Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2017shares | |
Entity Registrant Name | LexinFintech Holdings Ltd. |
Entity Central Index Key | 1,708,259 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2017 |
Amendment Flag | false |
Trading Symbol | lx |
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 |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | FY |
Class A Ordinary Shares | |
Entity Common Stock, Shares Outstanding | 217,070,940 |
Class B Ordinary Shares | |
Entity Common Stock, Shares Outstanding | 110,647,199 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) |
Current assets | |||
Cash and cash equivalents | $ 173,136 | ¥ 1,126,475 | ¥ 479,605 |
Restricted cash | 86,366 | 561,922 | 172,870 |
Restricted time deposits | 1,037 | 6,750 | 8,000 |
Short-term financing receivables, net | 1,515,025 | 9,857,209 | 6,470,898 |
Accrued interest receivable | 19,923 | 129,622 | 73,148 |
Prepaid expenses and other current assets | 145,283 | 945,258 | 219,981 |
Amounts due from related parties | 1,452 | 9,447 | 11,742 |
Inventories, net | 15,624 | 101,653 | 107,704 |
Total current assets | 1,957,846 | 12,738,336 | 7,543,948 |
Non-current assets | |||
Restricted cash | 7,207 | 46,889 | |
Restricted time deposits | 92 | 600 | 1,000 |
Long-term financing receivables, net | 274,356 | 1,785,045 | 1,066,148 |
Property, equipment and software, net | 9,702 | 63,125 | 41,747 |
Long-term investments | 3,610 | 23,485 | 24,887 |
Deferred tax assets | 5,970 | 38,841 | 42,405 |
Other assets | 5,112 | 33,263 | |
Total non-current assets | 306,049 | 1,991,248 | 1,176,187 |
TOTAL ASSETS | 2,263,895 | 14,729,584 | 8,720,135 |
Current liabilities | |||
Accounts payable (including amounts of the consolidated VIEs of RMB72,703 and RMB158,692 as of December 31, 2016 and 2017, respectively) | 30,459 | 198,177 | 72,703 |
Amounts due to related parties (including amounts of the consolidated VIEs of RMB397,023 and RMB1,913,601 as of December 31, 2016 and 2017, respectively) | 10,376 | 67,510 | 137,782 |
Short term borrowings (including amounts of the consolidated VIEs of RMB70,036 and RMB168,844 as of December 31, 2016 and 2017, respectively) | 25,951 | 168,844 | 70,036 |
Short term funding debts (including amounts of the consolidated VIEs of RMB6,968,488 and RMB10,525,134 as of December 31, 2016 and 2017, respectively) | 1,617,683 | 10,525,134 | 6,968,488 |
Accrued interest payable (including amounts of the consolidated VIEs of RMB133,993 and RMB290,446 as of December 31, 2016 and 2017, respectively) | 44,641 | 290,446 | 133,993 |
Accrued expenses and other current liabilities (including amounts of the consolidated VIEs of RMB593,298 and RMB1,506,805 as of December 31, 2016 and 2017, respectively) | 247,611 | 1,611,029 | 602,259 |
Total current liabilities | 1,976,721 | 12,861,140 | 7,985,261 |
Non-current liabilities | |||
Long term funding debts (including amounts of the consolidated VIEs of RMB21,014 and RMB166,629 as of December 31, 2016 and 2017, respectively) | 25,610 | 166,629 | 21,014 |
Long term borrowings (including amounts of the consolidated VIEs of RMB1,762 and RMB289 as of December 31, 2016 and 2017, respectively) | 44 | 289 | 1,762 |
Convertible loans (including amounts of the consolidated VIEs of RMB587,092 and nil as of December 31, 2016 and 2017, respectively) | 698,179 | ||
Total non-current liabilities | 25,654 | 166,918 | 720,955 |
TOTAL LIABILITIES | 2,002,375 | 13,028,058 | 8,706,216 |
Commitments and contingencies (Note 22) | |||
MEZZANINE EQUITY (Note 15) | |||
TOTAL MEZZANINE EQUITY | 625,570 | ||
SHAREHOLDERS' (DEFICIT)/EQUITY: | |||
Additional paid-in capital | 324,448 | 2,110,957 | |
Statutory reserves | 8,586 | 55,861 | 2,003 |
Accumulated other comprehensive income/(loss) | (2,298) | (14,951) | 16,942 |
Accumulated deficit | (69,248) | (450,551) | (630,664) |
TOTAL SHAREHOLDERS' (DEFICIT)/EQUITY | 261,520 | 1,701,526 | (611,651) |
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' (DEFICIT)/EQUITY | 2,263,895 | 14,729,584 | 8,720,135 |
Pre-IPO Series A-1 convertible redeemable preferred shares | |||
MEZZANINE EQUITY (Note 15) | |||
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount | 14,485 | ||
Pre-IPO Class B ordinary shares | |||
MEZZANINE EQUITY (Note 15) | |||
Redeemable Noncontrolling Interest, Equity, Common, Carrying Amount | 1,319 | ||
Pre-IPO Series A-2 convertible redeemable preferred shares | |||
MEZZANINE EQUITY (Note 15) | |||
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount | 41,810 | ||
Pre-IPO Series B-1 convertible redeemable preferred shares | |||
MEZZANINE EQUITY (Note 15) | |||
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount | 29,970 | ||
Pre-IPO Series B-2 convertible redeemable preferred shares | |||
MEZZANINE EQUITY (Note 15) | |||
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount | 537,986 | ||
Pre-IPO Class A Ordinary Shares | |||
SHAREHOLDERS' (DEFICIT)/EQUITY: | |||
Ordinary shares | ¥ 68 | ||
Class A Ordinary Shares | |||
SHAREHOLDERS' (DEFICIT)/EQUITY: | |||
Ordinary shares | 22 | 142 | |
Class B Ordinary Shares | |||
SHAREHOLDERS' (DEFICIT)/EQUITY: | |||
Ordinary shares | $ 10 | ¥ 68 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2016CNY (¥)shares |
Current liabilities | ||
Accounts payable, current | ¥ 198,177 | ¥ 72,703 |
Amounts due to related parties | 67,510 | 137,782 |
Short-term borrowings | 168,844 | 70,036 |
Short-term Funding Debts | 10,525,134 | 6,968,488 |
Accrued interest payable | 290,446 | 133,993 |
Accrued expenses and other current liabilities | 1,611,029 | 602,259 |
Non-current liabilities | ||
Long-term Funding Debts | 166,629 | 21,014 |
Long-term borrowings | ¥ 289 | 1,762 |
Convertible loans | ¥ | ¥ 698,179 | |
Pre-IPO Series A-1 convertible redeemable preferred shares | ||
Non-current liabilities | ||
Convertible redeemable shares, shares authorized | 0 | 38,602,941 |
Convertible redeemable shares, shares issued | 0 | 38,602,941 |
Convertible redeemable shares, shares outstanding | 0 | 38,602,941 |
Convertible redeemable shares redemption value | ¥ | ¥ 7,792 | |
Pre-IPO Class B ordinary shares | ||
Non-current liabilities | ||
Convertible redeemable shares, shares authorized | 0 | 7,350,000 |
Convertible redeemable shares, shares issued | 0 | 7,350,000 |
Convertible redeemable shares, shares outstanding | 0 | 7,350,000 |
Convertible redeemable shares redemption value | ¥ | ¥ 1,443 | |
Pre-IPO Series A-2 convertible redeemable preferred shares | ||
Non-current liabilities | ||
Convertible redeemable shares, shares authorized | 0 | 39,390,757 |
Convertible redeemable shares, shares issued | 0 | 39,390,757 |
Convertible redeemable shares, shares outstanding | 0 | 39,390,757 |
Convertible redeemable shares redemption value | ¥ | ¥ 46,712 | |
Pre-IPO Series B-1 convertible redeemable preferred shares | ||
Non-current liabilities | ||
Convertible redeemable shares, shares authorized | 0 | 4,119,294 |
Convertible redeemable shares, shares issued | 0 | 4,119,294 |
Convertible redeemable shares, shares outstanding | 0 | 4,119,294 |
Convertible redeemable shares redemption value | ¥ | ¥ 34,633 | |
Pre-IPO Series B-2 convertible redeemable preferred shares | ||
Non-current liabilities | ||
Convertible redeemable shares, shares authorized | 0 | 69,152,661 |
Convertible redeemable shares, shares issued | 0 | 63,775,246 |
Convertible redeemable shares, shares outstanding | 0 | 63,775,246 |
Convertible redeemable shares redemption value | ¥ | ¥ 601,272 | |
Pre-IPO Series C convertible redeemable preferred shares | ||
Non-current liabilities | ||
Convertible redeemable shares, shares authorized | 0 | 53,774,149 |
Convertible redeemable shares, shares issued | 0 | 2 |
Convertible redeemable shares, shares outstanding | 0 | 2 |
Convertible redeemable shares redemption value | ¥ | ¥ 0 | |
Pre-IPO Class A Ordinary Shares | ||
Non-current liabilities | ||
Common stock, shares authorized | 0 | 287,610,198 |
Common stock, shares issued | 0 | 110,647,199 |
Common stock, shares outstanding | 0 | 110,647,199 |
Class A Ordinary Shares | ||
Non-current liabilities | ||
Common stock, shares authorized | 1,889,352,801 | 0 |
Common stock, shares issued | 217,070,940 | 0 |
Common stock, shares outstanding | 217,070,940 | 0 |
Class B Ordinary Shares | ||
Non-current liabilities | ||
Common stock, shares authorized | 110,647,199 | 0 |
Common stock, shares issued | 110,647,199 | 0 |
Common stock, shares outstanding | 110,647,199 | 0 |
VIEs | ||
Current liabilities | ||
Accounts payable, current | ¥ | ¥ 158,692 | ¥ 72,703 |
Amounts due to related parties | ¥ | 1,913,601 | 397,023 |
Short-term borrowings | ¥ | 168,844 | 70,036 |
Short-term Funding Debts | ¥ | 10,525,134 | 6,968,488 |
Accrued interest payable | ¥ | 290,446 | 133,993 |
Accrued expenses and other current liabilities | ¥ | 1,506,805 | 593,298 |
Non-current liabilities | ||
Long-term Funding Debts | ¥ | 166,629 | 21,014 |
Long-term borrowings | ¥ | 289 | 1,762 |
Convertible loans | ¥ | ¥ 0 | ¥ 587,092 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | Dec. 31, 2015CNY (¥)¥ / sharesshares | |
Operating revenue: | ||||
Online direct sales | $ 389,620 | ¥ 2,534,983 | ¥ 2,770,634 | ¥ 2,164,393 |
Services and others | 4,911 | 31,950 | 5,060 | |
Online direct sales and services income | 394,531 | 2,566,933 | 2,775,694 | 2,164,393 |
Interest and financial services income | 375,599 | 2,443,761 | 1,373,559 | 325,601 |
Loan facilitation and servicing fees | 58,235 | 378,892 | 54,201 | 661 |
Other revenue | 29,603 | 192,603 | 135,232 | 34,287 |
Financial services income | 463,437 | 3,015,256 | 1,562,992 | 360,549 |
Total operating revenue | 857,968 | 5,582,189 | 4,338,686 | 2,524,942 |
Operating cost: | ||||
Cost of sales (including cost of goods purchased from a related party of RMB745,412, RMB658,898 and RMB530,605 for the years ended December 31, 2015, 2016 and 2017, respectively) | (404,860) | (2,634,142) | (2,894,025) | (2,309,586) |
Funding cost | (121,754) | (792,170) | (491,695) | (168,470) |
Processing and servicing cost | (34,415) | (223,916) | (114,323) | (51,057) |
Provision for credit losses | (94,043) | (611,869) | (236,611) | (68,287) |
Total operating cost | (655,072) | (4,262,097) | (3,736,654) | (2,597,400) |
Gross profit | 202,896 | 1,320,092 | 602,032 | (72,458) |
Operating expenses: | ||||
Sales and marketing expenses | (62,325) | (405,505) | (376,313) | (243,463) |
Research and development expenses | (36,164) | (235,292) | (127,317) | (40,441) |
General and administrative expenses | (31,298) | (203,635) | (87,364) | (40,962) |
Total operating expenses | (129,787) | (844,432) | (590,994) | (324,866) |
Interest expense, net | (11,607) | (75,517) | (48,343) | (1,930) |
Investment related impairment | (143) | (932) | (5,635) | |
Change in fair value of financial guarantee derivatives | 7,278 | 47,355 | (5,942) | |
Others, net | 4,306 | 28,013 | (10,799) | 126 |
(Loss)/income before income tax expense | 72,943 | 474,579 | (59,681) | (399,128) |
Income tax benefit/(expense) | (36,000) | (234,227) | (58,258) | 88,934 |
Net (loss)/income | 36,943 | 240,352 | (117,939) | (310,194) |
Pre-IPO Preferred shares redemption value accretion | (12,621) | (82,117) | (62,299) | (51,524) |
Income allocation to participating preferred shares | (20,325) | (132,241) | ||
Deemed dividend to a preferred shareholder | ¥ | (42,679) | |||
Net (loss)/income attributable to ordinary shareholders | $ 3,997 | ¥ 25,994 | ¥ (222,917) | ¥ (361,718) |
Net (loss)/income per ordinary share/ADS | ||||
Basic (per share) | ¥ / shares | ¥ 0.23 | ¥ (2.01) | ¥ (3.27) | |
Diluted (per share) | ¥ / shares | ¥ 0.18 | ¥ (2.01) | ¥ (3.27) | |
Weighted average number of ordinary shares outstanding | ||||
Basic (in shares) | shares | 113,620,774 | 113,620,774 | 110,647,199 | 110,647,199 |
Diluted (in shares) | shares | 140,852,401 | 140,852,401 | 110,647,199 | 110,647,199 |
Share-based compensation expenses included in: | ||||
Share-based compensation expenses | ¥ | ¥ 75,736 | ¥ 23,999 | ¥ 14,488 | |
Processing and servicing cost | ||||
Share-based compensation expenses included in: | ||||
Share-based compensation expenses | $ 909 | 5,916 | 1,067 | 472 |
Sales and marketing expenses | ||||
Share-based compensation expenses included in: | ||||
Share-based compensation expenses | 1,016 | 6,611 | 4,009 | 3,194 |
Research and development expenses | ||||
Share-based compensation expenses included in: | ||||
Share-based compensation expenses | 2,627 | 17,089 | 9,068 | 3,736 |
General and administrative expenses | ||||
Share-based compensation expenses included in: | ||||
Share-based compensation expenses | $ 7,088 | ¥ 46,120 | ¥ 9,855 | ¥ 7,086 |
Ordinary shares | ||||
Net (loss)/income per ordinary share/ADS | ||||
Basic (per share) | (per share) | $ 0.04 | ¥ 0.23 | ¥ (2.01) | ¥ (3.27) |
Diluted (per share) | (per share) | 0.03 | 0.18 | ¥ (2.01) | ¥ (3.27) |
ADS | ||||
Net (loss)/income per ordinary share/ADS | ||||
Basic (per share) | (per share) | 0.07 | 0.46 | ||
Diluted (per share) | (per share) | $ 0.06 | ¥ 0.37 |
CONSOLIDATED STATEMENTS OF OPE5
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
Cost of goods purchased from a related party | ¥ 530,605 | ¥ 658,898 | ¥ 745,412 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME | ||||
Net (loss)/income | $ 36,943 | ¥ 240,352 | ¥ (117,939) | ¥ (310,194) |
Other comprehensive income/(loss): | ||||
Foreign currency translation adjustments, net of nil tax | (4,902) | (31,893) | 1,908 | 15,422 |
Total comprehensive (loss)/income | $ 32,041 | ¥ 208,459 | ¥ (116,031) | ¥ (294,772) |
CONSOLIDATED STATEMENTS OF COM7
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME | |||
Foreign currency translation adjustments, tax | ¥ 0 | ¥ 0 | ¥ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT ¥ in Thousands, $ in Thousands | Class A Ordinary SharesOrdinary sharesCNY (¥)shares | Class A Ordinary SharesCNY (¥)shares | Class B Ordinary SharesOrdinary sharesCNY (¥)shares | Class B Ordinary Sharesshares | Additional Paid in CapitalCNY (¥) | Statutory ReservesCNY (¥) | Accumulated Other Comprehensive Income/(Loss)CNY (¥) | Accumulated DeficitCNY (¥) | USD ($) | CNY (¥) |
Balances at beginning of the year (Pre-IPO) at Dec. 31, 2014 | ¥ 68 | |||||||||
Balances at beginning of the year at Dec. 31, 2014 | ¥ 2 | ¥ (388) | ¥ (76,609) | ¥ (76,927) | ||||||
Balances at beginning of the year (in shares) (Pre-IPO) at Dec. 31, 2014 | shares | 110,647,199 | |||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Net (loss)/income | (310,194) | (310,194) | ||||||||
Share-based compensation expenses | ¥ 14,488 | 14,488 | ||||||||
Repurchase of vested options | (5,906) | (5,906) | ||||||||
Preferred shares redemption value accretion | (8,582) | (42,942) | (51,524) | |||||||
Appropriation to statutory reserves | 101 | (101) | ||||||||
Foreign currency translation adjustments, net of nil tax | 15,422 | 15,422 | ||||||||
Balances at end of the year (Pre-IPO) at Dec. 31, 2015 | ¥ 68 | |||||||||
Balances at end of the year at Dec. 31, 2015 | 103 | 15,034 | (429,846) | (414,641) | ||||||
Balances at end of the year (in shares) (Pre-IPO) at Dec. 31, 2015 | shares | 110,647,199 | |||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Net (loss)/income | (117,939) | (117,939) | ||||||||
Share-based compensation expenses | 23,999 | 23,999 | ||||||||
Preferred shares redemption value accretion | (23,999) | (38,300) | (62,299) | |||||||
Deemed dividend to a preferred shareholder | (42,679) | (42,679) | ||||||||
Appropriation to statutory reserves | 1,900 | (1,900) | ||||||||
Foreign currency translation adjustments, net of nil tax | 1,908 | 1,908 | ||||||||
Balances at end of the year (Pre-IPO) at Dec. 31, 2016 | ¥ 68 | |||||||||
Balances at end of the year at Dec. 31, 2016 | 2,003 | 16,942 | (630,664) | (611,651) | ||||||
Balances at end of the year (in shares) (Pre-IPO) at Dec. 31, 2016 | shares | 110,647,199 | |||||||||
Balances at end of the year (in shares) at Dec. 31, 2016 | shares | 0 | 0 | ||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Net (loss)/income | 240,352 | $ 36,943 | 240,352 | |||||||
Share issuance upon the initial public offering, net of issuance costs | ¥ 16 | 612,835 | 612,851 | |||||||
Share issuance upon the initial public offering, net of issuance costs (in shares) | shares | 24,000,000 | |||||||||
Share issuance upon the conversion and redesignation of Pre-IPO Preferred Shares into class A Ordinary Shares | ¥ 126 | 1,498,122 | 230,277 | 1,498,248 | ||||||
Share issuance upon the conversion and redesignation of Pre-IPO Preferred Shares into class A Ordinary Shares (in shares) | shares | 193,070,940 | |||||||||
Share issuance upon the redesignation of Pre-IPO Class A Ordinary Shares into Class B Ordinary Shares | Pre-IPO | ¥ (68) | |||||||||
Share issuance upon the redesignation of Pre-IPO Class A Ordinary Shares into Class B Ordinary Shares | ¥ 68 | |||||||||
Share issuance upon the redesignation of Pre-IPO Class A Ordinary Shares into Class B Ordinary Shares (in shares) | Pre-IPO | shares | (110,647,199) | |||||||||
Share issuance upon the redesignation of Pre-IPO Class A Ordinary Shares into Class B Ordinary Shares (in shares) | shares | 110,647,199 | |||||||||
Share-based compensation expenses | 75,736 | 75,736 | ||||||||
Preferred shares redemption value accretion | (75,736) | (6,381) | (82,117) | |||||||
Appropriation to statutory reserves | 53,858 | (53,858) | ||||||||
Foreign currency translation adjustments, net of nil tax | (31,893) | (4,902) | (31,893) | |||||||
Balances at end of the year at Dec. 31, 2017 | ¥ 142 | ¥ 68 | ¥ 2,110,957 | ¥ 55,861 | ¥ (14,951) | ¥ (450,551) | $ 261,520 | ¥ 1,701,526 | ||
Balances at end of the year (in shares) at Dec. 31, 2017 | shares | 217,070,940 | 217,070,940 | 110,647,199 | 110,647,199 |
CONSOLIDATED STATEMENTS OF CHA9
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT | |||
Foreign currency translation adjustments, tax | ¥ 0 | ¥ 0 | ¥ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Cash flows from operating activities: | ||||
Net (loss)/income | $ 36,943 | ¥ 240,352 | ¥ (117,939) | ¥ (310,194) |
Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities: | ||||
Accrued convertible loans interest expense | 10,339 | 67,270 | 45,268 | |
Amortization of debt issuance cost | 707 | 4,597 | 10,880 | |
Change in fair value of servicing rights | 1,958 | 12,741 | 3,535 | (521) |
Share-based compensation expenses | 11,640 | 75,736 | 23,999 | 14,488 |
Depreciation and amortization | 2,899 | 18,859 | 4,586 | 1,388 |
Provision for credit losses | 94,043 | 611,869 | 236,611 | 68,287 |
Inventory write-downs | 271 | 1,764 | 1,688 | 2,321 |
Change in fair value of financial guarantee derivatives | (7,278) | (47,355) | 5,942 | |
Deferred income tax | 548 | 3,564 | 47,054 | (89,459) |
Investment related impairment | 143 | 932 | 5,635 | |
Share of results of an equity investee | 312 | 2,028 | 1,640 | |
Foreign exchange gain | (321) | (2,090) | ||
Changes in operating assets and liabilities: | ||||
Financing receivables related to online direct sales | 35,633 | 231,840 | (253,660) | (1,312,503) |
Accrued interest receivable | (8,680) | (56,474) | (47,628) | (21,850) |
Prepaid expenses and other current assets | (26,594) | (173,026) | (8,356) | (209,898) |
Amounts due from related parties | 265 | 1,726 | 1,487 | 33,800 |
Inventories | 659 | 4,287 | (65,097) | (33,265) |
Other assets | (5,112) | (33,263) | ||
Accounts payable | 19,285 | 125,474 | 41,942 | 30,641 |
Amounts due to related parties | (14,232) | (92,597) | (84,411) | 177,018 |
Accrued interest payable | 24,046 | 156,453 | 66,831 | 64,263 |
Accrued expenses and other current liabilities | 78,023 | 507,638 | 459,832 | 100,378 |
Net cash (used in)/provided by operating activities | 255,497 | 1,662,325 | 379,839 | (1,485,106) |
Cash flows from investing activities: | ||||
Cash paid on long-term investments | (435) | (2,832) | (13,333) | (11,132) |
Purchases of property, equipment and software | (5,817) | (37,844) | (32,147) | (10,418) |
Financing receivables originated (excluding receivables related to online direct sales) | (3,689,119) | (24,002,518) | (12,004,213) | (3,252,366) |
Principal collection on financing receivables and recoveries (excluding receivables related to online direct sales) | 2,928,485 | 19,053,601 | 7,702,963 | 1,651,028 |
Changes in restricted cash | (67,003) | (435,941) | (146,540) | (25,947) |
Placement of restricted time deposits | (1,668) | (10,850) | (9,000) | |
Withdrawal of restricted time deposits | 1,921 | 12,500 | 61,190 | |
Net cash used in investing activities | (833,636) | (5,423,884) | (4,502,270) | (1,587,645) |
Cash flows from financing activities: | ||||
Proceeds from financial institution borrowings | 35,658 | 232,000 | 80,000 | |
Principal payments on financial institution borrowings | (20,437) | (132,969) | (8,202) | (55,300) |
Proceeds from Funding Debts | 2,798,030 | 18,204,825 | 15,432,174 | 5,752,255 |
Principal payments on Funding Debts | (2,234,998) | (14,541,577) | (11,589,727) | (2,864,683) |
Proceeds from issuances of convertible loans | 654,680 | |||
Payment of debt issuance cost | (261) | (1,696) | (21,055) | (3,648) |
Proceeds from issuance of Pre-IPO Preferred Shares | 203,240 | |||
Proceeds from initial public offering, net of issuance costs | 100,095 | 651,250 | ||
Proceeds from receivables from Pre-IPO Series C-1 preferred shareholders | 7,650 | 49,775 | ||
Repayment of liabilities to Pre-IPO Series C-1 preferred shareholders | (7,685) | (50,000) | ||
Repurchase of Pre-IPO Preferred Shares | (87,923) | |||
Net cash provided by financing activities | 678,052 | 4,411,608 | 4,459,947 | 3,031,864 |
Effect of exchange rate changes on cash and cash equivalents | (491) | (3,179) | 6,718 | 14,674 |
Net (decrease)/increase in cash and cash equivalents | 99,422 | 646,870 | 344,234 | (26,213) |
Cash and cash equivalents at beginning of the year | 73,714 | 479,605 | 135,371 | 161,584 |
Cash and cash equivalents at end of the year | 173,136 | 1,126,475 | 479,605 | 135,371 |
Supplemental disclosure of cash flows information | ||||
Cash paid for interest expense | 704 | 4,580 | 1,132 | 3,366 |
Cash paid for income tax expense | 8,903 | 57,924 | ||
Non-cash financing activities | ||||
Pre-IPO Preferred Shares redemption value accretion | 12,621 | 82,117 | ¥ 62,299 | ¥ 51,524 |
Conversion of convertible loans into Pre-IPO Preferred Shares | 117,533 | 764,703 | ||
Conversion and redesignation of Pre-IPO Preferred Shares into Class A Ordinary Shares | $ 230,277 | ¥ 1,498,248 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2017 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES LexinFintech Holdings Ltd. (“Lexin” or the “Company”), formerly known as Staging Finance Holding Ltd., was incorporated in the Cayman Islands on November 22, 2013. The Company is a holding company and conducts its business mainly through its subsidiaries, variable interest entities (“VIEs”) and subsidiaries of the VIEs (collectively referred to as the “Group”). The Group offers online direct sales with installment payment terms and offers installment purchase loans and personal installment loans mainly through its retail and online consumer finance platform (“Platform”), www.fenqile.com , and its mobile application (“APP”) to young adults typically between the age of 18 and 36 (“Customers”) in the People’s Republic of China (“PRC”). The Group addresses its Customers’ credit needs by offering installment purchase loans and personal installment loans (collectively referred to as the “Loans”). Installment purchase loans are loans offered to Customers who want to finance their online direct purchase from the Platform with general terms of between one month and thirty-six months. Personal installment loans are loans provided to Customers who have consumption needs (other than purchase from the Platform) with terms generally ranging from one month to thirty-six months. The Group primarily finances the Loans to Customers through its own online investment platform, www.juzilicai.com and its APP, by offering various investment programs that are backed by the Loans to individual investors (“Individual Investors”). The Group also finances the Loans with proceeds from commercial banks, consumer finance companies, other licensed financial institutions and partnering peer-to-peer lending platforms (collectively “Institutional Funding Partners”). As of December 31, 2017, the Company’s principal subsidiaries, consolidated VIEs and subsidiaries of VIEs are as follows: Date of Place of Percentage of Principal Activities Subsidiaries Installment (HK) Investment Limited (“Installment HK”) December 9, 2013 Hong Kong, PRC % Investment holding Beijing Shijitong Technology Co., Ltd.(“Beijing Shijitong”) July 1, 2014 Beijing, PRC % Technical support and consulting services Shenzhen Lexin Software Technology Co., Ltd.(“Shenzhen Lexin Software”) March 1, 2017 Shenzhen, PRC % Software development VIEs Beijing Lejiaxin Network Technology Co., Ltd.(“Beijing Lejiaxin”) October 25, 2013 Beijing, PRC % Investment holding Shenzhen Xinjie Investment Co., Ltd.(“Shenzhen Xinjie”) December 22, 2015 Shenzhen, PRC % Investment holding Shenzhen Qianhai Dingsheng Asset Management Co., Ltd. (“Qianhai Dingsheng”) January 13, 2016 Shenzhen, PRC % Financial technology services Subsidiaries of the VIEs Shenzhen Fenqile Network Technology Co., Ltd.(“Shenzhen Fenqile”) August 15, 2013 Shenzhen, PRC % Online direct sales and online consumer finance Shenzhen Qianhai Juzi Information Technology Co., Ltd.(“Qianhai Juzi”) June 26, 2014 Shenzhen, PRC % Online investment platform Shenzhen Tiqianle Network Technology Co., Ltd.(“Shenzhen Tiqianle”) January 13, 2016 Shenzhen, PRC % Online direct sales and online consumer finance Shenzhen Mengtian Technology Co., Ltd. (“Shenzhen Mengtian”) August 9, 2016 Shenzhen, PRC % Software development Ji’an Fenqile Network Microcredit Co., Ltd.(“Ji’an Microcredit”) December 2, 2016 Ji’an, PRC % Online consumer credit Shenzhen Fenqile Trading Co., Ltd.(“Shenzhen Fenqile Trading”) December 30, 2016 Shenzhen, PRC % Online direct sales Shenzhen Dingsheng Computer Technology Co., Ltd.(“Shenzhen Dingsheng Technology”) March 23, 2017 Shenzhen, PRC % Financial technology services Shenzhen Lexin Financing Guarantee Co., Ltd.(“Shenzhen Lexin Financing Guarantee”) September 14, 2017 Shenzhen, PRC % Financing guarantee services History of the Group and Basis of Presentation The Group commenced operations through Shenzhen Fenqile, a PRC company incorporated in August 2013 that offers online direct sales with installment payment terms, installment purchase loans and personal installment loans. The equity interests of Shenzhen Fenqile were held by Mr. Jay Wenjie Xiao, the Group’s founder, Chief Executive Officer and chairman of board of directors (the “Founding Shareholder”), and two angel investors, Mr. Richard Qiangdong Liu and Tibet Xianfeng Huaxing Changqing Investment Co. Ltd. (“Tibet Xianfeng Huaxing”), prior to July 2014. In October 2013, Beijing Lejiaxin was incorporated as an investment holding company in the PRC. The equity interests of Beijing Lejiaxin were held by the Founding Shareholder and Mr. Richard Qiangdong Liu. Beijing Lejiaxin established its wholly owned subsidiary Qianhai Juzi in June 2014 in order to launch the Group’s online investment platform Juzi Licai , which offers investment programs to the Individual Investors. 2014 Reorganization In order to facilitate international financing for the Company, the Group underwent a reorganization (the “2014 Reorganization”) from November 2013 to July 2014. In November 2013, the Company was incorporated under the Laws of the Cayman Islands to be an offshore holding company for the Group. In December 2013, Installment HK was incorporated in Hong Kong as a wholly owned subsidiary of the Company. In July 2014, Beijing Shijitong was incorporated as a wholly owned subsidiary of Installment HK in the PRC. To comply with PRC laws and regulations which prohibit or restrict foreign ownership of Internet content, the Company obtained control over Shenzhen Fenqile and Beijing Lejiaxin through Beijing Shijitong by entering into a series of contractual arrangements with Shenzhen Fenqile, Beijing Lejiaxin and their shareholders in July 2014. These contractual arrangements include exclusive option agreements, power of attorney, exclusive business cooperation agreements, and equity pledge agreements. As a result of the 2014 Reorganization, Shenzhen Fenqile and Beijing Lejiaxin became the consolidated VIEs of the Group through the contractual arrangements described in Note 2. The Founding Shareholder, Tibet Xianfeng Huaxing, and Mr. Richard Qiangdong Liu are collectively referred to as the nominee shareholders (“Nominee Shareholders”). The Nominee Shareholders are legal owners of an entity; however, the rights of the shareholders have been transferred to the Company through contractual arrangements. Concurrently with the 2014 Reorganization, the Company completed its Pre-IPO Class B Ordinary Shares, Pre-IPO Series A-1 Preferred Shares and Pre-IPO Series A-2 Preferred Shares financing. The 2014 Reorganization was accounted for as a reorganization and the historical financial statements were presented on a carryover basis. 2016 Reorganization In December 2015, Shenzhen Xinjie was incorporated by the Founding Shareholder as an investment holding company in the PRC. In March 2016, Shenzhen Xinjie acquired 73.33% equity interests of Shenzhen Fenqile by investing additional capital in Shenzhen Fenqile to better structure the Group, and the remaining equity interests were still held by the same Nominee Shareholders (the “2016 Reorganization”). In January 2016, Shenzhen Xinjie established a subsidiary Shenzhen Tiqianle to offer online direct sales and online consumer finance services. In January 2016, Qianhai Dingsheng was incorporated by the Founding Shareholder (90%) and Shenzhen Xinjie (10%) to conduct financial technology services business. The Company obtained control over Shenzhen Xinjie and Qianhai Dingsheng through Beijing Shijitong in December 2015 and January 2016 respectively by entering into a series contractual arrangements with Shenzhen Xinjie, Qianhai Dingsheng and the Founding Shareholder. These contractual arrangements include exclusive option agreements, power of attorney, exclusive business cooperation agreements, and equity pledge agreements. As a result of the 2016 Reorganization, Shenzhen Xinjie and Qianhai Dingsheng became the consolidated VIEs of the Group through the contractual arrangements described in Note 2 and the Company’s ability to control Shenzhen Fenqile remains unchanged. Shenzhen Fenqile then became one of the subsidiaries of Shenzhen Xinjie. All the entities involved in the 2016 Reorganization were under common control and therefore the historical financial statements were presented on a carryover basis. In December 2016, Ji’an Microcredit and Shenzhen Fenqile Trading were incorporated by Shenzhen Fenqile. The two entities started to carry out online consumer credit businesses and online direct sales businesses respectively since early 2017. In March 2017, Shenzhen Lexin Software was incorporated by Installment HK to conduct software development businesses. Subsequently in March 2017, the Founding Shareholder transferred 90% equity interests of Qianhai Dingsheng to two employees as the Nominee Shareholders and the remaining 10% equity interests were still held by Shenzhen Xinjie. In April 2017, Beijing Shijitong granted a loan with a total principal of RMB10.0 million to these two Nominee Shareholders and Shenzhen Xinjie. In May 2017, Beijing Shijitong granted another loan with a total principal of RMB1.0 million to the Nominee Shareholders of Shenzhen Xinjie. The two loans granted by Beijing Shijitong were solely for the purpose of providing funds necessary for capital injection into the VIEs to operate their respective businesses. Term of both loans is ten years and will be extended automatically for another ten years on each expiration. These loans were eliminated with the paid-in capital of the VIEs during consolidation. Management concluded that Shenzhen Fenqile (before the 2016 Reorganization), Beijing Lejiaxin, Shenzhen Xinjie and Qianhai Dingsheng are the VIEs of the Company and the Company is entitled to substantially all of the economic benefits from the VIEs and is obligated to absorb all of their expected losses. As such, the Company is the ultimate primary beneficiary of the VIEs and shall consolidate the financial results of these VIEs and their subsidiaries in the Group’s consolidated financial statements. Refer to Note 2 to the consolidated financial statements for the basis of consolidation. Initial Public Offering On December 26, 2017, the Company completed its initial public offering (“IPO”) on the NASDAQ Global Market in the United States of America. In this offering, 12,000,000 American Depositary Shares (“ADSs”), representing 24,000,000 Class A ordinary shares (“Class A Ordinary Shares”), were issued and sold to the public at a price of US$9.00 per ADS. Immediately prior to the completion of the IPO, in accordance with the written resolutions passed by the board of directors of the Company and its shareholders in October 2017 (“October 2017 Resolutions”), all of 110,647,199 shares of issued and outstanding Pre-IPO Class A Ordinary Shares were automatically redesignated into Class B Ordinary Shares on a one-for-one basis. All of 193,070,940 shares of issued and outstanding Pre-IPO Series A-1 Preferred Shares, Pre-IPO Class B Ordinary Shares, Pre-IPO Series A-2 Preferred Shares, Pre-IPO Series B-1 Preferred Shares, Pre-IPO Series B-2 Preferred Shares, Pre-IPO Series C-1 Preferred Shares, and Pre-IPO Series C-2 Preferred Shares (collectively, “Pre-IPO Preferred Shares”) were automatically converted and redesignated into Class A Ordinary Shares on a one-for-one basis. In addition, the authorized share capital of the Company increased from US$50,000 divided into 500,000,000 shares of par value of US$0.0001 each, to US$500,000 divided into 5,000,000,000 shares of par value of US$0.0001 each, of which (i) 1,889,352,801 shares were designated as Class A Ordinary Shares; (ii) 110,647,199 shares were designated as Class B Ordinary Shares; and (iii) 3,000,000,000 shares were designated as Reserved Shares, with such rights preferences and privileges set forth in the Sixth Amended and Restated Memorandum and Articles of Association of the Company effective immediately prior to the completion of the IPO. Liquidity Prior to 2017, the Group incurred significant losses from operations. It generated net profit for the year ended December 31, 2017. The Group’s accumulated deficit amounted to RMB630.7 million and RMB450.6 million as of December 31, 2016 and 2017, respectively. Net current liabilities of the Group were RMB441.3 million and RMB122.8 million as of December 31, 2016 and 2017, respectively. The net cash used in operating activities was approximately RMB1,485.1 million for the year ended December 31, 2015, while the net cash provided by operating activities was approximately RMB379.8 million and RMB1,662.3 million for the years ended December 31, 2016 and 2017, respectively. The Group’s liquidity is based on its ability to generate cash from operations or obtain capital financing from equity interest investors to fund its general operations and capital expansion needs. The growth of the Group’s business is also dependent on its ability to obtain funds from the Individual Investors on Juzi Licai and Institutional Funding Partners to fund its Loans to Customers. The Group’s ability to continue as a going concern is dependent on management’s ability to successfully execute its business plan, which includes increasing revenues while controlling operating cost and expenses to generate positive operational cash flows, and obtaining funds from Individual Investors, Institutional Funding Partners or equity interest investors to generate positive financing cash flows. The Group successfully completed its IPO in December 2017 through which the Company issued and sold 12,000,000 ADSs, representing 24,000,000 Class A Ordinary Shares. The aggregate proceeds received from the IPO, net of issuance costs, were approximately RMB651.3 million ($100.1 million). Based on cash flows projections from operating and financing activities and existing balances of cash and cash equivalents, the Group believed that it will be able to meet its payment obligations for general operations and debt related commitments for the next twelve months from the date of issuance of the consolidated financial statements. Based on the above considerations, the Group’s consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities during the normal course of operations. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”). Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. Basis of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and subsidiaries of the VIEs for which the Company is the primary beneficiary. Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All transactions and balances among the Company, its subsidiaries, the VIEs and subsidiaries of the VIEs have been eliminated upon consolidation. VIE Companies a. Contractual Agreements with VIEs The following is a summary of the contractual agreements (collectively, “Contractual Agreements”) between the Company’s PRC subsidiary, Beijing Shijitong, and the VIEs, Shenzhen Fenqile (before the 2016 Reorganization), Beijing Lejiaxin, Shenzhen Xinjie and Qianhai Dingsheng. Through the Contractual Agreements, the VIEs are effectively controlled by the Company. Exclusive Option Agreements. Pursuant to the Exclusive Option Agreements, the Nominee Shareholders of the VIEs have irrevocably granted Beijing Shijitong or any third party designated by Beijing Shijitong an exclusive option to purchase all or part of their respective equity interests in the VIEs. The purchase price shall be the lowest price permitted by law. Without Beijing Shijitong’s prior written consent, the VIEs shall not, among other things, amend their articles of association, increase or decrease the registered capital, sell, dispose of or set any encumbrance on their assets, business or revenue, enter into any material contract outside the ordinary course of business, merge with any other persons or make any investments, distribute dividends, or enter into any transactions which have material adverse effects on their business. The Nominee Shareholders of the VIEs also jointly and severally undertake that they will not transfer, gift or otherwise dispose of their respective equity interests in the VIEs to any third party or create or allow any encumbrance on their equity interests within the term of these agreements. These agreements will remain effective until Beijing Shijitong and/or any third party designated by Beijing Shijitong has acquired all equity interests of the VIEs from their respective Nominee Shareholders. Power of Attorney. Pursuant to the Power of Attorney, each Nominee Shareholder of the VIEs irrevocably authorizes Beijing Shijitong or any person(s) designated by Beijing Shijitong to act as its attorney-in-fact to exercise all of such shareholder’s voting and other rights associated with the shareholder’s equity interests in the VIEs, including but not limited to, the right to attend shareholder meetings on behalf of such shareholder, the right to appoint legal representatives, directors, supervisors and chief executive officers and other senior management, and the right to sell, transfer, pledge and dispose of all or a portion of the shares held by such shareholder. The power of attorney is irrevocable and remains in force continuously upon execution. Exclusive Business Cooperation Agreements. Pursuant to these Exclusive Business Cooperation Agreements, Beijing Shijitong or its designated party has the exclusive right to provide the VIEs with comprehensive business support, technical support and consulting services. Without Beijing Shijitong’s prior written consent, the VIEs shall not accept any services covered by these agreements from any third party. The VIEs agree to pay service fees in an amount determined by Beijing Shijitong based on respective profits calculated as operating revenue minus operating cost of the VIEs for the relevant period on a yearly basis or other service fees for specific services as required and as otherwise agreed by both parties. Beijing Shijitong owns the intellectual property rights arising out of the services performed under these agreements. Unless Beijing Shijitong terminates these agreements or pursuant to other provisions of these agreements, these agreements will remain effective indefinitely. These agreements can be terminated by Beijing Shijitong through a 30-day advance written notice, the VIEs have no right to unilaterally terminate these agreements. Beijing Shijitong is entitled to substantially all of the economic benefits of the VIEs. Loan Agreements. Pursuant to the loan agreement between Beijing Shijitong and the Nominee Shareholders of Qianhai Dingsheng, and the loan agreement between Beijing Shijitong and the Nominee Shareholders of Shenzhen Xinjie, Beijing Shijitong made the loans solely for the purpose of providing funds necessary for capital injection into the VIEs to operate their respective businesses. Pursuant to these loan agreements, the Nominee Shareholders can only repay the loans by the transfer of all their equity interests in Qianhai Dingsheng or Shenzhen Xinjie, where applicable, to Beijing Shijitong or its designated person(s) pursuant to their respective Exclusive Option Agreements. The Nominee Shareholders of the VIEs must pay all of the proceeds from transfer of such equity interests to Beijing Shijitong. In the event that the Nominee Shareholders transfer their equity interests to Beijing Shijitong or its designated person(s) with a price equivalent to or less than the amount of the principal, the loans will be interest free. If the price is higher than the amount of the principal, the excess amount will be paid to Beijing Shijitong as the loan interest. The loans must be repaid immediately when permitted by PRC laws at Beijing Shijitong’s request. Term of both loans is ten years and will be extended automatically for another ten years on each expiration. Equity Pledge Agreements. Pursuant to these Equity Pledge Agreements, each Nominee Shareholder of the VIEs has pledged all of his, her or its respective equity interests in the VIEs to Beijing Shijitong to guarantee the performance by such Nominee Shareholder and the VIEs of their respective obligations under the Exclusive Option Agreements, the Power of Attorney, the Loan Agreements (applicable to the contractual arrangements with Qianhai Dingsheng or Shenzhen Xinjie), and the Exclusive Business Cooperation Agreements, and any amendment, supplement or restatement to such agreements. If the VIEs or any of their Nominee Shareholders breach any obligations under these agreements, Beijing Shijitong, as pledgee, will be entitled to dispose of the pledged equity and have priority to be compensated by the proceeds from the disposal of the pledged equity. Each of the Nominee Shareholders of the VIEs agrees that before his, her or its obligations under the Contractual Agreements are discharged, he, she or it will not dispose of the pledged equity interests, create or allow any encumbrance on the pledged equity interests, which may result in the change of the pledged equity that may have adverse effects on the pledgee’s rights under these agreements without the prior written consent of Beijing Shijitong. These Equity Pledge Agreements will remain effective until the VIEs and their Nominee Shareholders discharge all their respective obligations under the Contractual Agreements. In April 2015, the Contractual Agreements were restated to reflect the replacement of Tibet Xianfeng Huaxing with its affiliated entity, Tibet Xianfeng Changqing Start-up Investment and Management Co., Ltd. (formerly known as Tibet Xianfeng Management Consultation Co., Ltd.), as a Nominee Shareholder of Shenzhen Fenqile. In March 2016, the Contractual Agreements were restated to reflect the 2016 Reorganization. These changes had no impact on the Group’s effective control over Shenzhen Fenqile, and therefore had no impact on the consolidated financial statements. In March 2017, the Contractual Agreements were restated to reflect the replacement of the Founding Shareholder with two employees Nominee Shareholders of Qianhai Dingsheng. In April and May 2017, the Contractual Agreements were restated to reflect the Loan Agreements entered into between Beijing Shijitong and the Nominee Shareholders of Qianhai Dingsheng, and Beijing Shijitong and the Nominee Shareholders of Shenzhen Xinjie, respectively. These changes had no impact on the Group’s effective control over Qianhai Dingsheng and Shenzhen Xinjie, and therefore had no impact on the consolidated financial statements. b. Risks in relation to the VIE structure The following table sets forth the assets, liabilities, results of operations and changes in cash and cash equivalents of the VIEs and their subsidiaries taken as a whole, which were included in the Group’s consolidated financial statements with intercompany balances and transactions eliminated: As of December 31, 2016 2017 (RMB in thousands) Total assets Total liabilities For the Year Ended December 31, 2015 2016 2017 (RMB in thousands) Total operating revenue Net loss ) ) ) For the Year Ended December 31, 2015 2016 2017 (RMB in thousands) Net cash (used in)/provided by operating activities ) Net cash used in investing activities ) ) ) Net cash provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year Under the Contractual Agreements with the VIEs, the Company has the power to direct activities of the VIEs and VIEs’ subsidiaries and can have assets transferred out of the VIEs and VIEs’ subsidiaries. Therefore, the Company considers itself the ultimate primary beneficiary of the VIEs and there is no asset of the VIEs that can only be used to settle obligations of the VIEs and VIEs’ subsidiaries, except for registered capital and PRC statutory reserves of the VIEs and their subsidiaries amounting to RMB671.8 million and RMB1,314.3 million as of December 31, 2016 and 2017, respectively. Since the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIEs. However, as the Company is conducting certain businesses mainly through its VIEs and VIEs’ subsidiaries, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss. In the opinion of the Company’s management, the contractual arrangements among its subsidiary, the VIEs and their respective Nominee Shareholders are in compliance with current PRC laws and are legally binding and enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies could limit the Company’s ability to enforce these contractual arrangements. As a result, the Company may be unable to consolidate the VIEs and VIEs’ subsidiaries in the consolidated financial statements. In January 2015, the Ministry of Commerce (“MOFCOM”), released for public comment a proposed PRC law, the Draft Foreign Investment Enterprises (“FIE”) Law, that appears to include VIEs within the scope of entities that could be considered to be FIEs, that would be subject to restrictions under existing PRC law on foreign investment in certain categories of industry. Specifically, the Draft FIE Law introduces the concept of “actual control” for determining whether an entity is considered to be an FIE. In addition to control through direct or indirect ownership or equity, the Draft FIE Law includes control through contractual arrangements within the definition of “actual control”. If the Draft FIE Law is passed by the People’s Congress of the PRC and goes into effect in its current form, these provisions regarding control through contractual arrangements could be construed to include the Group’s contractual arrangements with its VIEs, and as a result, the Group’s VIEs could become explicitly subject to the current restrictions on foreign investment in certain categories of industry. The Draft FIE Law includes provisions that would exempt from the definition of FIEs where the ultimate controlling shareholders are either entities organized under PRC law or individuals who are PRC citizens. The Draft FIE Law is silent as to what type of enforcement action might be taken against existing VIE, that operates in restricted or prohibited industries and is not controlled by entities organized under PRC law or individuals who are PRC citizens. If the restrictions and prohibitions on FIEs included in the Draft FIE Law are enacted and enforced in their current form, the Group’s ability to use the contractual arrangements with its VIEs and the Group’s ability to conduct business through the VIEs could be severely limited. The Company’s ability to control the VIEs also depends on the power of attorney Beijing Shijitong has to vote on all matters requiring shareholders’ approvals in the VIEs. As noted above, the Company believes these power of attorney are legally binding and enforceable but may not be as effective as direct equity ownership. In addition, if the Group’s corporate structure or the contractual arrangements with the VIEs were found to be in violation of any existing PRC laws and regulations, the PRC regulatory authorities could, within their respective jurisdictions: · revoke the Group’s business and operating licenses; · require the Group to discontinue or restrict its operations; · restrict the Group’s right to collect revenues; · block the Group’s websites; · require the Group to restructure its operations, re-apply for the necessary licenses or relocate the Group’s businesses, staff and assets; · impose additional conditions or requirements with which the Group may not be able to comply; or · take other regulatory or enforcement actions against the Group that could be harmful to the Group’s business. The imposition of any of these restrictions or actions may result in a material adverse effect on the Group’s ability to conduct its business. In addition, if the imposition of any of these restrictions causes the Group to lose the right to direct the activities of the VIEs or the right to receive their economic benefits, the Group would no longer be able to consolidate the financial statements of the VIEs. In the opinion of management, the likelihood of losing the benefits in respect of the Group’s current ownership structure or the contractual arrangements with its VIEs is remote. Use of estimates The preparation of the Group’s consolidated financial statements is in conformity with the U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of financial statement and reported revenues and expenses during the reported periods. Significant accounting estimates include, but are not limited to (i) revenue recognition associated with principal versus agent considerations; (ii) fair value of financial guarantee derivatives; (iii) determination of the fair value of Pre-IPO Preferred Shares and Pre-IPO Class A Ordinary Shares; (iv) valuation and recognition of share-based compensation expenses; (v) provision for income tax and valuation allowance for deferred tax assets; (vi) provision for credit losses; (vii) basis of consolidation; (viii) inventory valuation for excess and obsolete inventories. Actual results could materially differ from these estimates. Functional currency and foreign currency translation The Group uses Renminbi (“RMB”) as its reporting currency. The functional currency of the Company and its subsidiary incorporated in Hong Kong (i.e. Installment HK) is United States dollars (“US$”) and the functional currencies of the PRC entities in the Group are RMB. In the consolidated financial statements, the financial information of the Company and its subsidiary incorporated in Hong Kong have been translated into RMB at the exchange rates quoted by the People’s Bank of China (the “PBOC”). Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the period. Translation adjustments arising from these are reported as foreign currency translation adjustments, and are shown as a component of accumulated other comprehensive income in the Consolidated Statements of Changes in Shareholders’ (Deficit)/Equity and a component of other comprehensive income in the Consolidated Statements of Comprehensive (Loss)/Income. Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are remeasured at the applicable rates of exchange in effect at that date. Foreign currency exchange gain or loss resulting from the settlement of such transactions and from remeasurement at period-end is recognized in “Others, net” in the Consolidated Statements of Operations. Foreign currency translation adjustments included in the Group’s Consolidated Statements of Comprehensive (Loss)/Income for the years ended December 31, 2015, 2016 and 2017 were gain of RMB15.4 million, gain of RMB1.9 million and loss of RMB31.9 million, respectively. Foreign currency exchange gain or loss recorded was immaterial for each of the periods presented. Convenience translation Translations of balances in the Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Comprehensive (Loss)/Income and Consolidated Statements of Cash Flows from RMB into US$ as of and for the year ended December 31, 2017 are solely for the convenience of the readers and were calculated at the rate of US$1.00=RMB6.5063, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 29, 2017. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 29, 2017, or at any other rate. Financing receivables The Group generates financing receivables from providing installment purchase loans, from its online direct sales, and personal installment loans to Customers. Financing receivables are measured at amortized cost and reported on the Consolidated Balance Sheets at outstanding principal adjusted for any charge-offs, the allowance for credit losses, and net deferred origination fees on originated financing receivables. With respect to the Group’s financing receivables, the Group’s main funding sources include (1) proceeds from Individual Investors; (2) proceeds from Institutional Funding Partners; (3) the issuance of asset-backed securitized debts. On-balance sheet: Loans funded by Individual Investors on Juzi Licai and certain Institutional Funding Partners For the proceeds from loans facilitated through the Group’s own online investment platform Juzi Licai , which offers the Individual Investors various investment programs with different terms and estimated rates of return, or from certain Institutional Funding Partners, the Group’s role includes: (1) collecting the investment principal from the Individual Investors or Institutional Funding Partners and lending the funds to Customers, (2) collecting monthly repayment from the Customers and repaying the Individual Investors or Institutional Funding Partners according to the terms (i.e. interest rate and scheduled repayment dates) of the respective investment programs or agreements between the Individual Investors or Institutional Funding Partners and the Group (“Investment Programs or Agreements”). The Group noted that the terms of the underlying loan agreements between the Individual Investors or Institutional Funding Partners and the Customers (“Underlying Loan Agreements”) do not necessarily match the terms of the Investment Programs or Agreements. The mismatch is mainly due to the fact that some Individual Investors or Institutional Funding Partners may invest in the programs that have shorter investment periods than the terms of the Underlying Loan Agreements. Depending on the types of Investment Programs the Individual Investors choose or the Investment Agreements the Institutional Funding Partners entered into with the Group, the investing periods could be as short as one week and as long as thirty-six months. Pursuant to the Investment Programs or Agreements, the Individual Investors or Institutional Funding Partners agree on a rate of return with the Group which is normally lower than the coupon interest rate stipulated in the Underlying Loan Agreement, given the shorter periods of those Investment Programs or Agreements. The Group considers the terms of the Investment Programs or Agreements, which drive the return of the investments, and concludes the Group has liabilities to the Individual Investors or Institutional Funding Partners when the underlying loans are funded. Accordingly, the Group is considered as the primary obligor to the Individual Investors or Institutional Funding Partners in the lending relationship and therefore records the liabilities to Individual Investors or Institutional Funding Partners on its Consolidated Balance Sheets. Consequently, the Group considered that the financing receivables were not settled or extinguished when Customers enter into the Underlying Loan Agreements with the Individual Investors or Institutional Funding Partners. Therefore, the Group continues to account for the financing receivables over the terms of the installment purchase loans and personal installment loans. Quality assurance program on Juzi Licai In July 2017, the Group established a quality assurance program (“QAP”) with the purposes of providing make-up payments to Individual Investors on Juzi Licai when Customers fail to satisfy their principal or interest repayment obligations. The Group considers historical loan performance, the expected repayments (including prepayments) by Customers, market conditions, the product lines, profitability, cash position, the actual and expected payouts of the quality assurance funds, and determines to set aside a portion of each repayment equal to certain percentage of the outstanding principal balance of the loan and transfers such amount to custody bank accounts as quality assurance funds. The percentage is currently equal to 4.5% of the outstanding principal balance at the beginning of the relevant monthly period, divided by 12. The Group reserves the right to revise this percentage upwards or downwards from time to time. The QAP only applies to loans newly funded by Individual Investors on Juzi Licai on or after July 7, 2017. Under the Investment Programs with Individual Investors on Juzi Licai relating to the QAP, the amount of make-up payments to Individual Investors with defaulted loans is up to the available balance under the QAP. If the QAP becomes insufficient to pay back all Individual Investors with defaulted loans, these Individual Investors will be repaid on a pro rata basis, and their outstanding unpaid loans will be deferred to the next time the QAP is replenished, at which time a distribution will again be made to all Individual Investors with those defaulted loans. The Group places a three-year limit on the period during which Individual Investors with defaulted loans have the right to collect the unpaid balances from the QAP. Once the Group makes a payment out of the QAP to an Individual Investor on Juzi Licai when a Customer defaults, the Group seeks to collect the amounts from that Customer through the collection process. The amount collected from the Customer, if any, is remitted to first replenish the portion of the QAP used to repay the Individual Investor, and if there is any additional amount remaining, then to reimburse the Group’s collection expenses. Considering that the loans funded with the proceeds from Individual Investors on Juzi Licai are on-balance sheet loans, the Group is obligated to repay the Individual Investors for all amounts of principal and future interests regardless of whether the QAP has been implemented or not. The Group determines that there are no additional liabilities to be recognized in addition to the principal and interests due to Individual Investors recorded as “Funding Debts” and “Accrued interest payable” on its Consolidated Balance Sheets. The quality assurance funds set aside under the QAP through custody bank accounts are recorded as “Restricted cash” on its Consolidated Balance Sheets. The Group applies the same process and methodology to evaluate the creditworthiness and collectability of the loan portfolio covered by the QAP on a pooled basis, mainly based on delinquency levels and historical charge-offs. Off-balance sheet: Loans funded by certain other Institutional Funding Partners such as third-party commercial banks or consumer finance companies For the financing receivables funded by the proceeds from certain other Institutional Funding Partners such as third-party commercial banks or consumer finance companies, each underlying loan and Customer has to be approved by the commercial banks or consumer finance companies individually. Once the loan is approved by and originated by the commercial bank or consumer finance company, the fund is provided by the commercial bank or consumer finance company to the Customer and a lending relationship between the Customer and the commercial bank or consumer finance company is established through a loan agreement. The funds can only be used to settle the existing financing receivables the Group generated from installment purchase loans or personal installment loans previously provided to the Customers. Effectively, the Group offers loan facilitation and matching services to the Customers who have credit needs and the commercial banks or consumer finance companies who originate loans directly to Customers referred by the Group. The Group continues to provide account maintenance, collection, and payment processing services to the Customers over the term of the loan agreement. At the same time, the Group also provides a financial guarantee on the principal and the accrued interest repayment of the defaulted loans in case of Customers’ defaults, and full interest repayment in the event that Customers early repay their loans. Under this scenario, the Group determines that it is not the legal lender or borrower in the loan origination and repayment process. Accordingly, the Group does not record financing receivables arising from these loans nor loans payable to the commercial banks or consumer finance companies and considered that the financing receivables arising from installment purchase loans or personal installment loans previously provided to the Customers were settled and extinguished when the funds are received. Separately, the Group accounts for the financial guarantee provided as discussed in Note 2. On-balance sheet: Issuance of asset-backed securitized debts The Group periodically securitizes its financing receivables arising from online direct sales through the transfer of those assets to a securitization vehicle. The securitization vehicle then issues debt securities to third-party investors and is considered a consolidated variable interest entity under ASC 810. Therefore, the financing receivables remain at the Group and are recorded as “Financing receivables, net” in the Consolidated Balance Sheets. The Group recognizes interest and financial services income over the terms of the financing receivables using the effective interest rate method. The proceeds from third-party investors are recorded as Funding Debts (described below). Provision for credit losses The Group assesses the creditworthiness and collectability of its financing receivable portfolio mainly based on delinquency levels and historical charge-offs of the financing receivables using an established systematic process on a pooled basis within respective credit risk levels. The Group considers location, education background, income level, outstanding external borrowings, and external credit references when assigning Customers into different credit risk levels. Also, the financing receivable portfolio within each credit risk level consists of individually small amount of installment purchase loans and personal installment loans. In the consideration of above factors, the Group determines that the entire financing receivable portfolio within each credit risk level is homogenous with similar credit characteristics. The Group’s provision for credit losses is calculated separately for financing receivables within each credit risk level, taking into considerations of those financing receivables with flexible repayment options. For each credit risk level, the Group estimates the expected credit losses rate based on delinquency status of the financing receivables within that level: current, 1 to 29, 30 to 59, 60 to 89, 90 to 119, 120 to 149, 150 to 179 calendar days past due. These loss rates in each delinquency status are based on average historical loss rates of financing receivables associated with each of the abovementioned delinquency categories. The expected loss rate of each risk level will be applied to the outstanding loan balances within that level to determine the allowance for credit loss for each reporting period. In addition, the Group considers other general economic conditions, if any, when determining the provision for credit losses. Accrued interest receivable Accrued interest income on financing receivables is calculated based on the contractual interest rate of the loan and recorded as interest and financial services income as earned. Financing receivables are placed on non-accrual status upon reaching 90 days past due. When a financing receivable is placed on non-accrual status, the Group stops accruing interest and reverses all accrued but unpaid interest as of such date. Nonaccrual financing receivables and charged-off financing receivables The Group considers a financing receivable to be delinquent when a monthly payment is one day past due. When the Group determines it is probable that it will be unable to collect unpaid principal amount on the receivable, the remaining unpaid principal balance is charged off against the allowance for credit losses. Generally, charge-offs occur after the 180th day of delinquency. Interest and financial services income for nonaccrual financing receivables is recognized on a cash basis. Cash receipt of non-accrual financing receivables would be first applied to any unpaid principal, late payment fees, if any, before recognizing interest and financial services income. The Group does not resume accrual of interest after a loan has been placed on nonaccrual status. Funding Debts For the proceeds received from the Individual Investors, Institutional Funding Partners, or the asset-backed securitized debts to fund the Group’s on-balance sheet loans, the Group records them as Funding Debts on the Consolidated Balance Sheets. Accrued interest payable Accrued interest payable is calculated based on the contractual interest rates of Funding Debts. Guarantee liabilities For the off-balance sheet loans funded by certain other Institutional Funding Partners such as third-party commercial banks or consumer finance companies, the Group is obligated to compensate the commercial banks or consumer finance companies for the principal and interest repayment of the defaulted loans in case of Customers’ default, and full interest repayment according to the loan terms in the event that the Customers early |
FINANCING RECEIVABLES, NET
FINANCING RECEIVABLES, NET | 12 Months Ended |
Dec. 31, 2017 | |
FINANCING RECEIVABLES, NET | |
FINANCING RECEIVABLES, NET | 3. FINANCING RECEIVABLES, NET Financing receivables, net as of December 31, 2016 and 2017 consisted of the followings: As of December 31, 2016 2017 (RMB in thousands) Short-term: Installment purchase loans Personal installment loans Net deferred origination fees ) ) Total short-term financing receivables Allowance for credit losses ) ) Total short-term financing receivables, net Long-term: Installment purchase loans Personal installment loans Net deferred origination fees ) ) Total long-term financing receivables Allowance for credit losses ) ) Total long-term financing receivables, net These balances represent short-term and long-term financing receivables generated from online direct sales and personal installment loans transacted on the Platform with an original term generally up to three years and do not have collateral. The weighted average interest rates of these financing receivables were 26.3% and 24.5% as of December 31, 2016 and 2017, respectively. As of December 31, 2016, installment purchase loans and personal installment loans that were collectively evaluated for impairment were RMB1,861.1 million and RMB5,850.7 million, respectively. As of December 31, 2016, installment purchase loans and personal installment loans that were individually evaluated for impairment were RMB30.1 million and RMB84.6 million, respectively. As of December 31, 2017, installment purchase loans and personal installment loans that were collectively evaluated for impairment were RMB1,190.7 million and RMB10,821.7 million, respectively. As of December 31, 2017, installment purchase loans and personal installment loans that were individually evaluated for impairment were RMB87.0 million and RMB460.1 million, respectively. As of December 31, 2016 and 2017, installment purchase loans and personal installment loans that were individually evaluated for impairment were fully charged off, respectively, given the Group determined it was probable that the Group will be unable to collect unpaid principal amount on those loans. The following table summarizes the balances of financing receivables by due date as of December 31, 2016 and 2017: As of December 31, 2016 2017 (RMB in thousands) Due in months 0 - 12 13 - 24 25 - 36 Thereafter Total financing receivables The activities in the provision for credit losses for the years ended December 31, 2015, 2016 and 2017, respectively, consisted of the following: For the Year Ended December 31, 2015 2016 2017 (RMB in thousands) Beginning balance ) ) ) Provisions ) ) ) Charge-offs Recoveries from prior charge-offs ) ) ) Ending balance ) ) ) As of December 31, 2016, allowance for credit losses that was collectively and individually evaluated for impairment was RMB174.8 million and RMB114.7 million, respectively. As of December 31, 2017, allowance for credit losses that was collectively and individually evaluated for impairment was RMB370.2 million and RMB444.2 million, respectively. Aging analysis of past due financing receivables as of December 31, 2016 and 2017 are as follows: RMB in thousands 1 - 29 Days 30 - 59 Days 60 - 89 Days 90 - 179 Days 180 Days Total Current Total Installment purchase loans — Personal installment loans — December 31, 2016 — Installment purchase loans — Personal installment loans — December 31, 2017 — The Group evaluates the creditworthiness and collectability of its financing receivable portfolio on a pooled basis, due to its composition of small, homogeneous financing receivables with similar general credit risk characteristics. Financing receivables amounting to RMB78.5 million and RMB193.0 million as of December 31, 2016 and 2017, respectively, were in non-accrual status. Interest and financial services income for non-accrual financing receivables is recognized on a cash basis. Cash receipt of non-accrual financing receivables would be first applied to any unpaid principal, late payment fees, if any, before recognizing interest and financial services income. For the years ended December 31, 2015, 2016 and 2017, interest and financial services income earned from non-accrual financing receivables were RMB19.2 million, RMB37.1 million and RMB86.0 million, respectively. As of December 31, 2016 and 2017, financing receivables amounting to RMB84.5 million and RMB75.8 million have been pledged as collaterals pursuant to investment agreements with certain Institutional Funding Partners (Note 9) and credit facility arrangements with lending financial institutions (Note 10). As of December 31, 2016 and 2017, financing receivables amounting to RMB200.0 million and nil have been securitized pursuant to the Group’s ABS Plan (Note 9). For the years ended December 31, 2015, 2016 and 2017, net deferred origination fees associated with the financing receivables amounting to RMB10.9 million, RMB67.4 million and RMB168.4 million have been recognized as adjustments to interest and financial services income over the terms of the personal installment loans. Credit Quality Indicators The Group developed its credit assessment model based on the historical delinquency performance of the customers as well as information submitted in the customers’ credit applications. The credit assessment model is designed to predict the likelihood that a customer will be delinquent in the future. The Group assigns one of the seven credit risk levels to each customer, with risk level A representing the lowest risk, risk level F representing the highest risk and risk level N representing customers who are approved for trial purposes only and will be separately tracked accordingly. The key factors the Group considers in determining the credit risk level of each customer include geographic location, education background, level of income, etc. The Group updates the information for each of the risk levels on a regularly basis. The following tables present the net recorded investment of financing receivables, by credit quality indicator, as of December 31, 2016 and 2017. As of December 31, 2016 As of December 31, 2017 Installment Personal Installment Personal (RMB in thousand) Risk level: A B C D E F N Total |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 4. PREPAID EXPENSES AND OTHER CURRENT ASSETS As of December 31, 2016 2017 (RMB in thousands) Receivables from Pre-IPO Series C-1 preferred shareholders (Note 15) — Receivables from third-party online payment service providers(i) Deposits to Institutional Funding Partners Prepaid input value-added tax Prepayment to inventory suppliers Rental deposits and other current assets Total prepaid expenses and other current assets (i) The Group opened accounts with third-party online payment service providers mainly to facilitate collection and transfer of the funds, interest and service fees from/to the Customers and Individual Investors or Institutional Funding Partners. The balance of receivables from third-party online payment service providers represents amounts temporarily held in these accounts. |
PROPERTY, EQUIPMENT AND SOFTWAR
PROPERTY, EQUIPMENT AND SOFTWARE, NET | 12 Months Ended |
Dec. 31, 2017 | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | 5. PROPERTY, EQUIPMENT AND SOFTWARE, NET As of December 31, 2016 2017 (RMB in thousands) Computers and equipment Furniture and fixtures Leasehold improvement Software Total property, equipment and software Accumulated depreciation and amortization ) ) Total property, equipment and software, net Depreciation and amortization expenses on property, equipment and software for the years ended December 31, 2015, 2016 and 2017 were RMB1.4 million, RMB4.6 million and RMB18.9 million, respectively. |
LONG-TERM INVESTMENTS
LONG-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2017 | |
LONG-TERM INVESTMENT | |
LONG-TERM INVESTMENTS | 6. LONG-TERM INVESTMENTS Cost Method Equity Method Total (RMB in thousands) Balances at December 31, 2014 — — — Additions — Foreign currency translation adjustments — Balances at December 31, 2015 — Additions Share of results of an equity investee — ) ) Impairment charges ) — ) Foreign currency translation adjustments — Balances at December 31, 2016 Additions — Share of results of an equity investee — ) ) Impairment charges — ) ) Foreign currency translation adjustments ) — ) Balances at December 31, 2017 — Cost method As of December 31, 2016 and 2017, carrying value of the Group’s cost method investments was RMB21.9 million and RMB23.5 million, respectively. Investments were accounted for under the cost method if the Group had no significant influence over the investee or if the underlying shares the Group invested in were not considered in-substance common stock and had no readily determinable fair value. Equity method As of December 31, 2016 and 2017, the Group’s investments accounted for under the equity method totaled RMB3.0 million and nil, respectively. The Group applies the equity method of accounting to account for its equity investments over which it has significant influence but does not own a majority equity interest or otherwise control. Investment impairment The Group performs impairment assessment over its investments under the cost method and equity method whenever events or changes in circumstances indicate that the carrying value of the investment may not be fully recoverable. For the years ended December 31, 2015, 2016 and 2017, the Group recorded nil, RMB5.6 million and RMB0.9 million of impairment charges to the carrying value of its investments. |
LOAN SERVICING RIGHTS
LOAN SERVICING RIGHTS | 12 Months Ended |
Dec. 31, 2017 | |
LOAN SERVICING RIGHTS | |
LOAN SERVICING RIGHTS | 7. LOAN SERVICING RIGHTS For the off-balance sheet loans funded by certain third-party commercial banks or consumer finance companies, where the Group was determined not to be the legal lender or borrower in the loan origination and repayment process, the Group effectively services the loans and provides financial guarantee to the commercial banks or consumer finance companies that include credit risk and prepayment risk. Loan servicing rights Servicing is comprised of account maintenance, collection, and payment processing from Customers and distributions to the commercial banks or consumer finance companies. Servicing fees compensate the Group for the costs it incurs in servicing the related loans. The amount of servicing revenue earned is predominantly affected by the various servicing rates paid by the Customers, the outstanding principal balance of the loans serviced, and the amount of principal and interest collected from Customers and remitted to the commercial banks or consumer finance companies. Servicing rights are recorded as either an asset or liability when the benefits of servicing are expected to be more or less than adequate compensation. The Group records servicing assets and liabilities at their estimated fair values, when the off-balance sheet loans are originated, in “Prepaid expenses and other current assets” and “Accrued expenses and other current liabilities,” respectively, on the Consolidated Balance Sheets. Change in fair value of the servicing assets and liabilities is reported in “Loan facilitation and servicing fees” in the Consolidated Statements of Operations in the period in which the change occurs. The Group utilizes industry standard valuation techniques, such as discounted cash flows models, to arrive at an estimate of fair value with the assistance of an independent valuation firm. Significant assumptions used in valuing the servicing rights are estimates of adequate compensation rates, discount rates, cumulative default rates and cumulative prepayment rates. Changes in certain assumptions may have a significant impact on the fair value of the servicing rights. The selection of cumulative default rates and cumulative prepayment rates are based on data derived from historical trends. As of December 31, 2016 and 2017, the servicing assets and liabilities recorded were insignificant. The change in fair value of the servicing assets and liabilities was insignificant for each of the periods presented. |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2017 | |
FAIR VALUE MEASUREMENT | |
FAIR VALUE MEASUREMENT | 8. FAIR VALUE MEASUREMENT Recurring The following table presents the fair value hierarchy for the Group’s assets and liabilities that are measured and recorded at fair value on a recurring basis as of December 31, 2016 and 2017: December 31, 2016 Level 1 Level 2 Level 3 Balance at (RMB in thousands) Assets Restricted time deposits-current portion — — Restricted time deposits-noncurrent portion — — Total assets — — Liabilities Guarantee liabilities — — Total liabilities — — December 31, 2017 Level 1 Level 2 Level 3 Balance at (RMB in thousands) Assets Restricted time deposits-current portion — — Restricted time deposits-noncurrent portion — — Total assets — — Liabilities Guarantee liabilities — — Total liabilities — — The fair value of the Group’s restricted time deposits is determined based on the prevailing interest rates for similar products in the market (Level 2). For the off-balance sheet loans funded by certain third-party commercial banks or consumer finance companies, as the Group’s financial guarantee provided to the commercial banks or consumer finance companies does not trade in an active market with readily observable quoted prices, the Group uses significant unobservable inputs to measure the fair value of these guarantee liabilities (Level 3). Transfers into or out of fair value hierarchy classifications are made if the significant inputs used in the financial models measuring the fair value of the assets and liabilities became unobservable or observable in the current marketplace. These transfers are considered to be effective as of the beginning of the period in which they occur. The Group did not transfer any assets or liabilities in or out of Level 2 and Level 3 during each of the periods presented. Significant Unobservable Inputs The Group uses a discounted cash flows model to estimate fair value of the guarantee liabilities. The following table presents quantitative information about the significant unobservable inputs used for the Group’s Level 3 fair value measurement as of December 31, 2016 and 2017: Range of Inputs December 31, 2016 December 31, 2017 Financial Unobservable Input Minimum Maximum Weighted- Minimum Maximum Weighted- Guarantee liabilities Discount rates % % % % % % Cumulative default rates (i) % % % % % % Cumulative prepayment rates (i)(ii) % % % % % % Margins on cost % % % % % % (i) Expressed as a percentage of the original principal balance of the loans. (ii) Starting from January 1, 2017, third-party commercial banks and consumer finance companies allowed full prepayment rather than partial prepayment of the loans from Customers. Therefore, the Group no longer provides guarantees for loans that are fully prepaid but still provides guarantees for loans that are partially prepaid. The cumulative prepayment rates as of December 31, 2017 represented the cumulative partial prepayment rates only. The following table summarizes the activities related to fair value of the guarantee liabilities: For the Year Ended December 31, 2015 2016 2017 (RMB in thousands) Fair value at beginning of the year (Level 3) — — Issuances — Cash payment — ) ) Change in fair value(i) — ) Fair value at end of the year (Level 3) — (i) Recognized as change in fair value of financial guarantee derivatives in the Consolidated Statements of Operations. Significant Recurring Level 3 Fair Value Liability Input Sensitivity Changes in certain of the unobservable inputs noted above may have a significant impact on the fair value of the guarantee liabilities. The following table summarizes the effect adverse changes in estimate would have on the fair value of the guarantee liabilities as of December 31, 2016 and 2017, respectively, given a hypothetical changes in the cumulative default rates: As of December 31, 2016 2017 (RMB in thousands, except for percentages) Weighted-average cumulative default rates (i) % % Change in fair value from: Increase by 10% Decrease by 10% ) ) (i) Expressed as a percentage of the original principal balance of the loans. Other financial instruments The followings are other financial instruments not measured at fair value in the Consolidated Balance Sheets, but for which the fair value is estimated for disclosure purposes. Cash and cash equivalents, current restricted cash, and amounts due from related parties are financial assets with carrying amounts that approximate fair value due to their short-term nature. Accounts payable and amounts due to related parties are financial liabilities with carrying amounts that approximate fair value because of their short-term nature. Non-recurring The Group measures certain financial assets, including the investments under the cost method and the equity method at fair value on a non-recurring basis only if an impairment charge were to be recognized. The Group’s non-financial assets, such as property, equipment and software, would be measured at fair value only if they were determined to be impaired. |
FUNDING DEBTS
FUNDING DEBTS | 12 Months Ended |
Dec. 31, 2017 | |
Funding Debts obligations | |
FUNDING DEBTS | |
FUNDING DEBTS | 9. FUNDING DEBTS The following table summarizes the Group’s outstanding Funding Debts as of December 31, 2016 and 2017, respectively: As of December 31, 2016 2017 (RMB in thousands) Short-term: Liabilities to Individual Investors— Juzi Licai Liabilities to Institutional Funding Partners Asset-backed securitized debts — Total short-term Funding Debts Long-term: Liabilities to Individual Investors— Juzi Licai — Liabilities to Institutional Funding Partners Total long-term Funding Debts For the years ended December 31, 2015, 2016 and 2017, the following significant activities took place related to the Group’s funding sources: Liabilities to Individual Investors—Juzi Licai The Group finances its financing receivables using the proceeds from Individual Investors on Juzi Licai by offering various investment programs. As of December 31, 2016, the terms of those programs were all within 12 months with weighted average interest rates of 8.3%. As of December 31, 2017, the terms of those programs were all within 24 months with weighted average interest rates of 7.6%. As of December 31, 2016 and 2017, Individual Investors on Juzi Licai funded an aggregate amount of RMB5,331.1 million and RMB9,253.4 million in outstanding financing receivables originated by the Group, respectively. Liabilities to Institutional Funding Partners The Group also finances the financing receivables using the proceeds from Institutional Funding Partners, including partnering peer-to-peer lending platforms and other financial institutions. As part of the arrangement with each of them, the Group and Institutional Funding Partners typically agree on an aggregated amount of funds to be provided, maximum credit limit given to an individual customer, maximum borrowing term and an annualized interest rate. Those liabilities mature from January 2018 to June 2019 bearing weighted average interest rates of 8.3% and 7.7% as of December 31, 2016 and 2017, respectively. As of December 31, 2016 and 2017, Institutional Funding Partners funded an aggregate amount of RMB1,302.7 million and RMB1,157.7 in outstanding financing receivables originated by the Group, respectively. As of December 31, 2016, financing receivables amounting to RMB16.4 million were pledged as collaterals pursuant to certain credit facility arrangements with lending financial institutions, while no financing receivables were pledged as collaterals as of December 31, 2017. Asset-backed securitized debts In December 2015, the Group, through its VIE, Shenzhen Fenqile, created an asset-backed securitization plan (“ABS Plan”) which was issued and listed on the Shanghai Stock Exchange in January 2016. Of the total commitment, an Institutional Funding Partner purchased RMB183.0 million senior tranche securities bearing interest at 5.05%, representing 91.5% of total securities issued by the ABS Plan. The Group purchased all subordinated tranche securities amounting to RMB17.0 million, representing 8.5% of the total securities issued. Interest only payments began in January 2016 and are payable quarterly through January 2017. Beginning January 2017, monthly payments will consist of both principal and interest with a final maturity of January 2018. Shenzhen Fenqile has power to direct the activities that most significantly impact economic performance of the ABS Plan by providing the loan servicing and default loan collection services. Accordingly, Shenzhen Fenqile is considered the primary beneficiary of the ABS plan and has consolidated the ABS plan’s assets, liabilities, results of operations, and cash flows in the Group’s consolidated financial statements. As of December 31, 2016, RMB199.8 million short-term financing receivables and RMB0.2 million long-term financing receivables were pledged as collateral under the ABS Plan. As of December 31, 2017, no financing receivables were pledged as collateral under the ABS Plan. The assets of the ABS Plan are not available to creditors of the Company. In addition, the investors of the ABS plan have no recourse against the assets of the Company. Maturities of Funding Debts The following table summarizes the remaining contractual maturity dates of the Group’s Funding Debts and associated interest payments. 1 - 12 months 13 - 24 months 25 - 36 months 37 - 48 months 49 - 60 months Total (RMB in thousands) Liabilities to Individual Investors— Juzi Licai — — — Liabilities to Institutional Funding Partners — — — Total Funding Debts — — — Interest payments(i) — — — Total interest payments — — — (i) Interest payments for Funding Debts with variable interest rates are calculated using the interest rate as of December 31, 2017. |
SHORT-TERM AND LONG-TERM BORROW
SHORT-TERM AND LONG-TERM BORROWINGS | 12 Months Ended |
Dec. 31, 2017 | |
Short-term and long-term borrowings obligations | |
SHORT-TERM AND LONG-TERM BORROWINGS | |
SHORT-TERM AND LONG-TERM BORROWINGS | 10. SHORT-TERM AND LONG-TERM BORROWINGS The following table summarizes the Group’s outstanding short-term and long-term borrowings as of December 31, 2016 and 2017, respectively: Maturity Principal Interest Rate As of December 31, Date Amount Per Annum Type 2016 2017 (RMB in thousands, except for percentages) Loan I (i) May 18, 2018 % Bank loan Loan II (ii) September 18, 2017 % Financial institution loan — Loan III (iii) December 22, 2017 % Bank loan — Loan IV (iv) February 20, 2018 % Bank loan — Loan V (v) March 8, 2019 54 basis points plus the PBOC benchmark rate at the inception date Bank loan — Loan VI (vi) November 22, 2018 % Bank loan — Loan VII (vii) November 27, 2018 % Bank loan — Loan VIII (viii) December 28, 2018 % Bank loan — Total short-term borrowings Maturity Principal Interest Rate As of December 31, Date Amount Per Annum Type 2016 2017 (RMB in thousands, except for percentages) Loan I (i) May 18, 2018 % Bank loan — Loan V (v) March 8, 2019 54 basis points plus the PBOC benchmark rate at the inception date Bank loan — Total long-term borrowings (i) The principal and interest is payable on a monthly basis. As of December 31, 2017, the outstanding balance of the loan was secured by RMB1.0 million time deposit and RMB1.4 million financing receivables of the Group pledged as collateral. (ii) The interest was payable on a quarterly basis and the principal was due upon maturity. As of December 31, 2017, the outstanding balance of the loan was repaid by the Group. (iii) The Group was granted a one-year RMB100.0 million credit facility that expired on December 22, 2017 and used amounts borrowed under the facility for general operations. As of December 31, 2017, the outstanding balance was repaid by the Group. (iv) The interest is payable on a monthly basis and the principal will be due upon maturity. As of December 31, 2017, the outstanding balance of the loan was secured by RMB2.5 million time deposit and RMB24.2 million financing receivables of the Group pledged as collateral. (v) The principal and interest is payable on a monthly basis. As of December 31, 2017, the outstanding balance of the loan was secured by RMB0.6 million time deposit and RMB3.9 million financing receivables of the Group pledged as collateral. (vi) The interest is payable on a monthly basis and the principal will be due upon maturity. As of December 31, 2017, the outstanding balance of the loan was secured by RMB3.1 million financing receivables of the Group pledged as collateral. (vii) The principal and interest is payable on a monthly basis. As of December 31, 2017, the outstanding balance of the loan was secured by RMB37.1 million financing receivables of the Group pledged as collateral. (viii) The interest is payable on a monthly basis and the principal will be due upon maturity. As of December 31, 2017, the outstanding balance of the loan was secured by RMB6.1 million financing receivables of the Group pledged as collateral. The Group was in compliance with the covenants of the above credit facilities during all periods presented. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2017 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 11. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES As of December 31, 2016 2017 (RMB in thousands) Liabilities to Pre-IPO Series C-1 preferred shareholders (Note 15) — Funds payable to Institutional Funding Partners(i) Tax payable Accrued payroll and welfare Deferred revenues Accrued IPO expenses — Payable to third-party sellers Guarantee liabilities at fair value Security deposits from third-party sellers Accrued professional fees Other accrued expenses Total accrued expenses and other current liabilities (i) The payable balance mainly includes funds received from Customers but not yet transferred to accounts of Institutional Funding Partners due to the settlement time lag. |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
RELATED PARTY BALANCES AND TRANSACTIONS | 12. RELATED PARTY BALANCES AND TRANSACTIONS The table below sets forth major related parties of the Group and their relationships with the Group: Entity or individual name Relationship with the Group JD.com, Inc. and its subsidiaries (“JD Group”) JD Group is a shareholder of the Group Mr. Jay Wenjie Xiao Chief Executive Officer and Chairman of Board of Directors of the Group Individual Director or Officer Directors or Officers of the Group (a) The Group entered into the following significant related party transactions: For the Year Ended December 31, 2015 2016 2017 (RMB in thousands) Purchases of goods and services from JD Group (b) The Group had the following significant related party balances: (i) Amounts due from related parties As of December 31, 2016 2017 (RMB in thousands) Due from Mr. Jay Wenjie Xiao* Others Total * Above balances represented amounts prepaid to Mr. Jay Wenjie Xiao for potential investing activities to be conducted on behalf of the Group. For the year ended December 31, 2017, Mr. Jay Wenjie Xiao paid RMB2.8 million to acquire shares of one of the Group’s investees.The amounts due from Mr. Jay Wenjie Xiao have been repaid by Mr. Xiao subsequently. (ii) Amounts due to related parties As of December 31, 2016 2017 (RMB in thousands) Due to individual Director or Officer and his/her immediate family members under Juzi Licai investment programs as Individual Investors Due to JD Group — Others — Total The Group believes that the terms of the transactions with the related parties are comparable to the terms of arm’s-length transactions with third-party vendors and Individual Investors. |
TAXATION
TAXATION | 12 Months Ended |
Dec. 31, 2017 | |
TAXATION | |
TAXATION | 13. TAXATION a) Value-added tax (“VAT”) During the periods presented, the Group is subject to 17% VAT for online direct sales revenues from sales of electronic products, home appliance products and general merchandise products, and 6% for financial services income earned from rendering services to its Customers in the PRC. The Group is also subject to surcharges on VAT payments according to PRC tax law. b) Income tax Cayman Islands The Company was incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Company is not subject to tax on either income or capital gain. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders. Hong Kong Under the current Hong Kong Inland Revenue Ordinance, Installment HK is subject to 16.5% income tax on its taxable income generated from operations in Hong Kong. Additionally, payments of dividends by the subsidiaries incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax. PRC The Enterprise Income Tax (“EIT”) Law generally applies a statutory income tax rate of 25% to all enterprises, but grants preferential tax treatment to qualified High and New Technology Enterprises (“HNTEs”) and Software Enterprises. Qianhai Juzi qualified as an HNTE is entitled for a preferential income tax rate of 15% from 2017 to 2019, and will need to re-apply for HNTE qualification in 2020. Shenzhen Mengtian, Shenzhen Lexin Software and Shenzhen Dingsheng Computer Technology qualify as Software Enterprises and are entitled to an income tax exemption for the two years beginning with their respective first profitable year and a 50% reduction to a preferential income tax rate of 12.5% for the subsequent three years. The Group’s other PRC subsidiaries, VIEs and VIEs’ subsidiaries are subject to the statutory income tax rate of 25%. PRC Withholding Tax on Dividends Under the EIT Law enacted by the National People’s Congress of PRC on March 16, 2007 and its implementation rules which became effective on January 1, 2008, dividends generated after January 1, 2008 and payable by FIEs 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 was incorporated, does not have a tax treaty with PRC. The EIT Law includes a provision specifying that legal entities organized outside of the PRC will be considered resident enterprises for the PRC income tax purposes if the place of effective management or control of the entity is within the PRC. The implementation rules to the EIT Law provide that non-resident legal entities will be considered as PRC resident enterprises 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 Group’s entities organized outside of the PRC should be treated as resident enterprises for the PRC income tax purposes. If the PRC tax authorities subsequently determine that the Company and its subsidiary registered outside the PRC should be deemed as resident enterprises, the Company and its subsidiary registered outside the PRC will be subject to the PRC income tax, at a rate of 25%. The components of the Group’s (loss)/income before income tax (benefit)/expense for the years ended December 31, 2015 and 2016 and 2017 are as follows: For the Year Ended December 31, 2015 2016 2017 (RMB in thousands, except for percentages) (Loss)/income before income tax expense ) ) Loss from non-China operations ) ) ) (Loss)/income from China operations ) ) Income tax (benefit)/expense applicable to China operations ) Effective tax rate for China operations % −124.6 % % Composition of income tax (benefit) / expense for China operations The following table sets forth current and deferred portion of income tax (benefit)/expense of the Company’s China subsidiaries, VIEs, and subsidiaries of the VIEs: For the Year Ended December 31, 2015 2016 2017 (RMB in thousands) Current income tax expense Deferred income tax (benefit)/expense ) Income tax (benefit)/expense ) The following table sets forth reconciliation between the statutory EIT rate and the effective tax rate for the Group’s China operations: For the Year Ended December 31, 2015 2016 2017 Statutory EIT rate % % % Effect of tax holidays — — −12.3 % Tax effect of non-deductible expense −0.7 % −24.2 % −0.1 % Changes in valuation allowance −2.0 % −125.4 % % Effective tax rate for China operations % −124.6 % % The following table sets forth the effect of tax holiday related to China operations: For the Year Ended December 31, 2015 2016 2017 (In thousands, except for per share data) Tax holiday effect — — Basic net income per share effect — — Diluted net income per share effect — — Deferred tax assets Deferred income tax expense reflects 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: As of December 31, 2016 2017 (RMB in thousands) Deferred tax assets —Provision for credit losses —Net operating loss carryforwards —Accrued expenses and others Less: valuation allowance ) ) Net deferred tax assets Movement of valuation allowance For the Year Ended December 31, 2015 2016 2017 (RMB in thousands) Balances at beginning of the year ) ) ) Additions ) ) ) Reversals — Balances at end of the year ) ) ) Valuation allowance is provided against deferred tax assets when the Group determines that it is more-likely-than-not that the deferred tax assets will not be utilized in the future. The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will be more-likely-than-not realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses and forecasts of future profitability. These assumptions require significant judgment and the forecasts of future taxable income are consistent with the plans and estimates the Group is using to manage the underlying businesses. The statutory income tax rate of 25% or applicable preferential income tax rates were applied when calculating deferred tax assets. As of December 31, 2016 and 2017, the Group provided full valuation allowance of RMB70.2 million and RMB241.9 million, respectively, for the deferred tax assets related to provision for credit losses. Given that the Group had limited successful experience in getting approval from the relevant tax authorities for the deduction of the tax allowance on provision for credit losses, the Group believes it is more-likely-than-not that these deferred tax assets will not be utilized in the future. As of December 31, 2016 and 2017, the Group had net operating loss carryforwards of approximately RMB90.5 million and RMB35.5 million, respectively, which arose from the Group’s certain subsidiaries, VIEs and the VIEs’ subsidiaries established in the PRC. As of December 31, 2016 and 2017, deferred tax assets arose from the net operating loss carryforwards amounted to RMB6.1 million and RMB16.8 million was provided for full valuation allowance respectively, while the remaining RMB84.4 million and RMB18.7 million is expected to be utilized prior to expiration considering future taxable income for respective entities. As of December 31, 2017, the net operating loss carryforwards of RMB0.1 million and RMB35.4 million will expire in 2021 and 2022, respectively, if not utilized. The Company intends to indefinitely reinvest all the undistributed earnings of the Company’s VIEs and subsidiaries of the VIEs in China, and does not plan to have any of its PRC subsidiaries to distribute any dividend; therefore no withholding tax is expected to be incurred in the foreseeable future. Accordingly, no income tax is accrued on the undistributed earnings of the Company’s VIEs and subsidiaries of the VIEs as of December 31, 2016 and 2017. Although the Company’s certain PRC subsidiaries have generated accumulated earnings as of December 31, 2017, they have not paid any dividends in the past and currently have no plans to pay any dividends. These PRC subsidiaries plan to reinvest their profits into the PRC operations. Uncertain Tax Position The Group did not identify any significant unrecognized tax benefits for each of the periods presented. The Group did not incur any interest related to unrecognized tax benefits, did not recognize any penalties as income tax expense and also does not anticipate any significant change in unrecognized tax benefits within 12 months from December 31, 2017. |
CONVERTIBLE LOANS
CONVERTIBLE LOANS | 12 Months Ended |
Dec. 31, 2017 | |
CONVERTIBLE LOANS | |
CONVERTIBLE LOANS | 14. CONVERTIBLE LOANS In May 2016, the Group issued convertible loans in the aggregated principal amount of RMB654,680,000 (US$100,000,000) to four investors of the Group with compounding interest at 12% per annum, maturing two years after the issuance date. Pursuant to the convertible loans agreements, the holders of the convertible loans may (i) convert the outstanding principal of the convertible loans into a fixed percentage of the equity interest in Shenzhen Fenqile, one subsidiary of the Group’s VIE, or (ii) convert the outstanding principal of the convertible loans into a fixed number of shares of Pre-IPO Series C Convertible Redeemable Preferred Shares (“Pre-IPO Series C Preferred Shares”) of the Company at a conversion price of US$2.5105 per share. Accrued interests shall be waived if the investors elect to exercise any of the conversion options. Convertible loans in the principal amount of RMB98,202,000 (US$15,000,000) were issued by the Company (the “Convertible Loans A”) and convertible loans in the principal amount of RMB556,478,000 (US$85,000,000) were issued by Shenzhen Fenqile (the “Convertible Loans B”). The issuance costs for the convertible loans were RMB11.3 million. In conjunction with the issuance of the convertible loans, the Group entered into Pre-IPO Series C Preferred Shares purchase agreements with two Convertible Loans B investors and issued 1 share of Pre-IPO Series C Preferred Shares to each of them for no consideration. The issuance of Pre-IPO Series C Preferred Shares was to allow Convertible Loans B investors to exercise voting rights in the Company on an as-converted basis. No other rights of Pre-IPO Series C Preferred Shares could be enjoyed by Convertible Loans B investors prior to the conversion of the Convertible Loans B. Although the legal forms of the Convertible Loans B and the 2 shares of Pre-IPO Series C Preferred Shares of the Company are two separate instruments held by Convertible Loans B investors, the Group considered these two instruments are in substance one combined instrument issued to Convertible Loans B investors, that is, convertible loans, which were initially measured at par under ASC 470 and subsequently stated at amortized cost with any difference between the initial carrying value and the principal amount as interest expenses using the effective interest method over the period from the issuance date to the maturity date. The 2 shares of Pre-IPO Series C Preferred Shares were recorded at par and classified as mezzanine equity. The investors for Convertible Loans B are entitled to down round protection if the Group issues additional equity interest in the future at a lower valuation. The protection will be provided through conversion price adjustments (“Conversion Price Adjustments”) before the Convertible Loans B are converted or by issuing additional shares for free after the conversion of the loans into the equity interest of the VIE (“After Conversion Adjustments”). In the event of a lower valuation prior to the conversion of Convertible Loans B, the down round protection is provided in the form of Conversion Price Adjustment, which effectively resets the strike or conversion rate to the lower valuation. The Group considers the Conversion Price Adjustments are part of the conversion features that do not require bifurcation. The After Conversion Adjustments are considered as an embedded feature that requires bifurcation pursuant to criteria set forth under ASC 815. The Group determined the fair value of the After Conversion Adjustments was immaterial with the assistance from an independent valuation firm. No Pre-IPO Series C Preferred Shares of the Company were issued to Convertible Loans A investors, and the investors of Convertible Loans A are not entitled to the down round protection as discussed above. In October 2017, the Convertible Loans B were converted into 33,857,797 shares of Pre-IPO Series C-1 Preferred Shares and the Convertible Loans A were converted into 5,974,905 shares of Pre-IPO Series C-2 Preferred Shares. The accrued but unpaid convertible loans interests were waived by the investors upon the conversion of the convertible loans. Refer to Note 15 for further discussion on the accounting for the conversion of convertible loans into Pre-IPO Series C-1/C-2 Preferred Shares. |
CONVERTIBLE REDEEMABLE PREFERRE
CONVERTIBLE REDEEMABLE PREFERRED SHARES | 12 Months Ended |
Dec. 31, 2017 | |
CONVERTIBLE REDEEMABLE PREFERRED SHARES | |
CONVERTIBLE REDEEMABLE PREFERRED SHARES | 15. CONVERTIBLE REDEEMABLE PREFERRED SHARES From 2014 to 2015, the Group issued several rounds of Pre-IPO Preferred Shares to certain investors. All series of Pre-IPO Preferred Shares had the same par value of US$0.0001 per share. Upon the completion of the Company’s IPO in December 2017, all of the issued and outstanding Pre-IPO Preferred Shares were automatically converted and redesignated into Class A Ordinary Shares on a one-for-one basis. Prior to the automatic conversion into Class A Ordinary Shares, the Pre-IPO Preferred Shares were entitled to certain preferences with respect to conversion, dividend, liquidation and redemption. The holders of Pre-IPO Preferred Shares were entitled to vote together with the holders of ordinary shares on all matters submitted to a vote of the shareholders of the Company on an as-if-converted basis and not as a separate class. Immediately prior to the IPO, the Pre-IPO Preferred Shares comprised the following: Series Issuance Date Shares Issued Issuance Price Proceeds Shares US$ US$ Pre-IPO Series A-1 Preferred Shares July 18, 2014 Pre-IPO Class B Ordinary Shares July 18, 2014 Pre-IPO Series A-2 Preferred Shares July 18, 2014 * Pre-IPO Series B-1 Preferred Shares November 10, 2014 Pre-IPO Series B-2 Preferred Shares November 10, 2014, March 13, 2015 ** Pre-IPO Series C-1 Preferred Shares October 23, 2017 Not Applicable Pre-IPO Series C-2 Preferred Shares October 23, 2017 Not Applicable * ** The Group determined that the Pre-IPO Series A-1 Preferred Shares, Pre-IPO Class B Ordinary Shares, Pre-IPO Series A-2 Preferred Shares, Pre-IPO Series B-1 Preferred Shares, Pre-IPO Series B-2 Preferred Shares, and Pre-IPO Series C Preferred Shares should be classified as mezzanine equity upon their respective issuance since the Pre-IPO Preferred Shares were contingently redeemable. Except for Pre-IPO Series C Preferred Shares discussed in Note 14, the Group accreted changes in the redemption value over the period from the date of issuance of the Pre-IPO Preferred Shares to their respective earliest redemption date using effective interest method. Changes in the redemption value should be considered to be changes in accounting estimates. The accretion were recorded against retained earnings, or in the absence of retained earnings, by charges against additional paid-in capital. Once additional paid-in capital was exhausted, additional charges was recorded by increasing the accumulated deficit. The accretion of Pre-IPO Preferred Shares was RMB51.5 million, RMB62.3 million and RMB82.1 million for the years ended December 31, 2015, 2016 and 2017, respectively. The Group’s Pre-IPO Preferred Shares activities for the years ended December 31, 2015, 2016 and 2017 are summarized below: Pre-IPO Series A-1 Pre-IPO Class B Pre-IPO Series A-2 Pre-IPO Series B-1 Pre-IPO Series B-2 Pre-IPO Series C Pre-IPO Series C-1 Pre-IPO Series C-2 No. of Amount No. of Amount No. of Amount No. of Amount No. of Amount No. of Amount No. of Amount No. of Amount Balances at December 31, 2014 — — — — — — Issuance of Pre-IPO Preferred Shares — — — — — — — — — — — — — — Pre-IPO Preferred Shares redemption value accretion — — — — — — — — — — — Balances at December 31, 2015 — — — — — — Issuance of Pre-IPO Preferred Shares — — — — — — — — — — * — — — — Pre-IPO Preferred Shares redemption value accretion — — — — — — — — — — — Repurchase of Pre-IPO Preferred Shares — — — — — — — — ) ) — — — — — — Balances at December 31, 2016 * — — — — Issuance of Pre-IPO Preferred Shares — — — — — — — — — — — — Redesignation of Pre-IPO Series C Preferred Shares — — — — — — — — — — ) (* ) * — — Pre-IPO Preferred Shares redemption value accretion — — — — — — — — — Conversion and redesignation of Pre-IPO Preferred Shares ) ) ) ) ) ) ) ) ) ) — — ) ) ) ) Balances at December 31, 2017 — — — — — — — — — — — — — — — — * Less than 1. Accounting for the Conversion of Convertible Loans into Pre-IPO Series C-1/C-2 Preferred Shares Pursuant to the October 2017 Resolutions, in connection with the exercise of the conversion options of the convertible loans issued in May 2016, the Group entered into share purchase agreements (“SPAs”) for Pre-IPO Series C-2 Convertible Redeemable Preferred Shares (“Pre-IPO Series C-2 Preferred Shares”) with Convertible Loans A investors and issued 5,974,905 Pre-IPO Series C-2 Preferred Shares to Convertible Loans A investors in October 2017. The accrued but unpaid interests were waived by Convertible Loans A investors upon the conversion of the Convertible Loans A. In October 2017, the Group also entered into SPAs for Pre-IPO Series C-1 Convertible Redeemable Preferred Shares (“Pre-IPO Series C-1 Preferred Shares”) with Convertible Loans B investors and issued 33,857,795 Pre-IPO Series C-1 Preferred Shares and redesignated and reclassified 2 Pre-IPO Series C Preferred Shares previously issued to Convertible Loans B investors in May 2016 as 2 Pre-IPO Series C-1 Preferred Shares. In conjunction with the issuance of Pre-IPO Series C-1 Preferred Shares, the Group entered into supplementary agreements to the convertible loans agreements with Convertible Loans B Investors (“Convertible Loans B Amendments”). Pursuant to the Convertible Loans B Amendments, the Convertible Loans B was modified to two interest-free loans (“Interest-free Loans”) payable to two Convertible Loans B investors respectively by Shenzhen Fenqile with no conversion features. The accrued but unpaid interests were waived by Convertible Loans B investors upon the conversion of the Convertible Loans B. The principal amount of the Interest-free Loans is RMB556,478,000 and shall be repaid prior to or on the date of the 5 th anniversary of the date of the issuance of Pre-IPO Series C-1 Preferred Shares. At the same time, Convertible Loans B Investors issued two promissory notes (“Promissory Notes”) with principal amounts of RMB 327,340,000 (US$ 49,443,396) and RMB229,138,000, respectively. Upon the issuance of the Promissory Notes, the purchase price of Pre-IPO Series C-1 Preferred Shares were deemed fully paid and the Convertible Loans B investors are entitled to all rights as the holder of such shares. The Pre-IPO Series C-1 Preferred Shares have the same rights and preferences as the 2 Pre-IPO Series C Preferred Shares previously issued to the Convertible Loans B investors. All series of Pre-IPO C-1/C-2 Preferred Shares had the same par value of US$0.0001 per share. The Group considered above facts and concluded that the Convertible Loans B Amendments, the Interest-free Loans and the Promissory Notes are in substance one instrument, that is, the Pre-IPO Series C-1 Preferred Shares. The carrying amount of the convertible loans, including unamortized issuance costs and accrued but unpaid interests, was credited to the capital accounts (i.e. the carrying value of Pre-IPO Series C-1/C-2 Preferred Shares on the date of issuance) upon conversion in accordance with ASC 470-20-40-4. The Group recorded the Interest-free Loans payable to the two Convertible Loans B investors by Shenzhen Fenqile in “Accrued expenses and other current liabilities” and the Promissory Notes receivable from Convertible Loans B investors by the Company in “Prepaid expenses and other current assets” respectively on its Consolidated Balance Sheets. The Group accreted changes in the redemption value over the period from the date of issuance of the Pre-IPO C-1/C-2 Preferred Shares to their respective earliest redemption date using effective interest method. Changes in the redemption value should be considered to be changes in accounting estimates. The accretion were recorded against retained earnings, or in the absence of retained earnings, by charges against additional paid in capital. Once additional paid in capital was exhausted, additional charges were recorded by increasing the accumulated deficit. The Group has determined that there was no embedded beneficial conversion feature attributable to the Pre-IPO Series C-1/C-2 Preferred Shares. All of the issued and outstanding Pre-IPO Series C1/C2 Preferred Shares were converted into Class A Ordinary Shares upon the completion of the Company’s IPO on a one-for-one basis. Amendment of the Definition of QIPO The October 2017 Resolutions amended the definition of QIPO in the then-effective memorandum and articles of association and shareholder agreement of the Company by replacing the existing definition of QIPO with the following: “an initial public offering of the Company that is completed by and prior to June 30, 2018 shall be deemed to be a QIPO.” The October 2017 Resolutions resulted in value transfer from the preferred shareholders of the Company, which would be recorded as a deemed contribution from the preferred shareholders in the fourth quarter of 2017. The Group concluded that the value transfer was not material to its consolidated financial statements. |
ORDINARY SHARES
ORDINARY SHARES | 12 Months Ended |
Dec. 31, 2017 | |
ORDINARY SHARES | |
ORDINARY SHARES | 16. ORDINARY SHARES In November 2013, the Company was formed as a limited liability company in the Cayman Islands with issuance of 125,000,000 ordinary shares at a par value of US$0.0001 each. In July 2014, the Company became the holding company of the Group pursuant to the 2014 Reorganization described in Note 1. On December 26, 2017, the Company completed its IPO on the NASDAQ Global Market. In this offering, 12,000,000 ADSs, representing 24,000,000 Class A Ordinary Shares, were issued and sold to the public at a price of US$9.00 per ADS. The aggregate proceeds received by the Company from the IPO, net of issuance costs, were approximately RMB651.3 million ($100.1 million). Immediately prior to the completion of the IPO, the Company adopted a dual-class share structure, consisting of Class A Ordinary Shares and Class B Ordinary Shares, par value US$0.0001 per share. All of the issued and outstanding Pre-IPO Class A Ordinary Shares were automatically re-designated into Class B Ordinary Shares on a one-for-one basis, and all of the issued and outstanding Pre-IPO Preferred Shares were automatically converted and redesignated into Class A Ordinary Shares on a one-for-one basis. Holders of Class A Ordinary Shares and Class B Ordinary Shares have the same rights except that the holders of Class A Ordinary Shares are entitled to one vote per share in respect of matters requiring the votes of shareholders, while holders of Class B Ordinary Shares are entitled to ten votes per share. Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof. Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. The Group concluded that the adoption of dual-class share structure did not have a material impact on its consolidated financial statements. |
NET (LOSS)_INCOME PER SHARE
NET (LOSS)/INCOME PER SHARE | 12 Months Ended |
Dec. 31, 2017 | |
NET (LOSS)/INCOME PER SHARE | |
NET (LOSS)/INCOME PER SHARE | 17. NET (LOSS)/INCOME PER SHARE Basic net (loss)/income per share is the amount of net (loss)/income available to each share of ordinary shares outstanding during the reporting period. Diluted net (loss)/income per share is the amount of net (loss)/income available to each share of ordinary shares outstanding during the reporting period adjusted to include the effect of potentially dilutive ordinary shares. For the years ended December 31, 2015, 2016 and 2017, options to purchase ordinary shares that were anti-dilutive and excluded from the calculation of diluted net (loss)/income per share were 13,674,424 shares, 22,635,281 shares and 10,851 shares on a weighted average basis, respectively. For the years ended December 31, 2015, 2016 and 2017, the Pre-IPO Preferred Shares and convertible loans convertible into ordinary shares that were also anti-dilutive and excluded from the calculation of diluted net loss per share of the Company were 176,751,805 shares, 178,923,801 shares and 190,426,133 shares on a weighted average basis, respectively. The following table sets forth the computation of basic and diluted net (loss)/income per share for the periods indicated: For the Year Ended December 31, 2015 2016 2017 (RMB in thousands, except for Basic net (loss)/income per share calculation: Numerator: Net (loss)/income ) ) Accretion on Pre-IPO Series A-1 Preferred Shares redemption value ) ) ) Accretion on Pre-IPO Class B Ordinary Shares redemption value ) ) ) Accretion on Pre-IPO Series A-2 Preferred Shares redemption value ) ) ) Accretion on Pre-IPO Series B-1 Preferred Shares redemption value ) ) ) Accretion on Pre-IPO Series B-2 Preferred Shares redemption value ) ) ) Accretion on Pre-IPO Series C-1 Preferred Shares redemption value — — ) Accretion on Pre-IPO Series C-2 Preferred Shares redemption value — — ) Income allocation to participating preferred shares — — ) Deemed dividend to a preferred shareholder — ) — Net (loss)/income attributable to ordinary shareholders ) ) Denominator: Weighted average ordinary shares outstanding—basic Net (loss)/income per share attributable to ordinary shareholders—basic ) ) Diluted net (loss)/income per share calculation: Numerator: Net (loss)/income attributable to ordinary shareholders—diluted ) ) Denominator: Weighted average ordinary shares outstanding—basic Ordinary shares issuable upon the exercise of outstanding stock options using the treasury stock method — — Weighted average ordinary shares outstanding—diluted Net (loss)/income per share attributable to ordinary shareholders—diluted ) ) |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2017 | |
EMPLOYEE BENEFIT PLAN | |
EMPLOYEE BENEFIT PLAN | 18. EMPLOYEE BENEFIT PLAN Full-time employees of the Group in the PRC are entitled to welfare benefits including pension insurance, medical insurance, unemployment insurance, maternity insurance, on-the-job injury insurance, and housing fund plans through a PRC government-mandated defined contribution plan. Chinese labor regulations require that the Group makes contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Group has no legal obligation for the benefits beyond the contributions. Total contributions by the Group for such employee benefits were RMB19.8 million, RMB54.2 million and RMB79.7 million for the years ended December 31, 2015, 2016 and 2017, respectively. |
STATUTORY RESERVES AND RESTRICT
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
Statutory Reserves And Restricted Net Assets | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 19. STATUTORY RESERVES AND RESTRICTED NET ASSETS In accordance with the PRC laws and regulations, the Company’s PRC subsidiaries registered as wholly foreign-owned enterprise are required to make appropriation to certain reserve funds, namely general reserve fund, enterprise expansion fund, and staff bonus and welfare fund, all of which are appropriated from the subsidiaries’ annual after-tax profits as reported under PRC GAAP. The appropriation must be at least 10% of the annual after-tax profits to the general reserve fund until such reserve fund has reached 50% of the subsidiaries’ registered capital. Additionally, in accordance with the PRC Company Laws, a domestic company is required to provide statutory surplus fund at least 10% of its annual after-tax profits as reported under PRC GAAP until such statutory surplus fund has reached 50% of its registered capital. A domestic company is also required to provide discretionary surplus fund, at the discretion of the board of directors, from its annual after-tax profits as reported under PRC GAAP. The aforementioned reserve funds can only be used for specific purposes and are not distributable as cash dividends. 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 PRC GAAP, the PRC entity is restricted from transferring a portion of its net assets to the Company. Amounts restricted include paid-in capital, additional paid-in capital and statutory reserves of the Company’s PRC entities. As of December 31, 2016 and 2017, the aggregated amounts of paid-in capital, additional paid-in capital and statutory reserves represented the amount of net assets of the relevant PRC entities in the Group not available for distribution amounted to RMB339.4 million and RMB895.8 million, respectively (including RMB2.0 million and RMB55.9 million statutory surplus fund as of December 31, 2016 and 2017, respectively). As a result of the above restrictions, parent company only condensed financial information is disclosed in Note 24. |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2017 | |
SHARE-BASED COMPENSATION. | |
SHARE-BASED COMPENSATION | 20. SHARE-BASED COMPENSATION Share-based compensation was recognized in operating cost and expenses for the years ended December 31, 2015, 2016 and 2017 as follows: For the Year Ended 2015 2016 2017 (RMB in thousands) Processing and servicing cost Sales and marketing expenses Research and development expenses General and administrative expenses Total share-based compensation expenses The Group recognizes share-based compensation, net of estimated forfeitures, on a straight-line basis over the vesting term of the awards. There was no income tax benefit recognized in the Consolidated Statements of Operations for share-based compensation and the Group did not capitalize any of the share-based compensation as part of the cost of any asset in the years ended December 31, 2015, 2016 and 2017. 2014 Share Incentive Plan In September 2014, the Group adopted its 2014 Share Incentive Plan (the “2014 Plan”), which permits the grant of options, restricted shares and restricted share units of the Company to employees, directors and other eligible persons of the Company and its affiliates. Under the 2014 Plan, the maximum number of Class A Ordinary Shares that may be delivered will not exceed a total of 20,220,588 shares in the aggregate. In August 2015, the Company’s shareholders approved to newly reserve an additional of 15,235,971 Class A Ordinary Shares for future issuance. Option awards are granted with an exercise price determined by the board of directors. Those option awards generally vest over a period of four years and expire in ten years. 2017 Share Incentive Plan In October 2017, the Group adopted its 2017 Share Incentive Plan (the “2017 Plan”), which permits the grant of options, restricted shares and restricted share units of the Company to employees, directors and other eligible persons of the Company and its affiliates. The Group planned to no longer grant share-based awards under the 2014 Plan and all future share-based shares will be granted under its 2017 Plan. Under the 2017 Plan, the maximum number of Class A Ordinary Shares that may be delivered will not exceed a total of 22,859,634 shares in the aggregate. Option awards are granted with an exercise price determined by the board of directors. Those option awards generally vest over a period of four years and expire in ten years. In November 2017, the Group granted 2,576,725 stock options to its employees, directors and non-employees directors under the 2017 Plan with an exercise price of US$0.0001. Stock options The following table sets forth a summary of the number of shares available for issuance: Shares Available (In thousands) December 31, 2014 Additions under the 2014 Plan Granted ) Cancelled/forfeited/repurchased December 31, 2015 Granted ) Cancelled/forfeited/repurchased December 31, 2016 Additions under the 2017 Plan Granted ) Cancelled/forfeited/repurchased Expired ) December 31, 2017 1) Stock options granted to employees, directors and non-employees directors The following table sets forth the summary of activities for stock options granted to employees, directors and non-employees directors under the 2014 Plan and 2017 Plan: Options Weighted Weighted Aggregate (In thousands) US$ (In years) (RMB in thousands) December 31, 2014 Granted* Exercised — — Cancelled/forfeited/repurchased ) December 31, 2015 Granted* Exercised — — Cancelled/forfeited/repurchased ) December 31, 2016 Granted* Exercised — — Cancelled/forfeited/repurchased ) December 31, 2017 Vested and expected to vest as of December 31, 2016 Exercisable as of December 31, 2016 Vested and expected to vest as of December 31, 2017 Exercisable as of December 31, 2017 * Nil, nil and 50,000 stock options were granted to non-employee directors in 2015, 2016 and 2017, respectively. The weighted average grant date fair value of stock options granted to employees, directors and non-employees directors for the years ended December 31, 2015, 2016 and 2017 was RMB3.3 (US$0.5), RMB20.7 (US$3.0) and RMB38.1 (US$5.7) per share, respectively. For the years ended December 31, 2015, 2016 and 2017, total share-based compensation expenses recognized for stock options granted to employees, directors and non-employees directors were RMB14.5 million, RMB24.0 million and RMB73.8 million, respectively. No stock options granted to employees, directors and non-employees directors were exercised for the years ended December 31, 2015, 2016 and 2017. As of December 31, 2017, the unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock options granted to the Group’s employees, directors and non-employees directors was RMB327.1 million. Total unrecognized compensation cost is expected to be recognized over a weighted-average period of 3.0 years and may be adjusted for future changes in estimated forfeitures. 2) Stock options granted to non-employees The following table sets forth the summary of activities for stock options granted to non-employees under the 2014 Plan and 2017 Plan: Options Weighted Weighted Aggregate (In thousands) US$ (In years) (RMB in thousands) December 31, 2016 — — — — Granted Exercised — — Cancelled/forfeited/repurchased — — December 31, 2017 Vested and expected to vest as of December 31, 2017 Exercisable as of December 31, 2017 — — — — The weighted average grant date fair value of stock options granted to non-employees for the year ended December 31, 2017 was RMB49.3 (US$7.4) per share. No stock options granted to non-employees were exercised for the year ended December 31, 2017. For the year ended December 31, 2017, total share-based compensation expenses recognized for stock options granted to non-employees was RMB1.9 million. As of December 31, 2017, the unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock options granted to the Group’s non-employees was RMB20.3 million. Total unrecognized compensation cost is expected to be recognized over a weighted average period of 3.6 years and may be adjusted for future changes in estimated forfeitures. |
OTHERS, NET
OTHERS, NET | 12 Months Ended |
Dec. 31, 2017 | |
OTHERS, NET | |
OTHERS, NET | 21. OTHERS, NET Others, net, mainly consist of non-operating income, non-operating expense and foreign currency exchange gain or loss for all periods presented. Non-operating income represents VAT refund granted by relevant tax authorities, in writing, in the form of reducing tax payable on the Group’s tax returns in 2017. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | 22. COMMITMENTS AND CONTINGENCIES Operating lease commitments The Group leases certain office premises under non-cancelable leases. Rental expenses under operating leases for the years ended December 31, 2015, 2016 and 2017 were RMB10.0 million, RMB26.2 million and RMB43.2 million, respectively. Future minimum lease payments under non-cancelable operating leases agreements are as follows: Years ending December 31, RMB in thousands 2018 2019 2020 2021 2022 and thereafter — Purchase obligations The Group’s purchase obligations primarily relate to commitments on the purchases of professional services and other capital commitments, amounting to RMB47.6 million as of December 31, 2017. All of these commitments will be fulfilled within the next twelve months. Debt obligations The Group’s debt obligations are associated with 1) the Funding Debts and interest payable to Individual Investors on Juzi Lica i and certain Institutional Funding Partners, and ABS securities issued in connection with securitization of certain financial assets; 2) the borrowings from financial institutions to support the Group’s general operations; and 3) the liabilities payable to Pre-IPO Series C-1 preferred shareholders. The expected repayment amount of the debt obligations are as follows: Less than 1 year 1 - 2 years 2 - 3 years Total (RMB in thousands) Funding Debts obligations Liabilities to Individual Investors — Juzi Licai — Liabilities to Institutional Funding Partners — Interest payments (i) — Total Funding Debts obligations — Short-term and long-term borrowings — Interest payments (i) — Total short-term and long-term borrowings obligations — Liabilities to Pre-IPO Series C-1 preferred shareholders — — Total liabilities to Pre-IPO Series C-1 preferred shareholders — — (i) Interest payments with variable interest rates are calculated using the interest rate as of December 31, 2017. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2017 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 23. SUBSEQUENT EVENTS On January 5, 2018, the underwriters of the Company’s IPO exercised the option to purchase an additional 1,800,000 ADSs, representing 3,600,000 Class A Ordinary Shares, par value US$0.0001 per share, of the Company to cover over-allotments in full. The proceeds in connection with 1,800,000 ADSs received by the Company was RMB97.8 million (US$15.1 million), which represents a total gross capital raise of RMB105.2 million (US$16.2 million) less underwriting discounts and commissions in the aggregate amount of RMB7.4 million (US$1.1 million). In March 2018, the Group granted 344,000 restricted share units to its employees, directors and non-employee directors under the 2017 Plan. In April 2018, to ensure its compliance with new regulations, the Group ceased its QAP on Juzi Licai. Instead, the Group entered into a contract with an independent guarantee company to set up new investor protection measures called Risk Safeguard Scheme (“RSS”) with the purposes of providing make-up payments to Individual Investors on Juzi Licai when Customers fail to satisfy their principal or interest repayment obligations. The RSS only applies to loans newly funded by Individual Investors on Juzi Licai on or after April 24, 2018. The Group is in the process of assessing the accounting treatment of the ceasing of the QAP and the launch of the RSS. |
PARENT COMPANY ONLY CONDENSED F
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | 24. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION The condensed financial information of the Company has been prepared in accordance with SEC Regulation S-X Rule 5-04 and Rule 12-04, using the same accounting policies as set out in the Group’s consolidated financial statements, except that the Company uses the equity method to account for investments in its subsidiaries, VIEs and VIEs’ subsidiaries. The subsidiaries did not pay any dividend to the Company for the years presented. Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed and omitted. The footnote disclosures contain supplemental information relating to the operations of the Company, as such, these statements are not the general-purpose financial statements of the reporting entity and should be read in conjunction with the notes to the consolidated financial statements of the Company. The Company did not have significant capital and other commitments or guarantees as of December 31, 2017. Condensed Balance Sheets (In thousands, except for share and per share data) As of December 31, 2016 2017 RMB RMB US$ Note 2 ASSETS Current assets Cash and cash equivalents Amounts due from subsidiaries and other related parties Prepaid expenses and other current assets Total current assets Non-current assets Investments in subsidiaries, VIEs and VIEs’ subsidiaries ) Long-term investments Total non-current assets Total assets LIABILITIES Current liabilities Amounts due to subsidiaries, VIEs and VIEs’ subsidiaries Accrued expenses and other current liabilities Total current liabilities Convertible loans — — Total liabilities Commitments and contingencies (Note 22) As of December 31, 2016 2017 RMB RMB US$ Note 2 MEZZANINE EQUITY Pre-IPO Series A-1 convertible redeemable preferred shares ($0.0001 of par value per share; 38,602,941 shares authorized, issued and outstanding with redemption value of RMB7,792 as of December 31, 2016; none authorized, issued and outstanding as of December 31, 2017) — — Pre-IPO Class B ordinary shares ($0.0001 of par value per share; 7,350,000 shares authorized, issued and outstanding with redemption value of RMB1,443 as of December 31, 2016; none authorized, issued and outstanding as of December 31, 2017) — — Pre-IPO Series A-2 convertible redeemable preferred shares ($0.0001 of par value per share; 39,390,757 shares authorized, issued and outstanding with redemption value of RMB46,712 as of December 31, 2016; none authorized, issued and outstanding as of December 31, 2017) — — Pre-IPO Series B-1 convertible redeemable preferred shares ($0.0001 of par value per share; 4,119,294 shares authorized, issued and outstanding with redemption value of RMB34,633 as of December 31, 2016; none authorized, issued and outstanding as of December 31, 2017) — — Pre-IPO Series B-2 convertible redeemable preferred shares ($0.0001 of par value per share; 69,152,661 shares authorized, 63,775,246 shares issued and outstanding with redemption value of RMB601,272 as of December 31, 2016; none authorized, issued and outstanding as of December 31, 2017) — — Pre-IPO Series C convertible redeemable preferred shares ($0.0001 of par value per share; 53,774,149 shares authorized, 2 shares issued and outstanding with redemption value of nil as of December 31, 2016; none authorized, issued and outstanding as of December 31, 2017) * — — Total mezzanine equity — — * Less than 1 SHAREHOLDERS’ (DEFICIT)/EQUITY: Pre-IPO Class A Ordinary Shares ($0.0001 par value per share; 287,610,198 shares authorized; 110,647,199 shares issued and outstanding as of December 31, 2016; none authorized, issued and outstanding as of December 31, 2017) — — Class A Ordinary Shares ($0.0001 par value per share; none authorized, issued and outstanding as of December 31, 2016; 1,889,352,801 shares authorized, 217,070,940 shares issued and outstanding as of December 31, 2017) — Class B Ordinary Shares ($0.0001 par value per share; none authorized, issued and outstanding as of December 31, 2016; 110,647,199 shares authorized, 110,647,199 shares issued and outstanding as of December 31, 2017) — Additional paid-in capital — Accumulated other comprehensive income/(loss) ) ) Accumulated deficit ) ) ) Total shareholders’ (deficit)/equity ) Total liabilities, mezzanine equity and shareholders’ (deficit)/equity Condensed Statements of Operations and Comprehensive (Loss)/Income (In thousands) For the Year Ended December 31, 2015 2016 2017 RMB RMB RMB US$ Note 2 Operating expenses: General and administrative expenses ) ) ) ) Total operating expenses ) ) ) ) Interest income/(expense), net ) ) ) Equity in (loss)/gain of subsidiaries, VIEs and VIEs’ subsidiaries ) ) Other long-term investments related impairment — ) — — (Loss)/income before income tax expense ) ) Income tax expense — — — — Net (loss)/income ) ) Preferred shares redemption value accretion ) ) ) ) Income allocation to participating preferred shares — — ) ) Deemed dividend to a preferred shareholder — ) — — Net (loss)/income attributable to ordinary shareholders ) ) Net (loss)/income ) ) Other comprehensive income/(loss): Foreign currency translation adjustments, net of nil tax ) ) Total comprehensive (loss)/income ) ) Condensed Statements of Cash Flows (In thousands) For the Year Ended December 31, 2015 2016 2017 RMB RMB RMB US$ Note 2 Net cash provided by/(used in) operating activities ) ) ) Cash flows from investing activities: Cash paid on long-term investments ) ) ) ) Net cash used in investing activities ) ) ) ) Cash flows from financing activities: Proceeds from issuance of Pre-IPO Preferred Shares — — — Proceeds from initial public offering, net of issuance costs — — Proceeds from receivables from Pre-IPO Series C-1 preferred shareholders — — Repurchase of preferred shares — ) — — Proceeds from issuance of convertible loans — — — Payment of debt issuance cost — ) — — Net cash provided by financing activities Effect of exchange rate changes on cash and cash equivalents ) ) Net (decrease)/increase in cash and cash equivalents ) Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year Basis of presentation The Company’s accounting policies are the same as the Group’s accounting policies with the exception of the accounting for the investments in subsidiaries, VIEs and VIEs’ subsidiaries. For the Company only condensed financial information, the Company records its investments in subsidiaries, VIEs and VIEs’ subsidiaries under the equity method of accounting as prescribed in ASC 323, Investments—Equity Method and Joint Ventures . Such investments are presented on the Condensed Balance Sheets as “Investments in subsidiaries, VIEs and VIEs’ subsidiaries” and shares in the subsidiaries, VIEs and VIEs’ subsidiaries’ loss are presented as “Equity in (loss)/gain of subsidiaries, VIEs and VIEs’ subsidiaries” on the Condensed Statements of Operations and Comprehensive (Loss)/Income. The parent company only condensed financial information should be read in conjunction with the Group’s consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI35
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”). Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. |
Basis of consolidation | Basis of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and subsidiaries of the VIEs for which the Company is the primary beneficiary. Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All transactions and balances among the Company, its subsidiaries, the VIEs and subsidiaries of the VIEs have been eliminated upon consolidation. VIE Companies a. Contractual Agreements with VIEs The following is a summary of the contractual agreements (collectively, “Contractual Agreements”) between the Company’s PRC subsidiary, Beijing Shijitong, and the VIEs, Shenzhen Fenqile (before the 2016 Reorganization), Beijing Lejiaxin, Shenzhen Xinjie and Qianhai Dingsheng. Through the Contractual Agreements, the VIEs are effectively controlled by the Company. Exclusive Option Agreements. Pursuant to the Exclusive Option Agreements, the Nominee Shareholders of the VIEs have irrevocably granted Beijing Shijitong or any third party designated by Beijing Shijitong an exclusive option to purchase all or part of their respective equity interests in the VIEs. The purchase price shall be the lowest price permitted by law. Without Beijing Shijitong’s prior written consent, the VIEs shall not, among other things, amend their articles of association, increase or decrease the registered capital, sell, dispose of or set any encumbrance on their assets, business or revenue, enter into any material contract outside the ordinary course of business, merge with any other persons or make any investments, distribute dividends, or enter into any transactions which have material adverse effects on their business. The Nominee Shareholders of the VIEs also jointly and severally undertake that they will not transfer, gift or otherwise dispose of their respective equity interests in the VIEs to any third party or create or allow any encumbrance on their equity interests within the term of these agreements. These agreements will remain effective until Beijing Shijitong and/or any third party designated by Beijing Shijitong has acquired all equity interests of the VIEs from their respective Nominee Shareholders. Power of Attorney. Pursuant to the Power of Attorney, each Nominee Shareholder of the VIEs irrevocably authorizes Beijing Shijitong or any person(s) designated by Beijing Shijitong to act as its attorney-in-fact to exercise all of such shareholder’s voting and other rights associated with the shareholder’s equity interests in the VIEs, including but not limited to, the right to attend shareholder meetings on behalf of such shareholder, the right to appoint legal representatives, directors, supervisors and chief executive officers and other senior management, and the right to sell, transfer, pledge and dispose of all or a portion of the shares held by such shareholder. The power of attorney is irrevocable and remains in force continuously upon execution. Exclusive Business Cooperation Agreements. Pursuant to these Exclusive Business Cooperation Agreements, Beijing Shijitong or its designated party has the exclusive right to provide the VIEs with comprehensive business support, technical support and consulting services. Without Beijing Shijitong’s prior written consent, the VIEs shall not accept any services covered by these agreements from any third party. The VIEs agree to pay service fees in an amount determined by Beijing Shijitong based on respective profits calculated as operating revenue minus operating cost of the VIEs for the relevant period on a yearly basis or other service fees for specific services as required and as otherwise agreed by both parties. Beijing Shijitong owns the intellectual property rights arising out of the services performed under these agreements. Unless Beijing Shijitong terminates these agreements or pursuant to other provisions of these agreements, these agreements will remain effective indefinitely. These agreements can be terminated by Beijing Shijitong through a 30-day advance written notice, the VIEs have no right to unilaterally terminate these agreements. Beijing Shijitong is entitled to substantially all of the economic benefits of the VIEs. Loan Agreements. Pursuant to the loan agreement between Beijing Shijitong and the Nominee Shareholders of Qianhai Dingsheng, and the loan agreement between Beijing Shijitong and the Nominee Shareholders of Shenzhen Xinjie, Beijing Shijitong made the loans solely for the purpose of providing funds necessary for capital injection into the VIEs to operate their respective businesses. Pursuant to these loan agreements, the Nominee Shareholders can only repay the loans by the transfer of all their equity interests in Qianhai Dingsheng or Shenzhen Xinjie, where applicable, to Beijing Shijitong or its designated person(s) pursuant to their respective Exclusive Option Agreements. The Nominee Shareholders of the VIEs must pay all of the proceeds from transfer of such equity interests to Beijing Shijitong. In the event that the Nominee Shareholders transfer their equity interests to Beijing Shijitong or its designated person(s) with a price equivalent to or less than the amount of the principal, the loans will be interest free. If the price is higher than the amount of the principal, the excess amount will be paid to Beijing Shijitong as the loan interest. The loans must be repaid immediately when permitted by PRC laws at Beijing Shijitong’s request. Term of both loans is ten years and will be extended automatically for another ten years on each expiration. Equity Pledge Agreements. Pursuant to these Equity Pledge Agreements, each Nominee Shareholder of the VIEs has pledged all of his, her or its respective equity interests in the VIEs to Beijing Shijitong to guarantee the performance by such Nominee Shareholder and the VIEs of their respective obligations under the Exclusive Option Agreements, the Power of Attorney, the Loan Agreements (applicable to the contractual arrangements with Qianhai Dingsheng or Shenzhen Xinjie), and the Exclusive Business Cooperation Agreements, and any amendment, supplement or restatement to such agreements. If the VIEs or any of their Nominee Shareholders breach any obligations under these agreements, Beijing Shijitong, as pledgee, will be entitled to dispose of the pledged equity and have priority to be compensated by the proceeds from the disposal of the pledged equity. Each of the Nominee Shareholders of the VIEs agrees that before his, her or its obligations under the Contractual Agreements are discharged, he, she or it will not dispose of the pledged equity interests, create or allow any encumbrance on the pledged equity interests, which may result in the change of the pledged equity that may have adverse effects on the pledgee’s rights under these agreements without the prior written consent of Beijing Shijitong. These Equity Pledge Agreements will remain effective until the VIEs and their Nominee Shareholders discharge all their respective obligations under the Contractual Agreements. In April 2015, the Contractual Agreements were restated to reflect the replacement of Tibet Xianfeng Huaxing with its affiliated entity, Tibet Xianfeng Changqing Start-up Investment and Management Co., Ltd. (formerly known as Tibet Xianfeng Management Consultation Co., Ltd.), as a Nominee Shareholder of Shenzhen Fenqile. In March 2016, the Contractual Agreements were restated to reflect the 2016 Reorganization. These changes had no impact on the Group’s effective control over Shenzhen Fenqile, and therefore had no impact on the consolidated financial statements. In March 2017, the Contractual Agreements were restated to reflect the replacement of the Founding Shareholder with two employees Nominee Shareholders of Qianhai Dingsheng. In April and May 2017, the Contractual Agreements were restated to reflect the Loan Agreements entered into between Beijing Shijitong and the Nominee Shareholders of Qianhai Dingsheng, and Beijing Shijitong and the Nominee Shareholders of Shenzhen Xinjie, respectively. These changes had no impact on the Group’s effective control over Qianhai Dingsheng and Shenzhen Xinjie, and therefore had no impact on the consolidated financial statements. b. Risks in relation to the VIE structure The following table sets forth the assets, liabilities, results of operations and changes in cash and cash equivalents of the VIEs and their subsidiaries taken as a whole, which were included in the Group’s consolidated financial statements with intercompany balances and transactions eliminated: As of December 31, 2016 2017 (RMB in thousands) Total assets Total liabilities For the Year Ended December 31, 2015 2016 2017 (RMB in thousands) Total operating revenue Net loss ) ) ) For the Year Ended December 31, 2015 2016 2017 (RMB in thousands) Net cash (used in)/provided by operating activities ) Net cash used in investing activities ) ) ) Net cash provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year Under the Contractual Agreements with the VIEs, the Company has the power to direct activities of the VIEs and VIEs’ subsidiaries and can have assets transferred out of the VIEs and VIEs’ subsidiaries. Therefore, the Company considers itself the ultimate primary beneficiary of the VIEs and there is no asset of the VIEs that can only be used to settle obligations of the VIEs and VIEs’ subsidiaries, except for registered capital and PRC statutory reserves of the VIEs and their subsidiaries amounting to RMB671.8 million and RMB1,314.3 million as of December 31, 2016 and 2017, respectively. Since the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIEs. However, as the Company is conducting certain businesses mainly through its VIEs and VIEs’ subsidiaries, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss. In the opinion of the Company’s management, the contractual arrangements among its subsidiary, the VIEs and their respective Nominee Shareholders are in compliance with current PRC laws and are legally binding and enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies could limit the Company’s ability to enforce these contractual arrangements. As a result, the Company may be unable to consolidate the VIEs and VIEs’ subsidiaries in the consolidated financial statements. In January 2015, the Ministry of Commerce (“MOFCOM”), released for public comment a proposed PRC law, the Draft Foreign Investment Enterprises (“FIE”) Law, that appears to include VIEs within the scope of entities that could be considered to be FIEs, that would be subject to restrictions under existing PRC law on foreign investment in certain categories of industry. Specifically, the Draft FIE Law introduces the concept of “actual control” for determining whether an entity is considered to be an FIE. In addition to control through direct or indirect ownership or equity, the Draft FIE Law includes control through contractual arrangements within the definition of “actual control”. If the Draft FIE Law is passed by the People’s Congress of the PRC and goes into effect in its current form, these provisions regarding control through contractual arrangements could be construed to include the Group’s contractual arrangements with its VIEs, and as a result, the Group’s VIEs could become explicitly subject to the current restrictions on foreign investment in certain categories of industry. The Draft FIE Law includes provisions that would exempt from the definition of FIEs where the ultimate controlling shareholders are either entities organized under PRC law or individuals who are PRC citizens. The Draft FIE Law is silent as to what type of enforcement action might be taken against existing VIE, that operates in restricted or prohibited industries and is not controlled by entities organized under PRC law or individuals who are PRC citizens. If the restrictions and prohibitions on FIEs included in the Draft FIE Law are enacted and enforced in their current form, the Group’s ability to use the contractual arrangements with its VIEs and the Group’s ability to conduct business through the VIEs could be severely limited. The Company’s ability to control the VIEs also depends on the power of attorney Beijing Shijitong has to vote on all matters requiring shareholders’ approvals in the VIEs. As noted above, the Company believes these power of attorney are legally binding and enforceable but may not be as effective as direct equity ownership. In addition, if the Group’s corporate structure or the contractual arrangements with the VIEs were found to be in violation of any existing PRC laws and regulations, the PRC regulatory authorities could, within their respective jurisdictions: · revoke the Group’s business and operating licenses; · require the Group to discontinue or restrict its operations; · restrict the Group’s right to collect revenues; · block the Group’s websites; · require the Group to restructure its operations, re-apply for the necessary licenses or relocate the Group’s businesses, staff and assets; · impose additional conditions or requirements with which the Group may not be able to comply; or · take other regulatory or enforcement actions against the Group that could be harmful to the Group’s business. The imposition of any of these restrictions or actions may result in a material adverse effect on the Group’s ability to conduct its business. In addition, if the imposition of any of these restrictions causes the Group to lose the right to direct the activities of the VIEs or the right to receive their economic benefits, the Group would no longer be able to consolidate the financial statements of the VIEs. In the opinion of management, the likelihood of losing the benefits in respect of the Group’s current ownership structure or the contractual arrangements with its VIEs is remote. |
Use of estimates | Use of estimates The preparation of the Group’s consolidated financial statements is in conformity with the U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of financial statement and reported revenues and expenses during the reported periods. Significant accounting estimates include, but are not limited to (i) revenue recognition associated with principal versus agent considerations; (ii) fair value of financial guarantee derivatives; (iii) determination of the fair value of Pre-IPO Preferred Shares and Pre-IPO Class A Ordinary Shares; (iv) valuation and recognition of share-based compensation expenses; (v) provision for income tax and valuation allowance for deferred tax assets; (vi) provision for credit losses; (vii) basis of consolidation; (viii) inventory valuation for excess and obsolete inventories. Actual results could materially differ from these estimates. |
Functional currency and foreign currency translation | Functional currency and foreign currency translation The Group uses Renminbi (“RMB”) as its reporting currency. The functional currency of the Company and its subsidiary incorporated in Hong Kong (i.e. Installment HK) is United States dollars (“US$”) and the functional currencies of the PRC entities in the Group are RMB. In the consolidated financial statements, the financial information of the Company and its subsidiary incorporated in Hong Kong have been translated into RMB at the exchange rates quoted by the People’s Bank of China (the “PBOC”). Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the period. Translation adjustments arising from these are reported as foreign currency translation adjustments, and are shown as a component of accumulated other comprehensive income in the Consolidated Statements of Changes in Shareholders’ (Deficit)/Equity and a component of other comprehensive income in the Consolidated Statements of Comprehensive (Loss)/Income. Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are remeasured at the applicable rates of exchange in effect at that date. Foreign currency exchange gain or loss resulting from the settlement of such transactions and from remeasurement at period-end is recognized in “Others, net” in the Consolidated Statements of Operations. Foreign currency translation adjustments included in the Group’s Consolidated Statements of Comprehensive (Loss)/Income for the years ended December 31, 2015, 2016 and 2017 were gain of RMB15.4 million, gain of RMB1.9 million and loss of RMB31.9 million, respectively. Foreign currency exchange gain or loss recorded was immaterial for each of the periods presented. |
Convenience translation | Convenience translation Translations of balances in the Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Comprehensive (Loss)/Income and Consolidated Statements of Cash Flows from RMB into US$ as of and for the year ended December 31, 2017 are solely for the convenience of the readers and were calculated at the rate of US$1.00=RMB6.5063, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 29, 2017. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 29, 2017, or at any other rate. |
Financing receivables | Financing receivables The Group generates financing receivables from providing installment purchase loans, from its online direct sales, and personal installment loans to Customers. Financing receivables are measured at amortized cost and reported on the Consolidated Balance Sheets at outstanding principal adjusted for any charge-offs, the allowance for credit losses, and net deferred origination fees on originated financing receivables. With respect to the Group’s financing receivables, the Group’s main funding sources include (1) proceeds from Individual Investors; (2) proceeds from Institutional Funding Partners; (3) the issuance of asset-backed securitized debts. On-balance sheet: Loans funded by Individual Investors on Juzi Licai and certain Institutional Funding Partners For the proceeds from loans facilitated through the Group’s own online investment platform Juzi Licai , which offers the Individual Investors various investment programs with different terms and estimated rates of return, or from certain Institutional Funding Partners, the Group’s role includes: (1) collecting the investment principal from the Individual Investors or Institutional Funding Partners and lending the funds to Customers, (2) collecting monthly repayment from the Customers and repaying the Individual Investors or Institutional Funding Partners according to the terms (i.e. interest rate and scheduled repayment dates) of the respective investment programs or agreements between the Individual Investors or Institutional Funding Partners and the Group (“Investment Programs or Agreements”). The Group noted that the terms of the underlying loan agreements between the Individual Investors or Institutional Funding Partners and the Customers (“Underlying Loan Agreements”) do not necessarily match the terms of the Investment Programs or Agreements. The mismatch is mainly due to the fact that some Individual Investors or Institutional Funding Partners may invest in the programs that have shorter investment periods than the terms of the Underlying Loan Agreements. Depending on the types of Investment Programs the Individual Investors choose or the Investment Agreements the Institutional Funding Partners entered into with the Group, the investing periods could be as short as one week and as long as thirty-six months. Pursuant to the Investment Programs or Agreements, the Individual Investors or Institutional Funding Partners agree on a rate of return with the Group which is normally lower than the coupon interest rate stipulated in the Underlying Loan Agreement, given the shorter periods of those Investment Programs or Agreements. The Group considers the terms of the Investment Programs or Agreements, which drive the return of the investments, and concludes the Group has liabilities to the Individual Investors or Institutional Funding Partners when the underlying loans are funded. Accordingly, the Group is considered as the primary obligor to the Individual Investors or Institutional Funding Partners in the lending relationship and therefore records the liabilities to Individual Investors or Institutional Funding Partners on its Consolidated Balance Sheets. Consequently, the Group considered that the financing receivables were not settled or extinguished when Customers enter into the Underlying Loan Agreements with the Individual Investors or Institutional Funding Partners. Therefore, the Group continues to account for the financing receivables over the terms of the installment purchase loans and personal installment loans. Quality assurance program on Juzi Licai In July 2017, the Group established a quality assurance program (“QAP”) with the purposes of providing make-up payments to Individual Investors on Juzi Licai when Customers fail to satisfy their principal or interest repayment obligations. The Group considers historical loan performance, the expected repayments (including prepayments) by Customers, market conditions, the product lines, profitability, cash position, the actual and expected payouts of the quality assurance funds, and determines to set aside a portion of each repayment equal to certain percentage of the outstanding principal balance of the loan and transfers such amount to custody bank accounts as quality assurance funds. The percentage is currently equal to 4.5% of the outstanding principal balance at the beginning of the relevant monthly period, divided by 12. The Group reserves the right to revise this percentage upwards or downwards from time to time. The QAP only applies to loans newly funded by Individual Investors on Juzi Licai on or after July 7, 2017. Under the Investment Programs with Individual Investors on Juzi Licai relating to the QAP, the amount of make-up payments to Individual Investors with defaulted loans is up to the available balance under the QAP. If the QAP becomes insufficient to pay back all Individual Investors with defaulted loans, these Individual Investors will be repaid on a pro rata basis, and their outstanding unpaid loans will be deferred to the next time the QAP is replenished, at which time a distribution will again be made to all Individual Investors with those defaulted loans. The Group places a three-year limit on the period during which Individual Investors with defaulted loans have the right to collect the unpaid balances from the QAP. Once the Group makes a payment out of the QAP to an Individual Investor on Juzi Licai when a Customer defaults, the Group seeks to collect the amounts from that Customer through the collection process. The amount collected from the Customer, if any, is remitted to first replenish the portion of the QAP used to repay the Individual Investor, and if there is any additional amount remaining, then to reimburse the Group’s collection expenses. Considering that the loans funded with the proceeds from Individual Investors on Juzi Licai are on-balance sheet loans, the Group is obligated to repay the Individual Investors for all amounts of principal and future interests regardless of whether the QAP has been implemented or not. The Group determines that there are no additional liabilities to be recognized in addition to the principal and interests due to Individual Investors recorded as “Funding Debts” and “Accrued interest payable” on its Consolidated Balance Sheets. The quality assurance funds set aside under the QAP through custody bank accounts are recorded as “Restricted cash” on its Consolidated Balance Sheets. The Group applies the same process and methodology to evaluate the creditworthiness and collectability of the loan portfolio covered by the QAP on a pooled basis, mainly based on delinquency levels and historical charge-offs. Off-balance sheet: Loans funded by certain other Institutional Funding Partners such as third-party commercial banks or consumer finance companies For the financing receivables funded by the proceeds from certain other Institutional Funding Partners such as third-party commercial banks or consumer finance companies, each underlying loan and Customer has to be approved by the commercial banks or consumer finance companies individually. Once the loan is approved by and originated by the commercial bank or consumer finance company, the fund is provided by the commercial bank or consumer finance company to the Customer and a lending relationship between the Customer and the commercial bank or consumer finance company is established through a loan agreement. The funds can only be used to settle the existing financing receivables the Group generated from installment purchase loans or personal installment loans previously provided to the Customers. Effectively, the Group offers loan facilitation and matching services to the Customers who have credit needs and the commercial banks or consumer finance companies who originate loans directly to Customers referred by the Group. The Group continues to provide account maintenance, collection, and payment processing services to the Customers over the term of the loan agreement. At the same time, the Group also provides a financial guarantee on the principal and the accrued interest repayment of the defaulted loans in case of Customers’ defaults, and full interest repayment in the event that Customers early repay their loans. Under this scenario, the Group determines that it is not the legal lender or borrower in the loan origination and repayment process. Accordingly, the Group does not record financing receivables arising from these loans nor loans payable to the commercial banks or consumer finance companies and considered that the financing receivables arising from installment purchase loans or personal installment loans previously provided to the Customers were settled and extinguished when the funds are received. Separately, the Group accounts for the financial guarantee provided as discussed in Note 2. On-balance sheet: Issuance of asset-backed securitized debts The Group periodically securitizes its financing receivables arising from online direct sales through the transfer of those assets to a securitization vehicle. The securitization vehicle then issues debt securities to third-party investors and is considered a consolidated variable interest entity under ASC 810. Therefore, the financing receivables remain at the Group and are recorded as “Financing receivables, net” in the Consolidated Balance Sheets. The Group recognizes interest and financial services income over the terms of the financing receivables using the effective interest rate method. The proceeds from third-party investors are recorded as Funding Debts (described below). |
Provision for credit losses | Provision for credit losses The Group assesses the creditworthiness and collectability of its financing receivable portfolio mainly based on delinquency levels and historical charge-offs of the financing receivables using an established systematic process on a pooled basis within respective credit risk levels. The Group considers location, education background, income level, outstanding external borrowings, and external credit references when assigning Customers into different credit risk levels. Also, the financing receivable portfolio within each credit risk level consists of individually small amount of installment purchase loans and personal installment loans. In the consideration of above factors, the Group determines that the entire financing receivable portfolio within each credit risk level is homogenous with similar credit characteristics. The Group’s provision for credit losses is calculated separately for financing receivables within each credit risk level, taking into considerations of those financing receivables with flexible repayment options. For each credit risk level, the Group estimates the expected credit losses rate based on delinquency status of the financing receivables within that level: current, 1 to 29, 30 to 59, 60 to 89, 90 to 119, 120 to 149, 150 to 179 calendar days past due. These loss rates in each delinquency status are based on average historical loss rates of financing receivables associated with each of the abovementioned delinquency categories. The expected loss rate of each risk level will be applied to the outstanding loan balances within that level to determine the allowance for credit loss for each reporting period. In addition, the Group considers other general economic conditions, if any, when determining the provision for credit losses. |
Accrued interest receivable | Accrued interest receivable Accrued interest income on financing receivables is calculated based on the contractual interest rate of the loan and recorded as interest and financial services income as earned. Financing receivables are placed on non-accrual status upon reaching 90 days past due. When a financing receivable is placed on non-accrual status, the Group stops accruing interest and reverses all accrued but unpaid interest as of such date. |
Nonaccrual financing receivables and charged-off financing receivables | Nonaccrual financing receivables and charged-off financing receivables The Group considers a financing receivable to be delinquent when a monthly payment is one day past due. When the Group determines it is probable that it will be unable to collect unpaid principal amount on the receivable, the remaining unpaid principal balance is charged off against the allowance for credit losses. Generally, charge-offs occur after the 180th day of delinquency. Interest and financial services income for nonaccrual financing receivables is recognized on a cash basis. Cash receipt of non-accrual financing receivables would be first applied to any unpaid principal, late payment fees, if any, before recognizing interest and financial services income. The Group does not resume accrual of interest after a loan has been placed on nonaccrual status. |
Funding Debts | Funding Debts For the proceeds received from the Individual Investors, Institutional Funding Partners, or the asset-backed securitized debts to fund the Group’s on-balance sheet loans, the Group records them as Funding Debts on the Consolidated Balance Sheets. |
Accrued interest payable | Accrued interest payable Accrued interest payable is calculated based on the contractual interest rates of Funding Debts. |
Guarantee liabilities | Guarantee liabilities For the off-balance sheet loans funded by certain other Institutional Funding Partners such as third-party commercial banks or consumer finance companies, the Group is obligated to compensate the commercial banks or consumer finance companies for the principal and interest repayment of the defaulted loans in case of Customers’ default, and full interest repayment according to the loan terms in the event that the Customers early repay their loans. Therefore, the Group effectively provides guarantees to the commercial banks or consumer finance companies that include credit risk and prepayment risk. In order to determine the accounting treatment of the guarantees, the Group considered the criteria of scope exception under ASC 815-10-15-58. In order to qualify for this scope exception, the financial guarantee contracts must meet all three of the following criteria: (a) provide for payments to be made solely to reimburse the guaranteed party for failure of the debtor to satisfy its required payment obligations either at prescriptive payment dates or accelerated payment dates as a result of the occurrence of an event of default or notice of acceleration being made to the debtor by the creditor; (b) payment be made only if the debtor’s obligation to make payments as a result of conditions as described in (a) is past due; and (c) the guaranteed party is, as a precondition in the contract for receiving payment of any claim under the guarantee, exposed to the risk of non-payment both at inception and throughout its term either through direct legal ownership or through a back-to-back arrangement. As the guarantee provided by the Group does not solely reimburse these commercial banks or consumer finance companies for failure of the Customers to satisfy required payment obligations, but also the future interest in the event of early repayment by the Customers, the scope exception under ASC 815-10-15-58(a) is not met. Therefore, these contracts are accounted for as a derivative under ASC Topic 815, Derivatives and Hedging , and are recognized on the Consolidated Balance Sheets as either assets or liabilities and recorded at fair value. Derivative assets and liabilities within the scope of ASC 815 are required to be recorded at fair value at inception and remeasured at fair value on an ongoing basis in accordance with ASC Topic 820, Fair Value Measurement . Therefore, the financial guarantee derivatives will be subsequently marked to market at the end of each reporting period with gains and losses recognized as change in fair value of financial guarantee derivatives. The estimated fair value of the financial guarantee derivatives is determined by the Group based on a discounted cash flow model, with reference to estimates of cumulative default rates, cumulative prepayment rates, margins on cost of comparable companies and discount rates, using industry standard valuation techniques with the assistance of an independent valuation firm. |
Revenue recognition | Revenue recognition The Group mainly provides online direct sales and services, and financial services to its Customers. Consistent with the criteria set out by ASC Topic 605, Revenue Recognition , the Group recognizes revenues when the following four criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the selling price is fixed or determinable, and (iv) collectability is reasonably assured. Online direct sales and services Online direct sales The Group engages in the online direct sales of electronic products, and to a lesser extent, home appliance products and general merchandise products with installment payment terms mainly through its retail website www.fenqile.com and its APP. The Group considers whether it should report the gross amount of product sales and related cost or the net amount earned as commissions by assessing all indicators set forth in ASC subtopic 605-45. For arrangements where the Group is the primary obligor (i.e. primarily responsible for fulfilling the promise to provide the good or service), is subject to inventory risk, and has latitude in establishing prices and selecting suppliers, revenues are recorded on a gross basis. Otherwise, revenues are recorded on a net basis as services and others. For online direct sales for which the Group is considered the principal, the Group recognizes revenue net of discounts and return allowances when the products are delivered and titles are passed to Customers. Return allowances, which reduce net revenues, are estimated based on historical experiences. For these transactions, the Group originates instalment purchase loans and generates financing receivables due from the Customers who place orders. The online direct sales revenues and related financing receivables are accounted for as sales of products to the Customers with extended payment terms and recorded at present value of the contractual cash flows when the above revenue recognition criteria are met. The instalment purchase loans originated through online direct sales may be subsequently funded by certain other Institutional Funding Partners and such subsequent loans may be categorized as off-balance sheet loans. The financing receivables previously generated from online direct sales are settled with the proceeds the Customers receive from the loans issued by the Institutional Funding Partners. Revenue is recorded net of value-added tax and related surcharges. Services and others The Group also operates an online marketplace that enable third-party sellers to sell their products to Customers with installment payment terms. The Customers place their orders online through the website www.fenqile.com or its APP, whereby the Group pays to the third-party sellers on behalf of the Customers, which generate financing receivables due from the Customers. The Group charges the third-party sellers a fixed rate commission fee based on the sales amount for the services rendered. The Group recognizes the commission fees as revenues from the third-party sellers on a net basis at the point of successful delivery of products, as it is not the primary obligor and does not have general inventory risk or does not have latitude to establish prices. Financing receivables associated with third-party sellers’ sales are recorded at present value of the contractual cash flows when the above revenue recognition criteria are met. Financial services Interest and financial services income The Group generates interest and financial services income earned on installment purchase loans, from its online direct sales on the website www.fenqile.com and its APP, and personal installment loans to its Customers, if these loans are determined to be on-balance sheet loans. For the on-balance sheet loans funded by the Individual Investors on Juzi Licai or certain Institutional Funding Partners, and the on-balance sheet loans securitized and transferred to the securitization vehicle, the financing receivables continue to be recorded on the Group’s Consolidated Balance Sheets over the terms of the loans. Interest and financial services income is recognized over the terms of financing receivables using the effective interest method. Origination fees collected on the first repayment date, normally one month after the origination of personal installment loans, are recorded as a component of financing receivables, on the Consolidated Balance Sheets. Deferred origination fees are recognized over the terms of personal installment loans. Direct origination costs include costs directly attributable to originating financing receivables, including vendor costs and personnel costs directly related to the time spent by those individuals performing activities related to the origination of financing receivables. Considering the credit risk characteristics of the Customers as well as the relatively small amount of each individual financing receivable, the Group determined that direct origination costs incurred for originating individual financing receivables are insignificant and expensed as incurred and recorded in “Processing and servicing cost” in the Consolidated Statements of Operations. Interest and financial services income is not recorded when reasonable doubt exists as to the full, timely collection of interest or principal. Loan facilitation and servicing fees For the off-balance sheet loans funded by certain other Institutional Funding Partners such as third-party commercial banks or consumer finance companies, the Group does not record financing receivables arising from these loans nor loans payable to the commercial banks or consumer finance companies. For these transactions, the Group earns loan facilitation and servicing fees from the Customers. The Group provides intermediary services to both the Customers and the commercial banks or consumer finance companies. The intermediary services provided include (1) loan facilitation and matching services, (2) post-origination services (i.e. account maintenance, collection, and payment processing) to the Customers, and (3) a financial guarantee to the commercial banks or consumer finance companies. The Group determined that the financial guarantee is within the scope of ASC 815 Derivatives and Hedging and recorded it at fair value at inception, with the remaining consideration recognized as revenues under ASC 605-25. Under the off-balance sheet loan arrangements, fees for loan facilitation and matching services and post-origination services are charged and collected through deduction from the monthly repayments from the Customers to the commercial banks or consumer finance companies, and no fees are collected upfront. While the loan facilitation and matching services are rendered upfront, the amount allocable to these services based on relative selling prices is limited to nil under ASC 605-25-30-5, because all fees are contingent on ongoing servicing as well as the Customer not prepaying. In considering that, the revenue is recognized each month when the fee is received over the terms of the loans as the monthly repayments occur in line with the resolution of the contingency. Other revenue Other revenue includes fees collected for prepayment and late payment for on-balance sheet loans, which is calculated as a certain percentage of interest over the prepaid principal loan amount in case of prepayment or a certain percentage of past due amounts in case of late payment. Customer incentives In order to incentivize the Customers to use the Platform, the Group provides two major types of incentive coupons: cash coupons that have a stated discount amount that reduces the selling price of a future purchase of product and repayment coupons that have a stated discount amount that reduce a future repayment on the installment loan related to a previously executed product sale or personal installment loan. Both cash coupons and repayment coupons are given to the Customers for free as part of the Group’s promotion events at the Group’s discretion. In accordance with ASC subtopic 605-50, cash coupons are accounted for as a reduction of revenue upon the future purchase by the Customers. The amount of cash coupons recognized as a reduction of revenue was RMB9.0 million, RMB125.0 million and RMB209.4 million for the year ended December 31, 2015, 2016 and 2017, respectively. Repayment coupons are recorded as a reduction of revenue based on historical usage pattern as they are earned by the Customers. Repayment coupons generally have an expiration of one to six months after issuance. Expired repayment coupons are recognized as revenue at the coupons’ expiration, which was not material for each of the periods presented. The Group offers cash incentive in cash to existing Customers for each new Customer who successfully signs up on the Platform using the existing Customers’ referral codes and has been granted a credit line. Referral code incentives, amounting to RMB14.7 million, RMB37.2 million and RMB15.0 million, were recorded as sales and marketing expenses in the Consolidated Statements of Operations for the years ended December 31, 2015, 2016 and 2017, respectively. |
Cash and Cash equivalents | Cash and Cash equivalents Cash and cash equivalents represent cash on hand, demand deposits, time deposits and highly liquid investments placed with banks or other financial institutions, which are unrestricted to withdrawal or use, and which have original maturities of three months or less. As of December 31, 2016 and 2017, the Group did not have any cash equivalents. |
Restricted cash | Restricted cash Restricted cash mainly represents: (i) cash received from Customers but not yet been repaid to investors or received from investors but not yet been remitted to Customers which is not available to fund the general liquidity needs of the Group; (ii) security deposits set aside for partnering commercial banks or certain Institutional Funding Partners in case of Customers’ defaults; and (iii) cash set aside under the quality assurance program through custody bank accounts. |
Restricted time deposits | Restricted time deposits Time deposits securing the Group’s short-term and long-term borrowings from financial institutions are treated as restricted time deposits on the Consolidated Balance Sheets. Short-term and long-term borrowings are designated to support the Group’s general operation and could not be used to fund the Group’s financing receivables. |
Inventories, net | Inventories, net Inventories, consisting of products available for sale, are stated at the lower of cost or net realizable value. Cost of inventory is determined using the first-in first-out method. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of disposal and transportation. Adjustments are recorded to write down the cost of inventory to the net realizable value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Group takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the Consolidated Statements of Operations. As of December 31, 2016 and 2017, all inventory balances were products available for sale. The Group also provides fulfillment-related services in connection with the Group’s online marketplace. Third-party sellers maintain ownership of their inventories and therefore these products are not included in the Group’s inventories. |
Long-term investments | Long-term investments The Group accounts for long-term investments over which it has significant influence but does not own a majority of the equity interest or lack of control using the equity method. For long-term investments which the Group does not have significant influence or the underlying shares the Group invested in are not considered in-substance common stock and have no readily determinable fair value, the cost method accounting is applied. The Group assesses its long-term investments for other-than-temporary impairment by considering factors as well as all relevant and available information including, but not limited to, current economic and market conditions, the operating performance of the companies including current earnings trends and other company-specific information such as financing rounds. |
Property, equipment and software, net | Property, equipment and software, net Property, equipment and software, net are stated at cost less accumulated depreciation, amortization and impairment, if any. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows: Category Estimated Useful Lives Computers and equipment 3 - 5 years Furniture and fixtures 3 - 5 years Leasehold improvement Over the shorter of the expected life of leasehold improvement or the lease term Software 3 - 10 years |
Impairment of long-lived assets | Impairment of long-lived assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. |
Fair value measurements | Fair value measurements Financial instruments Accounting guidance defines fair value as 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. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value: · Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. · Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical asset or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. · Level 3 applies to asset or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The carrying amount of cash and cash equivalents, restricted cash, amounts due from related parties, accounts payable, and amounts due to related parties approximates fair value because of their short-term nature. Financing receivables are measured at amortized cost. Funding Debts and accrued interest payable are carried at amortized cost. The carrying amount of the financing receivables, Funding Debts, accrued interest receivable, and accrued interest payable approximates their respective fair value as the interest rates applied reflect the current quoted market yield for comparable financial instruments. The Group considers unobservable inputs to be significant, if, by their exclusion, the estimated fair value of a Level 3 asset or liability would be impacted by a significant percentage change, or based on qualitative factors such as the nature of the instrument and significance of the unobservable inputs relative to other inputs used within the valuation. For the off-balance sheet loans funded by certain third-party commercial banks or consumer finance companies, the Group accounts for financial guarantee provided to the commercial banks or consumer finance companies at fair value (Note 8). The Group measures certain financial assets, including the investments under the cost method and equity method at fair value on a non-recurring basis only if an impairment charge were to be recognized. The Group’s non-financial assets, such as property, equipment and software, would be measured at fair value only if they were determined to be impaired. |
Cost of sales | Cost of sales Cost of sales consists of purchase price of the products, shipping charges and handling costs, as well as write-downs of inventory. Shipping charges to receive products from suppliers are included in the inventories, and recognized as cost of sales upon sale of the products to the Customers. For each of the periods presented, write-downs of inventory were insignificant. |
Funding cost | Funding cost Funding cost consists of interest expense the Group pays to Individual Investors on Juzi Licai and Institutional Funding Partners, including partnering peer-to-peer lending platforms and other financial institutions, to fund its financing receivables, certain fees and amortization of deferred debt issuance costs incurred in connection with obtaining these debts, such as origination fees and legal fees. |
Processing and servicing cost | Processing and servicing cost Processing and servicing cost consists primarily of vendor costs related to credit assessment, customer and system support, payment processing services and collection services associated with originating, facilitating and servicing the loans. |
Sales and marketing expenses | Sales and marketing expenses Sales and marketing expenses consist primarily of advertising costs and payroll and related expenses for personnel engaged in marketing and business development activities. Advertising costs, which consist primarily costs of online advertising and offline outdoor promotion activities, are expensed as incurred and are included within sales and marketing expenses in the Consolidated Statements of Operations. For the years ended December 31, 2015, 2016 and 2017, advertising costs totaled RMB95.0 million, RMB104.9 million and RMB98.5 million, respectively. |
Research and development expenses | Research and development expenses Research and development expenses consist primarily of payroll and related expenses for IT professionals involved in developing technology platform and website, server and other equipment depreciation, bandwidth and data center costs, and rental expenses. All research and development costs have been expensed as incurred as the costs qualifying for capitalization have been insignificant. |
General and administrative expenses | General and administrative expenses General and administrative expenses consist of payroll and related expenses for employees involved in general corporate functions, including finance, legal and human resources; costs associated with use of facilities and equipment, such as depreciation expenses, rental and other general corporate related expenses. |
Operating leases | Operating leases The Group leases office space under operating lease agreements with initial lease term up to five years. Rental expense is recognized from the date of initial possession of the leased property on a straight-line basis over the term of the lease and charged to earnings. Certain lease agreements contain rent holidays, which are recognized on a straight-line basis over the lease term. Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease terms. |
Share-based compensation | Share-based compensation Share-based awards granted to the Group’s employees, directors and non-employees directors, such as stock options, are measured at the grant date based on the fair value of the awards in accordance with ASC 718 Compensation-Stock Compensation . Share-based compensation, net of estimated forfeitures, is recognized as expenses on a straight-line basis over the requisite service period, which is the vesting period. Share-based awards granted to non-employees are accounted for in accordance with ASC 505-50 Equity-Based Payments to Non-Employee. All transactions in which services are received in exchange for share-based awards are accounted for based on the fair value of the consideration received or the fair value of the awards issued, whichever is more reliably measurable. Share-based compensation is measured at fair value at the earlier of the commitment date or the date the services are completed. The Group remeasures the awards using the then-current fair value at each reporting date until the measurement date, generally when the services are completed and awards are vested, and attributes the changes in those fair values over the service period by straight-line method. Stock options granted generally vest over four years. Given the exercise price of each stock option is US$0.0001, the Group uses the intrinsic value (approximately the fair value of each of the Company’s ordinary share) on the grant date to estimate the fair value of stock options. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The Group uses historical data to estimate pre-vesting option and records share-based compensation expense only for those awards that are expected to vest. See Note 20 for further discussion on share-based compensation. |
Fair value of Pre-IPO Preferred Shares and Pre-IPO Class A Ordinary Shares | Fair value of Pre-IPO Preferred Shares and Pre-IPO Class A Ordinary Shares Shares of the Company, which did not have quoted market prices before the IPO, were valued based on the income approach. The income approach involves applying the discounted cash flow analysis based on projected cash flows using the Group’s best estimate as of the valuation dates. Estimating future cash flows requires the Group to analyze projected revenue growth, gross margins, effective tax rates, capital expenditures and working capital requirements. In determining an appropriate discount rate, the Group considered the cost of equity and the rate of return expected by venture capitalists. The Group also applied a discount for lack of marketability given that the shares underlying the award were not publicly traded at the time of grant. Determination of estimated fair value of the Group requires complex and subjective judgments due to its limited financial and operating history, unique business risks and limited public information on companies in China similar to the Group. Option-pricing method was used to allocate enterprise value to Pre-IPO Preferred Shares and Pre-IPO Class A Ordinary Shares. The method treats Pre-IPO Preferred Shares and Pre-IPO Class A Ordinary Shares as call options on the enterprise’s value, with exercise prices based on the liquidation preference of Pre-IPO Preferred Shares. The strike prices of the “options” based on the characteristics of the Group’s capital structure, including number of shares of each class of ordinary shares, seniority levels, liquidation preferences, and conversion values for Pre-IPO Preferred Shares. The option-pricing method also involves making estimates of the anticipated timing of a potential liquidity event, such as a sale of the Group or an IPO, and estimates of the volatility of the Group’s equity securities. The anticipated timing is based on the plans of board of directors and management of the Group. Estimating the volatility of the share price of a privately held company is complex because there is no readily available market for the shares. Volatility is estimated based on annualized standard deviation of daily stock price return of comparable companies. |
Taxation | Taxation Income tax Current income tax is provided for in accordance with the laws of the relevant tax jurisdictions. Deferred income tax is 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 financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. 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 Group considers all positive and negative evidence, including future reversals of projected future taxable income and results of recent operation. The Group records a valuation allowance to reduce the amount of deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. Uncertain tax positions To assess uncertain tax positions, the Group applies a more-likely-than-not threshold and a two-step approach for the tax position measurement and financial statement recognition. Under the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more-likely-than-not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likelihood of being realized upon settlement. The Group classifies interest and penalties related to income tax matters, if any, in income tax expense. |
(Loss)/income per share | (Loss)/income per share Basic (loss)/income per share is computed by dividing net (loss)/income attributable to ordinary shareholders, considering the accretion to redemption value of Pre-IPO Preferred Shares, allocation of net income attributable to Pre-IPO Preferred Shares and deemed dividend to a preferred shareholder, by the weighted average number of ordinary shares outstanding during the period using the two-class method. The two-class method was used to calculate the basic net (loss)/income per ordinary share for periods prior to the completion of the IPO, since the Pre-IPO Preferred Shares were entitled to participation with Pre-IPO Class A Ordinary Shares in the Company’s undistributed net income and therefore were deemed to be participating securities. After the IPO, net (loss)/income per ordinary share are computed on Class A Ordinary Shares and Class B Ordinary Shares together, because both classes have the same dividend rights in the Company’s undistributed net income. Under the two-class method, net loss is not allocated to other participating securities if based on their contractual terms they are not obligated to share in the loss. Diluted (loss)/income per share is calculated by dividing net (loss)/income attributable to ordinary shareholders by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of ordinary shares issuable upon the conversion of the Pre-IPO Preferred Shares and convertible loans, for periods prior to the completion of the IPO, using the if-converted method, and ordinary shares issuable upon the exercise of outstanding stock options, using the treasury stock method. Ordinary equivalent shares are not included in the denominator of the diluted (loss)/income per share calculation when inclusion of such shares would be anti-dilutive. |
Segment reporting | Segment reporting The Group engages primarily in online direct sales services and online consumer finance services for its Customers in the PRC. The Group does not distinguish between markets or segments for the purpose of internal reports. The Group does not distinguish revenues, costs and expenses between segments in its internal reporting, and reports costs and expenses by nature as a whole. The Group’s chief operating decision maker, who has been identified as the Chief Executive Officer, reviews the consolidated results when making decisions about allocating resources and assessing performance of the Group as a whole and hence, the Group has only one reportable segment. As most of the Group’s long-lived assets are all located in the PRC and all the Group’s revenues are derived from the PRC, no geographical segments are presented. |
Statutory reserves | Statutory reserves The Company’s subsidiaries, VIEs and VIEs’ subsidiaries established in the PRC are required to make appropriations to certain non-distributable reserve funds. In accordance with the laws applicable to the FIEs established in the PRC, the Group’s subsidiaries registered as wholly foreign-owned enterprises (“WFOEs”) have to make appropriations from its annual after-tax profits as determined under Generally Accepted Accounting Principles in the PRC (“PRC GAAP”) to reserve funds including general reserve fund, enterprise expansion fund and staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the annual after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the general reserve fund has reached 50% of the registered capital of the company. Appropriations to the enterprise expansion fund and staff bonus and welfare fund are made at the respective company’s discretion. In addition, in accordance with the PRC Company Laws, the Group’s VIEs and VIE’s subsidiaries, registered as Chinese domestic companies, must make appropriations from their annual after-tax profits as determined under PRC GAAP to non-distributable reserve funds including statutory surplus fund and discretionary surplus fund. The appropriation to the statutory surplus fund must be 10% of the annual after-tax profits as determined under PRC GAAP. Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the company. Appropriation to the discretionary surplus fund is made at the respective company’s discretion. The use of the general reserve fund, enterprise expansion fund, statutory surplus fund and discretionary surplus fund are restricted to offsetting of losses or increasing of the registered capital of the respective company. The staff bonus and welfare fund is a liability in nature and is restricted to fund payments of special bonus to employees and for the collective welfare of all employees. None of these reserves are allowed to be transferred to the company in terms of cash dividends, loans or advances, nor can they be distributed except under liquidation. For the years ended December 31, 2015, 2016 and 2017, profit appropriation to general reserve fund and statutory surplus fund for the Group’s entities incorporated in the PRC was approximately RMB0.1 million, RMB1.9 million and RMB53.9 million respectively. No appropriation to other reserve funds was made for any of the periods presented. |
Significant risks and uncertainties | Significant risks and uncertainties Foreign currency risk The PRC government imposes controls on the convertibility of RMB into foreign currencies. The Group’s cash and cash equivalents, restricted cash and restricted time deposits denominated in RMB that are subject to such government controls amounted to RMB558.6 million and RMB1,073.4 million as of December 31, 2016 and 2017, respectively. The value of RMB is subject to changes in the central government policies and to international economic and political developments affecting supply and demand in the PRC foreign exchange trading system market. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the PBOC. Remittances in currencies other than RMB by the Group in the PRC must be processed through PBOC or other Chinese foreign exchange regulatory bodies which require certain supporting documentation in order to process the remittance. Concentration of credit risk Credit risk is one of the most significant risks for the Group’s installment purchase loans and personal installment loans businesses. The Group records provision for credit losses based on its estimated probable losses against its financing receivables. Apart from the financing receivables, financial instruments that potentially expose the Group to significant concentration of credit risk primarily included in the financial statement line items of cash and cash equivalents, restricted cash, restricted time deposits, accrued interest receivable, prepaid expenses and other current assets. The Group holds its cash and cash equivalents, restricted cash and restricted time deposits at reputable financial institutions in the PRC and at international financial institutions with high ratings from internationally recognized rating agencies. As of December 31, 2017, approximately 67% of the Group’s cash and cash equivalents, restricted cash and restricted time deposits were held in the financial institutions in the PRC and the remaining cash and cash equivalents, restricted cash and restricted time deposits were held in one financial institution outside the PRC. Financing receivables are typically unsecured and are derived from revenues earned from Customers in the PRC. The risk with respect to financing receivables is mitigated by credit evaluations the Group performs on its Customers and the Group’s ongoing monitoring process of outstanding balances. Concentration of Customers, suppliers, Individual Investors, and Institutional Funding Partners There was no revenue from Customers which individually represented greater than 10% of the total operating revenue for any year of the three-years period ended December 31, 2017. There was no financing receivables due from Customers of the Group that individually accounted for greater than 10% of the Group’s carrying amount of financing receivables as of December 31, 2016 and 2017, respectively. There was two, three, two suppliers accounted for more than 10% of the Group’s total purchases for the years ended December 31, 2015, 2016 and 2017. Only two suppliers accounted for more than 10% of the Group’s accounts payable as of December 31, 2016. There was no supplier accounted for more than 10% of the Group’s accounts payable as of December 31, 2017, as follows: As of 2016 2017 Inventory supplier A % * Inventory supplier B % * * Less than 10%. Only one Institutional Funding Partner accounted for more than 10% of the Group’s total funding cost for the year ended December 31, 2015. However, there was no Individual Investor or Institutional Funding Partner that accounted for more than 10% of the Group’s total funding cost for the years ended December 31, 2016 and 2017, respectively. There was no Individual Investor or Institutional Funding Partner that accounted for more than 10% of the Group’s Funding Debts as of December 31, 2016 and 2017, respectively. |
Recent accounting pronouncements | Recent accounting pronouncements The Group qualifies as an “emerging growth company”, or EGC, pursuant to the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act. As an EGC, the Group does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”), 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance substantially converges final standards on revenue recognition between the FASB and the International Accounting Standards Board providing a framework on addressing revenue recognition issues and, upon its effective date, replaces almost all existing revenue recognition guidance, including industry-specific guidance, in current U.S. GAAP. In August 2015, FASB issued its final standard formally amending the effective date of the new revenue recognition guidance. The amendments in this ASU will be effective for the Group beginning the first quarter of 2019. The Group is currently in the process of assessing and quantifying the impact on its consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . The new guidance will impact the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified the need for a valuation allowance on deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The accounting for other financial instruments, such as loans, investments in debt securities, and financial liabilities not under the fair value option is largely unchanged. The standard is effective for the Group beginning the first quarter of 2019. The Group does not expect a material impact to the consolidated financial statements due to the adoption of this standard. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires that a lessee should recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expenses for such lease generally on a straight-line basis over the lease term. ASU 2016-02 is effective for the Group beginning the first quarter of 2020. The Group is currently evaluating the impact ASU 2016-02 will have on the Group’s consolidated financial statements, but expects that most existing operating lease commitments will be recognized as operating lease obligations and right-of-use assets as a result of adoption. In June 2016, the FASB amended guidance related to impairment of financial instruments as part of ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which will be effective for the Group on January 1, 2021. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which the Group is required to recognize an allowance based on its estimate of expected credit loss. The Group is currently evaluating the impact of this new guidance on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . ASU 2016-15 provides guidance for targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. ASU 2016-15 is effective for the Group beginning the first quarter of 2019. The Group does not expect a material impact to the consolidated financial statements due to the adoption of this guidance. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . This ASU affects all entities that have restricted cash or restricted cash equivalents and are required to present a statement of cash flows under Topic 230. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This update will become effective for the Group beginning the first quarter of 2019. The Group is currently evaluating the impact of this guidance on its Consolidated Statements of Cash Flows. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting . This ASU clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The standard is effective for the Group beginning the first quarter of 2019. The Group does not expect a material impact to the consolidated financial statements due to the adoption of this standard. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features. II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception . This ASU affects all entities that issue financial instruments (for example, warrants or convertible instruments) that include down round features. Part I of this ASU relates to the recognition, measurement, and earnings per share of certain freestanding equity-classified financial instruments that include down round features affect entities that present earnings per share in accordance with the guidance in Topic 260, Earnings Per Share , while in Part II does not have an accounting effect. The Group does not expect this standard to have a material impact to the consolidated financial statements. |
ORGANIZATION AND PRINCIPAL AC36
ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Schedule of percentage of ownership in principal subsidiaries, consolidated VIEs and subsidiaries of VIEs | As of December 31, 2017, the Company’s principal subsidiaries, consolidated VIEs and subsidiaries of VIEs are as follows: Date of Place of Percentage of Principal Activities Subsidiaries Installment (HK) Investment Limited (“Installment HK”) December 9, 2013 Hong Kong, PRC % Investment holding Beijing Shijitong Technology Co., Ltd.(“Beijing Shijitong”) July 1, 2014 Beijing, PRC % Technical support and consulting services Shenzhen Lexin Software Technology Co., Ltd.(“Shenzhen Lexin Software”) March 1, 2017 Shenzhen, PRC % Software development VIEs Beijing Lejiaxin Network Technology Co., Ltd.(“Beijing Lejiaxin”) October 25, 2013 Beijing, PRC % Investment holding Shenzhen Xinjie Investment Co., Ltd.(“Shenzhen Xinjie”) December 22, 2015 Shenzhen, PRC % Investment holding Shenzhen Qianhai Dingsheng Asset Management Co., Ltd. (“Qianhai Dingsheng”) January 13, 2016 Shenzhen, PRC % Financial technology services Subsidiaries of the VIEs Shenzhen Fenqile Network Technology Co., Ltd.(“Shenzhen Fenqile”) August 15, 2013 Shenzhen, PRC % Online direct sales and online consumer finance Shenzhen Qianhai Juzi Information Technology Co., Ltd.(“Qianhai Juzi”) June 26, 2014 Shenzhen, PRC % Online investment platform Shenzhen Tiqianle Network Technology Co., Ltd.(“Shenzhen Tiqianle”) January 13, 2016 Shenzhen, PRC % Online direct sales and online consumer finance Shenzhen Mengtian Technology Co., Ltd. (“Shenzhen Mengtian”) August 9, 2016 Shenzhen, PRC % Software development Ji’an Fenqile Network Microcredit Co., Ltd.(“Ji’an Microcredit”) December 2, 2016 Ji’an, PRC % Online consumer credit Shenzhen Fenqile Trading Co., Ltd.(“Shenzhen Fenqile Trading”) December 30, 2016 Shenzhen, PRC % Online direct sales Shenzhen Dingsheng Computer Technology Co., Ltd.(“Shenzhen Dingsheng Technology”) March 23, 2017 Shenzhen, PRC % Financial technology services Shenzhen Lexin Financing Guarantee Co., Ltd.(“Shenzhen Lexin Financing Guarantee”) September 14, 2017 Shenzhen, PRC % Financing guarantee services |
SIGNIFICANT ACCOUNTING POLICI37
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of the assets, liabilities, results of operations and changes in cash and cash equivalents of the VIEs and their subsidiaries | As of December 31, 2016 2017 (RMB in thousands) Total assets Total liabilities For the Year Ended December 31, 2015 2016 2017 (RMB in thousands) Total operating revenue Net loss ) ) ) For the Year Ended December 31, 2015 2016 2017 (RMB in thousands) Net cash (used in)/provided by operating activities ) Net cash used in investing activities ) ) ) Net cash provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year |
Schedule of estimated useful lives | Category Estimated Useful Lives Computers and equipment 3 - 5 years Furniture and fixtures 3 - 5 years Leasehold improvement Over the shorter of the expected life of leasehold improvement or the lease term Software 3 - 10 years |
Schedule of concentration risk | As of 2016 2017 Inventory supplier A % * Inventory supplier B % * * Less than 10%. |
FINANCING RECEIVABLES, NET (Tab
FINANCING RECEIVABLES, NET (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
FINANCING RECEIVABLES, NET | |
Schedule of financing receivables, net | As of December 31, 2016 2017 (RMB in thousands) Short-term: Installment purchase loans Personal installment loans Net deferred origination fees ) ) Total short-term financing receivables Allowance for credit losses ) ) Total short-term financing receivables, net Long-term: Installment purchase loans Personal installment loans Net deferred origination fees ) ) Total long-term financing receivables Allowance for credit losses ) ) Total long-term financing receivables, net |
Summary of balances in financing receivables | As of December 31, 2016 2017 (RMB in thousands) Due in months 0 - 12 13 - 24 25 - 36 Thereafter Total financing receivables |
Schedule of activities in the provision for credit losses | For the Year Ended December 31, 2015 2016 2017 (RMB in thousands) Beginning balance ) ) ) Provisions ) ) ) Charge-offs Recoveries from prior charge-offs ) ) ) Ending balance ) ) ) |
Schedule of aging analysis of past due financing receivables | RMB in thousands 1 - 29 Days 30 - 59 Days 60 - 89 Days 90 - 179 Days 180 Days Total Current Total Installment purchase loans — Personal installment loans — December 31, 2016 — Installment purchase loans — Personal installment loans — December 31, 2017 — |
Summary of net recorded investment of financing receivables, by credit quality indicator | As of December 31, 2016 As of December 31, 2017 Installment Personal Installment Personal (RMB in thousand) Risk level: A B C D E F N Total |
PREPAID EXPENSES AND OTHER CU39
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Schedule of prepaid expenses and other current assets | As of December 31, 2016 2017 (RMB in thousands) Receivables from Pre-IPO Series C-1 preferred shareholders (Note 15) — Receivables from third-party online payment service providers(i) Deposits to Institutional Funding Partners Prepaid input value-added tax Prepayment to inventory suppliers Rental deposits and other current assets Total prepaid expenses and other current assets (i) The Group opened accounts with third-party online payment service providers mainly to facilitate collection and transfer of the funds, interest and service fees from/to the Customers and Individual Investors or Institutional Funding Partners. The balance of receivables from third-party online payment service providers represents amounts temporarily held in these accounts. |
PROPERTY, EQUIPMENT AND SOFTW40
PROPERTY, EQUIPMENT AND SOFTWARE, NET (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |
Schedule of property, equipment and software, net | As of December 31, 2016 2017 (RMB in thousands) Computers and equipment Furniture and fixtures Leasehold improvement Software Total property, equipment and software Accumulated depreciation and amortization ) ) Total property, equipment and software, net |
LONG-TERM INVESTMENTS (Tables)
LONG-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
LONG-TERM INVESTMENT | |
Schedule of long-term investments | Cost Method Equity Method Total (RMB in thousands) Balances at December 31, 2014 — — — Additions — Foreign currency translation adjustments — Balances at December 31, 2015 — Additions Share of results of an equity investee — ) ) Impairment charges ) — ) Foreign currency translation adjustments — Balances at December 31, 2016 Additions — Share of results of an equity investee — ) ) Impairment charges — ) ) Foreign currency translation adjustments ) — ) Balances at December 31, 2017 — |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
FAIR VALUE MEASUREMENT | |
Schedule of assets and liabilities that are measured and recorded at fair value on a recurring basis | December 31, 2016 Level 1 Level 2 Level 3 Balance at (RMB in thousands) Assets Restricted time deposits-current portion — — Restricted time deposits-noncurrent portion — — Total assets — — Liabilities Guarantee liabilities — — Total liabilities — — December 31, 2017 Level 1 Level 2 Level 3 Balance at (RMB in thousands) Assets Restricted time deposits-current portion — — Restricted time deposits-noncurrent portion — — Total assets — — Liabilities Guarantee liabilities — — Total liabilities — — |
Schedule of quantitative information about the significant unobservable inputs used for the Group's Level 3 fair value measurement | Range of Inputs December 31, 2016 December 31, 2017 Financial Unobservable Input Minimum Maximum Weighted- Minimum Maximum Weighted- Guarantee liabilities Discount rates % % % % % % Cumulative default rates (i) % % % % % % Cumulative prepayment rates (i)(ii) % % % % % % Margins on cost % % % % % % (i) Expressed as a percentage of the original principal balance of the loans. (ii) Starting from January 1, 2017, third-party commercial banks and consumer finance companies allowed full prepayment rather than partial prepayment of the loans from Customers. Therefore, the Group no longer provides guarantees for loans that are fully prepaid but still provides guarantees for loans that are partially prepaid. The cumulative prepayment rates as of December 31, 2017 represented the cumulative partial prepayment rates only. |
Summary of the activities related to fair value of the guarantee liabilities | For the Year Ended December 31, 2015 2016 2017 (RMB in thousands) Fair value at beginning of the year (Level 3) — — Issuances — Cash payment — ) ) Change in fair value(i) — ) Fair value at end of the year (Level 3) — (i) Recognized as change in fair value of financial guarantee derivatives in the Consolidated Statements of Operations. |
Summary of the effect of adverse changes in estimate would have on the fair value of the guarantee liabilities | As of December 31, 2016 2017 (RMB in thousands, except for percentages) Weighted-average cumulative default rates (i) % % Change in fair value from: Increase by 10% Decrease by 10% ) ) (i) Expressed as a percentage of the original principal balance of the loans. |
FUNDING DEBTS (Tables)
FUNDING DEBTS (Tables) - Funding Debts obligations | 12 Months Ended |
Dec. 31, 2017 | |
FUNDING DEBTS | |
Summary of the Group's outstanding Funding Debts | As of December 31, 2016 2017 (RMB in thousands) Short-term: Liabilities to Individual Investors— Juzi Licai Liabilities to Institutional Funding Partners Asset-backed securitized debts — Total short-term Funding Debts Long-term: Liabilities to Individual Investors— Juzi Licai — Liabilities to Institutional Funding Partners Total long-term Funding Debts |
Summary of the remaining contractual maturity dates of the Group's Funding Debts and associated interest payments | 1 - 12 months 13 - 24 months 25 - 36 months 37 - 48 months 49 - 60 months Total (RMB in thousands) Liabilities to Individual Investors— Juzi Licai — — — Liabilities to Institutional Funding Partners — — — Total Funding Debts — — — Interest payments(i) — — — Total interest payments — — — (i) Interest payments for Funding Debts with variable interest rates are calculated using the interest rate as of December 31, 2017. |
SHORT-TERM AND LONG-TERM BORR44
SHORT-TERM AND LONG-TERM BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SHORT-TERM AND LONG-TERM BORROWINGS | |
Schedule of outstanding short-term and long-term borrowings | Maturity Principal Interest Rate As of December 31, Date Amount Per Annum Type 2016 2017 (RMB in thousands, except for percentages) Loan I (i) May 18, 2018 % Bank loan Loan II (ii) September 18, 2017 % Financial institution loan — Loan III (iii) December 22, 2017 % Bank loan — Loan IV (iv) February 20, 2018 % Bank loan — Loan V (v) March 8, 2019 54 basis points plus the PBOC benchmark rate at the inception date Bank loan — Loan VI (vi) November 22, 2018 % Bank loan — Loan VII (vii) November 27, 2018 % Bank loan — Loan VIII (viii) December 28, 2018 % Bank loan — Total short-term borrowings Maturity Principal Interest Rate As of December 31, Date Amount Per Annum Type 2016 2017 (RMB in thousands, except for percentages) Loan I (i) May 18, 2018 % Bank loan — Loan V (v) March 8, 2019 54 basis points plus the PBOC benchmark rate at the inception date Bank loan — Total long-term borrowings (i) The principal and interest is payable on a monthly basis. As of December 31, 2017, the outstanding balance of the loan was secured by RMB1.0 million time deposit and RMB1.4 million financing receivables of the Group pledged as collateral. (ii) The interest was payable on a quarterly basis and the principal was due upon maturity. As of December 31, 2017, the outstanding balance of the loan was repaid by the Group. (iii) The Group was granted a one-year RMB100.0 million credit facility that expired on December 22, 2017 and used amounts borrowed under the facility for general operations. As of December 31, 2017, the outstanding balance was repaid by the Group. (iv) The interest is payable on a monthly basis and the principal will be due upon maturity. As of December 31, 2017, the outstanding balance of the loan was secured by RMB2.5 million time deposit and RMB24.2 million financing receivables of the Group pledged as collateral. (v) The principal and interest is payable on a monthly basis. As of December 31, 2017, the outstanding balance of the loan was secured by RMB0.6 million time deposit and RMB3.9 million financing receivables of the Group pledged as collateral. (vi) The interest is payable on a monthly basis and the principal will be due upon maturity. As of December 31, 2017, the outstanding balance of the loan was secured by RMB3.1 million financing receivables of the Group pledged as collateral. (vii) The principal and interest is payable on a monthly basis. As of December 31, 2017, the outstanding balance of the loan was secured by RMB37.1 million financing receivables of the Group pledged as collateral. (viii) The interest is payable on a monthly basis and the principal will be due upon maturity. As of December 31, 2017, the outstanding balance of the loan was secured by RMB6.1 million financing receivables of the Group pledged as collateral. |
ACCRUED EXPENSES AND OTHER CU45
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | As of December 31, 2016 2017 (RMB in thousands) Liabilities to Pre-IPO Series C-1 preferred shareholders (Note 15) — Funds payable to Institutional Funding Partners(i) Tax payable Accrued payroll and welfare Deferred revenues Accrued IPO expenses — Payable to third-party sellers Guarantee liabilities at fair value Security deposits from third-party sellers Accrued professional fees Other accrued expenses Total accrued expenses and other current liabilities (i) The payable balance mainly includes funds received from Customers but not yet transferred to accounts of Institutional Funding Partners due to the settlement time lag. |
RELATED PARTY BALANCES AND TR46
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
Schedule of major related parties and their relationship with the Group | Entity or individual name Relationship with the Group JD.com, Inc. and its subsidiaries (“JD Group”) JD Group is a shareholder of the Group Mr. Jay Wenjie Xiao Chief Executive Officer and Chairman of Board of Directors of the Group Individual Director or Officer Directors or Officers of the Group |
Schedule of significant related party transactions | For the Year Ended December 31, 2015 2016 2017 (RMB in thousands) Purchases of goods and services from JD Group |
Schedule of amounts due from related parties | As of December 31, 2016 2017 (RMB in thousands) Due from Mr. Jay Wenjie Xiao* Others Total * Above balances represented amounts prepaid to Mr. Jay Wenjie Xiao for potential investing activities to be conducted on behalf of the Group. For the year ended December 31, 2017, Mr. Jay Wenjie Xiao paid RMB2.8 million to acquire shares of one of the Group’s investees.The amounts due from Mr. Jay Wenjie Xiao have been repaid by Mr. Xiao subsequently. |
Schedule of amounts due to related parties | As of December 31, 2016 2017 (RMB in thousands) Due to individual Director or Officer and his/her immediate family members under Juzi Licai investment programs as Individual Investors Due to JD Group — Others — Total |
TAXATION (Tables)
TAXATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
TAXATION | |
Schedule of components of the Group's (loss)/income before income tax (benefit)/expense | For the Year Ended December 31, 2015 2016 2017 (RMB in thousands, except for percentages) (Loss)/income before income tax expense ) ) Loss from non-China operations ) ) ) (Loss)/income from China operations ) ) Income tax (benefit)/expense applicable to China operations ) Effective tax rate for China operations % −124.6 % % |
Schedule of current and deferred portion of income tax (benefit)/expense of the Company's China subsidiaries, VIEs, and subsidiaries of the VIEs | For the Year Ended December 31, 2015 2016 2017 (RMB in thousands) Current income tax expense Deferred income tax (benefit)/expense ) Income tax (benefit)/expense ) |
Schedule of reconciliation between the statutory EIT rate and the effective tax rate for the Group's China operations | For the Year Ended December 31, 2015 2016 2017 Statutory EIT rate % % % Effect of tax holidays — — −12.3 % Tax effect of non-deductible expense −0.7 % −24.2 % −0.1 % Changes in valuation allowance −2.0 % −125.4 % % Effective tax rate for China operations % −124.6 % % |
Schedule of effect of tax holiday related to China operations | For the Year Ended December 31, 2015 2016 2017 (In thousands, except for per share data) Tax holiday effect — — Basic net income per share effect — — Diluted net income per share effect — — |
Schedule of components of the deferred tax assets | As of December 31, 2016 2017 (RMB in thousands) Deferred tax assets —Provision for credit losses —Net operating loss carryforwards —Accrued expenses and others Less: valuation allowance ) ) Net deferred tax assets |
Schedule of movement of valuation allowance | For the Year Ended December 31, 2015 2016 2017 (RMB in thousands) Balances at beginning of the year ) ) ) Additions ) ) ) Reversals — Balances at end of the year ) ) ) |
CONVERTIBLE REDEEMABLE PREFER48
CONVERTIBLE REDEEMABLE PREFERRED SHARES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
CONVERTIBLE REDEEMABLE PREFERRED SHARES | |
Schedule of Pre-IPO Preferred Shares | Series Issuance Date Shares Issued Issuance Price Proceeds Shares US$ US$ Pre-IPO Series A-1 Preferred Shares July 18, 2014 Pre-IPO Class B Ordinary Shares July 18, 2014 Pre-IPO Series A-2 Preferred Shares July 18, 2014 * Pre-IPO Series B-1 Preferred Shares November 10, 2014 Pre-IPO Series B-2 Preferred Shares November 10, 2014, March 13, 2015 ** Pre-IPO Series C-1 Preferred Shares October 23, 2017 Not Applicable Pre-IPO Series C-2 Preferred Shares October 23, 2017 Not Applicable * ** |
Schedule of Group's Pre-IPO Preferred Shares activities | Pre-IPO Series A-1 Pre-IPO Class B Pre-IPO Series A-2 Pre-IPO Series B-1 Pre-IPO Series B-2 Pre-IPO Series C Pre-IPO Series C-1 Pre-IPO Series C-2 No. of Amount No. of Amount No. of Amount No. of Amount No. of Amount No. of Amount No. of Amount No. of Amount Balances at December 31, 2014 — — — — — — Issuance of Pre-IPO Preferred Shares — — — — — — — — — — — — — — Pre-IPO Preferred Shares redemption value accretion — — — — — — — — — — — Balances at December 31, 2015 — — — — — — Issuance of Pre-IPO Preferred Shares — — — — — — — — — — * — — — — Pre-IPO Preferred Shares redemption value accretion — — — — — — — — — — — Repurchase of Pre-IPO Preferred Shares — — — — — — — — ) ) — — — — — — Balances at December 31, 2016 * — — — — Issuance of Pre-IPO Preferred Shares — — — — — — — — — — — — Redesignation of Pre-IPO Series C Preferred Shares — — — — — — — — — — ) (* ) * — — Pre-IPO Preferred Shares redemption value accretion — — — — — — — — — Conversion and redesignation of Pre-IPO Preferred Shares ) ) ) ) ) ) ) ) ) ) — — ) ) ) ) Balances at December 31, 2017 — — — — — — — — — — — — — — — — * Less than 1. |
NET (LOSS)_INCOME PER SHARE (Ta
NET (LOSS)/INCOME PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
NET (LOSS)/INCOME PER SHARE | |
Schedule of computation of basic and diluted net (loss)/income per share | For the Year Ended December 31, 2015 2016 2017 (RMB in thousands, except for Basic net (loss)/income per share calculation: Numerator: Net (loss)/income ) ) Accretion on Pre-IPO Series A-1 Preferred Shares redemption value ) ) ) Accretion on Pre-IPO Class B Ordinary Shares redemption value ) ) ) Accretion on Pre-IPO Series A-2 Preferred Shares redemption value ) ) ) Accretion on Pre-IPO Series B-1 Preferred Shares redemption value ) ) ) Accretion on Pre-IPO Series B-2 Preferred Shares redemption value ) ) ) Accretion on Pre-IPO Series C-1 Preferred Shares redemption value — — ) Accretion on Pre-IPO Series C-2 Preferred Shares redemption value — — ) Income allocation to participating preferred shares — — ) Deemed dividend to a preferred shareholder — ) — Net (loss)/income attributable to ordinary shareholders ) ) Denominator: Weighted average ordinary shares outstanding—basic Net (loss)/income per share attributable to ordinary shareholders—basic ) ) Diluted net (loss)/income per share calculation: Numerator: Net (loss)/income attributable to ordinary shareholders—diluted ) ) Denominator: Weighted average ordinary shares outstanding—basic Ordinary shares issuable upon the exercise of outstanding stock options using the treasury stock method — — Weighted average ordinary shares outstanding—diluted Net (loss)/income per share attributable to ordinary shareholders—diluted ) ) |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SHARE-BASED COMPENSATION. | |
Schedule of share-based compensation expenses | For the Year Ended 2015 2016 2017 (RMB in thousands) Processing and servicing cost Sales and marketing expenses Research and development expenses General and administrative expenses Total share-based compensation expenses |
Schedule of number of shares available for issuance | Shares Available (In thousands) December 31, 2014 Additions under the 2014 Plan Granted ) Cancelled/forfeited/repurchased December 31, 2015 Granted ) Cancelled/forfeited/repurchased December 31, 2016 Additions under the 2017 Plan Granted ) Cancelled/forfeited/repurchased Expired ) December 31, 2017 |
Schedule of stock option activity | Stock options granted to employees, directors and non-employees directors Options Weighted Weighted Aggregate (In thousands) US$ (In years) (RMB in thousands) December 31, 2014 Granted* Exercised — — Cancelled/forfeited/repurchased ) December 31, 2015 Granted* Exercised — — Cancelled/forfeited/repurchased ) December 31, 2016 Granted* Exercised — — Cancelled/forfeited/repurchased ) December 31, 2017 Vested and expected to vest as of December 31, 2016 Exercisable as of December 31, 2016 Vested and expected to vest as of December 31, 2017 Exercisable as of December 31, 2017 * Nil, nil and 50,000 stock options were granted to non-employee directors in 2015, 2016 and 2017, respectively. Stock options granted to non-employees Options Weighted Weighted Aggregate (In thousands) US$ (In years) (RMB in thousands) December 31, 2016 — — — — Granted Exercised — — Cancelled/forfeited/repurchased — — December 31, 2017 Vested and expected to vest as of December 31, 2017 Exercisable as of December 31, 2017 — — — — |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES. | |
Schedule of future minimum lease payments under non-cancelable operating leases agreements | Years ending December 31, RMB in thousands 2018 2019 2020 2021 2022 and thereafter — |
Schedule of the expected repayment amount of the debt obligations | Less than 1 year 1 - 2 years 2 - 3 years Total (RMB in thousands) Funding Debts obligations Liabilities to Individual Investors — Juzi Licai — Liabilities to Institutional Funding Partners — Interest payments (i) — Total Funding Debts obligations — Short-term and long-term borrowings — Interest payments (i) — Total short-term and long-term borrowings obligations — Liabilities to Pre-IPO Series C-1 preferred shareholders — — Total liabilities to Pre-IPO Series C-1 preferred shareholders — — (i) Interest payments with variable interest rates are calculated using the interest rate as of December 31, 2017. |
PARENT COMPANY ONLY CONDENSED52
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | |
Condensed Balance Sheets | Condensed Balance Sheets (In thousands, except for share and per share data) As of December 31, 2016 2017 RMB RMB US$ Note 2 ASSETS Current assets Cash and cash equivalents Amounts due from subsidiaries and other related parties Prepaid expenses and other current assets Total current assets Non-current assets Investments in subsidiaries, VIEs and VIEs’ subsidiaries ) Long-term investments Total non-current assets Total assets LIABILITIES Current liabilities Amounts due to subsidiaries, VIEs and VIEs’ subsidiaries Accrued expenses and other current liabilities Total current liabilities Convertible loans — — Total liabilities Commitments and contingencies (Note 22) As of December 31, 2016 2017 RMB RMB US$ Note 2 MEZZANINE EQUITY Pre-IPO Series A-1 convertible redeemable preferred shares ($0.0001 of par value per share; 38,602,941 shares authorized, issued and outstanding with redemption value of RMB7,792 as of December 31, 2016; none authorized, issued and outstanding as of December 31, 2017) — — Pre-IPO Class B ordinary shares ($0.0001 of par value per share; 7,350,000 shares authorized, issued and outstanding with redemption value of RMB1,443 as of December 31, 2016; none authorized, issued and outstanding as of December 31, 2017) — — Pre-IPO Series A-2 convertible redeemable preferred shares ($0.0001 of par value per share; 39,390,757 shares authorized, issued and outstanding with redemption value of RMB46,712 as of December 31, 2016; none authorized, issued and outstanding as of December 31, 2017) — — Pre-IPO Series B-1 convertible redeemable preferred shares ($0.0001 of par value per share; 4,119,294 shares authorized, issued and outstanding with redemption value of RMB34,633 as of December 31, 2016; none authorized, issued and outstanding as of December 31, 2017) — — Pre-IPO Series B-2 convertible redeemable preferred shares ($0.0001 of par value per share; 69,152,661 shares authorized, 63,775,246 shares issued and outstanding with redemption value of RMB601,272 as of December 31, 2016; none authorized, issued and outstanding as of December 31, 2017) — — Pre-IPO Series C convertible redeemable preferred shares ($0.0001 of par value per share; 53,774,149 shares authorized, 2 shares issued and outstanding with redemption value of nil as of December 31, 2016; none authorized, issued and outstanding as of December 31, 2017) * — — Total mezzanine equity — — * Less than 1 SHAREHOLDERS’ (DEFICIT)/EQUITY: Pre-IPO Class A Ordinary Shares ($0.0001 par value per share; 287,610,198 shares authorized; 110,647,199 shares issued and outstanding as of December 31, 2016; none authorized, issued and outstanding as of December 31, 2017) — — Class A Ordinary Shares ($0.0001 par value per share; none authorized, issued and outstanding as of December 31, 2016; 1,889,352,801 shares authorized, 217,070,940 shares issued and outstanding as of December 31, 2017) — Class B Ordinary Shares ($0.0001 par value per share; none authorized, issued and outstanding as of December 31, 2016; 110,647,199 shares authorized, 110,647,199 shares issued and outstanding as of December 31, 2017) — Additional paid-in capital — Accumulated other comprehensive income/(loss) ) ) Accumulated deficit ) ) ) Total shareholders’ (deficit)/equity ) Total liabilities, mezzanine equity and shareholders’ (deficit)/equity |
Condensed Statements of Operations and Comprehensive Loss | Condensed Statements of Operations and Comprehensive (Loss)/Income (In thousands) For the Year Ended December 31, 2015 2016 2017 RMB RMB RMB US$ Note 2 Operating expenses: General and administrative expenses ) ) ) ) Total operating expenses ) ) ) ) Interest income/(expense), net ) ) ) Equity in (loss)/gain of subsidiaries, VIEs and VIEs’ subsidiaries ) ) Other long-term investments related impairment — ) — — (Loss)/income before income tax expense ) ) Income tax expense — — — — Net (loss)/income ) ) Preferred shares redemption value accretion ) ) ) ) Income allocation to participating preferred shares — — ) ) Deemed dividend to a preferred shareholder — ) — — Net (loss)/income attributable to ordinary shareholders ) ) Net (loss)/income ) ) Other comprehensive income/(loss): Foreign currency translation adjustments, net of nil tax ) ) Total comprehensive (loss)/income ) ) |
Condensed Statements of Cash Flows | Condensed Statements of Cash Flows (In thousands) For the Year Ended December 31, 2015 2016 2017 RMB RMB RMB US$ Note 2 Net cash provided by/(used in) operating activities ) ) ) Cash flows from investing activities: Cash paid on long-term investments ) ) ) ) Net cash used in investing activities ) ) ) ) Cash flows from financing activities: Proceeds from issuance of Pre-IPO Preferred Shares — — — Proceeds from initial public offering, net of issuance costs — — Proceeds from receivables from Pre-IPO Series C-1 preferred shareholders — — Repurchase of preferred shares — ) — — Proceeds from issuance of convertible loans — — — Payment of debt issuance cost — ) — — Net cash provided by financing activities Effect of exchange rate changes on cash and cash equivalents ) ) Net (decrease)/increase in cash and cash equivalents ) Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year |
ORGANIZATION AND PRINCIPAL AC53
ORGANIZATION AND PRINCIPAL ACTIVITIES - Product information (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Minimum | |
Product information | |
Age of customer | 18 years |
Minimum | Installment purchase loans | |
Product information | |
Term of the "Loans" | 1 month |
Minimum | Personal installment loans | |
Product information | |
Term of the "Loans" | 1 month |
Maximum | |
Product information | |
Age of customer | 36 years |
Maximum | Installment purchase loans | |
Product information | |
Term of the "Loans" | 36 months |
Maximum | Personal installment loans | |
Product information | |
Term of the "Loans" | 36 months |
ORGANIZATION AND PRINCIPAL AC54
ORGANIZATION AND PRINCIPAL ACTIVITIES - Principal subsidiaries, consolidated VIEs and subsidiaries of VIEs (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Installment HK | |
Schedule of company's principal subsidiaries, consolidated VIEs and subsidiaries of VIEs | |
Percentage of Direct or Indirect Economic Interest in Subsidiary | 100.00% |
Beijing Shijitong | |
Schedule of company's principal subsidiaries, consolidated VIEs and subsidiaries of VIEs | |
Percentage of Direct or Indirect Economic Interest in Subsidiary | 100.00% |
Shenzhen Lexin Software | |
Schedule of company's principal subsidiaries, consolidated VIEs and subsidiaries of VIEs | |
Percentage of Direct or Indirect Economic Interest in Subsidiary | 100.00% |
Beijing Lejiaxin | |
Schedule of company's principal subsidiaries, consolidated VIEs and subsidiaries of VIEs | |
Percentage of Direct or Indirect Economic Interest in VIEs | 100.00% |
Shenzhen Xinjie | |
Schedule of company's principal subsidiaries, consolidated VIEs and subsidiaries of VIEs | |
Percentage of Direct or Indirect Economic Interest in VIEs | 100.00% |
Qianhai Dingsheng | |
Schedule of company's principal subsidiaries, consolidated VIEs and subsidiaries of VIEs | |
Percentage of Direct or Indirect Economic Interest in VIEs | 100.00% |
Shenzhen Fenqile | |
Schedule of company's principal subsidiaries, consolidated VIEs and subsidiaries of VIEs | |
Percentage of Direct or Indirect Economic Interest in Subsidiary | 100.00% |
Qianhai Juzi | |
Schedule of company's principal subsidiaries, consolidated VIEs and subsidiaries of VIEs | |
Percentage of Direct or Indirect Economic Interest in Subsidiary | 100.00% |
Shenzhen Tiqianle | |
Schedule of company's principal subsidiaries, consolidated VIEs and subsidiaries of VIEs | |
Percentage of Direct or Indirect Economic Interest in Subsidiary | 100.00% |
Shenzhen Mengtian | |
Schedule of company's principal subsidiaries, consolidated VIEs and subsidiaries of VIEs | |
Percentage of Direct or Indirect Economic Interest in Subsidiary | 100.00% |
Ji'an Microcredit | |
Schedule of company's principal subsidiaries, consolidated VIEs and subsidiaries of VIEs | |
Percentage of Direct or Indirect Economic Interest in Subsidiary | 100.00% |
Shenzhen Fenqile Trading | |
Schedule of company's principal subsidiaries, consolidated VIEs and subsidiaries of VIEs | |
Percentage of Direct or Indirect Economic Interest in Subsidiary | 100.00% |
Shenzhen Dingsheng Computer Technology | |
Schedule of company's principal subsidiaries, consolidated VIEs and subsidiaries of VIEs | |
Percentage of Direct or Indirect Economic Interest in Subsidiary | 100.00% |
Shenzhen Lexin Financing Guarantee | |
Schedule of company's principal subsidiaries, consolidated VIEs and subsidiaries of VIEs | |
Percentage of Direct or Indirect Economic Interest in Subsidiary | 100.00% |
ORGANIZATION AND PRINCIPAL AC55
ORGANIZATION AND PRINCIPAL ACTIVITIES - Reorganization and Liquidity (Details) $ / shares in Units, ¥ in Thousands | Dec. 26, 2017$ / sharesshares | Dec. 25, 2017USD ($)$ / sharesshares | Oct. 31, 2017shares | Nov. 30, 2013$ / sharesshares | Dec. 31, 2017USD ($)loanshares | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015CNY (¥) | Dec. 31, 2017CNY (¥)loanshares | May 31, 2017CNY (¥) | Apr. 30, 2017CNY (¥)shareholder | Mar. 31, 2017shareholder | Mar. 31, 2016 | Jan. 31, 2016 |
Initial Public Offering | ||||||||||||||
Number of new shares issued (in shares) | 125,000,000 | |||||||||||||
Proceeds from initial public offering, net of offering cost | $ 100,095,000 | ¥ 651,250 | ||||||||||||
Authorized share capital | $ | $ 50,000 | |||||||||||||
Par value of shares | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||||
Shares authorized | 500,000,000 | |||||||||||||
Liquidity | ||||||||||||||
Accumulated deficit | (69,248,000) | ¥ (630,664) | ¥ (450,551) | |||||||||||
Net current liabilities | ¥ | 441,300 | ¥ 122,800 | ||||||||||||
Net cash provided by (used in) operating activities | $ 255,497,000 | ¥ 1,662,325 | ¥ 379,839 | ¥ (1,485,106) | ||||||||||
Class A Ordinary Shares | ||||||||||||||
Initial Public Offering | ||||||||||||||
Shares issued (in shares) | 217,070,940 | 0 | 217,070,940 | |||||||||||
Shares outstanding (in shares) | 217,070,940 | 0 | 217,070,940 | |||||||||||
Par value of shares | $ / shares | $ 0.0001 | |||||||||||||
Shares authorized | 1,889,352,801 | 0 | 1,889,352,801 | |||||||||||
Class B Ordinary Shares | ||||||||||||||
Initial Public Offering | ||||||||||||||
Shares issued (in shares) | 110,647,199 | 0 | 110,647,199 | |||||||||||
Shares outstanding (in shares) | 110,647,199 | 0 | 110,647,199 | |||||||||||
Par value of shares | $ / shares | $ 0.0001 | |||||||||||||
Shares authorized | 110,647,199 | 0 | 110,647,199 | |||||||||||
Pre-IPO Class A Ordinary Shares | ||||||||||||||
Initial Public Offering | ||||||||||||||
Shares issued (in shares) | 110,647,199 | 0 | 110,647,199 | 0 | ||||||||||
Shares outstanding (in shares) | 110,647,199 | 0 | 110,647,199 | 0 | ||||||||||
Stock Conversion basis | 1 | 1 | ||||||||||||
Shares authorized | 0 | 287,610,198 | 0 | |||||||||||
Pre-IPO Series of Preferred Shares | ||||||||||||||
Initial Public Offering | ||||||||||||||
Share issuance upon the conversion and redesignation of Pre-IPO Preferred Shares into class A Ordinary Shares (in shares) | 193,070,940 | |||||||||||||
Stock Conversion basis | 1 | 1 | ||||||||||||
IPO | ||||||||||||||
Initial Public Offering | ||||||||||||||
Authorized share capital | $ | $ 500,000 | |||||||||||||
Par value of shares | $ / shares | $ 0.0001 | |||||||||||||
Shares authorized | 5,000,000,000 | |||||||||||||
IPO | ADS | ||||||||||||||
Initial Public Offering | ||||||||||||||
Number of new shares issued (in shares) | 12,000,000 | |||||||||||||
Price per share | $ / shares | $ 9 | |||||||||||||
IPO | Class A Ordinary Shares | ||||||||||||||
Initial Public Offering | ||||||||||||||
Number of new shares issued (in shares) | 24,000,000 | |||||||||||||
Shares authorized | 1,889,352,801 | |||||||||||||
IPO | Class B Ordinary Shares | ||||||||||||||
Initial Public Offering | ||||||||||||||
Shares authorized | 110,647,199 | |||||||||||||
IPO | Reserved Shares | ||||||||||||||
Initial Public Offering | ||||||||||||||
Shares authorized | 3,000,000,000 | |||||||||||||
Beijing Shijitong | ||||||||||||||
Reorganization | ||||||||||||||
Number of nominee shareholders | shareholder | 2 | |||||||||||||
Principal amount | ¥ | ¥ 1,000 | ¥ 10,000 | ||||||||||||
Number of loans granted | loan | 2 | 2 | ||||||||||||
Shenzhen Xinjie | Shenzhen Fenqile | ||||||||||||||
Reorganization | ||||||||||||||
Equity interest acquired (in percentage) | 73.33% | |||||||||||||
Qianhai Dingsheng | ||||||||||||||
Reorganization | ||||||||||||||
Ownership percentage by parent | 90.00% | |||||||||||||
Ownership percentage by Noncontrolling owners | 10.00% | |||||||||||||
Number of nominee shareholders, 90% of equity interest transferred to | shareholder | 2 | |||||||||||||
Term of the loan | 10 years | 10 years | ||||||||||||
Extension term of the loan | 10 years | 10 years |
SIGNIFICANT ACCOUNTING POLICI56
SIGNIFICANT ACCOUNTING POLICIES - VIE Companies (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2017CNY (¥) | |
Risks in relation to the VIE structure | |||||
Total assets | $ 2,263,895 | ¥ 8,720,135 | ¥ 14,729,584 | ||
Total liabilities | 2,002,375 | 8,706,216 | 13,028,058 | ||
Total operating revenue | 857,968 | ¥ 5,582,189 | 4,338,686 | ¥ 2,524,942 | |
Net loss | 36,943 | 240,352 | (117,939) | (310,194) | |
Net cash provided by (used in) operating activities | 255,497 | 1,662,325 | 379,839 | (1,485,106) | |
Net cash used in investing activities | (833,636) | (5,423,884) | (4,502,270) | (1,587,645) | |
Net cash provided by financing activities | 678,052 | 4,411,608 | 4,459,947 | 3,031,864 | |
Net increase in cash and cash equivalents | 99,422 | 646,870 | 344,234 | (26,213) | |
Cash and cash equivalents at beginning of the year | 73,714 | 479,605 | 135,371 | 161,584 | |
Cash and cash equivalents at end of the year | 173,136 | 1,126,475 | 479,605 | 135,371 | |
Registered capital and PRC statutory reserves | $ 8,586 | 2,003 | 55,861 | ||
VIEs | |||||
Risks in relation to the VIE structure | |||||
Total assets | 8,565,968 | 14,453,386 | |||
Total liabilities | 8,845,409 | 14,730,440 | |||
Total operating revenue | 5,582,189 | 4,338,686 | 2,524,942 | ||
Net loss | (7,905) | (89,726) | (297,545) | ||
Net cash provided by (used in) operating activities | 1,652,267 | 360,790 | (1,266,996) | ||
Net cash used in investing activities | (5,407,706) | (4,498,168) | (1,639,542) | ||
Net cash provided by financing activities | 3,851,583 | 4,450,392 | 2,938,424 | ||
Net increase in cash and cash equivalents | 96,144 | 313,014 | 31,886 | ||
Cash and cash equivalents at beginning of the year | 355,830 | 42,816 | 10,930 | ||
Cash and cash equivalents at end of the year | ¥ 451,974 | 355,830 | ¥ 42,816 | ||
Registered capital and PRC statutory reserves | ¥ 1,314,300 | ¥ 671,800 | |||
Qianhai Dingsheng | |||||
Risks in relation to the VIE structure | |||||
Term of the loan | 10 years | 10 years | |||
Extension term of the loan | 10 years | 10 years |
SIGNIFICANT ACCOUNTING POLICI57
SIGNIFICANT ACCOUNTING POLICIES - Functional currency and foreign currency translation, Convenience translation and Revenue recognition (Details) ¥ in Millions | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2017 | Dec. 31, 2017CNY (¥)item¥ / $ | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Functional currency and foreign currency translation | ||||
Foreign currency translation gain(loss) | ¥ (31.9) | ¥ 1.9 | ¥ 15.4 | |
Convenience translation | ||||
Translation rate calculated at noon buying rate set for on December 29, 2017 | ¥ / $ | 6.5063 | |||
Revenue recognition | ||||
Number of major types of incentive coupons | item | 2 | |||
Cash coupons recognized as a reduction of revenue | ¥ 209.4 | 125 | 9 | |
Referral code incentives recorded as sales and marketing expenses | ¥ 15 | ¥ 37.2 | ¥ 14.7 | |
Minimum | ||||
Revenue recognition | ||||
Coupons expiration period | 1 month | |||
Maximum | ||||
Revenue recognition | ||||
Coupons expiration period | 6 months | |||
Quality assurance program | ||||
Convenience translation | ||||
Percentage on outstanding principal balance | 4.50% | |||
Limitation on the period to collect the unpaid balances | 3 years |
SIGNIFICANT ACCOUNTING POLICI58
SIGNIFICANT ACCOUNTING POLICIES - Property, equipment and software, net (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Minimum | Computers and equipment | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |
Estimated Useful Lives | 3 years |
Minimum | Furniture and fixtures | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |
Estimated Useful Lives | 3 years |
Minimum | Software | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |
Estimated Useful Lives | 3 years |
Maximum | Computers and equipment | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |
Estimated Useful Lives | 5 years |
Maximum | Furniture and fixtures | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |
Estimated Useful Lives | 5 years |
Maximum | Software | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |
Estimated Useful Lives | 10 years |
SIGNIFICANT ACCOUNTING POLICI59
SIGNIFICANT ACCOUNTING POLICIES - Sales and marketing expenses, Operating Leases, Share-based compensation, Segment reporting and Statutory reserves (Details) ¥ in Thousands | 12 Months Ended | |||
Dec. 31, 2017CNY (¥)item | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2017$ / shares | |
Sales and marketing expenses | ||||
Advertising costs | ¥ 98,500 | ¥ 104,900 | ¥ 95,000 | |
Share-based compensation | ||||
Option granted vesting period (in years) | 4 years | |||
Exercise price of each stock option (in dollars per share) | $ / shares | $ 0.0001 | |||
Segment reporting | ||||
Number of reportable segments | item | 1 | |||
Statutory reserves | ||||
Minimum percentage of after-tax profit transferred by Chinese subsidiaries to general reserve fund (as a percent) | 10.00% | |||
Maximum percentage criteria for appropriation of after-tax profit of Chinese subsidiaries to general reserve fund (as a percent) | 50.00% | |||
Minimum percentage of after-tax profit transferred by VIEs to statutory surplus fund (as a percent) | 10.00% | |||
Maximum percentage criteria for in appropriation of after-tax profit by VIEs to certain statutory surplus funds (as a percent) | 50.00% | |||
Statutory Reserves | ||||
Statutory reserves | ||||
Appropriation to statutory reserves | ¥ 53,858 | ¥ 1,900 | ¥ 101 | |
Maximum | ||||
Operating leases | ||||
Initial lease term (in years) | 5 years |
SIGNIFICANT ACCOUNTING POLICI60
SIGNIFICANT ACCOUNTING POLICIES - Significant risks and uncertainties (Details) ¥ in Millions | 12 Months Ended | ||
Dec. 31, 2017CNY (¥)item | Dec. 31, 2016CNY (¥)item | Dec. 31, 2015item | |
Significant risks and uncertainties | |||
Cash and cash equivalents, restricted cash and restricted time deposits denominated in RMB that are subject to government controls | ¥ | ¥ 1,073.4 | ¥ 558.6 | |
Number of Individual Investor or Institutional Funding Partner that accounted for more than 10% of the Group's total funding cost | 0 | 0 | 1 |
Number of Individual Investor or Institutional Funding Partner that accounted for more than 10% of the Group's Funding Debts | 0 | 0 | |
Purchases | |||
Significant risks and uncertainties | |||
Numbers of suppliers accounted for more than 10% of the Group's total purchases | 2 | 3 | 2 |
Accounts payable | |||
Significant risks and uncertainties | |||
Numbers of suppliers accounted for more than 10% of the Group's accounts payable | 0 | 2 | |
Supplier Concentration Risk | Inventory supplier A | |||
Significant risks and uncertainties | |||
Concentration risk (as a percent) | 56.00% | ||
Supplier Concentration Risk | Inventory supplier B | |||
Significant risks and uncertainties | |||
Concentration risk (as a percent) | 11.00% | ||
Geographic Concentration Risk | Cash and cash equivalents, restricted cash and restricted time deposits | PRC | |||
Significant risks and uncertainties | |||
Concentration risk (as a percent) | 67.00% |
FINANCING RECEIVABLES, NET (Det
FINANCING RECEIVABLES, NET (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2017CNY (¥) | |
Short term: | |||
Short-term financing receivables | ¥ 6,620,994 | ¥ 10,170,673 | |
Net deferred origination fees | (15,839) | (9,829) | |
Allowance for credit losses | (150,096) | (313,464) | |
Total short-term financing receivables, net | $ 1,515,025 | 6,470,898 | 9,857,209 |
Long-term: | |||
Long-term financing receivables | 1,090,878 | 1,841,777 | |
Net deferred origination fees | (3,751) | (14,483) | |
Allowance for credit losses | (24,730) | (56,732) | |
Total long-term financing receivables, net | $ 274,356 | ¥ 1,066,148 | 1,785,045 |
Short term and long term financing receivables | |||
Weighted average interest rates of financing receivables (as a percent) | 24.50% | 26.30% | |
Installment purchase loans | |||
Short term: | |||
Short-term financing receivables | ¥ 1,591,486 | 1,020,662 | |
Long-term: | |||
Long-term financing receivables | 269,644 | 170,042 | |
Impairment of financial receivables | |||
Impairment of financing receivable, collectively | 1,861,100 | 1,190,700 | |
Impairment of financing receivable, individually | 30,100 | 87,000 | |
Personal installment loans | |||
Short term: | |||
Short-term financing receivables | 5,045,347 | 9,159,840 | |
Long-term: | |||
Long-term financing receivables | 824,985 | 1,686,218 | |
Impairment of financial receivables | |||
Impairment of financing receivable, collectively | 5,850,700 | 10,821,700 | |
Impairment of financing receivable, individually | ¥ 84,600 | ¥ 460,100 |
FINANCING RECEIVABLES, NET - Fi
FINANCING RECEIVABLES, NET - Financing receivables by due date (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
FINANCING RECEIVABLES, NET | ||
Due in 0-12 months | ¥ 10,170,673 | ¥ 6,620,994 |
Due in 13-24 months | 1,425,851 | 864,469 |
Due in 25-36 months | 406,671 | 206,609 |
Due thereafter | 9,255 | 19,800 |
Total financing receivables | ¥ 12,012,450 | ¥ 7,711,872 |
FINANCING RECEIVABLES, NET - Ac
FINANCING RECEIVABLES, NET - Activities in the provision for credit losses (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Provision for credit losses | ||||
Beginning balance | ¥ (174,826) | ¥ (47,667) | ¥ (333) | |
Provisions | $ (94,043) | (611,869) | (236,611) | (68,287) |
Charge-offs | 444,242 | 114,698 | 22,762 | |
Recoveries from prior charge-offs | (27,743) | (5,246) | (1,809) | |
Ending balance | (370,196) | (174,826) | ¥ (47,667) | |
Allowance for credit losses | ||||
Allowance for credit losses, collectively evaluated for impairment | 370,200 | 174,800 | ||
Allowance for credit losses, individually evaluated for impairment | ¥ 444,200 | ¥ 114,700 |
FINANCING RECEIVABLES, NET - Ag
FINANCING RECEIVABLES, NET - Aging analysis of past due financing receivables (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Aging analysis of past due financing receivables | |||
Financing receivables, past due | ¥ 580,001 | ¥ 271,835 | |
Financing receivables, current | 11,432,449 | 7,440,037 | |
Total financing receivables | 12,012,450 | 7,711,872 | |
Financing receivables, non-accrual status | 193,000 | 78,500 | |
Interest and financial services income earned from non-accrual financing receivables | 86,000 | 37,100 | ¥ 19,200 |
Financial receivable pledged as collaterals | 75,800 | 84,500 | |
Assets-backed securitized debts | |||
Aging analysis of past due financing receivables | |||
Financial receivable pledged as collaterals | 0 | 200,000 | |
Installment purchase loans | |||
Aging analysis of past due financing receivables | |||
Financing receivables, past due | 26,152 | 46,465 | |
Financing receivables, current | 1,164,552 | 1,814,665 | |
Total financing receivables | 1,190,704 | 1,861,130 | |
Personal installment loans | |||
Aging analysis of past due financing receivables | |||
Financing receivables, past due | 553,849 | 225,370 | |
Financing receivables, current | 10,267,897 | 5,625,372 | |
Total financing receivables | 10,821,746 | 5,850,742 | |
Net deferred origination fees recognized | 168,400 | 67,400 | ¥ 10,900 |
1-29 Days Past Due | |||
Aging analysis of past due financing receivables | |||
Financing receivables, past due | 230,294 | 107,589 | |
1-29 Days Past Due | Installment purchase loans | |||
Aging analysis of past due financing receivables | |||
Financing receivables, past due | 10,759 | 15,539 | |
1-29 Days Past Due | Personal installment loans | |||
Aging analysis of past due financing receivables | |||
Financing receivables, past due | 219,535 | 92,050 | |
30-59 Days Past Due | |||
Aging analysis of past due financing receivables | |||
Financing receivables, past due | 85,443 | 47,286 | |
30-59 Days Past Due | Installment purchase loans | |||
Aging analysis of past due financing receivables | |||
Financing receivables, past due | 3,441 | 7,324 | |
30-59 Days Past Due | Personal installment loans | |||
Aging analysis of past due financing receivables | |||
Financing receivables, past due | 82,002 | 39,962 | |
60-89 Days Past Due | |||
Aging analysis of past due financing receivables | |||
Financing receivables, past due | 71,226 | 38,444 | |
60-89 Days Past Due | Installment purchase loans | |||
Aging analysis of past due financing receivables | |||
Financing receivables, past due | 2,582 | 6,675 | |
60-89 Days Past Due | Personal installment loans | |||
Aging analysis of past due financing receivables | |||
Financing receivables, past due | 68,644 | 31,769 | |
90-179 Days Past Due | |||
Aging analysis of past due financing receivables | |||
Financing receivables, past due | 193,038 | 78,516 | |
90-179 Days Past Due | Installment purchase loans | |||
Aging analysis of past due financing receivables | |||
Financing receivables, past due | 9,370 | 16,927 | |
90-179 Days Past Due | Personal installment loans | |||
Aging analysis of past due financing receivables | |||
Financing receivables, past due | ¥ 183,668 | ¥ 61,589 |
FINANCING RECEIVABLES, NET - Ne
FINANCING RECEIVABLES, NET - Net recorded investment of financing receivables, by credit quality indicator (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Installment purchase loans | ||
Financing receivables credit quality indicator | ||
Financing receivables, net | ¥ 1,190,704 | ¥ 1,861,130 |
Personal installment loans | ||
Financing receivables credit quality indicator | ||
Financing receivables, net | 10,821,746 | 5,850,742 |
A | Installment purchase loans | ||
Financing receivables credit quality indicator | ||
Financing receivables, net | 598,418 | 664,167 |
A | Personal installment loans | ||
Financing receivables credit quality indicator | ||
Financing receivables, net | 2,480,065 | 1,911,617 |
B | Installment purchase loans | ||
Financing receivables credit quality indicator | ||
Financing receivables, net | 264,574 | 327,646 |
B | Personal installment loans | ||
Financing receivables credit quality indicator | ||
Financing receivables, net | 1,970,978 | 968,367 |
C | Installment purchase loans | ||
Financing receivables credit quality indicator | ||
Financing receivables, net | 180,446 | 562,366 |
C | Personal installment loans | ||
Financing receivables credit quality indicator | ||
Financing receivables, net | 2,709,756 | 1,892,710 |
D | Installment purchase loans | ||
Financing receivables credit quality indicator | ||
Financing receivables, net | 102,426 | 190,284 |
D | Personal installment loans | ||
Financing receivables credit quality indicator | ||
Financing receivables, net | 2,612,084 | 702,038 |
E | Installment purchase loans | ||
Financing receivables credit quality indicator | ||
Financing receivables, net | 34,293 | 48,285 |
E | Personal installment loans | ||
Financing receivables credit quality indicator | ||
Financing receivables, net | 772,997 | 157,879 |
F | Installment purchase loans | ||
Financing receivables credit quality indicator | ||
Financing receivables, net | 4,857 | 15,844 |
F | Personal installment loans | ||
Financing receivables credit quality indicator | ||
Financing receivables, net | 165,478 | 52,129 |
N | Installment purchase loans | ||
Financing receivables credit quality indicator | ||
Financing receivables, net | 5,690 | 52,538 |
N | Personal installment loans | ||
Financing receivables credit quality indicator | ||
Financing receivables, net | ¥ 110,388 | ¥ 166,002 |
PREPAID EXPENSES AND OTHER CU66
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |||
Receivables from Pre-IPO Series C-1 preferred shareholders (Note 15) | ¥ 502,211 | ||
Receivables from third-party online payment service providers(i) | 171,788 | ¥ 103,244 | |
Deposits to Institutional Funding Partners | 146,881 | 45,447 | |
Prepaid input value-added tax | 44,839 | 17,588 | |
Prepayment to inventory suppliers | 26,597 | 31,966 | |
Rental deposits and other current assets | 52,942 | 21,736 | |
Total prepaid expenses and other current assets | $ 145,283 | ¥ 945,258 | ¥ 219,981 |
PROPERTY, EQUIPMENT AND SOFTW67
PROPERTY, EQUIPMENT AND SOFTWARE, NET (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2017CNY (¥) | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||||
Total property, equipment and software, gross | ¥ 47,930 | ¥ 88,165 | |||
Accumulated depreciation and amortization | (6,183) | (25,040) | |||
Total property, equipment and software, net | $ 9,702 | 41,747 | 63,125 | ||
Depreciation and amortization expenses | $ 2,899 | ¥ 18,859 | 4,586 | ¥ 1,388 | |
Computers and equipment | |||||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||||
Total property, equipment and software, gross | 23,117 | 41,374 | |||
Furniture and fixtures | |||||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||||
Total property, equipment and software, gross | 5,668 | 9,972 | |||
Leasehold improvement | |||||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||||
Total property, equipment and software, gross | 15,990 | 23,005 | |||
Software | |||||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||||
Total property, equipment and software, gross | ¥ 3,155 | ¥ 13,814 |
LONG-TERM INVESTMENTS (Details)
LONG-TERM INVESTMENTS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
LONG-TERM INVESTMENTS | ||||
Balances at beginning of the year | ¥ 24,887 | ¥ 11,578 | ||
Additions | 2,833 | 19,437 | ¥ 11,132 | |
Share of results of an equity investee | $ (312) | (2,028) | (1,640) | |
Impairment charges | (143) | (932) | (5,635) | |
Foreign currency translation adjustments | (1,275) | 1,147 | 446 | |
Balances at end of the year | $ 3,610 | 23,485 | 24,887 | 11,578 |
Cost Method | ||||
LONG-TERM INVESTMENTS | ||||
Balances at beginning of the year | 21,927 | 11,578 | ||
Additions | 2,833 | 14,837 | 11,132 | |
Impairment charges | (5,635) | |||
Foreign currency translation adjustments | (1,275) | 1,147 | 446 | |
Balances at end of the year | 23,485 | 21,927 | ¥ 11,578 | |
Equity Method | ||||
LONG-TERM INVESTMENTS | ||||
Balances at beginning of the year | 2,960 | |||
Additions | 4,600 | |||
Share of results of an equity investee | (2,028) | (1,640) | ||
Impairment charges | ¥ (932) | |||
Balances at end of the year | ¥ 2,960 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) |
Assets | |||
Restricted time deposits-current portion | $ 1,037 | ¥ 6,750 | ¥ 8,000 |
Restricted time deposits-noncurrent portion | $ 92 | 600 | 1,000 |
Liabilities | |||
Guarantee liabilities | 30,958 | 31,191 | |
Fair Value | |||
Assets | |||
Restricted time deposits-current portion | 6,750 | 8,000 | |
Restricted time deposits-noncurrent portion | 600 | 1,000 | |
Total assets | 7,350 | 9,000 | |
Liabilities | |||
Guarantee liabilities | 30,958 | 31,191 | |
Total liabilities | 30,958 | 31,191 | |
Fair Value | Level 2 Inputs | |||
Assets | |||
Restricted time deposits-current portion | 6,750 | 8,000 | |
Restricted time deposits-noncurrent portion | 600 | 1,000 | |
Total assets | 7,350 | 9,000 | |
Fair Value | Level 3 Inputs | |||
Liabilities | |||
Guarantee liabilities | 30,958 | 31,191 | |
Total liabilities | ¥ 30,958 | ¥ 31,191 |
FAIR VALUE MEASUREMENT - Quanti
FAIR VALUE MEASUREMENT - Quantitative information about the significant unobservable inputs (Details) - Level 3 Inputs - Recurring basis - Guarantee liabilities | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Minimum | ||
Significant unobservable inputs used in our recurring Level 3 fair value measurements | ||
Discount rates | 10.60% | 10.60% |
Cumulative default rates | 2.30% | 2.40% |
Cumulative prepayment rates | 0.20% | 14.70% |
Margins on cost | 70.00% | 70.00% |
Maximum | ||
Significant unobservable inputs used in our recurring Level 3 fair value measurements | ||
Discount rates | 23.60% | 21.90% |
Cumulative default rates | 2.30% | 2.40% |
Cumulative prepayment rates | 1.00% | 15.40% |
Margins on cost | 70.00% | 70.00% |
Weighted-Average | ||
Significant unobservable inputs used in our recurring Level 3 fair value measurements | ||
Discount rates | 20.60% | 20.90% |
Cumulative default rates | 2.30% | 2.40% |
Cumulative prepayment rates | 0.70% | 14.80% |
Margins on cost | 70.00% | 70.00% |
FAIR VALUE MEASUREMENT - Activi
FAIR VALUE MEASUREMENT - Activities related to fair value of the guarantee liabilities (Details) - Guarantee liabilities - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Activities related to fair value of the guarantee liabilities | ||
Fair value at beginning of the year (Level 3) | ¥ 31,191 | |
Issuances | 134,881 | ¥ 38,516 |
Cash payment | (87,759) | (13,267) |
Change in fair value | (47,355) | 5,942 |
Fair value at end of the year (Level 3) | ¥ 30,958 | ¥ 31,191 |
FAIR VALUE MEASUREMENT -Signifi
FAIR VALUE MEASUREMENT -Significant Recurring Level 3 Fair Value Liability Input Sensitivity (Details) - Guarantee liabilities - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Significant Recurring Level 3 Fair Value Liability Input Sensitivity | ||
Weighted-average cumulative default rates | 2.30% | 2.40% |
Increase by 10% | ¥ 13,222 | ¥ 3,685 |
Decrease by 10% | ¥ (13,222) | ¥ (3,685) |
FUNDING DEBTS (Details)
FUNDING DEBTS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) |
FUNDING DEBTS | |||
Short-term Funding Debts | $ 1,617,683 | ¥ 10,525,134 | ¥ 6,968,488 |
Long-term Funding Debts | $ 25,610 | 166,629 | 21,014 |
Liabilities to Individual Investors - Juzi Licai | |||
FUNDING DEBTS | |||
Short-term Funding Debts | 9,627,850 | 5,537,031 | |
Long-term Funding Debts | 157,321 | ||
Liabilities to Institutional Funding Partners | |||
FUNDING DEBTS | |||
Short-term Funding Debts | 897,284 | 1,275,643 | |
Long-term Funding Debts | ¥ 9,308 | 21,014 | |
Assets-backed securitized debts | |||
FUNDING DEBTS | |||
Short-term Funding Debts | ¥ 155,814 |
FUNDING DEBTS - Liabilities to
FUNDING DEBTS - Liabilities to Individual Investors and Institutional Funding Partners (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
FUNDING DEBTS | ||||
Aggregate amount funded from funding sources | $ 2,798,030 | ¥ 18,204,825 | ¥ 15,432,174 | ¥ 5,752,255 |
Collateral Pledge | ||||
FUNDING DEBTS | ||||
Financing receivables pledged as collaterals | ¥ 0 | ¥ 16,400 | ||
Liabilities to Individual Investors - Juzi Licai | ||||
FUNDING DEBTS | ||||
Term | 24 months | 24 months | 12 months | |
Weighted average interest rate | 7.60% | 8.30% | ||
Aggregate amount funded from funding sources | ¥ 9,253,400 | ¥ 5,331,100 | ||
Liabilities to Institutional Funding Partners | ||||
FUNDING DEBTS | ||||
Weighted average interest rate | 7.70% | 8.30% | ||
Aggregate amount funded from funding sources | ¥ 1,157,700 | ¥ 1,302,700 |
FUNDING DEBTS - Asset-backed se
FUNDING DEBTS - Asset-backed securitized debts (Details) - CNY (¥) ¥ in Millions | 1 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Collateral Pledge | |||
Debt obligations | |||
Financing receivables pledged as collaterals | ¥ 0 | ¥ 16.4 | |
Asset backed securitization plan ("ABS Plan") | Institutional Funding Partner | |||
Debt obligations | |||
Interest rate (as a percent) | 5.05% | ||
Percentage of total securities purchased | 91.50% | ||
Asset backed securitization plan ("ABS Plan") | Collateral Pledge | |||
Debt obligations | |||
Short term financing receivables pledged as collaterals | 199.8 | ||
Long term financing receivables pledged as collaterals | ¥ 0.2 | ||
Financing receivables pledged as collaterals | ¥ 0 | ||
Asset backed securitization plan ("ABS Plan") | Assets-backed securitized debts | |||
Debt obligations | |||
Securities purchased | ¥ 17 | ||
Interest rate (as a percent) | 8.50% | ||
Asset backed securitization plan ("ABS Plan") | Assets-backed securitized debts | Institutional Funding Partner | |||
Debt obligations | |||
Securities purchased | ¥ 183 |
FUNDING DEBTS - Maturities of F
FUNDING DEBTS - Maturities of Funding Debts (Details) ¥ in Thousands | Dec. 31, 2017CNY (¥) |
Maturities of Funding Debts | |
1 - 12 months | ¥ 10,525,134 |
13 - 24 months | 166,629 |
Total Funding Debts | 10,691,763 |
Maturities of interest payments | |
1 - 12 months | 329,332 |
13 - 24 months | 10,053 |
Total interest payments | 339,385 |
Liabilities to Individual Investors - Juzi Licai | |
Maturities of Funding Debts | |
1 - 12 months | 9,627,850 |
13 - 24 months | 157,321 |
Total Funding Debts | 9,785,171 |
Liabilities to Institutional Funding Partners | |
Maturities of Funding Debts | |
1 - 12 months | 897,284 |
13 - 24 months | 9,308 |
Total Funding Debts | ¥ 906,592 |
SHORT-TERM AND LONG-TERM BORR77
SHORT-TERM AND LONG-TERM BORROWINGS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Short-term and long-term borrowings | |||
Short-term borrowings | $ 25,951 | ¥ 168,844 | ¥ 70,036 |
Long-term borrowings | $ 44 | 289 | 1,762 |
Loan I | |||
Short-term and long-term borrowings | |||
Principal amount | ¥ 20,000 | ¥ 20,000 | |
Interest rate (as a percent) | 7.30% | 7.30% | 7.30% |
Short-term borrowings | ¥ 1,762 | ¥ 10,036 | |
Long-term borrowings | 1,762 | ||
Loan II | |||
Short-term and long-term borrowings | |||
Principal amount | ¥ 30,000 | ||
Interest rate (as a percent) | 5.30% | ||
Short-term borrowings | ¥ 30,000 | ||
Loan III | |||
Short-term and long-term borrowings | |||
Principal amount | ¥ 65,000 | ||
Interest rate (as a percent) | 6.50% | ||
Short-term borrowings | ¥ 30,000 | ||
Loan IV | |||
Short-term and long-term borrowings | |||
Principal amount | ¥ 50,000 | ||
Interest rate (as a percent) | 6.90% | 6.90% | |
Short-term borrowings | ¥ 32,500 | ||
Loan V | |||
Short-term and long-term borrowings | |||
Principal amount | 12,000 | ||
Short-term borrowings | 3,528 | ||
Long-term borrowings | ¥ 289 | ||
Loan V | PBOC | |||
Short-term and long-term borrowings | |||
Interest rate (as a percent) | 0.54% | 0.54% | |
Basis spread on variable rate (as a percent) | 0.54% | ||
Loan VI | |||
Short-term and long-term borrowings | |||
Principal amount | ¥ 30,000 | ||
Interest rate (as a percent) | 5.70% | 5.70% | |
Short-term borrowings | ¥ 29,470 | ||
Loan VII | |||
Short-term and long-term borrowings | |||
Principal amount | ¥ 45,000 | ||
Interest rate (as a percent) | 6.90% | 6.90% | |
Short-term borrowings | ¥ 42,750 | ||
Loan VIII | |||
Short-term and long-term borrowings | |||
Principal amount | ¥ 60,000 | ||
Interest rate (as a percent) | 5.70% | 5.70% | |
Short-term borrowings | ¥ 58,834 | ||
Credit facility expire on December 22, 2017 | |||
Short-term and long-term borrowings | |||
Term of the loan | 1 year | ||
Maximum borrowing capacity | 100,000 | ||
Time deposit | Loan I | |||
Short-term and long-term borrowings | |||
Collateral amount | 1,000 | ||
Time deposit | Loan IV | |||
Short-term and long-term borrowings | |||
Collateral amount | 2,500 | ||
Time deposit | Loan V | |||
Short-term and long-term borrowings | |||
Collateral amount | 600 | ||
Financing receivables | Loan I | |||
Short-term and long-term borrowings | |||
Collateral amount | 1,400 | ||
Financing receivables | Loan IV | |||
Short-term and long-term borrowings | |||
Collateral amount | 24,200 | ||
Financing receivables | Loan V | |||
Short-term and long-term borrowings | |||
Collateral amount | 3,900 | ||
Financing receivables | Loan VI | |||
Short-term and long-term borrowings | |||
Collateral amount | 3,100 | ||
Financing receivables | Loan VII | |||
Short-term and long-term borrowings | |||
Collateral amount | 37,100 | ||
Financing receivables | Loan VIII | |||
Short-term and long-term borrowings | |||
Collateral amount | ¥ 6,100 |
ACCRUED EXPENSES AND OTHER CU78
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||
Liabilities to Pre-IPO Series C-1 preferred shareholders (Note 15) | ¥ 506,478 | ||
Funds payable to Institutional Funding Partners(i) | 449,127 | ¥ 253,297 | |
Tax payable | 228,660 | 78,734 | |
Accrued payroll and welfare | 168,249 | 116,674 | |
Deferred revenues | 100,448 | 34,600 | |
Accrued IPO expenses | 38,399 | ||
Payable to third-party sellers | 33,841 | 27,777 | |
Guarantee liabilities at fair value | 30,958 | 31,191 | |
Security deposits from third-party sellers | 10,104 | 15,287 | |
Accrued professional fees | 1,114 | 13,572 | |
Other accrued expenses | 43,651 | 31,127 | |
Total accrued expenses and other current liabilities | $ 247,611 | ¥ 1,611,029 | ¥ 602,259 |
RELATED PARTY BALANCES AND TR79
RELATED PARTY BALANCES AND TRANSACTIONS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | |
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Amounts due from related parties | ¥ 11,742 | $ 1,452 | ¥ 9,447 | ||
Amounts due to related parties | 137,782 | $ 10,376 | 67,510 | ||
JD Group | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Purchases of goods and services | ¥ 544,708 | 668,029 | ¥ 747,126 | ||
Amounts due to related parties | 92,597 | ||||
Mr. Jay Wenjie Xiao | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Amounts due from related parties | 11,038 | 8,122 | |||
Amount paid to acquire shares of one of the Group's investees | ¥ 2,800 | ||||
Others | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Amounts due from related parties | 704 | 1,325 | |||
Amounts due to related parties | 10 | ||||
Individual Director or Officer and his/her immediate family members under Juzi Licai investment programs as Individual Investors | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Amounts due to related parties | ¥ 45,175 | ¥ 67,510 |
TAXATION - Tax rates (Details)
TAXATION - Tax rates (Details) | 12 Months Ended | 36 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2019 | |
Income tax | ||||
Statutory tax rate (as a percentage) | 25.00% | 25.00% | 25.00% | |
Hong Kong | ||||
Income tax | ||||
Statutory tax rate (as a percentage) | 16.50% | |||
PRC | ||||
Value-added tax | ||||
VAT on online direct sales of products | 17.00% | |||
VAT on financial services | 6.00% | |||
Income tax | ||||
Statutory tax rate (as a percentage) | 25.00% | |||
Withholding income tax rate for dividend paid to foreign tax resident investors (as a percentage) | 10.00% | |||
Reduced withholding tax rate for beneficial owner (as a percentage) | 5.00% | |||
PRC | Shenzhen Lexin Software | ||||
Income tax | ||||
Preferential income tax rate (as a percentage) | 12.50% | |||
Income tax exemption (in years) | 2 years | |||
Percentage of reduction to a income tax rate for the subsequent three years | 50.00% | |||
PRC | Qianhai Juzi | ||||
Income tax | ||||
Preferential income tax rate (as a percentage) | 15.00% | |||
PRC | Shenzhen Mengtian | ||||
Income tax | ||||
Preferential income tax rate (as a percentage) | 12.50% | |||
Income tax exemption (in years) | 2 years | |||
Percentage of reduction to a income tax rate for the subsequent three years | 50.00% | |||
PRC | Shenzhen Dingsheng Computer Technology | ||||
Income tax | ||||
Preferential income tax rate (as a percentage) | 12.50% | |||
Income tax exemption (in years) | 2 years | |||
Percentage of reduction to a income tax rate for the subsequent three years | 50.00% |
TAXATION - Components of (loss)
TAXATION - Components of (loss)/income before income tax expense, Current and deferred portions of income tax (benefit)/expense (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Components of (loss)/income before income tax expense | ||||
(Loss)/income before income tax expense | $ 72,943 | ¥ 474,579 | ¥ (59,681) | ¥ (399,128) |
Loss from non-China operations | (11,125) | (12,943) | (664) | |
(Loss)/income from China operations | 485,704 | (46,738) | (398,464) | |
Income tax (benefit)/expense applicable to China operations | $ 36,000 | ¥ 234,227 | ¥ 58,258 | ¥ (88,934) |
Effective tax rate for China operations | 48.20% | 48.20% | (124.60%) | 22.30% |
Current and deferred portion of income tax (benefit)/expense | ||||
Current income tax expense | ¥ 230,663 | ¥ 11,204 | ¥ 525 | |
Deferred income tax (benefit)/expense | $ 548 | 3,564 | 47,054 | (89,459) |
Income tax (benefit)/expense | $ 36,000 | ¥ 234,227 | ¥ 58,258 | ¥ (88,934) |
TAXATION - Reconciliation of ta
TAXATION - Reconciliation of tax rate and Deferred tax assets (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation between the statutory EIT rate and the effective tax rate | ||||
Statutory EIT rate | 25.00% | 25.00% | 25.00% | |
Effect of tax holidays | (12.30%) | |||
Tax effect of non-deductible expense | (0.10%) | (24.20%) | (0.70%) | |
Changes in valuation allowance | 35.60% | (125.40%) | (2.00%) | |
Effective tax rate for China operations | 48.20% | (124.60%) | 22.30% | |
Effect of tax holiday | ||||
Tax holiday effect | ¥ 59,877 | |||
Basic net income per share effect | ¥ 0.53 | |||
Diluted net income per share effect | ¥ 0.43 | |||
Deferred tax assets | ||||
Provision for credit losses | ¥ 241,901 | ¥ 70,237 | ||
Net operating loss carryforwards | 7,040 | 22,623 | ||
Accrued expenses and others | 36,408 | 26,071 | ||
Less: valuation allowance | (246,508) | (76,526) | ¥ (17,864) | ¥ (10,048) |
Net deferred tax assets | ¥ 38,841 | ¥ 42,405 |
TAXATION - Movement of valuatio
TAXATION - Movement of valuation allowance (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Movement of valuation allowance | |||
Balances at beginning of the year | ¥ (76,526) | ¥ (17,864) | ¥ (10,048) |
Additions | (175,849) | (58,662) | (17,550) |
Reversals | 5,867 | 9,734 | |
Balances at end of the year | ¥ (246,508) | ¥ (76,526) | ¥ (17,864) |
TAXATION - Others (Details)
TAXATION - Others (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
TAXATION | ||||
Statutory tax rate (as a percentage) | 25.00% | 25.00% | 25.00% | |
Valuation allowance | ¥ 246,508 | ¥ 76,526 | ¥ 17,864 | ¥ 10,048 |
Net operating loss carryforwards | 7,040 | 22,623 | ||
Net operating loss carryforwards, expires in 2021 | 100 | |||
Net operating loss carryforwards, expires in 2022 | 35,400 | |||
Provision for credit losses | ||||
TAXATION | ||||
Valuation allowance | 241,900 | 70,200 | ||
VIEs | ||||
TAXATION | ||||
Operating loss carryforwards | 35,500 | 90,500 | ||
Valuation allowance for net operating loss carryforwards | 16,800 | 6,100 | ||
Net operating loss carryforwards | 18,700 | 84,400 | ||
Income tax accrued on the undistributed earnings | ¥ 0 | ¥ 0 |
CONVERTIBLE LOANS (Details)
CONVERTIBLE LOANS (Details) | 1 Months Ended | 12 Months Ended | ||||
Oct. 31, 2017CNY (¥)EquityInstrumentsshares | May 31, 2016USD ($)item$ / sharesshares | Dec. 31, 2015CNY (¥) | Dec. 31, 2017shares | Dec. 31, 2016shares | May 31, 2016CNY (¥)shares | |
Debt obligations | ||||||
Consideration received for issued of preferred shares | ¥ | ¥ 203,240,000 | |||||
Pre-IPO Series C convertible redeemable preferred shares | ||||||
Debt obligations | ||||||
Conversion price per share | $ / shares | $ 2.5105 | |||||
Temporary stock, shares issued (in shares) | 0 | 2 | ||||
Convertible Loans | ||||||
Debt obligations | ||||||
Principal amount | $ 100,000,000 | ¥ 654,680,000 | ||||
Number of investors | item | 4 | |||||
Interest rate (as a percent) | 12.00% | 12.00% | ||||
Term of the loan | 2 years | |||||
Issuance costs | ¥ | ¥ 11,300,000 | |||||
Convertible Loans A | ||||||
Debt obligations | ||||||
Principal amount | $ 15,000,000 | 98,202,000 | ||||
Convertible Loans A | Pre-IPO Series C-2 convertible redeemable preferred shares | ||||||
Debt obligations | ||||||
Debt instrument conversion into equity | EquityInstruments | 5,974,905 | |||||
Convertible Loans B | ||||||
Debt obligations | ||||||
Principal amount | $ 85,000,000 | ¥ 556,478,000 | ||||
Convertible Loans B | Pre-IPO Series C convertible redeemable preferred shares | ||||||
Debt obligations | ||||||
Number of investors | item | 2 | |||||
Number of preferred shares issued to each investor | 1 | |||||
Consideration received for issued of preferred shares | $ | $ 0 | |||||
Temporary stock, shares issued (in shares) | 2 | 2 | ||||
Convertible Loans B | Pre-IPO Series C-1 convertible redeemable preferred shares | ||||||
Debt obligations | ||||||
Principal amount | ¥ | ¥ 556,478,000 | |||||
Temporary stock, shares issued (in shares) | 2 | |||||
Debt instrument conversion into equity | EquityInstruments | 33,857,797 |
CONVERTIBLE REDEEMABLE PREFER86
CONVERTIBLE REDEEMABLE PREFERRED SHARES (Details) | Oct. 23, 2017$ / sharesshares | Nov. 10, 2014USD ($)$ / sharesshares | Jul. 18, 2014USD ($)$ / sharesshares | May 31, 2016USD ($)shareholdershares | May 31, 2016CNY (¥)shareholdershares | Mar. 13, 2015USD ($)$ / sharesshares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015CNY (¥)shares | Dec. 31, 2016$ / sharesshares | Dec. 31, 2015$ / sharesshares | Dec. 31, 2014$ / sharesshares |
Pre-IPO Series of Preferred Shares | ||||||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | ||||||||||||
Preferred Shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||
Convertible preferred shares, conversion ratio | 1 | 1 | ||||||||||
Pre-IPO Series A-1 convertible redeemable preferred shares | ||||||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | ||||||||||||
Preferred Shares, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||||||
Shares Issued | 38,602,941 | |||||||||||
Issuance Price per Share | $ / shares | $ 0.0222 | |||||||||||
Proceeds from Issuance | $ | $ 857,157 | |||||||||||
Shares Outstanding | 38,602,941 | 0 | 38,602,941 | 38,602,941 | 38,602,941 | |||||||
Pre-IPO Preferred Shares redemption value accretion | ¥ | ¥ 755,455 | ¥ 687,599 | ¥ 585,393 | |||||||||
Pre-IPO Series A-2 convertible redeemable preferred shares | ||||||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | ||||||||||||
Preferred Shares, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||||||
Shares Issued | 35,014,006 | |||||||||||
Issuance Price per Share | $ / shares | $ 0.1371 | |||||||||||
Proceeds from Issuance | $ | $ 4,800,000 | |||||||||||
Shares Outstanding | 39,390,757 | 0 | 39,390,757 | 39,390,757 | 39,390,757 | |||||||
Number of shares re-designated | 4,376,751 | |||||||||||
Pre-IPO Preferred Shares redemption value accretion | ¥ | ¥ 4,043,130 | 3,687,152 | 3,126,654 | |||||||||
Pre-IPO Class B ordinary shares | ||||||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | ||||||||||||
Preferred Shares, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||||||
Shares Issued | 7,350,000 | |||||||||||
Issuance Price per Share | $ / shares | $ 0.0222 | |||||||||||
Proceeds from Issuance | $ | $ 163,428 | |||||||||||
Shares Outstanding | 7,350,000 | 0 | 7,350,000 | 7,350,000 | 7,350,000 | |||||||
Pre-IPO Preferred Shares redemption value accretion | ¥ | ¥ 139,412 | 127,310 | 108,402 | |||||||||
Pre-IPO Series B-1 convertible redeemable preferred shares | ||||||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | ||||||||||||
Preferred Shares, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||||||
Shares Issued | 4,119,294 | |||||||||||
Issuance Price per Share | $ / shares | $ 0.9710 | |||||||||||
Proceeds from Issuance | $ | $ 4,000,000 | |||||||||||
Shares Outstanding | 4,119,294 | 0 | 4,119,294 | 4,119,294 | 4,119,294 | |||||||
Pre-IPO Preferred Shares redemption value accretion | ¥ | ¥ 3,335,065 | 3,035,116 | ¥ 2,585,510 | |||||||||
Pre-IPO Series B-2 convertible redeemable preferred shares | ||||||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | ||||||||||||
Preferred Shares, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||||||
Shares Issued | 69,152,661 | 28,886,555 | ||||||||||
Issuance Price per Share | $ / shares | $ 1.1424 | |||||||||||
Proceeds from Issuance | $ | $ 79,000,000 | |||||||||||
Shares Outstanding | 63,775,246 | 0 | 63,775,246 | 69,152,661 | 40,266,106 | |||||||
Pre-IPO Preferred Shares redemption value accretion | ¥ | ¥ 58,599,600 | ¥ 54,761,693 | ¥ 45,117,851 | |||||||||
Repurchase of Pre-IPO Preferred Shares (in shares) | (5,377,415) | |||||||||||
Pre-IPO Series C-1 convertible redeemable preferred shares | ||||||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | ||||||||||||
Shares Issued | 33,857,797 | 33,857,795 | ||||||||||
Issuance Price per Share | $ / shares | $ 2.5105 | |||||||||||
Shares Outstanding | 33,857,797 | |||||||||||
Pre-IPO Preferred Shares redemption value accretion | ¥ | ¥ 12,912,925 | |||||||||||
Pre-IPO Series C-2 convertible redeemable preferred shares | ||||||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | ||||||||||||
Shares Issued | 5,974,905 | 5,974,905 | ||||||||||
Issuance Price per Share | $ / shares | $ 2.5105 | |||||||||||
Shares Outstanding | 5,974,905 | |||||||||||
Pre-IPO Preferred Shares redemption value accretion | ¥ | ¥ 2,331,846 | |||||||||||
One of preferred shareholders | Pre-IPO Series B-2 convertible redeemable preferred shares | ||||||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | ||||||||||||
Repurchase of Pre-IPO Preferred Shares (in shares) | (5,377,415) | (5,377,415) | ||||||||||
Number of Investors | shareholder | 1 | 1 | ||||||||||
Repurchase of Preferred Shares | $ 13,500,000 | ¥ 87,922,800 | ||||||||||
Deemed dividend | ¥ | ¥ 42,679,055 |
CONVERTIBLE REDEEMABLE PREFER87
CONVERTIBLE REDEEMABLE PREFERRED SHARES - Preferred Shares activities (Details) $ in Thousands | Oct. 23, 2017shares | Nov. 10, 2014shares | Jul. 18, 2014shares | Mar. 13, 2015shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015CNY (¥)shares |
Preferred Shares activities | ||||||||
Conversion and redesignation of Pre-IPO Preferred Shares | $ (230,277) | ¥ (1,498,248,000) | ||||||
Pre-IPO Series A-1 convertible redeemable preferred shares | ||||||||
Preferred Shares activities | ||||||||
Beginning balance | ¥ 14,484,875 | ¥ 13,797,276 | ¥ 13,211,883 | |||||
Beginning balance (in shares) | shares | 38,602,941 | 38,602,941 | 38,602,941 | 38,602,941 | ||||
Issuance of Pre-IPO Preferred Shares (in shares) | shares | 38,602,941 | |||||||
Pre-IPO Preferred Shares redemption value accretion | ¥ 755,455 | ¥ 687,599 | ¥ 585,393 | |||||
Conversion and redesignation of Pre-IPO Preferred Shares | ¥ (15,240,330) | |||||||
Conversion and redesignation of Pre-IPO Preferred Shares (in shares) | shares | (38,602,941) | (38,602,941) | ||||||
Ending balance | ¥ 14,484,875 | ¥ 13,797,276 | ||||||
Ending balance (in shares) | shares | 38,602,941 | 0 | 0 | 38,602,941 | 38,602,941 | |||
Pre-IPO Class B ordinary shares | ||||||||
Preferred Shares activities | ||||||||
Beginning balance | ¥ 1,318,578 | ¥ 1,191,268 | ¥ 1,082,866 | |||||
Beginning balance (in shares) | shares | 7,350,000 | 7,350,000 | 7,350,000 | 7,350,000 | ||||
Issuance of Pre-IPO Preferred Shares (in shares) | shares | 7,350,000 | |||||||
Pre-IPO Preferred Shares redemption value accretion | ¥ 139,412 | ¥ 127,310 | ¥ 108,402 | |||||
Conversion and redesignation of Pre-IPO Preferred Shares | ¥ (1,457,990) | |||||||
Conversion and redesignation of Pre-IPO Preferred Shares (in shares) | shares | (7,350,000) | (7,350,000) | ||||||
Ending balance | ¥ 1,318,578 | ¥ 1,191,268 | ||||||
Ending balance (in shares) | shares | 7,350,000 | 0 | 0 | 7,350,000 | 7,350,000 | |||
Pre-IPO Series A-2 convertible redeemable preferred shares | ||||||||
Preferred Shares activities | ||||||||
Beginning balance | ¥ 41,809,759 | ¥ 38,122,607 | ¥ 34,995,953 | |||||
Beginning balance (in shares) | shares | 39,390,757 | 39,390,757 | 39,390,757 | 39,390,757 | ||||
Issuance of Pre-IPO Preferred Shares (in shares) | shares | 35,014,006 | |||||||
Pre-IPO Preferred Shares redemption value accretion | ¥ 4,043,130 | ¥ 3,687,152 | ¥ 3,126,654 | |||||
Conversion and redesignation of Pre-IPO Preferred Shares | ¥ (45,852,889) | |||||||
Conversion and redesignation of Pre-IPO Preferred Shares (in shares) | shares | (39,390,757) | (39,390,757) | ||||||
Ending balance | ¥ 41,809,759 | ¥ 38,122,607 | ||||||
Ending balance (in shares) | shares | 39,390,757 | 0 | 0 | 39,390,757 | 39,390,757 | |||
Pre-IPO Series B-1 convertible redeemable preferred shares | ||||||||
Preferred Shares activities | ||||||||
Beginning balance | ¥ 29,970,441 | ¥ 26,935,325 | ¥ 24,349,815 | |||||
Beginning balance (in shares) | shares | 4,119,294 | 4,119,294 | 4,119,294 | 4,119,294 | ||||
Issuance of Pre-IPO Preferred Shares (in shares) | shares | 4,119,294 | |||||||
Pre-IPO Preferred Shares redemption value accretion | ¥ 3,335,065 | ¥ 3,035,116 | ¥ 2,585,510 | |||||
Conversion and redesignation of Pre-IPO Preferred Shares | ¥ (33,305,506) | |||||||
Conversion and redesignation of Pre-IPO Preferred Shares (in shares) | shares | (4,119,294) | (4,119,294) | ||||||
Ending balance | ¥ 29,970,441 | ¥ 26,935,325 | ||||||
Ending balance (in shares) | shares | 4,119,294 | 0 | 0 | 4,119,294 | 4,119,294 | |||
Pre-IPO Series B-2 convertible redeemable preferred shares | ||||||||
Preferred Shares activities | ||||||||
Beginning balance | ¥ 537,985,682 | ¥ 528,467,734 | ¥ 280,109,483 | |||||
Beginning balance (in shares) | shares | 63,775,246 | 63,775,246 | 69,152,661 | 40,266,106 | ||||
Issuance of Pre-IPO Preferred Shares | ¥ 203,240,400 | |||||||
Issuance of Pre-IPO Preferred Shares (in shares) | shares | 69,152,661 | 28,886,555 | ||||||
Pre-IPO Preferred Shares redemption value accretion | ¥ 58,599,600 | ¥ 54,761,693 | ¥ 45,117,851 | |||||
Repurchase of Pre-IPO Preferred Shares | ¥ (45,243,745) | |||||||
Repurchase of Pre-IPO Preferred Shares (in shares) | shares | (5,377,415) | |||||||
Conversion and redesignation of Pre-IPO Preferred Shares | ¥ (596,585,282) | |||||||
Conversion and redesignation of Pre-IPO Preferred Shares (in shares) | shares | (63,775,246) | (63,775,246) | ||||||
Ending balance | ¥ 537,985,682 | ¥ 528,467,734 | ||||||
Ending balance (in shares) | shares | 63,775,246 | 0 | 0 | 63,775,246 | 69,152,661 | |||
Pre-IPO Series C convertible redeemable preferred shares | ||||||||
Preferred Shares activities | ||||||||
Beginning balance (in shares) | shares | 2 | 2 | ||||||
Issuance of Pre-IPO Preferred Shares (in shares) | shares | 2 | |||||||
Redesignation of Pre-IPO Series C Preferred Shares (in shares) | shares | (2) | (2) | ||||||
Ending balance (in shares) | shares | 0 | 0 | 2 | |||||
Pre-IPO Series C convertible redeemable preferred shares | Maximum | ||||||||
Preferred Shares activities | ||||||||
Beginning balance | ¥ 1 | |||||||
Issuance of Pre-IPO Preferred Shares | ¥ 1 | |||||||
Redesignation of Pre-IPO Series C Preferred shares | (1) | |||||||
Ending balance | ¥ 1 | |||||||
Pre-IPO Series C-1 convertible redeemable preferred shares | ||||||||
Preferred Shares activities | ||||||||
Issuance of Pre-IPO Preferred Shares | ¥ 647,734,116 | |||||||
Issuance of Pre-IPO Preferred Shares (in shares) | shares | 33,857,797 | 33,857,795 | 33,857,795 | |||||
Redesignation of Pre-IPO Series C Preferred Shares (in shares) | shares | 2 | 2 | ||||||
Pre-IPO Preferred Shares redemption value accretion | ¥ 12,912,925 | |||||||
Conversion and redesignation of Pre-IPO Preferred Shares | ¥ (660,647,041) | |||||||
Conversion and redesignation of Pre-IPO Preferred Shares (in shares) | shares | (33,857,797) | (33,857,797) | ||||||
Ending balance (in shares) | shares | 33,857,797 | |||||||
Pre-IPO Series C-1 convertible redeemable preferred shares | Maximum | ||||||||
Preferred Shares activities | ||||||||
Redesignation of Pre-IPO Series C Preferred shares | ¥ 1 | |||||||
Pre-IPO Series C-2 convertible redeemable preferred shares | ||||||||
Preferred Shares activities | ||||||||
Issuance of Pre-IPO Preferred Shares | ¥ 116,969,352 | |||||||
Issuance of Pre-IPO Preferred Shares (in shares) | shares | 5,974,905 | 5,974,905 | 5,974,905 | |||||
Pre-IPO Preferred Shares redemption value accretion | ¥ 2,331,846 | |||||||
Conversion and redesignation of Pre-IPO Preferred Shares | ¥ (119,301,198) | |||||||
Conversion and redesignation of Pre-IPO Preferred Shares (in shares) | shares | (5,974,905) | (5,974,905) | ||||||
Ending balance (in shares) | shares | 5,974,905 |
CONVERTIBLE REDEEMABLE PREFER88
CONVERTIBLE REDEEMABLE PREFERRED SHARES - Accounting for the Conversion of Convertible Loans into Pre-IPO Series C-1/C-2 Preferred Shares (Details) | Oct. 23, 2017shares | Oct. 31, 2017USD ($)itemshares | Dec. 31, 2017shares | Dec. 31, 2016$ / sharesshares | Dec. 26, 2017shares | Dec. 25, 2017$ / shares | Oct. 31, 2017CNY (¥)shares | May 31, 2016USD ($)shares | May 31, 2016CNY (¥)shares |
Pre-IPO Series C convertible redeemable preferred shares | |||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | |||||||||
Issuance of Pre-IPO Preferred Shares (in shares) | 2 | ||||||||
Convertible redeemable shares, shares issued | 0 | 2 | |||||||
Convertible redeemable shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||||
Convertible preferred shares, conversion ratio | 1 | ||||||||
Pre-IPO Series C-1 convertible redeemable preferred shares | |||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | |||||||||
Issuance of Pre-IPO Preferred Shares (in shares) | 33,857,797 | 33,857,795 | |||||||
Pre-IPO Series C-2 convertible redeemable preferred shares | |||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | |||||||||
Issuance of Pre-IPO Preferred Shares (in shares) | 5,974,905 | 5,974,905 | |||||||
Convertible Loans A | |||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | |||||||||
Principal amount | $ 15,000,000 | ¥ 98,202,000 | |||||||
Convertible Loans A | Pre-IPO Series C-2 convertible redeemable preferred shares | |||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | |||||||||
Issuance of Pre-IPO Preferred Shares (in shares) | 5,974,905 | ||||||||
Convertible Loans B | |||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | |||||||||
Principal amount | $ 85,000,000 | ¥ 556,478,000 | |||||||
Number of promissory notes issued | item | 2 | ||||||||
Convertible Loans B | Pre-IPO Series C convertible redeemable preferred shares | |||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | |||||||||
Convertible redeemable shares, shares issued | 2 | 2 | |||||||
Convertible Loans B | Pre-IPO Series C-1 convertible redeemable preferred shares | |||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | |||||||||
Issuance of Pre-IPO Preferred Shares (in shares) | 33,857,795 | ||||||||
Convertible redeemable shares, shares issued | 2 | 2 | |||||||
Principal amount | ¥ | ¥ 556,478,000 | ||||||||
Promissory note one | |||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | |||||||||
Principal amount | $ 49,443,396 | 327,340,000 | |||||||
Promissory note two | |||||||||
CONVERTIBLE REDEEMABLE PREFERRED SHARES | |||||||||
Principal amount | ¥ | ¥ 229,138,000 |
ORDINARY SHARES (Details)
ORDINARY SHARES (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Dec. 26, 2017Vote$ / sharesshares | Dec. 25, 2017$ / shares | Oct. 31, 2017 | Nov. 30, 2013$ / sharesshares | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) |
Ordinary Shares | ||||||
Number of new shares issued (in shares) | shares | 125,000,000 | |||||
Par value of shares | $ 0.0001 | $ 0.0001 | ||||
Proceeds from initial public offering, net of issuance costs | $ 100,095 | ¥ 651,250 | ||||
Class A Ordinary Shares | ||||||
Ordinary Shares | ||||||
Par value of shares | 0.0001 | |||||
Number of votes per share | Vote | 1 | |||||
Class B Ordinary Shares | ||||||
Ordinary Shares | ||||||
Par value of shares | $ 0.0001 | |||||
Number of votes per share | Vote | 10 | |||||
Pre-IPO Class A Ordinary Shares | ||||||
Ordinary Shares | ||||||
Stock conversion basis | 1 | 1 | ||||
Pre-IPO Series of Preferred Shares | ||||||
Ordinary Shares | ||||||
Stock conversion basis | 1 | 1 | ||||
IPO | ||||||
Ordinary Shares | ||||||
Par value of shares | $ 0.0001 | |||||
IPO | Class A Ordinary Shares | ||||||
Ordinary Shares | ||||||
Number of new shares issued (in shares) | shares | 24,000,000 | |||||
IPO | ADS | ||||||
Ordinary Shares | ||||||
Number of new shares issued (in shares) | shares | 12,000,000 | |||||
Price per share | $ 9 |
NET (LOSS)_INCOME PER SHARE - A
NET (LOSS)/INCOME PER SHARE - Antidilutive (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Options to purchase ordinary shares | |||
Antidilutive securities excluded from computation of earnings per share | |||
Number of shares that were anti-dilutive and excluded from the calculation of diluted net (loss)/income per share | 10,851 | 22,635,281 | 13,674,424 |
Pre-IPO Preferred Shares and convertible loans | |||
Antidilutive securities excluded from computation of earnings per share | |||
Number of shares that were anti-dilutive and excluded from the calculation of diluted net (loss)/income per share | 190,426,133 | 178,923,801 | 176,751,805 |
NET (LOSS)_INCOME PER SHARE - C
NET (LOSS)/INCOME PER SHARE - Computation of basic and diluted net loss (Details) ¥ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($)shares | Dec. 31, 2017CNY (¥)¥ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | Dec. 31, 2015CNY (¥)¥ / sharesshares | |
Numerator: | ||||
Net (loss)/income | $ 36,943 | ¥ 240,352 | ¥ (117,939) | ¥ (310,194) |
Accretion on Preferred Shares redemption value | (12,621) | (82,117) | (62,299) | (51,524) |
Income allocation to participating preferred shares | (20,325) | (132,241) | ||
Deemed dividend to a preferred shareholder | (42,679) | |||
Net (loss)/income attributable to ordinary shareholders | $ 3,997 | ¥ 25,994 | ¥ (222,917) | ¥ (361,718) |
Denominator: | ||||
Weighted average ordinary shares outstanding-basic | shares | 113,620,774 | 113,620,774 | 110,647,199 | 110,647,199 |
Net (loss)/income per share attributable to ordinary shareholders-basic | ¥ / shares | ¥ 0.23 | ¥ (2.01) | ¥ (3.27) | |
Numerator: | ||||
Net (loss)/income attributable to ordinary shareholders-diluted | ¥ 25,994 | ¥ (222,917) | ¥ (361,718) | |
Denominator: | ||||
Weighted average ordinary shares outstanding-basic | shares | 113,620,774 | 113,620,774 | 110,647,199 | 110,647,199 |
Ordinary shares issuable upon the exercise of outstanding stock options using the treasury stock method | shares | 27,231,627 | 27,231,627 | ||
Weighted average ordinary shares outstanding-diluted | shares | 140,852,401 | 140,852,401 | 110,647,199 | 110,647,199 |
Net (loss)/income per share attributable to ordinary shareholders-diluted | ¥ / shares | ¥ 0.18 | ¥ (2.01) | ¥ (3.27) | |
Pre-IPO Series A-1 convertible redeemable preferred shares | ||||
Numerator: | ||||
Accretion on Preferred Shares redemption value | ¥ (755) | ¥ (688) | ¥ (585) | |
Pre-IPO Class B ordinary shares | ||||
Numerator: | ||||
Accretion on Preferred Shares redemption value | (139) | (127) | (108) | |
Pre-IPO Series A-2 convertible redeemable preferred shares | ||||
Numerator: | ||||
Accretion on Preferred Shares redemption value | (4,043) | (3,687) | (3,127) | |
Pre-IPO Series B-1 convertible redeemable preferred shares | ||||
Numerator: | ||||
Accretion on Preferred Shares redemption value | (3,335) | (3,035) | (2,586) | |
Pre-IPO Series B-2 convertible redeemable preferred shares | ||||
Numerator: | ||||
Accretion on Preferred Shares redemption value | (58,600) | ¥ (54,762) | ¥ (45,118) | |
Pre-IPO Series C-1 convertible redeemable preferred shares | ||||
Numerator: | ||||
Accretion on Preferred Shares redemption value | (12,913) | |||
Pre-IPO Series C-2 convertible redeemable preferred shares | ||||
Numerator: | ||||
Accretion on Preferred Shares redemption value | ¥ (2,332) |
EMPLOYEE BENEFIT PLAN (Details)
EMPLOYEE BENEFIT PLAN (Details) - CNY (¥) ¥ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
EMPLOYEE BENEFIT PLAN | |||
Contributions for employee benefits | ¥ 79.7 | ¥ 54.2 | ¥ 19.8 |
STATUTORY RESERVES AND RESTRI93
STATUTORY RESERVES AND RESTRICTED NET ASSETS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Statutory Reserves And Restricted Net Assets | |||
Appropriation to the general reserve fund (as a percent) | 10.00% | ||
Required subsidiaries registered capital to avoid net profit allocation to general reserve (as a percent) | 50.00% | ||
Portion of after-tax profit to be allocated to statutory surplus fund under PRC law (as a percent) | 10.00% | ||
Required statutory surplus fund/registered capital ratio to avoid net profit allocation to statutory surplus fund (as a percent) | 50.00% | ||
Amount of net assets of the relevant PRC in the group, not available for distribution | ¥ 895,800 | ¥ 339,400 | |
Statutory surplus funds | 55,900 | 2,000 | |
Registered capital and PRC statutory reserves | $ 8,586 | ¥ 55,861 | ¥ 2,003 |
SHARE BASED COMPENSATION - Shar
SHARE BASED COMPENSATION - Share-based compensation expenses (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Share-based compensation | ||||
Share-based compensation expenses | ¥ 75,736 | ¥ 23,999 | ¥ 14,488 | |
Income tax benefit | 0 | 0 | 0 | |
Processing and servicing cost | ||||
Share-based compensation | ||||
Share-based compensation expenses | $ 909 | 5,916 | 1,067 | 472 |
Sales and marketing expenses | ||||
Share-based compensation | ||||
Share-based compensation expenses | 1,016 | 6,611 | 4,009 | 3,194 |
Research and development expenses | ||||
Share-based compensation | ||||
Share-based compensation expenses | 2,627 | 17,089 | 9,068 | 3,736 |
General and administrative expenses | ||||
Share-based compensation | ||||
Share-based compensation expenses | $ 7,088 | ¥ 46,120 | ¥ 9,855 | ¥ 7,086 |
SHARE BASED COMPENSATION - Stoc
SHARE BASED COMPENSATION - Stock options (Details) - $ / shares | 1 Months Ended | 12 Months Ended | |||||
Nov. 30, 2017 | Aug. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 31, 2017 | Sep. 30, 2014 | |
Share-based compensation | |||||||
Additional ordinary shares reserve for future issuance | 22,860,000 | 15,236,000 | |||||
Option granted vesting period (in years) | 4 years | ||||||
Granted (in shares) | 7,348,000 | 5,805,000 | 9,580,000 | ||||
Shares available for issuance | |||||||
Balance at the beginning of the period (in shares) | 6,357,000 | 11,217,000 | 4,111,000 | ||||
Additions (in shares) | 22,860,000 | 15,236,000 | |||||
Granted (in shares) | (7,348,000) | (5,805,000) | (9,580,000) | ||||
Cancelled/forfeited/repurchased (in shares) | 1,300,000 | 945,000 | 1,450,000 | ||||
Expired | (2,686,000) | ||||||
Balance at the end of the period (in shares) | 20,483,000 | 6,357,000 | 11,217,000 | ||||
Employees, directors and non-employees directors | |||||||
Share-based compensation | |||||||
Granted (in shares) | 6,848,000 | 5,805,000 | 9,580,000 | ||||
Shares available for issuance | |||||||
Granted (in shares) | (6,848,000) | (5,805,000) | (9,580,000) | ||||
Cancelled/forfeited/repurchased (in shares) | 1,300,000 | 945,000 | 1,450,000 | ||||
Exercise Price | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
2014 Share Incentive Plan | |||||||
Share-based compensation | |||||||
Option granted vesting period (in years) | 4 years | ||||||
Expiration period (in years) | 10 years | ||||||
2014 Share Incentive Plan | Class A Ordinary Shares | |||||||
Share-based compensation | |||||||
Maximum number of ordinary shares authorized for stock based compensation | 20,220,588 | ||||||
Additional ordinary shares reserve for future issuance | 15,235,971 | ||||||
Shares available for issuance | |||||||
Additions (in shares) | 15,235,971 | ||||||
2017 Share Incentive Plan | |||||||
Share-based compensation | |||||||
Option granted vesting period (in years) | 4 years | ||||||
Granted (in shares) | 2,576,725 | ||||||
Expiration period (in years) | 10 years | ||||||
Shares available for issuance | |||||||
Granted (in shares) | (2,576,725) | ||||||
Exercise Price | $ 0.0001 | ||||||
2017 Share Incentive Plan | Class A Ordinary Shares | |||||||
Share-based compensation | |||||||
Maximum number of ordinary shares authorized for stock based compensation | 22,859,634 |
SHARE BASED COMPENSATION - St96
SHARE BASED COMPENSATION - Stock options activity (Details) | 12 Months Ended | ||||||||
Dec. 31, 2017$ / shares | Dec. 31, 2017CNY (¥)¥ / sharesshares | Dec. 31, 2016$ / shares | Dec. 31, 2016CNY (¥)¥ / sharesshares | Dec. 31, 2015CNY (¥)$ / shares | Dec. 31, 2015CNY (¥)¥ / sharesshares | Dec. 31, 2014CNY (¥)$ / sharesshares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2016CNY (¥)shares | |
Options Outstanding | |||||||||
Granted (in shares) | 7,348,000 | 5,805,000 | 9,580,000 | ||||||
Cancelled/forfeited/repurchased (in shares) | (1,300,000) | (945,000) | (1,450,000) | ||||||
Weighted Average Exercise Price | |||||||||
Balance at the end of the period (in dollars per share) | $ / shares | $ 0.0001 | ||||||||
Weighted Average Remaining Contractual Life and Aggregate Intrinsic Value | |||||||||
Share-based compensation expenses | ¥ | ¥ 75,736,000 | ¥ 23,999,000 | ¥ 14,488,000 | ||||||
Employees, directors and non-employees directors | |||||||||
Options Outstanding | |||||||||
Balance at the beginning of the period (in shares) | 29,100,000 | 24,240,000 | 16,110,000 | ||||||
Granted (in shares) | 6,848,000 | 5,805,000 | 9,580,000 | ||||||
Exercised (in shares) | 0 | 0 | 0 | ||||||
Cancelled/forfeited/repurchased (in shares) | (1,300,000) | (945,000) | (1,450,000) | ||||||
Balance at the end of the period (in shares) | 34,648,000 | 29,100,000 | 24,240,000 | 16,110,000 | |||||
Vested and expected to vest at the end of the period (in shares) | 34,648,000 | 29,100,000 | |||||||
Exercisable at the end of the period (in shares) | 18,300,000 | 11,670,000 | |||||||
Weighted Average Exercise Price | |||||||||
Balance at the beginning of the period (in dollars per share) | $ / shares | 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Granted (in dollars per share) | $ / shares | 0.0001 | 0.0001 | 0.0001 | ||||||
Cancelled/forfeited/repurchased (in dollars per share) | $ / shares | 0.0001 | 0.0001 | 0.0001 | ||||||
Balance at the end of the period (in dollars per share) | $ / shares | 0.0001 | 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Vested and expected to vest at the end of the period (in dollars per share) | $ / shares | 0.0001 | 0.0001 | |||||||
Exercisable at the end of the period (in dollars per share) | $ / shares | 0.0001 | 0.0001 | |||||||
Weighted Average Remaining Contractual Life and Aggregate Intrinsic Value | |||||||||
Weighted average remaining contractual life (in years) | 7 years 5 months 9 days | 8 years 4 months 28 days | 9 years 1 month 10 days | 9 years 9 months 22 days | |||||
Vested and expected to vest at the end of the period, weighted average remaining contractual life | 7 years 5 months 9 days | 8 years 4 months 28 days | |||||||
Exercisable at the end of the period, weighted average remaining contractual life | 6 years 7 months 10 days | 7 years 11 months 16 days | |||||||
Aggregate Intrinsic Value | ¥ | $ 178,676,000 | ¥ 178,676,000 | $ 30,947,000 | ¥ 1,573,424,000 | ¥ 737,880,000 | ||||
Vested and expected to vest at the end of the period, Aggregate intrinsic value | ¥ | 1,573,424,000 | 737,880,000 | |||||||
Exercisable at the end of the period, Aggregate intrinsic value | ¥ | 831,040,000 | ¥ 295,913,000 | |||||||
Weighted-average grant date fair value of options granted (in dollars per share) | (per share) | 5.7 | ¥ 38.1 | $ 3 | ¥ 20.7 | $ 0.5 | ¥ 3.3 | |||
Total share-based compensation expense recognized for stock options granted | ¥ | ¥ 73,800,000 | ¥ 24,000,000 | ¥ 14,500,000 | ||||||
Unrecognized share-based compensation cost related to non-vested stock options granted | ¥ | ¥ 327,100,000 | ||||||||
Period over which remaining unrecognized stock-based compensation expense is recognized | 3 years | ||||||||
Non-employee | |||||||||
Options Outstanding | |||||||||
Granted (in shares) | 500,000 | ||||||||
Exercised (in shares) | 0 | ||||||||
Balance at the end of the period (in shares) | 500,000 | ||||||||
Vested and expected to vest at the end of the period (in shares) | 500,000 | ||||||||
Weighted Average Exercise Price | |||||||||
Granted (in dollars per share) | $ / shares | 0.0001 | ||||||||
Balance at the end of the period (in dollars per share) | $ / shares | 0.0001 | ||||||||
Vested and expected to vest at the end of the period (in dollars per share) | $ / shares | 0.0001 | ||||||||
Weighted Average Remaining Contractual Life and Aggregate Intrinsic Value | |||||||||
Weighted average remaining contractual life (in years) | 9 years 6 months 29 days | ||||||||
Vested and expected to vest at the end of the period, weighted average remaining contractual life | 9 years 6 months 29 days | ||||||||
Aggregate Intrinsic Value | ¥ | ¥ 22,706,000 | ||||||||
Vested and expected to vest at the end of the period, Aggregate intrinsic value | ¥ | 22,706,000 | ||||||||
Weighted-average grant date fair value of options granted (in dollars per share) | (per share) | $ 7.4 | ¥ 49.3 | |||||||
Share-based compensation expenses | ¥ | ¥ 1,900,000 | ||||||||
Unrecognized share-based compensation cost related to non-vested stock options granted | ¥ | ¥ 20,300,000 | ||||||||
Period over which remaining unrecognized stock-based compensation expense is recognized | 3 years 7 months 6 days | ||||||||
Non-employee directors | |||||||||
Options Outstanding | |||||||||
Granted (in shares) | 50,000 | 0 | 0 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Operating lease commitments (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES. | |||
Rental expenses under operating leases | ¥ 43,200 | ¥ 26,200 | ¥ 10,000 |
Future minimum lease payments | |||
2,018 | 40,799 | ||
2,019 | 36,423 | ||
2,020 | 29,231 | ||
2,021 | 17,485 | ||
Purchase obligations | |||
Purchases of professional services and other capital commitments | ¥ 47,600 |
COMMITMENTS AND CONTINGENCIES98
COMMITMENTS AND CONTINGENCIES - Debt Obligations (Details) ¥ in Thousands | Dec. 31, 2017CNY (¥) |
Expected repayment amount of debt obligation | |
Less than 1 year | ¥ 172,959 |
1 - 2 years | 292 |
Interest payments | |
Liabilities to Pre-IPO Series C-1 preferred shareholders (Note 15) | 506,478 |
Total debt obligations | 173,251 |
Total interest payments | 339,385 |
Funding Debts obligations | |
Expected repayment amount of debt obligation | |
Less than 1 year | 10,854,466 |
1 - 2 years | 176,682 |
Interest payments | |
Less than 1 year | 329,332 |
1 - 2 years | 10,053 |
Total debt obligations | 11,031,148 |
Total interest payments | 339,385 |
Short-term and long-term borrowings obligations | |
Expected repayment amount of debt obligation | |
Less than 1 year | 168,844 |
1 - 2 years | 289 |
Interest payments | |
Less than 1 year | 4,115 |
1 - 2 years | 3 |
Total debt obligations | 169,133 |
Total interest payments | 4,118 |
Convertible Loans | |
Expected repayment amount of debt obligation | |
Less than 1 year | 506,478 |
Interest payments | |
Liabilities to Pre-IPO Series C-1 preferred shareholders (Note 15) | 506,478 |
Total debt obligations | 506,478 |
Liabilities to Individual Investors - Juzi Licai | Funding Debts obligations | |
Expected repayment amount of debt obligation | |
Less than 1 year | 9,627,850 |
1 - 2 years | 157,321 |
Interest payments | |
Total debt obligations | 9,785,171 |
Liabilities to Institutional Funding Partners | Funding Debts obligations | |
Expected repayment amount of debt obligation | |
Less than 1 year | 897,284 |
1 - 2 years | 9,308 |
Interest payments | |
Total debt obligations | ¥ 906,592 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Jan. 05, 2018USD ($)$ / sharesshares | Jan. 05, 2018CNY (¥)shares | Mar. 31, 2018shares | Nov. 30, 2013shares | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2017CNY (¥) | Dec. 31, 2016$ / shares | Dec. 31, 2015$ / shares |
SUBSEQUENT EVENTS | ||||||||
Number of new shares issued (in shares) | 125,000,000 | |||||||
Proceeds from initial public offering, net of offering cost | $ 100,095 | ¥ 651,250 | ||||||
Class A Ordinary Shares | ||||||||
SUBSEQUENT EVENTS | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||
Employees, directors and non-employees directors | ||||||||
SUBSEQUENT EVENTS | ||||||||
Exercise Price | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Subsequent Event | ADS | Over-Allotment Option | ||||||||
SUBSEQUENT EVENTS | ||||||||
Number of new shares issued (in shares) | 1,800,000 | 1,800,000 | ||||||
Proceeds from initial public offering, net of offering cost | $ 15,100 | ¥ 97,800 | ||||||
Total gross capital | 16,200 | 105,200 | ||||||
Aggregate amount of underwriting discounts and commissions | $ 1,100 | ¥ 7,400 | ||||||
Subsequent Event | Class A Ordinary Shares | Over-Allotment Option | ||||||||
SUBSEQUENT EVENTS | ||||||||
Number of new shares issued (in shares) | 3,600,000 | 3,600,000 | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||
Subsequent Event | Employees, directors and non-employees directors | Restricted share units | ||||||||
SUBSEQUENT EVENTS | ||||||||
Granted (in shares) | 344,000 |
PARENT COMPANY ONLY CONDENSE100
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION - Condensed Balance Sheets (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) |
Current assets | ||||||
Cash and cash equivalents | $ 173,136 | ¥ 1,126,475 | $ 73,714 | ¥ 479,605 | ¥ 135,371 | ¥ 161,584 |
Prepaid expenses and other current assets | 145,283 | 945,258 | 219,981 | |||
Total current assets | 1,957,846 | 12,738,336 | 7,543,948 | |||
Non-current assets | ||||||
Long-term investments | 3,610 | 23,485 | 24,887 | 11,578 | ||
Total non-current assets | 306,049 | 1,991,248 | 1,176,187 | |||
TOTAL ASSETS | 2,263,895 | 14,729,584 | 8,720,135 | |||
Current liabilities | ||||||
Accrued expenses and other current liabilities | 247,611 | 1,611,029 | 602,259 | |||
Total current liabilities | 1,976,721 | 12,861,140 | 7,985,261 | |||
Non-current liabilities | ||||||
Convertible loans | 698,179 | |||||
TOTAL LIABILITIES | 2,002,375 | 13,028,058 | 8,706,216 | |||
Commitments and contingencies (Note 22) | ||||||
MEZZANINE EQUITY (Note 15) | ||||||
TOTAL MEZZANINE EQUITY | 625,570 | |||||
SHAREHOLDERS' (DEFICIT)/EQUITY: | ||||||
Additional paid-in capital | 324,448 | 2,110,957 | ||||
Accumulated other comprehensive income/(loss) | (2,298) | (14,951) | 16,942 | |||
Accumulated deficit | (69,248) | (450,551) | (630,664) | |||
TOTAL SHAREHOLDERS' (DEFICIT)/EQUITY | 261,520 | 1,701,526 | (611,651) | (414,641) | (76,927) | |
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' (DEFICIT)/EQUITY | 2,263,895 | 14,729,584 | 8,720,135 | |||
Pre-IPO Series A-1 convertible redeemable preferred shares | ||||||
MEZZANINE EQUITY (Note 15) | ||||||
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount | 14,485 | |||||
Class B Ordinary Shares | ||||||
SHAREHOLDERS' (DEFICIT)/EQUITY: | ||||||
Ordinary shares | 10 | 68 | ||||
Pre-IPO Series A-2 convertible redeemable preferred shares | ||||||
MEZZANINE EQUITY (Note 15) | ||||||
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount | 41,810 | |||||
Pre-IPO Series B-1 convertible redeemable preferred shares | ||||||
MEZZANINE EQUITY (Note 15) | ||||||
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount | 29,970 | |||||
Pre-IPO Series B-2 convertible redeemable preferred shares | ||||||
MEZZANINE EQUITY (Note 15) | ||||||
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount | 537,986 | |||||
Pre-IPO Class A Ordinary Shares | ||||||
SHAREHOLDERS' (DEFICIT)/EQUITY: | ||||||
Ordinary shares | 68 | |||||
Pre-IPO Class B ordinary shares | ||||||
MEZZANINE EQUITY (Note 15) | ||||||
Redeemable Noncontrolling Interest, Equity, Common, Carrying Amount | 1,319 | |||||
Class A Ordinary Shares | ||||||
SHAREHOLDERS' (DEFICIT)/EQUITY: | ||||||
Ordinary shares | 22 | 142 | ||||
Parent | ||||||
Current assets | ||||||
Cash and cash equivalents | 87,663 | 570,359 | $ 15,743 | 102,431 | ¥ 92,046 | ¥ 143,839 |
Amounts due from subsidiaries and other related parties | 15,175 | 98,734 | 11,000 | |||
Prepaid expenses and other current assets | 78,351 | 509,776 | 6,579 | |||
Total current assets | 181,189 | 1,178,869 | 120,010 | |||
Non-current assets | ||||||
Investments in subsidiaries, VIEs and VIEs' subsidiaries | 84,511 | 549,853 | (6,517) | |||
Long-term investments | 3,229 | 21,008 | 19,451 | |||
Total non-current assets | 87,740 | 570,861 | 12,934 | |||
TOTAL ASSETS | 268,929 | 1,749,730 | 132,944 | |||
Current liabilities | ||||||
Amounts due to subsidiaries, VIEs and VIEs' subsidiaries | 2,692 | 17,512 | 537 | |||
Accrued expenses and other current liabilities | 4,717 | 30,692 | 7,401 | |||
Total current liabilities | 7,409 | 48,204 | 7,938 | |||
Non-current liabilities | ||||||
Convertible loans | 111,087 | |||||
TOTAL LIABILITIES | 7,409 | 48,204 | 119,025 | |||
Commitments and contingencies (Note 22) | ||||||
MEZZANINE EQUITY (Note 15) | ||||||
TOTAL MEZZANINE EQUITY | 625,570 | |||||
SHAREHOLDERS' (DEFICIT)/EQUITY: | ||||||
Additional paid-in capital | 324,448 | 2,110,957 | ||||
Accumulated other comprehensive income/(loss) | (2,298) | (14,951) | 16,942 | |||
Accumulated deficit | (60,662) | (394,690) | (628,661) | |||
TOTAL SHAREHOLDERS' (DEFICIT)/EQUITY | 261,520 | 1,701,526 | (611,651) | |||
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' (DEFICIT)/EQUITY | 268,929 | 1,749,730 | 132,944 | |||
Parent | Pre-IPO Series A-1 convertible redeemable preferred shares | ||||||
MEZZANINE EQUITY (Note 15) | ||||||
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount | 14,485 | |||||
Parent | Class B Ordinary Shares | ||||||
SHAREHOLDERS' (DEFICIT)/EQUITY: | ||||||
Ordinary shares | 10 | 68 | ||||
Parent | Pre-IPO Series A-2 convertible redeemable preferred shares | ||||||
MEZZANINE EQUITY (Note 15) | ||||||
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount | 41,810 | |||||
Parent | Pre-IPO Series B-1 convertible redeemable preferred shares | ||||||
MEZZANINE EQUITY (Note 15) | ||||||
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount | 29,970 | |||||
Parent | Pre-IPO Series B-2 convertible redeemable preferred shares | ||||||
MEZZANINE EQUITY (Note 15) | ||||||
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount | 537,986 | |||||
Parent | Pre-IPO Class A Ordinary Shares | ||||||
SHAREHOLDERS' (DEFICIT)/EQUITY: | ||||||
Ordinary shares | 68 | |||||
Parent | Pre-IPO Class B ordinary shares | ||||||
MEZZANINE EQUITY (Note 15) | ||||||
Redeemable Noncontrolling Interest, Equity, Common, Carrying Amount | ¥ 1,319 | |||||
Parent | Class A Ordinary Shares | ||||||
SHAREHOLDERS' (DEFICIT)/EQUITY: | ||||||
Ordinary shares | $ 22 | ¥ 142 |
PARENT COMPANY ONLY CONDENSE101
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION - Condensed Balance Sheets (Parenthetical) (Details) ¥ in Thousands | Dec. 31, 2017$ / sharesshares | Dec. 25, 2017$ / sharesshares | Oct. 31, 2017shares | Dec. 31, 2016$ / shares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015shares | Mar. 13, 2015shares | Dec. 31, 2014shares | Nov. 10, 2014shares | Jul. 18, 2014shares |
Condensed Balance Sheets | ||||||||||
Common stock, shares authorized | 500,000,000 | |||||||||
Pre-IPO Series A-1 convertible redeemable preferred shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Convertible redeemable shares, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||||
Convertible redeemable shares, shares authorized | 0 | 38,602,941 | ||||||||
Convertible redeemable shares, shares issued | 0 | 38,602,941 | ||||||||
Convertible redeemable shares, shares outstanding | 0 | 38,602,941 | 38,602,941 | 38,602,941 | 38,602,941 | |||||
Convertible redeemable shares redemption value | ¥ | ¥ 7,792 | |||||||||
Class B Ordinary Shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | 0.0001 | ||||||||
Common stock, shares authorized | 110,647,199 | 0 | ||||||||
Common stock, shares issued | 110,647,199 | 0 | ||||||||
Common stock, shares outstanding | 110,647,199 | 0 | ||||||||
Pre-IPO Series A-2 convertible redeemable preferred shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Convertible redeemable shares, par value (in dollars per share) | $ / shares | 0.0001 | |||||||||
Convertible redeemable shares, shares authorized | 0 | 39,390,757 | ||||||||
Convertible redeemable shares, shares issued | 0 | 39,390,757 | ||||||||
Convertible redeemable shares, shares outstanding | 0 | 39,390,757 | 39,390,757 | 39,390,757 | 39,390,757 | |||||
Convertible redeemable shares redemption value | ¥ | ¥ 46,712 | |||||||||
Pre-IPO Series B-1 convertible redeemable preferred shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Convertible redeemable shares, par value (in dollars per share) | $ / shares | 0.0001 | |||||||||
Convertible redeemable shares, shares authorized | 0 | 4,119,294 | ||||||||
Convertible redeemable shares, shares issued | 0 | 4,119,294 | ||||||||
Convertible redeemable shares, shares outstanding | 0 | 4,119,294 | 4,119,294 | 4,119,294 | 4,119,294 | |||||
Convertible redeemable shares redemption value | ¥ | ¥ 34,633 | |||||||||
Pre-IPO Series B-2 convertible redeemable preferred shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Convertible redeemable shares, par value (in dollars per share) | $ / shares | 0.0001 | |||||||||
Convertible redeemable shares, shares authorized | 0 | 69,152,661 | ||||||||
Convertible redeemable shares, shares issued | 0 | 63,775,246 | ||||||||
Convertible redeemable shares, shares outstanding | 0 | 63,775,246 | 69,152,661 | 63,775,246 | 40,266,106 | |||||
Convertible redeemable shares redemption value | ¥ | ¥ 601,272 | |||||||||
Pre-IPO Series C convertible redeemable preferred shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Convertible redeemable shares, par value (in dollars per share) | $ / shares | $ 0.0001 | 0.0001 | ||||||||
Convertible redeemable shares, shares authorized | 0 | 53,774,149 | ||||||||
Convertible redeemable shares, shares issued | 0 | 2 | ||||||||
Convertible redeemable shares, shares outstanding | 0 | 2 | ||||||||
Convertible redeemable shares redemption value | ¥ | ¥ 0 | |||||||||
Pre-IPO Class A Ordinary Shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Common stock, par value (in dollars per share) | $ / shares | 0.0001 | |||||||||
Common stock, shares authorized | 0 | 287,610,198 | ||||||||
Common stock, shares issued | 0 | 110,647,199 | 110,647,199 | |||||||
Common stock, shares outstanding | 0 | 110,647,199 | 110,647,199 | |||||||
Pre-IPO Class B ordinary shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Convertible redeemable shares, par value (in dollars per share) | $ / shares | 0.0001 | |||||||||
Convertible redeemable shares, shares authorized | 0 | 7,350,000 | ||||||||
Convertible redeemable shares, shares issued | 0 | 7,350,000 | ||||||||
Convertible redeemable shares, shares outstanding | 0 | 7,350,000 | 7,350,000 | 7,350,000 | 7,350,000 | |||||
Convertible redeemable shares redemption value | ¥ | ¥ 1,443 | |||||||||
Class A Ordinary Shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | 0.0001 | ||||||||
Common stock, shares authorized | 1,889,352,801 | 0 | ||||||||
Common stock, shares issued | 217,070,940 | 0 | ||||||||
Common stock, shares outstanding | 217,070,940 | 0 | ||||||||
Parent | Pre-IPO Series A-1 convertible redeemable preferred shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Convertible redeemable shares, par value (in dollars per share) | $ / shares | 0.0001 | |||||||||
Convertible redeemable shares, shares authorized | 0 | 38,602,941 | ||||||||
Convertible redeemable shares, shares issued | 0 | 38,602,941 | ||||||||
Convertible redeemable shares, shares outstanding | 0 | 38,602,941 | ||||||||
Convertible redeemable shares redemption value | ¥ | ¥ 7,792 | |||||||||
Parent | Class B Ordinary Shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | 0.0001 | ||||||||
Common stock, shares authorized | 110,647,199 | 0 | ||||||||
Common stock, shares issued | 110,647,199 | 0 | ||||||||
Common stock, shares outstanding | 110,647,199 | 0 | ||||||||
Parent | Pre-IPO Series A-2 convertible redeemable preferred shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Convertible redeemable shares, par value (in dollars per share) | $ / shares | 0.0001 | |||||||||
Convertible redeemable shares, shares authorized | 0 | 39,390,757 | ||||||||
Convertible redeemable shares, shares issued | 0 | 39,390,757 | ||||||||
Convertible redeemable shares, shares outstanding | 0 | 39,390,757 | ||||||||
Convertible redeemable shares redemption value | ¥ | ¥ 46,712 | |||||||||
Parent | Pre-IPO Series B-1 convertible redeemable preferred shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Convertible redeemable shares, par value (in dollars per share) | $ / shares | 0.0001 | |||||||||
Convertible redeemable shares, shares authorized | 0 | 4,119,294 | ||||||||
Convertible redeemable shares, shares issued | 0 | 4,119,294 | ||||||||
Convertible redeemable shares, shares outstanding | 0 | 4,119,294 | ||||||||
Convertible redeemable shares redemption value | ¥ | ¥ 34,633 | |||||||||
Parent | Pre-IPO Series B-2 convertible redeemable preferred shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Convertible redeemable shares, par value (in dollars per share) | $ / shares | 0.0001 | |||||||||
Convertible redeemable shares, shares authorized | 0 | 69,152,661 | ||||||||
Convertible redeemable shares, shares issued | 0 | 63,775,246 | ||||||||
Convertible redeemable shares, shares outstanding | 0 | 63,775,246 | ||||||||
Convertible redeemable shares redemption value | ¥ | ¥ 601,272 | |||||||||
Parent | Pre-IPO Series C convertible redeemable preferred shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Convertible redeemable shares, par value (in dollars per share) | $ / shares | 0.0001 | |||||||||
Convertible redeemable shares, shares authorized | 0 | 53,774,149 | ||||||||
Convertible redeemable shares, shares issued | 0 | 2 | ||||||||
Convertible redeemable shares, shares outstanding | 0 | 2 | ||||||||
Convertible redeemable shares redemption value | ¥ | ¥ 0 | |||||||||
Parent | Pre-IPO Class A Ordinary Shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Common stock, par value (in dollars per share) | $ / shares | 0.0001 | |||||||||
Common stock, shares authorized | 0 | 287,610,198 | ||||||||
Common stock, shares issued | 0 | 110,647,199 | ||||||||
Common stock, shares outstanding | 0 | 110,647,199 | ||||||||
Parent | Pre-IPO Class B ordinary shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Convertible redeemable shares, par value (in dollars per share) | $ / shares | 0.0001 | |||||||||
Convertible redeemable shares, shares authorized | 0 | 7,350,000 | ||||||||
Convertible redeemable shares, shares issued | 0 | 7,350,000 | ||||||||
Convertible redeemable shares, shares outstanding | 0 | 7,350,000 | ||||||||
Convertible redeemable shares redemption value | ¥ | ¥ 1,443 | |||||||||
Parent | Class A Ordinary Shares | ||||||||||
Condensed Balance Sheets | ||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||
Common stock, shares authorized | 1,889,352,801 | 0 | ||||||||
Common stock, shares issued | 217,070,940 | 0 | ||||||||
Common stock, shares outstanding | 217,070,940 | 0 |
PARENT COMPANY ONLY CONDENSE102
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION - Condensed Statements of Operations and Comprehensive (Loss)/Income (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Operating expenses: | ||||
General and administrative expenses | $ (31,298) | ¥ (203,635) | ¥ (87,364) | ¥ (40,962) |
Total operating expenses | (129,787) | (844,432) | (590,994) | (324,866) |
Investment related impairment | (143) | (932) | (5,635) | |
(Loss)/income before income tax expense | 72,943 | 474,579 | (59,681) | (399,128) |
Income tax benefit/(expense) | (36,000) | (234,227) | (58,258) | 88,934 |
Net (loss)/income | 36,943 | 240,352 | (117,939) | (310,194) |
Pre-IPO Preferred shares redemption value accretion | (12,621) | (82,117) | (62,299) | (51,524) |
Income allocation to participating preferred shares | (20,325) | (132,241) | ||
Deemed dividend to a preferred shareholder | (42,679) | |||
Net (loss)/income attributable to ordinary shareholders | 3,997 | 25,994 | (222,917) | (361,718) |
Other comprehensive income/(loss): | ||||
Foreign currency translation adjustments, net of nil tax | (4,902) | (31,893) | 1,908 | 15,422 |
Total comprehensive (loss)/income | 32,041 | 208,459 | (116,031) | (294,772) |
Foreign currency translation adjustments, tax | 0 | 0 | 0 | |
Parent | ||||
Operating expenses: | ||||
General and administrative expenses | (306) | (1,989) | (1,611) | (1,601) |
Total operating expenses | (306) | (1,989) | (1,611) | (1,601) |
Interest income/(expense), net | (1,402) | (9,134) | (7,458) | 812 |
Equity in (loss)/gain of subsidiaries, VIEs and VIEs' subsidiaries | 38,651 | 251,475 | (104,996) | (309,405) |
Investment related impairment | (3,874) | |||
(Loss)/income before income tax expense | 36,943 | 240,352 | (117,939) | (310,194) |
Net (loss)/income | 36,943 | 240,352 | (117,939) | (310,194) |
Pre-IPO Preferred shares redemption value accretion | (12,621) | (82,117) | (62,299) | (51,524) |
Income allocation to participating preferred shares | (20,325) | (132,241) | ||
Deemed dividend to a preferred shareholder | (42,679) | |||
Net (loss)/income attributable to ordinary shareholders | 3,997 | 25,994 | (222,917) | (361,718) |
Other comprehensive income/(loss): | ||||
Foreign currency translation adjustments, net of nil tax | (4,902) | (31,893) | 1,908 | 15,422 |
Total comprehensive (loss)/income | $ 32,041 | 208,459 | (116,031) | (294,772) |
Foreign currency translation adjustments, tax | ¥ 0 | ¥ 0 | ¥ 0 |
PARENT COMPANY ONLY CONDENSE103
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION - Condensed Statements of Cash Flows (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Condensed Statements of Cash Flows | ||||
Net cash provided by/(used in) operating activities | $ 255,497 | ¥ 1,662,325 | ¥ 379,839 | ¥ (1,485,106) |
Cash flows from investing activities: | ||||
Cash paid on long-term investments | (435) | (2,832) | (13,333) | (11,132) |
Net cash used in investing activities | (833,636) | (5,423,884) | (4,502,270) | (1,587,645) |
Cash flows from financing activities: | ||||
Proceeds from issuance of Pre-IPO Preferred Shares | 203,240 | |||
Proceeds from initial public offering, net of issuance costs | 100,095 | 651,250 | ||
Proceeds from receivables from Pre-IPO Series C-1 preferred shareholders | 7,650 | 49,775 | ||
Repurchase of preferred shares | (87,923) | |||
Proceeds from issuances of convertible loans | 654,680 | |||
Payment of debt issuance cost | (261) | (1,696) | (21,055) | (3,648) |
Net cash provided by financing activities | 678,052 | 4,411,608 | 4,459,947 | 3,031,864 |
Effect of exchange rate changes on cash and cash equivalents | (491) | (3,179) | 6,718 | 14,674 |
Net (decrease)/increase in cash and cash equivalents | 99,422 | 646,870 | 344,234 | (26,213) |
Cash and cash equivalents at beginning of the year | 73,714 | 479,605 | 135,371 | 161,584 |
Cash and cash equivalents at end of the year | 173,136 | 1,126,475 | 479,605 | 135,371 |
Parent | ||||
Condensed Statements of Cash Flows | ||||
Net cash provided by/(used in) operating activities | (152) | (987) | 1,040 | (13,440) |
Cash flows from investing activities: | ||||
Cash paid on long-term investments | (35,656) | (231,986) | (6,306) | (256,467) |
Net cash used in investing activities | (35,656) | (231,986) | (6,306) | (256,467) |
Cash flows from financing activities: | ||||
Proceeds from issuance of Pre-IPO Preferred Shares | 203,240 | |||
Proceeds from initial public offering, net of issuance costs | 100,567 | 654,319 | ||
Proceeds from receivables from Pre-IPO Series C-1 preferred shareholders | 7,650 | 49,775 | ||
Repurchase of preferred shares | (87,923) | |||
Proceeds from issuances of convertible loans | 98,202 | |||
Payment of debt issuance cost | (722) | |||
Net cash provided by financing activities | 108,217 | 704,094 | 9,557 | 203,240 |
Effect of exchange rate changes on cash and cash equivalents | (489) | (3,193) | 6,094 | 14,874 |
Net (decrease)/increase in cash and cash equivalents | 71,920 | 467,928 | 10,385 | (51,793) |
Cash and cash equivalents at beginning of the year | 15,743 | 102,431 | 92,046 | 143,839 |
Cash and cash equivalents at end of the year | $ 87,663 | ¥ 570,359 | ¥ 102,431 | ¥ 92,046 |