-CONDENSED BALANCE SHEETS (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2020CNY (¥)shares | Jan. 01, 2020CNY (¥) | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018CNY (¥) | [1] | Dec. 31, 2017CNY (¥) | [1] |
Assets: | ||||||||
Cash and cash equivalents | $ 378,530 | ¥ 2,469,909 | ¥ 3,198,086 | ¥ 2,606,939 | ||||
Prepaid expenses and other assets | 42,697 | 278,591 | 1,333,221 | |||||
Amounts due from related parties | 135,480 | 884,006 | 988,853 | |||||
Available-for-sale investments | 26,899 | 175,515 | 460,991 | |||||
Total assets | 1,027,165 | 6,702,253 | 9,644,420 | |||||
Liabilities: | ||||||||
Accrued expenses and other liabilities | 185,275 | 1,208,915 | 2,324,552 | |||||
Total liabilities | 448,213 | 2,924,589 | 5,154,330 | |||||
Equity: | ||||||||
Ordinary shares (US$0.0001 par value; 500,000,000 shares authorized; 186,332,444 and 187,569,640 shares issued as of December 31, 2019 and 2020, respectively; 185,595,072 and 167,965,710 shares outstanding as of December 31, 2019 and 2020, respectively) | 19 | 121 | 121 | |||||
Treasury stock (737,372 and 1,043,930 shares as of December 31, 2019 and 2020, respectively) | (6,153) | (40,147) | (37,097) | |||||
Additional paid-in capital | 775,199 | 5,058,176 | 5,038,691 | |||||
Accumulated other comprehensive income | 2,622 | 17,108 | 21,855 | |||||
Accumulated deficit | (192,735) | (1,257,594) | ¥ (26,054) | (533,480) | ||||
Total equity | 578,952 | 3,777,664 | 4,490,090 | ¥ (363,413) | ¥ (7,889,733) | |||
Total liabilities and equity | $ 1,027,165 | ¥ 6,702,253 | ¥ 9,644,420 | |||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||
Ordinary shares, authorized (in shares) | 500,000,000 | 500,000,000 | 500,000,000 | |||||
Ordinary shares, issued (in shares) | 187,569,640 | 187,569,640 | 186,332,444 | |||||
Ordinary shares, outstanding (in shares) | 167,965,710 | 167,965,710 | 185,595,072 | |||||
Treasury Stock, Shares | 1,043,930 | 1,043,930 | 737,372 | |||||
Reportable Legal Entities | Parent Company | ||||||||
Assets: | ||||||||
Cash and cash equivalents | $ 7,818 | ¥ 51,013 | ¥ 68,438 | |||||
Prepaid expenses and other assets | 355 | 2,319 | 2,639 | |||||
Amounts due from its subsidiaries and the consolidated VIEs | 125,722 | 820,329 | 905,015 | |||||
Amounts due from related parties | 88,205 | 575,537 | ||||||
Available-for-sale investments | 11,339 | 73,990 | 85,129 | |||||
Investments in its subsidiaries and the consolidated VIEs | 346,844 | 2,263,159 | 3,682,743 | |||||
Total assets | 580,283 | 3,786,347 | 4,743,964 | |||||
Liabilities: | ||||||||
Accrued expenses and other liabilities | 1,331 | 8,683 | 6,497 | |||||
Amounts due to its subsidiaries and the consolidated VIEs | ¥ | 200,331 | |||||||
Amounts due to related parties | ¥ | 47,046 | |||||||
Total liabilities | 1,331 | 8,683 | 253,874 | |||||
Equity: | ||||||||
Ordinary shares (US$0.0001 par value; 500,000,000 shares authorized; 186,332,444 and 187,569,640 shares issued as of December 31, 2019 and 2020, respectively; 185,595,072 and 167,965,710 shares outstanding as of December 31, 2019 and 2020, respectively) | 19 | 121 | 121 | |||||
Treasury stock (737,372 and 1,043,930 shares as of December 31, 2019 and 2020, respectively) | (6,153) | (40,147) | (37,097) | |||||
Additional paid-in capital | 775,199 | 5,058,176 | 5,038,691 | |||||
Accumulated other comprehensive income | 2,622 | 17,108 | 21,855 | |||||
Accumulated deficit | (192,735) | (1,257,594) | (533,480) | |||||
Total equity | 578,952 | 3,777,664 | 4,490,090 | |||||
Total liabilities and equity | $ 580,283 | ¥ 3,786,347 | ¥ 4,743,964 | |||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||
Ordinary shares, authorized (in shares) | 500,000,000 | 500,000,000 | 500,000,000 | |||||
Ordinary shares, issued (in shares) | 187,569,640 | 187,569,640 | 186,332,444 | |||||
Ordinary shares, outstanding (in shares) | 167,965,710 | 167,965,710 | 185,595,072 | |||||
Treasury Stock, Shares | 1,043,930 | 1,043,930 | 737,372 | |||||
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
SCHEDULE I-CONDENSED STATEMENTS
SCHEDULE I-CONDENSED STATEMENTS OF OPERATIONS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | ||
SCHEDULE I-CONDENSED STATEMENTS OF OPERATIONS | |||||
Interest income | $ 9,444 | ¥ 61,623 | ¥ 73,367 | ¥ 73,917 | [1] |
Net income/(loss) | (106,168) | (692,748) | 1,155,611 | 1,579,810 | [1] |
Reportable Legal Entities | Parent Company | |||||
SCHEDULE I-CONDENSED STATEMENTS OF OPERATIONS | |||||
Operating expenses | (4,806) | (31,359) | (62,789) | (129,942) | |
Interest income | 102 | 665 | 5,280 | 5,362 | |
Non-operating income, net | 159 | 1,041 | 795 | 761 | |
Share of income/(loss) of its subsidiaries and the consolidated VIEs | (101,623) | (663,095) | 1,212,325 | 1,703,629 | |
Net income/(loss) | $ (106,168) | ¥ (692,748) | ¥ 1,155,611 | ¥ 1,579,810 | |
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
SCHEDULE I-CONDENSED STATEMEN_2
SCHEDULE I-CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | ||
SCHEDULE I-CONDENSED STATEMENTS OF COMPREHENSIVE INCOME | |||||
Net income/(loss) | $ (106,168) | ¥ (692,748) | ¥ 1,155,611 | ¥ 1,579,810 | [1] |
Other comprehensive income/(loss), net of tax of nil: | |||||
Foreign currency translation adjustments | (1,271) | (8,293) | 1,626 | 7,737 | [1] |
Unrealized (losses)/gains on available-for-sale investments | 543 | 3,546 | 3,839 | (2,414) | [1] |
Comprehensive income/(loss) | (106,896) | (697,495) | 1,161,076 | 1,585,133 | [1] |
Other comprehensive (loss)/income, tax | 0 | 0 | 0 | ||
Reportable Legal Entities | Parent Company | |||||
SCHEDULE I-CONDENSED STATEMENTS OF COMPREHENSIVE INCOME | |||||
Net income/(loss) | (106,168) | (692,748) | 1,155,611 | 1,579,810 | |
Other comprehensive income/(loss), net of tax of nil: | |||||
Foreign currency translation adjustments | (1,271) | (8,293) | 1,626 | 7,737 | |
Unrealized (losses)/gains on available-for-sale investments | 543 | 3,546 | 3,839 | (2,414) | |
Comprehensive income/(loss) | $ (106,896) | ¥ (697,495) | ¥ 1,161,076 | ¥ 1,585,133 | |
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |
SCHEDULE I-CONDENSED STATEMEN_3
SCHEDULE I-CONDENSED STATEMENTS OF CASH FLOWS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | ||||
Cash Flows from Operating Activities: | |||||||
Net cash (used in)/provided by operating activities | $ 43,222 | ¥ 282,028 | ¥ 274,168 | ¥ (3,959,094) | [1] | ||
Cash Flows from Investing Activities: | |||||||
Purchase of available-for-sale investments | (64,828) | (423,000) | (653,150) | (1,270,341) | [1] | ||
Proceeds on disposal of available-for-sale investments | 108,300 | 706,655 | 1,050,443 | 1,398,500 | [1] | ||
Net cash provided by/(used in) investing activities | (275,351) | (1,796,663) | 1,110,001 | 3,297,648 | [1] | ||
Cash Flows from Financing Activities: | |||||||
Dividends paid to shareholders | [1] | (106,626) | |||||
Repurchase of ordinary shares | (467) | (3,050) | (36,843) | (254) | [1] | ||
Net cash (used in)/provided by financing activities | 146,429 | 955,448 | (1,149,705) | (788,022) | [1] | ||
Effect of foreign exchange rate changes | (430) | (2,807) | 193 | 3,631 | [1] | ||
Net (decrease) / increase in cash, cash equivalents and restricted cash | (86,130) | (561,994) | 234,657 | (1,445,837) | [1] | ||
Cash, cash equivalents and restricted cash, beginning of year | 501,018 | 3,269,142 | 3,034,485 | [1] | 4,480,322 | [1] | |
Cash, cash equivalents and restricted cash, end of year | 414,888 | 2,707,148 | 3,269,142 | 3,034,485 | [1] | ||
Reportable Legal Entities | Parent Company | |||||||
Cash Flows from Operating Activities: | |||||||
Net cash (used in)/provided by operating activities | (2,053) | (13,393) | (15,001) | (12,170) | |||
Cash Flows from Investing Activities: | |||||||
Amounts due from/to its subsidiaries, the consolidated VIEs and related parties | (1,465) | (9,561) | (13,867) | (6,678) | |||
Redemption of available-for-sale investments | 1,495 | 9,755 | |||||
Purchase of available-for-sale investments | (91,050) | (46,379) | |||||
Proceeds on disposal of available-for-sale investments | 93,343 | ||||||
Net cash provided by/(used in) investing activities | 30 | 194 | (11,574) | (53,057) | |||
Cash Flows from Financing Activities: | |||||||
Dividends paid to shareholders | (106,626) | ||||||
Repurchase of ordinary shares | (467) | (3,050) | (36,843) | (254) | |||
Net cash (used in)/provided by financing activities | (467) | (3,050) | (36,843) | (106,880) | |||
Effect of foreign exchange rate changes | (181) | (1,176) | 322 | 3,423 | |||
Net (decrease) / increase in cash, cash equivalents and restricted cash | (2,671) | (17,425) | (63,096) | (168,684) | |||
Cash, cash equivalents and restricted cash, beginning of year | 10,489 | 68,438 | 131,534 | 300,218 | |||
Cash, cash equivalents and restricted cash, end of year | $ 7,818 | ¥ 51,013 | ¥ 68,438 | ¥ 131,534 | |||
[1] | Retrospectively adjusted to reflect the acquisitions under common control, as discussed in Note 1. |