Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2022 | |
Document and Entity Information | |
Entity Registrant Name | 360 DigiTech, Inc. |
Entity Central Index Key | 0001741530 |
Document Type | 6-K |
Document Period End Date | Jun. 30, 2022 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Sep. 30, 2022 CNY (¥) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 CNY (¥) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
Current assets: | |||||
Cash and cash equivalents | ¥ 7,219,700 | $ 1,014,929 | ¥ 6,965,238 | $ 1,039,883 | ¥ 6,116,360 |
Restricted cash (including RMB657,075 and RMB626,752 from the consolidated trusts as of December 31, 2021 and September 30,2022, respectively) | 3,009,630 | 423,087 | 3,764,988 | 562,098 | 2,643,587 |
Short term investments | 30,000 | 4,217 | |||
Security deposit prepaid to third-party guarantee companies | 549,548 | 77,254 | 698,478 | 104,280 | 874,886 |
Funds receivable from third party payment service providers | 983,851 | 138,308 | 312,447 | 46,647 | 153,151 |
Accounts receivable and contract assets, net (net of allowance of RMB287,538 and RMB276,947 as of December 31, 2021 and September 30, 2022, respectively) | 3,109,128 | 437,074 | 3,499,385 | 522,444 | 3,097,254 |
Financial assets receivable, net (net of allowance of RMB432,658 and RMB449,897 as of December 31, 2021 and September 30, 2022, respectively) | 3,321,117 | 466,875 | 3,618,560 | 540,237 | 3,806,243 |
Amounts due from related parties (net of allowance of RMB99,962 and RMB103,840 as of December 31, 2021 and September 30, 2022, respectively) | 518,001 | 72,819 | 733,386 | 109,492 | 837,324 |
Loans receivable, net (including RMB8,646,950 and RMB12,003,519 from the consolidated trusts as of December 31, 2021 and September 30, 2022, respectively) | 14,002,507 | 1,968,441 | 10,850,458 | 1,619,931 | 9,844,481 |
Prepaid expenses and other assets (including RMB104,515 and RMB111,039 from the consolidated trusts as of December 31, 2021 and September 30,2022, respectively) | 534,340 | 75,116 | 364,908 | 54,479 | 383,937 |
Total current assets | 33,277,822 | 4,678,120 | 30,807,848 | 4,599,491 | 27,757,223 |
Non-current assets: | |||||
Accounts receivable and contract assets, net-noncurrent (net of allowance of RMB28,374 and RMB42,986 as of December 31, 2021 and September 30, 2022, respectively) | 298,161 | 41,915 | 291,908 | 43,581 | 223,474 |
Financial assets receivable, net-noncurrent (net of allowance of RMB60,988 and RMB87,079 as of December 31, 2021 and September 30, 2022, respectively) | 755,977 | 106,274 | 683,078 | 101,981 | 597,965 |
Amounts due from related parties (net of allowance of RMB22,055 and RMB5,450 as of December 31, 2021 and September 30, 2022, respectively) | 72,245 | 10,156 | 55,136 | 8,231 | 140,851 |
Loans receivable, net-noncurrent (including RMB1,829,804 and RMB714,412 from the consolidated trusts as of December 31, 2021 and September 30, 2022) | 3,289,501 | 462,431 | 3,657,879 | 546,107 | 2,859,349 |
Property and equipment, net | 25,170 | 3,538 | 20,487 | 3,059 | 24,941 |
Land use rights, net | 1,003,366 | 141,051 | 1,008,548 | 150,572 | 1,018,908 |
Intangible assets | 4,835 | 680 | 5,231 | 781 | 4,961 |
Deferred tax assets | 1,170,598 | 164,560 | 1,059,963 | 158,248 | 834,717 |
Other non-current assets | 64,702 | 9,097 | 76,030 | 11,351 | 42,606 |
Total non-current assets | 6,684,555 | 939,702 | 6,858,260 | 1,023,911 | 5,747,772 |
TOTAL ASSETS | 39,962,377 | 5,617,822 | 37,666,108 | 5,623,402 | 33,504,995 |
Current liabilities: | |||||
Payable to investors of the consolidated trusts-current | 6,173,089 | 867,799 | 5,224,973 | 780,068 | 2,304,518 |
Accrued expenses and other current liabilities | 2,267,693 | 318,787 | 2,117,357 | 316,113 | 2,258,329 |
Amounts due to related parties | 203,324 | 28,583 | 178,687 | 26,677 | 214,057 |
Short term loans | 639,764 | 89,937 | 611,164 | 91,244 | 397,576 |
Guarantee liabilities-stand ready | 4,385,117 | 616,450 | 4,538,963 | 677,649 | 4,818,144 |
Guarantee liabilities-contingent | 3,404,333 | 478,574 | 3,320,414 | 495,725 | 3,285,081 |
Income tax payable | 683,342 | 96,063 | 654,347 | 97,691 | 624,112 |
Other tax payable | 186,270 | 26,185 | 177,611 | 26,517 | 241,369 |
Total current liabilities | 17,942,932 | 2,522,378 | 16,823,516 | 2,511,684 | 14,143,186 |
Non-current liabilities: | |||||
Deferred tax liabilities | 196,517 | 27,626 | 173,777 | 25,944 | 121,426 |
Payable to investors of the consolidated trusts-noncurrent | 3,802,348 | 534,526 | 3,613,690 | 539,510 | 4,010,597 |
Other long-term liabilities | 31,067 | 4,366 | 34,147 | 5,099 | 13,177 |
Total non-current liabilities | 4,029,932 | 566,518 | 3,821,614 | 570,553 | 4,145,200 |
TOTAL LIABILITIES | 21,972,864 | 3,088,896 | 20,645,130 | 3,082,237 | 18,288,386 |
Commitments and Contingencies (Note 14) | |||||
SHAREHOLDERS' EQUITY | |||||
Ordinary shares ($0.00001 par value per share 5,000,000,000 shares authorized, 315,433,018 shares issued and 310,486,975 shares outstanding as of December 31, 2021, and 315,433,018 shares issued and 312,522,703 shares outstanding as of September 30, 2022, respectively) | 22 | 3 | 22 | 3 | 22 |
Additional paid-in capital | 5,820,650 | 818,254 | 5,771,100 | 861,603 | 5,672,267 |
Retained earnings | 12,111,262 | 1,702,574 | 11,314,746 | 1,689,247 | 9,642,506 |
Other comprehensive loss | (30,662) | (4,310) | (67,612) | (10,094) | (110,932) |
TOTAL 360 DIGITECH, INC. EQUITY | 17,901,272 | 2,516,521 | 17,018,256 | 2,540,759 | 15,203,863 |
Non-controlling interests | 88,241 | 12,405 | 2,722 | 406 | 12,746 |
TOTAL EQUITY | 17,989,513 | 2,528,926 | 17,020,978 | 2,541,165 | 15,216,609 |
TOTAL LIABILITIES AND EQUITY | ¥ 39,962,377 | $ 5,617,822 | ¥ 37,666,108 | $ 5,623,402 | ¥ 33,504,995 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Sep. 30, 2022 CNY (¥) shares | Jun. 30, 2022 CNY (¥) shares | Dec. 31, 2021 CNY (¥) shares |
Restricted cash | ¥ 3,009,630 | ¥ 3,764,988 | ¥ 2,643,587 |
Accounts receivable and contract assets, allowance | 276,947 | 295,934 | 287,538 |
Financial assets receivable, allowance | 449,897 | 455,181 | 432,658 |
Amounts due from related parties, current, allowance | 103,840 | 117,339 | 99,962 |
Loans receivable, net | 14,002,507 | 10,850,458 | 9,844,481 |
Prepaid expenses and other assets | 534,340 | 364,908 | 383,937 |
Accounts receivable and contract assets, net-noncurrent, allowance | 42,986 | 28,779 | 28,374 |
Financial assets receivable, net-noncurrent, allowance | 87,079 | 64,382 | 60,988 |
Amounts due from related parties, non current, allowance | 5,450 | 7,837 | 22,055 |
Loans receivable, net-noncurrent | ¥ 3,289,501 | ¥ 3,657,879 | ¥ 2,859,349 |
Ordinary shares, authorized (in shares) | shares | 5,000,000,000 | 5,000,000,000 | 5,000,000,000 |
Ordinary shares, issued (in shares) | shares | 315,433,018 | 315,433,018 | 315,433,018 |
Ordinary shares, outstanding (in shares) | shares | 312,522,703 | 312,459,711 | 310,486,975 |
Consolidated Trusts | |||
Restricted cash | ¥ 626,452 | ¥ 1,420,864 | ¥ 657,075 |
Loans receivable, net | 12,003,519 | 9,545,367 | 8,646,950 |
Prepaid expenses and other assets | 111,039 | 104,515 | 104,515 |
Loans receivable, net-noncurrent | ¥ 714,412 | ¥ 1,023,231 | ¥ 1,829,804 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | ||||
Jun. 30, 2022 CNY (¥) ¥ / shares shares | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2021 CNY (¥) ¥ / shares shares | Sep. 30, 2022 CNY (¥) ¥ / shares shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 CNY (¥) ¥ / shares shares | |
Revenue, net of value-added tax and related surcharges: | ||||||
Total net revenue | ¥ 8,503,246 | $ 1,269,502 | ¥ 7,600,767 | ¥ 12,647,375 | $ 1,777,940 | ¥ 12,213,580 |
Operating costs and expenses: | ||||||
Facilitation, origination and servicing (including costs charged by related parties of RMB79,997 and RMB96,953 for the nine months ended September 30, 2021 and 2022, respectively) | 1,170,561 | 174,760 | 1,035,735 | 1,787,872 | 251,335 | 1,662,927 |
Funding costs | 227,630 | 33,984 | 162,242 | 366,105 | 51,466 | 245,995 |
Sales and marketing (including expenses charged by related parties of RMB252,103 and RMB335,398 for the nine months ended September 30, 2021 and 2022, respectively) | 1,167,657 | 174,327 | 884,946 | 1,791,761 | 251,882 | 1,462,210 |
General and administrative (including expenses charged by related parties of RMB9,693 and RMB12,710 for the nine months ended September 30, 2021 and 2022, respectively) | 216,148 | 32,270 | 243,774 | 318,869 | 44,826 | 416,777 |
Provision for loans receivable | 907,317 | 135,459 | 381,887 | 1,098,859 | 154,475 | 742,286 |
Provision for financial assets receivable (including provision generated from related parties of RMB807 and RMB1,426 for the nine months ended September 30, 2021 and 2022, respectively) | 164,217 | 24,517 | 103,576 | 279,361 | 39,272 | 173,661 |
Provision for accounts receivable and contract assets (including provision generated from related parties of RMB127,705 and RMB11,171 for the nine months ended September 30, 2021 and 2022, respectively) | 117,025 | 17,471 | 157,116 | 170,787 | 24,009 | 286,202 |
Provision for contingent liabilities | 2,162,638 | 322,873 | 1,220,586 | 3,305,458 | 464,674 | 1,918,899 |
Total operating costs and expenses | 6,133,193 | 915,661 | 4,189,862 | 9,119,072 | 1,281,939 | 6,908,957 |
Income from operations | 2,370,053 | 353,841 | 3,410,905 | 3,528,303 | 496,001 | 5,304,623 |
Interest income, net | 68,188 | 10,180 | 82,875 | 126,007 | 17,714 | 109,790 |
Foreign exchange gain (loss) | (86,658) | (12,938) | 13,895 | (155,241) | (21,823) | 17,897 |
Investment gain (loss) | (8,996) | (1,265) | 10,115 | |||
Other income, net | 203,458 | 30,375 | 50,811 | 227,485 | 31,979 | 38,737 |
Investment gain (loss) | (8,996) | (1,343) | ||||
Income before income tax expense | 2,546,045 | 380,115 | 3,558,486 | 3,717,558 | 522,606 | 5,481,162 |
Income tax expense | (396,732) | (59,231) | (663,357) | (579,891) | (81,520) | (1,021,956) |
Net income | 2,149,313 | 320,884 | 2,895,129 | 3,137,667 | 441,086 | 4,459,206 |
Net (income) loss attributable to non-controlling interests | 10,024 | 1,497 | (42) | 14,505 | 2,039 | (42) |
Net income attributable to ordinary shareholders of the Company | ¥ 2,159,337 | $ 322,381 | ¥ 2,895,087 | ¥ 3,152,172 | $ 443,125 | ¥ 4,459,164 |
Net income per ordinary share attributable to ordinary shareholders of 360 DigiTech, Inc. | ||||||
Basic | (per share) | ¥ 6.94 | $ 1.04 | ¥ 9.46 | ¥ 10.12 | $ 1.42 | ¥ 14.54 |
Diluted | (per share) | ¥ 6.74 | $ 1.01 | ¥ 9.02 | ¥ 9.81 | $ 1.38 | ¥ 13.89 |
Weighted average shares used in calculating net income per ordinary share | ||||||
Basic (in shares) | 311,109,257 | 311,109,257 | 305,886,883 | 311,571,575 | 311,571,575 | 306,641,972 |
Diluted (in shares) | 320,251,194 | 320,251,194 | 320,958,192 | 321,224,803 | 321,224,803 | 320,946,727 |
ADS | ||||||
Net income per ordinary share attributable to ordinary shareholders of 360 DigiTech, Inc. | ||||||
Basic | (per share) | ¥ 13.88 | $ 2.08 | ¥ 18.92 | ¥ 20.24 | $ 2.84 | ¥ 29.08 |
Diluted | (per share) | ¥ 13.48 | $ 2.02 | ¥ 18.04 | ¥ 19.62 | $ 2.76 | ¥ 27.78 |
Credit driven services | ||||||
Revenue, net of value-added tax and related surcharges: | ||||||
Total net revenue | ¥ 5,868,397 | $ 876,129 | ¥ 4,856,038 | ¥ 8,809,503 | $ 1,238,420 | ¥ 7,476,006 |
Loan facilitation and servicing fees-capital heavy | ||||||
Revenue, net of value-added tax and related surcharges: | ||||||
Total net revenue | 1,141,771 | 170,462 | 1,265,047 | 1,724,628 | 242,444 | 1,846,102 |
Financing income | ||||||
Revenue, net of value-added tax and related surcharges: | ||||||
Total net revenue | 1,608,820 | 240,191 | 897,528 | 2,485,871 | 349,458 | 1,468,075 |
Revenue from releasing of guarantee liabilitiesing of guarantee liabilities | ||||||
Revenue, net of value-added tax and related surcharges: | ||||||
Total net revenue | 3,074,515 | 459,013 | 2,647,734 | 4,522,107 | 635,708 | 4,088,453 |
Other services fees | ||||||
Revenue, net of value-added tax and related surcharges: | ||||||
Total net revenue | 43,291 | 6,463 | 45,729 | 76,897 | 10,810 | 73,376 |
Platform services | ||||||
Revenue, net of value-added tax and related surcharges: | ||||||
Total net revenue | 2,634,849 | 393,373 | 2,744,729 | 3,837,872 | 539,520 | 4,737,574 |
Loan facilitation and servicing fees-capital light | ||||||
Revenue, net of value-added tax and related surcharges: | ||||||
Total net revenue | 2,128,955 | 317,845 | 2,392,602 | 3,169,165 | 445,514 | 4,192,673 |
Referral service fees | ||||||
Revenue, net of value-added tax and related surcharges: | ||||||
Total net revenue | 382,650 | 57,128 | 286,594 | 468,031 | 65,795 | 442,889 |
Other services fees | ||||||
Revenue, net of value-added tax and related surcharges: | ||||||
Total net revenue | ¥ 123,244 | $ 18,400 | ¥ 65,533 | ¥ 200,676 | $ 28,211 | ¥ 102,012 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Parenthetical) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue from related parties | ¥ 787,157 | ¥ 1,050,036 | ¥ 1,016,463 | ¥ 1,702,734 |
Facilitation, origination and servicing costs charged by related parties | 63,448 | 57,639 | 96,953 | 79,997 |
Sales and marketing expenses charged by related parties | 246,546 | 113,988 | 335,398 | 252,103 |
General and administrative expenses charged by related parties | 8,252 | 6,451 | 12,710 | 9,693 |
Provision for financial asset receivable, including provision generated from related parties | 342 | 807 | 1,426 | 807 |
Provision for accounts receivable and contract assets, including provision charged by related parties | 13,400 | 78,542 | 11,171 | 127,705 |
Loan facilitation and servicing fees-capital heavy | ||||
Revenue from related parties | 1,515 | 93 | 7,797 | 93 |
Loan facilitation and servicing fees-capital light | ||||
Revenue from related parties | 656,203 | 1,036,893 | 859,581 | 1,689,299 |
Referral service fees | ||||
Revenue from related parties | 108,757 | 0 | 109,000 | 6,360 |
Other services fees | ||||
Revenue from related parties | ¥ 20,526 | ¥ 13,050 | ¥ 37,829 | ¥ 5,550 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME OR LOSS ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | ||||
Jun. 30, 2022 CNY (¥) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 CNY (¥) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 CNY (¥) | |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME OR LOSS | ||||||
Net income | ¥ 2,149,313 | $ 320,884 | ¥ 2,895,129 | ¥ 3,137,667 | $ 441,086 | ¥ 4,459,206 |
Other comprehensive (loss) income, net of tax of nil: | ||||||
Foreign currency translation adjustment | 43,320 | 6,468 | (15,792) | 80,270 | 11,284 | (20,227) |
Other comprehensive income (loss) | 43,320 | 6,468 | (15,792) | 80,270 | 11,284 | (20,227) |
Total comprehensive income | 2,192,633 | 327,352 | 2,879,337 | 3,217,937 | 452,370 | 4,438,979 |
Comprehensive (income) loss attributable to non-controlling interests | 10,024 | 1,497 | (42) | 14,505 | 2,039 | (42) |
Comprehensive income attributable to ordinary shareholders | ¥ 2,202,657 | $ 328,849 | ¥ 2,879,295 | ¥ 3,232,442 | $ 454,409 | ¥ 4,438,937 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME OR LOSS (Parenthetical) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME OR LOSS | ||||
Other comprehensive income, tax | ¥ 0 | ¥ 0 | ¥ 0 | ¥ 0 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ¥ in Thousands, $ in Thousands | Ordinary shares CNY (¥) shares | Additional Paid-in capital CNY (¥) | Retained earnings CNY (¥) | Other Comprehensive Income (Loss) CNY (¥) | Non-controlling interests CNY (¥) | CNY (¥) shares | USD ($) shares |
Balance at Dec. 31, 2020 | ¥ 21 | ¥ 5,417,406 | ¥ 4,137,542 | ¥ (74,391) | ¥ 512 | ¥ 9,481,090 | |
Balance (in shares) at Dec. 31, 2020 | shares | 304,453,780 | ||||||
Increase (Decrease) in Equity | |||||||
Issuance of ordinary shares (in shares) | shares | 3,310,860 | ||||||
Share-based compensation | 126,830 | 126,830 | |||||
Other comprehensive income | (15,792) | (15,792) | |||||
Net income (loss) | 2,895,087 | 42 | 2,895,129 | ||||
Balance at Jun. 30, 2021 | ¥ 21 | 5,544,236 | 7,032,629 | (90,183) | 554 | 12,487,257 | |
Balance (in shares) at Jun. 30, 2021 | shares | 307,764,640 | ||||||
Balance at Dec. 31, 2020 | ¥ 21 | 5,417,406 | 4,137,542 | (74,391) | 512 | 9,481,090 | |
Balance (in shares) at Dec. 31, 2020 | shares | 304,453,780 | ||||||
Increase (Decrease) in Equity | |||||||
Issuance of ordinary shares (in shares) | shares | 4,155,822 | ||||||
Share-based compensation | 196,371 | 196,371 | |||||
Other comprehensive income | (20,227) | (20,227) | |||||
Net income (loss) | 4,459,164 | 42 | 4,459,206 | ||||
Disposal of a subsidiary | 939 | (554) | 385 | ||||
Balance at Sep. 30, 2021 | ¥ 21 | 5,614,716 | 8,596,706 | (94,618) | 14,116,825 | ||
Balance (in shares) at Sep. 30, 2021 | shares | 308,609,602 | ||||||
Balance at Dec. 31, 2021 | ¥ 22 | 5,672,267 | 9,642,506 | (110,932) | 12,746 | ¥ 15,216,609 | |
Balance (in shares) at Dec. 31, 2021 | shares | 310,486,975 | 315,433,018 | 315,433,018 | ||||
Increase (Decrease) in Equity | |||||||
Issuance of ordinary shares (in shares) | shares | 1,972,736 | ||||||
Share-based compensation | 98,833 | ¥ 98,833 | |||||
Dividends to shareholders | (487,097) | (487,097) | |||||
Other comprehensive income | 43,320 | 43,320 | $ 6,468 | ||||
Net income (loss) | 2,159,337 | (10,024) | 2,149,313 | 320,884 | |||
Balance at Jun. 30, 2022 | ¥ 22 | 5,771,100 | 11,314,746 | (67,612) | 2,722 | ¥ 17,020,978 | $ 2,541,165 |
Balance (in shares) at Jun. 30, 2022 | shares | 312,459,711 | 315,433,018 | 315,433,018 | ||||
Balance at Dec. 31, 2021 | ¥ 22 | 5,672,267 | 9,642,506 | (110,932) | 12,746 | ¥ 15,216,609 | |
Balance (in shares) at Dec. 31, 2021 | shares | 310,486,975 | 315,433,018 | 315,433,018 | ||||
Increase (Decrease) in Equity | |||||||
Issuance of ordinary shares | ¥ 0 | 0 | 0 | 0 | 0 | ¥ 0 | |
Issuance of ordinary shares (in shares) | shares | 2,035,728 | ||||||
Share-based compensation | 148,383 | 148,383 | |||||
Dividends to shareholders | (683,416) | (683,416) | |||||
Other comprehensive income | 80,270 | 80,270 | $ 11,284 | ||||
Net income (loss) | 3,152,172 | (14,505) | 3,137,667 | 441,086 | |||
Capital injection of non-controlling interest holders to a subsidiary | 90,000 | 90,000 | |||||
Balance at Sep. 30, 2022 | ¥ 22 | ¥ 5,820,650 | ¥ 12,111,262 | ¥ (30,662) | ¥ 88,241 | ¥ 17,989,513 | $ 2,528,926 |
Balance (in shares) at Sep. 30, 2022 | shares | 312,522,703 | 315,433,018 | 315,433,018 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | ||||
Jun. 30, 2022 CNY (¥) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 CNY (¥) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 CNY (¥) | |
Cash Flows from Operating Activities: | ||||||
Net income | ¥ 2,149,313 | $ 320,884 | ¥ 2,895,129 | ¥ 3,137,667 | $ 441,086 | ¥ 4,459,206 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation, amortization and reduction in right-of-use assets | 39,650 | 5,920 | 23,761 | 58,381 | 8,207 | 35,965 |
Share-based compensation | 98,833 | 14,755 | 126,830 | 148,383 | 20,859 | 196,371 |
Investment (gain) loss | 8,996 | 1,343 | ||||
Investment (gain) loss | 8,996 | 1,265 | (10,115) | |||
Provision for loans receivable, financial assets receivable and accounts receivable and contract assets | 1,188,559 | 177,447 | 642,579 | 1,549,008 | 217,756 | 1,222,148 |
Provision for contingent liabilities | 2,162,638 | 322,873 | 1,220,586 | 3,305,458 | 464,674 | 1,918,899 |
Foreign exchange (gain) loss | 86,658 | 12,938 | (13,895) | 155,241 | 21,823 | (17,897) |
Fair value change of foreign exchange options | (7,377) | (1,037) | ||||
Changes in operating assets and liabilities | ||||||
Funds receivable from third party payment service providers | (159,295) | (23,782) | 24,034 | (830,700) | (116,778) | (76,402) |
Accounts receivable and contract assets | (574,191) | (85,724) | 152,151 | (246,178) | (34,607) | 23,016 |
Financial assets receivable | (61,305) | (9,153) | (534,353) | 49,180 | 6,914 | (869,542) |
Prepaid expenses and other assets | 15,698 | 2,344 | 86,702 | (140,606) | (19,766) | 81,622 |
Security deposit prepaid to third-party guarantee companies | 176,407 | 26,337 | (45,848) | 325,337 | 45,735 | (20,297) |
Deferred tax | (172,895) | (25,813) | 432,815 | (260,790) | (36,661) | 309,622 |
Other assets | (54,068) | (8,072) | (9,659) | (52,376) | (7,363) | (8,390) |
Amounts due from/to related parties | 140,542 | 20,982 | (752,106) | 374,779 | 52,686 | (1,038,812) |
Guarantee liabilities | (2,406,485) | (359,279) | (1,171,421) | (3,619,233) | (508,784) | (1,836,938) |
Income tax payable | 30,234 | 4,514 | (350,383) | 59,230 | 8,326 | (235,670) |
Other tax payable | (63,758) | (9,519) | (5,749) | (55,099) | (7,746) | 39,015 |
Accrued expenses and other current liabilities | (93,959) | (14,028) | 360,563 | 169,638 | 23,847 | 688,243 |
Other long-term liabilities | 20,969 | 3,131 | (2,369) | 13,697 | 1,925 | (5,029) |
Interest receivable/ payable | 5,370 | 802 | (41,550) | |||
Interest receivable | (12,598) | (1,771) | (40,521) | |||
Land use rights | (1,036,178) | (1,036,178) | ||||
Net cash provided by operating activities | 2,537,911 | 378,900 | 2,001,639 | 4,130,038 | 580,590 | 3,778,316 |
Cash Flows from Investing Activities: | ||||||
Purchase of property and equipment and intangible assets | (4,476) | (668) | (9,807) | (13,086) | (1,840) | (17,244) |
Loans provided to related parties | (50,000) | (50,000) | ||||
Investment in loans receivable | (24,707,860) | (3,688,786) | (17,336,499) | (41,317,180) | (5,808,277) | (30,180,828) |
Collection of investment in loans receivable | 22,023,551 | 3,288,030 | 15,108,308 | 35,695,623 | 5,018,011 | 24,534,751 |
Capital injection to an investee entity | (8,996) | (1,343) | ||||
Capital injection to an investee entity | (8,996) | (1,265) | 0 | |||
Purchase of short-term investments | (30,000) | (4,217) | ||||
Purchase of foreign exchange options | (5,338) | (750) | ||||
Disposal of subsidiaries and other business units, net of cash received | 3,349 | 500 | ||||
Disposal of subsidiaries and other business units, net of cash received | 3,349 | 471 | (5,492) | |||
Net cash used in investing activities | (2,694,432) | (402,267) | (2,287,998) | (5,675,628) | (797,867) | (5,718,813) |
Cash Flows from Financing Activities: | ||||||
Proceeds from short-term loans | 190,179 | 28,393 | 150,327 | 190,179 | 26,735 | 150,327 |
Proceeds from long-term loans | 4,193 | 589 | ||||
Cash received from investors of the consolidated trusts | 4,514,320 | 673,970 | 3,015,273 | 6,816,920 | 958,307 | 4,587,773 |
Cash paid to investors of the consolidated trusts | (2,023,656) | (302,124) | (2,442,693) | (3,209,480) | (451,182) | (3,559,968) |
Contribution by non-controlling interests | 90,000 | 12,652 | ||||
Dividend to shareholders | (551,666) | (82,362) | (784,363) | (110,264) | 0 | |
Loan received from non-controlling interests | 344,487 | 3,000 | 422 | 344,487 | ||
Loan payment to non-controlling interests | (30,168) | (90,000) | (12,652) | (30,168) | ||
Investing receivable from related parties | 344,487 | |||||
Cash received from a related party for investment | 0 | 0 | 344,487 | |||
Cash repayment to a related party | (30,168) | (10,180) | (1,431) | (30,168) | ||
Net cash provided by financing activities | 2,129,177 | 317,877 | 1,351,545 | 3,010,269 | 423,176 | 1,806,770 |
Effect of foreign exchange rate changes | (2,377) | (355) | (2,752) | 4,704 | 663 | (2,709) |
Net increase in cash and cash equivalents | 1,970,279 | 294,155 | 1,062,434 | 1,469,383 | 206,562 | (136,436) |
Cash, cash equivalents, and restricted cash, beginning of period | 8,759,947 | 1,231,454 | 6,774,266 | 8,759,947 | 1,231,454 | 6,774,266 |
Cash, cash equivalents, and restricted cash, beginning of period | $ | 1,307,826 | 1,307,826 | ||||
Cash, cash equivalents, and restricted cash, end of period | 10,730,226 | 1,601,981 | 7,836,700 | 10,229,330 | 1,438,016 | 6,637,830 |
Supplemental disclosures of cash flow information: | ||||||
Income taxes paid | (539,393) | (80,529) | (580,879) | (781,452) | (109,855) | (948,001) |
Interest paid (not including interest paid to investors of consolidated trusts) | (3,941) | (588) | (6,727) | (8,821) | (1,240) | (12,304) |
Supplemental disclosure of significant non-cash investing and financing activities: | ||||||
Payables for dividends: | 230,095 | $ 34,352 | 200,076 | $ 28,126 | ||
Reconciliation to amounts on consolidated balance sheet: | ||||||
Cash and cash equivalents | 6,965,238 | 5,191,999 | 7,219,700 | 4,224,320 | ||
Restricted cash | 3,764,988 | 2,644,701 | 3,009,630 | 2,413,510 | ||
Total cash, cash equivalents, and restricted cash | ¥ 10,730,226 | ¥ 7,836,700 | ¥ 10,229,330 | ¥ 6,637,830 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES 360 DigiTech, Inc. (the “Company”, previously known as “360 Finance, Inc. ”) was incorporated in Cayman Islands with limited liability on April 27, 2018. The Company and its subsidiaries (together, the “Group”) are engaged in matching borrowers with credit demand to a diversified pool of financial institutions with credit to supply through a financial technology platform. The Company’s significant subsidiaries and its consolidated Variable Interest Entities (“VIEs”) as of June 30, 2022 are as follows: Date of Place of Incorporation Incorporation Subsidiaries HK Qirui International Technology Company Limited (“HK Qirui”) June 14, 2018 Hong Kong Shanghai Qiyue Information & Technology Co., Ltd. (“Qiyue”) August 7, 2018 PRC Shanghai Qidi Information Technology Co., Ltd. (“Qidi”) June 27, 2019 PRC Beihai Qicheng Information & Technology Co., Ltd. (“Qicheng”) August 6, 2019 PRC VIEs and VIEs Subsidiaries Shanghai Qiyu Information & Technology Co., Ltd. (“Qiyu”) July 25, 2016 PRC Fuzhou 360 Online Microcredit Co., Ltd. (“Fuzhou Microcredit”) March 30, 2017 PRC Fuzhou 360 Financing Guarantee Co., Ltd. (“Fuzhou Guarantee”) June 29, 2018 PRC Shanghai Qiyaoxin Technology Co., Ltd. (formerly known as “Shanghai 360 Financing Guarantee Co., Ltd.”, “Shanghai Financing Guarantee”) May 20, 2019 PRC History of the Group and reorganization under identical common ownership The Group started its business in 2016 through Qiyu, a limited liability company in the People’s Republic of China (“PRC”). In 2018, the Company undertook a series of transactions to redomicile its business from the PRC to the Cayman Islands and established intermediary companies of HK Qirui and Qiyue (“WFOE”) for the purpose of establishing a VIE structure of the Group. The WFOE entered into VIE agreements which effectively provided control to the WFOE over the operations of the VIEs. The VIE arrangement PRC laws and regulations prohibit or restrict foreign control of companies involved in provision of internet content and certain finance business. To comply with these foreign ownership restrictions, the Company operates substantially all of its service through its VIEs in the PRC. The VIEs hold leases and other assets necessary to provide services and generate the majority of the Company’s revenues. To provide the Company effective control over the VIEs and the ability to receive substantially all of the economic benefits of the VIEs, a series of contractual arrangements were entered into amongst Qiyue (“WFOE”), VIEs and their beneficial shareholders. In June 2022, the set of VIE agreements were terminated and replaced by a set of new VIE agreements signed by the same parties, with no material changes to the major terms. 1. ORGANIZATION AND PRINCIPAL ACTIVITIES - continued The VIE arrangement - continued Agreements that were entered to provide the Company effective control over the VIEs Voting Proxy Agreement Pursuant to the voting proxy agreement entered into among WFOE, Qiyu and Shanghai Qibutianxia Information Technology Co., Ltd. (formerly known as Beijing Qibutianxia Technology Co., Ltd. “Qibutianxia”), Qibutianxia would irrevocably authorize the WFOE or any person designated by the WFOE to act as its attorney-in-fact to exercise all of its rights as a shareholder of Qiyu, including, but not limited to: (i) to convene and participate in shareholders’ meeting pursuant to the constitutional documents of Qiyu in the capacity of a proxy of Qibutianxia; (ii) to exercise the voting rights pursuant to the relevant PRC laws and regulations and the articles of Qiyu, on behalf of Qibutianxia, and adopt resolutions, including but not limited to dividend rights, sale or transfer or pledge or disposal of part or all of Qiyu’s equity; (iii) to nominate, designate or appoint and remove the legal representative, directors, supervisors and other senior management of Qiyu pursuant to the constitutional documents of Qiyu. The Voting Proxy Agreement has an indefinite term and will be terminated in the event that (i) it is unilaterally terminated by the WFOE, or (ii) it is legally permissible for the WFOE, the Company or any of the subsidiaries to hold equity interests directly or indirectly in Qiyu and the WFOE or its designated person is registered to be the sole shareholder of Qiyu. Exclusive Option Agreement Pursuant to the exclusive option agreement entered into among WFOE, Qiyu and Qibutianxia, the sole Registered Shareholder of Qiyu. Qibutianxia irrevocably grants the WFOE an exclusive option to purchase or designate one or more persons to purchase, all or part of its equity interests in Qiyu, and Qiyu irrevocably grants the WFOE an exclusive option to purchase all or part of its assets, subject to applicable PRC laws. The WFOE or its designated person may exercise such options at the lowest price permitted under applicable PRC laws. Qibutianxia and Qiyu will undertake that, among other things, without the WFOE’s prior written consent, including but not limited to: (i) they shall not in any manner supplement, change or amend the constitutional documents of Qiyu, increase or decrease their registered capital, or change the structure of their registered capital in other manner; (ii) they shall not at any time following the signing of the Exclusive Option Agreement, sell, transfer, pledge or dispose of in any manner any assets of Qiyu or interest in the business or revenues of Qiyu, or allow the encumbrance thereon of any security interest; (iii) they shall not cause or permit Qiyu to merge, consolidate with, acquire or invest in any person. In addition, Qibutianxia will undertake that, without the WFOE’s prior written consent, it will not, among other things including, but not limited to, sell, transfer, pledge or dispose of in any other manner the legal or beneficial interest in Qiyu, or allow the encumbrance thereon of any security interest, except for the equity pledge under Qiyu’s equity interests pursuant to the Equity Interest Pledge Agreement. The Exclusive Option Agreement has an indefinite term commencing from its date of signing unless and until all the equity interests and assets subject to the agreement have been transferred to the WFOE and/or its designated person and the WFOE and its subsidiaries or affiliates can legally operate the business of Qiyu, whereby the exclusive option agreement shall terminate. WFOE is entitled to unilaterally terminate the Exclusive Option Agreement while other parties to the Exclusive Option Agreement may not terminate the Exclusive Option Agreement unilaterally, unless otherwise provided under PRC laws. 1. ORGANIZATION AND PRINCIPAL ACTIVITIES - continued The VIE arrangement Agreements that were entered to transfer economic benefits to the Company Exclusive Business Cooperation Agreement Pursuant to the exclusive business cooperation agreement between the WFOE and Qiyu, Qiyu agreed to engage the WFOE as its exclusive service provider of, among other things, consulting and technical services required by Qiyu’s business. Qiyu will agree to pay the WFOE service fee at the amount which is adjusted at the WFOE’s sole discretion taking into account factors including but not limited to: (i) the management and technical difficulty and the complexity of the management, technical consulting and other services provided by the WFOE; (ii) the time required by relevant personnel of the WFOE in providing such management and technical consulting and other services; (iii) the exact content and business value of the management, technical consulting and other services; (iv) the exact content and business value of intellectual property license and lease provided by the WFOE; and (v) the market price of services of similar types. In addition, absent the prior written consent of the WFOE, during the term of the Exclusive Business Cooperation Agreement, with respect to the services subject to the Exclusive Business Cooperation Agreement and other matters, Qiyu and its subsidiaries shall not accept the same or any similar services provided by any third party and shall not establish cooperation relationships similar to that formed by the exclusive business cooperation agreement with any third party. The WFOE would have the exclusive ownership of all the intellectual property rights created as a result of the performance of the Exclusive Business Cooperation Agreement to the extent permitted by applicable PRC laws. The Company considers that the arrangement will ensure the economic benefits generated from the operations of the consolidated affiliated entities flow to the WFOE and hence, the Group as a whole. The Exclusive Business Cooperation Agreement has an indefinite term. The Exclusive Business Cooperation Agreement may be terminated by the WFOE: (i) when Qiyu becomes insolvent, bankrupt or subject to liquidation or dissolution procedures; (ii) upon the transfer of the entire equity interests in and the transfer of all assets of Qiyu to the WFOE or its designated person pursuant to the exclusive option agreement entered into between the WFOE, Qiyu and Qibutianxia; (iii) when it is legally permissible for the WFOE to hold equity interests directly or indirectly in Qiyu and the WFOE or its designated person is registered to be the shareholder of Qiyu; (iv) when relevant government authorities refuse to renew the expired operating period of Qiyu or the WFOE; (v) by giving Qiyu a 30 days’ prior written notice of termination; or (vi) Qiyu breaches the Exclusive Business Cooperation Agreement. Qiyu is not contractually entitled to unilaterally terminate the Exclusive Business Cooperation Agreement with the WFOE. Loan Agreement Pursuant to the loan agreement among the WFOE, Qiyu and Qibutianxia, the WFOE is entitled to provide interest-free loans, to the extent permitted by laws, regulations and industry policies of the PRC from time to time at such time and amount as it deems appropriate to Qibutianxia for the purpose of Qiyu’s business operation and development, including but not limited to directly injecting such funds to the registered capital of Qiyu. Each of the loans made under this loan agreement has no fixed term, and unless otherwise agreed, the WFOE shall unilaterally decide when to withdraw the loans, provided that the WFOE shall notify Qibutianxia in writing one month in advance. The loan agreement shall remain in effect during Qiyu’s term (and any renewable term provided by the PRC law), and shall automatically terminate after the WFOE and/or other entities designated by the WFOE fully exercise all their rights under the exclusive option agreement. 1. ORGANIZATION AND PRINCIPAL ACTIVITIES – continued The VIE arrangement – continued Equity Interest Pledge Agreement Pursuant to the equity pledge agreement, Qibutianxia agreed to pledge all of its equity interests in Qiyu to the WFOE as a security interest to guarantee the performance of contractual obligations and the payment of outstanding debts under the VIE arrangements. In the event of a breach by Qiyu or Qibutianxia of contractual obligations under the VIE arrangements, the WFOE, as pledgee, will have the right to dispose of the pledged equity interests in Qiyu. Qibutianxia has undertaken to the WFOE, among other things, not to transfer its equity interests in Qiyu and not to create or allow any pledge thereon that may affect the rights and interest of the WFOE without its prior written consent. The Company also has some other sets of VIE contractual arrangements. The arrangements with its significant VIEs include 1) the arrangement among the WFOE, Fuzhou Guarantee and Qibutianxia, and 2) the arrangement among the WFOE, Shanghai Financing Guarantee and two fully owned subsidiaries of Qibutianxia. These sets of the contractual agreements are substantially similar to the set with Qiyu as described above. In April 2021, the contractual arrangements amongst WFOE, Fuzhou Microcredit and Qibutianxia were terminated and Qibutianxia transferred all of its equity interest in Fuzhou Microcredit to Qiyu. As a result, Fuzhou Microcredit became a wholly-owned subsidiary of Qiyu. This transaction had no impact to the consolidated financial statements. Risks in relation to VIE structure The Company believes that the contractual arrangements with Qiyu, Fuzhou Guarantee, Shanghai Financing Guarantee and their shareholders, Qibutianxia, are in compliance with existing PRC laws and regulations and are valid, binding and enforceable and will not result in any violation of PRC laws or regulations and the PRC regulatory authorities may take a contrary view. If the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the regulatory authorities may exercise their discretion and: ● revoke the business and operating licenses of the Company’s PRC subsidiaries or consolidated affiliated entities; ● restrict the rights to collect revenues from any of the Company’s PRC subsidiaries; ● discontinue or restrict the operations of any related-party transactions among the Company’s PRC subsidiaries or consolidated affiliated entities; ● require the Company’s PRC subsidiaries or consolidated affiliated entities to restructure the relevant ownership structure or operations; ● take other regulatory or enforcement action is, including levying fines that could be harmful to the Company’s business; or ● impose additional conditions or requirements with which the Company may not be able to comply. The imposition of any of these penalties may result in a material adverse effect on the Company’s ability to conduct its business. In addition, if the imposition of any of these penalties causes the Company to lose the rights to direct the activities of the VIEs or the right to receive substantially all of their economic benefits, the Company would no longer be able to consolidate the financial results of the VIEs. 1. ORGANIZATION AND PRINCIPAL ACTIVITIES The VIE arrangement Risks in relation to VIE structure These contractual arrangements allow the Company to effectively control Qiyu, Fuzhou Guarantee and Shanghai Financing Guarantee, and to derive substantially all of the economic benefits from them. Accordingly, the Company treats Qiyu, Fuzhou Guarantee and Shanghai Financing Guarantee as VIEs. Because the Company is the primary beneficiary, the Company has consolidated the financial results of the VIEs. The following financial statement amounts and balances of the VIEs were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances. The table below does not include the financial information of the consolidated trusts (see note 2 “Consolidated Trusts”): December 31, June 30, 2021 2022 RMB RMB ASSETS Cash and cash equivalents 4,605,851 6,556,202 Restricted cash 1,986,512 2,344,124 Funds receivable from third party payment service providers 153,151 312,447 Accounts receivable and contract assets, net 2,133,477 1,653,349 Financial assets receivable, net 3,806,243 3,618,560 Security deposit prepaid to third-party guarantee companies 874,886 698,478 Amounts due from related parties 608,924 384,804 Loans receivable, net 1,197,532 1,305,091 Prepaid expenses and other assets 235,780 253,539 Property and equipment, net 15,074 12,831 Land use rights, net 1,018,908 1,008,548 Intangible assets 3,972 4,433 Deferred tax assets 779,291 967,237 Accounts receivable and contract assets, net-non current 217,298 290,528 Financial assets receivable, net-non current 597,965 683,078 Amounts due from related parties, non-current 121,855 49,627 Loans receivable, net-non current 1,029,545 2,634,648 Other non-current assets 27,729 48,602 Total Assets 19,413,993 22,826,126 LIABILITIES Short term loans 150,000 150,000 Guarantee liabilities-stand ready 4,818,144 4,538,963 Guarantee liabilities-contingent 3,285,081 3,320,414 Accrued expenses and other current liabilities 1,820,609 1,617,329 Income tax payable 449,553 581,136 Other tax payable 218,017 108,509 Amounts due to related parties 94,057 82,063 Deferred tax liabilities 65,542 27,328 Other long-term liabilities 10,271 23,958 Total liabilities 10,911,274 10,449,700 1. ORGANIZATION AND PRINCIPAL ACTIVITIES The VIE arrangement Risks in relation to VIE structure Six months ended June 30, 2021 2022 RMB RMB (unaudited) Net revenue 6,248,574 6,713,481 Net income 2,930,834 1,566,142 Six months ended June 30, 2021 2022 RMB RMB (unaudited) Net cash provided by operating activities 1,861,811 2,453,285 Net cash (used in) investing activities (351,780) (2,148,700) Net cash provided by financing activities 673,400 — The consolidated VIEs contributed 82% (unaudited) and 79% of the Group’s consolidated revenue for the six months ended June 30, 2021 and 2022, respectively. As of December 31, 2021 and June 30, 2022, the consolidated VIEs accounted for an aggregate of 58% and 61% , respectively, of the consolidated total assets, and 60% and 51% , respectively, of the consolidated total liabilities. There are no assets of the VIEs that are collateral for the obligations of the VIEs and their subsidiaries and can only be used to settle the obligations of the VIEs and their subsidiaries. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to the shareholder of the VIEs. Relevant PRC laws and regulations restrict the VIEs from transferring a portion of their net assets, equivalent to the balance of its statutory reserve and its share capital, to the Company in the form of loans and advances or cash dividends. Please refer to Note 14 for disclosure of restricted net assets. | NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“USD”) except for number of shares and per share data, or otherwise noted) 1. ORGANIZATION AND PRINCIPAL ACTIVITIES 360 DigiTech, Inc. (the “Company”, previously known as “360 Finance, Inc.”) was incorporated in Cayman Islands with limited liability on April 27, 2018. The Company, its subsidiaries, its consolidated variable interest entities (“VIEs”) (together, the “Group”) are engaged in matching borrowers with credit demand to a diversified pool of financial institutions with credit to supply through a financial technology platform. The VIE arrangements PRC laws and regulations prohibit or restrict foreign control of companies involved in provision of internet content and certain finance business. To comply with these foreign ownership restrictions, the Company operates substantially all of its service through its VIEs in the PRC. The VIEs hold leases and other assets necessary to provide services and generate the majority of the Company’s revenues. To provide the Company effective control over the VIEs and the ability to receive substantially all of the economic benefits of the VIEs, a series of contractual arrangements were entered into amongst Qiyue (“WFOE”), VIEs and their beneficial shareholders. In June 2022, the set of VIE agreements were terminated and replaced by a set of new VIE agreements signed by the same parties, with no material changes to the major terms. Risks in relation to VIE structure The following financial statement amounts and balances of the VIEs were included in the accompanying unaudited condensed consolidated financial statements after elimination of intercompany transactions and balances. The table below does not include the financial information of the consolidated trusts (see note 2 “Consolidated Trusts”): December 31, September 30, 2021 2022 RMB RMB ASSETS Cash and cash equivalents 4,605,851 6,753,079 Restricted cash 1,986,512 2,383,178 Short term investments — 30,000 Security deposit prepaid to third-party guarantee companies 874,886 549,548 Funds receivable from third party payment service providers 153,151 983,851 Accounts receivable and contract assets, net 2,133,477 1,589,517 Financial assets receivable, net 3,806,243 3,321,117 Amounts due from related parties 608,924 317,557 Loans receivable, net 1,197,532 1,998,988 Prepaid expenses and other assets 235,780 337,254 Accounts receivable and contract assets, net-non current 217,298 297,756 Financial assets receivable, net-non current 597,965 755,977 Amounts due from related parties, non-current 121,855 70,322 Loans receivable, net-non current 1,029,545 2,575,089 Property and equipment, net 15,074 17,887 Land use rights, net 1,018,908 1,003,366 Intangible assets 3,972 4,131 Deferred tax assets 779,291 1,086,165 Other non-current assets 27,729 42,719 Total Assets 19,413,993 24,117,501 LIABILITIES Accrued expenses and other current liabilities 1,820,609 1,699,591 Amounts due to related parties 94,057 138,542 Short term loans 150,000 150,000 Guarantee liabilities – stand ready 4,818,144 4,385,117 Guarantee liabilities – contingent 3,285,081 3,404,333 Income tax payable 449,553 644,363 Other tax payable 218,017 146,792 Deferred tax liabilities 65,542 23,810 Other long-term liabilities 10,271 22,929 Total liabilities 10,911,274 10,615,477 Nine months ended September 30, 2021 2022 RMB RMB Net revenue 10,070,969 10,012,621 Net income 4,551,396 2,291,880 Nine months ended September 30, 2021 2022 RMB RMB Net cash provided by operating activities 3,274,881 3,191,592 Net cash (used in) investing activities (1,008,797) (2,964,541) Net cash provided by financing activities 673,400 (2,987) The consolidated VIEs contributed 82% and 79% of the Group’s consolidated revenue for the nine months ended September 30, 2021 and 2022, respectively. As of December 31, 2021 and September 30, 2022, the consolidated VIEs accounted for an aggregate of 58% and 60% , respectively, of the consolidated total assets, and 60% and 48% , respectively, of the consolidated total liabilities. Other than the land use right held as loan collateral as disclosed in Note 8, there are no assets of the VIEs that are collateral for the obligations of the VIEs and their subsidiaries and can only be used to settle the obligations of the VIEs and their subsidiaries. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to the shareholder of the VIEs. Relevant PRC laws and regulations restrict the VIEs from transferring a portion of their net assets, equivalent to the balance of its statutory reserve and its share capital, to the Company in the form of cash dividends. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Basis of consolidation The accompanying consolidated financial statements include the financial statements of the Company, its subsidiaries, and consolidated VIEs. All intercompany transactions and balances have been eliminated. Consolidated Trusts Loans funded by the financial institution partners in the Group’s loan facilitation business are typically disbursed to the borrowers directly from such partners. However, in order to diversify the Group’s funding sources, lower the Group’s funding cost and due to the need of certain financial institution partners, loans from such financial institution partners are funded and disbursed indirectly through trusts. Several trusts were formed by third-party trust companies, who administer the trusts. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Consolidated Trusts The Trusts fund loans facilitated by the Group using the funds received from its beneficiaries to the borrowers. The Trusts provide the returns to its beneficiaries through interest payments made by the borrowers. The borrowers are charged with the interests by the Trusts. For the majority of trust, the Group is either entitled to the residual profit in the Trusts or the Group has provided guarantee to the Trusts by agreeing to repurchase any loans that are delinquent for 30 to 90 days from which the Group absorbs the credit risk of the Trusts resulting from borrowers’ delinquencies. The Group determined that the residual profit or the guarantee represents a variable interest in the Trusts through which the Group has the right to receive benefits or the obligation to absorb losses from the Trusts that could potentially be significant to the Trusts. Since the Trusts only invest in the loans facilitated by the Group and the Group continues to service the loans through a service agreement post origination and has the ability to direct default mitigation activities, the Group has the power to direct the activities of the Trusts that most significantly impact the economic performance of the Trusts. As a result, the Group is considered the primary beneficiary of the Trusts and consolidated the Trusts’ assets, liabilities, results of operations and cash flows. In 2019, the Group received letter of approval for listing and transferring assets backed securities (“ABS”) on both Shanghai Stock Exchange and Shenzhen Stock Exchange within the issue scale of RMB 5 billion for each, respectively. In 2020, the Group also received letter of approval for listing and transferring assets backed securities (“ABS”) on Shenzhen Stock Exchange within the issue scale of RMB 10 billion. In 2021, the Group also received letter of approval for listing and transferring assets backed securities (“ABS”) on Shanghai Stock Exchange and Shenzhen Stock Exchange within the issue scale of RMB 8 billion and RMB 4 billion, respectively. For some trusts, the trust beneficial rights, or the loans receivable in the trusts, were transferred, as underlying assets, to the asset backed special plans (the “ABS plans”). The beneficial rights and loans receivable of RMB3.1 billion (unaudited) and RMB3.0 billion in trusts were transferred to the ABS plans for the six months ended June 30, 2021 and 2022, respectively. The ABS plans were securitized and listed on Shanghai Stock Exchange and Shenzhen Stock Exchange, with terms of no more than two years. As of June 30, 2022, the Group held the whole subordinated tranche securities to provide credit enhancement. The underlying trusts were continued to be consolidated by the Group. Senior tranche securities held by external financial institution partners were recorded as “payable to investors of the consolidated trusts – current” with the balance of RMB 2,139,063 and RMB 4,019,635 as of December 31, 2021 and June 30, 2022, respectively and “payable to investors of the consolidated trusts – noncurrent” with the balance of RMB 3,903,597 and RMB 3,613,690 as of December 31, 2021 and June 30, 2022, respectively on the consolidated balance sheet. As of December 31, 2021 and June 30, 2022, the balance of delinquent loans repurchased by the Group from the consolidated trusts are RMB 904,586 and RMB 1,194,155, respectively. As of December 31, 2021 and June 30, 2022, the balance of performing loans upon liquidation of certain consolidated trusts repurchased by the Group from the consolidated trusts per the contracts agreed with the counterparty are RMB 12,686 and RMB 16,081, respectively. For the years ended December 31, 2021 and six months ended June 30, 2022, the provision for loan losses of RMB 661,402 and RMB 463,750 were charged to the consolidated statements of operations, respectively. There were RMB 1,033,228 and RMB 1,416,707 of loans written off for the years ended December 31, 2021 and six months ended June 30, 2022, respectively. Interest on loans receivable is accrued and credited to income as earned. The Group determines a loan’s past due status by the number of days that have elapsed since a borrower has failed to make a contractual loan payment. Accrual of interest is generally discontinued when the loan principal and interest are deemed to be uncollectible. In general, loans receivable is identified as uncollectible when it is determined to be not probable that the balance can be collected. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Consolidated Trusts The following financial statement amounts and balances of the consolidated trusts were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: December 31, 2021 June 30, 2022 RMB RMB ASSETS Restricted cash 657,075 1,420,864 Loans receivable, net 8,646,950 9,545,367 Prepaid expenses and other assets 104,515 104,515 Loans receivable, net-noncurrent 1,829,804 1,023,231 Total Assets 11,238,344 12,093,977 December 31, 2021 June 30, 2022 RMB RMB LIABILITIES Payable to investors of the consolidated trusts-current 2,304,518 5,224,973 Accrued expenses and other current liabilities 5,928 11,285 Other tax payable 34,448 37,504 Payable to investors of the consolidated trusts-noncurrent 4,010,597 3,613,690 Total liabilities 6,355,491 8,887,452 Six months ended June 30, 2021 2022 RMB RMB (unaudited) Net revenue 663,907 1,108,643 Net income 263,141 418,827 Six months ended June 30, 2021 2022 RMB RMB (unaudited) Net cash provided by operating activities 486,996 916,753 Net cash (used in) investing activities (1,921,400) (548,254) Net cash provided by financing activities 572,579 2,490,664 The consolidated trusts contributed 9% (unaudited) and 13% of the Group’s consolidated revenue for the six months ended June 30, 2021 and 2022, respectively. As of December 31, 2021 and June 30, 2022, the consolidated trusts accounted for an aggregate of 34% and 32%, respectively, of the consolidated total assets, and 35% and 43% respectively, of the consolidated total liabilities. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company to provide financial support to the consolidated trusts. The Group believes that the assets of the consolidated trusts could only be used to settle the obligations of the consolidated trusts. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates. Significant accounting estimates reflected in the Group’s financial statements include revenue recognition, financial assets receivable, guarantee liabilities, allowance for loans receivable, allowance for uncollectible accounts receivable and contract assets, allowance for financial assets receivable, and valuation allowance for deferred tax assets. Revenue recognition Through collaborating with channel partners to direct users with credit needs to its app, the Group provides services through its facilitation of loan transactions between the borrowers and the financial institution partners through the use of two business models. The first business model involves the Group providing credit driven services through facilitating loans that are guaranteed by the Group directly or through third-party guarantee companies and insurance companies (referred to as “off-balance capital heavy loans” hereafter), or providing loans through the Consolidated Trusts and Fuzhou Microcredit. In either cases, the Group ultimately bears all the credit risks when the borrowers default. The second business model involves the Group providing platform services through facilitating loans with no or partial guarantee provided by the Group (referred to as “capital light loans” hereafter) and referral services. In these cases, the Group bears limited credit risks when the borrowers default. The loans facilitated under both models are with terms of 1~36months (the majority are within the terms of 1~12 months) and with principal of up to RMB 1,000 (the majority are within RMB500). Loan facilitation and servicing fees The Group earns loan facilitation and service fees from both off-balance capital heavy loans and capital light loans. The Group’s services mainly consist of: 1) Performing customer acquisition, initial credit screening and advanced risk assessment on the borrowers on its mobile platform and matching the financial institution partners to potential qualified borrowers and facilitating the execution of loan agreements between the parties, referred to as “Loan Facilitation Services” and; 2) Providing collection and other repayment processing services for the financial institution partners over the loan term, referred to as “Post Facilitation Services”; Based on the agreements entered into between the Group’s financial institution partners and borrowers, the Group determined that it is not the legal lender or borrower in the loan origination and repayment process. Accordingly, the Group does not record loans receivable and payable arising from the loan between the financial institution partner and the borrowers. The Group charges service fees directly from financial institution partner based on the contractual agreements. In 2019, the Group started cooperating with insurance companies and financing guarantee companies to provide guarantee for the loans between the borrowers and financial institution partners. Under this cooperation, the Group charges guarantee fees from the borrower, including insurance premium collected on behalf of the insurance company. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued Revenue recognition - Loan facilitation and servicing fees – For the loans the Group is entitled to the full service fee regardless of whether the borrowers choose to early repay or not, the Group has the unconditional right to the consideration. For the loans facilitated with borrowers who have the option of early repayment and upon termination they do not have the obligation to pay the remaining monthly service fees or not have to pay the excessive portion if the total fees are more than 24% of the origination principal on an annualized basis, the Group’s right to consideration for the service fees is conditional on whether or not the borrowers repay in advance. For off-balance capital heavy loans, the Group enjoys a fixed rate of service fees. For capital light loans, the Group enjoys a fixed rate of service fees, while in certain cases, the service fee rate the Group entitled to is subject to adjustment based on the actual default rate of the underlying loans. Under the off-balance capital heavy loans, the Group also provides a guarantee service to its financial institution partners whereas in the event of default, the financial institution partners are entitled to receive unpaid interest and principal from the Group. Given that the Group effectively takes on all of the credit risk of the borrowers and are compensated by the service fees charged, the guarantee is deemed as a service and the guarantee exposure is recognized as a stand-ready obligation in accordance with ASC Topic 460, Guarantees (see accounting policy for Guarantee Liabilities). Under the capital light model, the Group either provides no guarantee or partial guarantee service. Under the partial guarantee scenario, the Group agrees with each financial institution partner a fixed upper limit of guarantee amount the Group is liable of. If the accumulated defaulted loan amount exceeds the agreed upper limit, the excess portion is borne by the financial institution partners. The Group recognize revenue to depict the transfer of promised services to customers in an amount that reflects the consideration to which the Group expects to be entitled in exchange for those services. To achieve that core principle, the Group applies the following steps: ● Step 1: Identify the contract (s) with a customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation The Group determines that both the financial institution partners and the borrowers are its customers because they both receive services provided by the Group pursuant to the contractual terms among the Group, the borrowers and the financial institution partners. For each loan facilitated on the platform, the Group considers the loan facilitation service, post facilitation service and guarantee service (not applicable for arrangements where the Group does not provide guarantee service) as three separate services. Of which, the guarantee service is accounted for in accordance with ASC Topic 460, Guarantees, at fair value. Revenue from the guarantee services is recognized once the Group is released from the underlying risk. Starting from 2020, the Group recognized the stand-ready guarantee liability at the inception of each loan, and it was amortized to “revenue from releasing of guarantee liabilities” over the term of the guarantee (see accounting policy for Guarantee Liabilities).While the post- origination service is within the scope of ASC Topic 860, the ASC Topic 606 revenue recognition model is applied due to the lack of definitive guidance in ASC Topic 860. The loan facilitation service and post- origination service are two separate performance obligations under ASC 606, as these two deliverables are distinct in that customers can benefit from each service on its own and the Group’s promises to deliver the services are separately identifiable from each other in the contract. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue recognition - Loan facilitation and servicing fees The Group determines the total transaction price to be the service fees chargeable from the borrowers or the financial institution partners. The Group’s transaction price includes variable considerations in the form of prepayment risk of the borrowers and service fee allocation rate under capital light model under certain agreements. The Group estimates the prepayment risk of borrowers using the expected value approach on the basis of historical information and current trends of the collection percentage of the borrowers. The service fee allocated to the Group under capital light model would be fluctuated along with the actual default rate of the loans facilitated. The Group uses the service fee allocation rate applicable to the estimated default rate of the underlying loans. The transaction price is allocated amongst the guarantee service, if any, and the other two performance obligations. The Group first allocates the transaction price to the guarantee liabilities, if any, in accordance with ASC Topic 460, Guarantees which requires the guarantee to be measured initially at fair value based on the stand-ready obligation. Then the remaining considerations are allocated to the loan facilitation services and post facilitation services using their relative standalone selling prices consistent with the guidance in ASC 606. The Group does not have observable standalone selling price information for the loan facilitation services or post facilitation services because it does not provide loan facilitation services or post facilitation services on a standalone basis. There is no direct observable standalone selling price for similar services in the market reasonably available to the Group. As a result, the estimation of standalone selling price involves significant judgment. The Group uses expected cost plus margin approach to estimate the standalone selling prices of loan facilitation services and post facilitation services as the basis of revenue allocation. In estimating its standalone selling price for the loan facilitation services and post facilitation services, the Group considers the cost incurred to deliver such services, profit margin for similar arrangements, customer demand, effect of competitors on the Group’s services, and other market factors. For each type of service, the Group recognizes revenue when (or as) the entity satisfies the service/ performance obligation by transferring the promised service (that is, an asset) to customers. Revenues from loan facilitation services are recognized at the time a loan is originated between the financial institution partners and the borrowers and the principal loan balance is transferred to the borrowers, at which time the facilitation service is considered completed. Revenues from post facilitation services are recognized on a straight-line basis over the term of the underlying loans as the post- origination services are a series of distinct services that are substantially the same and that have the same pattern of transfer to the financial institution partners. Revenue from releasing of guarantee liabilities With the adoption of ASC 326 in 2020, the stand-ready guarantee liabilities are released into guarantee revenue over the term of the guarantee (see accounting policy for Guarantee Liabilities). For the six months ended June 30, 2021 and 2022, revenue from guarantee liabilities were RMB 2,647,734 (unaudited) and RMB 3,074,515, respectively. Incentives The Group provides incentives to the borrowers by providing coupons which can only be used as a reduction of repayment and ultimately reduced the service fees received by the Group. Because the borrower does not enter into any enforceable commitment by picking up the coupons, no contract arises from the coupons. Therefore the Group records the incentives as a deduction to revenue upon redemption. Financing income The Group provides loans through the Consolidated Trusts and Fuzhou Microcredit. The interest rate charged to the borrowers are fixed. The Group recognized revenue under “financing income” the fees and interests charged to the borrowers over the lifetime of the loans using the effective interest method. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue recognition - Referral service fees The Group provides the referral services to other platforms, by referring to them the borrowers who have not passed the Group’s credit assessment. Specifically, the Group receives a fixed rate of referral fee from the platforms once the borrowers are accepted by the other funding providers on those platforms. The revenue is recognized once the referral is completed as confirmed by those platforms. The Group provides the referral services to the financial institution partner also through the Group’s Intelligence Credit Engine platform, by matching the borrowers and the financial institution partner. For loans originated through the platform, the Group charges the financial institution partner a fixed rate of service fees. The revenue is recognized upon receipt of confirmation by the financial institution partner of loan facilitation at which time the referral service is deemed completed. For the six months ended June 30, 2021 and 2022, RMB 286,594 (unaudited)and RMB 382,650 were generated from the referral service, respectively. Other services fees Other service fees mainly pertain to the revenue from late fees from borrowers under off-balance capital heavy loans and capital light loans. The following table presents the disaggregation of revenue for the six months ended June 30, 2021 and 2022: Six months ended June 30, 2021 2022 RMB RMB (unaudited) Credit driven services 4,856,038 5,868,397 Loan facilitation and servicing fees-capital heavy 1,265,047 1,141,771 Revenue from loan facilitation services At a point in time 745,134 822,420 Revenue from post-origination services Over time 519,913 319,351 Financing income Over time 897,528 1,608,820 Revenue from releasing of guarantee liabilities Over time 2,647,734 3,074,515 Other services fees At a point in time 45,729 43,291 Platform services 2,744,729 2,634,849 Loan facilitation and servicing fees-capital light 2,392,602 2,128,955 Revenue from loan facilitation services At a point in time 1,988,160 1,298,998 Revenue from post-origination services Over time 404,442 829,957 Referral services fees At a point in time 286,594 382,650 Other services fees At a point in time/ Over time 65,533 123,244 Total net revenue 7,600,767 8,503,246 Total revenue recognized at a point in time is RMB 3,105 million (unaudited) and RMB 2,634 million for the six months ended June, 2021 and 2022. Total revenue recognized over time is RMB 4,496 million (unaudited) and RMB 5,869 for the six months ended June 30, 2021 and 2022. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue recognition Accounts receivable and Contract Assets, net For the loans the Group is entitled to the full service fee regardless of whether the borrowers choose to early repay or not, the Group has the unconditional right to the consideration and an accounts receivable is recorded for the monthly service fees allocated to loan facilitation service that have already been delivered in relation to loans facilitated on the Group’s platform when recognizing revenue from loan facilitation service. For the loans facilitated with borrowers who have the option of early repayment and upon termination they do not have the obligation to pay the remaining monthly service fees or do not have to pay the excessive portion if the total fees are more than 24% of the origination principal on an annualized basis, the Group’s right to consideration for the service fees of facilitation service is conditional on whether or not the borrowers repay in advance. In these instances, the Group records a corresponding contract asset when recognizing revenue from loan facilitation service. Accounts receivable and contract assets are stated at the historical carrying amount net of write-offs and allowance for collectability in accordance with ASC Topic 310, and from January 1, 2020 ASC Topic 326. The Group established an allowance for uncollectible accounts receivable and contract assets based on estimates, which incorporate historical experience and other factors surrounding the credit risk of specific type of customers which is essentially the expected net default rates used in determining the fair value of guarantee liabilities. The Group evaluates and adjusts its allowance for uncollectible accounts receivable and contract assets on a quarterly basis or more often as necessary. Uncollectible accounts receivable and contract assets are written off when the consideration entitled to be received by the Group is due and a settlement is reached for an amount that is less than the outstanding historical balance or when the Group has determined the balance will not be collected. Contract assets and accounts receivable are identified as uncollectible when the underlying loan is determined to be not probable that the balance can be collected. The Group will write off contract assets and accounts receivable and the corresponding provisions if the underlying loan is deemed uncollectible. The Group did not recognize any contract liabilities during the periods presented. The amount of the transaction price allocated to performance obligations that are unsatisfied as of June 30, 2021 and 2022 are RMB 2,260,131 (unaudited) and RMB 1,518,044, respectively, all of which pertain to post- facilitation service. Remaining unsatisfied performance obligations that will be recognized as revenue by the Group within The Group determines that acquisition cost paid for financial institution partner based on the amount of loans facilitated represents costs to obtain a contract qualifying for capitalization since these payments are directly related to sales achieved during a period. Such cost was not material during the periods presented. Revenue recognized for year ended December 31, 2019 from performance obligations satisfied (or partially satisfied) in prior periods pertaining to adjustments to variable consideration due to the change of estimated prepayment rate and service fee allocation rate was immaterial, and for the six months ended June 30, 2021 and 2022 was RMB 39,946 (unaudited) and RMB 219,680, respectively. The Group is subject to value-added tax and other surcharges including education surtax and urban maintenance and construction tax, on the services provided in the PRC. The Group has made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by the governmental authority. Such taxes excluded from revenues are RMB 457,537 (unaudited) and RMB 503,295, respectively, for the six months ended June 30, 2021 and 2022. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Allowance for credit losses On January 1, 2020, the Group adopted ASC 326, Financial Instruments—Credit Losses, which requires recognition of allowances upon origination or acquisition of financial assets at an estimate of expected credit losses over the contractual term of the financial assets (the current expected credit loss or the “CECL” model). The Group’s financial assets subject to the CECL model mainly include: loans receivable, accounts receivable, contract assets and financial assets receivable, and the allowance for these financial assets is driven by estimated default rate of underlying loans. The Group does not assign internal risk ratings to loans facilitated as they are of small balance and homogeneous. The Group estimates the default rate of loans on a pool basis by taking into consideration the historical delinquency rate by vintage, adjusted by specific risks for loans within each vintage, correlated industrial and macro-economic factors, and other pertinent information such as CPI and delinquent loan collection rate in assessing future performance of the loan portfolio. The Group monitors the delinquency status by vintage of origination and write off delinquent loans timely when the loans become uncollectible. The adoption of CECL model does not change the Group’s method used to estimate loan losses. The allowance for loans receivable is calculated based on estimated default rate of loans facilitated through the Consolidated Trusts or Fuzhou Microcredit. The allowance for accounts receivable, contract assets, financial assets receivable and account receivable, contract assets and financial assets receivables from related parties (recorded as “amounts due from related parties”) is assessed in accordance with the estimated default rate of the underlying off-balance loans facilitated. Since the allowance is recorded at loan inception based on the estimated collectability over the entire loan tenure and adjusted in each subsequent reporting period based on update of relevant information, the adoption of the CECL model does not have material impact on the timing and amount of allowance recognized for these financial assets. Other financial receivables subject to the CECL model mainly include security deposit prepaid to third party guarantee companies, funds receivable from third party payment service providers, other receivables from related parties (recorded as “amount due from related parties”), and security deposit paid to insurance companies, which are of short term and shows no historical default record. The Group determines no allowance is needed for these receivables, except for receivables from related parties as financial institution partners, which are based on the estimated default rate of underlying loans as discussed above. The adoption of ASC 326 also requires the Group to record financial guarantee on a gross basis. As such, the Group recognized a separate contingent guarantee liability with an allowance for credit losses following the CECL model at the inception of loans facilitated with guarantee services provided (see accounting policy for Guarantee Liabilities). The allowance is an estimate of future net payout by the Group upon borrowers’ default, which is ultimately based on the same estimated default rate of loans facilitated as discussed above. Cash and cash equivalents Cash and cash equivalents mainly consist of funds in banks, which are highly liquid and are unrestricted as to withdrawal or use. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Restricted cash Restricted cash represents: (i) Deposit to funding banks which is used to secure timely loan repayment. As of December 31, 2021 and June 30, 2022, the amount of restricted cash related to deposit to the funding banks is RMB 1,986,512 and RMB 2,344,124 , respectively. (ii) Cash held by the trusts and ABS plans through segregated bank accounts which can only be used to invest in loans or other securities as stipulated in the trust agreement and ABS plan. Substantially all trusts have a maximum operating period of two years . The cash in the trusts is not available to fund the general liquidity needs of the Group. Security deposit prepaid to third-party guarantee companies Security deposit prepaid to third-party guarantee companies mainly represents deposit prepaid to licensed third-party vendors the Group cooperates with to provide guarantee to secure timely loan repayment for financial institution partners. Funds receivable from third party payment service providers The Group opened accounts with third party online payment service providers to collect and transfer the loan funds and interest to financial institution partners or borrowers. The Group also uses such accounts to collect the transaction fee and service fee, and repay and collect the default loan principal and interest. The balance of funds receivable from third party payment service providers mainly includes: (a) Funds provided by Fuzhou Microcredit but not yet transferred to the borrowers by third party payment service providers due to the settlement time lag; (b) Repayment of loan principal and interest amounts received from the borrowers but not yet transferred to the investors by third party payment service providers due to the settlement time lag; and, (c) Accumulated amounts of transaction fee, service fee received, payment and collection of default loan and interest at the balance sheet date. Fair value Fair value is considered to be 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 considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1 applie | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of preparation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) regarding interim financial reporting, and include all normal and recurring adjustments that management of the Group considers necessary for a fair presentation of its financial position and operating results. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these financial statements should be read in conjunction with the Group’s audited consolidated financial statements and notes for the six months ended June 30, 2022. The financial information as of December 31, 2021 presented in the unaudited condensed consolidated financial statements is derived from the audited consolidated financial statements for the year ended December 31, 2021. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. Basis of consolidation The accompanying unaudited condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, and consolidated VIEs. All inter-company transactions and balances have been eliminated. Consolidated Trusts For some trusts, the trust beneficial rights, or the loans receivable in the trusts, were transferred, as underlying assets, to the asset backed special plans (the “ABS plans”). The beneficial rights and loans receivable of RMB4.1 billion and RMB5.1 billion in trusts were transferred to the ABS plans for the nine months ended September 30, 2021 and 2022, respectively. The following financial statement amounts and balances of the consolidated trusts were included in the accompanying unaudited condensed consolidated financial statements after elimination of intercompany transactions and balances: December 31, September 30, 2021 2022 RMB RMB ASSETS Restricted cash 657,075 626,452 Loans receivable, net 8,646,950 12,003,519 Prepaid expenses and other assets 104,515 111,039 Loans receivable, net-noncurrent 1,829,804 714,412 Total Assets 11,238,344 13,455,422 December 31, September 30, 2021 2022 RMB RMB LIABILITIES Payable to investors of the consolidated trusts-current 2,304,518 6,173,089 Accrued expenses and other current liabilities 5,928 17,081 Other tax payable 34,448 36,485 Payable to investors of the consolidated trusts-noncurrent 4,010,597 3,802,348 Total liabilities 6,355,491 10,029,003 Nine months ended September 30, 2021 2022 RMB RMB Net revenue 1,127,851 1,667,660 Net income 372,408 806,808 Nine months ended September 30, 2021 2022 RMB RMB Net cash provided by operating activities 847,960 1,332,513 Net cash (used in) investing activities (4,690,085) (2,707,114) Net cash provided by financing activities 1,027,804 3,607,440 The consolidated trusts contributed 9% and 13% of the Group’s consolidated revenue for the nine months ended September 30, 2021 and 2022, respectively. As of December 31, 2021 and September 30, 2022, the consolidated trusts accounted for an aggregate of 34% and 34%, respectively, of the consolidated total assets, and 35% and 46% respectively, of the consolidated total liabilities. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company to provide financial support to the consolidated trusts. The Group believes that the assets of the consolidated trusts could only be used to settle the obligations of the consolidated trusts. Fair Value Fair value is considered to be 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 considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1 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 assets 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 assets 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 values of financial instruments, which consist of cash and cash equivalents, restricted cash, short-term investment, security deposits, accounts receivable and contract assets, financial assets receivable, funds receivable from third party payment service providers, loans receivable, short term loan, payable to investors of the consolidated trusts, and amounts due from/to related parties are recorded at cost which approximates their fair value due to the short-term nature of these instruments. As of September 30, 2022, the Group’s long-term financial instruments that are not reported at fair value on balance sheet include loans receivable, payable to investors of the consolidated trusts, accounts receivable and contract assets, financial assets receivable and accounts receivable, contract assets and financial assets receivable from related parties (recorded as “amounts due from related parties”). Fair values of these financial instruments are estimated using a discounted cash flow model based on contractual cash flows. The fair values of loans receivable, accounts receivable and contract assets, financial assets receivable are classified as Level 3 fair value measurement due to the significant unobservable inputs concerning the estimation of default rate. The fair value of payable to investors of the consolidated trusts is classified as Level 2 fair value measurement. As of September 30, 2022, the differences between fair values and carrying amount for loans receivable and payable to investors are due to the discount factor or interests in future periods, and the fair value approximates the carrying amount. For accounts receivable and contract assets, financial assets receivable, the differences are due to the discount factor solely and the fair value approximates the carrying amount. The Group has foreign exchange options that are recorded at fair value subsequent to initial recognition on a recurring basis. The fair value of such options amount to RMB12,715, which is estimated based on interbank market quoted price and is classified as Level 2 in the fair value hierarchy. Fair value measurement on a nonrecurring basis for the nine months ended September 30, 2022 included that used in impairment of an equity-method investment which was classified as a Level 3 fair value measurement. Convenience translation The Group’s business is primarily conducted in China and all of the revenues are denominated in RMB. The financial statements of the Group are stated in RMB. Translations of balances in the condensed consolidated balance sheet, and the related condensed consolidated statements of operations, shareholders’ equity and cash flows from RMB into US dollars as of and for the period ended September 30, 2022 are solely for the convenience of the readers and were calculated at the rate of USD1.00 = RMB7.1135, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on September 30, 2022. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into USD at that rate or at any other rate. |
ACCOUNTS RECEIVABLE AND CONTRAC
ACCOUNTS RECEIVABLE AND CONTRACT ASSETS, NET | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
ACCOUNTS RECEIVABLE AND CONTRACT ASSETS, NET | ||
ACCOUNTS RECEIVABLE AND CONTRACT ASSETS, NET | 3. ACCOUNTS RECEIVABLE AND CONTRACT ASSETS, NET The Group’s accounts receivable as of December 31, 2020 and June 30, 2021 are as follows: Allowance for Accounts uncollectible Accounts As of December 31, 2021 receivable Accounts receivable receivable, net Accounts receivable from loan facilitation service 502 (375) 127 Accounts receivable from post facilitation service 5,825 (1,683) 4,142 Accounts receivable from referral services 10,797 — 10,797 Total 17,124 (2,058) 15,066 Allowance for Accounts uncollectible Accounts As of June 30, 2022 receivable Accounts receivable receivable, net Accounts receivable from referral services 25,080 — 25,080 Total 25,080 — 25,080 The movement of allowance for uncollectible accounts receivables for the six months ended June 30, 2021 and 2022 are as follows: Opening Ending balance as of Current Write off in balance as of January 1, period net the current June 30, (unaudited) 2021 provision period 2021 Accounts receivable from loan facilitation service 17,462 (10,043) (7,382) 37 Accounts receivable from post facilitation service 3,958 1,758 (4,574) 1,142 Accounts receivable from referral services 1,836 — (1,836) — Total 23,256 (8,285) (13,792) 1,179 Opening Ending balance as of Current Write off in balance as of January 1, period net the current June 30, 2022 provision period 2022 Accounts receivable from loan facilitation service 375 — (375) — Accounts receivable from post facilitation service 1,683 — (1,683) — Total 2,058 — (2,058) — 3. ACCOUNTS RECEIVABLE AND CONTRACT ASSETS, NET - continued The Group’s contract assets as of December 31, 2021 and June 30, 2022 are as follows: Allowance for Uncollectible Contract assets, As of December 31, 2021 Contract assets Contract assets net Contract assets from loan facilitation service 3,097,872 (287,397) 2,810,475 Contract assets from post facilitation service 282,767 (26,457) 256,310 Contract assets from referral services 238,877 — 238,877 Total 3,619,516 (313,854) 3,305,662 Allowance for Uncollectible Contract assets, As of June 30, 2022 Contract assets Contract assets net Contract assets from loan facilitation service 3,276,001 (299,395) 2,976,606 Contract assets from post facilitation service 463,530 (25,318) 438,212 Contract assets from referral services 351,395 — 351,395 Total 4,090,926 (324,713) 3,766,213 The movement of allowance for uncollectible contract assets for the six months ended June 30, 2021 and 2022 are as follows: Opening Ending balance as of Current Write off in balance as of January 1, period net the current June 30, (unaudited) 2021 provision period 2021 Contract assets from loan facilitation service 222,526 64,947 (40,576) 246,897 Contract assets from post facilitation service 10,045 21,913 (15,392) 16,566 Total 232,571 86,860 (55,968) 263,463 Opening Ending balance as of Current Write off in balance as of January 1, period net the current June 30, 2022 provision period 2022 Contract assets from loan facilitation service 287,397 77,952 (65,954) 299,395 Contract assets from post facilitation service 26,457 25,673 (26,812) 25,318 Total 313,854 103,625 (92,766) 324,713 The Group’s accounts receivable and contract assets generated from related parties and recorded in amounts due from related parties as of December 31, 2021 and June 30, 2022 are as follows: Accounts Allowance for Accounts receivable uncollectible receivable and contract accounts receivable and contract As of December 31, 2021 assets and contract assets assets, net Contract assets from loan facilitation service 953,846 (120,208) 833,638 Contract assets from post facilitation service 5,178 (1,809) 3,369 Total 959,024 (122,017) 837,007 3. ACCOUNTS RECEIVABLE AND CONTRACT ASSETS, NET - continued Accounts Allowance for Accounts receivable uncollectible receivable and contract accounts receivable and contract As of June 30, 2022 assets and contract assets assets, net Contract assets from loan facilitation service 592,384 (118,719) 473,665 Contract assets from post facilitation service 15,762 (6,457) 9,305 Contract assets from referral services 54,116 — 54,116 Total 662,262 (125,176) 537,086 The movement of allowance for uncollectible accounts receivables and contract assets generated from related parties and recorded in amounts due from related parties for the six months ended June 30, 2021 and 2022 are as follows: Opening Ending balance as of Current Write off in balance as of January 1, period net the current June 30, (unaudited) 2021 provision period 2021 Contract assets from loan facilitation service 8,072 77,069 (1,497) 83,644 Contract assets from post facilitation service 227 1,473 (1,531) 169 Total 8,299 78,542 (3,028) 83,813 The movement of allowance for uncollectible accounts receivables and contract assets generated from related parties and recorded in amounts due from related parties for the six months ended June 30, 2021 and 2022 are as follows: - continued Opening Ending balance as of Current Write off in balance as of January 1, period net the current June 30, 2022 provision period 2022 Contract assets from loan facilitation service 120,208 5,594 (7,083) 118,719 Contract assets from post origination service 1,809 7,806 (3,158) 6,457 Total 122,017 13,400 (10,241) 125,176 As of December 31, 2021 and June 30, 2022, the principal of accounts receivable and contract assets by year of origination: 2021 2020 2019 Total As of December 31, 2021 Loan facilitation service 2,708,137 390,236 — 3,098,373 Post origination service 249,726 38,867 — 288,593 Referral service 249,674 — — 249,674 Total 3,207,537 429,103 — 3,636,640 2022 2021 2020 Total As of June 30, 2022 Loan facilitation service 2,447,427 742,111 86,463 3,276,001 Post origination service 433,153 15,378 14,999 463,530 Referral service 376,475 — — 376,475 Total 3,257,055 757,489 101,462 4,116,006 The past-due balance of the Group’s accounts receivable as of December 31, 2021 and June 30, 2022 are immaterial. | 3. ACCOUNTS RECEIVABLE AND CONTRACT ASSETS, NET The Group’s accounts receivable as of December 31, 2021 and September 30, 2022 are as follows: Allowance for Accounts uncollectible Accounts As of December 31, 2021 receivable Accounts receivable receivable, net Accounts receivable from loan facilitation service 502 (375) 127 Accounts receivable from post facilitation service 5,825 (1,683) 4,142 Accounts receivable from referral services 10,797 — 10,797 Total 17,124 (2,058) 15,066 Allowance for Accounts uncollectible Accounts As of September 30, 2022 receivable Accounts receivable receivable, net Accounts receivable from referral services 10,903 — 10,903 Total 10,903 — 10,903 The movement of allowance for uncollectible accounts receivables for the nine months ended September 30, 2021 and 2022 are as follows: Opening Ending balance as of Current Write off in balance as of January 1, period net the current September 30, 2021 provision period 2021 Accounts receivable from loan facilitation service 17,462 (10,904) (6,091) 467 Accounts receivable from post facilitation service 3,958 1,845 (4,082) 1,720 Accounts receivable from referral services 1,836 — (1,836) — Total 23,256 (9,059) (12,009) 2,187 Opening Ending balance as of Current Write off in balance as of January 1, period net the current September 30, 2022 provision period 2022 Accounts receivable from loan facilitation service 375 — (375) — Accounts receivable from post facilitation service 1,683 — (1,683) — Total 2,058 — (2,058) — The Group’s contract assets as of December 31, 2021 and September 30, 2022 are as follows: Allowance for Uncollectible Contract As of December 31, 2021 Contract assets Contract assets assets, net Contract assets from loan facilitation service 3,097,872 (287,397) 2,810,475 Contract assets from post facilitation service 282,767 (26,457) 256,310 Contract assets from referral services 238,877 — 238,877 Total 3,619,516 (313,854) 3,305,662 Allowance for Uncollectible Contract As of September 30, 2022 Contract assets Contract assets assets, net Contract assets from loan facilitation service 3,130,934 (297,032) 2,833,902 Contract assets from post facilitation service 364,824 (22,901) 341,923 Contract assets from referral services 220,561 — 220,561 Total 3,716,319 (319,933) 3,396,386 The movement of allowance for uncollectible contract assets for the nine months ended September 30, 2021 and 2022 are as follows: Opening Ending balance as of Current Write off in balance as of January 1, period net the current September 30, 2021 provision period 2021 Contract assets from loan facilitation service 222,526 132,648 (73,934) 281,240 Contract assets from post facilitation service 10,045 34,908 (27,959) 16,994 Total 232,571 167,556 (101,893) 298,234 Opening Ending balance as of Current Write off in balance as of January 1, period net the current September 30, 2022 provision period 2022 Contract assets from loan facilitation service 287,397 118,281 (108,646) 297,032 Contract assets from post facilitation service 26,457 41,335 (44,891) 22,901 Total 313,854 159,616 (153,537) 319,933 The Group’s contract assets generated from related parties and recorded in amounts due from related parties as of December 31, 2021 and September 30, 2022 are as follows: Accounts Allowance for Accounts receivable uncollectible receivable and contract accounts receivable and contract As of December 31, 2021 assets and contract assets assets, net Contract assets from loan facilitation service 953,846 (120,208) 833,638 Contract assets from post facilitation service 5,178 (1,809) 3,369 Total 959,024 (122,017) 837,007 Accounts Allowance for Accounts receivable uncollectible receivable and contract accounts receivable and contract As of September 30, 2022 assets and contract assets assets, net Contract assets from loan facilitation service 443,777 (101,661) 342,116 Contract assets from post facilitation service 18,051 (6,206) 11,845 Contract assets from referral services 25,058 — 25,058 Total 486,886 (107,867) 379,019 The movement of allowance for uncollectible accounts receivables and contract assets generated from related parties and recorded in amounts due from related parties for nine months ended September 30, 2021 and 2022 are as follows: Opening Ending balance as of Current Write off in balance as of January 1, period net the current September 30, 2021 provision period 2021 Contract assets from loan facilitation service 8,072 122,560 (5,209) 125,423 Contract assets from post facilitation service 227 5,145 (4,778) 594 Total 8,299 127,705 (9,987) 126,017 Opening Ending balance as of Current Write off in balance as of January 1, period net the current September 30, 2022 provision period 2022 Contract assets from loan facilitation service 120,208 (1,012) (17,535) 101,661 Contract assets from post facilitation service 1,809 12,183 (7,786) 6,206 Total 122,017 11,171 (25,321) 107,867 As of December 31, 2021 and September 30, 2022, the principal of accounts receivable and contract assets by year of origination: 2021 2020 Total As of December 31, 2021 Loan facilitation service 2,708,137 390,236 3,098,373 Post facilitation service 249,726 38,867 288,593 Referral Service 249,674 — 249,674 Total 3,207,537 429,103 3,636,640 2022 2021 2020 Total As of September 30, 2022 Loan facilitation service 2,744,208 369,128 17,598 3,130,934 Post facilitation service 340,980 16,338 7,506 364,824 Referral Service 231,464 — — 231,464 Total 3,316,652 385,466 25,104 3,727,222 The past-due balance of the Group’s accounts receivable as of December 31, 2021 and September 30, 2022 are immaterial. The Group did not recognize any contract liabilities during the periods presented. The amount of the transaction price allocated to performance obligations that are unsatisfied as of December 31, 2021 and September 30, 2022, are RMB1,637,484 and RMB1,639,375, respectively, all of which pertain to post-origination service. Remaining unsatisfied performance obligations that will be recognized as revenue by the Group within the following 12 months are 88% and 79% of the remaining performance obligations as of December 31, 2021 and September 30, 2022, respectively, with the remainder recognized thereafter. |
FINANCIAL ASSETS RECEIVABLE, NE
FINANCIAL ASSETS RECEIVABLE, NET | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
FINANCIAL ASSETS RECEIVABLE, NET | ||
FINANCIAL ASSETS RECEIVABLE, NET | 4. FINANCIAL ASSETS RECEIVABLE The Group’s financial assets receivable as of December 31, 2021 and June 30, 2022 are as follows: December 31, June 30, 2021 2022 RMB RMB Financial assets receivable 4,897,854 4,821,201 Allowance for uncollectible receivables (493,646) (519,563) Financial assets receivable, net 4,404,208 4,301,638 The movement of financial assets receivable for the six months ended June 30, 2021 and 2022 is as follows: Six months ended June 30, 2021 2022 RMB RMB (unaudited) Balance at beginning of period 4,601,642 4,897,854 Addition in the current period 3,242,066 3,012,766 Collection in the current period (2,707,712) (2,951,461) Write-off (69,140) (137,958) Balance at end of period 5,066,856 4,821,201 The movement of allowance for uncollectible receivables for the six months ended June 30, 2021 and 2022 is as follows: Six months ended June 30, 2021 2022 RMB RMB (unaudited) Balance at beginning of period 390,834 493,646 Current period net provision 102,769 163,875 Write-off (69,140) (137,958) Balance at end of period 424,463 519,563 The Group’s financial assets receivable generated from related parties and recorded in amounts due from related parties as of December 31, 2021 and June 30, 2022 are as follows: December 31, June 30, 2021 2022 RMB RMB Financial assets receivable — 5,802 Allowance for uncollectible receivables — (340) Financial assets receivable, net — 5,462 4. FINANCIAL ASSETS RECEIVABLE The movement of financial assets receivable generated from related parties and recorded in amounts due from related parties for the six months ended June 30, 2021 and 2022 is as follows: Six months ended June 30, 2021 2022 RMB RMB (unaudited) Balance at beginning of period 3,149 — Addition in the current period — 6,112 Collection in the current period (309) (308) Write-off (2,840) (2) Balance at end of period — 5,802 The movement of allowance for uncollectible receivables generated from related parties and recorded in amounts due from related parties for the six months ended June 30, 2021 and 2022 is as follows: Six months ended June 30, 2021 2022 RMB RMB (unaudited) Balance at beginning of period 2,033 — Current period net provision 807 342 Write-off (2,840) (2) Balance at end of period — 340 The following table summarizes the aging of the Group’s financial assets receivable as of December 31, 2021 and June 30, 2022: 31-60 Over 60 Total 0-30 days days days financial past past past assets due due due Current receivable December 31, 2021 15,594 12,038 — 4,870,222 4,897,854 June 30, 2022 32,536 34,257 — 4,754,408 4,821,201 As of December 31, 2021 and June 30, 2022, the principal of financial assets receivable by year of origination: 2021 2020 2019 Total As of December 31, 2021 4,078,249 819,605 — 4,897,854 2022 2021 2020 Total As of June 30, 2022 2,390,103 2,095,971 335,127 4,821,201 | 4. FINANCIAL ASSETS RECEIVABLE, NET The Group’s financial assets receivable as of December 31, 2021 and September 30, 2022 are as follows: December 31, September 30, 2021 2022 RMB RMB Financial assets receivable 4,897,854 4,614,070 Allowance for uncollectible receivables (493,646) (536,976) Financial assets receivable, net 4,404,208 4,077,094 The movement of financial assets receivable for the nine months ended September 30, 2021 and 2022 is as follows: Nine months ended September 30, 2021 2022 RMB RMB Balance at beginning of period 4,601,642 4,897,854 Addition in the current period 4,943,489 4,391,406 Collection in the current period (4,073,947) (4,440,585) Write-off (109,429) (234,605) Balance at end of period 5,361,755 4,614,070 The movement of allowance for uncollectible receivables for the nine months ended September 30, 2021 and 2022 is as follows: Nine months ended September 30, 2021 2022 RMB RMB Balance at beginning of period 390,834 493,646 Current period net provision 172,854 277,935 Write-off (109,429) (234,605) Balance at end of period 454,259 536,976 The movement of financial assets receivable generated from related parties and recorded in amounts due from related parties for the nine months ended September 30, 2021 and 2022 is as follows: Nine months ended September 30, 2021 2022 RMB RMB Balance at beginning of period 3,149 — Addition in the current period — 26,859 Collection in the current period (309) (2,617) Write-off (2,840) (3) Balance at end of period — 24,239 The movement of allowance for uncollectible receivables generated from related parties and recorded in amounts due from related parties for the nine months ended September 30, 2021 and 2022 is as follows: Nine months ended September 30, 2021 2022 RMB RMB Balance at beginning of period 2,033 — Current period net provision 807 1,426 Write-off (2,840) (3) Balance at end of period — 1,423 The following table summarizes the aging of the Group’s financial assets receivable as of December 31, 2021 and September 30, 2022: 31-60 Over 60 Total 0-30 days days days financial past past past assets due due due Current receivable December 31, 2021 15,594 12,038 — 4,870,222 4,897,854 September 30, 2022 33,033 36,128 — 4,544,909 4,614,070 As of December 31, 2021 and September 30, 2022, the principal of financial assets receivable by year of origination: 2021 2020 Total As of December 31, 2021 4,078,249 819,605 4,897,854 2022 2021 2020 Total As of September 30, 2022 3,041,583 1,402,475 170,012 4,614,070 |
LOANS RECEIVABLE, NET
LOANS RECEIVABLE, NET | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
LOANS RECEIVABLE, NET. | ||
LOANS RECEIVABLE, NET | 5. LOANS RECEIVABLE, NET Loans receivable consists of the following: December 31, June 30, 2021 2022 RMB RMB Loans receivable 13,652,723 15,844,979 Less allowance for loan losses (948,893) (1,336,642) Loans receivable, net 12,703,830 14,508,337 5. LOANS RECEIVABLE, NET As of December 31, 2021 and June 30, 2022, the accrued interest receivables are RMB 86,144 and RMB 113,658 ( net of allowance RMB 5,987 and RMB 9,588, respectively ), which is recorded under loans receivable. The following table presents the aging of loans as of December 31, 2021 and June 30, 2022: 0-30 days 31-60 days Over 6 0 days Total amount past due past due past due past due Current Total loans December 31, 2021 113,771 87,171 — 200,942 13,451,781 13,652,723 June 30, 2022 134,692 102,233 — 236,925 15,608,054 15,844,979 The Group has not recorded any financing income on an accrual basis for the loans that are past due for more than 60 days in 2022 (60 days in 2021). Loans are returned to accrual status if they are brought to non-delinquent status or have performed in accordance with the contractual terms for a reasonable period of time and, in the Group’s judgment, will continue to make periodic principal and interest payments as scheduled. For the six months ended June 30, 2021 and 2022, the Group has charged off loans receivable of RMB 156 million (unaudited) and RMB 536 million, respectively. Movement of allowance for loan losses is as follows: Six months ended June 30, 2021 2022 RMB RMB (unaudited) Balance at beginning of period 421,767 948,893 Provision for loan losses 381,887 907,317 Gross write-off (156,368) (535,743) Recoveries 24,125 16,175 Balance at end of period 671,411 1,336,642 The principal of loans receivable as of December 31, 2021 and June 30, 2022 by year of origination is as follows: 2021 2020 2019 Total As of December 31, 2021 13,614,369 38,354 — 13,652,723 2022 2021 2020 Total As of June 30, 2022 11,436,797 4,391,267 16,915 15,844,979 | 5. LOANS RECEIVABLE, NET Loans receivable consists of the following: December 31, September 30, 2021 2022 RMB RMB Loans receivable 13,652,723 18,557,814 Less allowance for loan losses (948,893) (1,265,806) Loans receivable, net 12,703,830 17,292,008 As of December 31, 2021 and September 30, 2022, the accrued interest receivables are RMB86,144 and RMB151,625 (net of allowance RMB5,987 and RMB10,342, respectively), which is recorded under loans receivable. The following table presents the aging of loans as of December 31, 2021 and September 30, 2022: 0-30 days 31-60 days Total amount past due past due past due Current Total loans As of December 31, 2021 113,771 87,171 200,942 13,451,781 13,652,723 As of September 30, 2022 148,808 103,503 252,311 18,305,503 18,557,814 The Group has not recorded any financing income on an accrual basis for the loans that are past due for more than 60 days for the nine months ended September 30, 2022 (60 days in 2021). Loans are returned to accrual status if they are brought to non-delinquent status or have performed in accordance with the contractual terms for a reasonable period of time and, in the Group’s judgment, will continue to make periodic principal and interest payments as scheduled. For the nine months ended September 30, 2021 and 2022, the Group has charged off loans receivable of RMB314 million and RMB 806 Movement of allowance for loan losses is as follows: Nine months ended September 30, 2021 2022 RMB RMB Balance at beginning of period 421,767 948,893 Provision for loan losses 742,286 1,098,859 Gross write-off (313,536) (806,127) Recoveries 31,574 24,181 Balance at end of period 882,091 1,265,806 The principal of loans receivable as of December 31, 2021 by year of origination is as follows: 2021 2020 Total loans Loans receivable 13,614,369 38,354 13,652,723 The principal of loans receivable as of September 30, 2022 by year of origination is as follows: 2022 2021 2020 Total loans Loans receivable 16,649,447 1,896,796 11,571 18,557,814 |
LAND USE RIGHTS, NET
LAND USE RIGHTS, NET | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
LAND USE RIGHTS, NET | ||
LAND USE RIGHTS, NET | 6. LAND USE RIGHTS, NET Land use rights represent acquired right to use the parcel of land on which the Group’s regional headquarters and affiliated industrial park stand. In 2021, the Group acquired the land use rights in Shanghai from the local authorities. Amortization of the land use right is made over the remaining term of the land use right period from the date when the land was made available for use by the Group. The land use rights are summarized as follows: December 31, June 30, 2021 2022 RMB RMB Cost 1,036,178 1,036,178 Accumulated amortization (17,270) (27,630) Land use rights, net 1,018,908 1,008,548 The total amortization expense for the six months ended June 30, 2021 and 2022 amounted to RMB 6,908 (unaudited) and RMB 10,360, respectively. | 6. LAND USE RIGHTS, NET Land use rights represent acquired right to use the parcel of land on which the Group’s regional headquarters and affiliated industrial park stand. In 2021, the Group acquired the land use rights in Shanghai from the local authorities. Amortization of the land use right is made over the remaining term of the land use right period from the date when the land was made available for use by the Group. The land use rights are summarized as follows: December 31, September 30, 2021 2022 RMB RMB Cost 1,036,178 1,036,179 Accumulated amortization (17,270) (32,813) Land use rights, net 1,018,908 1,003,366 The total amortization expense for the nine months ended September 30, 2021 and 2022 amounted to RMB12,089 and RMB15,543 respectively. |
SHORT-TERM LOANS
SHORT-TERM LOANS | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
SHORT-TERM LOANS | ||
SHORT-TERM LOANS | 7. SHORT-TERM LOANS Short-term loans as of December 31, 2021 represents bank borrowings of USD 38,850 and RMB 150,000 obtained from domestic commercial banks, the latter loan is guaranteed by Shanghai Qibutianxia Co,. Ltd. The short-term loan of USD 38,850 bears interest rates of London InterBank Offered Rate (“LIBOR”) plus 300 Short-term loans as of June 30, 2022 includes newly raised bank borrowings of USD 30,000 obtained from domestic commercial banks during the six months ended June 30, 2022. The short-term loan of USD 30,000 bears interest rates of London InterBank Offered Rate (“LIBOR”) plus 330bps for the six months ended June 30, 2022. The weighted average interest rate for the outstanding borrowings as of December 31, 2021 and June 30, 2022 was 3.46% and 4.70%, respectively. There is one financial covenant stipulating that Qiyu shall not make dividend distribution before the loans, interest and other payable due under the contract are paid. In June 2022, 360 Changfeng signed a mortgage loan agreement of RMB 1 billion with tenure of 25 years. The interest rate is based on market price quote for loans with tenure of more than five years minus 136bps. The loan is guaranteed by the land use rights owned by 360 Changfeng and is for the specific use of construction of the regional headquarters and the affiliated industrial park. As of June 30, 2022, the unused amount of the mortgage loan is RMB 1 billion. The mortgage loan agreement requires the subsidiary’s registered capital to be paid in the same proportion of the total facility used. Subsequently in September, the registered capital of the subsidiary has been fully paid. | 7. SHORT-TERM LOANS Short-term loans as of December 31, 2021 represents bank borrowings of USD38,850 and RMB150,000 obtained from domestic commercial banks, the latter loan is guaranteed by Shanghai Qibutianxia Co,. Ltd. and WFOE. The short-term loan of USD38,850 bears interest rates of London InterBank Offered Rate (“LIBOR”) plus 300bps. The loan of RMB150,000 applying a fixed rate of 4.05%. Short-term loans as of September 30, 2022 represents bank borrowings of USD38,850, RMB150,000 and USD 30,000 obtained from domestic commercial banks. The short-term loan of USD 30,000 bears interest rates of London InterBank Offered Rate (“LIBOR”) plus 330bps for the nine months ended September 30, 2022. The weighted average interest rate for the outstanding borrowings as of December 31, 2021 and September 30, 2022 was 3.46% and 5.75%, respectively. There is one financial covenant stipulating that Qiyu shall not make dividend distribution before the loans, interest and other payable due under the contract are paid. |
LONG-TERM LOANS
LONG-TERM LOANS | 9 Months Ended |
Sep. 30, 2022 | |
LONG-TERM LOANS | |
LONG-TERM LOANS | 8. LONG-TERM LOANS In June 2022, Shanghai 360 Changfeng Technology, Co., Ltd. (“360 Changfeng”) signed a mortgage loan agreement of RMB1 billion with tenure of 25 years. The interest rate is based on market price quote for loans with tenure of more than five years minus 136bps. The loan is guaranteed by the land use rights owned by 360 Changfeng and is for the specific use of construction of the regional headquarters and the affiliated industrial park. The mortgage loan agreement requires the subsidiary’s registered capital to be paid in the same proportion of the total facility used. In September, the registered capital of the subsidiary has been fully paid. As of September 30, 2022, the balance of used mortgage loan is RMB4,193, which is included in other long-term liabilities. |
GUARANTEE LIABILITIES
GUARANTEE LIABILITIES | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
GUARANTEE LIABILITIES. | ||
GUARANTEE LIABILITIES | 8. GUARANTEE LIABILITIES The movement of guarantee liabilities during the six months ended June 30, 2021 and 2022 is as follows: Guarantee liabilities-stand ready (unaudited) RMB As of January 1, 2021 4,173,497 Provision at the inception of new loans 3,242,066 Released into revenue (2,897,943) As of June 30, 2021 4,517,620 As of January 1, 2022 4,818,144 Provision at the inception of new loans 3,018,878 Released into revenue (3,298,059) As of June 30, 2022 4,538,963 8. GUARANTEE LIABILITIES - continued Guarantee liabilities-contingent (unaudited) RMB As of January 1, 2021 3,543,454 Provision for contingent liabilities 1,220,586 Net payout (1) (1,515,544) As of June 30, 2021 3,248,496 Adoption of ASC 326 As of January 1, 2022 3,285,081 Provision for contingent liabilities 2,162,638 Net payout (1) (2,127,305) As of June 30, 2022 3,320,414 (1) Net payout represents the amount paid upon borrowers’ default net of subsequent recoveries from the borrowers during a given period. The following table summarizes the aging of the Group’s contractual amounts of the outstanding loans subject to guarantee as of December 31, 2021 and June 30, 2022. 31-60 61-90 Over 90 0-30 days days days days past past past past due due due due Current Total loans December 31, 2021 (RMB) 446,780 235,769 57,526 — 49,117,630 49,857,705 June 30, 2022 (RMB) 456,773 228,107 32,970 — 49,904,061 50,621,911 As of December 31, 2021 and June 30, 2022, the contractual amounts of the outstanding loans subject to guarantee by the Group is estimated to be RMB 49,857,705 and RMB 50,621,911, respectively. The approximate term of guarantee compensation service ranged from 1 month to 36 months, as of both December 31, 2021 and June 30, 2022. As of December 31, 2021 and June 30, 2022, the contractual amounts of the outstanding loans (excluding loans that are written off) that have been compensated by the Group were estimated to be RMB 3,129,264 and RMB 3,769,627, respectively. | 9. GUARANTEE LIABILITIES The movement of guarantee liabilities during the nine months ended September 30, 2021 and 2022 is as follows: Guarantee liabilities-stand ready RMB As of January 1, 2021 4,173,497 Provision at the inception of new loans 4,943,489 Released into revenue (4,460,935) As of September 30, 2021 4,656,051 As of January 1, 2022 4,818,144 Provision at the inception of new loans 4,418,265 Released into revenue (4,851,292) As of September 30, 2022 4,385,117 Guarantee liabilities-contingent RMB As of January 1, 2021 3,543,454 Provision for contingent liabilities 1,918,899 Net payout (1) (2,320,195) As of September 30, 2021 3,142,158 As of January 1, 2022 3,285,081 Provision for contingent liabilities 3,305,458 Net payout (1) (3,186,206) As of September 30, 2022 3,404,333 (1) Net payout represents the amount paid upon borrowers’ default net of subsequent recoveries from the borrowers during a given period. The following table summarizes the aging of the Group’s contractual amounts of the outstanding loans subject to guarantee: 31-60 61-90 Over 90 0-30 days days days days past past past past due due due due Current Total loans December 31, 2021 (RMB): 446,780 235,769 57,526 — 49,117,630 49,857,705 September 30, 2022 (RMB): 481,618 214,321 21,382 — 48,021,601 48,738,922 As of December 31, 2021 and September 30, 2022, the contractual amounts of the outstanding loans subject to guarantee by the Group were RMB49,857,705 and RMB48,738,922, respectively. The approximate term of guarantee compensation service ranged from 1 month to 36 months as both of December 31, 2021 and September 30, 2022. As of December 31, 2021 and September 30, 2022, the contractual amounts of the outstanding loans (excluding loans that are written off) that have been compensated by the Group were RMB3,129,264 and RMB3,860,296, respectively. |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
RELATED PARTY BALANCES AND TRANSACTIONS | ||
RELATED PARTY BALANCES AND TRANSACTIONS | The table below sets forth the major related parties and their relationships with the Group, with which the Group entered into transactions during the six months ended June 30, 2021 (unaudited) and 2022: Name of related parties Relationship with the group 360 Security Technology Inc. (“360 Group”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Qifutong Technology Co., Ltd. (“Qifutong”) An affiliate of 360 Group, ultimately controlled by Mr. Zhou, the Chairman of the Group Shanghai Qibutianxia Information Technology Co., Ltd. (“Qibutianxia”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Qicaitianxia Technology Co., Ltd. (“Qicaitianxia”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Qihu Technology Co., Ltd. (“Qihu”) An affiliate of 360 Group, ultimately controlled by Mr. Zhou, the Chairman of the Group Jinshang Consumer Finance Inc. (“Jinshang”) An affiliate of an entity controlled by Mr. Zhou, the Chairman of the Group Beijing Zixuan Information Technology Co., Ltd. (“Beijing Zixuan”) Entity controlled by Mr. Zhou, the Chairman of the Group Xixian New Area Financial Asset Exchange Co., Ltd (“Xixian”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Qifei Xiangyi Consultation Co., Ltd (“Beijing Qifei”) Entity controlled by Mr. Zhou, the Chairman of the Group Hangzhou Qifei Huachuang Technology Co, Ltd (“Hangzhou Qifei ”) Investee of the Group Shanghai Jiehu Internet Technology Co., Ltd. (“Shanghai Jiehu”) Entity controlled by Mr. Zhou, the Chairman of the Group Kincheng Bank of Tianjin Co., Ltd. (“Kincheng Bank”) An affiliate of an entity controlled by Mr. Zhou, the Chairman of the Group Tianjin Yujie Technology Co., Ltd. (Yujie) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Hongying Information Technology Co., Ltd. (“Hongying”) Entity controlled by Mr. Zhou, the Chairman of the Group Shareholders Shareholders of the Group Others Entities controlled by Mr. Zhou, the Chairman of the Group 10. RELATED PARTY BALANCES AND TRANSACTIONS - continued The Group entered into the following transactions with its related parties: For the six months ended June 30, 2021 and 2022, services provided by the related parties were RMB 178,078 (unaudited) and RMB 318,246, respectively. Six months ended June 30, 2021 2022 RMB RMB (unaudited) Referral service fee charged by Yujie 101,715 221,380 Bandwidth service fee charged by Qihu 51,696 62,882 Brand fees charged by Qihu — 23,584 Referral service fee charged by Qihu 12,273 880 Rental expenses charged by Hongying 5,696 7,340 Corporate expenses allocated from Qibutianxia 5,660 — Others 1,038 2,180 Total 178,078 318,246 For the six months ended June 30, 2021 and 2022, services provided to the related parties were RMB 1,050,036 (unaudited) and RMB 787,157 respectively. Six months ended June 30, 2021 2022 RMB RMB (unaudited) Referral service fee charged from Kincheng Bank — 108,757 Loan facilitation services fee charged from Jinshang 89,582 62,967 Loan facilitation services fee charged from Beijing Zixuan 37 — Loan facilitation services fee charged from Kincheng Bank 852,625 289,961 Post-origination services fee charged from Jinshang 32,644 36,043 Post-origination services fee charged from Beijing Zixuan 56 — Post-origination services fee charged from Kincheng Bank 62,042 268,747 Others 13,050 20,682 Total 1,050,036 787,157 Jinshang is an affiliate of an entity controlled by Mr. Zhou and provides funds to the borrowers through the Group’s platform. Kincheng Bank is an affiliate of an entity controlled by Mr. Zhou and provides funds to the borrowers through the Group’s platform. The Group collected service fees from Jinshang and Kincheng Bank. The amounts from Jinshang and Kincheng Bank represent the loan facilitation service, post-facilitation service and referral service fees charged from them. The Company has held bank deposit with Kincheng Bank of Tianjin Co. Ltd (“Kinchen”) which amounted to RMB320,491 and RMB2,519,337 as December 31, 2021 and June 30, 2022. The related interest income was RMB29,312, RMB8,561(unaudited) and RMB31,996 for the year ended December 31, 2021, six months ended June 30, 2021 and 2022, respectively and interest receivable as of December 31, 2021 and June 30, 2022 was RMB1,244 and RMB21,835 respectively. 10 RELATED PARTY BALANCES AND TRANSACTIONS As of December 31, 2021 and June 30, 2022, amounts due from related parties were RMB 978,175 and RMB 788,522, respectively, and details are as follows: December 31, June 30, 2021 2022 RMB RMB Kincheng 771,335 572,272 Jinshang 194,123 200,965 Shareholders(1) 10,158 10,158 Beijing Zixuan — — Others 2,559 5,127 Total 978,175 788,522 (1) The balance represents the ADS registration fees incurred on behalf of certain shareholders that are to be reimbursed from them. As of December 31, 2021 and June 30, 2022, amounts due to related parties were RMB 214,057 and RMB 178,687 respectively, and details are as follows: December 31, June 30, 2021 2022 RMB RMB Qibutianxia 9,156 1,656 Qihu 144,999 127,688 Yujie 30,165 13,200 Others 29,737 36,143 Total 214,057 178,687 Qibutianxia provided joint back to back guarantee to certain third party guarantee companies for the loans facilitated by the Group. The amounts of loans under such arrangement are RMB 11,803,492 and RMB 7,115,977 as of December 31, 2021 and June 30, 2022 respectively. In September 2020, Beijing Qifei transferred to the Group part of its interest in Hangzhou Qifei, a joint venture company established by Beijing Qifei and an independent third party. After the transfer, Beijing Qifei and the Group hold 26% and 25% of the equity interest in the investee, respectively. As part of the arrangement, the Group is responsible to assist Hangzhou Qifei in meeting certain performance targets. The Group accounted for the equity investment using alternative measurement, and the carrying amount was nil since no capital contribution has been made as of December 31, 2021. The Company made investment of RMB 8,996 to Hangzhou Qifei during the six months ended June 30, 2022, the investment was fully impaired at the same period after considering the business forecast of the investee and the fair value of this equity investment. Thus, the carrying amount of Hangzhou Qifei is nil as of June 30, 2022. The Company is not obligated to fund its remaining unpaid share of registered capital of RMB 41,004 till June 30, 2028 and given the uncertainty with regards to the financial position of the investee, the probability of future contribution and the exact amount cannot be estimated, thus no additional liabilities are accrued as of June 30, 2022. In October 2020, the Group established a company, Shanghai 360 Changfeng Technology, Co.,Ltd. (“360 Changfeng”) in Shanghai, China through Qiyu together with Shanghai Jiehu and an independent third party, Changfeng, to develop and build regional headquarter and the affiliated industrial park in Shanghai. Changfeng, Shanghai Jiehu and the Group each holds 30%, 30% and 40% of the equity interests of the 360 Changfeng, respectively. The shareholders execute their voting rights based on their equity interest and the stakeholders’ meeting will pass the resolutions with the approval of stakeholders representing more than half of the voting rights. 10 RELATED PARTY BALANCES AND TRANSACTIONS In December 2021, the Group acquired the 30% equity interest held by Shanghai Jiehu and became the controlling shareholder of 360 Changfeng. The transaction is a business acquisition under common control as both Shanghai Jiehu and the Group is ultimately controlled by Mr. Zhou, and has been retrospectively reflected in the consolidated financial statements of the Company for all periods presented. The impact to prior year financials was inconsequential. Pursuant to the agreement, the shareholders is obligated to contribute initial funding for acquisition of land use rights and funds required for subsequent developments will be mainly financed by external financings with any remaining shortfall funded by the shareholders ratably in proportion to their respective equity interest ownership. As of December 31, 2021 and June 30, 2022, shareholders of the company have invested a total of RMB 1.0 billion, of which RMB 0.3 billion was funded by the Changfeng. | 10. RELATED PARTY BALANCES AND TRANSACTIONS The table below sets forth the major related parties and their relationships with the Group, with which the Group entered into transactions during the nine months ended September 30, 2021 and 2022: Name of related parties Relationship with the group 360 Security Technology Inc. (“360 Group”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Qifutong Technology Co., Ltd. (“Qifutong”) An affiliate of 360 Group, ultimately controlled by Mr. Zhou, the Chairman of the Group Shanghai Qibutianxia Information Technology Co., Ltd. (“Qibutianxia”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Qicaitianxia Technology Co., Ltd. (“Qicaitianxia”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Qihu Technology Co., Ltd. (“Qihu”) An affiliate of 360 Group, ultimately controlled by Mr. Zhou, the Chairman of the Group Jinshang Consumer Finance Co.,Ltd. (“Jinshang”) An affiliate of an entity controlled by Mr. Zhou, the Chairman of the Group Beijing Zixuan Information Technology Co., Ltd. (“Beijing Zixuan”) Entity controlled by Mr. Zhou, the Chairman of the Group Xixian New Area Financial Asset Exchange Co., Ltd. (“Xixian”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Qifei Xiangyi Consultation Co., Ltd (“Beijing Qifei”) Entity controlled by Mr. Zhou, the Chairman of the Group Hangzhou Qifei Huachuang Technology Co, Ltd (“Hangzhou Qifei”) Investee of the Group Shanghai Jiehu Internet Technology Co., Ltd. (“Shanghai Jiehu”) An affiliate of 360 Group, ultimately controlled by Mr. Zhou, the Chairman of the Group Kincheng Bank of Tianjin Co., Ltd. (“Kincheng Bank”) An affiliate of an entity controlled by Mr. Zhou, the Chairman of the Group Tianjin Yujie Technology Co., Ltd. (“Yujie”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Hongying Information Technology Co., Ltd. (“Hongying”) Entity controlled by Mr. Zhou, the Chairman of the Group Shareholders Shareholders of the Group Others Entities controlled by Mr. Zhou, the Chairman of the Group The Group entered into the following transactions with its related parties: For the nine months ended September 30, 2021 and 2022, services provided by the related parties were RMB 341,793 and RMB445,061, respectively. Nine months ended September 30, 2021 2022 RMB RMB Referral service fee charged by Yujie 217,889 298,069 Bandwidth service fee charged by Qihu 79,714 96,387 Brand fees charged by Qihu 11,792 35,376 Referral service fee charged by Qihu 16,760 1,251 Rental expenses charged by Hongying 8,561 10,967 Corporate expenses allocated from Qibutianxia 5,660 — Others 1,417 3,011 Total 341,793 445,061 For the nine months ended September 30, 2021 and 2022, services provided to the related parties were RMB 1,702,734 and RMB1,016,463, respectively. Nine months ended September 30, 2021 2022 RMB RMB Referral service fee charged from Kincheng Bank — 109,000 Loan facilitation services fee charged from Kincheng Bank 1,303,832 349,553 Loan facilitation services fee charged from Jinshang 165,528 101,190 Loan facilitation services fee charged from Beijing Zixuan 37 — Post-facilitation services fee charged from Kincheng Bank 169,274 364,455 Post-facilitation services fee charged from Jinshang 50,665 52,180 Post-facilitation services fee charged from Beijing Zixuan 56 — Others 13,342 40,085 Total 1,702,734 1,016,463 Jinshang is an affiliate of an entity controlled by Mr. Zhou and provides funds to the borrowers through the Group’s platform. Kincheng Bank is an affiliate of an entity controlled by Mr. Zhou and provides funds to the borrowers through the Group’s platform. The Group collected service fees from Jinshang and Kincheng. Bank. The amounts from Jinshang and Kincheng Bank represent the loan facilitation service, post-facilitation service and referral service fees charged from them. The Company has held bank deposit with Kincheng Bank which amounted to RMB320,491 and RMB2,825,298 as of December 31, 2021 and September 30, 2022. The related interest income was RMB11,954 and RMB63,553 for the nine months ended September 30, 2021 and 2022, respectively and interest receivable as of December 31, 2021 and September 30, 2022 was RMB79 and RMB 53,364, respectively. As of December 31, 2021 and September 30, 2022, amounts due from related parties were RMB978,175 and RMB590,246, respectively, and details are as follows: December 31, September 30, 2021 2022 RMB RMB Kincheng Bank 771,335 410,015 Jinshang 194,123 158,414 Shareholders (1) 10,158 3,614 Others 2,559 18,203 Total 978,175 590,246 (1) The balance represents the ADS registration fees incurred on behalf of certain shareholders that are to be reimbursed from them. As of December 31, 2021 and September 30, 2022, amounts due to related parties were RMB214,057 and RMB203,324 respectively, and details are as follows: December 31, September 30, 2021 2022 RMB RMB Qibutianxia 9,156 1,656 Qihu 144,999 174,055 Yujie 30,165 11,340 Others 29,737 16,273 Total 214,057 203,324 Qibutianxia provided joint back to back guarantee to certain third party guarantee companies for the loans facilitated by the Group. The amounts of loans under such arrangement are RMB11,803,492 and RMB4,417,883 as of December 31, 2021 and September 30, 2022 respectively. In September, 2020, Beijing Qifei transferred to the Group part of its interest in Hangzhou Qifei, a joint venture company established by Beijing Qifei and an independent third party. After the transfer, Beijing Qifei and the Group hold 26% and 25% of the equity interest in the investee, respectively. As part of the arrangement, the Group is responsible to assist Hangzhou Qifei in meeting certain performance targets. The Group accounted for the equity investment using alternative measurement, and the carrying amount was nil since no capital contribution has been made as of December 31, 2021. The Company made investment of RMB8,996 to Hangzhou Qifei during the nine months ended September 30, 2022, and the investment was fully impaired at the same period after considering the business forecast of the investee and the fair value of this equity investment. Thus, the carrying amount of Hangzhou Qifei is nil as of September 30, 2022. The Company is not obligated to fund its remaining unpaid share of registered capital of RMB41,004 till June 30, 2028 and given the uncertainty with regards to the financial position of the investee, the probability of future contribution and the exact amount cannot be estimated, thus no additional liabilities are accrued as of September 30, 2022. In October 2020, the Group established a company, 360 Changfeng in Shanghai, China through Qiyu together with Shanghai Jiehu and an independent third party, Changfeng, to develop and build regional headquarter and the affiliated industrial park in Shanghai. Changfeng, Shanghai Jiehu and the Group each holds 30%, 30% and 40% of the equity interests, respectively. The shareholders execute their voting rights based on their equity interest and the stakeholders’ meeting will pass the resolutions with the approval of stakeholders representing more than half of the voting rights. In December 2021, the Group acquired the 30% equity interest held by Shanghai Jiehu and became the controlling shareholder of 360 Changfeng. The transaction is a business acquisition under common control as both Shanghai Jiehu and the Group is ultimately controlled by Mr. Zhou, and has been retrospectively reflected for all periods presented. The impact to prior year financials was inconsequential. Pursuant to the agreement, the shareholders is obligated to contribute initial funding for acquisition of land use rights and funds required for subsequent developments will be mainly financed by external financings with any remaining shortfall funded by the shareholders ratably in proportion to their respective equity interest ownership. As of December 31, 2021 and September 30, 2022, shareholders of the Company have invested a total of RMB1.0 billion, of which RMB0.3 billion was funded by the Changfeng. |
NET REVENUE
NET REVENUE | 9 Months Ended |
Sep. 30, 2022 | |
NET REVENUE | |
NET REVENUE | 11. NET REVENUE The following table presents the disaggregation of revenue for the nine months ended September 30, 2021 and 2022: Nine months ended September 30, 2021 2022 RMB RMB Credit driven services 7,476,006 8,809,503 Loan facilitation and servicing fees-capital heavy 1,846,102 1,724,628 Revenue from loan facilitation services At a point in time 1,105,164 1,235,784 Revenue from post-facilitation services Over time 740,938 488,844 Financing income Over time 1,468,075 2,485,871 Revenue from releasing of guarantee liabilities Over time 4,088,453 4,522,107 Other services fees At a point in time 73,376 76,897 Platform services 4,737,574 3,837,872 Loan facilitation and servicing fees-capital light 4,192,673 3,169,165 Revenue from loan facilitation services At a point in time 3,432,784 2,003,965 Revenue from post-facilitation services Over time 759,889 1,165,200 Referral services fees At a point in time 442,889 468,031 Other services fees At a point in time/ Over time 102,012 200,676 Total net revenue 12,213,580 12,647,375 Total revenue recognized at a point of time is RMB5,114 million and RMB3,930 million for the nine months ended September 30, 2021 and 2022. Total revenue recognized over time is RMB7,099 million and RMB8,717 for the nine months ended September 30, 2021 and 2022. |
INCOME TAXES
INCOME TAXES | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
INCOME TAXES | ||
INCOME TAXES | 11. INCOME TAXES PRC Under the Law of the People’s Republic of China on Enterprise Income Tax (“EIT Law”), domestically-owned enterprises and foreign-invested enterprises are subject to a uniform tax rate of 25%. Qiyu received its “high and new technology enterprises” status in 2018 and renewed it in 2021 and was entitled for a preferential income tax rate of 15% from 2018 to 2023. In November 2020, Qiyue received its “high and new technology enterprises” status and was entitled to a reduced EIT rate of 15% from 2020 to 2022. From August 2019, Qicheng benefits from a preferential tax rate of 15% as it falls within the encouraged industries catalogue in western China. The 40% of the EIT payables of Qicheng could be further reduced as it is located in Autonomous Region of China. From 2021, two of the Company’s subsidiaries benefit from a preferential tax rate of 15% as they are registered in Hainan and engaged in encouraged business activities. From 2022, Beihai Borui Credit Service Co., Ltd., benefits from a preferential tax rate of 15% as it falls within the encouraged industries catalogue in western China. Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. In addition, the Cayman Islands do not impose withholding tax on dividend payments. Hong Kong Under the current Hong Kong Inland Revenue Ordinance, the Company’s subsidiaries domiciled in Hong Kong has introduced a two-tiered profits tax rate regime which is applicable to any year of assessment commencing on or after April 1, 2018. The profits tax rate for the first HK$2 million of profits of corporations will be lowered to 8.25%, while profits above that amount will continue to be subject to the tax rate of 16.5%. Additionally, payments of dividends by the subsidiary incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax. The current and deferred portion of income tax expenses included in the consolidated statements of operations, which were all attributable to the Group is as follows: Six months ended June 30, 2021 2022 RMB RMB (unaudited) Current tax 639,412 573,083 Deferred tax 23,945 (176,351) Total 663,357 396,732 11. INCOME TAXES - continued Hong Kong - continued The effective tax rate is based on expected income and statutory tax rates. For interim financial reporting, the Group estimates the annual tax rate based on projected taxable income for the full year and records a quarterly income tax provision in accordance with the guidance on accounting for income taxes in an interim period. As the year progresses, the Group refines the estimates of the year’s taxable income as new information becomes available. This continual estimation process often results in a change to the expected effective tax rate for the year. When this occurs, the Group adjusts the income tax provision during the quarter in which the change in estimate occurs so that the year to- date provision reflects the expected annual tax rate. The Group’s effective tax rate for the six months ended June 30, 2021 and 2022 was 18.00% (unaudited) and 15.00%, respectively. The Group did not | 12. INCOME TAXES The current and deferred portion of income tax expenses included in the condensed consolidated statement of operations, which were all attributable to the Group is as follows: Nine months ended September 30, 2021 2022 RMB RMB Current tax 1,121,203 844,137 Deferred tax (99,247) (264,246) Total 1,021,956 579,891 The effective tax rate is based on expected income and statutory tax rates. For interim financial reporting, the Group estimates the annual tax rate based on projected taxable income for the full year and records a quarterly income tax provision in accordance with the guidance on accounting for income taxes in an interim period. As the year progresses, the Group refines the estimates of the year’s taxable income as new information becomes available. This continual estimation process often results in a change to the expected effective tax rate for the year. When this occurs, the Group adjusts the income tax provision during the quarter in which the change in estimate occurs so that the year to- date provision reflects the expected annual tax rate. The Group’s effective tax rate for the nine months ended September 30, 2021 and 2022 was 18.00% and 15.00%, respectively. The Group did not incur any interest and penalties related to potential underpaid income tax expenses. From 2022, Beihai Borui Credit Service Co., Ltd., benefits from a preferential tax rate of 15% as it falls within the encouraged industries catalogue in western China. |
DIVIDENDS
DIVIDENDS | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
DIVIDENDS | ||
DIVIDENDS | 15. DIVIDENDS Quarterly Dividend Policy On November 15, 2021, the board of directors of the Company approved a quarterly cash dividend policy. Under the policy, the Company will declare and distribute a recurring cash dividend every fiscal quarter, starting from the third fiscal quarter of 2021, at an amount equivalent to approximately 15% to 20% of the Company’s net income after tax for such quarter. The determination to make dividend distributions and the exact amount of such distributions in any particular quarter will be based upon the Company’s operations and financial conditions, and other relevant factors, and subject to adjustment and determination by the board of directors. The board of directors of the Company has approved a dividend of US$0.14 per ordinary share, or US$0.28 per ADS, for the third fiscal quarter of 2021 in accordance with the Company’s dividend policy, which was paid on January 18, 2022 to shareholders of record as of the close of business on December 15, 2021. The board of directors of the Company has approved a dividend of US$0.13 per ordinary share, or US$0.26 per ADS, for the fourth fiscal quarter of 2021 in accordance with the Company’s dividend policy, which was paid on May 13, 2022 to shareholders of record as of the close of business on April 6, 2022. The board of directors of the Company has approved and declared a dividend of US$0.11 per ordinary share, or US$0.22 per ADS, for the first fiscal quarter of 2022 in accordance with the Company’s dividend policy on May 26, 2022, which was paid on July 27, 2022 to shareholders of record as of the close of business on June 20, 2022. | 13. DIVIDENDS Quarterly Dividend Policy On November 15, 2021, the board of directors of the Company approved a quarterly cash dividend policy. Under the policy, the Company will declare and distribute a recurring cash dividend every fiscal quarter, starting from the third fiscal quarter of 2021, at an amount equivalent to approximately 15% to 20% of the Company’s net income after tax for such quarter. The determination to make dividend distributions and the exact amount of such distributions in any particular quarter will be based upon the Company’s operations and financial conditions, and other relevant factors, and subject to adjustment and determination by the board of directors. The board of directors of the Company has approved a dividend of US$0.14 per ordinary share, or US$0.28 per ADS, for the third fiscal quarter of 2021 in accordance with the Company’s dividend policy, which was paid on January 18, 2022 to shareholders of record as of the close of business on December 15, 2021. The board of directors of the Company has approved a dividend of US$0.13 per ordinary share, or US$0.26 per ADS, for the fourth fiscal quarter of 2021 in accordance with the Company’s dividend policy, which was paid on May 13, 2022 to shareholders of record as of the close of business on April 6, 2022. The board of directors of the Company has approved and declared a dividend of US$0.11 per ordinary share, or US$0.22 per ADS, for the first fiscal quarter of 2022 in accordance with the Company’s dividend policy on May 26, 2022, which was paid on July 27, 2022 to shareholders of record as of the close of business on June 20, 2022. The board of directors of the Company has approved a dividend of US$0.09 per ordinary share, or US$0.18 per ADS, for the second fiscal quarter of 2022 in accordance with the Company’s dividend policy, which was paid on October 28, 2022 to shareholders of record as of the close of business on September 16, 2022. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES | ||
COMMITMENTS AND CONTINGENCIES | 17. COMMITMENTS AND CONTINGENCIES Contingencies Historically the Group has provided guarantees to certain financial institution partners through a subsidiary that does not hold a financing guarantee license. In October 2019, The China Banking and Insurance Regulatory Commission (“CBIRC”) and other government authorities, promulgated a new regulation pursuant to which this structure, may not deemed appropriate. The Group has ceased the business in 2020, and for existing loans, the Group will execute the contract until the expiration of the loans. The new regulation is silent with respect to any grace period that may be permitted to undertake the restructuring. Management has concluded, with the advice of the Group’s legal counsel, that it is not reasonably possible to estimate any potential financial exposure the group may have as a result of operating the business during this intermediate time period, due to the substantial uncertainties regarding the interpretation and application of the relevant laws and regulations. As of June 30, 2022, the outstanding loan balance under this guarantee model amounted to RMB 0.06 billion, constituting 0.04% of total outstanding loan balance facilitated by the Group (excluding loans delinquent for more than 180 days). In July 2020 and in February 2021, CBIRC promulgated two regulations stating that regional banks that carry out internet lending business shall mainly serve local customers, and are not allowed to conduct the internet lending business beyond the local administrative area of their registered place, except those who have no physical business branch, conducting business primarily online as well as meeting the other conditions prescribed by the CBIRC. The Company has changed its distribution strategy so that only local borrowers would be matched to regional banks for new loans facilitated starting from January 1, 2022. The Company believed that, as advised by the Group’s legal counsel, given the lack of exact definition regarding the regional banks in the existing laws and regulations, there are uncertainties as to how the regulation will be implemented, therefore the impact to the Company’s current business operations cannot be reasonably estimated. In September, 2021, the People’s Bank of China (“PBOC”) issued a new regulation stating that organizations that engage in credit investigation business should obtain the credit reporting business license and comply with its other provisions within an 18 month grace period from its effectiveness date of January 1, 2022. Given that the rule does not specify the legitimacy of existing data analytics or precision marketing service providers in the financial service industry, the Company has concluded, as advised by its legal counsel, that it is not reasonably possible to estimate its impact on the Company’s current business operations for credit assessment on borrowers and the potential penalties incurred by the Company thereof. The Company and its certain current and former officers and directors are named as defendants in a putative securities class action brought by investors who purchased the Company’s securities between April 30, 2020 and July 8, 2021 and who allegedly suffered damages as a result of alleged misstatements and omissions in the Company’s public disclosure documents in connection with its compliance and data collection practices. On January 14, 2022, Lead Plaintiff filed an Amended Complaint. On March 15, 2022, the Company filed a motion to dismiss the Amended Complaint. On September 26, 2022, Lead Plaintiff notified the Court that he does not intend to file a Second Amended Complaint. The Court entered a judgment in favor of defendants on September 29, 2022. Plaintiff has until October 31, 2022 to appeal the judgment. As the Plaintiff has not appealed till such date, the judgement is final and the Company had no losses over this case. Commitments As of June 30, 2022, the Group has certain capital commitments that primarily related to commitments for construction of the regional headquarters and the affiliated industrial park. The total capital commitments contracted but not yet reflected in the financial statements was not less than RMB500 million (US$74.6 million) as of June 30, 2022. All of these capital commitments will be fulfilled in the future according to the construction progress. | 14. COMMITMENTS AND CONTINGENCIES Contingencies Historically the Group has provided guarantees to certain funding partners through a subsidiary that does not hold a financing guarantee license. In October 2019, the China Banking and Insurance Regulatory Commission (“CBIRC”) and other government authorities, promulgated a new regulation pursuant to which this structure, may not deemed appropriate. The Group has ceased the business in 2020, and for existing loans, the Group will execute the contract until the expiration of the loans. The new regulation is silent with respect to any grace period that may be permitted to undertake the restructuring. Management has concluded, with the advice of the Group’s legal counsel, that it is not reasonably possible to estimate any potential financial exposure the Group may have as a result of operating the business during this intermediate time period, due to the substantial uncertainties regarding the interpretation and application of the relevant laws and regulations. As of September 30, 2022, the outstanding loan balance under this guarantee model amounted to RMB0.005 billion, constituting 0.003% of total outstanding loan balance facilitated by the Group (excluding loans delinquent for more than 180 days). In July 2020 and in February 2021, CBIRC promulgated two regulations stating that regional banks that carry out internet lending business shall mainly serve local customers, and are not allowed to conduct the internet lending business beyond the local administrative area of their registered place, except those who have no physical business branch, conducting business primarily online as well as meeting the other conditions prescribed by the CBIRC. The Company has changed its distribution strategy so that only local borrowers would be matched to regional banks for new loans facilitated starting from January 1, 2022. The Company believed that, as advised by the Group’s legal counsel, given the lack of exact definition regarding the regional banks in the existing laws and regulations, there are uncertainties as to how the regulation will be implemented, therefore the impact to the Company’s current business operations cannot be reasonably estimated. In September, 2021, the People’s Bank of China (“PBOC”) issued a new regulation stating that organizations that engage in credit investigation business should obtain the credit reporting business license and comply with its other provisions within an 18 month grace period from its effectiveness date of January 1, 2022. Given that the rule does not specify the legitimacy of existing data analytics or precision marketing service providers in the financial service industry, the Company has concluded, as advised by its legal counsel, that it is not reasonably possible to estimate its impact on the Company’s current business operations for credit assessment on borrowers and the potential penalties incurred by the Company thereof. The Company and its certain current and former officers and directors are named as defendants in a putative securities class action brought by investors who purchased the Company’s securities between April 30, 2020 and July 8, 2021 and who allegedly suffered damages as a result of alleged misstatements and omissions in the Company’s public disclosure documents in connection with its compliance and data collection practices. On January 14, 2022, Lead Plaintiff filed an Amended Complaint. On March 15, 2022, the Company filed a motion to dismiss the Amended Complaint. On September 26, 2022, Lead Plaintiff notified the Court that he does not intend to file a Second Amended Complaint. The Court entered a judgment in favor of defendants on September 29, 2022. Plaintiff has until October 31, 2022 to appeal the judgment. As the Plaintiff has not appealed till such date, the judgement is final and the Company had no losses over this case. Commitments As of September 30, 2022, the Group has certain capital commitments that primarily related to commitments for construction of the regional headquarters and the affiliated industrial park. The total capital commitments contracted but not yet reflected in the financial statements was not less than RMB500 million (US$70 million) as of September 30, 2022. All of these capital commitments will be fulfilled in the future according to the construction progress. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
NET INCOME PER SHARE | ||
NET INCOME PER SHARE | 18. NET INCOME PER SHARE Basic and diluted net income per share for each of the periods presented were calculated as follows: Six months ended June 30, 2021 2022 RMB RMB (unaudited) Numerator: Net income attributable to shareholders of the Company 2,895,087 2,159,337 Net income attributable to Class A and Class B ordinary shareholders for computing basic and diluted net income per share 2,895,087 2,159,337 Denominator: Weighted average Class A and Class B ordinary shares outstanding used in computing basic income per ordinary share 305,886,883 311,109,257 Plus: incremental weighted average ordinary shares from assumed exercise of stock options and restricted share units using the treasury stock method 15,071,309 9,141,937 Weighted average Class A and Class B ordinary shares outstanding used in computing diluted income per ordinary share 320,958,192 320,251,194 Basic net income per share 9.46 6.94 Diluted net income per share 9.02 6.74 For the six months ended June 30, 2021 and 2022, no options or restricted share units were excluded from the calculation of diluted net income per share due to the anti-dilutive effect. | 15. NET INCOME PER SHARE Basic and diluted net income per share for each of the periods presented were calculated as follows: Nine months ended September 30, 2021 2022 RMB RMB Numerator: Net income attributable to shareholders of the Company 4,459,164 3,152,172 Denominator: Weighted average Class A and Class B ordinary shares outstanding used in computing basic income per ordinary share 306,641,972 311,571,575 Plus: incremental weighted average ordinary shares from assumed exercise of stock options and restricted shares using the treasury stock method 14,304,755 9,653,228 Weighted average Class A and Class B ordinary shares outstanding used in computing diluted income per ordinary share 320,946,727 321,224,803 Basic net income per share 14.54 10.12 Diluted net income per share 13.89 9.81 For the nine months ended September 30, 2021 and 2022, no options or restricted share units were excluded from the calculation of diluted net income per share due to the anti-dilutive effect. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | 19. SUBSEQUENT EVENTS On August 18, 2022, the board of directors of the Company has approved a dividend of US$0.09 per ordinary share, or US$0.18 per ADS, for the second fiscal quarter of 2022 in accordance with the Company’s dividend policy, which is expected to be paid on October 28, 2022 to shareholders of record as of the close of business on September 16, 2022. On November 11, 2022, the board of directors of the Company has approved a dividend of US$0.08 per ordinary share, or US$0.16 per ADS, for the third fiscal quarter of 2022 in accordance with the Company’s dividend policy, which is expected to be paid on January 18, 2023 to shareholders of record as of the close of business on December 12, 2022. | 16. SUBSEQUENT EVENTS On November 11,2022, the board of directors of the Company has approved a dividend of US$0.08 per ordinary share, or US$0.16 per ADS, for the third fiscal quarter of 2022 in accordance with the Company’s dividend policy, which is expected to be paid on January 18, 2023 to shareholders of record as of the close of business on December 12, 2022. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 6 Months Ended |
Jun. 30, 2022 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES December 31, June 30, 2021 2022 RMB RMB User traffic direction fees 472,269 472,101 Payable to financial institution partners (1) 422,423 347,313 Accrued payroll and welfare 409,216 317,612 Payable for third-party service fee 298,411 341,097 Payable to shareholder of non-controlling interests (2) 296,617 303,407 Dividend payable (3) 276,991 230,095 Lease liabilities 25,779 37,535 Others 56,623 68,197 Total 2,258,329 2,117,357 (1) Payable to financial institution partners mainly include amounts collected from the borrowers but have not been transferred to the financial institution partners due to settlement time lag. 9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - continued (2) Payable to shareholder of non-controlling interests mainly includes loans from Shanghai Changfeng Investment (Group) Co., Ltd.( “Changfeng”) to acquire land use right, the principal of RMB 90,000 of which is repaid in September, 2022. (3) Dividends payable as of December 31, 2021 has been paid in January 2022 and May 2022 respectively. Dividends payable as of June 30, 2022 has been paid in July, 2022. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2022 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 12. SHARE-BASED COMPENSATION Share incentive plan In May 2018, the shareholders and board of directors of the Company adopted the Share Incentive Plan (the “2018 plan”) for the granting of share options and restricted share units to employees, directors and consultants to reward them for services to the Company and to provide incentives for future service. Under the 2018 plan, the maximum aggregate number of shares which may be issued is 25,336,096 ordinary shares, plus an annual increase equal to 1.0% of the total number of the then issued and outstanding shares. The share options expire 10 years from the date of grant. The Company’s board of directors and shareholders approved the 2019 Share Incentive Plan (the “2019 Plan”) and amended it in August 2020, for the granting of share options and restricted share units to employees, directors and consultants to reward them for services to the Company and to provide incentives for future service. Under the 2019 plan, the maximum aggregate number of shares which may be issued is 17,547,567 ordinary shares, and may increase annually by an amount up to 1.0% of the total number of ordinary shares then issued and outstanding commencing with the first fiscal year beginning January 1, 2021 or such fewer amount as determined by the board of directors. The share options and restricted share units expire 10 years from the date of grant. Stock options On May 20 and November 20, 2018, and May 20, 2020, and November 20, 2021 the Company granted 24,627,493, 690,023, 3,514 and 2,400 stock options, respectively, with an exercises price of US$0.00001 per share to certain employees, directors and officers. The stock options shall vest over a period from immediate to 4 years. The grant date fair value per option was RMB 48.64, RMB 60.77, RMB 32.02 and RMB 64.46, respectively. On November 2021, the compensation committee of the board of directors of the Company approved to convert the form of 10,264,366 outstanding restricted share units into stock options to purchase the same number of shares as represented by the restricted share units with an exercises price of US$0.00001 per share. This conversion did not affect the fair value of the awards immediately before and after the modification as the exercise price is nominal. In addition, there were no other changes to the awards including the vesting conditions and classification. Accordingly, modification accounting is not required and the cost will continue to be recognized based on the grant date fair-value-based measure. 12. SHARE-BASED COMPENSATION Share incentive plan - Stock options - The Group used the Black-Scholes option pricing model to estimate the fair value of options granted, with the following assumptions used. Year ended, December 31, 2021 Risk-free rate of interest 2.76% Estimated volatility rate 67.27% Dividend yield 5.10% Expected life (years) 5.00 Exercise price USD 0.00001 The risk-free rate of interest is based on the yield to maturity of China government bonds with a maturity period close to the expected term of the options. The volatility of the underlying ordinary shares during the life of the options was estimated based on the historical share price volatility of comparable companies over a period comparable to the expected term of the options. The dividend yield was estimated by the Group based on its expected dividend policy over the expected term of the options. The Group did not have sufficient historical share option exercise experience, it estimated the expected term average based on a consideration of factors including contractual term and vesting period. The closing market price of the ordinary shares of the Company as of the grant date was used as the fair value of the ordinary shares on that date. A summary of option activity during period from January 1, 2022 to June 30, 2022 is as follows: Weighted Weighted Average Number of Average Remaining Aggregate Options Exercise Price Contract Life Intrinsic Value USD Years RMB Options outstanding at January 1, 2022 12,945,337 0.00001 8.03 945,786 Options forfeited in 2022 (755,190) 0.00001 7.75 (43,756) Options exercised in 2022 (1,584,034) 0.00001 6.03 (91,779) Options outstanding at June 30, 2022 10,606,113 0.00001 7.75 614,518 Options exercisable at June 30, 2022 3,002,620 0.00001 6.65 173,972 Options vested or expected to be vested at June 30, 2022 10,606,113 0.00001 7.75 614,518 As of June 30, 2022, there was RMB 211,281 of unrecognized compensation cost related to share options that are expected to be recognized over a weighted-average vesting period of 1.22 years. 12. SHARE-BASED COMPENSATION Share incentive plan - Restricted Share Units A summary of the restricted share units for the six months ended June 30, 2022 was stated below: Weighted-Average Number of Grant-Date Restricted Share Units Fair Value Outstanding at January 1, 2022 6,961,446 52.38 Granted 258,500 43.43 Forfeited (260,238) 65.41 Vested (388,702) 66.59 Outstanding at June 30, 2022 6,571,006 50.52 The restricted share units granted shall vest in accordance with contractual schedules over a period from three The Company recognizes the compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting period. Total share-based compensation expense of share-based awards granted to employees and directors was as follows: Six months ended June 30, 2021 2022 RMB RMB (unaudited) Facilitation, origination and servicing expenses 30,893 34,704 Sales and marketing expenses 5,565 525 General and administrative expenses 90,372 63,604 Total 126,830 98,833 |
ORDINARY SHARES
ORDINARY SHARES | 6 Months Ended |
Jun. 30, 2022 | |
ORDINARY SHARES | |
ORDINARY SHARES | 13. ORDINARY SHARES 5,000,000,000 shares was authorized at par value of USD 0.00001 per share. The ordinary shares include Class A ordinary shares and Class B ordinary shares. Each Class A ordinary share is entitled to one vote and each Class B ordinary share is entitled to twenty votes on all matters that are subject to shareholder vote. All classes of ordinary shares are entitled to the same dividend right. Class B ordinary shares could be converted into Class A ordinary shares, at the option of the holders, on one-for-one basis. All Class B ordinary shares are beneficially owned by Mr. Zhou, the Chairman of the Company. As of December 31, 2021, there were 310,486,975 ordinary shares outstanding, with par value of $0.00001 per share, consisting of 270,666,389 Class A ordinary shares and 39,820,586 Class B ordinary shares. As of June 30, 2022, there were 312,459,711 ordinary shares outstanding, with par value of $0.00001 per share, consisting of 272,639,125 Class A ordinary shares and 39,820,586 Class B ordinary shares. |
STATUTORY RESERVES AND RESTRICT
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 6 Months Ended |
Jun. 30, 2022 | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 14. STATUTORY RESERVES AND RESTRICTED NET ASSETS In accordance with the PRC laws and regulations, the PRC entities of the Group are required to make appropriation to certain statutory reserves, namely general reserve, industry specific reserve, enterprise expansion reserve, and staff welfare and bonus reserve, all of which are appropriated from net profit as reported in their PRC statutory accounts. The PRC entities of the Group are required to appropriate at least 10% of their after-tax profits to the general reserve until such reserve has reached 50% of their respective registered capital. Appropriations to the enterprise expansion reserve and the staff welfare and bonus reserve are to be made at the discretion of the board of directors of the PRC entities of the Group. There are no appropriations to these reserves by the PRC entities of the Group for the years ended December 31, 2021 and six months ended June 30, 2022. As a result of PRC laws and regulations and the requirement that distributions by the PRC entities of the Group can only be paid out of distributable profits computed in accordance with the PRC GAAP, the PRC entities of the Group restricted from transferring a portion of their net assets to the Group. Amounts restricted include paid-in capital, capital reserve and statutory reserves of the PRC entities of the Group. As of December 31, 2021 and June 30, 2022, the aggregated amounts of paid-in capital, capital reserve and statutory reserves represented the amount of net assets of the relevant entity in the Group not available for distribution amounted to RMB 8,283,560 and RMB 14,536,140, respectively (including the statutory reserve fund of RMB 168,541 and RMB 218,082 as of December 31, 2021 and June 30, 2022, respectively). |
LEASE
LEASE | 6 Months Ended |
Jun. 30, 2022 | |
LEASE | |
LEASE | 16. LEASE Operating lease as lessee The Group enters into operating leases primarily for general office space. The Group’s leases typically have original terms not exceeding 5 years. These leases have remaining lease terms of 1 year to 3 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year. Lease costs are included in facilitation, origination and servicing expense, sales and marketing expense, and general and administrative expenses. Operating lease expenses were RMB 23,752 (unaudited) and RMB 32,064 for the six months ended June 30, 2021 and 2022, respectively, included amortization expenses of land use rights of RMB 6,908 (unaudited) and RMB 10,362 for the six months ended June 30, 2021 and 2022, respectively. Under ASC 842, land use rights agreements are also considered as operating lease contracts. See Note 6 for separate disclosures related to land use right. Supplemental cash flow information related to leases was as follows: Six months ended June 30, 2021 2022 RMB RMB (unaudited) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 16,844 21,565 Right-of-use assets obtained in exchange for lease obligations: Operating leases 9,871 55,845 The following table shows ROU assets and lease liabilities as of December 31, 2021 and June 30, 2022 (except lease term and discount rate): December 31, 2021 June 30, 2022 RMB RMB Right-of-use assets 42,606 76,030 Operating lease liabilities-current 25,779 37,535 Operating lease liabilities-non current 13,177 34,147 December 31, 2021 June 30, 2022 RMB RMB Weighted-average remaining lease term 2.09 2.29 Weighted-average discount rate 6.22 % 4.75 % The maturities of operating lease liabilities as of December 31, 2021 and June 30, 2022 are as follows: December 31, 2021 June 30, 2022 RMB RMB Within one year 28,203 38,326 Within a period of more than one year but not more than two years 7,034 25,146 Within a period of more than two year but not more than three years 3,550 11,785 Within a period of more than three year but not more than four years 382 — Total undiscounted lease payments 39,169 75,257 Imputed interest (213) (3,575) Total lease liabilities 38,956 71,682 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Basis of preparation | Basis of presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). | Basis of preparation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) regarding interim financial reporting, and include all normal and recurring adjustments that management of the Group considers necessary for a fair presentation of its financial position and operating results. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these financial statements should be read in conjunction with the Group’s audited consolidated financial statements and notes for the six months ended June 30, 2022. The financial information as of December 31, 2021 presented in the unaudited condensed consolidated financial statements is derived from the audited consolidated financial statements for the year ended December 31, 2021. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. |
Basis of consolidation | Basis of consolidation The accompanying consolidated financial statements include the financial statements of the Company, its subsidiaries, and consolidated VIEs. All intercompany transactions and balances have been eliminated. | Basis of consolidation The accompanying unaudited condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, and consolidated VIEs. All inter-company transactions and balances have been eliminated. |
Consolidated Trusts | Consolidated Trusts Loans funded by the financial institution partners in the Group’s loan facilitation business are typically disbursed to the borrowers directly from such partners. However, in order to diversify the Group’s funding sources, lower the Group’s funding cost and due to the need of certain financial institution partners, loans from such financial institution partners are funded and disbursed indirectly through trusts. Several trusts were formed by third-party trust companies, who administer the trusts. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Consolidated Trusts The Trusts fund loans facilitated by the Group using the funds received from its beneficiaries to the borrowers. The Trusts provide the returns to its beneficiaries through interest payments made by the borrowers. The borrowers are charged with the interests by the Trusts. For the majority of trust, the Group is either entitled to the residual profit in the Trusts or the Group has provided guarantee to the Trusts by agreeing to repurchase any loans that are delinquent for 30 to 90 days from which the Group absorbs the credit risk of the Trusts resulting from borrowers’ delinquencies. The Group determined that the residual profit or the guarantee represents a variable interest in the Trusts through which the Group has the right to receive benefits or the obligation to absorb losses from the Trusts that could potentially be significant to the Trusts. Since the Trusts only invest in the loans facilitated by the Group and the Group continues to service the loans through a service agreement post origination and has the ability to direct default mitigation activities, the Group has the power to direct the activities of the Trusts that most significantly impact the economic performance of the Trusts. As a result, the Group is considered the primary beneficiary of the Trusts and consolidated the Trusts’ assets, liabilities, results of operations and cash flows. In 2019, the Group received letter of approval for listing and transferring assets backed securities (“ABS”) on both Shanghai Stock Exchange and Shenzhen Stock Exchange within the issue scale of RMB 5 billion for each, respectively. In 2020, the Group also received letter of approval for listing and transferring assets backed securities (“ABS”) on Shenzhen Stock Exchange within the issue scale of RMB 10 billion. In 2021, the Group also received letter of approval for listing and transferring assets backed securities (“ABS”) on Shanghai Stock Exchange and Shenzhen Stock Exchange within the issue scale of RMB 8 billion and RMB 4 billion, respectively. For some trusts, the trust beneficial rights, or the loans receivable in the trusts, were transferred, as underlying assets, to the asset backed special plans (the “ABS plans”). The beneficial rights and loans receivable of RMB3.1 billion (unaudited) and RMB3.0 billion in trusts were transferred to the ABS plans for the six months ended June 30, 2021 and 2022, respectively. The ABS plans were securitized and listed on Shanghai Stock Exchange and Shenzhen Stock Exchange, with terms of no more than two years. As of June 30, 2022, the Group held the whole subordinated tranche securities to provide credit enhancement. The underlying trusts were continued to be consolidated by the Group. Senior tranche securities held by external financial institution partners were recorded as “payable to investors of the consolidated trusts – current” with the balance of RMB 2,139,063 and RMB 4,019,635 as of December 31, 2021 and June 30, 2022, respectively and “payable to investors of the consolidated trusts – noncurrent” with the balance of RMB 3,903,597 and RMB 3,613,690 as of December 31, 2021 and June 30, 2022, respectively on the consolidated balance sheet. As of December 31, 2021 and June 30, 2022, the balance of delinquent loans repurchased by the Group from the consolidated trusts are RMB 904,586 and RMB 1,194,155, respectively. As of December 31, 2021 and June 30, 2022, the balance of performing loans upon liquidation of certain consolidated trusts repurchased by the Group from the consolidated trusts per the contracts agreed with the counterparty are RMB 12,686 and RMB 16,081, respectively. For the years ended December 31, 2021 and six months ended June 30, 2022, the provision for loan losses of RMB 661,402 and RMB 463,750 were charged to the consolidated statements of operations, respectively. There were RMB 1,033,228 and RMB 1,416,707 of loans written off for the years ended December 31, 2021 and six months ended June 30, 2022, respectively. Interest on loans receivable is accrued and credited to income as earned. The Group determines a loan’s past due status by the number of days that have elapsed since a borrower has failed to make a contractual loan payment. Accrual of interest is generally discontinued when the loan principal and interest are deemed to be uncollectible. In general, loans receivable is identified as uncollectible when it is determined to be not probable that the balance can be collected. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Consolidated Trusts The following financial statement amounts and balances of the consolidated trusts were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: December 31, 2021 June 30, 2022 RMB RMB ASSETS Restricted cash 657,075 1,420,864 Loans receivable, net 8,646,950 9,545,367 Prepaid expenses and other assets 104,515 104,515 Loans receivable, net-noncurrent 1,829,804 1,023,231 Total Assets 11,238,344 12,093,977 December 31, 2021 June 30, 2022 RMB RMB LIABILITIES Payable to investors of the consolidated trusts-current 2,304,518 5,224,973 Accrued expenses and other current liabilities 5,928 11,285 Other tax payable 34,448 37,504 Payable to investors of the consolidated trusts-noncurrent 4,010,597 3,613,690 Total liabilities 6,355,491 8,887,452 Six months ended June 30, 2021 2022 RMB RMB (unaudited) Net revenue 663,907 1,108,643 Net income 263,141 418,827 Six months ended June 30, 2021 2022 RMB RMB (unaudited) Net cash provided by operating activities 486,996 916,753 Net cash (used in) investing activities (1,921,400) (548,254) Net cash provided by financing activities 572,579 2,490,664 The consolidated trusts contributed 9% (unaudited) and 13% of the Group’s consolidated revenue for the six months ended June 30, 2021 and 2022, respectively. As of December 31, 2021 and June 30, 2022, the consolidated trusts accounted for an aggregate of 34% and 32%, respectively, of the consolidated total assets, and 35% and 43% respectively, of the consolidated total liabilities. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company to provide financial support to the consolidated trusts. The Group believes that the assets of the consolidated trusts could only be used to settle the obligations of the consolidated trusts. | Consolidated Trusts For some trusts, the trust beneficial rights, or the loans receivable in the trusts, were transferred, as underlying assets, to the asset backed special plans (the “ABS plans”). The beneficial rights and loans receivable of RMB4.1 billion and RMB5.1 billion in trusts were transferred to the ABS plans for the nine months ended September 30, 2021 and 2022, respectively. The following financial statement amounts and balances of the consolidated trusts were included in the accompanying unaudited condensed consolidated financial statements after elimination of intercompany transactions and balances: December 31, September 30, 2021 2022 RMB RMB ASSETS Restricted cash 657,075 626,452 Loans receivable, net 8,646,950 12,003,519 Prepaid expenses and other assets 104,515 111,039 Loans receivable, net-noncurrent 1,829,804 714,412 Total Assets 11,238,344 13,455,422 December 31, September 30, 2021 2022 RMB RMB LIABILITIES Payable to investors of the consolidated trusts-current 2,304,518 6,173,089 Accrued expenses and other current liabilities 5,928 17,081 Other tax payable 34,448 36,485 Payable to investors of the consolidated trusts-noncurrent 4,010,597 3,802,348 Total liabilities 6,355,491 10,029,003 Nine months ended September 30, 2021 2022 RMB RMB Net revenue 1,127,851 1,667,660 Net income 372,408 806,808 Nine months ended September 30, 2021 2022 RMB RMB Net cash provided by operating activities 847,960 1,332,513 Net cash (used in) investing activities (4,690,085) (2,707,114) Net cash provided by financing activities 1,027,804 3,607,440 The consolidated trusts contributed 9% and 13% of the Group’s consolidated revenue for the nine months ended September 30, 2021 and 2022, respectively. As of December 31, 2021 and September 30, 2022, the consolidated trusts accounted for an aggregate of 34% and 34%, respectively, of the consolidated total assets, and 35% and 46% respectively, of the consolidated total liabilities. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company to provide financial support to the consolidated trusts. The Group believes that the assets of the consolidated trusts could only be used to settle the obligations of the consolidated trusts. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates. Significant accounting estimates reflected in the Group’s financial statements include revenue recognition, financial assets receivable, guarantee liabilities, allowance for loans receivable, allowance for uncollectible accounts receivable and contract assets, allowance for financial assets receivable, and valuation allowance for deferred tax assets. | |
Revenue recognition | Revenue recognition Through collaborating with channel partners to direct users with credit needs to its app, the Group provides services through its facilitation of loan transactions between the borrowers and the financial institution partners through the use of two business models. The first business model involves the Group providing credit driven services through facilitating loans that are guaranteed by the Group directly or through third-party guarantee companies and insurance companies (referred to as “off-balance capital heavy loans” hereafter), or providing loans through the Consolidated Trusts and Fuzhou Microcredit. In either cases, the Group ultimately bears all the credit risks when the borrowers default. The second business model involves the Group providing platform services through facilitating loans with no or partial guarantee provided by the Group (referred to as “capital light loans” hereafter) and referral services. In these cases, the Group bears limited credit risks when the borrowers default. The loans facilitated under both models are with terms of 1~36months (the majority are within the terms of 1~12 months) and with principal of up to RMB 1,000 (the majority are within RMB500). Loan facilitation and servicing fees The Group earns loan facilitation and service fees from both off-balance capital heavy loans and capital light loans. The Group’s services mainly consist of: 1) Performing customer acquisition, initial credit screening and advanced risk assessment on the borrowers on its mobile platform and matching the financial institution partners to potential qualified borrowers and facilitating the execution of loan agreements between the parties, referred to as “Loan Facilitation Services” and; 2) Providing collection and other repayment processing services for the financial institution partners over the loan term, referred to as “Post Facilitation Services”; Based on the agreements entered into between the Group’s financial institution partners and borrowers, the Group determined that it is not the legal lender or borrower in the loan origination and repayment process. Accordingly, the Group does not record loans receivable and payable arising from the loan between the financial institution partner and the borrowers. The Group charges service fees directly from financial institution partner based on the contractual agreements. In 2019, the Group started cooperating with insurance companies and financing guarantee companies to provide guarantee for the loans between the borrowers and financial institution partners. Under this cooperation, the Group charges guarantee fees from the borrower, including insurance premium collected on behalf of the insurance company. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued Revenue recognition - Loan facilitation and servicing fees – For the loans the Group is entitled to the full service fee regardless of whether the borrowers choose to early repay or not, the Group has the unconditional right to the consideration. For the loans facilitated with borrowers who have the option of early repayment and upon termination they do not have the obligation to pay the remaining monthly service fees or not have to pay the excessive portion if the total fees are more than 24% of the origination principal on an annualized basis, the Group’s right to consideration for the service fees is conditional on whether or not the borrowers repay in advance. For off-balance capital heavy loans, the Group enjoys a fixed rate of service fees. For capital light loans, the Group enjoys a fixed rate of service fees, while in certain cases, the service fee rate the Group entitled to is subject to adjustment based on the actual default rate of the underlying loans. Under the off-balance capital heavy loans, the Group also provides a guarantee service to its financial institution partners whereas in the event of default, the financial institution partners are entitled to receive unpaid interest and principal from the Group. Given that the Group effectively takes on all of the credit risk of the borrowers and are compensated by the service fees charged, the guarantee is deemed as a service and the guarantee exposure is recognized as a stand-ready obligation in accordance with ASC Topic 460, Guarantees (see accounting policy for Guarantee Liabilities). Under the capital light model, the Group either provides no guarantee or partial guarantee service. Under the partial guarantee scenario, the Group agrees with each financial institution partner a fixed upper limit of guarantee amount the Group is liable of. If the accumulated defaulted loan amount exceeds the agreed upper limit, the excess portion is borne by the financial institution partners. The Group recognize revenue to depict the transfer of promised services to customers in an amount that reflects the consideration to which the Group expects to be entitled in exchange for those services. To achieve that core principle, the Group applies the following steps: ● Step 1: Identify the contract (s) with a customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation The Group determines that both the financial institution partners and the borrowers are its customers because they both receive services provided by the Group pursuant to the contractual terms among the Group, the borrowers and the financial institution partners. For each loan facilitated on the platform, the Group considers the loan facilitation service, post facilitation service and guarantee service (not applicable for arrangements where the Group does not provide guarantee service) as three separate services. Of which, the guarantee service is accounted for in accordance with ASC Topic 460, Guarantees, at fair value. Revenue from the guarantee services is recognized once the Group is released from the underlying risk. Starting from 2020, the Group recognized the stand-ready guarantee liability at the inception of each loan, and it was amortized to “revenue from releasing of guarantee liabilities” over the term of the guarantee (see accounting policy for Guarantee Liabilities).While the post- origination service is within the scope of ASC Topic 860, the ASC Topic 606 revenue recognition model is applied due to the lack of definitive guidance in ASC Topic 860. The loan facilitation service and post- origination service are two separate performance obligations under ASC 606, as these two deliverables are distinct in that customers can benefit from each service on its own and the Group’s promises to deliver the services are separately identifiable from each other in the contract. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue recognition - Loan facilitation and servicing fees The Group determines the total transaction price to be the service fees chargeable from the borrowers or the financial institution partners. The Group’s transaction price includes variable considerations in the form of prepayment risk of the borrowers and service fee allocation rate under capital light model under certain agreements. The Group estimates the prepayment risk of borrowers using the expected value approach on the basis of historical information and current trends of the collection percentage of the borrowers. The service fee allocated to the Group under capital light model would be fluctuated along with the actual default rate of the loans facilitated. The Group uses the service fee allocation rate applicable to the estimated default rate of the underlying loans. The transaction price is allocated amongst the guarantee service, if any, and the other two performance obligations. The Group first allocates the transaction price to the guarantee liabilities, if any, in accordance with ASC Topic 460, Guarantees which requires the guarantee to be measured initially at fair value based on the stand-ready obligation. Then the remaining considerations are allocated to the loan facilitation services and post facilitation services using their relative standalone selling prices consistent with the guidance in ASC 606. The Group does not have observable standalone selling price information for the loan facilitation services or post facilitation services because it does not provide loan facilitation services or post facilitation services on a standalone basis. There is no direct observable standalone selling price for similar services in the market reasonably available to the Group. As a result, the estimation of standalone selling price involves significant judgment. The Group uses expected cost plus margin approach to estimate the standalone selling prices of loan facilitation services and post facilitation services as the basis of revenue allocation. In estimating its standalone selling price for the loan facilitation services and post facilitation services, the Group considers the cost incurred to deliver such services, profit margin for similar arrangements, customer demand, effect of competitors on the Group’s services, and other market factors. For each type of service, the Group recognizes revenue when (or as) the entity satisfies the service/ performance obligation by transferring the promised service (that is, an asset) to customers. Revenues from loan facilitation services are recognized at the time a loan is originated between the financial institution partners and the borrowers and the principal loan balance is transferred to the borrowers, at which time the facilitation service is considered completed. Revenues from post facilitation services are recognized on a straight-line basis over the term of the underlying loans as the post- origination services are a series of distinct services that are substantially the same and that have the same pattern of transfer to the financial institution partners. Revenue from releasing of guarantee liabilities With the adoption of ASC 326 in 2020, the stand-ready guarantee liabilities are released into guarantee revenue over the term of the guarantee (see accounting policy for Guarantee Liabilities). For the six months ended June 30, 2021 and 2022, revenue from guarantee liabilities were RMB 2,647,734 (unaudited) and RMB 3,074,515, respectively. Incentives The Group provides incentives to the borrowers by providing coupons which can only be used as a reduction of repayment and ultimately reduced the service fees received by the Group. Because the borrower does not enter into any enforceable commitment by picking up the coupons, no contract arises from the coupons. Therefore the Group records the incentives as a deduction to revenue upon redemption. Financing income The Group provides loans through the Consolidated Trusts and Fuzhou Microcredit. The interest rate charged to the borrowers are fixed. The Group recognized revenue under “financing income” the fees and interests charged to the borrowers over the lifetime of the loans using the effective interest method. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue recognition - Referral service fees The Group provides the referral services to other platforms, by referring to them the borrowers who have not passed the Group’s credit assessment. Specifically, the Group receives a fixed rate of referral fee from the platforms once the borrowers are accepted by the other funding providers on those platforms. The revenue is recognized once the referral is completed as confirmed by those platforms. The Group provides the referral services to the financial institution partner also through the Group’s Intelligence Credit Engine platform, by matching the borrowers and the financial institution partner. For loans originated through the platform, the Group charges the financial institution partner a fixed rate of service fees. The revenue is recognized upon receipt of confirmation by the financial institution partner of loan facilitation at which time the referral service is deemed completed. For the six months ended June 30, 2021 and 2022, RMB 286,594 (unaudited)and RMB 382,650 were generated from the referral service, respectively. Other services fees Other service fees mainly pertain to the revenue from late fees from borrowers under off-balance capital heavy loans and capital light loans. The following table presents the disaggregation of revenue for the six months ended June 30, 2021 and 2022: Six months ended June 30, 2021 2022 RMB RMB (unaudited) Credit driven services 4,856,038 5,868,397 Loan facilitation and servicing fees-capital heavy 1,265,047 1,141,771 Revenue from loan facilitation services At a point in time 745,134 822,420 Revenue from post-origination services Over time 519,913 319,351 Financing income Over time 897,528 1,608,820 Revenue from releasing of guarantee liabilities Over time 2,647,734 3,074,515 Other services fees At a point in time 45,729 43,291 Platform services 2,744,729 2,634,849 Loan facilitation and servicing fees-capital light 2,392,602 2,128,955 Revenue from loan facilitation services At a point in time 1,988,160 1,298,998 Revenue from post-origination services Over time 404,442 829,957 Referral services fees At a point in time 286,594 382,650 Other services fees At a point in time/ Over time 65,533 123,244 Total net revenue 7,600,767 8,503,246 Total revenue recognized at a point in time is RMB 3,105 million (unaudited) and RMB 2,634 million for the six months ended June, 2021 and 2022. Total revenue recognized over time is RMB 4,496 million (unaudited) and RMB 5,869 for the six months ended June 30, 2021 and 2022. | |
Accounts receivable and Contract Assets, net | Accounts receivable and Contract Assets, net For the loans the Group is entitled to the full service fee regardless of whether the borrowers choose to early repay or not, the Group has the unconditional right to the consideration and an accounts receivable is recorded for the monthly service fees allocated to loan facilitation service that have already been delivered in relation to loans facilitated on the Group’s platform when recognizing revenue from loan facilitation service. For the loans facilitated with borrowers who have the option of early repayment and upon termination they do not have the obligation to pay the remaining monthly service fees or do not have to pay the excessive portion if the total fees are more than 24% of the origination principal on an annualized basis, the Group’s right to consideration for the service fees of facilitation service is conditional on whether or not the borrowers repay in advance. In these instances, the Group records a corresponding contract asset when recognizing revenue from loan facilitation service. Accounts receivable and contract assets are stated at the historical carrying amount net of write-offs and allowance for collectability in accordance with ASC Topic 310, and from January 1, 2020 ASC Topic 326. The Group established an allowance for uncollectible accounts receivable and contract assets based on estimates, which incorporate historical experience and other factors surrounding the credit risk of specific type of customers which is essentially the expected net default rates used in determining the fair value of guarantee liabilities. The Group evaluates and adjusts its allowance for uncollectible accounts receivable and contract assets on a quarterly basis or more often as necessary. Uncollectible accounts receivable and contract assets are written off when the consideration entitled to be received by the Group is due and a settlement is reached for an amount that is less than the outstanding historical balance or when the Group has determined the balance will not be collected. Contract assets and accounts receivable are identified as uncollectible when the underlying loan is determined to be not probable that the balance can be collected. The Group will write off contract assets and accounts receivable and the corresponding provisions if the underlying loan is deemed uncollectible. The Group did not recognize any contract liabilities during the periods presented. The amount of the transaction price allocated to performance obligations that are unsatisfied as of June 30, 2021 and 2022 are RMB 2,260,131 (unaudited) and RMB 1,518,044, respectively, all of which pertain to post- facilitation service. Remaining unsatisfied performance obligations that will be recognized as revenue by the Group within The Group determines that acquisition cost paid for financial institution partner based on the amount of loans facilitated represents costs to obtain a contract qualifying for capitalization since these payments are directly related to sales achieved during a period. Such cost was not material during the periods presented. Revenue recognized for year ended December 31, 2019 from performance obligations satisfied (or partially satisfied) in prior periods pertaining to adjustments to variable consideration due to the change of estimated prepayment rate and service fee allocation rate was immaterial, and for the six months ended June 30, 2021 and 2022 was RMB 39,946 (unaudited) and RMB 219,680, respectively. The Group is subject to value-added tax and other surcharges including education surtax and urban maintenance and construction tax, on the services provided in the PRC. The Group has made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by the governmental authority. Such taxes excluded from revenues are RMB 457,537 (unaudited) and RMB 503,295, respectively, for the six months ended June 30, 2021 and 2022. | |
Allowance for credit losses | Allowance for credit losses On January 1, 2020, the Group adopted ASC 326, Financial Instruments—Credit Losses, which requires recognition of allowances upon origination or acquisition of financial assets at an estimate of expected credit losses over the contractual term of the financial assets (the current expected credit loss or the “CECL” model). The Group’s financial assets subject to the CECL model mainly include: loans receivable, accounts receivable, contract assets and financial assets receivable, and the allowance for these financial assets is driven by estimated default rate of underlying loans. The Group does not assign internal risk ratings to loans facilitated as they are of small balance and homogeneous. The Group estimates the default rate of loans on a pool basis by taking into consideration the historical delinquency rate by vintage, adjusted by specific risks for loans within each vintage, correlated industrial and macro-economic factors, and other pertinent information such as CPI and delinquent loan collection rate in assessing future performance of the loan portfolio. The Group monitors the delinquency status by vintage of origination and write off delinquent loans timely when the loans become uncollectible. The adoption of CECL model does not change the Group’s method used to estimate loan losses. The allowance for loans receivable is calculated based on estimated default rate of loans facilitated through the Consolidated Trusts or Fuzhou Microcredit. The allowance for accounts receivable, contract assets, financial assets receivable and account receivable, contract assets and financial assets receivables from related parties (recorded as “amounts due from related parties”) is assessed in accordance with the estimated default rate of the underlying off-balance loans facilitated. Since the allowance is recorded at loan inception based on the estimated collectability over the entire loan tenure and adjusted in each subsequent reporting period based on update of relevant information, the adoption of the CECL model does not have material impact on the timing and amount of allowance recognized for these financial assets. Other financial receivables subject to the CECL model mainly include security deposit prepaid to third party guarantee companies, funds receivable from third party payment service providers, other receivables from related parties (recorded as “amount due from related parties”), and security deposit paid to insurance companies, which are of short term and shows no historical default record. The Group determines no allowance is needed for these receivables, except for receivables from related parties as financial institution partners, which are based on the estimated default rate of underlying loans as discussed above. The adoption of ASC 326 also requires the Group to record financial guarantee on a gross basis. As such, the Group recognized a separate contingent guarantee liability with an allowance for credit losses following the CECL model at the inception of loans facilitated with guarantee services provided (see accounting policy for Guarantee Liabilities). The allowance is an estimate of future net payout by the Group upon borrowers’ default, which is ultimately based on the same estimated default rate of loans facilitated as discussed above. | |
Cash and cash equivalents and Restricted cash | Cash and cash equivalents Cash and cash equivalents mainly consist of funds in banks, which are highly liquid and are unrestricted as to withdrawal or use. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Restricted cash Restricted cash represents: (i) Deposit to funding banks which is used to secure timely loan repayment. As of December 31, 2021 and June 30, 2022, the amount of restricted cash related to deposit to the funding banks is RMB 1,986,512 and RMB 2,344,124 , respectively. (ii) Cash held by the trusts and ABS plans through segregated bank accounts which can only be used to invest in loans or other securities as stipulated in the trust agreement and ABS plan. Substantially all trusts have a maximum operating period of two years . The cash in the trusts is not available to fund the general liquidity needs of the Group. | |
Security deposit prepaid to third-party guarantee companies | Security deposit prepaid to third-party guarantee companies Security deposit prepaid to third-party guarantee companies mainly represents deposit prepaid to licensed third-party vendors the Group cooperates with to provide guarantee to secure timely loan repayment for financial institution partners. | |
Funds receivable from third party payment service providers | Funds receivable from third party payment service providers The Group opened accounts with third party online payment service providers to collect and transfer the loan funds and interest to financial institution partners or borrowers. The Group also uses such accounts to collect the transaction fee and service fee, and repay and collect the default loan principal and interest. The balance of funds receivable from third party payment service providers mainly includes: (a) Funds provided by Fuzhou Microcredit but not yet transferred to the borrowers by third party payment service providers due to the settlement time lag; (b) Repayment of loan principal and interest amounts received from the borrowers but not yet transferred to the investors by third party payment service providers due to the settlement time lag; and, (c) Accumulated amounts of transaction fee, service fee received, payment and collection of default loan and interest at the balance sheet date. | |
Fair value | Fair value Fair value is considered to be 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 considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Fair value 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 assets 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 assets 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 values of financial instruments, which consist of cash and cash equivalents, restricted cash, security deposits, accounts receivable and contract assets, financial assets receivable, funds receivable from third party payment service providers, loans receivable, short-term loan, payable to investors of the consolidated trusts, and amounts due from/to related parties are recorded at cost which approximates their fair value due to the short-term nature of these instruments. As of June 30, 2022, the Group’s long-term financial instruments that are not reported at fair value on balance sheet include loans receivable, payable to investors of the consolidated trusts, accounts receivable and contract assets, financial assets receivable and accounts receivable, contract assets and financial assets receivable from related parties (recorded as “amounts due from related parties”). Fair values of these financial instruments are estimated using a discounted cash flow model based on contractual cash flows. The fair values of loans receivable, accounts receivable and contract assets, financial assets receivable are classified as Level 3 fair value measurement due to the significant unobservable inputs concerning the estimation of default rate. The fair value of payable to investors of the consolidated trusts is classified as Level 2 fair value measurement. As of June 30, 2022, the differences between fair values and carrying amount for loans receivable and payable to investors are due to the discount factor or interests in future periods, and the fair value approximates the carrying amount. For accounts receivable and contract assets, financial assets receivable, the differences are due to the discount factor solely and the fair value approximates the carrying amount. The Group does not have any assets or liabilities that are recorded at fair value subsequent to initial recognition on a recurring basis. Fair value measurement on a nonrecurring basis for the six months ended June 30, 2022 included that used in impairment of an equity-method investment which was classified as a Level 3 fair value measurement. | Fair Value Fair value is considered to be 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 considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1 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 assets 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 assets 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 values of financial instruments, which consist of cash and cash equivalents, restricted cash, short-term investment, security deposits, accounts receivable and contract assets, financial assets receivable, funds receivable from third party payment service providers, loans receivable, short term loan, payable to investors of the consolidated trusts, and amounts due from/to related parties are recorded at cost which approximates their fair value due to the short-term nature of these instruments. As of September 30, 2022, the Group’s long-term financial instruments that are not reported at fair value on balance sheet include loans receivable, payable to investors of the consolidated trusts, accounts receivable and contract assets, financial assets receivable and accounts receivable, contract assets and financial assets receivable from related parties (recorded as “amounts due from related parties”). Fair values of these financial instruments are estimated using a discounted cash flow model based on contractual cash flows. The fair values of loans receivable, accounts receivable and contract assets, financial assets receivable are classified as Level 3 fair value measurement due to the significant unobservable inputs concerning the estimation of default rate. The fair value of payable to investors of the consolidated trusts is classified as Level 2 fair value measurement. As of September 30, 2022, the differences between fair values and carrying amount for loans receivable and payable to investors are due to the discount factor or interests in future periods, and the fair value approximates the carrying amount. For accounts receivable and contract assets, financial assets receivable, the differences are due to the discount factor solely and the fair value approximates the carrying amount. The Group has foreign exchange options that are recorded at fair value subsequent to initial recognition on a recurring basis. The fair value of such options amount to RMB12,715, which is estimated based on interbank market quoted price and is classified as Level 2 in the fair value hierarchy. Fair value measurement on a nonrecurring basis for the nine months ended September 30, 2022 included that used in impairment of an equity-method investment which was classified as a Level 3 fair value measurement. |
Loans receivable | Loans receivable Loans receivable represents loans facilitated through the consolidated trusts and Fuzhou Microcredit. Loans receivable are recorded as receivable, reduced by a valuation allowance estimated as of the balance sheet date. The allowance for loan losses is determined at a level believed to be reasonable to absorb probable losses inherent in the portfolio as of each balance sheet date. The allowance is provided based on an assessment performed on a portfolio basis. All loans are assessed collectively depending on factors such as delinquency rate, size, and other risk characteristics of the portfolio.About adoption of ASC 326, see accounting policy of “Allowance for credit losses”. The Group charges off loans receivable as a reduction to the allowance for loans receivable when the loan principal and interest are deemed to be uncollectible. In general, loans receivable is identified as uncollectible when it is determined to be not probable that the balance can be collected. | |
Property and equipment, net | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Property and equipment, net Property and equipment are recorded at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives: Leasehold improvements Over the shorter of the lease term or expected useful lives Electronic equipment 5 years Furniture and office equipment 5 years Gains and losses from the disposal of furniture and equipment are recognized in the consolidated statements of operations. Depreciation expense on property and equipment for the six months ended June 30, 2021 and 2022 were RMB 5,944 (unaudited) and RMB 7,580, respectively. Land use rights, net Land use rights represent lease prepayments to the local government authorities and are recorded at cost less accumulated amortization. Amortization is provided on a straight-line basis over the term of the agreement, which is 50 years. Under ASC 842, land use rights were identified as operating lease right-of-use assets, which is separately disclosed as “Land use rights, net” in the Group’s consolidated balance sheets. | |
Guarantee liabilities | Guarantee liabilities For the loans facilitated through the loan facilitation business, the Group provides a guarantee service to its financial institution partners whereas in the event of default, the financial institution partners are entitled to receive unpaid interest and principal from the Group. In general, any unpaid interest and principal are paid when the borrower does not repay as scheduled. From February 2018, to follow the recent regulation change, particularly the Circular 141 which came into effect in December 2017, the Group began to involve third-party licensed vendors including financing guarantee companies and insurance companies to provide guarantee for new loans facilitated for certain financial institution partners. Under the cooperation with financing guarantee companies, these guarantee companies initially reimburses the loan principal and interest to the financial institution partners upon borrower’s default. Although the Group does not have direct contractual obligation to the financial institution partners for defaulted principal and interest, the Group provides back to back guarantee to the licensed guarantee companies. As agreed in the back to back guarantee contract, the Group would pay the licensed guarantee companies for actual losses incurred based on defaulted principal and interest. Under the cooperation with insurance companies, the Group is obligated to provide funding in the form of security deposit with the insurance companies which is used to compensate the financial institution partners for borrowers’ default. Given that the Group effectively takes on all of the credit risk of the borrowers, the Group recognizes a stand ready obligation for its guarantee exposure in accordance with ASC Topic 460. Under capital light model, in the condition of no guarantee service provided, the Group does not take any credit risk and not record any guarantee liabilities associated with those loans. Besides, in the condition of partial guarantee, the amount of guarantee exposure is immaterial for the six months ended June 30, 2021 (unaudited) and 2022. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Guarantee liabilities - continued At the inception of each loan, the Group recognizes the guarantee liability at fair value in accordance with ASC 460-10, which incorporates the expectation of potential future payments under the guarantee and takes into both non-contingent and contingent aspects of the guarantee. Subsequent to the loan’s inception, the guarantee liability is composed of two components: (i) ASC Topic 460 component; and (ii) ASC Topic 450 component. The liability recorded based on ASC Topic 460 is determined on a loan by loan basis and it is reduced when the Group is released from the underlying risk, i.e. as the loan is repaid by the borrower or when the investor is compensated in the event of a default. This component is a stand ready obligation which is not subject to the probable threshold used to record a contingent obligation. When the Group is released from the stand ready liability upon expiration of the underlying loan, the Group records a corresponding amount as “Revenue from releasing of guarantee liabilities” in the consolidated statement of operations. The other component is a contingent liability determined based on probable loss considering the actual historical performance and current conditions, representing the obligation to make future payouts under the guarantee liability in excess of the stand-ready liability, measured using the guidance in ASC Topic 450. The ASC Topic 450 contingent component is determined on a collective basis and loans with similar risk characteristics are pooled into cohorts for purposes of measuring incurred losses. The ASC 450 contingent component is recognized as part of expense on guarantee liabilities in the consolidated statement of operations. At all times the recognized liability (including the stand ready liability and contingent liability) is at least equal to the probable estimated losses of the guarantee portfolio. On January 1, 2020, the Group adopted ASC 326, Financial Instruments—Credit Losses, which requires gross accounting for guarantee liability. As a result, at inception of the guarantee, the Group will recognize both a stand-ready guarantee liability under ASC 460 with an associated financial assets receivable, and a contingent guarantee liability with an allowance for credit losses under Current expected credit loss (“CECL”) model. Subsequent to the initial recognition, the ASC 460 stand-ready guarantee is released into guarantee revenue on a straight-line basis over the term of the guarantee, while the contingent guarantee is reduced by the payouts made by the Group to compensate the investors upon borrowers’ default. Allowance for credit losses under CECL model was included in “Provision for contingent liabilities” and revalued at each period end to reflect updated estimation for future net pay-out. | |
Financial assets receivable | Financial assets receivable Financial assets receivable is recognized at loan inception which is equal to the stand-ready liability recorded at fair value in accordance with ASC 460-10-30-2(b) and considers what premium would be required by the Group to issue the same guarantee service in a standalone arm’s-length transaction. The fair value recognized at loan inception is estimated using a discounted cash flow model based on the expected net payouts by incorporating a markup margin. The Group estimates its expected net payouts according to the product mix, default rates, loan terms and discount rate. The financial assets receivable is accounted for as a financial asset, and reduced upon the receipt of the service fee payment from the borrowers. At each reporting date, the Group estimates the future cash flows and assesses whether there is any indicator of impairment. If the carrying amounts of the financial assets receivable exceed the expected cash to be received, an impairment loss is recorded for the financial assets receivable not recoverable and is recorded in the consolidated statements of operations. About adoption of ASC 326, see accounting policy of “Allowance for credit losses”. Impairment losses of RMB 102,769 (unaudited) and RMB 163,875 were recorded in the consolidated statements of operations during the six months ended June 30, 2021 and 2022. | |
Facilitation, origination and servicing expenses | Facilitation, origination and servicing expenses Facilitation, origination and servicing expense represents cost of services which consists primarily of variable expenses and vendor costs, and costs related to risk management, credit assessment, borrower and system support, payment processing services and third-party collection agencies with facilitating and servicing loans. Facilitation and origination expense includes expense related to the Group’s borrower referral program under which the Group provides cash incentives to existing borrowers who have successfully referred a new borrower/borrowers to the Group. Such cash reward is offered when the new borrower makes a drawdown. As the cash reward is directly associated with the new borrower acquisition, the Group accounted for it as origination expense to facilitate the loans. The Group recorded RMB 9.5 million (unaudited) and RMB 12.0 million of cash reward for the six months ended June 30, 2021 and 2022, respectively. | |
Sales and marketing expenses | Sales and marketing expenses Sales and marketing expenses primarily consist of variable marketing and promotional expenses and general brand and awareness building, including fees paid to channel partners for directing user traffic to the Group. Salaries and benefits expenses related to the Group’s sales and marketing personnel and other expenses related to the Group’s sales and marketing team are also included in the sales and marketing expenses. For the six months ended June 30, 2021 and 2022, the advertising and marketing related expenses were RMB 706.679 | |
Funding costs | Funding costs Funding cost consists of interest expense the Group pays to financial institution partners of the Consolidated Trusts and the asset backed securities, trust issuance and costs incurred by the trusts. | |
Government grant | Government grant Government grants are primarily referred to the amounts received from various levels of local governments from time to time which are granted for general corporate purposes and to support its ongoing operations in the region. The grants are determined at the discretion of the relevant government authority and there are no restrictions on their use. The government subsidies are recorded as other income in the period the cash is received. The government grants received by the Group is RMB 5,067 (unaudited) and RMB 194,439 for the six months ended June 30, 2021 and 2022, respectively. | |
Income taxes | Income taxes Current income taxes are provided on the basis of net profit (loss) for financial reporting purposes, adjusted for income and expenses which are not assessable or deductible for income tax purposes, in accordance with the laws of the relevant tax jurisdictions. Deferred income taxes are provided using assets and liabilities method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the 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 management consider all positive and negative evidence, including future reversals of projected future taxable income and results of recent operation. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Income taxes - continued In order 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% likely of being realized upon settlement. The Group recognizes interest and penalties, if any, under accrued expenses and other current liabilities on its consolidated balance sheet and under other expenses in its consolidated statement of operations. The Group did not have any significant unrecognized uncertain tax positions as of and for the six months ended June 30, 2021 (unaudited) and 2022. | |
Value added taxes ("VAT") | Value added taxes (“VAT”) The consolidated trusts are subject to VAT at the rate of 3%, while the other entities under the Group are subject to VAT at the rate of 6% as general taxpayers, and related surcharges on revenue generated from providing services. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in the line item of other tax payable on the consolidated balance sheets. | |
Certain risks and concentrations | Certain risks and concentrations As of December 31, 2021 and June 30, 2022, substantially all of the Group’s cash and cash equivalents as well as restricted cash were held in major financial institutions located in the PRC, which management considers to be of high credit quality. For the six months ended June 30, 2021, financial institution partner A and B funded loans which generated greater than 10% (unaudited) of the total revenues. For the six months ended June 30, 2022, financial institution partner A funded loans which generated greater than 10% of the total revenue. | |
Share-based compensation | Share-based compensation Share-based payment transactions with employees, such as stock options and restricted share units, are measured based on the grant date fair value of the awards, with the resulting expense generally recognized on a straight-line basis in the consolidated statements of operations over the period during which the employee is required to perform service in exchange for the award. The Group has elected to account for forfeitures as they occur. | |
Foreign currency translation | Foreign currency translation The reporting currency of the Group is the Renminbi (“RMB”).The Group’s operations are principally conducted through the companies located in the PRC where the RMB is the functional currency. The functional currency of the other major entities incorporated outside of PRC is the United States dollar (“USD”). Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in currencies other than functional currency are translated into functional currency at the exchange rates prevailing at the balance sheet date. Transactions in currencies other than functional currency during the year are converted into the functional currency at the applicable rates of exchange prevailing on the transaction date. Transaction gains and losses are included in earnings as foreign exchange gain (loss). 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Foreign currency translation - The consolidated financial statements of the Group are translated from the functional currency into reporting currency. Assets and liabilities denominated in foreign currencies are translated using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated at the appropriate historical rates. Revenues, expenses, gains and losses are translated using the periodic average exchange rates. The resulting foreign currency translation adjustment are recorded in other comprehensive income (loss). | |
Convenience translation | Convenience translation The Group’s business is primarily conducted in China and all of the revenues are denominated in RMB. The financial statements of the Group are stated in RMB. Translations of balances in the consolidated balance sheets, and the related consolidated statements of operations, changes in equity and cash flows from RMB into US dollars as of and for the six months ended June 30, 2022 are solely for the convenience of the readers and were calculated at the rate of USD1.00=RMB 6.6981, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on June 30, 2022. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into USD at that rate or at any other rate. | Convenience translation The Group’s business is primarily conducted in China and all of the revenues are denominated in RMB. The financial statements of the Group are stated in RMB. Translations of balances in the condensed consolidated balance sheet, and the related condensed consolidated statements of operations, shareholders’ equity and cash flows from RMB into US dollars as of and for the period ended September 30, 2022 are solely for the convenience of the readers and were calculated at the rate of USD1.00 = RMB7.1135, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on September 30, 2022. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into USD at that rate or at any other rate. |
Employee defined contribution plan | Employee defined contribution plan Full time employees of the Group in the PRC participate in a government mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require that the Group makes contributions to the government for these benefits based on a certain percentage of the employee’s salaries. The Group has no legal obligation for the benefits beyond the contributions, and the Group cannot utilize the contributed amount for future obligations if employee left the Group. The total amount that was expensed as incurred was RMB 62,914 (unaudited) and RMB 85,868 for the six months ended June 30, 2021 and 2022, respectively. | |
Income per share | Income per share Basic income per ordinary share is computed by dividing net income attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the period assuming the ordinary shares were issued and outstanding from the earliest period presented. Diluted income per ordinary share reflects the potential dilution that could occur if securities were exercised or converted into ordinary shares. Ordinary share equivalents are excluded from the computation in income periods should their effects be anti-dilutive. The Group had restricted share units and share options, which could potentially dilute basic earnings per share in the future. Dividends Dividends of the Company are recognized when declared. | |
Segment reporting | Segment reporting The Group uses management approach to determine operation segment. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker (“CODM”) for making decisions, allocation of resource and assessing performance. The Group’s CODM has been identified as the Chief Executive Officer who reviews the consolidated results of operations when making decisions about allocating resources and assessing performance of the Group. The Group operates and manages its business as a single operating segment. Substantially all of the Group’s long-lived assets are located in the PRC and substantially all of the Group’s revenues are derived from within the PRC. Therefore, no geographical segments are presented. | |
Operating leases | Operating leases The Group accounts for operating leases in accordance with ASC 842, Leases (“ASC 842”) after the adoption on January 1, 2019. The Group determines if a contract contains a lease based on whether it has the right to obtain substantially all of the economic benefits from the use of an identified asset and whether it has the right to direct the use of an identified asset in exchange for consideration, which relates to an asset the Group does not own. As part of the lease agreements, the Group may include options to extend or terminate the lease when it is reasonably certain that the Group will exercise those options. Right of use (“ROU”) assets represent the Group’s right to use an underlying asset for the lease term and lease liabilities represent the Group’s obligation to make lease payments arising from the lease. ROU assets are initially measured based on the lease liability, adjusted for any initial direct costs, any lease payments made prior to lease commencement and for any lease incentives, and are included in other assets (long term) on the Group’s consolidated balance sheets. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date, and are included in accrued expenses and other current liabilities (short term) and other long-term liabilities on the Group’s consolidated balance sheets. The discount rate used to determine the present value of the future lease payments is the Group’s incremental borrowing rate, because the interest rate implicit in most of the Group’s leases is not readily determinable. The Group’s incremental borrowing rate represents the rate would be incurred to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. Operating lease expense is recorded on a straight-line basis over the lease term. The Company does not possess any leases that have variable lease payments or residual value guarantees. | |
Recent accounting pronouncements | Recent accounting pronouncements Recently Adopted Accounting Guidance In December 2019, the FASB issued ASU 2019-12, a new accounting standard update to simplify the accounting for income taxes. The new guidance removes certain exceptions for recognizing deferred taxes for investments, performing intra period allocation and calculating income taxes in interim periods. It also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The Group has adopted this new standard effective on January 1, 2021. The adoption of this new standard did not have a material impact on the Group’s Historical Financial Information. Recent Accounting Guidance Not Yet Adopted No new accounting pronouncements issued but not yet adopted are expected to have a material impact on the Company’s consolidated financial statements. |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||
Schedule of significant subsidiaries and its consolidated VIEs | Date of Place of Incorporation Incorporation Subsidiaries HK Qirui International Technology Company Limited (“HK Qirui”) June 14, 2018 Hong Kong Shanghai Qiyue Information & Technology Co., Ltd. (“Qiyue”) August 7, 2018 PRC Shanghai Qidi Information Technology Co., Ltd. (“Qidi”) June 27, 2019 PRC Beihai Qicheng Information & Technology Co., Ltd. (“Qicheng”) August 6, 2019 PRC VIEs and VIEs Subsidiaries Shanghai Qiyu Information & Technology Co., Ltd. (“Qiyu”) July 25, 2016 PRC Fuzhou 360 Online Microcredit Co., Ltd. (“Fuzhou Microcredit”) March 30, 2017 PRC Fuzhou 360 Financing Guarantee Co., Ltd. (“Fuzhou Guarantee”) June 29, 2018 PRC Shanghai Qiyaoxin Technology Co., Ltd. (formerly known as “Shanghai 360 Financing Guarantee Co., Ltd.”, “Shanghai Financing Guarantee”) May 20, 2019 PRC | |
Schedule of financial information of VIEs | December 31, June 30, 2021 2022 RMB RMB ASSETS Cash and cash equivalents 4,605,851 6,556,202 Restricted cash 1,986,512 2,344,124 Funds receivable from third party payment service providers 153,151 312,447 Accounts receivable and contract assets, net 2,133,477 1,653,349 Financial assets receivable, net 3,806,243 3,618,560 Security deposit prepaid to third-party guarantee companies 874,886 698,478 Amounts due from related parties 608,924 384,804 Loans receivable, net 1,197,532 1,305,091 Prepaid expenses and other assets 235,780 253,539 Property and equipment, net 15,074 12,831 Land use rights, net 1,018,908 1,008,548 Intangible assets 3,972 4,433 Deferred tax assets 779,291 967,237 Accounts receivable and contract assets, net-non current 217,298 290,528 Financial assets receivable, net-non current 597,965 683,078 Amounts due from related parties, non-current 121,855 49,627 Loans receivable, net-non current 1,029,545 2,634,648 Other non-current assets 27,729 48,602 Total Assets 19,413,993 22,826,126 LIABILITIES Short term loans 150,000 150,000 Guarantee liabilities-stand ready 4,818,144 4,538,963 Guarantee liabilities-contingent 3,285,081 3,320,414 Accrued expenses and other current liabilities 1,820,609 1,617,329 Income tax payable 449,553 581,136 Other tax payable 218,017 108,509 Amounts due to related parties 94,057 82,063 Deferred tax liabilities 65,542 27,328 Other long-term liabilities 10,271 23,958 Total liabilities 10,911,274 10,449,700 Six months ended June 30, 2021 2022 RMB RMB (unaudited) Net revenue 6,248,574 6,713,481 Net income 2,930,834 1,566,142 Six months ended June 30, 2021 2022 RMB RMB (unaudited) Net cash provided by operating activities 1,861,811 2,453,285 Net cash (used in) investing activities (351,780) (2,148,700) Net cash provided by financing activities 673,400 — | December 31, September 30, 2021 2022 RMB RMB ASSETS Cash and cash equivalents 4,605,851 6,753,079 Restricted cash 1,986,512 2,383,178 Short term investments — 30,000 Security deposit prepaid to third-party guarantee companies 874,886 549,548 Funds receivable from third party payment service providers 153,151 983,851 Accounts receivable and contract assets, net 2,133,477 1,589,517 Financial assets receivable, net 3,806,243 3,321,117 Amounts due from related parties 608,924 317,557 Loans receivable, net 1,197,532 1,998,988 Prepaid expenses and other assets 235,780 337,254 Accounts receivable and contract assets, net-non current 217,298 297,756 Financial assets receivable, net-non current 597,965 755,977 Amounts due from related parties, non-current 121,855 70,322 Loans receivable, net-non current 1,029,545 2,575,089 Property and equipment, net 15,074 17,887 Land use rights, net 1,018,908 1,003,366 Intangible assets 3,972 4,131 Deferred tax assets 779,291 1,086,165 Other non-current assets 27,729 42,719 Total Assets 19,413,993 24,117,501 LIABILITIES Accrued expenses and other current liabilities 1,820,609 1,699,591 Amounts due to related parties 94,057 138,542 Short term loans 150,000 150,000 Guarantee liabilities – stand ready 4,818,144 4,385,117 Guarantee liabilities – contingent 3,285,081 3,404,333 Income tax payable 449,553 644,363 Other tax payable 218,017 146,792 Deferred tax liabilities 65,542 23,810 Other long-term liabilities 10,271 22,929 Total liabilities 10,911,274 10,615,477 Nine months ended September 30, 2021 2022 RMB RMB Net revenue 10,070,969 10,012,621 Net income 4,551,396 2,291,880 Nine months ended September 30, 2021 2022 RMB RMB Net cash provided by operating activities 3,274,881 3,191,592 Net cash (used in) investing activities (1,008,797) (2,964,541) Net cash provided by financing activities 673,400 (2,987) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
Schedule of disaggregation of revenue | Six months ended June 30, 2021 2022 RMB RMB (unaudited) Credit driven services 4,856,038 5,868,397 Loan facilitation and servicing fees-capital heavy 1,265,047 1,141,771 Revenue from loan facilitation services At a point in time 745,134 822,420 Revenue from post-origination services Over time 519,913 319,351 Financing income Over time 897,528 1,608,820 Revenue from releasing of guarantee liabilities Over time 2,647,734 3,074,515 Other services fees At a point in time 45,729 43,291 Platform services 2,744,729 2,634,849 Loan facilitation and servicing fees-capital light 2,392,602 2,128,955 Revenue from loan facilitation services At a point in time 1,988,160 1,298,998 Revenue from post-origination services Over time 404,442 829,957 Referral services fees At a point in time 286,594 382,650 Other services fees At a point in time/ Over time 65,533 123,244 Total net revenue 7,600,767 8,503,246 | Nine months ended September 30, 2021 2022 RMB RMB Credit driven services 7,476,006 8,809,503 Loan facilitation and servicing fees-capital heavy 1,846,102 1,724,628 Revenue from loan facilitation services At a point in time 1,105,164 1,235,784 Revenue from post-facilitation services Over time 740,938 488,844 Financing income Over time 1,468,075 2,485,871 Revenue from releasing of guarantee liabilities Over time 4,088,453 4,522,107 Other services fees At a point in time 73,376 76,897 Platform services 4,737,574 3,837,872 Loan facilitation and servicing fees-capital light 4,192,673 3,169,165 Revenue from loan facilitation services At a point in time 3,432,784 2,003,965 Revenue from post-facilitation services Over time 759,889 1,165,200 Referral services fees At a point in time 442,889 468,031 Other services fees At a point in time/ Over time 102,012 200,676 Total net revenue 12,213,580 12,647,375 |
Schedule of estimated useful lives for property and equipment | Leasehold improvements Over the shorter of the lease term or expected useful lives Electronic equipment 5 years Furniture and office equipment 5 years | |
Consolidated Trusts | ||
Schedule of financial statements | December 31, 2021 June 30, 2022 RMB RMB ASSETS Restricted cash 657,075 1,420,864 Loans receivable, net 8,646,950 9,545,367 Prepaid expenses and other assets 104,515 104,515 Loans receivable, net-noncurrent 1,829,804 1,023,231 Total Assets 11,238,344 12,093,977 December 31, 2021 June 30, 2022 RMB RMB LIABILITIES Payable to investors of the consolidated trusts-current 2,304,518 5,224,973 Accrued expenses and other current liabilities 5,928 11,285 Other tax payable 34,448 37,504 Payable to investors of the consolidated trusts-noncurrent 4,010,597 3,613,690 Total liabilities 6,355,491 8,887,452 Six months ended June 30, 2021 2022 RMB RMB (unaudited) Net revenue 663,907 1,108,643 Net income 263,141 418,827 Six months ended June 30, 2021 2022 RMB RMB (unaudited) Net cash provided by operating activities 486,996 916,753 Net cash (used in) investing activities (1,921,400) (548,254) Net cash provided by financing activities 572,579 2,490,664 | December 31, September 30, 2021 2022 RMB RMB ASSETS Restricted cash 657,075 626,452 Loans receivable, net 8,646,950 12,003,519 Prepaid expenses and other assets 104,515 111,039 Loans receivable, net-noncurrent 1,829,804 714,412 Total Assets 11,238,344 13,455,422 December 31, September 30, 2021 2022 RMB RMB LIABILITIES Payable to investors of the consolidated trusts-current 2,304,518 6,173,089 Accrued expenses and other current liabilities 5,928 17,081 Other tax payable 34,448 36,485 Payable to investors of the consolidated trusts-noncurrent 4,010,597 3,802,348 Total liabilities 6,355,491 10,029,003 Nine months ended September 30, 2021 2022 RMB RMB Net revenue 1,127,851 1,667,660 Net income 372,408 806,808 Nine months ended September 30, 2021 2022 RMB RMB Net cash provided by operating activities 847,960 1,332,513 Net cash (used in) investing activities (4,690,085) (2,707,114) Net cash provided by financing activities 1,027,804 3,607,440 |
ACCOUNTS RECEIVABLE AND CONTR_2
ACCOUNTS RECEIVABLE AND CONTRACT ASSETS, NET (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
Schedule of accounts receivables | Allowance for Accounts uncollectible Accounts As of December 31, 2021 receivable Accounts receivable receivable, net Accounts receivable from loan facilitation service 502 (375) 127 Accounts receivable from post facilitation service 5,825 (1,683) 4,142 Accounts receivable from referral services 10,797 — 10,797 Total 17,124 (2,058) 15,066 Allowance for Accounts uncollectible Accounts As of June 30, 2022 receivable Accounts receivable receivable, net Accounts receivable from referral services 25,080 — 25,080 Total 25,080 — 25,080 | Allowance for Accounts uncollectible Accounts As of December 31, 2021 receivable Accounts receivable receivable, net Accounts receivable from loan facilitation service 502 (375) 127 Accounts receivable from post facilitation service 5,825 (1,683) 4,142 Accounts receivable from referral services 10,797 — 10,797 Total 17,124 (2,058) 15,066 Allowance for Accounts uncollectible Accounts As of September 30, 2022 receivable Accounts receivable receivable, net Accounts receivable from referral services 10,903 — 10,903 Total 10,903 — 10,903 |
Schedule of movement of allowance for uncollectible accounts receivables | Opening Ending balance as of Current Write off in balance as of January 1, period net the current June 30, (unaudited) 2021 provision period 2021 Accounts receivable from loan facilitation service 17,462 (10,043) (7,382) 37 Accounts receivable from post facilitation service 3,958 1,758 (4,574) 1,142 Accounts receivable from referral services 1,836 — (1,836) — Total 23,256 (8,285) (13,792) 1,179 Opening Ending balance as of Current Write off in balance as of January 1, period net the current June 30, 2022 provision period 2022 Accounts receivable from loan facilitation service 375 — (375) — Accounts receivable from post facilitation service 1,683 — (1,683) — Total 2,058 — (2,058) — | Opening Ending balance as of Current Write off in balance as of January 1, period net the current September 30, 2021 provision period 2021 Accounts receivable from loan facilitation service 17,462 (10,904) (6,091) 467 Accounts receivable from post facilitation service 3,958 1,845 (4,082) 1,720 Accounts receivable from referral services 1,836 — (1,836) — Total 23,256 (9,059) (12,009) 2,187 Opening Ending balance as of Current Write off in balance as of January 1, period net the current September 30, 2022 provision period 2022 Accounts receivable from loan facilitation service 375 — (375) — Accounts receivable from post facilitation service 1,683 — (1,683) — Total 2,058 — (2,058) — |
Schedule of contract assets | Allowance for Uncollectible Contract assets, As of December 31, 2021 Contract assets Contract assets net Contract assets from loan facilitation service 3,097,872 (287,397) 2,810,475 Contract assets from post facilitation service 282,767 (26,457) 256,310 Contract assets from referral services 238,877 — 238,877 Total 3,619,516 (313,854) 3,305,662 Allowance for Uncollectible Contract assets, As of June 30, 2022 Contract assets Contract assets net Contract assets from loan facilitation service 3,276,001 (299,395) 2,976,606 Contract assets from post facilitation service 463,530 (25,318) 438,212 Contract assets from referral services 351,395 — 351,395 Total 4,090,926 (324,713) 3,766,213 | Allowance for Uncollectible Contract As of December 31, 2021 Contract assets Contract assets assets, net Contract assets from loan facilitation service 3,097,872 (287,397) 2,810,475 Contract assets from post facilitation service 282,767 (26,457) 256,310 Contract assets from referral services 238,877 — 238,877 Total 3,619,516 (313,854) 3,305,662 Allowance for Uncollectible Contract As of September 30, 2022 Contract assets Contract assets assets, net Contract assets from loan facilitation service 3,130,934 (297,032) 2,833,902 Contract assets from post facilitation service 364,824 (22,901) 341,923 Contract assets from referral services 220,561 — 220,561 Total 3,716,319 (319,933) 3,396,386 |
Schedule of movement of allowance uncollectible contract assets | Opening Ending balance as of Current Write off in balance as of January 1, period net the current June 30, (unaudited) 2021 provision period 2021 Contract assets from loan facilitation service 222,526 64,947 (40,576) 246,897 Contract assets from post facilitation service 10,045 21,913 (15,392) 16,566 Total 232,571 86,860 (55,968) 263,463 Opening Ending balance as of Current Write off in balance as of January 1, period net the current June 30, 2022 provision period 2022 Contract assets from loan facilitation service 287,397 77,952 (65,954) 299,395 Contract assets from post facilitation service 26,457 25,673 (26,812) 25,318 Total 313,854 103,625 (92,766) 324,713 | Opening Ending balance as of Current Write off in balance as of January 1, period net the current September 30, 2021 provision period 2021 Contract assets from loan facilitation service 222,526 132,648 (73,934) 281,240 Contract assets from post facilitation service 10,045 34,908 (27,959) 16,994 Total 232,571 167,556 (101,893) 298,234 Opening Ending balance as of Current Write off in balance as of January 1, period net the current September 30, 2022 provision period 2022 Contract assets from loan facilitation service 287,397 118,281 (108,646) 297,032 Contract assets from post facilitation service 26,457 41,335 (44,891) 22,901 Total 313,854 159,616 (153,537) 319,933 |
Schedule of contract assets by year of origination | 2021 2020 2019 Total As of December 31, 2021 Loan facilitation service 2,708,137 390,236 — 3,098,373 Post origination service 249,726 38,867 — 288,593 Referral service 249,674 — — 249,674 Total 3,207,537 429,103 — 3,636,640 2022 2021 2020 Total As of June 30, 2022 Loan facilitation service 2,447,427 742,111 86,463 3,276,001 Post origination service 433,153 15,378 14,999 463,530 Referral service 376,475 — — 376,475 Total 3,257,055 757,489 101,462 4,116,006 | 2021 2020 Total As of December 31, 2021 Loan facilitation service 2,708,137 390,236 3,098,373 Post facilitation service 249,726 38,867 288,593 Referral Service 249,674 — 249,674 Total 3,207,537 429,103 3,636,640 2022 2021 2020 Total As of September 30, 2022 Loan facilitation service 2,744,208 369,128 17,598 3,130,934 Post facilitation service 340,980 16,338 7,506 364,824 Referral Service 231,464 — — 231,464 Total 3,316,652 385,466 25,104 3,727,222 |
Due From Related Parties | ||
Summary of accounts receivable and contract assets | Accounts Allowance for Accounts receivable uncollectible receivable and contract accounts receivable and contract As of December 31, 2021 assets and contract assets assets, net Contract assets from loan facilitation service 953,846 (120,208) 833,638 Contract assets from post facilitation service 5,178 (1,809) 3,369 Total 959,024 (122,017) 837,007 Accounts Allowance for Accounts receivable uncollectible receivable and contract accounts receivable and contract As of June 30, 2022 assets and contract assets assets, net Contract assets from loan facilitation service 592,384 (118,719) 473,665 Contract assets from post facilitation service 15,762 (6,457) 9,305 Contract assets from referral services 54,116 — 54,116 Total 662,262 (125,176) 537,086 | Accounts Allowance for Accounts receivable uncollectible receivable and contract accounts receivable and contract As of December 31, 2021 assets and contract assets assets, net Contract assets from loan facilitation service 953,846 (120,208) 833,638 Contract assets from post facilitation service 5,178 (1,809) 3,369 Total 959,024 (122,017) 837,007 Accounts Allowance for Accounts receivable uncollectible receivable and contract accounts receivable and contract As of September 30, 2022 assets and contract assets assets, net Contract assets from loan facilitation service 443,777 (101,661) 342,116 Contract assets from post facilitation service 18,051 (6,206) 11,845 Contract assets from referral services 25,058 — 25,058 Total 486,886 (107,867) 379,019 |
Summary of movement of allowance for uncollectible accounts receivables and contract assets | Opening Ending balance as of Current Write off in balance as of January 1, period net the current June 30, (unaudited) 2021 provision period 2021 Contract assets from loan facilitation service 8,072 77,069 (1,497) 83,644 Contract assets from post facilitation service 227 1,473 (1,531) 169 Total 8,299 78,542 (3,028) 83,813 Opening Ending balance as of Current Write off in balance as of January 1, period net the current June 30, 2022 provision period 2022 Contract assets from loan facilitation service 120,208 5,594 (7,083) 118,719 Contract assets from post origination service 1,809 7,806 (3,158) 6,457 Total 122,017 13,400 (10,241) 125,176 | Opening Ending balance as of Current Write off in balance as of January 1, period net the current September 30, 2021 provision period 2021 Contract assets from loan facilitation service 8,072 122,560 (5,209) 125,423 Contract assets from post facilitation service 227 5,145 (4,778) 594 Total 8,299 127,705 (9,987) 126,017 Opening Ending balance as of Current Write off in balance as of January 1, period net the current September 30, 2022 provision period 2022 Contract assets from loan facilitation service 120,208 (1,012) (17,535) 101,661 Contract assets from post facilitation service 1,809 12,183 (7,786) 6,206 Total 122,017 11,171 (25,321) 107,867 |
FINANCIAL ASSETS RECEIVABLE, _2
FINANCIAL ASSETS RECEIVABLE, NET (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
Schedule of financial assets receivable | December 31, June 30, 2021 2022 RMB RMB Financial assets receivable 4,897,854 4,821,201 Allowance for uncollectible receivables (493,646) (519,563) Financial assets receivable, net 4,404,208 4,301,638 | December 31, September 30, 2021 2022 RMB RMB Financial assets receivable 4,897,854 4,614,070 Allowance for uncollectible receivables (493,646) (536,976) Financial assets receivable, net 4,404,208 4,077,094 |
Schedule of movement of financial assets receivable | Six months ended June 30, 2021 2022 RMB RMB (unaudited) Balance at beginning of period 4,601,642 4,897,854 Addition in the current period 3,242,066 3,012,766 Collection in the current period (2,707,712) (2,951,461) Write-off (69,140) (137,958) Balance at end of period 5,066,856 4,821,201 | Nine months ended September 30, 2021 2022 RMB RMB Balance at beginning of period 4,601,642 4,897,854 Addition in the current period 4,943,489 4,391,406 Collection in the current period (4,073,947) (4,440,585) Write-off (109,429) (234,605) Balance at end of period 5,361,755 4,614,070 |
Schedule of movement of allowance for uncollectible receivables | Six months ended June 30, 2021 2022 RMB RMB (unaudited) Balance at beginning of period 390,834 493,646 Current period net provision 102,769 163,875 Write-off (69,140) (137,958) Balance at end of period 424,463 519,563 | Nine months ended September 30, 2021 2022 RMB RMB Balance at beginning of period 390,834 493,646 Current period net provision 172,854 277,935 Write-off (109,429) (234,605) Balance at end of period 454,259 536,976 |
Schedule of aging of loans | 31-60 Over 60 Total 0-30 days days days financial past past past assets due due due Current receivable December 31, 2021 15,594 12,038 — 4,870,222 4,897,854 June 30, 2022 32,536 34,257 — 4,754,408 4,821,201 | 31-60 Over 60 Total 0-30 days days days financial past past past assets due due due Current receivable December 31, 2021 15,594 12,038 — 4,870,222 4,897,854 September 30, 2022 33,033 36,128 — 4,544,909 4,614,070 |
Schedule of principal of financial assets receivable by year of origination | 2021 2020 2019 Total As of December 31, 2021 4,078,249 819,605 — 4,897,854 2022 2021 2020 Total As of June 30, 2022 2,390,103 2,095,971 335,127 4,821,201 | 2021 2020 Total As of December 31, 2021 4,078,249 819,605 4,897,854 2022 2021 2020 Total As of September 30, 2022 3,041,583 1,402,475 170,012 4,614,070 |
Due From Related Parties | ||
Schedule of financial assets receivable | December 31, June 30, 2021 2022 RMB RMB Financial assets receivable — 5,802 Allowance for uncollectible receivables — (340) Financial assets receivable, net — 5,462 | |
Schedule of movement of financial assets receivable | Six months ended June 30, 2021 2022 RMB RMB (unaudited) Balance at beginning of period 3,149 — Addition in the current period — 6,112 Collection in the current period (309) (308) Write-off (2,840) (2) Balance at end of period — 5,802 | Nine months ended September 30, 2021 2022 RMB RMB Balance at beginning of period 3,149 — Addition in the current period — 26,859 Collection in the current period (309) (2,617) Write-off (2,840) (3) Balance at end of period — 24,239 |
Schedule of movement of allowance for uncollectible receivables | Six months ended June 30, 2021 2022 RMB RMB (unaudited) Balance at beginning of period 2,033 — Current period net provision 807 342 Write-off (2,840) (2) Balance at end of period — 340 | Nine months ended September 30, 2021 2022 RMB RMB Balance at beginning of period 2,033 — Current period net provision 807 1,426 Write-off (2,840) (3) Balance at end of period — 1,423 |
LOANS RECEIVABLE, NET (Tables)
LOANS RECEIVABLE, NET (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
LOANS RECEIVABLE, NET. | ||
Schedule of loans receivable | December 31, June 30, 2021 2022 RMB RMB Loans receivable 13,652,723 15,844,979 Less allowance for loan losses (948,893) (1,336,642) Loans receivable, net 12,703,830 14,508,337 | December 31, September 30, 2021 2022 RMB RMB Loans receivable 13,652,723 18,557,814 Less allowance for loan losses (948,893) (1,265,806) Loans receivable, net 12,703,830 17,292,008 |
Schedule of aging of loans | The following table presents the aging of loans as of December 31, 2021 and June 30, 2022: 0-30 days 31-60 days Over 6 0 days Total amount past due past due past due past due Current Total loans December 31, 2021 113,771 87,171 — 200,942 13,451,781 13,652,723 June 30, 2022 134,692 102,233 — 236,925 15,608,054 15,844,979 | The following table presents the aging of loans as of December 31, 2021 and September 30, 2022: 0-30 days 31-60 days Total amount past due past due past due Current Total loans As of December 31, 2021 113,771 87,171 200,942 13,451,781 13,652,723 As of September 30, 2022 148,808 103,503 252,311 18,305,503 18,557,814 |
Schedule of movement of allowance for loan losses | Six months ended June 30, 2021 2022 RMB RMB (unaudited) Balance at beginning of period 421,767 948,893 Provision for loan losses 381,887 907,317 Gross write-off (156,368) (535,743) Recoveries 24,125 16,175 Balance at end of period 671,411 1,336,642 | Nine months ended September 30, 2021 2022 RMB RMB Balance at beginning of period 421,767 948,893 Provision for loan losses 742,286 1,098,859 Gross write-off (313,536) (806,127) Recoveries 31,574 24,181 Balance at end of period 882,091 1,265,806 |
Schedule of principal of loans receivable by year of origination | 2021 2020 2019 Total As of December 31, 2021 13,614,369 38,354 — 13,652,723 2022 2021 2020 Total As of June 30, 2022 11,436,797 4,391,267 16,915 15,844,979 | 2021 2020 Total loans Loans receivable 13,614,369 38,354 13,652,723 The principal of loans receivable as of September 30, 2022 by year of origination is as follows: 2022 2021 2020 Total loans Loans receivable 16,649,447 1,896,796 11,571 18,557,814 |
LAND USE RIGHTS, NET (Tables)
LAND USE RIGHTS, NET (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
LAND USE RIGHTS, NET | ||
Schedule of land use rights | December 31, June 30, 2021 2022 RMB RMB Cost 1,036,178 1,036,178 Accumulated amortization (17,270) (27,630) Land use rights, net 1,018,908 1,008,548 | December 31, September 30, 2021 2022 RMB RMB Cost 1,036,178 1,036,179 Accumulated amortization (17,270) (32,813) Land use rights, net 1,018,908 1,003,366 |
GUARANTEE LIABILITIES (Tables)
GUARANTEE LIABILITIES (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
GUARANTEE LIABILITIES. | ||
Schedule of movement of guarantee liabilities | (unaudited) RMB As of January 1, 2021 4,173,497 Provision at the inception of new loans 3,242,066 Released into revenue (2,897,943) As of June 30, 2021 4,517,620 As of January 1, 2022 4,818,144 Provision at the inception of new loans 3,018,878 Released into revenue (3,298,059) As of June 30, 2022 4,538,963 8. GUARANTEE LIABILITIES - continued Guarantee liabilities-contingent (unaudited) RMB As of January 1, 2021 3,543,454 Provision for contingent liabilities 1,220,586 Net payout (1) (1,515,544) As of June 30, 2021 3,248,496 Adoption of ASC 326 As of January 1, 2022 3,285,081 Provision for contingent liabilities 2,162,638 Net payout (1) (2,127,305) As of June 30, 2022 3,320,414 (1) Net payout represents the amount paid upon borrowers’ default net of subsequent recoveries from the borrowers during a given period. | RMB As of January 1, 2021 4,173,497 Provision at the inception of new loans 4,943,489 Released into revenue (4,460,935) As of September 30, 2021 4,656,051 As of January 1, 2022 4,818,144 Provision at the inception of new loans 4,418,265 Released into revenue (4,851,292) As of September 30, 2022 4,385,117 Guarantee liabilities-contingent RMB As of January 1, 2021 3,543,454 Provision for contingent liabilities 1,918,899 Net payout (1) (2,320,195) As of September 30, 2021 3,142,158 As of January 1, 2022 3,285,081 Provision for contingent liabilities 3,305,458 Net payout (1) (3,186,206) As of September 30, 2022 3,404,333 (1) Net payout represents the amount paid upon borrowers’ default net of subsequent recoveries from the borrowers during a given period. |
Schedule of aging of the Group's contractual amounts of the outstanding loans subject to guarantee | The following table summarizes the aging of the Group’s contractual amounts of the outstanding loans subject to guarantee as of December 31, 2021 and June 30, 2022. 31-60 61-90 Over 90 0-30 days days days days past past past past due due due due Current Total loans December 31, 2021 (RMB) 446,780 235,769 57,526 — 49,117,630 49,857,705 June 30, 2022 (RMB) 456,773 228,107 32,970 — 49,904,061 50,621,911 | The following table summarizes the aging of the Group’s contractual amounts of the outstanding loans subject to guarantee: 31-60 61-90 Over 90 0-30 days days days days past past past past due due due due Current Total loans December 31, 2021 (RMB): 446,780 235,769 57,526 — 49,117,630 49,857,705 September 30, 2022 (RMB): 481,618 214,321 21,382 — 48,021,601 48,738,922 |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
RELATED PARTY BALANCES AND TRANSACTIONS | ||
Schedule of major related parties and their relationships with the Group | The table below sets forth the major related parties and their relationships with the Group, with which the Group entered into transactions during the six months ended June 30, 2021 (unaudited) and 2022: Name of related parties Relationship with the group 360 Security Technology Inc. (“360 Group”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Qifutong Technology Co., Ltd. (“Qifutong”) An affiliate of 360 Group, ultimately controlled by Mr. Zhou, the Chairman of the Group Shanghai Qibutianxia Information Technology Co., Ltd. (“Qibutianxia”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Qicaitianxia Technology Co., Ltd. (“Qicaitianxia”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Qihu Technology Co., Ltd. (“Qihu”) An affiliate of 360 Group, ultimately controlled by Mr. Zhou, the Chairman of the Group Jinshang Consumer Finance Inc. (“Jinshang”) An affiliate of an entity controlled by Mr. Zhou, the Chairman of the Group Beijing Zixuan Information Technology Co., Ltd. (“Beijing Zixuan”) Entity controlled by Mr. Zhou, the Chairman of the Group Xixian New Area Financial Asset Exchange Co., Ltd (“Xixian”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Qifei Xiangyi Consultation Co., Ltd (“Beijing Qifei”) Entity controlled by Mr. Zhou, the Chairman of the Group Hangzhou Qifei Huachuang Technology Co, Ltd (“Hangzhou Qifei ”) Investee of the Group Shanghai Jiehu Internet Technology Co., Ltd. (“Shanghai Jiehu”) Entity controlled by Mr. Zhou, the Chairman of the Group Kincheng Bank of Tianjin Co., Ltd. (“Kincheng Bank”) An affiliate of an entity controlled by Mr. Zhou, the Chairman of the Group Tianjin Yujie Technology Co., Ltd. (Yujie) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Hongying Information Technology Co., Ltd. (“Hongying”) Entity controlled by Mr. Zhou, the Chairman of the Group Shareholders Shareholders of the Group Others Entities controlled by Mr. Zhou, the Chairman of the Group | The table below sets forth the major related parties and their relationships with the Group, with which the Group entered into transactions during the nine months ended September 30, 2021 and 2022: Name of related parties Relationship with the group 360 Security Technology Inc. (“360 Group”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Qifutong Technology Co., Ltd. (“Qifutong”) An affiliate of 360 Group, ultimately controlled by Mr. Zhou, the Chairman of the Group Shanghai Qibutianxia Information Technology Co., Ltd. (“Qibutianxia”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Qicaitianxia Technology Co., Ltd. (“Qicaitianxia”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Qihu Technology Co., Ltd. (“Qihu”) An affiliate of 360 Group, ultimately controlled by Mr. Zhou, the Chairman of the Group Jinshang Consumer Finance Co.,Ltd. (“Jinshang”) An affiliate of an entity controlled by Mr. Zhou, the Chairman of the Group Beijing Zixuan Information Technology Co., Ltd. (“Beijing Zixuan”) Entity controlled by Mr. Zhou, the Chairman of the Group Xixian New Area Financial Asset Exchange Co., Ltd. (“Xixian”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Qifei Xiangyi Consultation Co., Ltd (“Beijing Qifei”) Entity controlled by Mr. Zhou, the Chairman of the Group Hangzhou Qifei Huachuang Technology Co, Ltd (“Hangzhou Qifei”) Investee of the Group Shanghai Jiehu Internet Technology Co., Ltd. (“Shanghai Jiehu”) An affiliate of 360 Group, ultimately controlled by Mr. Zhou, the Chairman of the Group Kincheng Bank of Tianjin Co., Ltd. (“Kincheng Bank”) An affiliate of an entity controlled by Mr. Zhou, the Chairman of the Group Tianjin Yujie Technology Co., Ltd. (“Yujie”) Entity controlled by Mr. Zhou, the Chairman of the Group Beijing Hongying Information Technology Co., Ltd. (“Hongying”) Entity controlled by Mr. Zhou, the Chairman of the Group Shareholders Shareholders of the Group Others Entities controlled by Mr. Zhou, the Chairman of the Group |
Schedule of transactions with related parties | Six months ended June 30, 2021 2022 RMB RMB (unaudited) Referral service fee charged by Yujie 101,715 221,380 Bandwidth service fee charged by Qihu 51,696 62,882 Brand fees charged by Qihu — 23,584 Referral service fee charged by Qihu 12,273 880 Rental expenses charged by Hongying 5,696 7,340 Corporate expenses allocated from Qibutianxia 5,660 — Others 1,038 2,180 Total 178,078 318,246 | Nine months ended September 30, 2021 2022 RMB RMB Referral service fee charged by Yujie 217,889 298,069 Bandwidth service fee charged by Qihu 79,714 96,387 Brand fees charged by Qihu 11,792 35,376 Referral service fee charged by Qihu 16,760 1,251 Rental expenses charged by Hongying 8,561 10,967 Corporate expenses allocated from Qibutianxia 5,660 — Others 1,417 3,011 Total 341,793 445,061 |
Schedule of services provided to the related parties | Six months ended June 30, 2021 2022 RMB RMB (unaudited) Referral service fee charged from Kincheng Bank — 108,757 Loan facilitation services fee charged from Jinshang 89,582 62,967 Loan facilitation services fee charged from Beijing Zixuan 37 — Loan facilitation services fee charged from Kincheng Bank 852,625 289,961 Post-origination services fee charged from Jinshang 32,644 36,043 Post-origination services fee charged from Beijing Zixuan 56 — Post-origination services fee charged from Kincheng Bank 62,042 268,747 Others 13,050 20,682 Total 1,050,036 787,157 | Nine months ended September 30, 2021 2022 RMB RMB Referral service fee charged from Kincheng Bank — 109,000 Loan facilitation services fee charged from Kincheng Bank 1,303,832 349,553 Loan facilitation services fee charged from Jinshang 165,528 101,190 Loan facilitation services fee charged from Beijing Zixuan 37 — Post-facilitation services fee charged from Kincheng Bank 169,274 364,455 Post-facilitation services fee charged from Jinshang 50,665 52,180 Post-facilitation services fee charged from Beijing Zixuan 56 — Others 13,342 40,085 Total 1,702,734 1,016,463 |
Schedule of amounts due from related parties | December 31, June 30, 2021 2022 RMB RMB Kincheng 771,335 572,272 Jinshang 194,123 200,965 Shareholders(1) 10,158 10,158 Beijing Zixuan — — Others 2,559 5,127 Total 978,175 788,522 (1) The balance represents the ADS registration fees incurred on behalf of certain shareholders that are to be reimbursed from them. | December 31, September 30, 2021 2022 RMB RMB Kincheng Bank 771,335 410,015 Jinshang 194,123 158,414 Shareholders (1) 10,158 3,614 Others 2,559 18,203 Total 978,175 590,246 (1) The balance represents the ADS registration fees incurred on behalf of certain shareholders that are to be reimbursed from them. |
Schedule of amounts due to related parties | December 31, June 30, 2021 2022 RMB RMB Qibutianxia 9,156 1,656 Qihu 144,999 127,688 Yujie 30,165 13,200 Others 29,737 36,143 Total 214,057 178,687 | December 31, September 30, 2021 2022 RMB RMB Qibutianxia 9,156 1,656 Qihu 144,999 174,055 Yujie 30,165 11,340 Others 29,737 16,273 Total 214,057 203,324 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
INCOME TAXES | ||
Schedule of current and deferred portion of income tax expenses | Six months ended June 30, 2021 2022 RMB RMB (unaudited) Current tax 639,412 573,083 Deferred tax 23,945 (176,351) Total 663,357 396,732 | Nine months ended September 30, 2021 2022 RMB RMB Current tax 1,121,203 844,137 Deferred tax (99,247) (264,246) Total 1,021,956 579,891 |
NET REVENUE (Tables)
NET REVENUE (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
NET REVENUE | ||
Schedule of disaggregation of revenue | Six months ended June 30, 2021 2022 RMB RMB (unaudited) Credit driven services 4,856,038 5,868,397 Loan facilitation and servicing fees-capital heavy 1,265,047 1,141,771 Revenue from loan facilitation services At a point in time 745,134 822,420 Revenue from post-origination services Over time 519,913 319,351 Financing income Over time 897,528 1,608,820 Revenue from releasing of guarantee liabilities Over time 2,647,734 3,074,515 Other services fees At a point in time 45,729 43,291 Platform services 2,744,729 2,634,849 Loan facilitation and servicing fees-capital light 2,392,602 2,128,955 Revenue from loan facilitation services At a point in time 1,988,160 1,298,998 Revenue from post-origination services Over time 404,442 829,957 Referral services fees At a point in time 286,594 382,650 Other services fees At a point in time/ Over time 65,533 123,244 Total net revenue 7,600,767 8,503,246 | Nine months ended September 30, 2021 2022 RMB RMB Credit driven services 7,476,006 8,809,503 Loan facilitation and servicing fees-capital heavy 1,846,102 1,724,628 Revenue from loan facilitation services At a point in time 1,105,164 1,235,784 Revenue from post-facilitation services Over time 740,938 488,844 Financing income Over time 1,468,075 2,485,871 Revenue from releasing of guarantee liabilities Over time 4,088,453 4,522,107 Other services fees At a point in time 73,376 76,897 Platform services 4,737,574 3,837,872 Loan facilitation and servicing fees-capital light 4,192,673 3,169,165 Revenue from loan facilitation services At a point in time 3,432,784 2,003,965 Revenue from post-facilitation services Over time 759,889 1,165,200 Referral services fees At a point in time 442,889 468,031 Other services fees At a point in time/ Over time 102,012 200,676 Total net revenue 12,213,580 12,647,375 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
NET INCOME PER SHARE | ||
Schedule of basic and diluted net income per share | Six months ended June 30, 2021 2022 RMB RMB (unaudited) Numerator: Net income attributable to shareholders of the Company 2,895,087 2,159,337 Net income attributable to Class A and Class B ordinary shareholders for computing basic and diluted net income per share 2,895,087 2,159,337 Denominator: Weighted average Class A and Class B ordinary shares outstanding used in computing basic income per ordinary share 305,886,883 311,109,257 Plus: incremental weighted average ordinary shares from assumed exercise of stock options and restricted share units using the treasury stock method 15,071,309 9,141,937 Weighted average Class A and Class B ordinary shares outstanding used in computing diluted income per ordinary share 320,958,192 320,251,194 Basic net income per share 9.46 6.94 Diluted net income per share 9.02 6.74 | Nine months ended September 30, 2021 2022 RMB RMB Numerator: Net income attributable to shareholders of the Company 4,459,164 3,152,172 Denominator: Weighted average Class A and Class B ordinary shares outstanding used in computing basic income per ordinary share 306,641,972 311,571,575 Plus: incremental weighted average ordinary shares from assumed exercise of stock options and restricted shares using the treasury stock method 14,304,755 9,653,228 Weighted average Class A and Class B ordinary shares outstanding used in computing diluted income per ordinary share 320,946,727 321,224,803 Basic net income per share 14.54 10.12 Diluted net income per share 13.89 9.81 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | December 31, June 30, 2021 2022 RMB RMB User traffic direction fees 472,269 472,101 Payable to financial institution partners (1) 422,423 347,313 Accrued payroll and welfare 409,216 317,612 Payable for third-party service fee 298,411 341,097 Payable to shareholder of non-controlling interests (2) 296,617 303,407 Dividend payable (3) 276,991 230,095 Lease liabilities 25,779 37,535 Others 56,623 68,197 Total 2,258,329 2,117,357 (1) Payable to financial institution partners mainly include amounts collected from the borrowers but have not been transferred to the financial institution partners due to settlement time lag. 9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - continued (2) Payable to shareholder of non-controlling interests mainly includes loans from Shanghai Changfeng Investment (Group) Co., Ltd.( “Changfeng”) to acquire land use right, the principal of RMB 90,000 of which is repaid in September, 2022. (3) Dividends payable as of December 31, 2021 has been paid in January 2022 and May 2022 respectively. Dividends payable as of June 30, 2022 has been paid in July, 2022. |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
SHARE-BASED COMPENSATION | |
Schedule of fair value of options granted | Year ended, December 31, 2021 Risk-free rate of interest 2.76% Estimated volatility rate 67.27% Dividend yield 5.10% Expected life (years) 5.00 Exercise price USD 0.00001 |
Summary of option activity | Weighted Weighted Average Number of Average Remaining Aggregate Options Exercise Price Contract Life Intrinsic Value USD Years RMB Options outstanding at January 1, 2022 12,945,337 0.00001 8.03 945,786 Options forfeited in 2022 (755,190) 0.00001 7.75 (43,756) Options exercised in 2022 (1,584,034) 0.00001 6.03 (91,779) Options outstanding at June 30, 2022 10,606,113 0.00001 7.75 614,518 Options exercisable at June 30, 2022 3,002,620 0.00001 6.65 173,972 Options vested or expected to be vested at June 30, 2022 10,606,113 0.00001 7.75 614,518 |
Summary of the restricted shares | Weighted-Average Number of Grant-Date Restricted Share Units Fair Value Outstanding at January 1, 2022 6,961,446 52.38 Granted 258,500 43.43 Forfeited (260,238) 65.41 Vested (388,702) 66.59 Outstanding at June 30, 2022 6,571,006 50.52 |
Schedule of share-based compensation expense | Six months ended June 30, 2021 2022 RMB RMB (unaudited) Facilitation, origination and servicing expenses 30,893 34,704 Sales and marketing expenses 5,565 525 General and administrative expenses 90,372 63,604 Total 126,830 98,833 |
LEASE (Tables)
LEASE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
LEASE | |
Schedule of supplemental cash flow information related to leases | Six months ended June 30, 2021 2022 RMB RMB (unaudited) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 16,844 21,565 Right-of-use assets obtained in exchange for lease obligations: Operating leases 9,871 55,845 |
Schedule of ROU assets and lease liabilities | December 31, 2021 June 30, 2022 RMB RMB Right-of-use assets 42,606 76,030 Operating lease liabilities-current 25,779 37,535 Operating lease liabilities-non current 13,177 34,147 |
Schedule of weighted-average remaining lease term and weighted-average discount rate | December 31, 2021 June 30, 2022 RMB RMB Weighted-average remaining lease term 2.09 2.29 Weighted-average discount rate 6.22 % 4.75 % |
Schedule of maturities of operating lease liabilities | December 31, 2021 June 30, 2022 RMB RMB Within one year 28,203 38,326 Within a period of more than one year but not more than two years 7,034 25,146 Within a period of more than two year but not more than three years 3,550 11,785 Within a period of more than three year but not more than four years 382 — Total undiscounted lease payments 39,169 75,257 Imputed interest (213) (3,575) Total lease liabilities 38,956 71,682 |
ORGANIZATION AND PRINCIPAL AC_3
ORGANIZATION AND PRINCIPAL ACTIVITIES - Financial statement amounts and balances of the VIEs (Details) ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2022 CNY (¥) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 CNY (¥) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 CNY (¥) | Dec. 31, 2021 CNY (¥) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2020 CNY (¥) | |
ASSETS | ||||||||||
Cash and cash equivalents | ¥ 6,965,238 | ¥ 5,191,999 | ¥ 7,219,700 | ¥ 4,224,320 | ¥ 6,116,360 | $ 1,014,929 | $ 1,039,883 | |||
Restricted cash | 3,764,988 | 2,644,701 | 3,009,630 | 2,413,510 | 2,643,587 | 423,087 | 562,098 | |||
Short term investments | 30,000 | 4,217 | ||||||||
Security deposit prepaid to third-party guarantee companies | 698,478 | 549,548 | 874,886 | 77,254 | 104,280 | |||||
Funds receivable from third party payment service providers | 312,447 | 983,851 | 153,151 | 138,308 | 46,647 | |||||
Accounts receivable and contract assets, net | 3,499,385 | 3,109,128 | 3,097,254 | 437,074 | 522,444 | |||||
Financial assets receivable, net | 4,301,638 | 4,077,094 | 4,404,208 | |||||||
Amounts due from related parties | 733,386 | 518,001 | 837,324 | 72,819 | 109,492 | |||||
Loans receivable, net | 10,850,458 | 14,002,507 | 9,844,481 | 1,968,441 | 1,619,931 | |||||
Prepaid expenses and other assets | 364,908 | 534,340 | 383,937 | 75,116 | 54,479 | |||||
Accounts receivable and contract assets, net-non current | 291,908 | 298,161 | 223,474 | 41,915 | 43,581 | |||||
Financial assets receivable, net-non current | 683,078 | 755,977 | 597,965 | 106,274 | 101,981 | |||||
Amounts due from related parties, non-current | 55,136 | 72,245 | 140,851 | 10,156 | 8,231 | |||||
Loans receivable, net-noncurrent | 3,657,879 | 3,289,501 | 2,859,349 | 462,431 | 546,107 | |||||
Property and equipment, net | 20,487 | 25,170 | 24,941 | 3,538 | 3,059 | |||||
Land use rights, net | 1,008,548 | 1,003,366 | 1,018,908 | 141,051 | 150,572 | |||||
Intangible assets | 5,231 | 4,835 | 4,961 | 680 | 781 | |||||
Deferred tax assets | 1,059,963 | 1,170,598 | 834,717 | 164,560 | 158,248 | |||||
Other non-current assets | 76,030 | 64,702 | 42,606 | 9,097 | 11,351 | |||||
TOTAL ASSETS | 37,666,108 | 39,962,377 | 33,504,995 | 5,617,822 | 5,623,402 | |||||
LIABILITIES | ||||||||||
Accrued expenses and other current liabilities | 2,117,357 | 2,267,693 | 2,258,329 | 318,787 | 316,113 | |||||
Amounts due to related parties | 178,687 | 203,324 | 214,057 | 28,583 | 26,677 | |||||
Short term loans | 611,164 | 639,764 | 397,576 | 89,937 | 91,244 | |||||
Guarantee liabilities-stand ready | 4,538,963 | 4,517,620 | 4,385,117 | 4,656,051 | 4,818,144 | 616,450 | 677,649 | ¥ 4,173,497 | ||
Guarantee liabilities-contingent | 3,320,414 | 3,404,333 | 3,285,081 | 478,574 | 495,725 | |||||
Income tax payable | 654,347 | 683,342 | 624,112 | 96,063 | 97,691 | |||||
Deferred tax liabilities | 173,777 | 196,517 | 121,426 | 27,626 | 25,944 | |||||
Other long-term liabilities | 34,147 | 31,067 | 13,177 | 4,366 | 5,099 | |||||
TOTAL LIABILITIES | 20,645,130 | 21,972,864 | 18,288,386 | $ 3,088,896 | $ 3,082,237 | |||||
Net cash provided by operating activities | 2,537,911 | $ 378,900 | 2,001,639 | 4,130,038 | $ 580,590 | 3,778,316 | ||||
Net cash (used in) investing activities | (2,694,432) | (402,267) | (2,287,998) | (5,675,628) | (797,867) | (5,718,813) | ||||
Net cash provided by financing activities | 2,129,177 | $ 317,877 | 1,351,545 | 3,010,269 | $ 423,176 | 1,806,770 | ||||
Consolidated VIEs | ||||||||||
ASSETS | ||||||||||
Cash and cash equivalents | 6,556,202 | 6,753,079 | 4,605,851 | |||||||
Restricted cash | 2,344,124 | 2,383,178 | 1,986,512 | |||||||
Short term investments | 30,000 | |||||||||
Security deposit prepaid to third-party guarantee companies | 698,478 | 549,548 | 874,886 | |||||||
Funds receivable from third party payment service providers | 312,447 | 983,851 | 153,151 | |||||||
Accounts receivable and contract assets, net | 1,653,349 | 1,589,517 | 2,133,477 | |||||||
Financial assets receivable, net | 3,618,560 | 3,321,117 | 3,806,243 | |||||||
Amounts due from related parties | 384,804 | 317,557 | 608,924 | |||||||
Loans receivable, net | 1,305,091 | 1,998,988 | 1,197,532 | |||||||
Prepaid expenses and other assets | 253,539 | 337,254 | 235,780 | |||||||
Accounts receivable and contract assets, net-non current | 290,528 | 297,756 | 217,298 | |||||||
Financial assets receivable, net-non current | 683,078 | 755,977 | 597,965 | |||||||
Amounts due from related parties, non-current | 49,627 | 70,322 | 121,855 | |||||||
Loans receivable, net-noncurrent | 2,634,648 | 2,575,089 | 1,029,545 | |||||||
Property and equipment, net | 12,831 | 17,887 | 15,074 | |||||||
Land use rights, net | 1,008,548 | 1,003,366 | 1,018,908 | |||||||
Intangible assets | 4,433 | 4,131 | 3,972 | |||||||
Deferred tax assets | 967,237 | 1,086,165 | 779,291 | |||||||
Other non-current assets | 48,602 | 42,719 | 27,729 | |||||||
TOTAL ASSETS | 22,826,126 | 24,117,501 | 19,413,993 | |||||||
LIABILITIES | ||||||||||
Accrued expenses and other current liabilities | 1,617,329 | 1,699,591 | 1,820,609 | |||||||
Amounts due to related parties | 82,063 | 138,542 | 94,057 | |||||||
Short term loans | 150,000 | 150,000 | 150,000 | |||||||
Guarantee liabilities-stand ready | 4,538,963 | 4,385,117 | 4,818,144 | |||||||
Guarantee liabilities-contingent | 3,320,414 | 3,404,333 | 3,285,081 | |||||||
Income tax payable | 581,136 | 644,363 | 449,553 | |||||||
Other tax payable | 108,509 | 146,792 | 218,017 | |||||||
Deferred tax liabilities | 27,328 | 23,810 | 65,542 | |||||||
Other long-term liabilities | 23,958 | 22,929 | 10,271 | |||||||
TOTAL LIABILITIES | 10,449,700 | 10,615,477 | ¥ 10,911,274 | |||||||
Net revenue | 6,713,481 | 6,248,574 | 10,012,621 | 10,070,969 | ||||||
Net income (loss) | 1,566,142 | 2,930,834 | 2,291,880 | 4,551,396 | ||||||
Net cash provided by operating activities | 2,453,285 | 1,861,811 | 3,191,592 | 3,274,881 | ||||||
Net cash (used in) investing activities | ¥ (2,148,700) | (351,780) | (2,964,541) | (1,008,797) | ||||||
Net cash provided by financing activities | ¥ 673,400 | ¥ (2,987) | ¥ 673,400 | |||||||
Percentage of consolidated revenues | 79% | 79% | 82% | 79% | 79% | 82% | ||||
Percentage of consolidated total assets | 61% | 61% | 60% | 60% | 58% | |||||
Percentage of consolidated total liabilities | 51% | 51% | 48% | 48% | 60% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Consolidated Trusts (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Nov. 30, 2017 | Jun. 30, 2022 CNY (¥) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 CNY (¥) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 CNY (¥) | Dec. 31, 2021 CNY (¥) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2020 CNY (¥) | Dec. 31, 2019 CNY (¥) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Asset based Securities, maximum issue scale | ¥ 10,000,000 | ¥ 5,000,000 | ||||||||||
Asset based Securities, beneficial rights value | ¥ 3,000,000 | ¥ 3,100,000 | ¥ 5,100,000 | ¥ 4,100,000 | ||||||||
Provision for loan losses | 907,317 | 381,887 | 1,098,859 | 742,286 | ||||||||
Loans written off | 535,743 | 156,368 | 806,127 | 313,536 | ||||||||
ASSETS | ||||||||||||
Restricted cash | 3,764,988 | 2,644,701 | 3,009,630 | 2,413,510 | ¥ 2,643,587 | $ 423,087 | $ 562,098 | |||||
Loans receivable, net | 10,850,458 | 14,002,507 | 9,844,481 | 1,968,441 | 1,619,931 | |||||||
Prepaid expenses and other assets | 364,908 | 534,340 | 383,937 | 75,116 | 54,479 | |||||||
Loans receivable, net-noncurrent | 3,657,879 | 3,289,501 | 2,859,349 | 462,431 | 546,107 | |||||||
TOTAL ASSETS | 37,666,108 | 39,962,377 | 33,504,995 | 5,617,822 | 5,623,402 | |||||||
LIABILITIES | ||||||||||||
Payable to investors of the consolidated trusts-current | 5,224,973 | 6,173,089 | 2,304,518 | 867,799 | 780,068 | |||||||
Accrued expenses and other current liabilities | 2,117,357 | 2,267,693 | 2,258,329 | 318,787 | 316,113 | |||||||
Payable to investors of the consolidated trusts-noncurrent | 3,613,690 | 3,802,348 | 4,010,597 | 534,526 | 539,510 | |||||||
TOTAL LIABILITIES | 20,645,130 | 21,972,864 | 18,288,386 | $ 3,088,896 | $ 3,082,237 | |||||||
Net revenue | 8,503,246 | $ 1,269,502 | 7,600,767 | 12,647,375 | $ 1,777,940 | 12,213,580 | ||||||
Net cash provided by operating activities | 2,537,911 | 378,900 | 2,001,639 | 4,130,038 | 580,590 | 3,778,316 | ||||||
Net cash (used in) investing activities | (2,694,432) | (402,267) | (2,287,998) | (5,675,628) | (797,867) | (5,718,813) | ||||||
Net cash provided by financing activities | ¥ 2,129,177 | $ 317,877 | 1,351,545 | 3,010,269 | $ 423,176 | 1,806,770 | ||||||
Maximum | ||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Term of the plan | 2 years | 2 years | ||||||||||
Subordinated tranche securities | ||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
ABS purchased, value | 2,139,063 | |||||||||||
Senior tranche securities | ||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
ABS purchased, value | ¥ 4,019,635 | |||||||||||
Shenzhen Stock Exchange | Listing And Transferring Assets Based Securities [Member] | ||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Asset based Securities, maximum issue scale | 4,000,000 | |||||||||||
Shanghai Stock Exchange | Listing And Transferring Assets Based Securities [Member] | ||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Asset based Securities, maximum issue scale | 8,000,000 | |||||||||||
Consolidated Trusts | ||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Payable to investors of the consolidated trusts - current | 3,613,690 | 3,903,597 | ||||||||||
Repurchase of delinquent loans | 1,194,155 | 904,586 | ||||||||||
Repurchase of performing loans upon liquidation of consolidated trusts | 16,081 | 12,686 | ||||||||||
Provision for loan losses | 463,750 | 661,402 | ||||||||||
Loans written off | 1,416,707 | 1,033,228 | ||||||||||
ASSETS | ||||||||||||
Restricted cash | 1,420,864 | 626,452 | 657,075 | |||||||||
Loans receivable, net | 9,545,367 | 12,003,519 | 8,646,950 | |||||||||
Prepaid expenses and other assets | 104,515 | 111,039 | 104,515 | |||||||||
Loans receivable, net-noncurrent | 1,023,231 | 714,412 | 1,829,804 | |||||||||
TOTAL ASSETS | 12,093,977 | 13,455,422 | 11,238,344 | |||||||||
LIABILITIES | ||||||||||||
Payable to investors of the consolidated trusts-current | 5,224,973 | 6,173,089 | 2,304,518 | |||||||||
Accrued expenses and other current liabilities | 11,285 | 17,081 | 5,928 | |||||||||
Other tax payable | 37,504 | 36,485 | 34,448 | |||||||||
Payable to investors of the consolidated trusts-noncurrent | 3,613,690 | 3,802,348 | 4,010,597 | |||||||||
TOTAL LIABILITIES | 8,887,452 | 10,029,003 | ¥ 6,355,491 | |||||||||
Net revenue | 1,108,643 | 663,907 | 1,667,660 | 1,127,851 | ||||||||
Net income | 418,827 | 263,141 | 806,808 | 372,408 | ||||||||
Net cash provided by operating activities | 916,753 | 486,996 | 1,332,513 | 847,960 | ||||||||
Net cash (used in) investing activities | (548,254) | (1,921,400) | (2,707,114) | (4,690,085) | ||||||||
Net cash provided by financing activities | ¥ 2,490,664 | ¥ 572,579 | ¥ 3,607,440 | ¥ 1,027,804 | ||||||||
Percentage of consolidated revenues | 13% | 13% | 9% | 13% | 13% | 9% | ||||||
Percentage of consolidated total assets | 32% | 32% | 34% | 34% | 34% | |||||||
Percentage of consolidated total liabilities | 43% | 43% | 46% | 46% | 35% | |||||||
Consolidated Trusts | Minimum | ||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Repurchase of loans delinquent period | 30 days | |||||||||||
Consolidated Trusts | Maximum | ||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Repurchase of loans delinquent period | 90 days |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition, Restricted cash and Fair value (Details) ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | ||||||
Jun. 30, 2022 CNY (¥) item | Jun. 30, 2022 USD ($) item | Jun. 30, 2021 CNY (¥) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 CNY (¥) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | |
Disaggregation of Revenue | ||||||||
Number of business models | item | 2 | 2 | ||||||
Obligation to pay interest and late fees, maximum threshold percentage | 24% | 24% | ||||||
Total net revenue | ¥ 8,503,246 | $ 1,269,502 | ¥ 7,600,767 | ¥ 12,647,375 | $ 1,777,940 | ¥ 12,213,580 | ||
Revenue, net of value-added tax and related surcharges: | ||||||||
Performance obligations | 1,518,044 | 2,260,131 | 1,639,375 | ¥ 1,637,484 | ||||
Revenue recognized from performance obligations | 219,680 | 39,946 | ||||||
Taxes excluded from revenues | 503,295 | ¥ 457,537 | ||||||
Restricted cash | ||||||||
Restricted cash related to deposit to the funding banks | ¥ 2,344,124 | ¥ 1,986,512 | ||||||
Operating period | 2 years | 2 years | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | ||||||||
Revenue, net of value-added tax and related surcharges: | ||||||||
Revenue, remaining performance obligation, Expected timing of satisfaction, period | 12 months | |||||||
Revenue, remaining performance obligation (as a percent) | 86% | |||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | ||||||||
Revenue, net of value-added tax and related surcharges: | ||||||||
Revenue, remaining performance obligation, Expected timing of satisfaction, period | 12 months | 12 months | ||||||
Revenue, remaining performance obligation (as a percent) | 81% | 81% | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | ||||||||
Revenue, net of value-added tax and related surcharges: | ||||||||
Revenue, remaining performance obligation, Expected timing of satisfaction, period | 12 months | |||||||
Recurring | Level 2 | Foreign Exchange Option | ||||||||
Disaggregation of Revenue | ||||||||
Fair value | 12,715 | |||||||
At a point in time | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | ¥ 2,634,000 | ¥ 3,105,000 | 3,930 | 5,114 | ||||
Over time | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 5,869,000 | 4,496,000 | 8,717 | 7,099 | ||||
Credit driven services | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 5,868,397 | $ 876,129 | 4,856,038 | 8,809,503 | 1,238,420 | 7,476,006 | ||
Loan facilitation and servicing fees-capital heavy | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 1,141,771 | 170,462 | 1,265,047 | 1,724,628 | 242,444 | 1,846,102 | ||
Revenue from loan facilitation services | At a point in time | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 822,420 | 745,134 | 1,235,784 | 1,105,164 | ||||
Revenue from post-origination services | Over time | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 319,351 | 519,913 | 488,844 | 740,938 | ||||
Financing income | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 1,608,820 | 240,191 | 897,528 | 2,485,871 | 349,458 | 1,468,075 | ||
Financing income | Over time | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 1,608,820 | 897,528 | 2,485,871 | 1,468,075 | ||||
Revenue from releasing of guarantee liabilitiesing of guarantee liabilities | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 3,074,515 | 459,013 | 2,647,734 | 4,522,107 | 635,708 | 4,088,453 | ||
Revenue from releasing of guarantee liabilitiesing of guarantee liabilities | Over time | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 3,074,515 | 2,647,734 | 4,522,107 | 4,088,453 | ||||
Other services fees | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 43,291 | 6,463 | 45,729 | 76,897 | 10,810 | 73,376 | ||
Other services fees | At a point in time | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 43,291 | 45,729 | 76,897 | 73,376 | ||||
Platform services | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 2,634,849 | 393,373 | 2,744,729 | 3,837,872 | 539,520 | 4,737,574 | ||
Loan facilitation and servicing fees-capital light | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 2,128,955 | 317,845 | 2,392,602 | 3,169,165 | 445,514 | 4,192,673 | ||
Revenue from loan facilitation services | At a point in time | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 1,298,998 | 1,988,160 | 2,003,965 | 3,432,784 | ||||
Revenue from post-origination services | Over time | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 829,957 | 404,442 | 1,165,200 | 759,889 | ||||
Referral services | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 382,650 | 57,128 | 286,594 | 468,031 | 65,795 | 442,889 | ||
Referral services | At a point in time | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | 382,650 | 286,594 | 468,031 | 442,889 | ||||
Other services fees | ||||||||
Disaggregation of Revenue | ||||||||
Total net revenue | ¥ 123,244 | $ 18,400 | ¥ 65,533 | ¥ 200,676 | $ 28,211 | ¥ 102,012 | ||
Loan facilitation service | ||||||||
Disaggregation of Revenue | ||||||||
Number of separate services provided for each loan facilitated | item | 3 | 3 | ||||||
Number of separate performance obligations under ASC 606 | item | 2 | 2 | ||||||
Minimum | ||||||||
Disaggregation of Revenue | ||||||||
Loan terms (In months) | 1 month | 1 month | ||||||
Loan amount | ¥ 500 | |||||||
Revenue, net of value-added tax and related surcharges: | ||||||||
Term of loan | 1 month | 1 month | ||||||
Maximum | ||||||||
Disaggregation of Revenue | ||||||||
Loan terms (In months) | 36 months | 36 months | ||||||
Loan amount | $ | $ 1,000 | |||||||
Revenue, net of value-added tax and related surcharges: | ||||||||
Term of loan | 12 months | 12 months |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and equipment, net (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Property and equipment, net | ||
Depreciation expense on property and equipment | ¥ 7,580 | ¥ 5,944 |
Electronic Equipment | ||
Property and equipment, net | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Furniture and office equipment | ||
Property and equipment, net | ||
Property, Plant and Equipment, Useful Life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Financial assets receivable (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Financial assets receivable | ||
Impairment losses | ¥ 163,875 | ¥ 102,769 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Origination and servicing expense, Sales and marketing expenses, Government grant and Value added taxes (VAT) (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Product Information | ||
Cash reward | ¥ 12,000 | ¥ 9,500 |
Advertising and marketing related expenses | 1,031,406 | 706,679 |
Government grants received | ¥ 194,439 | ¥ 5,067 |
Consolidated Trusts | ||
Product Information | ||
VAT rate (as a percent) | 3% | |
Other Entities | ||
Product Information | ||
VAT rate (as a percent) | 6% |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Convenience translation, Employee defined contribution plan (Details) ¥ in Thousands | 6 Months Ended | ||
Jun. 30, 2022 CNY (¥) $ / ¥ | Jun. 30, 2021 CNY (¥) | Sep. 30, 2022 $ / ¥ | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Convenience translation rate (USD to RMB) | $ / ¥ | 6.6981 | 7.1135 | |
Defined contribution plan cost | ¥ | ¥ 85,868 | ¥ 62,914 |
ACCOUNTS RECEIVABLE AND CONTR_3
ACCOUNTS RECEIVABLE AND CONTRACT ASSETS, NET (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Accounts receivable | |||||
Accounts receivable | ¥ 25,080 | ¥ 10,903 | ¥ 17,124 | ||
Allowance for uncollectible Accounts receivable | ¥ (1,179) | ¥ (2,187) | (2,058) | ||
Accounts receivable, net | 25,080 | 10,903 | 15,066 | ||
Movement of allowance for uncollectible receivables | |||||
Opening balance | 2,058 | 23,256 | 2,058 | 23,256 | |
Current period net provision | (8,285) | (9,059) | |||
Write off in the current period | (2,058) | (13,792) | |||
Write off in the current period | (2,058) | (12,009) | |||
Ending balance | 1,179 | 2,187 | |||
Contract assets | |||||
Contract assets | 4,090,926 | 3,716,319 | 3,619,516 | ||
Allowance for Uncollectible Contract assets | (324,713) | (263,463) | (319,933) | (298,234) | (313,854) |
Contract assets, net | 3,766,213 | 3,396,386 | 3,305,662 | ||
Movement of allowance for uncollectible contract assets | |||||
Opening balance | 313,854 | 232,571 | 313,854 | 232,571 | |
Current year net provision | 103,625 | 86,860 | 159,616 | 167,556 | |
Write off in the current period | (92,766) | (55,968) | (153,537) | (101,893) | |
Ending balance | 324,713 | 263,463 | 319,933 | 298,234 | |
Accounts receivable and contract assets | |||||
Accounts receivable and contract assets | 662,262 | 486,886 | 959,024 | ||
Allowance for uncollectible accounts receivable and contract assets | (125,176) | (107,867) | (122,017) | ||
Accounts receivable and contract Assets, net | 537,086 | 379,019 | 837,007 | ||
Opening balance | 122,017 | 8,299 | 122,017 | 8,299 | |
Current year net provision | 13,400 | 78,542 | 11,171 | 127,705 | |
Write off in the current period | (10,241) | (3,028) | (25,321) | (9,987) | |
Ending balance | 125,176 | 83,813 | 107,867 | 126,017 | |
Amount of contract assets originated in fiscal year prior to current fiscal year | 3,636,640 | ||||
Amount of contract assets originated in current fiscal year | 4,116,006 | 3,727,222 | |||
2022 | |||||
Accounts receivable and contract assets | |||||
Amount of contract assets originated in current fiscal year | 3,257,055 | 3,316,652 | |||
2021 | |||||
Accounts receivable and contract assets | |||||
Amount of contract assets originated in fiscal year prior to current fiscal year | 3,207,537 | ||||
Amount of contract assets originated in current fiscal year | 757,489 | 385,466 | |||
2020 | |||||
Accounts receivable and contract assets | |||||
Amount of contract assets originated in fiscal year prior to current fiscal year | 429,103 | ||||
Amount of contract assets originated in current fiscal year | 101,462 | 25,104 | |||
Loan facilitation service | |||||
Accounts receivable | |||||
Accounts receivable | 502 | ||||
Allowance for uncollectible Accounts receivable | (37) | (467) | (375) | ||
Accounts receivable, net | 127 | ||||
Movement of allowance for uncollectible receivables | |||||
Opening balance | 375 | 17,462 | 375 | 17,462 | |
Current period net provision | (10,043) | (10,904) | |||
Write off in the current period | (375) | (7,382) | |||
Write off in the current period | (375) | (6,091) | |||
Ending balance | 37 | 467 | |||
Contract assets | |||||
Contract assets | 3,276,001 | 3,130,934 | 3,097,872 | ||
Allowance for Uncollectible Contract assets | (299,395) | (246,897) | (297,032) | (281,240) | (287,397) |
Contract assets, net | 2,976,606 | 2,833,902 | 2,810,475 | ||
Movement of allowance for uncollectible contract assets | |||||
Opening balance | 287,397 | 222,526 | 287,397 | 222,526 | |
Current year net provision | 77,952 | 64,947 | 118,281 | 132,648 | |
Write off in the current period | (65,954) | (40,576) | (108,646) | (73,934) | |
Ending balance | 299,395 | 246,897 | 297,032 | 281,240 | |
Accounts receivable and contract assets | |||||
Amount of contract assets originated in fiscal year prior to current fiscal year | 3,098,373 | ||||
Amount of contract assets originated in current fiscal year | 3,276,001 | 3,130,934 | |||
Loan facilitation service | 2022 | |||||
Accounts receivable and contract assets | |||||
Amount of contract assets originated in current fiscal year | 2,447,427 | 2,744,208 | |||
Loan facilitation service | 2021 | |||||
Accounts receivable and contract assets | |||||
Amount of contract assets originated in fiscal year prior to current fiscal year | 2,708,137 | ||||
Amount of contract assets originated in current fiscal year | 742,111 | 369,128 | |||
Loan facilitation service | 2020 | |||||
Accounts receivable and contract assets | |||||
Amount of contract assets originated in fiscal year prior to current fiscal year | 390,236 | ||||
Amount of contract assets originated in current fiscal year | 86,463 | 17,598 | |||
Post facilitation service | |||||
Accounts receivable | |||||
Accounts receivable | 5,825 | ||||
Allowance for uncollectible Accounts receivable | (1,142) | (1,720) | (1,683) | ||
Accounts receivable, net | 4,142 | ||||
Movement of allowance for uncollectible receivables | |||||
Opening balance | 1,683 | 3,958 | 1,683 | 3,958 | |
Current period net provision | 1,758 | 1,845 | |||
Write off in the current period | (1,683) | (4,574) | |||
Write off in the current period | (1,683) | (4,082) | |||
Ending balance | 1,142 | 1,720 | |||
Contract assets | |||||
Contract assets | 463,530 | 364,824 | 282,767 | ||
Allowance for Uncollectible Contract assets | (25,318) | (16,566) | (22,901) | (16,994) | (26,457) |
Contract assets, net | 438,212 | 341,923 | 256,310 | ||
Movement of allowance for uncollectible contract assets | |||||
Opening balance | 26,457 | 10,045 | 26,457 | 10,045 | |
Current year net provision | 25,673 | 21,913 | 41,335 | 34,908 | |
Write off in the current period | (26,812) | (15,392) | (44,891) | (27,959) | |
Ending balance | 25,318 | 16,566 | 22,901 | 16,994 | |
Accounts receivable and contract assets | |||||
Amount of contract assets originated in fiscal year prior to current fiscal year | 288,593 | ||||
Amount of contract assets originated in current fiscal year | 463,530 | 364,824 | |||
Post facilitation service | 2022 | |||||
Accounts receivable and contract assets | |||||
Amount of contract assets originated in current fiscal year | 433,153 | 340,980 | |||
Post facilitation service | 2021 | |||||
Accounts receivable and contract assets | |||||
Amount of contract assets originated in fiscal year prior to current fiscal year | 249,726 | ||||
Amount of contract assets originated in current fiscal year | 15,378 | 16,338 | |||
Post facilitation service | 2020 | |||||
Accounts receivable and contract assets | |||||
Amount of contract assets originated in fiscal year prior to current fiscal year | 38,867 | ||||
Amount of contract assets originated in current fiscal year | 14,999 | 7,506 | |||
Referral services | |||||
Accounts receivable | |||||
Accounts receivable | 25,080 | 10,903 | 10,797 | ||
Allowance for uncollectible Accounts receivable | |||||
Accounts receivable, net | 25,080 | 10,903 | 10,797 | ||
Movement of allowance for uncollectible receivables | |||||
Opening balance | 1,836 | 1,836 | |||
Write off in the current period | (1,836) | ||||
Write off in the current period | (1,836) | ||||
Contract assets | |||||
Contract assets | 351,395 | 220,561 | 238,877 | ||
Contract assets, net | 351,395 | 220,561 | 238,877 | ||
Accounts receivable and contract assets | |||||
Amount of contract assets originated in fiscal year prior to current fiscal year | 249,674 | ||||
Amount of contract assets originated in current fiscal year | 376,475 | 231,464 | |||
Referral services | 2022 | |||||
Accounts receivable and contract assets | |||||
Amount of contract assets originated in current fiscal year | 376,475 | 231,464 | |||
Referral services | 2021 | |||||
Accounts receivable and contract assets | |||||
Amount of contract assets originated in fiscal year prior to current fiscal year | 249,674 | ||||
Contract assets | Loan facilitation service | |||||
Accounts receivable and contract assets | |||||
Accounts receivable and contract assets | 592,384 | 443,777 | 953,846 | ||
Allowance for uncollectible accounts receivable and contract assets | (118,719) | (101,661) | (120,208) | ||
Accounts receivable and contract Assets, net | 473,665 | 342,116 | 833,638 | ||
Opening balance | 120,208 | 8,072 | 120,208 | 8,072 | |
Current year net provision | 5,594 | 77,069 | (1,012) | 122,560 | |
Write off in the current period | (7,083) | (1,497) | (17,535) | (5,209) | |
Ending balance | 118,719 | 83,644 | 101,661 | 125,423 | |
Contract assets | Post facilitation service | |||||
Accounts receivable and contract assets | |||||
Accounts receivable and contract assets | 15,762 | 18,051 | 5,178 | ||
Allowance for uncollectible accounts receivable and contract assets | (6,457) | (6,206) | (1,809) | ||
Accounts receivable and contract Assets, net | 9,305 | 11,845 | ¥ 3,369 | ||
Opening balance | 1,809 | 227 | 1,809 | 227 | |
Current year net provision | 7,806 | 1,473 | 12,183 | 5,145 | |
Write off in the current period | (3,158) | (1,531) | (7,786) | (4,778) | |
Ending balance | 6,457 | ¥ 169 | 6,206 | ¥ 594 | |
Contract assets | Referral services | |||||
Accounts receivable and contract assets | |||||
Accounts receivable and contract assets | 54,116 | 25,058 | |||
Accounts receivable and contract Assets, net | ¥ 54,116 | ¥ 25,058 |
ACCOUNTS RECEIVABLE AND CONTR_4
ACCOUNTS RECEIVABLE AND CONTRACT ASSETS, NET - Additional Information (Details) - CNY (¥) ¥ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | ||||
Transaction price allocated to performance obligation that are unsatisfied | ¥ 1,639,375 | ¥ 1,518,044 | ¥ 1,637,484 | ¥ 2,260,131 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | ||||
Period of unsatisfied performance obligations to be recognized as revenue | 12 months | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | ||||
Period of unsatisfied performance obligations to be recognized as revenue | 12 months | |||
Remaining performance obligation (as a percent) | 88% | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | ||||
Period of unsatisfied performance obligations to be recognized as revenue | 12 months | |||
Remaining performance obligation (as a percent) | 79% |
FINANCIAL ASSETS RECEIVABLE, _3
FINANCIAL ASSETS RECEIVABLE, NET (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Financial assets receivable | |||||
Financial assets receivable | ¥ 4,821,201 | ¥ 5,066,856 | ¥ 4,614,070 | ¥ 5,361,755 | ¥ 4,897,854 |
Allowance for uncollectible receivables | (519,563) | (424,463) | (536,976) | (454,259) | (493,646) |
Financial assets receivable, net | 4,301,638 | 4,077,094 | 4,404,208 | ||
Movement of financial assets receivable | |||||
Balance at beginning of period | 4,897,854 | 4,601,642 | 4,897,854 | 4,601,642 | |
Addition in the current period | 3,012,766 | 3,242,066 | 4,391,406 | 4,943,489 | |
Collection in the current period | (2,951,461) | (2,707,712) | (4,440,585) | (4,073,947) | |
Write-off | (137,958) | (69,140) | (234,605) | (109,429) | |
Balance at end of period | 4,821,201 | 5,066,856 | 4,614,070 | 5,361,755 | |
Movement of allowance for uncollectible receivables | |||||
Balance at beginning of period | 493,646 | 390,834 | 493,646 | 390,834 | |
Current period net provision | (163,875) | (102,769) | (277,935) | (172,854) | |
Write-off | (137,958) | (69,140) | (234,605) | (109,429) | |
Balance at end of period | 519,563 | 424,463 | 536,976 | 454,259 | |
Financial assets receivable | 4,821,201 | 4,614,070 | 4,897,854 | ||
2020 | |||||
Movement of allowance for uncollectible receivables | |||||
Financial assets receivable | 335,127 | 170,012 | 819,605 | ||
2021 | |||||
Movement of allowance for uncollectible receivables | |||||
Financial assets receivable | 2,095,971 | 1,402,475 | 4,078,249 | ||
2022 | |||||
Movement of allowance for uncollectible receivables | |||||
Financial assets receivable | 2,390,103 | 3,041,583 | |||
Amount Due From Related Parties | |||||
Financial assets receivable | |||||
Financial assets receivable | 5,802 | 24,239 | |||
Allowance for uncollectible receivables | (340) | (1,423) | |||
Financial assets receivable, net | 5,462 | ||||
Movement of financial assets receivable | |||||
Balance at beginning of period | 3,149 | 3,149 | |||
Addition in the current period | 6,112 | 26,859 | |||
Collection in the current period | (308) | (309) | (2,617) | (309) | |
Write-off | (2) | (2,840) | (3) | (2,840) | |
Balance at end of period | 5,802 | 24,239 | |||
Movement of allowance for uncollectible receivables | |||||
Balance at beginning of period | 2,033 | 2,033 | |||
Current period net provision | 342 | 807 | 1,426 | 807 | |
Write-off | (2) | ¥ (2,840) | (3) | ¥ (2,840) | |
Balance at end of period | 340 | 1,423 | |||
0-30 days past due | |||||
Financial assets receivable | |||||
Financial assets receivable | 32,536 | 33,033 | 15,594 | ||
Movement of financial assets receivable | |||||
Balance at beginning of period | 15,594 | 15,594 | |||
Balance at end of period | 32,536 | 33,033 | |||
31 to 60 days past due | |||||
Financial assets receivable | |||||
Financial assets receivable | 34,257 | 36,128 | 12,038 | ||
Movement of financial assets receivable | |||||
Balance at beginning of period | 12,038 | 12,038 | |||
Balance at end of period | 34,257 | 36,128 | |||
Current | |||||
Financial assets receivable | |||||
Financial assets receivable | 4,754,408 | 4,544,909 | ¥ 4,870,222 | ||
Movement of financial assets receivable | |||||
Balance at beginning of period | 4,870,222 | 4,870,222 | |||
Balance at end of period | ¥ 4,754,408 | ¥ 4,544,909 |
LOANS RECEIVABLE, NET - Loans r
LOANS RECEIVABLE, NET - Loans receivable (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
LOANS RECEIVABLE, NET. | ||||||
Loans receivable | ¥ 15,844,979 | ¥ 18,557,814 | ¥ 13,652,723 | |||
Less allowance for loan losses | (1,336,642) | (1,265,806) | (948,893) | ¥ (882,091) | ¥ (671,411) | ¥ (421,767) |
Loans receivable, net | 14,508,337 | 17,292,008 | 12,703,830 | |||
Accrued interest receivable | 113,658 | 151,625 | 86,144 | |||
Net of allowance for loans receivable | ¥ 9,588 | ¥ 10,342 | ¥ 5,987 |
LOANS RECEIVABLE, NET - Aging o
LOANS RECEIVABLE, NET - Aging of loans (Details) - CNY (¥) ¥ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Aging of loans | |||
Total amount past due | ¥ 252,311 | ¥ 236,925 | ¥ 200,942 |
Current | 18,305,503 | 15,608,054 | 13,451,781 |
Total Loans receivable | 18,557,814 | 15,844,979 | 13,652,723 |
0-30 days past due | |||
Aging of loans | |||
Total amount past due | 148,808 | 134,692 | 113,771 |
31 to 60 days past due | |||
Aging of loans | |||
Total amount past due | ¥ 103,503 | ¥ 102,233 | ¥ 87,171 |
LOANS RECEIVABLE, NET - Movemen
LOANS RECEIVABLE, NET - Movement of allowance for loan losses (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Movement of allowance for loan losses | |||||
Balance at beginning of period | ¥ 948,893 | ¥ 421,767 | ¥ 948,893 | ¥ 421,767 | ¥ 421,767 |
Provision for loan losses | 907,317 | 381,887 | 1,098,859 | 742,286 | |
Gross write-off | (535,743) | (156,368) | (806,127) | (313,536) | |
Recoveries | 16,175 | 24,125 | 24,181 | 31,574 | |
Balance at end of period | ¥ 1,336,642 | ¥ 671,411 | ¥ 1,265,806 | ¥ 882,091 | ¥ 948,893 |
LOANS RECEIVABLE, NET - Princip
LOANS RECEIVABLE, NET - Principal of loans (Details) - CNY (¥) ¥ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
LOANS RECEIVABLE, NET | |||
Loans receivable | ¥ 18,557,814 | ¥ 15,844,979 | ¥ 13,652,723 |
2022 | |||
LOANS RECEIVABLE, NET | |||
Loans receivable | 16,649,447 | 11,436,797 | |
2021 | |||
LOANS RECEIVABLE, NET | |||
Loans receivable | 1,896,796 | 4,391,267 | 13,614,369 |
2020 | |||
LOANS RECEIVABLE, NET | |||
Loans receivable | ¥ 11,571 | ¥ 16,915 | ¥ 38,354 |
LAND USE RIGHTS, NET (Details)
LAND USE RIGHTS, NET (Details) ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | |||||
Jun. 30, 2022 CNY (¥) | Jun. 30, 2021 CNY (¥) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2021 CNY (¥) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | |
LAND USE RIGHTS, NET | |||||||
Cost | ¥ 1,036,178 | ¥ 1,036,179 | ¥ 1,036,178 | ||||
Accumulated amortization | (27,630) | (32,813) | (17,270) | ||||
Land use rights, net | 1,008,548 | 1,003,366 | $ 141,051 | $ 150,572 | ¥ 1,018,908 | ||
Amortization of land use rights | ¥ 10,360 | ¥ 6,908 | ¥ 15,543 | ¥ 12,089 |
SHORT-TERM LOANS (Details)
SHORT-TERM LOANS (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2022 CNY (¥) | Jun. 30, 2022 CNY (¥) | Sep. 30, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
SHORT-TERM LOANS | |||||||
Short term loans | ¥ 611,164 | ¥ 611,164 | ¥ 639,764 | ¥ 397,576 | $ 89,937 | $ 91,244 | |
Principal amount | 90,000 | ||||||
Shanghai 360 Changfeng Technology, Co.,Ltd., | Mortgage Loan Agreement | |||||||
SHORT-TERM LOANS | |||||||
Principal amount | ¥ 1,000,000 | 1,000,000 | |||||
Tenure | 25 years | ||||||
Interest rate basis points | 1.36% | ||||||
Unused amount of loan | ¥ 1,000,000 | ¥ 1,000,000 | |||||
Short-term bank borrowings, one | |||||||
SHORT-TERM LOANS | |||||||
Short term loans | $ | $ 38,850 | ||||||
Basis spread on variable rate (as a percent) | 3% | ||||||
Short-term bank borrowings, two | |||||||
SHORT-TERM LOANS | |||||||
Short term loans | ¥ 150,000 | ||||||
Fixed interest rate (as a percent) | 4.05% | 4.05% | |||||
Short-term bank borrowings, three | |||||||
SHORT-TERM LOANS | |||||||
Short term loans | ¥ 150,000 | $ 38,850 | $ 30,000 | ||||
Fixed interest rate (as a percent) | 4.70% | 4.70% | 5.75% | 3.46% | 5.75% | 4.70% | 3.46% |
Interest rate basis points | 3.30% | 3.30% | |||||
Short-term bank borrowings, three | Domestic commercial banks | |||||||
SHORT-TERM LOANS | |||||||
Short term loans | $ | $ 30,000 |
LONG-TERM LOANS (Details)
LONG-TERM LOANS (Details) - CNY (¥) ¥ in Thousands | 1 Months Ended | |
Jun. 30, 2022 | Sep. 30, 2022 | |
LONG-TERM LOANS | ||
Principal amount | ¥ 90,000 | |
Shanghai 360 Changfeng Technology, Co.,Ltd., | Mortgage Loan Agreement | ||
LONG-TERM LOANS | ||
Principal amount | ¥ 1,000,000 | |
Tenure | 25 years | |
Interest rate basis points | 1.36% | |
Balance of used mortgage loan | ¥ 1,000,000 | |
Shanghai 360 Changfeng Technology, Co.,Ltd., | Mortgage Loan Agreement | Other long-term liabilities | ||
LONG-TERM LOANS | ||
Balance of used mortgage loan | ¥ 4,193 |
GUARANTEE LIABILITIES (Details)
GUARANTEE LIABILITIES (Details) ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2022 CNY (¥) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 CNY (¥) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
GUARANTEE LIABILITIES | |||||||
Provision at the inception of new loans | ¥ 3,018,878 | ¥ 3,242,066 | ¥ 4,418,265 | ¥ 4,943,489 | |||
Released into revenue | (3,298,059) | (2,897,943) | (4,851,292) | (4,460,935) | |||
Ending balance | 4,538,963 | $ 677,649 | 4,517,620 | 4,385,117 | $ 616,450 | 4,656,051 | ¥ 4,818,144 |
Beginning balance | 4,818,144 | ¥ 4,173,497 | 4,818,144 | ¥ 4,173,497 | 4,173,497 | ||
Contractual amounts of outstanding loans subject to guarantee | 50,621,911 | 48,738,922 | 49,857,705 | ||||
Estimated contractual amounts of outstanding loans that have compensated by the Group | ¥ 3,769,627 | ¥ 3,860,296 | ¥ 3,129,264 | ||||
Minimum | |||||||
GUARANTEE LIABILITIES | |||||||
Compensation service period | 1 month | ||||||
Maximum | |||||||
GUARANTEE LIABILITIES | |||||||
Compensation service period | 36 months | 36 months | 36 months | 36 months |
GUARANTEE LIABILITIES - Conting
GUARANTEE LIABILITIES - Contingent (Details) ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | ||||
Jun. 30, 2022 CNY (¥) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 CNY (¥) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 CNY (¥) | |
GUARANTEE LIABILITIES | ||||||
Beginning balance | ¥ 3,285,081 | ¥ 3,285,081 | ||||
Ending balance | 3,320,414 | $ 495,725 | 3,404,333 | $ 478,574 | ||
Contingent guarantee | ||||||
GUARANTEE LIABILITIES | ||||||
Beginning balance | 3,248,496 | ¥ 3,543,454 | 3,248,496 | ¥ 3,543,454 | ||
Provision for contingent liabilities | 2,162,638 | 1,220,586 | 3,305,458 | 1,918,899 | ||
Net payout | (2,127,305) | ¥ (1,515,544) | (3,186,206) | (2,320,195) | ||
Ending balance | 3,320,414 | 3,404,333 | ¥ 3,142,158 | |||
Contingent guarantee | Adjusted Balance | ||||||
GUARANTEE LIABILITIES | ||||||
Beginning balance | ¥ 3,285,081 | ¥ 3,285,081 |
GUARANTEE LIABILITIES - Contrac
GUARANTEE LIABILITIES - Contractual amounts (Details) - CNY (¥) ¥ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
GUARANTEE LIABILITIES | |||
Contractual amounts of outstanding loans subject to guarantee | ¥ 48,738,922 | ¥ 50,621,911 | ¥ 49,857,705 |
Current contractual amounts of outstanding loans subject to guarantee | 48,021,601 | 49,904,061 | 49,117,630 |
0 - 30 days past due | |||
GUARANTEE LIABILITIES | |||
Contractual amounts of outstanding loans subject to guarantee | 481,618 | 456,773 | 446,780 |
31 - 60 days past due | |||
GUARANTEE LIABILITIES | |||
Contractual amounts of outstanding loans subject to guarantee | 214,321 | 228,107 | 235,769 |
61 - 90 days past due | |||
GUARANTEE LIABILITIES | |||
Contractual amounts of outstanding loans subject to guarantee | ¥ 21,382 | ¥ 32,970 | ¥ 57,526 |
RELATED PARTY BALANCES AND TR_3
RELATED PARTY BALANCES AND TRANSACTIONS - Services provided by the related parties (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services received from related party | ¥ 318,246 | ¥ 178,078 | ¥ 445,061 | ¥ 341,793 |
Qihu | Referral service fee | ||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services received from related party | 880 | 12,273 | 1,251 | 16,760 |
Qihu | Bandwidth service fee | ||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services received from related party | 62,882 | 51,696 | 96,387 | 79,714 |
Qihu | Brand fees charged | ||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services received from related party | 23,584 | 35,376 | 11,792 | |
Yujie | Referral service fee | ||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services received from related party | 221,380 | 101,715 | 298,069 | 217,889 |
Qibutianxia | Corporate expenses | ||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services received from related party | 5,660 | 5,660 | ||
Others | ||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services received from related party | 2,180 | 1,038 | 3,011 | 1,417 |
Hongying | Rental Expenses Charged | ||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services received from related party | ¥ 7,340 | ¥ 5,696 | ¥ 10,967 | ¥ 8,561 |
RELATED PARTY BALANCES AND TR_4
RELATED PARTY BALANCES AND TRANSACTIONS - Services provided to the related parties (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services provided to the related parties | ¥ 787,157 | ¥ 1,050,036 | ¥ 1,016,463 | ¥ 1,702,734 |
Kincheng | Referral service fee | ||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services provided to the related parties | 108,757 | 109,000 | ||
Kincheng | Loan facilitation service | ||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services provided to the related parties | 289,961 | 852,625 | 349,553 | 1,303,832 |
Kincheng | Post-facilitation services | ||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services provided to the related parties | 268,747 | 62,042 | 364,455 | 169,274 |
Jinshang | Loan facilitation service | ||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services provided to the related parties | 62,967 | 89,582 | 101,190 | 165,528 |
Jinshang | Post-facilitation services | ||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services provided to the related parties | 36,043 | 32,644 | 52,180 | 50,665 |
Beijing Zixuan | Loan facilitation service | ||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services provided to the related parties | 37 | 37 | ||
Beijing Zixuan | Post-facilitation services | ||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services provided to the related parties | 56 | 56 | ||
Others | ||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||
Services provided to the related parties | ¥ 20,682 | ¥ 13,050 | ¥ 40,085 | ¥ 13,342 |
RELATED PARTY BALANCES AND TR_5
RELATED PARTY BALANCES AND TRANSACTIONS - Amounts due from related parties (Details) - CNY (¥) ¥ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Due from related parties | ¥ 590,246 | ¥ 788,522 | ¥ 978,175 |
Kincheng | |||
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Due from related parties | 410,015 | 572,272 | 771,335 |
Jinshang | |||
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Due from related parties | 158,414 | 200,965 | 194,123 |
Shareholders | |||
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Due from related parties | 3,614 | 10,158 | 10,158 |
Others | |||
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Due from related parties | ¥ 18,203 | ¥ 5,127 | ¥ 2,559 |
RELATED PARTY BALANCES AND TR_6
RELATED PARTY BALANCES AND TRANSACTIONS - Amounts due to related parties (Details) ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | ||||||
Jun. 30, 2022 CNY (¥) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) | Oct. 31, 2020 | Sep. 30, 2020 | |
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||||
Amounts due to related parties | ¥ 178,687 | ¥ 203,324 | $ 28,583 | $ 26,677 | ¥ 214,057 | |||
Hangzhou Qifei | ||||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||||
Investment made | 8,996 | 8,996 | ||||||
Remaining unpaid share of registered capital | 41,004 | 41,004 | ||||||
Additional liabilities accrued | 0 | 0 | ||||||
Changfeng | ||||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||||
Equity Method Investment, Ownership Percentage | 30% | |||||||
Shanghai Jiehu | ||||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||||
Equity Method Investment, Ownership Percentage | 30% | |||||||
Hangzhou Qifei | ||||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||||
Equity Method Investment, Ownership Percentage | 25% | |||||||
Capital contribution | ¥ 0 | |||||||
Equity Method Investments | ¥ 0 | 0 | ||||||
Shanghai 360 Changfeng Technology, Co.,Ltd., | ||||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||||
Equity Method Investment, Ownership Percentage | 40% | |||||||
Shanghai Jiehu | Shanghai 360 Changfeng Technology, Co.,Ltd., | ||||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||||
Equity interest acquired | 30% | 30% | 30% | |||||
Qibutianxia | ||||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||||
Amounts due to related parties | ¥ 1,656 | 1,656 | ¥ 9,156 | |||||
Amounts of loans under such arrangement | 7,115,977 | 4,417,883 | 11,803,492 | |||||
Qihu | ||||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||||
Amounts due to related parties | 127,688 | 174,055 | 144,999 | ¥ 144,999 | ||||
Yujie | ||||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||||
Amounts due to related parties | 13,200 | 11,340 | 30,165 | |||||
Others | ||||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||||
Amounts due to related parties | 36,143 | 16,273 | 29,737 | |||||
Changfeng | Shanghai 360 Changfeng Technology, Co.,Ltd., | ||||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||||
Capital contribution | 300,000 | ¥ 300,000 | ||||||
Beijing Qifei | Hangzhou Qifei | ||||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||||
Equity Method Investment, Ownership Percentage | 26% | |||||||
Shareholders | Shanghai 360 Changfeng Technology, Co.,Ltd., | ||||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ||||||||
Capital contribution | ¥ 1,000,000 | ¥ 1,000,000 |
RELATED PARTY BALANCES AND TR_7
RELATED PARTY BALANCES AND TRANSACTIONS - Additional Information (Details) - Kincheng Bank - CNY (¥) | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Bank deposit | ¥ 2,519,337,000 | ¥ 2,825,298,000 | ¥ 320,491,000 | ||
Interest income | 31,996,000 | ¥ 8,561,000 | 63,553,000 | ¥ 11,954,000 | 29,312,000 |
Interest receivable | ¥ 53,364,000 | 79,000 | |||
Interest receivables | ¥ 21,835 | ¥ 1,244,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) $ in Thousands, $ in Millions | 1 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Nov. 30, 2020 | Aug. 31, 2019 | Jun. 30, 2022 CNY (¥) | Jun. 30, 2022 USD ($) | Jun. 30, 2022 HKD ($) | Jun. 30, 2021 CNY (¥) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 CNY (¥) | Dec. 31, 2021 | |
Income tax rate (as a percent) | 25% | 25% | 25% | 15% | 15% | 18% | ||||
Preferential tax rate | 15% | 15% | ||||||||
Income tax benefit (expense) | ¥ 396,732,000 | $ 59,231 | ¥ 663,357,000 | ¥ 579,891,000 | $ 81,520 | ¥ 1,021,956,000 | ||||
Hong Kong | ||||||||||
Income tax rate (as a percent) | 15% | 15% | 15% | 18% | ||||||
Effective tax rate | 16.50% | 16.50% | 16.50% | |||||||
Next tax rate for first minimum portion of assessable profits | 8.25% | 8.25% | 8.25% | |||||||
Income tax benefit (expense) | $ | $ 2 | |||||||||
Interest and penalties related to potential underpaid income tax expenses | ¥ | ¥ 0 | |||||||||
Subsidiaries [Member] | ||||||||||
Preferential tax rate | 15% | |||||||||
Percentage of income tax exempt | 40% | |||||||||
West Development | Subsidiaries [Member] | ||||||||||
Preferential tax rate | 15% | |||||||||
Qiyu. | ||||||||||
Preferential tax rate | 15% | 15% | 15% | |||||||
Qiyu. | High And New Technology Enterprises | ||||||||||
Preferential tax rate | 15% | |||||||||
Beihai Borui Credit Service Co., Ltd | ||||||||||
Preferential tax rate | 15% | 15% | 15% |
NET REVENUE (Details)
NET REVENUE (Details) ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | ||||
Jun. 30, 2022 CNY (¥) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 CNY (¥) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 CNY (¥) | |
Disaggregation of Revenue | ||||||
Total net revenue | ¥ 8,503,246 | $ 1,269,502 | ¥ 7,600,767 | ¥ 12,647,375 | $ 1,777,940 | ¥ 12,213,580 |
At a point in time | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 2,634,000 | 3,105,000 | 3,930 | 5,114 | ||
Over time | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 5,869,000 | 4,496,000 | 8,717 | 7,099 | ||
Credit driven services | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 5,868,397 | 876,129 | 4,856,038 | 8,809,503 | 1,238,420 | 7,476,006 |
Loan facilitation and servicing fees-capital heavy | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 1,141,771 | 170,462 | 1,265,047 | 1,724,628 | 242,444 | 1,846,102 |
Revenue from loan facilitation services | At a point in time | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 822,420 | 745,134 | 1,235,784 | 1,105,164 | ||
Revenue from post-origination services | Over time | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 319,351 | 519,913 | 488,844 | 740,938 | ||
Financing income | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 1,608,820 | 240,191 | 897,528 | 2,485,871 | 349,458 | 1,468,075 |
Financing income | Over time | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 1,608,820 | 897,528 | 2,485,871 | 1,468,075 | ||
Revenue from releasing of guarantee liabilitiesing of guarantee liabilities | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 3,074,515 | 459,013 | 2,647,734 | 4,522,107 | 635,708 | 4,088,453 |
Revenue from releasing of guarantee liabilitiesing of guarantee liabilities | Over time | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 3,074,515 | 2,647,734 | 4,522,107 | 4,088,453 | ||
Other services fees. | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 43,291 | 6,463 | 45,729 | 76,897 | 10,810 | 73,376 |
Other services fees. | At a point in time | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 43,291 | 45,729 | 76,897 | 73,376 | ||
Platform services | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 2,634,849 | 393,373 | 2,744,729 | 3,837,872 | 539,520 | 4,737,574 |
Loan facilitation and servicing fees-capital light | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 2,128,955 | 317,845 | 2,392,602 | 3,169,165 | 445,514 | 4,192,673 |
Revenue from loan facilitation services | At a point in time | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 1,298,998 | 1,988,160 | 2,003,965 | 3,432,784 | ||
Revenue from post-origination services | Over time | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 829,957 | 404,442 | 1,165,200 | 759,889 | ||
Referral services | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 382,650 | 57,128 | 286,594 | 468,031 | 65,795 | 442,889 |
Referral services | At a point in time | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | 382,650 | 286,594 | 468,031 | 442,889 | ||
Other services fees | ||||||
Disaggregation of Revenue | ||||||
Total net revenue | ¥ 123,244 | $ 18,400 | ¥ 65,533 | ¥ 200,676 | $ 28,211 | ¥ 102,012 |
INCOME TAXES - Current and defe
INCOME TAXES - Current and deferred portion of income tax expenses (Details) ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | ||||
Jun. 30, 2022 CNY (¥) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 CNY (¥) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 CNY (¥) | |
INCOME TAXES | ||||||
Current tax | ¥ 573,083 | ¥ 639,412 | ¥ 844,137 | ¥ 1,121,203 | ||
Deferred tax | (176,351) | 23,945 | (264,246) | (99,247) | ||
Income tax expense | ¥ 396,732 | $ 59,231 | ¥ 663,357 | ¥ 579,891 | $ 81,520 | ¥ 1,021,956 |
DIVIDENDS (Details)
DIVIDENDS (Details) - $ / shares | 3 Months Ended | |||||
Oct. 28, 2022 | Aug. 18, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
DIVIDENDS | ||||||
Dividends declared per share | $ 0.09 | $ 0.09 | $ 0.11 | $ 0.13 | $ 0.14 | |
Minimum | ||||||
DIVIDENDS | ||||||
Dividends declared (in percent) | 15% | |||||
Maximum | ||||||
DIVIDENDS | ||||||
Dividends declared (in percent) | 20% | |||||
ADS | ||||||
DIVIDENDS | ||||||
Dividends declared per share | $ 0.18 | $ 0.18 | $ 0.22 | $ 0.26 | $ 0.28 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) ¥ in Millions, $ in Millions | Sep. 30, 2022 CNY (¥) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 CNY (¥) | Jun. 30, 2022 USD ($) |
COMMITMENTS AND CONTINGENCIES | ||||
Amount of outstanding loan balance under guarantee model | ¥ 5 | ¥ 60 | ||
Percentage of total outstanding loan balances represented by the guarantee model loan balances | 0.003% | 0.003% | 0.04% | 0.04% |
Capital commitments contracted but not yet reflected | ¥ 500 | $ 70 | ¥ 500 | $ 74.6 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | ||||
Jun. 30, 2022 CNY (¥) ¥ / shares shares | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2021 CNY (¥) ¥ / shares shares | Sep. 30, 2022 CNY (¥) ¥ / shares shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 CNY (¥) ¥ / shares shares | |
Numerator: | ||||||
Net income attributable to shareholders of the Company | ¥ | ¥ 2,159,337 | ¥ 2,895,087 | ¥ 3,152,172 | ¥ 4,459,164 | ||
Net income attributable to Class A and Class B ordinary shareholders for computing basic and diluted net income per share | 2,159,337 | $ 322,381 | 2,895,087 | ¥ 3,152,172 | $ 443,125 | ¥ 4,459,164 |
Net income attributable to Class A and Class B ordinary shareholders for computing diluted net income per share | ¥ | ¥ 2,159,337 | ¥ 2,895,087 | ||||
Denominator: | ||||||
Weighted average Class A and Class B ordinary shares outstanding used in computing basic income per ordinary share | 311,109,257 | 311,109,257 | 305,886,883 | 311,571,575 | 311,571,575 | 306,641,972 |
Plus: incremental weighted average ordinary shares from assumed exercise of stock options and restricted shares using the treasury stock method | 9,141,937 | 9,141,937 | 15,071,309 | 9,653,228 | 9,653,228 | 14,304,755 |
Weighted average Class A and Class B ordinary shares outstanding used in computing diluted income per ordinary share | 320,251,194 | 320,251,194 | 320,958,192 | 321,224,803 | 321,224,803 | 320,946,727 |
Basic net income per share | (per share) | ¥ 6.94 | $ 1.04 | ¥ 9.46 | ¥ 10.12 | $ 1.42 | ¥ 14.54 |
Diluted net income per share | (per share) | ¥ 6.74 | $ 1.01 | ¥ 9.02 | ¥ 9.81 | $ 1.38 | ¥ 13.89 |
Anti-dilutive securities excluded from the calculation of diluted net income per share | 0 | 0 | 0 | 0 | 0 | 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | 3 Months Ended | ||||||
Nov. 11, 2022 | Oct. 28, 2022 | Aug. 18, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
SUBSEQUENT EVENTS | |||||||
Dividends declared per share | $ 0.09 | $ 0.09 | $ 0.11 | $ 0.13 | $ 0.14 | ||
ADS | |||||||
SUBSEQUENT EVENTS | |||||||
Dividends declared per share | $ 0.18 | $ 0.18 | $ 0.22 | $ 0.26 | $ 0.28 | ||
Subsequent Event | |||||||
SUBSEQUENT EVENTS | |||||||
Dividends declared per share | $ 0.08 | ||||||
Subsequent Event | ADS | |||||||
SUBSEQUENT EVENTS | |||||||
Dividends declared per share | $ 0.16 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) ¥ in Thousands, $ in Thousands | Sep. 30, 2022 CNY (¥) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 CNY (¥) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 CNY (¥) |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||||
User traffic direction fees | ¥ 472,101 | ¥ 472,269 | |||
Payable to financial institution partners | 347,313 | 422,423 | |||
Accrued payroll and welfare | 317,612 | 409,216 | |||
Payable for third-party service fee | 341,097 | 298,411 | |||
Payable to shareholder of non-controlling interests | 303,407 | 296,617 | |||
Dividend payable | 230,095 | 276,991 | |||
Lease liabilities | 37,535 | 25,779 | |||
Others | 68,197 | 56,623 | |||
Total | ¥ 2,267,693 | $ 318,787 | ¥ 2,117,357 | $ 316,113 | ¥ 2,258,329 |
Principal amount of loan | ¥ 90,000 |
SHARE-BASED COMPENSATION - Stoc
SHARE-BASED COMPENSATION - Stock options activity (Details) ¥ / shares in Units, ¥ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Nov. 20, 2021 ¥ / shares shares | May 20, 2020 $ / shares shares | May 20, 2020 ¥ / shares shares | Nov. 20, 2018 $ / shares shares | Nov. 20, 2018 ¥ / shares shares | May 20, 2018 $ / shares shares | May 20, 2018 ¥ / shares shares | Nov. 30, 2021 $ / shares shares | Aug. 31, 2020 shares | May 31, 2018 shares | Jun. 30, 2022 $ / shares | Jun. 30, 2022 CNY (¥) shares | Dec. 31, 2021 $ / shares | Dec. 31, 2021 CNY (¥) shares | Jun. 30, 2022 CNY (¥) shares | |
Share-based compensation arrangement by share-based payment award | |||||||||||||||
Number of shares granted | 2,400 | 3,514 | 3,514 | 690,023 | 690,023 | 24,627,493 | 24,627,493 | ||||||||
Exercise price per share | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||||||||
Weighted-average grant date fair value per option | ¥ / shares | ¥ 64.46 | ¥ 32.02 | ¥ 60.77 | ¥ 48.64 | |||||||||||
Number of options converted from restricted shares | 10,264,366 | ||||||||||||||
Weighted average exercise price for options converted | $ / shares | $ 0.00001 | ||||||||||||||
Fair value assumptions | |||||||||||||||
Risk-free rate of interest | 2.76% | 2.76% | |||||||||||||
Estimated volatility rate | 67.27% | 67.27% | |||||||||||||
Dividend yield | 5.10% | ||||||||||||||
Expected life (years) | 5 years | ||||||||||||||
Exercise price | $ / shares | $ 0.00001 | ||||||||||||||
Number of options | |||||||||||||||
Options outstanding at beginning | 12,945,337 | ||||||||||||||
Options forfeited in 2022 | (755,190) | ||||||||||||||
Options exercised in 2022 | (1,584,034) | ||||||||||||||
Options outstanding at ending | 10,606,113 | 12,945,337 | |||||||||||||
Options exercisable at June 30, 2022 | 3,002,620 | ||||||||||||||
Options vested or expected to be vested at June 30, 2022 | 10,606,113 | ||||||||||||||
Weighted Average Exercise Price | |||||||||||||||
Options outstanding at beginning | $ / shares | $ 0.00001 | ||||||||||||||
Options forfeited in 2022 | $ / shares | 0.00001 | ||||||||||||||
Options exercised in 2022 | $ / shares | 0.00001 | ||||||||||||||
Options outstanding at ending | $ / shares | 0.00001 | $ 0.00001 | |||||||||||||
Options exercisable at June 30, 2022 | $ / shares | 0.00001 | ||||||||||||||
Options vested or expected to be vested at June 30, 2022 | $ / shares | $ 0.00001 | ||||||||||||||
Weighted Average Remaining Contract Life Years | |||||||||||||||
Options forfeited in 2022 | 7 years 9 months | ||||||||||||||
Options exercised in 2022 | 6 years 10 days | ||||||||||||||
Options outstanding at ending | 7 years 9 months | 8 years 10 days | |||||||||||||
Options exercisable at June 30, 2022 | 6 years 7 months 24 days | ||||||||||||||
Options vested or expected to be vested at June 30, 2022 | 7 years 9 months | ||||||||||||||
Aggregate Intrinsic Value | |||||||||||||||
Options outstanding at beginning | ¥ | ¥ 945,786 | ||||||||||||||
Options forfeited in 2022 | ¥ | ¥ (43,756) | ||||||||||||||
Options exercised in 2022 | ¥ | (91,779) | ||||||||||||||
Options outstanding at ending | ¥ | ¥ 614,518 | ¥ 945,786 | |||||||||||||
Options exercisable at June 30, 2022 | ¥ | 173,972 | ||||||||||||||
Options vested or expected to be vested at June 30, 2022 | ¥ | 614,518 | ||||||||||||||
Options | Employees | |||||||||||||||
Share-based compensation arrangement by share-based payment award | |||||||||||||||
Vesting period (in years) | 1 year 2 months 19 days | ||||||||||||||
Aggregate Intrinsic Value | |||||||||||||||
Unrecognized compensation cost | ¥ | ¥ 211,281 | ||||||||||||||
Options | Maximum | |||||||||||||||
Share-based compensation arrangement by share-based payment award | |||||||||||||||
Vesting period (in years) | 4 years | 4 years | 4 years | 4 years | 4 years | 4 years | |||||||||
2018 plan | Options | |||||||||||||||
Share-based compensation arrangement by share-based payment award | |||||||||||||||
Number of shares available for grant | 25,336,096 | ||||||||||||||
Percentage of annual increase in shares | 1% | ||||||||||||||
Expiry period (in years) | 10 years | ||||||||||||||
2019 Plan | Options | |||||||||||||||
Share-based compensation arrangement by share-based payment award | |||||||||||||||
Number of shares available for grant | 17,547,567 | ||||||||||||||
Percentage of annual increase in shares | 1% | ||||||||||||||
Expiry period (in years) | 10 years |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted shares (Details) ¥ / shares in Units, ¥ in Thousands | 6 Months Ended |
Jun. 30, 2022 CNY (¥) ¥ / shares shares | |
Weighted Average Grant Date Fair Value | |
Fair value of the restricted shares vested | ¥ | ¥ 25,885 |
Restricted Shares | |
Number of Restricted Shares Units | |
Outstanding at beginning | shares | 6,961,446 |
Granted | shares | 258,500 |
Forfeited | shares | (260,238) |
Vested | shares | (388,702) |
Outstanding at ending | shares | 6,571,006 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning | ¥ / shares | ¥ 52.38 |
Granted | ¥ / shares | 43.43 |
Forfeited | ¥ / shares | 65.41 |
Vested | ¥ / shares | 66.59 |
Outstanding at ending | ¥ / shares | ¥ 50.52 |
Unrecognized compensation cost | ¥ | ¥ 253,248 |
Weighted-average vesting period | 1 year 4 months 13 days |
Restricted Shares | Minimum | |
Weighted Average Grant Date Fair Value | |
Vesting period (in years) | 3 years |
Restricted Shares | Maximum | |
Weighted Average Grant Date Fair Value | |
Vesting period (in years) | 5 years |
SHARE-BASED COMPENSATION - Comp
SHARE-BASED COMPENSATION - Compensation costs (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
SHARE-BASED COMPENSATION | ||
Total | ¥ 98,833 | ¥ 126,830 |
Facilitation, origination and servicing expenses | ||
SHARE-BASED COMPENSATION | ||
Total | 34,704 | 30,893 |
Sales and marketing expenses | ||
SHARE-BASED COMPENSATION | ||
Total | 525 | 5,565 |
General and administrative expenses | ||
SHARE-BASED COMPENSATION | ||
Total | ¥ 63,604 | ¥ 90,372 |
ORDINARY SHARES (Details)
ORDINARY SHARES (Details) - $ / shares | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
ORDINARY SHARES AND PREFERRED SHARES | |||
Common stock, authorized (in shares) | 5,000,000,000 | 5,000,000,000 | 5,000,000,000 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | $ 0.00001 |
Common stock, outstanding (in shares) | 312,522,703 | 312,459,711 | 310,486,975 |
Ordinary shares | |||
ORDINARY SHARES AND PREFERRED SHARES | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |
Common stock, outstanding (in shares) | 312,459,711 | 310,486,975 | |
Class A ordinary shares | |||
ORDINARY SHARES AND PREFERRED SHARES | |||
Common stock, outstanding (in shares) | 272,639,125 | 270,666,389 | |
Class B ordinary shares | |||
ORDINARY SHARES AND PREFERRED SHARES | |||
Common stock, outstanding (in shares) | 39,820,586 | 39,820,586 |
STATUTORY RESERVES AND RESTRI_2
STATUTORY RESERVES AND RESTRICTED NET ASSETS (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | ||
Percentage of minimum allocation to fund general reserve funds, after tax profits | 10% | |
Percentage of maximum allocation to fund general reserve funds, reserve registered capital | 50% | |
Amount of appropriations to reserves | ¥ 0 | ¥ 0 |
Paid-in capital, capital reserve and statutory reserves not available for distribution | 14,536,140 | 8,283,560 |
Statutory reserve fund | ¥ 218,082 | ¥ 168,541 |
LEASE (Details)
LEASE (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Existence of option to extend lease | true | |
Existence of option to terminate lease | true | |
Operating lease expenses | ¥ 32,064 | ¥ 23,752 |
Amortization expenses of land use rights | ¥ 10,362 | ¥ 6,908 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Original term of the lease | 5 years | |
Remaining lease term | 3 years | |
Extension term of the lease | 5 years | |
Termination term of the lease | 1 year |
LEASE - Cash paid for amounts i
LEASE - Cash paid for amounts included in the measurement of lease liabilities (Details) - CNY (¥) ¥ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | ¥ 21,565 | ¥ 16,844 |
Right-of-use assets obtained in exchange for lease obligations, Operating leases | ¥ 55,845 | ¥ 9,871 |
LEASE - ROU assets and lease li
LEASE - ROU assets and lease liabilities (Details) - CNY (¥) ¥ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
ROU assets and lease liabilities | ||
Right-of-use assets | ¥ 76,030 | ¥ 42,606 |
Operating lease, right-of-use asset, statement of financial position [Extensible List] | Other non-current assets | Other non-current assets |
Operating lease liabilities-current | ¥ 37,535 | ¥ 25,779 |
Operating lease, liability, current, statement of financial position [Extensible List] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Operating lease liabilities-non current | ¥ 34,147 | ¥ 13,177 |
Operating lease, liability, noncurrent, statement of financial position [Extensible List] | Other long-term liabilities | Other long-term liabilities |
Weighted-average remaining lease term | 2 years 3 months 14 days | 2 years 1 month 2 days |
Weighted-average discount rate | 4.75% | 6.22% |
LEASE - Maturities of operating
LEASE - Maturities of operating lease liabilities and maturities of operating leases (Details) - CNY (¥) ¥ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Maturities of operating lease liabilities | ||
Within one year | ¥ 38,326 | ¥ 28,203 |
Within a period of more than one year but not more than two years | 25,146 | 7,034 |
Within a period of more than two year but not more than three years | 11,785 | 3,550 |
Within a period of more than three year but not more than four years | 382 | |
Total undiscounted lease payments | 75,257 | 39,169 |
Imputed interest | (3,575) | (213) |
Total lease liabilities | ¥ 71,682 | ¥ 38,956 |