Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Entity Registrant Name | X Financial |
Entity Central Index Key | 0001725033 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2018 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | true |
Entity Shell Company | false |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
Class A ordinary shares | |
Entity Common Stock, Shares Outstanding | 206,014,298 |
Class B ordinary shares | |
Entity Common Stock, Shares Outstanding | 97,600,000 |
Common share | |
Entity Common Stock, Shares Outstanding | 303,614,298 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
ASSETS | |||
Cash and cash equivalents | $ 155,532,143 | ¥ 1,069,361,250 | ¥ 671,360,926 |
Restricted cash (including RMB12,614,745 and RMB4,861,491 from Consolidated Trusts as of December 31, 2017 and 2018 respectively) | 30,302,580 | 208,345,389 | 12,614,745 |
Accounts receivable and contract assets, net of allowance for doubtful accounts of RMB175,799,647 and RMB221,213,326 as of December 31, 2017 and 2018, respectively | 200,609,882 | 1,379,293,243 | 1,110,947,916 |
Loans held for sale | 92,024,799 | 632,716,508 | 768,638,420 |
Loans at fair value (including RMB667,838,880 and RMB33,417,119 from Consolidated Trusts as of December 31, 2017 and 2018 respectively) | 4,860,318 | 33,417,119 | 667,838,880 |
Prepaid expenses and other current assets (including RMB11,105,628 and RMB296,080 from Consolidated Trusts as of December 31, 2017 and 2018 respectively) | 16,754,103 | 115,192,835 | 82,099,649 |
Financial guarantee derivative | 52,105,289 | 358,249,913 | |
Amount due from related party | 2,908,879 | 20,000,000 | |
Deferred tax assets, net | 50,417,800 | 346,647,582 | 296,057,946 |
Long-term investments | 41,774,812 | 287,222,720 | 54,167,615 |
Property and equipment, net | 3,376,452 | 23,214,797 | 21,004,932 |
Intangible assets, net | 4,130,668 | 28,400,406 | 1,616,238 |
Loan receivable from Xiaoying Housing Loans, net | 18,631,558 | 128,101,279 | 197,595,942 |
Other non-current assets | 989,957 | 6,806,456 | 3,751,516 |
TOTAL ASSETS | 674,419,240 | 4,636,969,497 | 3,887,694,725 |
LIABILITIES | |||
Payable to investors at fair value of the Consolidated Trusts (including RMB 667,080,871 and nil from the consolidated VIEs, without recourse to the Company as of December 31, 2017 and 2018 respectively) | 667,080,871 | ||
Guarantee liabilities (including RMB545,169,033 and RMB19,297,718 from the consolidated VIEs, without recourse to the Company as of December 31, 2017 and 2018 respectively) | 3,039,517 | 20,898,201 | 545,169,033 |
Financial guarantee derivative (including RMB53,260,916 and nil from the consolidated VIEs, without recourse to the Company as of December 31, 2017 and 2018 respectively) | 53,260,916 | ||
Short-term bank borrowings (including nil and RMB198,000,000 from the consolidated VIEs, without recourse to the Company as of December 31, 2017 and 2018 respectively) | 28,797,906 | 198,000,000 | |
Accrued payroll and welfare (including RMB20,655,199 and RMB23,329,971 from the consolidated VIEs, without recourse to the Company as of December 31, 2017 and 2018 respectively) | 13,593,764 | 93,463,926 | 77,772,326 |
Other tax payable (including RMB95,368,838 and RMB95,184,938 from the consolidated VIEs, without recourse to the Company as of December 31, 2017 and 2018 respectively) | 19,508,264 | 134,129,068 | 105,948,089 |
Income tax payable (including RMB270,342,567 and RMB93,611,597 from the consolidated VIEs, without recourse to the Company as of December 31, 2017 and 2018 respectively) | 45,413,165 | 312,238,213 | 401,331,806 |
Deposit payable to channel cooperators (including RMB134,262,319 and nil from the consolidated VIEs, without recourse to the Company as of December 31, 2017 and 2018 respectively) | 19,495,629 | 134,042,199 | 134,262,319 |
Accrued expenses and other liabilities (including RMB132,525,198 and RMB117,547,625 from the consolidated VIEs, without recourse to the Company as of December 31, 2017 and 2018 respectively) | 25,991,051 | 178,701,474 | 137,328,364 |
Deferred tax liabilities(including nil and RMB47,145,390 from the consolidated VIEs, without recourse to the Company as of December 31, 2017 and 2018 respectively) | 6,898,052 | 47,427,564 | |
TOTAL LIABILITIES | 162,737,348 | 1,118,900,645 | 2,122,153,724 |
Commitments and Contingencies (Note 14) | |||
Equity: | |||
Common shares (US$0.0001 par value; 500,000,000 and 1,000,000,000 shares authorized, 280,087,342 and 303,614,298 shares issued and outstanding as of December 31, 2017 and 2018, respectively) | 27,574 | 189,586 | 173,444 |
Additional paid-in capital | 410,766,203 | 2,824,223,031 | 1,971,701,910 |
Retained earnings (Accumulated deficits) | 93,100,845 | 640,114,859 | (242,997,034) |
Other comprehensive income | 7,635,046 | 52,494,757 | 33,449,640 |
Total X Financial shareholders' equity | 511,529,668 | 3,517,022,233 | 1,762,327,960 |
Non-controlling interests | 152,224 | 1,046,619 | 3,213,041 |
TOTAL EQUITY | 511,681,892 | 3,518,068,852 | 1,765,541,001 |
TOTAL LIABILITIES AND EQUITY | $ 674,419,240 | ¥ 4,636,969,497 | ¥ 3,887,694,725 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017CNY (¥)shares |
Restricted cash | $ 30,302,580 | ¥ 208,345,389 | ¥ 12,614,745 | |
Allowance for doubtful accounts of accounts receivable and contract assets | 32,174,142 | 221,213,326 | $ 25,568,998 | 175,799,647 |
Loans at fair value | 4,860,318 | 33,417,119 | 667,838,880 | |
Prepaid expenses and other current assets | 16,754,103 | 115,192,835 | 82,099,649 | |
Payable to investors at fair value of the Consolidated Trusts | 667,080,871 | |||
Guarantee liabilities | 3,039,517 | 20,898,201 | $ 79,291,548 | 545,169,033 |
Financial guarantee derivative, liabilities | 53,260,916 | |||
Short-term bank borrowings | 28,797,906 | 198,000,000 | ||
Accrued payroll and welfare | 13,593,764 | 93,463,926 | 77,772,326 | |
Other tax payable | 19,508,264 | 134,129,068 | 105,948,089 | |
Income tax payable | 45,413,165 | 312,238,213 | 401,331,806 | |
Deposit payable to channel cooperators | 19,495,629 | 134,042,199 | 134,262,319 | |
Accrued expenses and other liabilities | 25,991,051 | 178,701,474 | ¥ 137,328,364 | |
Deferred tax liabilities | $ 6,898,052 | ¥ 47,427,564 | ||
Common shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common shares, shares authorized (in shares) | shares | 1,000,000,000 | 1,000,000,000 | 500,000,000 | 500,000,000 |
Common shares, shares issued (in shares) | shares | 303,614,298 | 303,614,298 | 280,087,342 | 280,087,342 |
Common shares, shares outstanding (in shares) | shares | 303,614,298 | 303,614,298 | 280,087,342 | 280,087,342 |
Consolidated Trusts | ||||
Restricted cash | $ 707,075 | ¥ 4,861,491 | ¥ 12,614,745 | |
Loans at fair value | 4,860,318 | 33,417,119 | 667,838,880 | |
Prepaid expenses and other current assets | 43,063 | 296,080 | 11,105,628 | |
Payable to investors at fair value of the Consolidated Trusts | 667,080,871 | |||
Other tax payable | $ 41,388 | 284,564 | 3,586,212 | |
Accrued expenses and other liabilities | 19,394,527 | |||
Consolidated VIEs | ||||
Payable to investors at fair value of the Consolidated Trusts | 0 | 667,080,871 | ||
Guarantee liabilities | 19,297,718 | 545,169,033 | ||
Financial guarantee derivative, liabilities | 0 | 53,260,916 | ||
Short-term bank borrowings | 198,000,000 | 0 | ||
Accrued payroll and welfare | 23,329,971 | 20,655,199 | ||
Other tax payable | 95,184,938 | 95,368,838 | ||
Income tax payable | 93,611,597 | 270,342,567 | ||
Deposit payable to channel cooperators | 0 | 134,262,319 | ||
Accrued expenses and other liabilities | 117,547,625 | 132,525,198 | ||
Deferred tax liabilities | ¥ 47,145,390 | ¥ 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | 12 Months Ended | |||
Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | |
Net revenues | ||||
Total net revenue | $ 514,958,919 | ¥ 3,540,600,044 | ¥ 1,786,935,193 | ¥ 230,305,685 |
Operating costs and expenses: | ||||
Origination and servicing | 172,487,401 | 1,185,937,128 | 760,143,348 | 259,054,329 |
General and administrative | 32,001,132 | 220,023,783 | 98,236,038 | 61,711,596 |
Sales and marketing | 29,921,577 | 205,725,801 | 76,584,015 | 38,210,523 |
Provision for contingent guarantee liabilities | 31,468,805 | 216,363,770 | 182,578,676 | |
Provision for accounts receivable and contract assets | 57,740,733 | 396,996,410 | 167,700,495 | 8,099,152 |
Provision for loan receivable from Xiaoying Housing Loans | 5,868,355 | 40,347,875 | ||
Total operating expenses | 329,488,003 | 2,265,394,767 | 1,285,242,572 | 367,075,600 |
Income (loss) from operations | 185,470,916 | 1,275,205,277 | 501,692,621 | (136,769,915) |
Interest income (expense), net | 614,474 | 4,224,817 | 3,632,860 | 256,832 |
Foreign exchange gain (loss) | 1,407 | 9,677 | (478,590) | (18,220) |
Investment income (loss), net | ¥ | 1,500,000 | (6,300,000) | ||
Change in fair value of financial guarantee derivative | (29,230,064) | (200,971,302) | (18,110,752) | |
Fair value adjustments related to Consolidated Trusts | 1,797,487 | 12,358,626 | (9,750,565) | (4,358,490) |
Other income (loss), net | (858,726) | (5,904,176) | 89,690 | (9,270) |
Income (loss) before income taxes and gain (loss) from equity in affiliates | 157,795,494 | 1,084,922,919 | 478,575,264 | (147,199,063) |
Income tax benefit (expense) | (30,531,770) | (209,921,188) | (138,248,227) | 27,018,204 |
Gain (loss) from equity in affiliates | 1,171,566 | 8,055,105 | (832,385) | |
Net income (loss) | 128,435,290 | 883,056,836 | 339,494,652 | (120,180,859) |
Less: net loss attributable to noncontrolling interests | (8,008) | (55,057) | (780,350) | (606,609) |
Net income (loss) attributable to X Financial | $ 128,443,298 | ¥ 883,111,893 | ¥ 340,275,002 | ¥ (119,574,250) |
Net income (loss) per share-basic | (per share) | $ 0.45 | ¥ 3.08 | ¥ 1.30 | ¥ (0.50) |
Weighted average number of ordinary shares outstanding-basic | 286,588,402 | 286,588,402 | 261,219,657 | 238,095,238 |
Net income (loss) per share-diluted | (per share) | $ 0.42 | ¥ 2.91 | ¥ 1.22 | ¥ (0.50) |
Weighted average number of ordinary shares outstanding-diluted | 303,984,284 | 303,984,284 | 279,710,804 | 238,095,238 |
Net income (loss) | $ 128,435,290 | ¥ 883,056,836 | ¥ 339,494,652 | ¥ (120,180,859) |
Other comprehensive income (loss), net of tax of nil: | ||||
Foreign currency translation adjustments | 2,769,997 | 19,045,117 | (24,463,956) | 27,871,616 |
Comprehensive income (loss) | 131,205,287 | 902,101,953 | 315,030,696 | (92,309,243) |
Less: comprehensive loss attributable to noncontrolling interests | (8,008) | (55,057) | (780,350) | (606,609) |
Comprehensive income (loss) attributable to X Financial | 131,213,295 | 902,157,010 | 315,811,046 | (91,702,634) |
Loan facilitation service | Direct Model | ||||
Net revenues | ||||
Total net revenue | 430,161,002 | 2,957,571,967 | 1,231,054,733 | 4,523,804 |
Loan facilitation service | Intermediary Model | ||||
Net revenues | ||||
Total net revenue | 33,200,840 | 228,272,373 | 302,614,463 | 176,849,079 |
Post-origination service | ||||
Net revenues | ||||
Total net revenue | 19,088,565 | 131,243,431 | 50,326,664 | 8,187,989 |
Financing income | ||||
Net revenues | ||||
Total net revenue | 11,068,862 | 76,103,961 | 130,740,149 | 30,500,162 |
Other revenue | ||||
Net revenues | ||||
Total net revenue | $ 21,439,650 | ¥ 147,408,312 | ¥ 72,199,184 | ¥ 10,244,651 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Other comprehensive income (loss), tax portion | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | Common shareUSD ($)shares | Common shareCNY (¥)shares | Additional paid in capitalUSD ($) | Additional paid in capitalCNY (¥) | Retained Earnings (Accumulated Deficits)USD ($) | Retained Earnings (Accumulated Deficits)CNY (¥) | Accumulated other comprehensive incomeUSD ($) | Accumulated other comprehensive incomeCNY (¥) | Equity Attributable to X FinancialUSD ($) | Equity Attributable to X FinancialCNY (¥) | Non-controlling InterestUSD ($) | Non-controlling InterestCNY (¥) | USD ($)shares | CNY (¥)shares |
Balance at Dec. 31, 2015 | ¥ 145,624 | ¥ 843,472,003 | ¥ (463,697,786) | ¥ 30,041,980 | ¥ 409,961,821 | ¥ 409,961,821 | ||||||||
Balance (in shares) at Dec. 31, 2015 | shares | 238,095,238 | 238,095,238 | ||||||||||||
Capital contribution by non-controlling interest | ¥ 4,600,000 | 4,600,000 | ||||||||||||
Capital contribution by owner | 16,354,156 | 16,354,156 | 16,354,156 | |||||||||||
Sharebased compensation (Note 12) | 37,893,996 | 37,893,996 | 37,893,996 | |||||||||||
Net income (loss) | (119,574,250) | (119,574,250) | (606,609) | (120,180,859) | ||||||||||
Foreign currency translation adjustments | 27,871,616 | 27,871,616 | 27,871,616 | |||||||||||
Balance at Dec. 31, 2016 | ¥ 145,624 | 897,720,155 | (583,272,036) | 57,913,596 | 372,507,339 | 3,993,391 | 376,500,730 | |||||||
Balance (in shares) at Dec. 31, 2016 | shares | 238,095,238 | 238,095,238 | ||||||||||||
Issuance of new shares (Note 1) | $ 41,992,104 | ¥ 27,820 | 999,972,180 | 1,000,000,000 | 1,000,000,000 | |||||||||
Sharebased compensation (Note 12) | 74,009,575 | 74,009,575 | 74,009,575 | |||||||||||
Net income (loss) | 340,275,002 | 340,275,002 | (780,350) | 339,494,652 | ||||||||||
Foreign currency translation adjustments | (24,463,956) | (24,463,956) | (24,463,956) | |||||||||||
Balance at Dec. 31, 2017 | $ 25,226 | ¥ 173,444 | $ 286,772,149 | 1,971,701,910 | $ (35,342,453) | (242,997,034) | $ 4,865,049 | 33,449,640 | $ 256,319,971 | 1,762,327,960 | $ 467,317 | 3,213,041 | $ 256,787,288 | ¥ 1,765,541,001 |
Balance (in shares) at Dec. 31, 2017 | shares | 280,087,342 | 280,087,342 | 280,087,342 | 280,087,342 | ||||||||||
Issuance of new shares (Note 1) | $ 2,348 | ¥ 16,142 | 99,188,898 | 681,973,271 | 99,191,246 | 681,989,413 | $ 99,191,246 | ¥ 681,989,413 | ||||||
Issuance of new shares (in shares) (Note 1) | shares | 23,526,956 | 23,526,956 | ||||||||||||
Sharebased compensation (Note 12) | 24,992,580 | 171,836,485 | 24,992,580 | 171,836,485 | 24,992,580 | 171,836,485 | ||||||||
Net income (loss) | 128,443,298 | 883,111,893 | 128,443,298 | 883,111,893 | (8,008) | (55,057) | 128,435,290 | 883,056,836 | ||||||
Acquisition in additional interest of subsidiary | (187,424) | (1,288,635) | (187,424) | (1,288,635) | (307,085) | (2,111,365) | (494,509) | (3,400,000) | ||||||
Foreign currency translation adjustments | 2,769,997 | 19,045,117 | 2,769,997 | 19,045,117 | 2,769,997 | 19,045,117 | ||||||||
Balance at Dec. 31, 2018 | $ 27,574 | ¥ 189,586 | $ 410,766,203 | ¥ 2,824,223,031 | $ 93,100,845 | ¥ 640,114,859 | $ 7,635,046 | ¥ 52,494,757 | $ 511,529,668 | ¥ 3,517,022,233 | $ 152,224 | ¥ 1,046,619 | $ 511,681,892 | ¥ 3,518,068,852 |
Balance (in shares) at Dec. 31, 2018 | shares | 303,614,298 | 303,614,298 | 303,614,298 | 303,614,298 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net income (loss) | $ 128,435,290 | ¥ 883,056,836 | ¥ 339,494,652 | ¥ (120,180,859) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Depreciation and amortization | 1,401,357 | 9,635,032 | 5,366,195 | 3,060,307 |
Share-based compensation | 24,992,580 | 171,836,485 | 74,009,575 | 37,893,996 |
Impairment of long-term investments | 6,300,000 | |||
Gain on disposal of investment | (1,500,000) | |||
Loss (gain) from equity in affiliates | (1,171,566) | (8,055,105) | 832,385 | |
Gain from disposal of property and equipment | (10) | (66) | (103) | (1,410) |
Fair value adjustments related to Consolidated Trusts | (1,797,487) | (12,358,626) | 9,750,565 | 4,358,490 |
Change in fair value of financial guarantee derivative | 29,230,064 | 200,971,302 | 18,110,752 | |
Provision for accounts receivable and contract assets | 57,740,733 | 396,996,410 | 167,700,495 | 8,099,152 |
Provision for loan receivable from Xiaoying Housing Loans | 5,868,355 | 40,347,875 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable and contract assets | (96,769,942) | (665,341,737) | (1,138,792,125) | (95,576,729) |
Prepaid expenses and other current assets | (936,761) | (6,440,698) | (11,850,168) | (56,014,240) |
Amount due from related party | (2,908,879) | (20,000,000) | ||
Deferred tax asset | (7,357,957) | (50,589,636) | (257,121,164) | (33,146,385) |
Deferred tax liabilities | 6,898,052 | 47,427,564 | ||
Origination of loans held for sale | (741,277,241) | (5,096,651,671) | (15,072,262,146) | (14,687,534,200) |
Sales of loans held for sale | 761,046,263 | 5,232,573,583 | 14,461,175,264 | 14,603,357,240 |
Loan receivable from Xiaoying Housing Loans | 4,239,224 | 29,146,788 | (176,499,046) | (14,646,776) |
Other non-current assets | (444,323) | (3,054,940) | (1,400,688) | (8,064,311) |
Guarantee liabilities | (76,252,030) | (524,270,832) | 444,507,581 | 90,966,424 |
Financial guarantee derivative | (89,081,831) | (612,482,131) | 35,150,164 | |
Accrued payroll and welfare | 2,282,249 | 15,691,600 | 30,959,302 | 41,991,301 |
Other tax payable | 4,098,753 | 28,180,979 | 89,845,696 | 12,008,239 |
Income tax payable | (12,958,126) | (89,093,593) | 395,221,541 | 6,110,265 |
Deposit payable to channel cooperators | (32,015) | (220,120) | (57,232,429) | 183,186,998 |
Accrued expenses and other current liabilities | 5,533,977 | 38,048,852 | 29,206,511 | 100,398,798 |
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 778,729 | 5,354,151 | (615,327,191) | 82,566,300 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchase of property and equipment and intangible assets | (5,619,131) | (38,634,331) | (20,645,321) | (3,424,687) |
Disposal of property and equipment | 776 | 5,332 | 2,997 | 8,386 |
Loan to shareholder | (217,000,000) | |||
Loan collected from shareholder | 217,000,000 | |||
Principal payment of loans at fair value | (9,868,718) | (67,852,371) | (1,444,135,285) | (2,130,643,007) |
Principal collection of loans at fair value | 108,261,492 | 744,351,887 | 1,492,468,221 | 1,420,643,007 |
Purchase of long-term investments | (32,724,893) | (225,000,000) | (55,000,000) | (21,300,000) |
Disposal of long-term investments | 16,500,000 | |||
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 60,049,526 | 412,870,517 | (10,809,388) | (734,716,301) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Contribution from shareholders | 16,354,156 | |||
Proceeds from initial public offering | 103,714,607 | 713,089,781 | ||
Payments of initial public offering cost | (4,523,361) | (31,100,368) | ||
Proceeds from equity financing | 1,000,000,000 | |||
Acquisition of additional interest in subsidiary | (203,622) | (1,400,000) | ||
Proceeds from short-term bank borrowings | 28,797,906 | 198,000,000 | ||
Loan from related parties | 285,467,540 | 325,427,200 | ||
Loan repayment to related parties | (392,113,384) | (331,216,528) | ||
Cash received from investors- Consolidated Trusts | 1,096,800,000 | 770,000,000 | ||
Cash paid to investors- Consolidated Trusts | (101,345,357) | (696,800,000) | (1,160,000,000) | (10,000,000) |
Contribution from non-controlling interest | 4,600,000 | |||
CASH PROVIDED BY FINANCING ACTIVITIES | 26,440,173 | 181,789,413 | 830,154,156 | 775,164,828 |
Effect of foreign exchange rate changes | (913,840) | (6,283,113) | (24,740,525) | 18,233,044 |
NET INCREASE IN CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH | 86,354,588 | 593,730,968 | 179,277,052 | 141,247,871 |
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF YEAR | 99,480,135 | 683,975,671 | 504,698,619 | 363,450,748 |
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH AT YEAR END | 185,834,723 | 1,277,706,639 | 683,975,671 | 504,698,619 |
Supplemental disclosures of cash flow information: | ||||
Income taxes paid | 43,949,801 | 302,176,854 | 147,849 | 17,917 |
Non-cash investing activities: | ||||
Payable for purchase of property and equipment and intangible assets | 1,586,987 | 1,650,868 | ||
Reconciliation to amounts on consolidated balance sheets: | ||||
Total cash and cash equivalents and restricted cash | $ 99,480,135 | ¥ 683,975,671 | ¥ 504,698,619 | ¥ 363,450,748 |
Organization and principal acti
Organization and principal activities | 12 Months Ended |
Dec. 31, 2018 | |
Organization and principal activities | |
Organization and principal activities | 1. Organization and principal activities X Financial (the “Company” or “X Financial”) is an exempted company incorporated with limited liabilities in the Cayman Islands under the laws of the Cayman Islands on January 5, 2015. The Company, its subsidiaries and its variable interest entities (collectively referred to as the “Group”) provides personal finance services in the People’s Republic of China (“PRC”) by connecting borrowers and investors through a proprietary internet platform. The Group began the operations through Shenzhen Ying Zhong Tong Financial Information Service Co., Ltd. (“Shenzhen Ying Zhong Tong”), which was founded in March 2014 in the PRC by Mr. Tang, Chief Executive Officer and Mr. Zhu (the “Founders”) who collectively held more than 50% of the equity holdings. During the period of 2015 to 2016, the Founders also established a number of special purpose vehicles (“SPVs”) to carry out personal finance business in the PRC. At the formation date of each SPV, Shenzhen Ying Zhong Tong entered into a series of contractual agreements with the SPV and its nominal shareholder(s) include Shareholders’ Voting Rights Proxy Agreements, Exclusive Call Option Agreements, Exclusive Business Cooperation Agreements, and Equity Pledge Agreements, through which Shenzhen Ying Zhong Tong (1) has power to direct the activities that most significantly affects the economic performance of the SPV and (2) can receive the economic benefits of the SPVs that could be significant to the SPV. Accordingly, Shenzhen Ying Zhong Tong is the primary beneficiary of the SPVs. On January 5, 2015, X Financial was incorporated in the Cayman Islands by the Founders and one other individual. The Founders collectively held more than 50% of the equity holdings of X Financial. Further, Mr. Zhu designated all of his shareholder rights to Mr. Tang through a proxy agreement. As such, Mr. Tang effectively was the controlling shareholder of the Company since its incorporation. On August 7, 2015, the Company completed its equity financing by issuing 38,095,238 ordinary shares to an unrelated third party investor at a consideration of US$60,000,000. In conjunction with the equity financing, the Company also issued an additional 40,000,000 ordinary shares to Mr. Yue Tang. Mr. Tang remained as the effective controlling shareholder. In order to raise capital through its initial public offering (“IPO”) in the United States, the Group undertook a series of transactions since late 2016 with X Financial being proposed as the listing entity (“Reorganization”): As PRC laws and regulations prohibit and restrict foreign ownership of internet value‑added businesses, the Company established a wholly‑owned foreign invested subsidiary in the PRC, Xiaoying (Beijing) Information Technology Co., Ltd (“Beijing WFOE”) on October 28, 2015. The existing contractual agreements with the SPVs and SPVs’ shareholders held by Shenzhen Ying Zhong Tong were assigned to Beijing WFOE. On October 19, 2016, Shenzhen Xiaoying Technology Co., Ltd. (“Shenzhen Xiaoying”) was incorporated in the PRC by the same shareholders of the Company with identical shareholdings. In December 2016, Shenzhen Xiaoying acquired Shenzhen Ying Zhong Tong for nominal consideration and Shenzhen Ying Zhong Tong became the wholly owned subsidiary of Shenzhen Xiaoying. As both Shenzhen Xiaoying and Shenzhen Ying Zhong Tong were controlled by Mr. Tang at the time, the transaction was a reorganization under common control. X Financial, through its PRC subsidiary, Beijing WFOE, entered into a series of contractual arrangements with Shenzhen Xiaoying, Beijing Ying Zhong Tong Rongxun Technology Service Co., Ltd (“Beijing Ying Zhong Tong”) in December 2017, and Shenzhen Tangren Financing Guarantee Co., Ltd (“Shenzhen Tangren”) in December 2016 and the shareholders of these entities respectively. Shenzhen Xiaoying, Beijing Ying Zhong Tong, Shenzhen Tangren and the SPVsare collectively referred to as “VIEs”. The series of contractual agreements included Shareholders’ Voting Rights Proxy Agreements, Spouse Consent Agreement, Exclusive Call Option Agreements, Exclusive Business Cooperation Agreements, and Equity Pledge Agreements. The Group believed that these contractual agreements would enable Beijing WFOE to (1) have power to direct the activities that most significantly affects the economic performance of the new VIEs and (2) receive the economic benefits of the VIEs that could be significant to the new VIEs. Accordingly, the Group believes that Beijing WFOE is the primary beneficiary of the VIEs. In conjunction with the Reorganization, the Group completed equity financing of RMB1 billion in June 2017. This round of equity financing was initially conducted by increasing registered capital of Shenzhen Xiaoying by 9 existing and new investors. Subsequently, X Financial issued additional shares to the affiliates of the same shareholders of this round of equity financing such that the shareholder ownership in X Financial mirrored those in Shenzhen Xiaoying. The Group considered the Reorganization as a reorganization of entities under common control. Accordingly, the accompanying financial statements have been prepared using historical cost basis as if the Reorganization had occurred at the beginning of the first period presented. During December 2017, Beijing WFOE acquired two subsidiaries from Shenzhen Xiaoying at cost. During February and March 2018, one of the Group's wholly owned subsidiaries Shenzhen Xiaoying Puhui Technology Co., Ltd ("Shenzhen Puhui") acquired four subsidiaries from one of the VIE entities Shenzhen Ying Zhong Tong at cost. During 2018, predominantly all of the SPVs under Shenzhen Xiaoying had been transferred to Shenzhen Xiaoying Puhui Technology Co., Ltd. ("Shenzhen Puhui"). These transactions represented a reorganization of entities under common control as they were already within the consolidated Group, with no impact to the consolidated financials. During September 2018, the Group completed an initial public offering of 11,763,478 American depositary shares (“ADSs”) at an initial offering price of US$9.50 which included the ADSs sold upon the exercise of the over-allotment option granted to the underwriters, representing 23,526,956 Class A ordinary shares. As of December 31, 2018, the Company’s principal subsidiaries, VIEs and subsidiaries of the VIEs are as follows: Date of Place of Percentage incorporation/ incorporation/ of legal establishment establishment ownership Principal activities Wholly owned subsidiaries YZT (HK) Limited January 14, 2015 Hong Kong 100% Investment holding Xiaoying (Beijing) Information Technology Co., Ltd. (“Beijing WFOE”) October 28, 2015 Beijing 100% Technology development and service, sale of products Shenzhen Xiaoying Puhui Technology Co., Ltd. (“Shenzhen Puhui”) December 6, 2016 Shenzhen 100% Technology development and service, sale of products Shenzhen Xiaoying Information Technology Co., Ltd. (“Shenzhen Xiaoying IT”) November 28, 2016 Shenzhen 100% Technology development and service, sale of products VIEs Shenzhen Xiaoying Technology Co., Ltd. (“Shenzhen Xiaoying”) October 19, 2016 Shenzhen 100% Technology development and service, sale of products Beijing Ying Zhong Tong Rongxun Technology Service Co., Ltd. (“Beijing Ying Zhong Tong”) March 27, 2015 Beijing 100% Technology development and service, sale of products Shenzhen Tangren Financing Guarantee Co., Ltd. (“Shenzhen Tangren”) December 16, 2016 Shenzhen 100% Guarantee services Significant subsidiaries of the VIEs Shenzhen Ying Zhong Tong Financial Information Service Co., Ltd. (“Shenzhen Ying Zhong Tong”) March 7, 2014 Shenzhen 100% Technology development and service, sale of products |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 2. Summary of significant accounting policies Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Principles of Consolidation Variable interest entity The consolidated financial statements include the financial statements of the Company, its wholly‑owned subsidiaries, and consolidated VIEs. All intercompany transactions and balances have been eliminated. The Company, through its wholly-owned foreign invested subsidiary, Beijing WFOE in the PRC, entered into a series of contractual arrangements (“VIE agreements”) with Shenzhen Xiaoying, Beijing Ying Zhong Tong, and Shenzhen Tangren (collectively known as “the VIEs”) and their respective shareholders that enable the Company to (1) have power to direct the activities that most significantly affects the economic performance of the VIEs, and (2) receive the economic benefits of the VIEs that could be significant to the VIEs. As PRC laws and regulations prohibit and restrict foreign ownership of internet value‑added businesses, the Company operates its business, primarily through the VIEs and the subsidiaries of the VIEs. Despite the lack of technical majority ownership, there exists a parent‑subsidiary relationship between Beijing WFOE and the VIEs through the aforementioned agreements with the nominee shareholders of the VIEs. The following is a summary of the VIE agreements: (1) Shareholders’ Voting Rights Proxy Agreement: Pursuant to the voting rights proxy agreements signed between the VIEs’ nominee shareholders and Beijing WFOE, each nominee shareholder irrevocably appointed Beijing WFOE as its attorney‑in‑fact to exercise on each shareholder’s behalf and all rights that each shareholder has in respect of its equity interest in the VIEs (including but not limited to executing the exclusive right to the voting rights and the right to appoint directors and executive officers of the VIEs). The nominee shareholders cannot revoke the authorization and entrustment as long as the nominee shareholders remain a shareholder of the VIEs. The power of attorney will remain in force for ten years. Unless a thirty‑day notice is given by Beijing WFOE, this agreement shall be automatically renewed for another one year upon its expiration. (2) Spouse Consent Agreement Under the spouse consent agreement, each signing spouse acknowledges that the shares of the VIEs held by the relevant shareholder of the VIEs are the personal assets of such shareholder and not jointly owned by the couple. Each signing spouse also unconditionally and irrevocably gives up his or her rights to such shares and any associated economic rights or interests to which he or she may be entitled pursuant to applicable laws and undertakes not to make any assertion of rights to such shares and the underlying assets. Each signing spouse agrees that he or she will not carry out in any circumstances any conduct that are contradictory to the contractual arrangements and this consent agreement. (3) Executive Call Option Agreement: Pursuant to the exclusive call option agreement entered into between the VIEs’ nominee shareholders and Beijing WFOE, the nominee shareholders irrevocably granted Beijing WFOE a call option to request the nominee shareholders to transfer or sell any part or all of its equity interests in the VIEs, to Beijing WFOE, or their designees. The purchase price of the equity interests in the VIEs shall be equal to the minimum price required by PRC law. Without Beijing WFOE’s prior written consent, the VIEs and its nominee shareholders shall not amend its articles of association, increase or decrease the registered capital, sell or otherwise dispose of its assets or beneficial interest, issue any additional equity or right to receive equity, provide any loans, distribute dividends in any form, etc. The term is for ten years and may be extended for another ten years at the option of Beijing WFOE. (4) Exclusive Business Cooperation Agreement: Pursuant to the exclusive business cooperation agreement entered into by Beijing WFOE and the VIEs, Beijing WFOE provides exclusive technical support and consulting services in return for fees based on 100% of the VIE’s total consolidated profit, which is adjustable at the sole discretion of Beijing WFOE. Without Beijing WFOE’s consent, the VIEs cannot procure services from any third party or enter into similar service arrangements with any other third party, except for those from Beijing WFOE. The term of this agreement is ten years. Unless agreed by both parties in writing, this agreement shall be automatically renewed for another ten years upon its expiration. (5) Equity Pledge Agreement Each nominee shareholder of the VIEs has also entered into an equity pledge agreement with Beijing WFOE, pursuant to which each shareholder pledged his/her interest in Beijing WFOE to guarantee the performance of obligations of Beijing WFOE and its shareholders under the exclusive business cooperation agreement, exclusive call option agreement, and shareholders’ voting rights proxy agreement. If the VIEs or any of the nominee shareholder breaches its contractual obligations, Beijing WFOE will be entitled to certain rights and interests regarding the pledged equity interests including the right to dispose the pledged equity interests. None of the nominee shareholders shall, without the prior written consent of Beijing WFOE, assign or transfer to any third party, create or cause any security interest and any liability in whatsoever form to be created on, all or any part of the equity interests it holds in the VIEs. This agreement is not terminated until all of the agreements under the shareholders’ voting rights proxy agreement, exclusive call option agreement and the exclusive business cooperation agreement are fully performed. The irrevocable power of attorney have conveyed all shareholder rights held by the VIEs’ shareholders to Beijing WFOE or any person designated by Beijing WFOE, including the right to appoint executive directors of the VIEs to conduct day to day management of the VIEs’ businesses, and to approve significant transactions of the VIEs. In addition, the exclusive call option agreement provides Beijing WFOE with a substantive kick‑out right of the VIEs shareholders through an exclusive option to purchase all or any part of the shareholders’ equity interest in the VIEs. In addition, through the exclusive business cooperation agreement, Beijing WFOE demonstrates its ability and intention to continue to exercise the ability to absorb substantially all of the profits and all of the expected losses of the VIEs. The equity pledge agreements further secure the obligations of the shareholders of the VIEs under the above agreements. Based on these contractual arrangements, the Company consolidates the VIEs in accordance with SEC Regulation S‑X Rule 3A‑02 and Accounting Standards Codification (“ASC”) topic 810 (“ASC 810”), Consolidation. The Company believes that the contractual arrangements with the VIEs are in compliance with PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could: · revoke the Group’s and operating licenses; · levy fines on the Group; · confiscate any of our income that they deem to be obtained through illegal operations; · shut down the Group’s services; · discontinue or restrict the Group’s operations in China; · impose conditions or requirements with which the Group may not be able to comply; · require the Group to change corporate structure and contractual arrangements; · restrict or prohibit the use of the proceeds from overseas offerings to finance the Group’s PRC consolidated VIEs’ business and operations; and · take other regulatory or enforcement actions that could be harmful to the Group’s business. Consolidated Trusts As part of the Group’s efforts to develop new product offerings for institutional investors, the Group established a business relationship with certain trusts which were administered by third‑party trust companies. The trusts were set up to invest solely in the loans facilitated by the Group on its platform to provide returns to the beneficiaries of the trusts through interest payments made by the borrowers. The Group typically provides credit to the borrowers through one of its consolidated SPVs first and then transfers the loans to the trusts, which issue beneficial interests to the institutional investors. The Group continues to service the loans, and provides a guarantee to absorb substantially all of the credit risk of the trusts resulting from borrower’s default on principal and interest. The Group determined that the guarantee represents a variable interest in the trusts through which the Group has the obligation to absorb losses of the trusts that could potentially be significant to the trusts. The servicing agreement and specifically the ability to direct default mitigation activities provide the Group with the power to direct the activities of the trusts that most significantly impact the economic performance of the trusts. As a result, the Company is considered the primary beneficiary of the trusts and consolidated the trusts’ assets, liabilities, results of operations and cash flows. The transfer of loans to the Consolidated Trusts are not eligible for sale accounting because the trust is consolidated and the loan transfer is considered an intercompany transaction. The Group further elected to apply fair value option to the loans (at the date of origination) and the liabilities to investors. That is, the loans are continued to be recorded on the Group’s consolidated balance sheets as loans held for investment under “Loans at fair value” and the proceeds received from the investors are recorded as trust liabilities under “Payable to investors at fair value”. During 2018, one of the subsidiaries of the Group funded RMB50,000,000 (US$7,272,198) to loan products facilitated on the Group’s platform through a third-party trust company. The trust is consolidated by the Group and the underlying loans are recorded on the Group’s consolidated balance sheets as loans held for investment under “Loans at fair value”. The following financial statement amounts and balances of the Consolidated Trust are included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: As of December 31, As of December 31, 2017 2018 2018 RMB RMB US$ Assets: Restricted cash 12,614,745 4,861,491 707,075 Loans at fair value 667,838,880 33,417,119 4,860,318 Prepaid expenses and other current assets 11,105,628 296,080 43,063 Total assets 691,559,253 38,574,690 5,610,456 Liabilities: Payable to investors at fair value of the Consolidated Trusts 667,080,871 — — Other tax payable 3,586,212 284,564 41,388 Accrued expenses and other liabilities 19,394,527 — — Total liabilities 690,061,610 284,564 41,388 Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Net revenue 20,594,271 117,684,121 61,475,364 8,941,221 Net income (loss) (368,455) 43,583,819 41,986,452 6,106,676 Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Net cash provided by (used in) operating activities (49,516,080) 26,997,889 12,547,230 1,824,919 Net cash provided by (used in) investing activities (710,000,000) 48,332,936 676,499,516 98,392,774 Net cash provided by (used in) financing activities 760,000,000 (63,200,000) (696,800,000) (101,345,357) The following financial statement amounts and balances of the VIEs and Consolidated Trusts were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: As of December 31, As of December 31, 2017 2018 2018 RMB RMB US$ Assets: Cash and cash equivalents 520,450,136 236,432,366 34,387,661 Restricted cash 12,614,745 5,880,989 855,354 Accounts receivable and contract assets, net 965,333,922 1,266,169,464 184,156,711 Loans held for sale 768,638,420 — — Loans at fair value 667,838,880 33,417,119 4,860,318 Prepaid expenses and other current assets 82,099,649 60,501,113 8,799,522 Deferred tax assets, net 275,968,157 173,287,013 25,203,551 Long-term investments 54,167,615 287,222,720 41,774,812 Property and equipment, net 21,004,932 21,333,636 3,102,849 Intangible assets, net 1,616,238 1,628,117 236,800 Financial guarantee derivative — 358,249,913 52,105,289 Loan receivable from Xiaoying Housing Loans, net 197,595,942 128,101,279 18,631,558 Other non-current assets 3,751,516 6,345,345 922,892 Total assets 3,571,080,152 2,578,569,074 375,037,317 Liabilities: Payable to investors at fair value of the Consolidated Trusts 667,080,871 — — Guarantee liabilities 545,169,033 19,297,718 2,806,737 Financial guarantee derivative 53,260,916 — — Accrued payroll and welfare 20,655,199 23,329,971 3,393,204 Other tax payable 95,368,838 95,184,938 13,844,075 Income tax payable 270,342,567 93,611,597 13,615,242 Deposit payable to channel cooperators 134,262,319 — — Accrued expenses and other liabilities 132,525,198 117,547,625 17,096,593 Short-term bank borrowings — 198,000,000 28,797,906 Deferred tax liabilities — 47,145,390 6,857,013 Total liabilities 1,918,664,941 594,117,239 86,410,770 Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Net revenue 230,305,685 1,474,934,261 2,168,665,965 315,419,383 Net income (loss) (81,273,361) 325,182,393 408,242,461 59,376,403 Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Net cash provided by (used in) operating activities 277,925,076 (592,979,915) (243,451,042) (35,408,486) Net cash provided by (used in) investing activities (734,716,301) (10,809,388) 451,499,516 65,667,881 Net cash provided by (used in) financing activities 775,164,828 830,154,156 (498,800,000) (72,547,451) The VIEs and Consolidated Trusts contributed 100%, 83% and 61% of the Group’s consolidated revenue for the years ended December 31, 2016, 2017 and 2018 respectively. As of December 31, 2017 and 2018, the VIEs and Consolidated Trusts accounted for an aggregate of 92% and 56% of the consolidated total assets, and 90% and 53% of the consolidated total liabilities. 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 and Consolidated Trusts. However, if the VIEs were ever to need financial support, the Group may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to the shareholders of the VIEs or entrustment loans to the VIEs. The Group believes that there are no assets held in the VIEs that can be used only to settle obligations of the VIEs, except for registered capital and the PRC statutory reserves. As the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company for any of the liabilities 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 13 for disclosure of restricted net assets. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ materially from such estimates. Significant accounting estimates reflected in the Group’s consolidated financial statements include share‑based compensation, allowance for accounts receivables and contract assets, allocation of considerations under revenue arrangements with various performance obligations, valuation allowance for deferred tax assets, fair value of guarantee liabilities and financial guarantee derivatives, loans at fair value and payable to investors at fair value of the Consolidated Trusts. Revenue recognition The Group provides services as an online marketplace connecting borrowers and investors primarily through the use of two business models. The major products offered by the Group include Xiaoying Credit Loan and Xiaoying Housing Loan. Xiaoying Credit Loan consists of Xiaoying Card Loan and Xiaoying Preferred Loan products. Revenue is the transaction price the Group expects to be entitled to in exchange for the promised services in a contract in the ordinary course of the Group’s activities and is recorded net of value-added tax (“VAT”). The services to be accounted for include loan facilitation service, post-origination service (e.g. cash processing and collection services) and guarantee service. The first business model (“Direct Model”) involves the Group matching borrowers with investors who directly funds the credit drawdowns to the borrowers. The Group has determined that it is not the legal lender or borrower in the loan origination and repayment process, but acting as an intermediary to bring the lender and the borrower together. Therefore, the Group does not record the loans receivable or payable arising from the loans facilitated between the investors and borrowers on its platform. The second business model (“Intermediary Model”) involves the Group initially providing credit to borrowers using its own funds through an intermediary and subsequently selling the loans including all of the creditor rights in the loans to external investors on its platform within a short period of time. Loans facilitated by the Group typically have a term of twelve months. For each loan facilitated either through the Direct Model or Intermediary Model, the Group charges a service fee, which is payable by the borrower for all three services provided. No application fee is charged to borrowers or investors. According to the contractual agreement with borrowers, upon the inception of the loan, the Group has the unconditional right to the entire service fee regardless of whether subsequent post‑origination or guarantee services are provided by the Group or timing of repayment of the loan. Since September 2017, for certain Xiaoying Card Loans facilitated, the borrower can early repay the loans with a portion of the monthly service fees for the remaining period being waived. The Group historically charged a portion of service fees upfront for certain products which is deducted from the loan proceeds at loan origination, and the remaining service fees are collected on a monthly basis. The upfront fees collected were RMB104,104,701, RMB520,952,503 and nil during the years ended December 31, 2016, 2017 and 2018, respectively. The Group has stopped charging upfront fees for all products since December 2017 to comply with new regulatory requirements. At contract inception, the Group determines that the collection of service fees is probable based on historical experiences as well as the credit due diligence performed on each borrower prior to loan origination. In order to be more competitive by providing a certain level of assurance to the investors, for substantially all of the loans facilitated by the Group’s platform, borrowers are required to directly sign a credit insurance agreement with ZhongAn Online P&C Insurance Co., Ltd (“ZhongAn”) to protect investors against the risk of borrower default. In 2016 and January to September 2017, substantially all of the loans facilitated by the Group’s platform are insured by ZhongAn (referred to as the “Old ZhongAn Model”). The Group did not have direct contractual obligation to the investors for defaulted principal and interest during that period. The Group entered into a strategic cooperation agreement with ZhongAn pursuant to which ZhongAn provided insurance to the investors for the loans facilitated by the Group and reimbursed the loan principal and interest to the investor upon borrower’s default. During the aforementioned period, in order to maintain stable business relationship with ZhongAn, although not contractually obligated by the agreement with ZhongAn, the Group at its sole discretion paid ZhongAn for substantially all the defaulted loan principal and interest but have not been subsequently collected. The Group also provides direct guarantee to investors on certain loan products via its consolidated entities. The Group is compensated for this reimbursement from the contractual service fees collected from the borrowers. Given that the Group is at its sole discretion responsible for the uncollected claims paid, the Group effectively took on substantially all of the losses incurred by the investors due to borrowers’ default, the Group deemed the guarantee as a guarantee service to the investors and recognizes a stand ready obligation for its guarantee exposure in accordance with ASC Topic 460, Guarantees . From September 2017, the Group revised the arrangement with ZhongAn on substantially all of the Xiaoying Credit Loans (referred to as the “New ZhongAn Model”). For certain Xiaoying Card Loans that were newly facilitated from September 2017, borrowers are required to enter into a guarantee agreement and an insurance agreement with the Group and ZhongAn, respectively, to pay the guarantee fee and insurance fee to the respective party at a pre agreed rate. Upon borrower’s default, ZhongAn reimburses the full loan principal and interest to the investor first, and has the right to recourse to both the borrower and the Group, but the Group’s contractual obligation at any time is limited to a cap (the “Cap”) which is the lower of (1) total amount of guarantee fees contractually required to be collected from the borrowers for such loans facilitated during the current period on an aggregated basis, and (2) a certain percentage of the total principal of the loans facilitated stated in an annualized manner, as pre agreed with ZhongAn (the “Rate”). The Group has no obligation or intention to compensate ZhongAn for any losses in excess of the contractual obligation. The Rate will be negotiated prospectively at each quarter between the two parties based on the expected default rate. The actual loss in excess of the Cap is absorbed by ZhongAn. ZhongAn ultimately bears substantially all of the credit risk. The Group’s exposure in this arrangement is limited to the default and prepayment risk in relation to the guarantee fee when the Group cannot collect the guarantee fee under the agreement with the borrower on an individual basis but is still obligated to compensate ZhongAn up to the Cap on a pool basis. The Group evaluated the guarantee arrangement pursuant to ASC Topic 815, and concluded that the arrangement meets the definition of a derivative and that it is not eligible for the guarantee scope exception. Therefore, the guarantee is recognized as a derivative liability/asset at fair value and is not accounted for pursuant to ASC Topic 460 or 450. See accounting policy for financial guarantee derivative. For other Xiaoying Preferred Loan products newly facilitated from September 2017, the borrowers are required to enter into an insurance agreement with ZhongAn only at a rate set by ZhongAn. No separate guarantee agreement is signed by the borrower with the Group and no additional guarantee fee is charged from the borrower. Upon borrower’s default, ZhongAn reimburses the full loan principal and interest to the investor. The Group collects the defaulted amount from borrowers on behalf of ZhongAn but has no obligation and it is no longer the Group’s intention to compensate ZhongAn for the defaulted loan principal and interest not subsequently collected in the future. ZhongAn is fully liable for all the borrower’s credit risk associated with the defaulted principal and interest of the loan. Therefore for these loans, the Group provides loan facilitation and post-origination services but no longer provides guarantee service. The Group does not record guarantee liabilities associated with these loans or corresponding account receivables from guarantee services. Under the Direct Model, the total transaction price is directly allocated to the facilitation service and post-origination service. Under the Intermediary—non-trust model, upon transfer of the loan to third party investors, the Group recognize the difference between (1) the proceeds received from the investors and accounts receivable and (2) the carrying value of the loan as a gain of sale, which effectively represents the service fees earned from facilitation of the loans under Intermediary Model, as the “Loan facilitation service—Intermediary Model” in the consolidated statements of comprehensive income (loss). Direct Model The Group has early adopted ASU 2014‑09, Revenue from Contracts with Customers (Topic 606) and all subsequent ASUs that modified ASC 606 on January 1, 2017 and has elected to apply it retrospectively for the year ended December 31, 2016. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or 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 its customers to be both the investors and borrowers. The Group considers the loan facilitation service, guarantee service and post‑origination service as three separate services of which the guarantee service is accounted for in accordance with ASC Topic 460, Guarantees . 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. The Group determines the total transaction price to be the service fees chargeable from the borrowers, including the guarantee fees charged by the Group under the seperate guarantee agreement with the borrowers for certain type of Xiaoying Card Loans that are newly facilitated since September 2017. The Group’s transaction price includes variable consideration in the form of prepayment risk for certain products. The Group reflects, in the transaction price, the prepayment risk and estimates variable consideration for these contracts using the expected value approach on the basis of historical information and current trends of the prepayment percentage of the borrowers. The transaction price is allocated amongst the guarantee service, if any, and two performance obligations. The Group first allocates the transaction price to the guarantee liabilities, if any, that is recognized in accordance with either (1) ASC Topic 460, Guarantees which requires the guarantee to be measured initially at fair value based on the stand-ready obligation or (2) ASC Topic 815, which requires the guarantee to be measured initially and subsequently at fair value. Then the remaining considerations are allocated to the loan facilitation services and post-origination services using their relative standalone selling prices consistent with the guidance in ASC 606. For certain loans faciliated since September 2017, the total transaction price is allocated to facilitation service and post-origination service only. The Group does not have observable standalone selling price information for the loan facilitation services or post-origination services because it does not provide loan facilitation services or post-origination services on a standalone basis. There is no direct observable standalone selling price for similar services in the market that is reasonably available to the Group. As a result, the estimation of standalone selling price involves significant judgment. The Group uses an expected cost plus margin approach to estimate the standalone selling prices of loan facilitation services and post origination services as the basis of revenue allocation. In estimating its standalone selling price for the loan facilitation services and post-origination 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 a promised good or service (that is, an asset) to a customer. Revenues from loan facilitation are recognized at the time a loan is originated between the investor and the borrower and the principal loan balance is transferred to the borrower, at which time the facilitation service is considered completed. Revenues from post‑origination services are recognized on a straight‑line basis over the term of the underlying loans as the services are provided. Revenues from guarantee services are recognized at the expiry of the guarantee term when there had been no defaults. Except for certain loan products offered since September 2017, the collection of service fees is not conditional on the provision of subsequent post‑origination or guarantee services. The Group charges upfront fees for certain loan products. The upfront fee, if any, is deducted from loan proceeds at origination and the remaining consideration is collected in equal payments on a monthly basis. When the upfront fee is not sufficient to cover the fair value of guarantee liabilities or relative standalone selling price of facilitation services performed, a corresponding accounts receivable or contract asset is recognized (see accounting policy for Accounts receivable and contract assets). The Group has stopped charging upfront fees for all products since December 2017. Intermediary Model During the years ended December 31, 2016 and 2017, to increase matching rate and enhance borrowers’ experience, the Group provides credit to borrowers’ using its own funds first and then transfers the loans (including the creditor rights) to third party investors including individuals, corporations, and institutional funding partners, typically within a few days. The Group does not have intention to retain the loans as investment but to provide temporary funding to bridge the facilitation services such that the borrowers can immediately obtain funds. Due to limitations imposed by the PRC laws and regulations, the Group appointed several senior management (the “Intermediary”) to act as an intermediary to facilitate such loan facilitation services. Sometimes, the process also involves a special purpose vehicle formed by the Group between the Intermediary and the ultimate third party investor as certain investors may have legal limitation on acquiring loans from individuals. These special purpose vehicles are consolidated by the Group. Under the Intermediary business model, the Intermediary acts as an agent for the Group and the Group further provides the funds that are loaned to borrowers. The Group directs the Intermediary in all activities related to the origination of the loans and transfer of the funds to the borrowers. The Group agrees to take predominantly all the risk arising from potential breaches of agreement by the borrowers receiving financing. Additionally, the Intermediary’s role is restricted to signing agreements with borrowers and investors at the direction of the Group and the Intermediary has no obligation to make any repayment t |
Fair value of assets and liabil
Fair value of assets and liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Fair value of assets and liabilities | |
Fair value of assets and liabilities | 3. Fair value of assets and liabilities For a description of the fair value hierarchy and the Group’s fair value methodologies, see “Note 2—Summary of Significant Accounting Policies”. Financial Instruments Recorded at Fair Value on a Recurring Basis The following tables present the fair value hierarchy for assets and liabilities measured at fair value on a recurring basis: Balance at Fair Level 1 Level 2 Level 3 Value December 31, 2017 (RMB) (RMB) (RMB) (RMB) Assets Loans at fair value — — 667,838,880 667,838,880 Total assets — — 667,838,880 667,838,880 Liabilities Payable to investors at fair value — — (667,080,871) (667,080,871) Financial guarantee derivative — — (53,260,916) (53,260,916) Total liabilities — — (720,341,787) (720,341,787) Balance at Fair Level 1 Level 2 Level 3 Value December 31, 2018 (RMB) (RMB) (RMB) (RMB) Assets Loans at fair value — — 33,417,119 33,417,119 Financial guarantee derivative — — 358,249,913 358,249,913 Total assets — — 391,667,032 391,667,032 Balance at Fair Level 1 Level 2 Level 3 Value December 31, 2018 (US$) (US$) (US$) (US$) Assets Loans at fair value — — 4,860,318 4,860,318 Financial guarantee derivative — — 52,105,289 52,105,289 Total assets — — 56,965,607 56,965,607 Financial guarantee derivative The Group uses the discounted cash flow model to value the financial guarantee derivatives. Significant unobservable inputs applied in the discounted cash flow model included expected default rates at inception, which ranged from 9.89% to 12.13% for the year ended December 31, 2018. The following table sets forth the Group’s financial guarantee derivative movement activities for the years ended December 31, 2017 and 2018. For loans facilitated from September 15 to December 31, 2017 Year ended December 31, 2017 RMB Balance at December 31, 2016 — Estimated payment to ZhongAn based on the pre-agreed Cap (1) 227,758,691 Less: Initially estimated net guarantee service fee to be collected (2) 209,647,939 Change in fair value of financial guarantee derivative 18,110,752 Add: Guarantee service fee received from borrowers 44,422,222 Less: Compensation paid to ZhongAn 9,272,058 Balance at December 31, 2017 53,260,916 Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31, 2017) 218,486,633 Changes in fair value related to balance outstanding at December 31, 2017 18,110,752 For loans facilitated in For loans facilitated in 2017 2018 Total Total Year ended December 31, 2018 RMB RMB RMB USD Balance at December 31, 2017 53,260,916 — 53,260,916 7,746,479 Estimated payment to ZhongAn based on the pre-agreed Cap (1) — 1,784,817,072 1,784,817,072 259,590,877 Less: Initially estimated net guarantee service fee to be collected (2) — 1,607,696,701 1,607,696,701 233,829,787 Add (Less): Subsequent changes in estimated net guarantee service fee to be collected for outstanding loans (3) 5,413,833 18,437,098 23,850,931 3,468,974 Change in fair value of financial guarantee derivative 5,413,833 195,557,469 200,971,302 29,230,064 Add: Guarantee service fee received from borrowers 159,811,884 860,051,384 1,019,863,268 148,332,960 Less: Compensation paid to ZhongAn 218,486,633 1,413,858,766 1,632,345,399 237,414,792 Balance at December 31, 2018 — (358,249,913) (358,249,913) (52,105,289) Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31, 2018) — 370,958,304 370,958,304 53,953,648 Changes in fair value related to balance outstanding at December 31, 2018 — 108,540,263 108,540,263 15,786,527 Note: (1) Amount represents estimated payment to ZhongAn which is calculated as the lesser of (1) the contractual guarantee service fees the Group is entitled to collect from the borrowers for the loans facilitated during the current period on an aggregated basis; and (2) the principal amount of such loans facilitated during the period on an annualized basis multiplied by the pre‑agreed Rate with ZhongAn. (2) Amount represents estimated guarantee service fees to be collected for loans newly facilitated during each vintage period according to the guarantee service agreement with the borrowers, net of estimated defaults and prepayments. (3) Amount represents the subsequent adjustment to update the estimated net guarantee service fees to be collected for all outstanding loans as a result of changes in estimated default or prepayment rates. The change in fair value of financial guarantee derivative primarily relates the Group’s estimated exposure in relation to the loans newly facilitated during the corresponding period, as the Group is obligated to compensate ZhongAn under the guarantee arrangement based on the contractual guarantee fees charged to borrowers across the entire portfolio subject to a pre‑agreed Cap rather than the actual guarantee fees collected from the borrowers. The change in fair value amount equals to the portion of amounts obligated to pay to ZhongAn that are not expected to be collected from the borrowers due to the estimated default or prepayment. The derivative is increased by the guarantee fees collected from the borrowers upon receipt as the Group expects all the fees to be ultimately paid to ZhongAn. When the payments are made to ZhongAn, the derivative is reduced by the coresponding amount. The total loan products related to guarantee derivatives facilitated during the years ended December 31, 2017 and 2018 were RMB6,091,191,209 and RMB25,389,448,598 (US$3,692,742,142), respectively. As of December 31, 2018, financial guarantee derivatives has an asset position of RMB358,249,913 (US$ 52,105,289) in comparison with it being a liability position of RMB53,260,916 as of December 31, 2017, primarily due to the time lag between the payments to ZhongAn and the collection of monthly guarantee service fees from borrowers. As of December 31, 2018, the cumulative amount paid to ZhongAn was greater than the cumulative monthly guarantee service fees collected from borrowers. However, the total amount paid to ZhongAn was still within the preagreed Cap with ZhongAn. The excess is expected to be fully collected from the borrowers during the remaining term of the underlying loans. As of December 31, 2017 and 2018, the maximum potential undiscounted future payment the Group would be required to make is RMB218,486,633 and RMB370,958,304 (US$53,953,648) respectively which also reflects the maximum potential payment to ZhongAn based on the pre-agreed Cap. The following table represents the outstanding loan balance, remaining weighted average contractual term and estimated default rate of the outstanding loans as of December 31, 2017 and 2018, respectively. As of As of As of December 31, December 31, December 31, 2017 2018 2018 RMB RMB US$ Outstanding loan balance 5,239,698,805 12,811,666,471 1,863,379,604 Remaining weighted average contractual term (Month) 10.10 7.53 7.53 Estimated default rate 10.19 % 11.06 % 11.06 % Loans at fair value and Payable to investors at fair value The Group has elected the fair value option for the loan assets and liabilities of the Consolidated Trusts that otherwise would not have been carried at fair value. Such election is irrevocable and is applied to financial instruments on an individual basis at initial recognition. As the Group’s loans and payable to investors in the Consolidated Trusts do not trade in an active market with readily observable prices, the Group uses significant unobservable inputs to measure the fair value of these assets and liabilities. Financial instruments are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. At December 31, 2017 and 2018, the discounted cash flow methodology is used to estimate the fair value of loans and payables to investors. As of December 31, 2017 and 2018, the significant unobservable inputs used in the fair value measurement of the loans and payables to investors of the Consolidated Trusts include the discount rate, net accumulative expected loss. These inputs in isolation can cause significant increases or decreases in fair value. Increases or decrease in the discount rate can significantly impact the fair value results. The discount rate is determined based on the market rates. Significant Unobservable Inputs December 31, 2017 December 31, 2018 Range of Inputs Range of Inputs Financial Instrument Unobservable Input Weighted-Average Weighted-Average Loans and payable to investors at fair value Discount rates 6.75 % 7.12 % Net cumulative expected loss rates (1) 2.05 % 7.59 % (1) Represents the net of default rate and collection rate, expressed as a percentage of the loan volume. The following table presents additional information about Level 3 loans and payable to investors measured at fair value on a recurring basis for the years ended December 31, 2017 and 2018. Changes in fair value of loans and payable to investors are reported net as “Fair value adjustments related to Consolidated Trusts” in the consolidated statements of comprehensive income. RMB Changes in fair value related to balance Balance at Balance at outstanding at December 31, Origination of Collection of Reinvestment Change in December December 31, 2016 loan principal principal of principal fair value 31, 2017 2017 Xiaoying Credit Loan — 496,800,000 (133,104,799) 98,757,578 (35,105,777) 427,347,002 (35,105,777) -Xiaoying Card Loan — 85,000,000 (45,681,457) 53,121,380 (11,486,373) 80,953,550 (11,486,373) -Xiaoying Preferred Loan — 411,800,000 (87,423,342) 45,636,198 (23,619,404) 346,393,452 (23,619,404) Xiaoying Housing Loan 723,746,021 600,000,000 (1,359,363,422) 248,577,707 27,531,572 240,491,878 (8,722,407) Total 723,746,021 1,096,800,000 (1,492,468,221) 347,335,285 (7,574,205) 667,838,880 (43,828,184) RMB Changes in fair value related to balance Balance at Balance at outstanding at December 31, Origination of Collection of Reinvestment Change in December December 31, 2017 loan principal principal of principal fair value 31, 2018 2018 Xiaoying Credit Loan 427,347,002 49,498,710 (476,783,941) — 33,355,348 33,417,119 (1,750,429) -Xiaoying Card Loan 80,953,550 49,498,710 (106,771,085) — 9,735,944 33,417,119 (1,750,429) -Xiaoying Preferred Loan 346,393,452 — (370,012,856) — 23,619,404 — — Xiaoying Housing Loan 240,491,878 — (267,567,946) 18,353,661 8,722,407 — — Total 667,838,880 49,498,710 (744,351,887) 18,353,661 42,077,755 33,417,119 (1,750,429) USD Changes in fair value related to balance Balance at Balance at outstanding at December 31, Origination of Collection of Reinvestment Change in December December 31, 2017 loan principal principal of principal fair value 31, 2018 2018 Xiaoying Credit Loan 62,155,044 7,199,289 (69,345,348) — 4,851,333 4,860,318 (254,589) -Xiaoying Card Loan 11,774,206 7,199,289 (15,529,210) — 1,416,033 4,860,318 (254,589) -Xiaoying Preferred Loan 50,380,838 — (53,816,138) — 3,435,300 — — Xiaoying Housing Loan 34,978,093 — (38,916,144) 2,669,429 1,268,622 — — Total 97,133,137 7,199,289 (108,261,492) 2,669,429 6,119,955 4,860,318 (254,589) Payable to investors at fair value of the Consolidated Trusts RMB Balance at December 31, 2016 728,104,511 Initial contribution 1,096,800,000 Principal payment (1,160,000,000) Changes in fair value 2,176,360 Balance at December 31, 2017 667,080,871 Changes in fair value related to balance outstanding at December 31, 2017 (29,719,129) Payable to investors at fair value of the Consolidated Trusts RMB US$ Balance at December 31, 2017 667,080,871 97,022,889 Initial contribution — — Principal payment (696,800,000) (101,345,357) Changes in fair value 29,719,129 4,322,468 Balance at December 31, 2018 — — Changes in fair value related to balance outstanding at December 31, 2018 — — The unpaid balance of loans at fair value as of December 31, 2017 and 2018 were RMB711,531,067 and RMB35,167,548 (US$5,114,908). The difference between the aggregate fair value and unpaid principal balance for loans at fair value is primarily attributable to the credit risk associated with the loan collections and time value of money, amounted to RMB43,828,184 and RMB1,750,429 (US$254,589) as of December 31, 2017 and 2018, respectively. The unpaid balance of payable to investors as of December 31, 2017 and 2018 were RMB696,800,000 and nil. The difference between the aggregate fair value and unpaid principal balance for payable to investors at fair value of the Consolidated Trusts is primarily due to the time value of money, amounted RMB29,719,129 and nil respectively as of December 31, 2017 and 2018. The difference between the aggregate fair value and unpaid principal balance for both loans at fair value and payable to investors at fair value was recorded in Fair value adjustments related to Consolidated Trusts in the consolidated statements of comprehensive income. Financial Instruments Recorded at Fair Value on a non‑recurring basis The Group records its loans held for sale at fair value on a non-recurring basis when the fair value is less than the carrying amount. Given most of loans held for sale are traded with unrelated third party investors in a short period of time at face value, the Group determines that the face value of loans approximate its fair value upon origination and are classified as level 2 fair value measurement. Financial Instruments Not Recorded at Fair Value Financial instruments, including cash and cash equivalents, accounts receivable and contract assets, accounts payable and amounts due from related party. The carrying values of cash and cash equivalents, accounts receivable and contract assets, accounts payable, and amounts due from related party approximate their fair value reported in the consolidated balance sheets due to the short term nature of these assets and liabilities. |
Property and equipment, net
Property and equipment, net | 12 Months Ended |
Dec. 31, 2018 | |
Property and equipment, net | |
Property and equipment, net | 4. Property and equipment, net Property and equipment, net consists of the following: As of December 31, As of December 31, 2017 2018 2018 RMB RMB US$ Computer and transmission equipment 10,191,732 15,522,913 2,257,714 Furniture and office equipment 3,324,181 3,659,047 532,186 Leasehold improvements 14,441,367 20,217,502 2,940,514 Motor vehicles 816,103 816,103 118,697 Total property and equipment 28,773,383 40,215,565 5,849,111 Accumulated depreciation (7,768,451) (17,000,768) (2,472,659) Property and equipment, net 21,004,932 23,214,797 3,376,452 Depreciation expense was RMB2,462,035, RMB4,687,503 and RMB9,245,203 (US$1,344,659) for the years ended December 31, 2016, 2017 and 2018 respectively. Gains from the disposal of property and equipment during the years ended December 31, 2016, 2017 and 2018 were RMB1,410, RMB103 and RMB66 (US$10) respectively. |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2018 | |
Intangible assets | |
Intangible assets | 5. Intangible assets Intangible assets, net consists of the following: As of December 31, As of December 31, 2017 2018 2018 RMB RMB US$ License (1) — 26,000,000 3,781,543 Domain name and others 3,188,898 4,362,895 634,557 Accumulated amortization (1,572,660) (1,962,489) (285,432) Intangible assets, net 1,616,238 28,400,406 4,130,668 (1) During 2018, the Group acquired an insurance broker license at a cost of RMB26,000,000. Amortization expenses were RMB598,272, RMB678,692 and RMB389,829 (US$56,698) for the years ended December 31, 2016, 2017 and 2018 respectively. The Group expects to record amortization expenses of RMB413,621 (US$60,159), RMB398,140 (US$57,907), RMB227,845 (US$33,139), RMB227,845 (US$33,139) and RMB227,845 (US$33,139) for the years ending December 31, 2019, 2020, 2021, 2022 and 2023, respectively. |
Short-term bank borrowings
Short-term bank borrowings | 12 Months Ended |
Dec. 31, 2018 | |
Short-term bank borrowings | |
Short-term bank borrowings | 6. Short-term bank borrowings In December 2018, the Group entered into a line of credit agreement with a PRC bank that provides a three year term revolving credit facility up to an amount of RMB700,000,000 (US$101,810,777) in aggregate with an interest rate of 2.08% per annum. To collateralize the loan, the Group made deposits to the bank that were restricted. During 2018, total loans drawn with a term of one year were RMB198,000,000 (US$28,797,906), which remained outstanding as of year end. As of December 31, 2018, the total outstanding balance of restricted cash in the form of deposits with a term of one year were US$29,500,000. Subsequently, the Company drew an additional loan of RMB203,000,000 (US$29,525,125) with a term of one year on January 2, 2019, and made a deposit of US$30,500,000 with a term of one year. |
Accrued expenses and other liab
Accrued expenses and other liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Accrued expenses and other liabilities | |
Accrued expenses and other liabilities | 7. Accrued expenses and other liabilities Accrued expenses and other current liabilities consist of the following: As of December 31, As of December 31, 2017 2018 2018 RMB RMB US$ Fund attributable to institutional investors (1) 58,266,669 5,776,821 840,204 Accrued interest payable of Consolidated Trusts 19,394,527 — — Payable for purchase of property and equipment 1,586,988 — — Accrued office expense 2,545,614 10,890,896 1,584,015 Professional fee payable 12,826,377 48,302,566 7,025,317 Commission fee payable (2) 35,408,781 75,280,155 10,949,044 Other accrued expenses 7,299,408 38,451,036 5,592,471 Total accrued expenses and other current liabilities 137,328,364 178,701,474 25,991,051 (1) Fund attributable to institutional investors relate to the principal and interest collected on behalf of the investors but have not yet been passed onto them as of December 31, 2017 and 2018. (2) Commission fee payable relates to the commission fees payable to channel partners who introduce investors or borrowers to the platform of the Group. The commission is typically determined based on the volume of traffic introduced, regardless of whether the introduced traffic becomes a borrower or investor on the Group’s platform. |
Guarantee liabilities
Guarantee liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Guarantee liabilities | |
Guarantee liabilities | 8. Guarantee liabilities The movement of guarantee liabilities during the years ended December 31, 2016, 2017 and 2018 are as follows: RMB As of Provision at As of January 1, the inception Released on Contingent December 31, 2016 of new loans Net payout (1) expiration liability 2016 Xiaoying Credit Loan 1,196,197 42,591,980 (5,323,494) (96,170) — 38,368,513 -Xiaoying Card Loan — 16,330,155 — — — 16,330,155 -Xiaoying Preferred Loan 1,196,197 26,261,825 (5,323,494) (96,170) — 22,038,358 Xiaoying Housing Loan 5,820,087 7,813,106 (4,056,219) (2,278,365) — 7,298,609 Internet Channel 974,220 2,577,686 (1,003,962) (70,153) — 2,477,791 Others 1,704,523 57,197,189 (6,099,184) (285,989) — 52,516,539 Total 9,695,027 110,179,961 (16,482,859) (2,730,677) — 100,661,452 RMB As of Provision at As of January 1, the inception Released on Contingent December 31, 2017 of new loans Net payout (1) expiration liability (2) 2017 Xiaoying Credit Loan 38,368,513 797,431,715 (411,239,134) (19,172,658) 109,086,588 514,475,024 -Xiaoying Card Loan 16,330,155 616,729,990 (322,763,679) (12,740,493) 109,086,588 406,642,561 -Xiaoying Preferred Loan 22,038,358 180,701,725 (88,475,455) (6,432,165) — 107,832,463 Xiaoying Housing Loan 7,298,609 23,970,437 (1,169,476) (21,410,597) — 8,688,973 Internet Channel 2,477,791 28,924,659 (23,731,237) (4,741,527) — 2,929,686 Others 52,516,539 7,437,265 (111,092,188) (3,278,354) 73,492,088 19,075,350 Total 100,661,452 857,764,076 (547,232,035) (48,603,136) 182,578,676 545,169,033 RMB As of Provision at As of January 1, the inception Released on Contingent December 31, 2018 of new loans Net payout (1) expiration liability (2) 2018 Xiaoying Credit Loan 514,475,024 5,884,134 (667,658,887) (15,691,880) 182,289,328 19,297,719 -Xiaoying Card Loan 406,642,561 4,183,193 (395,958,527) (13,868,799) 10,874,300 11,872,728 -Xiaoying Preferred Loan 107,832,463 1,700,941 (271,700,360) (1,823,081) 171,415,028 7,424,991 Xiaoying Housing Loan 8,688,973 1,773,180 (378,694) (8,482,977) — 1,600,482 Internet Channel 2,929,686 — (12,890,754) (365,456) 10,326,524 — Others 19,075,350 — (42,688,268) (135,000) 23,747,918 — Total 545,169,033 7,657,314 (723,616,603) (24,675,313) 216,363,770 20,898,201 USD As of Provision at As of January 1, the inception Released on Contingent December 31, 2018 of new loans Net payout (1) expiration liability (2) 2018 Xiaoying Credit Loan 74,827,289 855,812 (97,106,958) (2,282,289) 26,512,883 2,806,737 -Xiaoying Card Loan 59,143,708 608,420 (57,589,779) (2,017,133) 1,581,601 1,726,817 -Xiaoying Preferred Loan 15,683,581 247,392 (39,517,179) (265,156) 24,931,282 1,079,920 Xiaoying Housing Loan 1,263,759 257,898 (55,079) (1,233,798) — 232,780 Internet Channel 426,105 — (1,874,882) (53,154) 1,501,931 — Others 2,774,395 — (6,208,751) (19,635) 3,453,991 — Total 79,291,548 1,113,710 (105,245,670) (3,588,876) 31,468,805 3,039,517 (1) Net payouts represent the amount paid to ZhongAn upon borrowers’ default net of the amount subsequently collected from the borrower if they paid back the loan. (2) The Company recognized a contingent liability of RMB182,578,676 and RMB216,363,770 (US$31,468,805) relating to certain loan products whose performances were adversely impacted by the tightened liquidity environment and release of a series of new regulations during the years ended December 31, 2017 and 2018, respectively. The following table presents the maximum potential undiscounted future payments by product, remaining weighted average contractual loan term, and estimated net default rates as of December 31, 2017 and 2018, respectively: Maximum potential undiscounted future Remaining weighted payment average contractual Estimated net As of December 31, 2017 (RMB) term (Month) default rate Xiaoying Credit Loan 7,245,232,755 5.86 5.98 % -Xiaoying Card Loan 2,715,466,847 6.56 10.19 % -Xiaoying Preferred Loan 4,529,765,908 5.38 3.10 % Internet Channel 1,038,397,955 9.01 0.49 % Xiaoying Housing Loan 1,732,414,550 3.68 0.53 % Other products 540,224,362 4.23 1.76 % Total 10,556,269,622 Maximum potential Maximum potential undiscounted future undiscounted future Remaining weighted payment payment average contractual Estimated net As of December 31, 2018 (RMB) (USD) term (Month) default rate Xiaoying Credit Loan 61,705,508 8,974,694 18.02 16.57 % -Xiaoying Card Loan 42,762,991 6,219,619 17.59 17.31 % -Xiaoying Preferred Loan 18,942,517 2,755,075 19.14 14.64 % Internet Channel (1) 2,004,234,932 291,503,881 8.19 0.00 % Xiaoying Housing Loan 282,830,247 41,135,953 3.60 0.60 % Other products 1,427,397 207,606 3.67 0.00 % Total 2,350,198,084 341,822,134 (1) Relates to loans referred from third party channel cooperators that has back to back guarantee arrangements with the Group. As such, estimated net default rate is 0% as of December 31, 2018. As of December 31, 2017 and 2018, the maximum potential undiscounted future payment that had been collateralized by real estate was estimated to be RMB1.7 billion and RMB0.28 billion (US$0.04 billion)respectively. From August 2017, the Group entered into a new arrangement with a third party asset management company to obtain a back to back guarantee for an identified portfolio of Xiaoying Housing Loan products. The third party asset management company has the commitment to compensate the Group for the actual losses incurred on any loan within the portfolio upon default by the borrower and will acquire the creditor's rights and the associated collateral of the underlying loan from the Group upon settlement. The Group pays 0.6% of the portfolio amount as service fee to the asset management company for providing such services and accounts for as part of origination and servicing cost over the term of the asset management agreement. The Group ceased cooperation with the asset management company in 2018. From March 2018, Jiangxi Ruijing, an equity investee of the Company, provides guarantee service for an identified portfolio of loans facilitated on the Company's platform and engages directly with the borrowers and investors on the platform. Throughout the loan term, borrowers pay the guarantee fee directly to the asset management company. Upon the default of the borrower, Jiangxi Ruijing directly compensates the investors and obtains the creditor's rights of the loans. As a result, no guarantee liabilities have been recorded by the Group for the loan portfolio that are guaranteed by Jiangxi Ruijing. |
Related party balances and tran
Related party balances and transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related party balances and transactions | |
Related party balances and transactions | 9 . Related party balances and transactions In 2016, the Group received loan from Mr. Tang Yue (Founder and Chief Executive Officer) of RMB325,427,200 to support the Group’s working capital management and repaid Mr. Tang Yue RMB331,216,528. As of December 31, 2016, the amounts due to Mr. Tang Yue were RMB106,645,844. The related party loan is interest-free loan payable on demand. During 2017, the Group received RMB285.5 million loan from Mr. Tang Yue to support the Group’s working capital management which was subsequently fully repaid during the year. In addition, the Group separately provided loan of RMB217.0 million to Zijinzhonghao (Zhejiang) Investment Co., Ltd. (“ZJZH”) now known as Zijinzhonghao (Zhejiang) Investment Co., Ltd., an entity controlled by Mr. Tang Yue for its short‑term working capital needs, which was subsequently fully settled in July 2017. By the end of December 31, 2017, all outstanding related party loans were fully settled. In 2018, Jiangxi Ruijing provided guarantee over loans facilitated with a principal amount of RMB1,333,503,026 (US$193,949,971) through the Company’s platform and received RMB21,918,796 (US$3,187,957) guarantee fees from the borrowers. In 2018, the Group remitted RMB20,000,000 (US$2,908,879) to Jiangxi Ruijing as a form of security deposit to cover for any circumstances in which the loans referred by Company were fictitious. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income taxes | |
Income taxes | 10. Income taxes Cayman Islands X Financial is a company incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Company is not subject to tax on either income or capital gain. Hong Kong Under the current Hong Kong Inland Revenue Ordinance, YZT (HK) Limited, a subsidiary of the Group located in Hong Kong, is subject to 16.5% income tax on its taxable income generated from operations in Hong Kong. No provision for this entity has been made in the consolidated financial statements as it has no assessable income for the years ended December 31, 2016, 2017 and 2018. PRC The Company’s subsidiaries and consolidated VIEs established in the PRC are subject to an income tax rate of 25% in the years presented. As stipulated by the Taxation Law of PRC, entities founded in certain industrial cooperation zones can be subject to a reduced enterprice income tax rate of 15%. Two subsidiaries and one VIE in Shenzhen became qualified enterprises to enjoy the preferential income tax rate of 15% from 2018 to 2020. Uncertainties exist with respect to how the current income tax law in the PRC applies to the Group’s overall operations, and more specifically, with regard to tax residency status. The EIT Law includes a provision specifying that legal entities organized outside of the PRC will be considered residents for Chinese Income Tax purposes if the place of effective management or control is within the PRC. The implementation rules to the EIT Law provide that non‑resident legal entities will be considered PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting and properties, occurs within the PRC. Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Group does not believe that the legal entities organized outside of the PRC within the Group should be treated as residents for EIT law purposes. If the PRC tax authorities subsequently determine that the Company and its subsidiaries registered outside the PRC should be deemed resident enterprises, the Company and its subsidiaries registered outside the PRC will be subject to PRC income taxes, at a statutory income tax rate of 25%, except for two subsidiaries and one VIE in Shenzhen that are qualified enterprises which enjoy a preferential income tax rate of 15% in 2018. The Group is not subject to any other uncertain tax position. According to PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or withholding agent. The statute of limitations will be extended five years under special circumstances, which are not clearly defined (but an underpayment of tax liability exceeding RMB0.1 million is specifically listed as a special circumstance). In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. From inception to 2018, the Group is subject to examination of the PRC tax authorities. The current and deferred component of income tax expenses which are substantially attributable to the Company’s PRC subsidiaries, VIEs and subsidiaries of the VIEs, are as follows: Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Current tax 6,128,180 395,369,391 213,083,260 30,991,675 Deferred tax (33,146,384) (257,121,164) (3,162,072) (459,905) Total (27,018,204) 138,248,227 209,921,188 30,531,770 Reconciliation between the income taxes expense computed by applying the PRC tax rate of 25% to loss before the provision of income taxes and the actual provision for income taxes is as follows: Year ended Year ended Year ended December 31, December 31, December 31, 2016 2017 2018 2018 RMB RMB RMB US$ PRC income tax (36,799,766) 119,643,817 271,230,730 39,448,874 Other expenses not deductible for tax purposes 54,687 119,376 226,076 32,881 Share based compensation expenses not deductible for tax purposes 9,473,499 18,502,393 42,959,121 6,248,145 Effect of tax holiday and preferential tax rate (1) — — (104,548,726) (15,205,982) Effect of different tax rate of subsidiary operation in other jurisdiction 252,454 (20,242) 3,164,192 460,213 Research and Development Tax Credit — — (32,720,713) (4,759,030) Adjustment on current income tax of the previous periods (2) — — (17,208,473) (2,502,869) Withholding tax — — 46,419,145 6,751,384 Valuation allowance movement 922 2,883 399,836 58,154 Total (27,018,204) 138,248,227 209,921,188 30,531,770 (1) The aggregate amount and per share effect of the tax holiday and preferential tax rate are as follows: Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ The aggregate amount of tax holiday and preferential tax rate — — 104,548,726 15,205,982 The aggregate effect on basic and diluted net income per share: - Basic — — 0.36 0.05 - Diluted — — 0.34 0.05 (2) Adjustment on current income tax of the previous periods represented the adjustment according to final annual income tax filing with the PRC tax authorities. The tax effects of temporary differences that give rise to the deferred tax balances at December 31, 2017 and 2018 are as follows: As of December 31, As of December 31, 2017 2018 2018 Deferred tax assets: RMB RMB US$ Impairment of long-term investments 1,575,000 1,575,000 229,074 Accrued advertising 397,879 3,394,533 493,714 Guarantee liabilities 279,382,336 235,329,500 34,227,256 Fair value adjustments related to Consolidated Trusts 3,527,264 — — Fair value adjustments related to financial guarantee derivatives 4,527,688 54,770,514 7,966,041 Allowance for loan receivable from Xiaoying Housing Loans — 3,886,705 565,298 Fair value adjustments related to Loans held for sale — 853,899 124,194 Operating loss carryforwards, net 6,651,617 46,845,223 6,813,355 Others — 395,882 57,579 Deferred tax assets, gross 296,061,784 347,051,256 50,476,511 Valuation allowance (3,838) (403,674) (58,711) Total deferred tax assets, net 296,057,946 346,647,582 50,417,800 Deferred tax liabilities: Property and equipment arising from acquisitions — 1,008,419 146,668 Tax effects of distribution of VIE's earnings (1) — 46,419,145 6,751,384 Total deferred tax liabilities — 47,427,564 6,898,052 (1) A deferred tax liability was recorded for taxable temporary differences attributable to the excess of financial reporting amounts over tax basis amount in domestic VIEs. Movement of the valuation allowance is as follows: As of December 31, As of December 31, 2017 2018 2018 RMB RMB US$ Balance as of January 1 (955) (3,838) (558) Addition (2,883) (399,836) (58,153) Balance as of December 31 (3,838) (403,674) (58,711) The Company operates through its subsidiaries, VIEs and subsidiaries of the VIEs. The valuation allowance is considered on an individual entity basis. As of December 31, 2017 and 2018, the Company had tax operating loss carry forwards of RMB26,614,377 and RMB188,212,704 (US$ 27,374,402) respectively from its subsidiaries, VIEs and subsidiaries of the VIEs registered in the PRC, which can be carried forward to offset taxable income. The net operating loss will expire in years 2021 to 2023 if not utilized. The Group has recognized a valuation allowance against deferred tax assets on tax loss carry forwards of RMB922, RMB2,883 and RMB399,836 (US$58,153) for the years ended December 31, 2016, 2017 and 2018, respectively. The Group assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. The ultimate realization of deferred tax assets is dependent upon its ability to generate sufficient future taxable income within the carry‑forward periods provided for in the tax law and during the periods in which the temporary differences become deductible. When assessing the realization of deferred tax assets, the Group has considered possible sources of taxable income including (i) future reversals of existing taxable temporary differences, (ii) future taxable income exclusive of reversing temporary differences and carry‑forwards, (iii) future taxable income arising from implementing tax planning strategies, and (iv) specific known trend of profits expected to be reflected within the industry. On the basis of this evaluation, as of December 31, 2017 and 2018 a valuation allowance of RMB3,838 and RMB403,674 (US$58,711) was recorded respectively to reflect only the portion of the deferred tax assets that is not more likely than not to be realized. The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carry forwards period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth. In accordance with the EIT Law, dividends, which arise from profits of foreign invested enterprises (“FIEs”) earned after January 1, 2008, are subject to a 10% withholding income tax. In addition, under tax treaty between the PRC and Hong Kong, if the foreign investor is incorporated in Hong Kong and qualifies as the beneficial owner, the applicable withholding tax rate is reduced to 5%, if the investor holds at least 25% in the FIE, or 10%, if the investor holds less than 25% in the FIE. A deferred tax liability should be recognized for the undistributed profits of PRC subsidiaries unless the Company has sufficient evidence to demonstrate that the undistributed dividends will be reinvested and the remittance of the dividends will be postponed indefinitely. Management has asserted to indefinitely reinvest the undistributed earnings of the subsidiaries located in the PRC. The FIE of the Group had cumulative profits of RMB1,384,768,106 (US$201,406,168) as of December 31, 2018. A deferred tax liability should be recorded for taxable temporary differences attributable to the excess of financial reporting amounts over tax basis amounts, including those differences attributable to a more than 50% interest in a domestic subsidiary. However, recognition is not required in situations where the tax law provides a means by which the reported amount of that investment can be recovered tax-free and the enterprise expects that it will ultimately use that means. The Group accrued deferred tax liabilities on the earnings of the VIEs of nil and RMB46,419,145 (US$6,751,384) as of December 31, 2017 and 2018. |
Net income (loss) per share and
Net income (loss) per share and net income (loss) attributable to common stockholders | 12 Months Ended |
Dec. 31, 2018 | |
Net income (loss) per share and net income (loss) attributable to common stockholders | |
Net income (loss) per share and net income (loss) attributable to common stockholders | 11. Net income (loss) per share and net income (loss) attributable to common stockholders The following table details the computation of the basic and diluted net income (loss) per share: Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Net income (loss) attributable to X Financial (119,574,250) 340,275,002 883,111,893 128,443,298 Shares (denominator): Weighted average number of ordinary shares used in computing basic EPS 238,095,238 261,219,657 286,588,402 286,588,402 Basic net income (loss) per share (0.50) 1.30 3.08 0.45 Diluted effects of stock options — 18,491,147 17,395,882 17,395,882 Weighted average number of ordinary shares used in computing diluted EPS 238,095,238 279,710,804 303,984,284 303,984,284 Diluted net income (loss) per share (0.50) 1.22 2.91 0.42 Diluted income (loss) per share do not include the following instruments as their inclusion would have been anti‑dilutive: Year ended Year ended Year ended December 31, December 31, December 31, 2016 2017 2018 Stock options 21,898,645 7,857,000 56,926,054 |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2018 | |
Share-based compensation | |
Share-based compensation | 12. Share-based compensation On January 25, 2015, the Board of Directors of X Financial approved the Share Incentive Plan for the purpose of providing incentives and rewards to employees and executives who contribute to the success of the Company’s operations, and granted 13,843,645 of stock options. On June 29, 2015, May 3, 2016, October 11, 2017, April 30, 2018 and October 31, 2018, the Board of Directors of X Financial granted 630,000, 7,425,000, 16,616,000, 841,054, and 475,000 stock options respectively to certain employees, directors and officers. The stock options shall expire 10 years from the date of grant and vest over a period from three to four years. On May 9, 2018, the Board of Directors of X Financial granted 40,000,000 share options to certain senior management. The exercise price was the offering price per share of the Group's IPO which was US$4.75, and were eligible to vest, in whole or in part, when both the market capitalization milestone as well as the targeted adjusted net earnings were achieved subsequent to the IPO. The Company determined the service inception date to be May 9, 2018 and the grant date to be the date of the IPO. The offering price of the IPO was used to determine the fair value of ordinary shares at grant date to estimate the total share-based compensation expense of RMB16,210,135 (US$2,357,666) which was recognized over a 5 year period from service inception date on a straight line basis. The share-based compensation expense recognized upon the IPO was RMB9,163,461 (US$1,332,770). The Company used the Binomial model to estimate the fair value of the options granted on the respective grant dates with assistance from independent valuation firms. The fair value per option was estimated at the date of grant using the assumptions. The weighted-average grant date fair value of the options for the years ended December 31, 2017 and 2018 were RMB16.69 and RMB13.08 per share respectively. January 25, June 29, May 3, October 11, April 30, May 9, October 31, 2015 2015 2016 2017 2018 2018 2018 RMB RMB RMB RMB RMB RMB RMB Fair value of underlying ordinary shares 4.91 9.66 16.98 30.29 41.33 38.14 26.74 Exercise Price 0.27 0.27 0.27 - 10.71 0.27 - 27.02 25.42 30.27 27.93 Expected Volatility per annum (“p.a.”) 43.00 % 38.00 % 42.00 % 38.60 % 45.47 % 39.3 % 43.90 % Risk-Free Rate (p.a.) 1.81 % 2.33 % 1.81 % 2.35 % 2.96 % 2.94 % 3.15 % Exercise Multiple 2.5 2.5 2.5 2.5 2.5 5.58-38.33 2.5 Dividend Yield (p.a.) NIL NIL NIL NIL NIL NIL NIL Time to Maturity (Years) 10 10 10 10 10 5 10 The risk‑free rate of interest is based on the yield curve of government bonds in the PRC as of valuation date. The expected volatility is estimated based on annualized standard deviation of daily stock price return of comparable companies for the period before valuation date and with similar span as the expected expiration term. Prior to the IPO, the fair value of the ordinary shares was through a retrospective valuation as at each grant date, which used management’s best estimate for projected cash flows as of the valuation date with the assistance of an independent third‑party appraiser. Subsequent to the IPO, the fair value of ordinary shares was determined by observable market price. A summary of option activity during the year ended December 31, 2018 is presented below: Intrinsic value of Number of Exercise Price Remaining options Options RMB Contractual RMB Outstanding, as of January 1, 2018 38,259,645 0.27 - 27.02 7.07 - 9.78 1,156,955,666 Granted 41,316,054 25.42 - 30.27 10 1,781,629 Forfeited 2,109,000 0.27 - 30.27 7.34 - 9.83 162,452 Outstanding, as of December 31, 2018 77,466,699 0.27 - 30.27 6.07 - 9.83 1,005,012,166 Vested and expected to vest as of December 31, 2018 77,466,699 0.27 - 30.27 6.07 - 9.83 1,005,012,166 Exercisable as of December 31, 2018 20,053,395 0.27 - 25.42 6.07 - 9.33 586,560,814 The Group recognized the compensation cost for the stock options on a straight line basis. For the years ended December 31, 2016, 2017 and 2018 the Group recorded compensation expenses of RMB37,893,996, RMB74,009,575 and RMB171,836,485 (US$24,992,580) respectively for the stock options granted to the Group’s employees. The Group allocated share‑based compensation expense as follows: Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Origination and servicing 29,999,172 55,403,160 103,124,758 14,998,874 General and administrative 7,489,762 18,227,289 66,264,371 9,637,753 Sales and marketing 405,062 379,126 2,447,356 355,953 As of December 31, 2016, 2017 and 2018, there were RMB77,111,690, RMB477,996,293 and RMB425,970,675 (US$61,954,865) respectively of total unrecognized compensation expense related to unvested stock options granted. As of December 31, 2018 that cost is expected to be recognized over a weighted‑average period of 3.2 years. |
Statutory reserves and restrict
Statutory reserves and restricted net assets | 12 Months Ended |
Dec. 31, 2018 | |
Statutory reserves and restricted net assets | |
Statutory reserves and restricted net assets | 13. Statutory reserves and restricted net assets The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the VIEs and subsidiaries of the VIEs incorporated in PRC only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The consolidated results of operations reflected in the consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s subsidiaries. Under PRC law, the Company’s subsidiaries, VIEs and the subsidiaries of the VIEs located in the PRC (collectively referred as the (“PRC entities”) are required to provide for certain statutory reserves, namely a general reserve, an enterprise expansion fund and a staff welfare and bonus fund. The PRC entities are required to allocate at least 10% of their after tax profits on an individual company basis as determined under PRC accounting standards to the statutory reserve and has the right to discontinue allocations to the statutory reserve if such reserve has reached 50% of registered capital on an individual company basis. In addition, the registered capital of the PRC entities is also restricted. Amounts restricted that include paid‑in capital and statutory reserve funds, as determined pursuant to PRC GAAP, are RMB1,244,786,249 and RMB1,632,374,093 (US$237,418,965) as of December 31, 2017 and 2018 respectively. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and contingencies | |
Commitments and contingencies | 14. Commitments and contingencies Operating lease as lessee The Group leases certain office premises under non‑cancelable leases. Rental expenses under operating leases for the years ended December 31, 2016, 2017 and 2018 were RMB6,162,189, RMB17,543,824 and RMB24,006,995 (US$3,466,977) respectively. Future minimum lease payments under non‑cancelable operating leases agreements are as follows: Years ending RMB US$ 2019 23,838,499 3,467,166 2020 20,777,968 3,022,030 2021 18,294,107 2,660,768 2022 11,836,823 1,721,595 The Group’s operating lease commitments have no renewal options, rent escalation clauses and restriction or contingent rents. Contingencies The Group is subject to periodic legal or administrative proceedings in the ordinary course of business. The Group does not have any pending legal or administrative proceeding to which the Group is a party that will have a material effect on its business or financial condition. |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent events | |
Subsequent events | 15. Subsequent events On March 18, 2019, the Board of Directors declared a cash dividend of US$0.10 per ADS for full year 2018 as part of the Company’s dividend policy. |
CONDENSED FINANCIAL INFORMATION
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | 12 Months Ended |
Dec. 31, 2018 | |
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | |
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | SCHEDULE I CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY BALANCE SHEETS (in Renminbi “RMB”, except share and per share data) As of December 31, As of December 31, 2017 2018 2018 RMB RMB US$ Assets: Cash and cash equivalents 117,396,413 309,504,088 45,015,503 Prepaid expenses and other current assets — 5,823,242 846,955 Amount due from subsidiaries and VIEs 273,684,830 818,695,709 119,074,352 Investments in subsidiaries and VIEs 1,371,246,717 2,438,249,431 354,628,672 Total assets 1,762,327,960 3,572,272,470 519,565,482 Liabilities: Accrued expenses and other liabilities — 55,250,237 8,035,814 Total liabilities — 55,250,237 8,035,814 Equity: Common shares 173,444 189,586 27,574 Additional paid-in capital 1,971,701,910 2,824,223,031 410,766,203 Retained earnings (Accumulated deficits) (242,997,034) 640,114,859 93,100,845 Accumulated other comprehensive income 33,449,640 52,494,757 7,635,046 Total equity 1,762,327,960 3,517,022,233 511,529,668 Total liabilities and equity 1,762,327,960 3,572,272,470 519,565,482 CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in Renminbi “RMB”, except share and per share data) Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ General and administrative (38,905,856) (74,802,853) (79,265,535) (11,528,694) Foreign exchange loss (18,220) (478,590) — — Interest income 22,163 1,358,777 122,320 17,791 Equity in profit (loss) of subsidiaries and VIEs (80,672,337) 414,197,668 961,430,600 139,834,281 Other income (loss), net — — 824,508 119,920 Net income (loss) (119,574,250) 340,275,002 883,111,893 128,443,298 Other comprehensive income (loss) 27,871,616 (24,463,956) 19,045,117 2,769,997 Comprehensive income (loss) (91,702,634) 315,811,046 902,157,010 131,213,295 CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY STATEMENT OF CASH FLOWS (in Renminbi “RMB”, except share and per share data) Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Net cash provided by (used in) operating activities (14,594,973) 15,030,828 36,187,975 5,263,322 Loan to subsidaries and VIE (131,300,255) (69,544,598) (519,786,600) (75,599,825) Net cash used in investing activities (131,300,255) (69,544,598) (519,786,600) (75,599,825) Contribution from shareholders — — 681,989,413 99,191,246 Net cash provided by financing activities — — 681,989,413 99,191,246 Effect of foreign exchange rate changes 18,233,044 (24,740,525) (6,283,113) (913,840) Net increase (decrease) in cash and cash equivalents (127,662,184) (79,254,295) 192,107,675 27,940,903 Cash and cash equivalents, beginning of year 324,312,892 196,650,708 117,396,413 17,074,600 Cash and cash equivalents, end of year 196,650,708 117,396,413 309,504,088 45,015,503 SCHEDULE I—NOTES TO CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY 1. Schedule I has been provided pursuant to the requirements of Rule 12‑04(a) and 5‑04(c) of Regulation S‑X, which require condensed financial information as to the financial position, changes in financial position and results of operations of a parent company as of the same date and for the same period for which audited consolidated financial statements have been presented when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. 2. The condensed financial information has been prepared using the same accounting policies as set out in the consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries and VIEs. For the parent company, the Company records its investments in subsidiaries and VIEs under the equity method of accounting as prescribed in ASC 323, Investments—Equity Method and Joint Ventures. Such investments are presented on the Condensed Balance Sheet as “Investments in subsidiaries and VIEs” and the subsidiaries and VIEs’ profit or loss as “Equity in profit (loss) of subsidiaries and VIEs” on the Condensed Statements of Comprehensive Income (loss). Ordinarily under the equity, an investor in an equity method investee would cease to recognize its share of the losses of an investee once the carrying value of the investment has been reduced to nil absent an undertaking by the investor to provide continuing support and fund losses. For the purpose of this Schedule I, the parent company has continued to reflect its share, based on its proportionate interest, of the losses of subsidiaries and VIE regardless of the carrying value of the investment even though the parent company is not obligated to provide continuing support or fund losses. 3. For the years ended December 31, 2016, 2017 and 2018, there were no material contingencies, significant provisions of long‑term obligations, guarantees of the Company. 4. Translations of balances in the additional financial information of Parent Company—Financial Statements Schedule I from RMB into US$ as of and for the year ended December 31, 2018 are solely for the convenience of the readers and were calculated at the rate of US$1.00= RMB6.8755, as set forth in H.10 statistical release of the Federal Reserve Board on December 31, 2018. The translation is not intended to imply that the RMB amounts could have been, or could be, converted, realized or settled into United States dollars at that rate on December 31, 2018, or at any other rate. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of significant accounting policies | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Principles of Consolidation | Principles of Consolidation Variable interest entity The consolidated financial statements include the financial statements of the Company, its wholly‑owned subsidiaries, and consolidated VIEs. All intercompany transactions and balances have been eliminated. The Company, through its wholly-owned foreign invested subsidiary, Beijing WFOE in the PRC, entered into a series of contractual arrangements (“VIE agreements”) with Shenzhen Xiaoying, Beijing Ying Zhong Tong, and Shenzhen Tangren (collectively known as “the VIEs”) and their respective shareholders that enable the Company to (1) have power to direct the activities that most significantly affects the economic performance of the VIEs, and (2) receive the economic benefits of the VIEs that could be significant to the VIEs. As PRC laws and regulations prohibit and restrict foreign ownership of internet value‑added businesses, the Company operates its business, primarily through the VIEs and the subsidiaries of the VIEs. Despite the lack of technical majority ownership, there exists a parent‑subsidiary relationship between Beijing WFOE and the VIEs through the aforementioned agreements with the nominee shareholders of the VIEs. The following is a summary of the VIE agreements: (1) Shareholders’ Voting Rights Proxy Agreement: Pursuant to the voting rights proxy agreements signed between the VIEs’ nominee shareholders and Beijing WFOE, each nominee shareholder irrevocably appointed Beijing WFOE as its attorney‑in‑fact to exercise on each shareholder’s behalf and all rights that each shareholder has in respect of its equity interest in the VIEs (including but not limited to executing the exclusive right to the voting rights and the right to appoint directors and executive officers of the VIEs). The nominee shareholders cannot revoke the authorization and entrustment as long as the nominee shareholders remain a shareholder of the VIEs. The power of attorney will remain in force for ten years. Unless a thirty‑day notice is given by Beijing WFOE, this agreement shall be automatically renewed for another one year upon its expiration. (2) Spouse Consent Agreement Under the spouse consent agreement, each signing spouse acknowledges that the shares of the VIEs held by the relevant shareholder of the VIEs are the personal assets of such shareholder and not jointly owned by the couple. Each signing spouse also unconditionally and irrevocably gives up his or her rights to such shares and any associated economic rights or interests to which he or she may be entitled pursuant to applicable laws and undertakes not to make any assertion of rights to such shares and the underlying assets. Each signing spouse agrees that he or she will not carry out in any circumstances any conduct that are contradictory to the contractual arrangements and this consent agreement. (3) Executive Call Option Agreement: Pursuant to the exclusive call option agreement entered into between the VIEs’ nominee shareholders and Beijing WFOE, the nominee shareholders irrevocably granted Beijing WFOE a call option to request the nominee shareholders to transfer or sell any part or all of its equity interests in the VIEs, to Beijing WFOE, or their designees. The purchase price of the equity interests in the VIEs shall be equal to the minimum price required by PRC law. Without Beijing WFOE’s prior written consent, the VIEs and its nominee shareholders shall not amend its articles of association, increase or decrease the registered capital, sell or otherwise dispose of its assets or beneficial interest, issue any additional equity or right to receive equity, provide any loans, distribute dividends in any form, etc. The term is for ten years and may be extended for another ten years at the option of Beijing WFOE. (4) Exclusive Business Cooperation Agreement: Pursuant to the exclusive business cooperation agreement entered into by Beijing WFOE and the VIEs, Beijing WFOE provides exclusive technical support and consulting services in return for fees based on 100% of the VIE’s total consolidated profit, which is adjustable at the sole discretion of Beijing WFOE. Without Beijing WFOE’s consent, the VIEs cannot procure services from any third party or enter into similar service arrangements with any other third party, except for those from Beijing WFOE. The term of this agreement is ten years. Unless agreed by both parties in writing, this agreement shall be automatically renewed for another ten years upon its expiration. (5) Equity Pledge Agreement Each nominee shareholder of the VIEs has also entered into an equity pledge agreement with Beijing WFOE, pursuant to which each shareholder pledged his/her interest in Beijing WFOE to guarantee the performance of obligations of Beijing WFOE and its shareholders under the exclusive business cooperation agreement, exclusive call option agreement, and shareholders’ voting rights proxy agreement. If the VIEs or any of the nominee shareholder breaches its contractual obligations, Beijing WFOE will be entitled to certain rights and interests regarding the pledged equity interests including the right to dispose the pledged equity interests. None of the nominee shareholders shall, without the prior written consent of Beijing WFOE, assign or transfer to any third party, create or cause any security interest and any liability in whatsoever form to be created on, all or any part of the equity interests it holds in the VIEs. This agreement is not terminated until all of the agreements under the shareholders’ voting rights proxy agreement, exclusive call option agreement and the exclusive business cooperation agreement are fully performed. The irrevocable power of attorney have conveyed all shareholder rights held by the VIEs’ shareholders to Beijing WFOE or any person designated by Beijing WFOE, including the right to appoint executive directors of the VIEs to conduct day to day management of the VIEs’ businesses, and to approve significant transactions of the VIEs. In addition, the exclusive call option agreement provides Beijing WFOE with a substantive kick‑out right of the VIEs shareholders through an exclusive option to purchase all or any part of the shareholders’ equity interest in the VIEs. In addition, through the exclusive business cooperation agreement, Beijing WFOE demonstrates its ability and intention to continue to exercise the ability to absorb substantially all of the profits and all of the expected losses of the VIEs. The equity pledge agreements further secure the obligations of the shareholders of the VIEs under the above agreements. Based on these contractual arrangements, the Company consolidates the VIEs in accordance with SEC Regulation S‑X Rule 3A‑02 and Accounting Standards Codification (“ASC”) topic 810 (“ASC 810”), Consolidation. The Company believes that the contractual arrangements with the VIEs are in compliance with PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could: · revoke the Group’s and operating licenses; · levy fines on the Group; · confiscate any of our income that they deem to be obtained through illegal operations; · shut down the Group’s services; · discontinue or restrict the Group’s operations in China; · impose conditions or requirements with which the Group may not be able to comply; · require the Group to change corporate structure and contractual arrangements; · restrict or prohibit the use of the proceeds from overseas offerings to finance the Group’s PRC consolidated VIEs’ business and operations; and · take other regulatory or enforcement actions that could be harmful to the Group’s business. Consolidated Trusts As part of the Group’s efforts to develop new product offerings for institutional investors, the Group established a business relationship with certain trusts which were administered by third‑party trust companies. The trusts were set up to invest solely in the loans facilitated by the Group on its platform to provide returns to the beneficiaries of the trusts through interest payments made by the borrowers. The Group typically provides credit to the borrowers through one of its consolidated SPVs first and then transfers the loans to the trusts, which issue beneficial interests to the institutional investors. The Group continues to service the loans, and provides a guarantee to absorb substantially all of the credit risk of the trusts resulting from borrower’s default on principal and interest. The Group determined that the guarantee represents a variable interest in the trusts through which the Group has the obligation to absorb losses of the trusts that could potentially be significant to the trusts. The servicing agreement and specifically the ability to direct default mitigation activities provide the Group with the power to direct the activities of the trusts that most significantly impact the economic performance of the trusts. As a result, the Company is considered the primary beneficiary of the trusts and consolidated the trusts’ assets, liabilities, results of operations and cash flows. The transfer of loans to the Consolidated Trusts are not eligible for sale accounting because the trust is consolidated and the loan transfer is considered an intercompany transaction. The Group further elected to apply fair value option to the loans (at the date of origination) and the liabilities to investors. That is, the loans are continued to be recorded on the Group’s consolidated balance sheets as loans held for investment under “Loans at fair value” and the proceeds received from the investors are recorded as trust liabilities under “Payable to investors at fair value”. During 2018, one of the subsidiaries of the Group funded RMB50,000,000 (US$7,272,198) to loan products facilitated on the Group’s platform through a third-party trust company. The trust is consolidated by the Group and the underlying loans are recorded on the Group’s consolidated balance sheets as loans held for investment under “Loans at fair value”. The following financial statement amounts and balances of the Consolidated Trust are included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: As of December 31, As of December 31, 2017 2018 2018 RMB RMB US$ Assets: Restricted cash 12,614,745 4,861,491 707,075 Loans at fair value 667,838,880 33,417,119 4,860,318 Prepaid expenses and other current assets 11,105,628 296,080 43,063 Total assets 691,559,253 38,574,690 5,610,456 Liabilities: Payable to investors at fair value of the Consolidated Trusts 667,080,871 — — Other tax payable 3,586,212 284,564 41,388 Accrued expenses and other liabilities 19,394,527 — — Total liabilities 690,061,610 284,564 41,388 Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Net revenue 20,594,271 117,684,121 61,475,364 8,941,221 Net income (loss) (368,455) 43,583,819 41,986,452 6,106,676 Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Net cash provided by (used in) operating activities (49,516,080) 26,997,889 12,547,230 1,824,919 Net cash provided by (used in) investing activities (710,000,000) 48,332,936 676,499,516 98,392,774 Net cash provided by (used in) financing activities 760,000,000 (63,200,000) (696,800,000) (101,345,357) The following financial statement amounts and balances of the VIEs and Consolidated Trusts were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: As of December 31, As of December 31, 2017 2018 2018 RMB RMB US$ Assets: Cash and cash equivalents 520,450,136 236,432,366 34,387,661 Restricted cash 12,614,745 5,880,989 855,354 Accounts receivable and contract assets, net 965,333,922 1,266,169,464 184,156,711 Loans held for sale 768,638,420 — — Loans at fair value 667,838,880 33,417,119 4,860,318 Prepaid expenses and other current assets 82,099,649 60,501,113 8,799,522 Deferred tax assets, net 275,968,157 173,287,013 25,203,551 Long-term investments 54,167,615 287,222,720 41,774,812 Property and equipment, net 21,004,932 21,333,636 3,102,849 Intangible assets, net 1,616,238 1,628,117 236,800 Financial guarantee derivative — 358,249,913 52,105,289 Loan receivable from Xiaoying Housing Loans, net 197,595,942 128,101,279 18,631,558 Other non-current assets 3,751,516 6,345,345 922,892 Total assets 3,571,080,152 2,578,569,074 375,037,317 Liabilities: Payable to investors at fair value of the Consolidated Trusts 667,080,871 — — Guarantee liabilities 545,169,033 19,297,718 2,806,737 Financial guarantee derivative 53,260,916 — — Accrued payroll and welfare 20,655,199 23,329,971 3,393,204 Other tax payable 95,368,838 95,184,938 13,844,075 Income tax payable 270,342,567 93,611,597 13,615,242 Deposit payable to channel cooperators 134,262,319 — — Accrued expenses and other liabilities 132,525,198 117,547,625 17,096,593 Short-term bank borrowings — 198,000,000 28,797,906 Deferred tax liabilities — 47,145,390 6,857,013 Total liabilities 1,918,664,941 594,117,239 86,410,770 Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Net revenue 230,305,685 1,474,934,261 2,168,665,965 315,419,383 Net income (loss) (81,273,361) 325,182,393 408,242,461 59,376,403 Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Net cash provided by (used in) operating activities 277,925,076 (592,979,915) (243,451,042) (35,408,486) Net cash provided by (used in) investing activities (734,716,301) (10,809,388) 451,499,516 65,667,881 Net cash provided by (used in) financing activities 775,164,828 830,154,156 (498,800,000) (72,547,451) The VIEs and Consolidated Trusts contributed 100%, 83% and 61% of the Group’s consolidated revenue for the years ended December 31, 2016, 2017 and 2018 respectively. As of December 31, 2017 and 2018, the VIEs and Consolidated Trusts accounted for an aggregate of 92% and 56% of the consolidated total assets, and 90% and 53% of the consolidated total liabilities. 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 and Consolidated Trusts. However, if the VIEs were ever to need financial support, the Group may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to the shareholders of the VIEs or entrustment loans to the VIEs. The Group believes that there are no assets held in the VIEs that can be used only to settle obligations of the VIEs, except for registered capital and the PRC statutory reserves. As the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company for any of the liabilities 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 13 for disclosure of restricted net assets. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ materially from such estimates. Significant accounting estimates reflected in the Group’s consolidated financial statements include share‑based compensation, allowance for accounts receivables and contract assets, allocation of considerations under revenue arrangements with various performance obligations, valuation allowance for deferred tax assets, fair value of guarantee liabilities and financial guarantee derivatives, loans at fair value and payable to investors at fair value of the Consolidated Trusts. |
Revenue recognition | Revenue recognition The Group provides services as an online marketplace connecting borrowers and investors primarily through the use of two business models. The major products offered by the Group include Xiaoying Credit Loan and Xiaoying Housing Loan. Xiaoying Credit Loan consists of Xiaoying Card Loan and Xiaoying Preferred Loan products. Revenue is the transaction price the Group expects to be entitled to in exchange for the promised services in a contract in the ordinary course of the Group’s activities and is recorded net of value-added tax (“VAT”). The services to be accounted for include loan facilitation service, post-origination service (e.g. cash processing and collection services) and guarantee service. The first business model (“Direct Model”) involves the Group matching borrowers with investors who directly funds the credit drawdowns to the borrowers. The Group has determined that it is not the legal lender or borrower in the loan origination and repayment process, but acting as an intermediary to bring the lender and the borrower together. Therefore, the Group does not record the loans receivable or payable arising from the loans facilitated between the investors and borrowers on its platform. The second business model (“Intermediary Model”) involves the Group initially providing credit to borrowers using its own funds through an intermediary and subsequently selling the loans including all of the creditor rights in the loans to external investors on its platform within a short period of time. Loans facilitated by the Group typically have a term of twelve months. For each loan facilitated either through the Direct Model or Intermediary Model, the Group charges a service fee, which is payable by the borrower for all three services provided. No application fee is charged to borrowers or investors. According to the contractual agreement with borrowers, upon the inception of the loan, the Group has the unconditional right to the entire service fee regardless of whether subsequent post‑origination or guarantee services are provided by the Group or timing of repayment of the loan. Since September 2017, for certain Xiaoying Card Loans facilitated, the borrower can early repay the loans with a portion of the monthly service fees for the remaining period being waived. The Group historically charged a portion of service fees upfront for certain products which is deducted from the loan proceeds at loan origination, and the remaining service fees are collected on a monthly basis. The upfront fees collected were RMB104,104,701, RMB520,952,503 and nil during the years ended December 31, 2016, 2017 and 2018, respectively. The Group has stopped charging upfront fees for all products since December 2017 to comply with new regulatory requirements. At contract inception, the Group determines that the collection of service fees is probable based on historical experiences as well as the credit due diligence performed on each borrower prior to loan origination. In order to be more competitive by providing a certain level of assurance to the investors, for substantially all of the loans facilitated by the Group’s platform, borrowers are required to directly sign a credit insurance agreement with ZhongAn Online P&C Insurance Co., Ltd (“ZhongAn”) to protect investors against the risk of borrower default. In 2016 and January to September 2017, substantially all of the loans facilitated by the Group’s platform are insured by ZhongAn (referred to as the “Old ZhongAn Model”). The Group did not have direct contractual obligation to the investors for defaulted principal and interest during that period. The Group entered into a strategic cooperation agreement with ZhongAn pursuant to which ZhongAn provided insurance to the investors for the loans facilitated by the Group and reimbursed the loan principal and interest to the investor upon borrower’s default. During the aforementioned period, in order to maintain stable business relationship with ZhongAn, although not contractually obligated by the agreement with ZhongAn, the Group at its sole discretion paid ZhongAn for substantially all the defaulted loan principal and interest but have not been subsequently collected. The Group also provides direct guarantee to investors on certain loan products via its consolidated entities. The Group is compensated for this reimbursement from the contractual service fees collected from the borrowers. Given that the Group is at its sole discretion responsible for the uncollected claims paid, the Group effectively took on substantially all of the losses incurred by the investors due to borrowers’ default, the Group deemed the guarantee as a guarantee service to the investors and recognizes a stand ready obligation for its guarantee exposure in accordance with ASC Topic 460, Guarantees . From September 2017, the Group revised the arrangement with ZhongAn on substantially all of the Xiaoying Credit Loans (referred to as the “New ZhongAn Model”). For certain Xiaoying Card Loans that were newly facilitated from September 2017, borrowers are required to enter into a guarantee agreement and an insurance agreement with the Group and ZhongAn, respectively, to pay the guarantee fee and insurance fee to the respective party at a pre agreed rate. Upon borrower’s default, ZhongAn reimburses the full loan principal and interest to the investor first, and has the right to recourse to both the borrower and the Group, but the Group’s contractual obligation at any time is limited to a cap (the “Cap”) which is the lower of (1) total amount of guarantee fees contractually required to be collected from the borrowers for such loans facilitated during the current period on an aggregated basis, and (2) a certain percentage of the total principal of the loans facilitated stated in an annualized manner, as pre agreed with ZhongAn (the “Rate”). The Group has no obligation or intention to compensate ZhongAn for any losses in excess of the contractual obligation. The Rate will be negotiated prospectively at each quarter between the two parties based on the expected default rate. The actual loss in excess of the Cap is absorbed by ZhongAn. ZhongAn ultimately bears substantially all of the credit risk. The Group’s exposure in this arrangement is limited to the default and prepayment risk in relation to the guarantee fee when the Group cannot collect the guarantee fee under the agreement with the borrower on an individual basis but is still obligated to compensate ZhongAn up to the Cap on a pool basis. The Group evaluated the guarantee arrangement pursuant to ASC Topic 815, and concluded that the arrangement meets the definition of a derivative and that it is not eligible for the guarantee scope exception. Therefore, the guarantee is recognized as a derivative liability/asset at fair value and is not accounted for pursuant to ASC Topic 460 or 450. See accounting policy for financial guarantee derivative. For other Xiaoying Preferred Loan products newly facilitated from September 2017, the borrowers are required to enter into an insurance agreement with ZhongAn only at a rate set by ZhongAn. No separate guarantee agreement is signed by the borrower with the Group and no additional guarantee fee is charged from the borrower. Upon borrower’s default, ZhongAn reimburses the full loan principal and interest to the investor. The Group collects the defaulted amount from borrowers on behalf of ZhongAn but has no obligation and it is no longer the Group’s intention to compensate ZhongAn for the defaulted loan principal and interest not subsequently collected in the future. ZhongAn is fully liable for all the borrower’s credit risk associated with the defaulted principal and interest of the loan. Therefore for these loans, the Group provides loan facilitation and post-origination services but no longer provides guarantee service. The Group does not record guarantee liabilities associated with these loans or corresponding account receivables from guarantee services. Under the Direct Model, the total transaction price is directly allocated to the facilitation service and post-origination service. Under the Intermediary—non-trust model, upon transfer of the loan to third party investors, the Group recognize the difference between (1) the proceeds received from the investors and accounts receivable and (2) the carrying value of the loan as a gain of sale, which effectively represents the service fees earned from facilitation of the loans under Intermediary Model, as the “Loan facilitation service—Intermediary Model” in the consolidated statements of comprehensive income (loss). Direct Model The Group has early adopted ASU 2014‑09, Revenue from Contracts with Customers (Topic 606) and all subsequent ASUs that modified ASC 606 on January 1, 2017 and has elected to apply it retrospectively for the year ended December 31, 2016. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or 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 its customers to be both the investors and borrowers. The Group considers the loan facilitation service, guarantee service and post‑origination service as three separate services of which the guarantee service is accounted for in accordance with ASC Topic 460, Guarantees . 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. The Group determines the total transaction price to be the service fees chargeable from the borrowers, including the guarantee fees charged by the Group under the seperate guarantee agreement with the borrowers for certain type of Xiaoying Card Loans that are newly facilitated since September 2017. The Group’s transaction price includes variable consideration in the form of prepayment risk for certain products. The Group reflects, in the transaction price, the prepayment risk and estimates variable consideration for these contracts using the expected value approach on the basis of historical information and current trends of the prepayment percentage of the borrowers. The transaction price is allocated amongst the guarantee service, if any, and two performance obligations. The Group first allocates the transaction price to the guarantee liabilities, if any, that is recognized in accordance with either (1) ASC Topic 460, Guarantees which requires the guarantee to be measured initially at fair value based on the stand-ready obligation or (2) ASC Topic 815, which requires the guarantee to be measured initially and subsequently at fair value. Then the remaining considerations are allocated to the loan facilitation services and post-origination services using their relative standalone selling prices consistent with the guidance in ASC 606. For certain loans faciliated since September 2017, the total transaction price is allocated to facilitation service and post-origination service only. The Group does not have observable standalone selling price information for the loan facilitation services or post-origination services because it does not provide loan facilitation services or post-origination services on a standalone basis. There is no direct observable standalone selling price for similar services in the market that is reasonably available to the Group. As a result, the estimation of standalone selling price involves significant judgment. The Group uses an expected cost plus margin approach to estimate the standalone selling prices of loan facilitation services and post origination services as the basis of revenue allocation. In estimating its standalone selling price for the loan facilitation services and post-origination 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 a promised good or service (that is, an asset) to a customer. Revenues from loan facilitation are recognized at the time a loan is originated between the investor and the borrower and the principal loan balance is transferred to the borrower, at which time the facilitation service is considered completed. Revenues from post‑origination services are recognized on a straight‑line basis over the term of the underlying loans as the services are provided. Revenues from guarantee services are recognized at the expiry of the guarantee term when there had been no defaults. Except for certain loan products offered since September 2017, the collection of service fees is not conditional on the provision of subsequent post‑origination or guarantee services. The Group charges upfront fees for certain loan products. The upfront fee, if any, is deducted from loan proceeds at origination and the remaining consideration is collected in equal payments on a monthly basis. When the upfront fee is not sufficient to cover the fair value of guarantee liabilities or relative standalone selling price of facilitation services performed, a corresponding accounts receivable or contract asset is recognized (see accounting policy for Accounts receivable and contract assets). The Group has stopped charging upfront fees for all products since December 2017. Intermediary Model During the years ended December 31, 2016 and 2017, to increase matching rate and enhance borrowers’ experience, the Group provides credit to borrowers’ using its own funds first and then transfers the loans (including the creditor rights) to third party investors including individuals, corporations, and institutional funding partners, typically within a few days. The Group does not have intention to retain the loans as investment but to provide temporary funding to bridge the facilitation services such that the borrowers can immediately obtain funds. Due to limitations imposed by the PRC laws and regulations, the Group appointed several senior management (the “Intermediary”) to act as an intermediary to facilitate such loan facilitation services. Sometimes, the process also involves a special purpose vehicle formed by the Group between the Intermediary and the ultimate third party investor as certain investors may have legal limitation on acquiring loans from individuals. These special purpose vehicles are consolidated by the Group. Under the Intermediary business model, the Intermediary acts as an agent for the Group and the Group further provides the funds that are loaned to borrowers. The Group directs the Intermediary in all activities related to the origination of the loans and transfer of the funds to the borrowers. The Group agrees to take predominantly all the risk arising from potential breaches of agreement by the borrowers receiving financing. Additionally, the Intermediary’s role is restricted to signing agreements with borrowers and investors at the direction of the Group and the Intermediary has no obligation to make any repayment to the investors and never puts his own fund at risk. Consequently, the Intermediary is considered an agent of the Group. Through the Intermediary, the Group provides financing to borrowers on their platform and the loans are initially recorded on the consolidated balance sheet as loans held for sale. These loans carry the same insurance agreement with ZhongAn as loans facilitated under the Direct Model, which is attached to the loan and transfers along with the loan. The Group also charges service fees in the same manner as loans facilitated under the Direct Model. Intermediary Model—Non‑Trust Model The transfer of loans (including the creditor rights) to external investors not involving trust structure is accounted for as a true sale under ASC 860 (see accounting policy under “Sales and Transfers of Financial Instruments”). Upon sale, the Group records a guarantee liability in accordance with ASC 460 in relation to the on-going guarantee services to be provided to the investors, consistent with the loans facilitated under the Direct Model. The Group continues to provide post-origination services to the loans subsequent to their sale in the same manner as the Group services the loans facilitated under the Direct Model. No additional service fee is charged. Similar to the loans facilitated under the Direct Model, the Group charges and collects service fees from the borrowers in relation to the transferred loans on a monthly basis. The difference between (1) the proceeds received from the investors and accounts receivable and contract assets (see accounting policy on “Accounts receivable and contract assets and allowance for uncollectible accounts receivable and contract assets”) and (2) the sum of the carrying value of the loans and the fair value of the guarantee liability is recognized as a gain of sale, which effectively represents the service fees earned from facilitation of the loans under Intermediary Model, as the “Loan facilitation service—Intermediary Model” in the consolidated statements of comprehensive income (loss). For certain loans facilitated since September 2017, given the Group no longer provides guarantee services and the Group does not record any guarantee liabilities associated with those loans or related account receivable from guarantee services, the gain of sale is the difference between (1) the proceeds received from the investors and accounts receivable and (2) the carrying value of the loan. The subsequent accounting for post-origination service and guarantee services is consistent with that for loans facilitated under the Direct Model. Intermediary Model—Trust Model If the external investors are institutional investors, the transfer of loans under the Intermediary Model often involves transferring the loans to a trust formed and operated by unrelated third party trust companies. Loan principal and interests collected from monthly installments are immediately reinvested into new loans upon collection and the principal plus a pre-agreed fixed return is made to investors by the trusts at the end of the term of the trusts. The Group consolidates such trusts under the VIE model (see accounting policy on “Consolidated Trusts”). The Group also elects to apply fair value option to these loans at the date of origination. Loans transferred to Consolidated Trusts do not qualify for sales accounting as the transfer is to a consolidated subsidiary. The loans are recorded as “Loans at fair value” in the consolidated balance sheets. The Group recognizes as revenue under “financing income” the service fees and interests charged to the borrowers over the lifetime of the loans using effective interest method. Loans that were not yet transferred to external investors (other than institutional investors) as of December 31, 2017 and 2018 amounted to RMB768,638,420 and RMB632,716,508 (US$92,024,799) respectively and was recorded in “Loans held for sale” in the consolidated balance sheets. The online Intermediary Model ceased in April 2017 and the offline Intermediary Model with funding from banking financial institution partners ceased after December 31, 2017 to comply with the promulgated regulatory requirements. The Group continues the operations through the offline Intermediary Model with funding from other partners to the extent permitted under applicable laws and regulations in 2018. Disaggregation of revenues All of the Group’s revenue for the years ended December 31, 2016, 2017 and 2018 were generated from the PRC. The following table illustrates the disaggregation of revenue by product the Group offered in 2016, 2017 and 2018: Loan Loan facilitation facilitation service- service-direct Intermediary Post-origination Financing Other model Model service income revenue Total 2016 (RMB) (RMB) (RMB) (RMB) (RMB) (RMB) Major products Xiaoying Credit Loan 1,776,454 59,386,201 2,580,982 10,027,296 740,935 74,511,868 -Xiaoying Card Loan — 8,170,938 9,671 1,739,352 — 9,919,961 -Xiaoying Preferred Loan 1,776,454 51,215,263 2,571,311 8,287,944 740,935 64,591,907 Xiaoying Housing Loan — 33,579,446 1,582,306 16,925,206 729,727 52,816,685 Internet Channel (1) 508,468 16,560,238 682,541 822,305 191,316 18,764,868 Other loan products 2,238,882 67,323,194 3,342,160 2,725,355 1,068,699 76,698,290 Other service (2) — — — — 7,513,974 7,513,974 Total 4,523,804 176,849,079 8,187,989 30,500,162 10,244,651 230,305,685 Loan Loan facilitation facilitation service- service-Direct Intermediary Post-origination Financing Other Model Model service income revenue Total 2017 (RMB) (RMB) (RMB) (RMB) (RMB) (RMB) Major products Xiaoying Credit Loan 1,148,688,253 260,278,922 46,670,424 58,258,088 19,172,658 1,533,068,345 -Xiaoying Card Loan 1,104,724,129 52,724,493 38,624,854 18,311,559 12,740,493 1,227,125,528 -Xiaoying Preferred Loan 43,964,124 207,554,429 8,045,570 39,946,529 6,432,165 305,942,817 Xiaoying Housing Loan — 16,573,570 278,234 66,723,545 21,410,597 104,985,946 Internet Channel (1) 56,931,619 2,748,428 1,644,517 2,576,028 4,741,527 68,642,119 Other loan products 25,434,861 23,013,543 1,733,489 3,182,488 3,278,355 56,642,736 Other service (2) — — — — 23,596,047 23,596,047 Total 1,231,054,733 302,614,463 50,326,664 130,740,149 72,199,184 1,786,935,193 Loan Loan facilitation facilitation service- service-Direct Intermediary Post-origination Financing Other Model Model service income revenue Total 2018 (RMB) (RMB) (RMB) (RMB) (RMB) (RMB) Major products Xiaoying Credit Loan 2,897,702,061 216,754,528 128,865,000 67,731,784 109,141,168 3,420,194,541 -Xiaoying Card Loan 2,816,893,168 27,726,134 111,196,308 34,167,454 89,713,118 3,079,696,182 -Xiaoying Preferred Loan 80,808,893 189,028,394 17,668,692 33,564,330 19,428,050 340,498,359 Xiaoying Housing Loan 5,780,118 1,247,846 463,129 8,290,828 9,190,257 24,972,178 Internet Channel (1) 53,874,025 8,760,054 1,182,786 41,253 9,313,276 73,171,394 Other loan products 215,763 1,509,945 732,516 40,096 1,079,296 3,577,616 Other service (2) — — — — 18,684,315 18,684,315 Total 2,957,571,967 228,272,373 131,243,431 76,103,961 147,408,312 3,540,600,044 Loan Loan facilitation facilitation service- service-Direct Intermediary Post-origination Financing Other Model Model service income revenue Total 2018 (US$) (US$) (US$) (US$) (US$) (US$) Major products Xiaoying Credit Loan 421,453,286 31,525,639 18,742,637 9,851,179 15,873,925 497,446,666 -Xiaoying Card Loan 409,700,119 4,032,599 16,172,832 4,969,450 13,048,232 447,923,232 -Xiaoying Preferred Loan 11,753,167 27,493,040 2,569,805 4,881,729 2,825,693 49,523,434 Xiaoying Housing Loan 840,683 181,492 67,359 1,205,851 1,336,667 3,632,052 Internet Channel (1) 7,835,652 1,274,097 172,029 6,000 1,354,560 10,642,338 Other loan products 31,381 219,612 106,540 5,832 156,977 520,342 Other services (2) — — — — 2,717,521 2,717,521 Total 430,161,002 33,200,840 19,088,565 11,068,862 21,439,650 514,958,919 (1) Represents loans facilitated to borrowers referred by other platforms (2) Primarily consists of service fees charged for transferring loans between investors on the Group's online platform, referral service fee for introducing borrowers to other platforms and technology service fees received from ZhongAn for promoting its insurance products on the Group's online platform. Contract balances The Group did not enter into contracts with customers that were greater than one year for substantially all products for the years ended December 31, 2016, 2017 and 2018. The Group historically did not record any contract liabilities for both 2017 and 2018 and did not record any contract asset prior to September 2017. For certain Xiaoying Card Loan products facilitated since September 2017, the borrower can early repay the loans in which case a portion of the monthly service fees for the remaining period is waived. The Group does not have unconditional right to the consideration at the loan inception and records a corresponding contract asset when recognizing revenue from facilitation service. The contract asset will not be reclassified to a receivable given that the right to invoice and the payment due date is the same date. During 2018, the Group determined that the consideration for these loan products to no longer be probable that substantially all of the consideration will be collected from its customers, therefore no contract assets were recognized. Revenue for these loan products are recognized when the collection of consideration becomes probable. The contract assets as of December 31, 2017 and 2018 are RMB139,170,263 and nil respectively. Remaining unsatisfied performance obligations as of December 31, 2016, 2017 and 2018 pertained to post-origination service in the amount of RMB8,231,101, RMB32,704,036 and RMB103,023,734 (US$ 14,984,181) respectively. All remaining unsatisfied performance obligations would be recognized as revenue in the subsequent year. The revenues recognized in 2016, 2017 and 2018 from obligations satisfied (or partially satisfied) in prior periods are nil, nil and RMB3,390,633 (US$ 493,147), respectively. Incentives to investors To expand its market presence, the Group provides incentives to investors in a variety of forms that either reduces the amount of investment required to purchase financial products or entitles them to receive higher interest rates in the products they purchase. During the relevant incentive program period, the Group sets certain thresholds for the investor to qualify to enjoy the incentive. Such incentives are accounted for as a reduction of revenue in accordance with ASC 606. Financing income Financing income consists primarily the financing fees the Group charges for the loans facilitated through the Consolidated Trusts, including interest income and service fees generated from providing loan facilitation, guarantee and post‑origination services to the investors of the Consolidated Trusts and are recorded as revenue over the life of the underlying financing using the effective interest method. Financing income also includes interest income from loans held for sale that have not yet been transferred to external investors under the Intermediary Model. Other revenue Other revenue primarily includes penalty fees for loan prepayment and late payment, administration fee for transferring loans between investors on the Group’s platform, and commission fees for introducing borrowers to other platforms. The penalty fees, which are fees paid to the Group, will be received as a certain percentage of past due amounts in the case of late payments or a certain percentage of interest over the prepaid principal loan amount in the case of prepayment. Penalty fees are contingency-based variable considerations and constrained by the occurrence of delinquency or prepayment. They are recognized when the uncertainty associated with the variability is resolved, that is, when the underlying event occurs. The administration fees for transferring loans between investors and commission fees for introducing borrowers to other platforms are recognized when the obligation is fulfilled and is confirmed by the other platforms. The Group is also entitled to technology service fees every month from ZhongAn for promoting its insurance products on the online financing platform. The service fees are recognized ratably during the period of the services. |
Sales and transfers of financial instruments | Sales and transfers of financial instruments Sales and transfers of financial instruments are accounted under authoritative guidance for the transfers and servicing of financial assets and extinguishment of liabilities. Specifically, a transfer of a financial asset, a group of financial assets, or a participating interest in a financial asset is accounted for as a sale only if all the following conditions are met: 1. The financial assets are isolated from the transferor and its consolidated affiliates as well as its creditors; 2. The transferee or beneficial interest holders have the right to pledge or exchange the transferred financial assets; and 3. The transferor does not maintain effective control of the transferred asset. Under the Intermediary Model, the Group, through its Intermediary, facilitates credits to borrowers and subsequently transfers the loans (including the creditor rights) to third party investors at face value within a short period of time. When the loan (including the creditor rights) is transferred, the transferee becomes the direct counterparty to the borrower and the legal record holder of the loan upon transfer. The transfer is accounted for as a sale, as (1) the transferred loans are considered legally isolated from the assets of the Group and its creditors even in the bankruptcies under the PRC laws and regulations, (2) the investors (transferees) can freely pledge or exchange the transferred loans, and (3) the Group does not maintain effective control over the transferred loans. The cash flows related to the origination and transfer of these loans are presented as “Origination of loans held for sale” and “Sale of loans held for sale”, respectively, within operating cash flows in the consolidated statement of cash flows. For certain loans facilitated through the Intermediary Model, borrowers are required to pledge properties to one of the Group’s consolidated VIE entities (other than the Intermediary or the SPV conducting the facilitation and transfer of the loan) as collateral for the guarantee that the Group is providing to ZhongAn against borrower’s default. It is a separate arrangement with different counterparties from the loan provided by the Group. While the loan (including creditor’s rights) is transferred to third party investors, the lien remains under the Group’s name and in security for the Group agreeing to provide the guarantee to ZhongAn. The holding of the lien does not affect the creditor’s right in the loan being fully transferred. Provided all aforementioned conditions under sales accounting are met, the transfer of such loans with collateral are accounted for as a sale. |
Foreign currency translation | Foreign currency translation The functional currency of X Financial is in US dollars (“US$”). The functional currency of the Group’s subsidiaries and VIEs in the PRC is Renminbi (“RMB”). The determination of the respective functional currency is based on the criteria stated in ASC 830, Foreign Currency Matters. The Group also uses RMB as its reporting currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency are measured and recorded in the functional currency at the exchange rate prevailing on the transaction date. Translation gains and losses are recognized in the statements of comprehensive income (loss). The Company with functional currency of US$ translates its operating results and financial positions into RMB, the Group’s reporting currency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Equity amounts are translated at historical exchange rates. Revenues, expenses, gains and losses are translated using the average rates for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component in the statements of comprehensive income (loss). |
Guarantee liabilities | Guarantee liabilities The Group has an investor guarantee service which is directly and indirectly provided to the investors. The Group also provides direct guarantee to investors on certain loan products via its consolidated entities. If a borrower defaults, the Group makes its best efforts to collect the default loan. The Group directly or indirectly makes payment to the defaulted principal and interest to each investor. Under the Old ZhongAn Model, prior to September 2017, ZhongAn initially reimbursed the loan principal and interest to the investor upon the borrower’s default. In order to maintain stable business relationship with ZhongAn, although not contractually obligated, the Group at its sole discretion compensated ZhongAn for substantially all loan principal and interest default but not subsequently collected. 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 “Other revenue” in the consolidated statement of comprehensive income. 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 operating expenses in the consolidated statement of comprehensive income. 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. The Group measures its guarantee liabilities at inception at fair value based on the Group's expected payouts and also incorporating a markup margin. As the Group’s guarantee liabilities are not traded in an active market with readily observable prices, the Group applies a discounted cash flow methodology to measure the fair value of guarantee liabilities. The significant unobservable inputs used include expected future payout and discount rate. The expected future payouts were estimated based on expected default rates and collection rates for each product type, taking into consideration of historical loss experiences for both contingent and noncontingent elements. The expected future payouts take into account missed payments initially compensated by ZhongAn within two business days from borrowers’ payment due date. The expected collection rate of defaulted loans incorporates the proceeds from liquidiation of underlying collateral that would be expected to cover the payouts under the guarantee and was based on the average historical collection rate of the Group’s products. These inputs in isolation can cause significant increases or decreases in fair value. Increase in the expected default rates can significantly increase the fair value of guarantee liabilities; conversely a decrease in the expected default rates can significantly decrease the fair value of guarantee liabilities. The discount rate applied discounted cash flow methodology to present value the projected cash flows which is based on market rates. The Group also estimated the markup margin by looking at several comparable business models. The approximate term of the guarantee service correlates directly with the term of the loan product. Refer to Note 8 for additional information about guarantee liabilities for the years ended December 31, 2016, 2017 and 2018. From September 2017, the Group revised the Old ZhongAn Model on Xiaoying Credit Loan products, which is the major product offered by Group. The Group no longer records any guarantee liabilities in accordance with ASC Topic 460 for substantially all Xiaoying Preferred Loans. For most Xiaoying Card Loans, the Group records financial guarantee derivatives in accordance with ASC 815. See accounting policy of revenue recognition and financial guarantee derivatives. |
Financial guarantee derivative | Financial guarantee derivatives Starting from September 2017, for newly facilitated Xiaoying Card Loans, the Group’s exposure is limited to the contractual guarantee fee that the Group cannot collect under the agreement from the borrower as a result of default or prepayment but are still obligated to compensate ZhongAn based on the contractual guarantee fee up to the pre-agreed cap. See accounting policy in Revenue Recognition. The financial guarantee is accounted for as a derivative under ASC 815 because the financial guarantee scope exemption in ASC 815-10-15-58 is not met. The derivative is remeasured at each reporting period. The change in fair value of the derivative is recorded as a change in fair value of financial guarantee derivatives in the consolidated statements of comprehensive income. The derivative is increased by the guarantee fees collected from the borrowers upon receipt as the Group expects all the fees to be ultimately paid to ZhongAn. When the Group settles the guarantee through performance of the guarantee by making payments to ZhongAn, the Company records a corresponding deduction to the derivative. The Group uses the discounted cash flow model to value these financial guarantee derivatives at inception and subsequent valuation dates. This discounted cash flow model incorporates assumptions such as the expected delinquency rates, prepayment rate and discount rate. The expected delinquency rate and prepayment rate is estimated by taking into consideration of historical loss experiences. The discount rate is determined based on the market rates. For the loans facilitated after September 2017, the Group estimated at inception that the prepayment risk is immaterial. |
Fair value | Fair value Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: · Level 1—inputs are based upon unadjusted quoted prices for identical assets or liabilities traded in active markets. · Level 2—inputs are based upon quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active and model‑based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair value are therefore determined using model‑based techniques that include option pricing models, discounted cash flow models, and similar techniques. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents primarily consist of cash on hand and cash in bank which are highly liquid. As of December 31, 2018, cash equivalents were comprised of investments in time deposits with maturities of three months or less and money market funds stated at cost plus accrued interest. All cash and cash equivalents are unrestricted as to withdrawal and use. |
Restricted Cash | Restricted Cash Restricted cash consists primarily of cash deposited with banks as collateral for borrowings from the respective banks. Restriction on the use of such cash and the interest earned thereon is imposed by the banks and remains effective throughout the terms of the borrowings. See Note 6. Restricted cash also includes cash held by the Consolidated Trusts through segregated bank accounts which can only be used by the trusts to specified activities as stipulated in the trust agreements. Cash in the Consolidated Trusts is not available to fund the general liquidity needs of the Group. |
Accounts receivable and contract assets, and allowance for uncollectible accounts receivable and contract assets | Accounts receivable and contract assets, and allowance for uncollectible accounts receivable and contract assets Accounts receivable and contract assets consist of accounts receivable and contract assets from the facilitation, post‑origination and guarantee service in relation to loans facilitated under both Direct and Intermediary Models. Contract assets represent the Group’s right to consideration in exchange for facilitation services that the Company has transferred to the customer before payment is due. The Group only recognizes accounts receivable and contract assets to the extent that the Group believes it is probable that they will collect substantially all of the consideration to which it will be entitled in exchange for the services transferred to the customer. Accounts receivable and contract assets from facilitation service is stated at the historical carrying amount net of write‑offs and allowance for uncollectible accounts. The Group establishes an allowance for uncollectible accounts based on estimates, historical experience of net default rates and other factors surrounding the credit risk of customers which is essentially the expected net default rates used in determining the fair value of guarantee liabilities under each product type. The profile of the borrowers are similar under each product therefore the Group applies a consistent credit risk management framework to the entire portfolio of borrowers under each product. For individual customers where there is an observable indicator of impairment such as fraud, a specific allowance is provided. The Group evaluates and adjusts its allowance for accounts receivable and contract assets on a quarterly basis or more often as necessary. Uncollectible accounts receivable or contract assets are written off when a settlement is reached for an amount that is less than the outstanding historical balance or when accounts receivable or contract assets are deemed uncollectible. Accounts receivable from guarantee service is recognized initially at loan inception that corresponds to the guarantee liability recognized. It is accounted for as a financial asset and is measured at fair value of the corresponding guarantee liability at inception. Refer to accounting policy for Guarantee liabilities. The receivable is reduced by the amount of service fees collected each month that is allocated to the guarantee service. At each reporting date, the Group estimates the future cash flows and assesses whether there is any indicator of impairment. If the carrying amount exceeds the expected cash to be received, an impairment loss is recorded and is recorded under provision for contingent guarantee liabilities in the statements of comprehensive income. The following table presents the accounts receivable and contract assets from facilitation, post‑origination and guarantee services as of December 31, 2017 and 2018, respectively: Accounts Accounts receivable receivable Accounts Contract from from receivable from assets from Allowance for guarantee facilitation post-origination facilitation doubtful As of December 31, 2017 services services services services accounts Total RMB RMB RMB RMB RMB RMB Xiaoying Credit Loan 467,329,038 619,089,353 3,551,508 139,170,263 (159,791,649) 1,069,348,513 -Xiaoying Card Loan 356,644,143 473,135,151 3,308,266 139,170,263 (143,710,042) 828,547,781 -Xiaoying Preferred Loan 110,684,895 145,954,202 243,242 — (16,081,607) 240,800,732 Xiaoying Housing Loan 5,401,097 3,869,418 10,850 — (418,187) 8,863,178 Internet Channel 4,129,630 8,595,788 12,935 — (138,592) 12,599,761 Other products 6,777,336 28,796,219 14,128 — (15,451,219) 20,136,464 Total 483,637,101 660,350,778 3,589,421 139,170,263 (175,799,647) 1,110,947,916 Accounts Accounts receivable receivable Accounts Contract from from receivable from assets from Allowance for guarantee facilitation post-origination facilitation doubtful As of December 31, 2018 services services services services accounts Total RMB RMB RMB RMB RMB RMB Xiaoying Credit Loan — 1,501,967,864 59,670,931 — (206,575,845) 1,355,062,950 -Xiaoying Card Loan — 1,432,924,545 55,143,843 — (171,822,313) 1,316,246,075 -Xiaoying Preferred Loan — 69,043,319 4,527,088 — (34,753,532) 38,816,875 Xiaoying Housing Loan — 5,183,029 259,181 — (119,616) 5,322,594 Internet Channel — 17,546,683 466,662 — (133,707) 17,879,638 Other products — 14,678,225 733,994 — (14,384,158) 1,028,061 Total — 1,539,375,801 61,130,768 — (221,213,326) 1,379,293,243 Accounts Accounts receivable receivable Accounts Contract from from receivable from assets from Allowance for guarantee facilitation post-origination facilitation doubtful As of December 31, 2018 services services services services accounts Total US$ US$ US$ US$ US$ US$ Xiaoying Credit Loan — 218,452,165 8,678,777 — (30,045,211) 197,085,731 -Xiaoying Card Loan — 208,410,231 8,020,339 — (24,990,519) 191,440,051 -Xiaoying Preferred Loan — 10,041,934 658,438 — (5,054,692) 5,645,680 Xiaoying Housing Loan — 753,840 37,696 — (17,397) 774,139 Internet Channel — 2,552,059 67,873 — (19,447) 2,600,485 Other products — 2,134,859 106,755 — (2,092,087) 149,527 Total — 223,892,923 8,891,101 — (32,174,142) 200,609,882 The following tables present the aging of past‑due accounts receivables as of December 31, 2017 and 2018 respectively. As of December 31, 2017 Aging 0 - 30 days Over 30 days Total RMB RMB RMB Xiaoying Credit Loan 11,541,391 44,605,630 56,147,021 -Xiaoying Card Loan 10,163,559 39,567,608 49,731,167 -Xiaoying Preferred Loan 1,377,832 5,038,022 6,415,854 Xiaoying Housing Loan 1,262 3,024 4,286 Internet Channel 7,654 113,999 121,653 Other products 544,115 1,538,140 2,082,255 Total 12,094,422 46,260,793 58,355,215 As of December 31, 2018 Aging 0 - 30 days Over 30 days Total RMB RMB RMB Xiaoying Credit Loan 44,653,954 43,362,892 88,016,846 -Xiaoying Card Loan 39,142,378 37,866,093 77,008,471 -Xiaoying Preferred Loan 5,511,576 5,496,799 11,008,375 Xiaoying Housing Loan — — — Internet Channel — — — Other products 1,187,522 1,176,651 2,364,173 Total 45,841,476 44,539,543 90,381,019 As of December 31, 2018 Aging 0 - 30 days Over 30 days Total US$ US$ US$ Xiaoying Credit Loan 6,494,648 6,306,871 12,801,519 -Xiaoying Card Loan 5,693,023 5,507,395 11,200,418 -Xiaoying Preferred Loan 801,625 799,476 1,601,101 Xiaoying Housing Loan — — — Internet Channel — — — Other products 172,718 171,137 343,855 Total 6,667,366 6,478,008 13,145,374 The following tables present the movement of provision for accounts receivable and contract assets as of December 31, 2017 and 2018 respectively: As of Provision for Provision for As of Provision for Charge-off for Charge-off for As of January 1, accounts contract December 31, accounts Provision for accounts receviable contract December 31, 2017 receivable asset 2017 receivable contract asset assets assets 2018 RMB RMB RMB RMB RMB RMB RMB RMB RMB Xiaoying Credit Loan 3,366,007 145,607,092 10,818,550 159,791,649 393,205,248 3,557,738 (335,602,502) (14,376,288) 206,575,845 -Xiaoying Card Loan 2,017,312 130,874,180 10,818,550 143,710,042 338,188,729 3,557,738 (299,257,908) (14,376,288) 171,822,313 -Xiaoying Preferred Loan 1,348,695 14,732,912 — 16,081,607 55,016,519 — (36,344,594) — 34,753,532 Xiaoying Housing Loan 258,462 159,725 — 418,187 51,241 — (349,812) — 119,616 Internet Channel 134,739 3,853 — 138,592 44,227 — (49,112) — 133,707 Other products 4,339,944 11,111,275 — 15,451,219 137,956 — (1,205,017) — 14,384,158 Total 8,099,152 156,881,945 10,818,550 175,799,647 393,438,672 3,557,738 (337,206,443) (14,376,288) 221,213,326 As of Provision for Charge-off for December 31, accounts Provision for accounts Charge-off for As of 2017 receivable contract asset receivable contract assets December 31, 2018 US$ US$ US$ US$ US$ US$ Xiaoying Credit Loan 23,240,731 57,189,330 517,452 (48,811,358) (2,090,944) 30,045,211 -Xiaoying Card Loan 20,901,759 49,187,509 517,452 (43,525,257) (2,090,944) 24,990,519 -Xiaoying Preferred Loan 2,338,972 8,001,821 — (5,286,101) — 5,054,692 Xiaoying Housing Loan 60,823 7,453 — (50,879) — 17,397 Internet Channel 20,157 6,433 — (7,143) — 19,447 Other products 2,247,287 20,065 — (175,265) — 2,092,087 Total 25,568,998 57,223,281 517,452 (49,044,645) (2,090,944) 32,174,142 |
Loans held for sale | Loans held for sale From time to time, the Group provides credits to borrowers using its own fund first to enhance borrowers’ service satisfaction and transfers the loans to third party investors on its platform immediately thereafter (typically within a short period of time). These loans are accounted for as held for sale at lower of cost or fair value, as the Group does not have intention to hold the loans for the foreseeable future. During the period presented, the direct origination costs were inconsequential and were expensed as incurred. |
Loans and payable to investors of Consolidated Trusts | Loans and payable to investors of Consolidated Trusts The Group has elected the fair value option for the loan assets and liabilities of the Consolidated Trusts that otherwise would not have been carried at fair value. Such election is irrevocable and is applied to financial instruments on an individual basis at initial recognition. The Group estimates the fair value of loans and payable using a discounted cash flow valuation methodology by discounting the estimated future net cash flows using an appropriate discount rate. The future net cash flows are estimated based on contractual cash flows, taking into consideration of estimated delinquency rate and collection rate of the loans, and the pre‑determined Rate of the Group’s guarantee exposure for certain products. Changes in fair value of loans and payable to investors are reported net as recorded in “Fair value adjustments related to Consolidated Trusts” in the consolidated statement of comprehensive income. See Note 3 for further disclosure on financial instruments of the Consolidated Trusts for which the fair value option has been elected. |
Loan receivable from Xiaoying Housing Loans, net | Loan receivable from Xiaoying Housing Loans, net The Group directly or indirectly guarantees on borrowers’ defaults to the investors of Xiaoying Housing Loan products and obtains a collateral from the borrowers for such guarantees. Upon default of the loan, the Group compensates the investor or ZhongAn for defaulted loan principal and interest and obtains the creditor’s right of the underlying loan. The payout amount in relation to the original guarantee provision provided at loan inception was recorded as a deduction of guarantee liability, reflected in net payouts in the guarantee liabilities rollforward. The remaining payout amount in relation to the acquisition of the creditor’s right of the underlying loan is recorded as loan receivable upon payment of compensation in “Loan receivable from Xiaoying Housing Loans” in the consolidated balance sheets as the collection cycle typically will be more than one year. No loan receivables are recorded at loan inception. Loan receivable from Xiaoying Housing Loans is recorded based on the present value of the expected amount to be collected from the exercise of the collateral right, which approximates its acquisition cost. Given the deterioration of the credit related to those loans upon acquisition, the Group determined that those loans are in non-accrual status and should only recognize related service and penalty fees upon cash received in other revenues. Allowance for loan receivable is established through periodic charges to the provision for loan receivable when the Group believes that the future collection of defaulted loan principal and interest is unlikely. In order to accelerate the collection process, the Group transferred the creditor rights of certain defaulted loans as well as the underlying collateral to third party companies at a discount in 2018. The discounted amount was recorded as an allowance for loan receivables which represent the proceedings that the Group expects not able to collect. In addition, the Group also recorded an allowance for the remaining outstanding loans not transferred benchmarked to the discounted amount. The outstanding balance of loan receivable from Xiaoying Housing Loans were RMB197,595,942 and RMB128,101,279 (US$18,631,558) as of December 31, 2017 and 2018, respectively. The contractually required payments that are receivable for loans acquired during 2017 and 2018 were RMB194,912,711 and RMB184,822,069 (US$26,881,255), respectively. The outstanding undiscounted balance including the principal, interest, fees, penalties under loan receivable were RMB219,450,422 and 195,077,545 (US$28,372,852), as of December 31, 2017 and 2018, respectively. The following table presents the movement in provision for loans receivable from Xiaoying Housing Loans for the year ended December 31, 2018. Add: Provision for Loans Receivable As of December 31, 2017 from Xiaoying Housing Loans Less: Charge-off As of December 31, 2018 RMB RMB RMB RMB — 40,347,875 14,436,508 25,911,367 Add: Provision for Loans Receivable As of December 31, 2017 from Xiaoying Housing Loans Less: Charge-off As of December 31, 2018 US$ US$ US$ US$ — 5,868,355 2,099,703 3,768,652 |
Property and equipment, net | Property and equipment, net Furniture and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight‑line basis over the following estimated useful lives: Computer and transmission equipment 3 years Furniture and office equipment 5 years Motor vehicles 4 years Leasehold improvements Over the shorter of the lease term or expected useful lives Gains and losses from the disposal are included in ‘Other income (loss), net’. |
Intangible assets | Intangible assets Intangible assets with finite lives represent domain name and purchased computer software. These intangible assets are amortized on a straight line basis over their estimated useful lives of the respective assets, which varies from 2‑10 years. Intangible assets with an indefinite useful life represent the insurance broker license purchased during 2018. See Note 5. Intangible assets with an indefinite life is not amortized and is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. |
Impairment of long-lived assets | Impairment of long‑lived assets Long‑lived assets including intangible assets with definite lives, are assessed for impairment, whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable in accordance with ASC 360, Property, Plant and Equipment. The Group measures the carrying amount of long‑lived assets against the estimated undiscounted future cash flows associated with it. Impairment exists when the estimated undiscounted future cash flows are less than the carrying value of the asset being evaluated. Impairment loss is calculated as the amount by which the carrying value of the asset exceeds its fair value. No impairment loss was recognized for the years ended December 31, 2016, 2017 and 2018. |
Long-term investments | Long‑term investments The Group accounts for long‑term investments using either the cost or equity method of accounting depending upon whether the Group has the ability to exercise significant influence over investments. As part of this evaluation, the Group considers the participating and protective rights in the investments as well as its legal form. The Group uses the equity method of accounting for the long‑term investments when the Group has the ability to significantly influence the operations or financial activities of the investee. The Group record the equity method long‑term investments at historical cost and subsequently adjusts the carrying amount each period for share of the earnings or losses of the investee and other adjustments required by the equity method of accounting. Dividends received from the equity method investments are recorded as reductions in the cost of such investments. The Group records the cost method long‑term investments at historical cost and subsequently record any dividends received from the net accumulated earnings of the investee as income. Dividends received in excess of earnings are considered a return of investment and are recorded as reductions in the cost of the investments. Long‑term investments are evaluated for impairment when facts or circumstances indicate that the fair value of the long‑term investments is less than its carrying value. An impairment is recognized when a decline in fair value is determined to be other‑than‑temporary. The Group reviews several factors to determine whether a loss is other‑than‑temporary. These factors include, but are not limited to, the: (i) nature of the investment; (ii) cause and duration of the impairment; (iii) extent to which fair value is less than cost; (iv) financial condition and near term prospects of the investments; and (v) ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. During the year ended December 31, 2018, the Group invested RMB225,000,000 (US$ 32,724,893) in cash for 15% equity interest of a Jiangxi Ruijing Financial Asset Management Co., Ltd. (‘‘Jiangxi Ruijing’’), a PRC based asset management company through a nominee arrangement where the Group obtained all shareholder rights associated with the 15% equity holdings through contractual agreements with the nominal shareholder. Given that the Group has the ability to significantly influence Jiangxi Ruijing, the equity method of accounting was used. During the year ended December 31, 2017, the Group invested RMB15,000,000 in cash for 10% of the equity interest in private entities. The Group also invested RMB40,000,000 in cash for 40% of the equity interest through nominee arrangement where the Group obtained all shareholder rights associated with the 40% equity holdings through contractual agreements with the nominal shareholder as the Group currently does not meet certain regulatory requirements to directly invest in such investee company. As the Group has significant influence over the two private entities through its representation on the boards, the investments were accounted for using the equity method. During the year ended December 31, 2016, the Group invested RMB15,000,000 in cash for 2.78% of the equity interest in a PRC private entity operating computer services, advisory, and online merchandise services. As the Group did not have significant influence over the investee, the investment were accounted for using the cost method. During the year ended December 31, 2017, the Group disposed the investment to a third party for a cash consideration of RMB16,500,000. The gain on disposal of RMB1,500,000 was recorded in “Investment income (loss), net” in the consolidated statements of comprehensive income (loss). |
Deposit payable to channel cooperators | Deposit payable to channel cooperators The Group co‑operates with selected Fintech and other financial companies by connecting the borrowers referred by those companies to investors on the Group’s platform. As part of the arrangements, the selected companies also provide credit enhancements on the loans facilitated to the borrowers referred by them and are required to pay a certain amount of cash as deposit to the Group, from which the Group is entitled to deduct if they fail to compensate the defaulted loans on a timely basis. Any remaining balance of the deposit is released upon expiry of the co‑operation agreements. As of December 31, 2017 and 2018 the total deposit amount that the Group received from Fintech and other financial companies were RMB134,262,319 and RMB134,042,199 (US$19,495,629) respectively. |
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 make 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. The total amount that was expensed as incurred were RMB26,219,062, RMB66,739,619 and RMB51,979,823 (US$7,560,152) for the years ended December 31, 2016, 2017 and 2018 respectively. |
Advertising cost | Advertising cost Advertising costs are expensed as incurred in accordance with ASC 720‑35 Other Expense—Advertising costs. Advertising costs were RMB26,445,059, RMB68,838,176 and RMB192,483,874 (US$27,995,618) for the years ended December 31, 2016, 2017 and 2018 respectively. Advertising costs are included in sales and marketing expense in the consolidated statements of comprehensive income (loss). |
Origination and servicing expense | Origination and servicing expense Origination and servicing expense consists primarily of variable expenses and vendor costs, including labor costs, costs related to credit assessment, borrower acquisitions, payment processing services, fees paid to third party collection agencies, as well as interest expense paid to institutional investors of the Consolidated Trusts. |
Income taxes | Income taxes Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are provided using assets and liabilities method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the 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. Deferred tax assets are then reduced by a valuation allowance through a charge to income tax expense when, in the opinion of management, it is more like than not that a portion of or all of the deferred tax assets will not be realized. The Group accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two‑step process to determine the amount of the benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more‑likely‑than‑not to be sustained (defined as a likelihood of more than fifty percent of being sustained upon an audit, based on the technical merits of the tax position), the tax position is then assessed to determine the amount of benefits to recognize in the consolidated financial statements. The amount of the benefits that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. The Group did not recognize any income tax due to uncertain tax position or incur any interest and penalties related to potential underpaid income tax expenses for the years ended December 31, 2016, 2017 and 2018. |
Value added taxes ("VAT") | Value added taxes (“VAT”) The Group is subject to VAT at the rate of 6% given that they are classified as a general tax payer. VAT is reported as a deduction to revenue when incurred and amounted to RMB 19,546,622, RMB171,842,393 and RMB301,758,965 (US$43,889,021) for the years ended December 31, 2016, 2017 and 2018 respectively. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in the line item of accrued expense and other liabilities on the consolidated balance sheets. |
Segment information | Segment information 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 segment. All of the Group’s revenue for the years ended December 31, 2016, 2017 and 2018 were generated from the PRC. As of December 31, 2017 and 2018, all of long‑lived assets of the Group were located in the PRC. As the Group generates all of its revenues in the PRC, no geographical segments are presented. |
Operating leases | Operating leases Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Rentals applicable to such operating leases are recognized on a straight‑line basis over the lease term. Certain of the operating lease agreements contain rent holidays. Rent holidays are considered in determining the straight‑line rent expense to be recorded over the lease term. |
Net income (loss) per share | Net income (loss) per share Basic income (loss) per share is computed by dividing net income (loss) attributable to the holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year. Diluted income (loss) per share is calculated by dividing net income (loss) attributable to the holders of ordinary shares as adjusted for the effect of dilutive ordinary share equivalents, if any, by the weighted average number of ordinary shares and dilutive ordinary share equivalents outstanding during the period. Ordinary share equivalents of stock options are calculated using the treasury stock method. However, ordinary share equivalents are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti‑dilutive, such as in a period in which a net loss is recorded. |
Share-based compensation | Share‑based compensation Share‑based payment transactions with employees, such as stock options, 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 income over the period during which the employee is required to perform service in exchange for the award. |
Certain risks and concentrations | Certain risks and concentrations Financial instruments that potentially expose the Group to concentrations of credit risk consist principally of cash, restricted cash, accounts receivable and contract assets, loans held for sale and loans at fair value. The Group's investment policy requires cash and restricted cash to be placed with high-quality financial institutions and to limit the amount of credit risk from any one issuer. The Group regularly evaluates the credit standing of the counterparties or financial institutions. Accounts receivable and contract assets are typically unsecured and are derived from revenue earned from customers in the PRC. The risk with respect to accounts receivable and contract assets is mitigated through the Group’s consistent credit risk management framework to the entire portfolio of loans in accordance with ASC 450-20. Credit of loans held for sale and loans at fair value is controlled by the application of credit approval, limit and monitoring procedures. The Group's short term bank borrowing bears interest at fixed rates. If the Group were to renew these loans, the Group might be subject to interest rate risk. No investor represented greater than 10% or more of the total net revenues for the years ended December 31, 2016, 2017 and 2018. The Company manages current payment risk of guarantee liabilities / financial guarantee derivative through a self-developed risk management model. The rating scale of risk management model takes into account factors such as identity characteristics, credit history, payment overdue history, payment capacity, behavioral characteristics and online social network activity. As of December 31, 2018, predominantly all of the loans facilitated by the Group were insured by ZhongAn. |
Recent accounting pronouncements | Recent accounting pronouncements In February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842). The guidance supersedes existing guidance on accounting for leases with the main difference being that operating leases are to be recorded in the statement of financial position as right‑of‑use assets and lease liabilities, initially measured at the present value of the lease payments. For operating leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. For public business entities, the guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application of the guidance is permitted. In transition, entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. In November 2017, the FASB tentatively decided to amend certain aspects of ASC 2016‑02 in an attempt to provide relief from the costs of implementing the standards which included not having to restate comparative periods in the period of adoption of the new standard and electing not to separate lease and nonlease components when certain conditions are met. In July 2018 (ASU 2018-11), the FASB further amended the guidance to provide another transition method in addition to the existing transition method by allowing entities to initially apply the new leases standard at the adoption date and recognize an accumulative-effective adjustment to the opening balance of retained earnings in the period of adoption. The Group is currently evaluating the impact ASU 2016-02 and ASU 2018-11 will have on the Group’s consolidated financial statements, and expects to adopt the new standard using a modified retrospective approach under ASC 2018-11. The Group expects the majority of its existing operating lease commitments will be recognized as operating lease obligations and right‑of‑use assets as a result of the adoption. In June 2016, the FASB issued ASU No. 2016‑13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of the Group’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. For public business entities, the guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early application of the pending content that links to this paragraph is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Group is in the process of evaluating the impact of adoption of this guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 eliminates, adds and modifies certain disclosure requirements for fair value measurements. The amendments applicable to the disclosures of changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial year of adoption. This ASU is effective for all entities for fiscal years beginning after December 15, 2019, including interim periods therein. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted, and an entity is also permitted to early adopt any removed or modified disclosures and delay adoption of the additional disclosures until their effective date. The Group is in the process of evaluating the impact on its consolidated financial statements upon adoption. |
Translation into United States Dollars | Translation into United States Dollars The financial statements of the Group are stated in RMB. Translations of amounts from RMB into United States dollars are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB 6.8755, on December 31, 2018, as set forth in H.10 statistical release of the Federal Reserve Board. The translation is not intended to imply that the RMB amounts could have been, or could be, converted, realized or settled into United States dollars at that rate on December 31, 2018, or at any other rate. |
Organization and principal ac_2
Organization and principal activities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization and principal activities | |
Schedule of principal subsidiaries, VIEs and subsidiaries of the VIEs | Date of Place of Percentage incorporation/ incorporation/ of legal establishment establishment ownership Principal activities Wholly owned subsidiaries YZT (HK) Limited January 14, 2015 Hong Kong 100% Investment holding Xiaoying (Beijing) Information Technology Co., Ltd. (“Beijing WFOE”) October 28, 2015 Beijing 100% Technology development and service, sale of products Shenzhen Xiaoying Puhui Technology Co., Ltd. (“Shenzhen Puhui”) December 6, 2016 Shenzhen 100% Technology development and service, sale of products Shenzhen Xiaoying Information Technology Co., Ltd. (“Shenzhen Xiaoying IT”) November 28, 2016 Shenzhen 100% Technology development and service, sale of products VIEs Shenzhen Xiaoying Technology Co., Ltd. (“Shenzhen Xiaoying”) October 19, 2016 Shenzhen 100% Technology development and service, sale of products Beijing Ying Zhong Tong Rongxun Technology Service Co., Ltd. (“Beijing Ying Zhong Tong”) March 27, 2015 Beijing 100% Technology development and service, sale of products Shenzhen Tangren Financing Guarantee Co., Ltd. (“Shenzhen Tangren”) December 16, 2016 Shenzhen 100% Guarantee services Significant subsidiaries of the VIEs Shenzhen Ying Zhong Tong Financial Information Service Co., Ltd. (“Shenzhen Ying Zhong Tong”) March 7, 2014 Shenzhen 100% Technology development and service, sale of products |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
VIEs and Consolidated Trusts | |
Schedule of disaggregation of revenue by product | Loan Loan facilitation facilitation service- service-direct Intermediary Post-origination Financing Other model Model service income revenue Total 2016 (RMB) (RMB) (RMB) (RMB) (RMB) (RMB) Major products Xiaoying Credit Loan 1,776,454 59,386,201 2,580,982 10,027,296 740,935 74,511,868 -Xiaoying Card Loan — 8,170,938 9,671 1,739,352 — 9,919,961 -Xiaoying Preferred Loan 1,776,454 51,215,263 2,571,311 8,287,944 740,935 64,591,907 Xiaoying Housing Loan — 33,579,446 1,582,306 16,925,206 729,727 52,816,685 Internet Channel (1) 508,468 16,560,238 682,541 822,305 191,316 18,764,868 Other loan products 2,238,882 67,323,194 3,342,160 2,725,355 1,068,699 76,698,290 Other service (2) — — — — 7,513,974 7,513,974 Total 4,523,804 176,849,079 8,187,989 30,500,162 10,244,651 230,305,685 Loan Loan facilitation facilitation service- service-Direct Intermediary Post-origination Financing Other Model Model service income revenue Total 2017 (RMB) (RMB) (RMB) (RMB) (RMB) (RMB) Major products Xiaoying Credit Loan 1,148,688,253 260,278,922 46,670,424 58,258,088 19,172,658 1,533,068,345 -Xiaoying Card Loan 1,104,724,129 52,724,493 38,624,854 18,311,559 12,740,493 1,227,125,528 -Xiaoying Preferred Loan 43,964,124 207,554,429 8,045,570 39,946,529 6,432,165 305,942,817 Xiaoying Housing Loan — 16,573,570 278,234 66,723,545 21,410,597 104,985,946 Internet Channel (1) 56,931,619 2,748,428 1,644,517 2,576,028 4,741,527 68,642,119 Other loan products 25,434,861 23,013,543 1,733,489 3,182,488 3,278,355 56,642,736 Other service (2) — — — — 23,596,047 23,596,047 Total 1,231,054,733 302,614,463 50,326,664 130,740,149 72,199,184 1,786,935,193 Loan Loan facilitation facilitation service- service-Direct Intermediary Post-origination Financing Other Model Model service income revenue Total 2018 (RMB) (RMB) (RMB) (RMB) (RMB) (RMB) Major products Xiaoying Credit Loan 2,897,702,061 216,754,528 128,865,000 67,731,784 109,141,168 3,420,194,541 -Xiaoying Card Loan 2,816,893,168 27,726,134 111,196,308 34,167,454 89,713,118 3,079,696,182 -Xiaoying Preferred Loan 80,808,893 189,028,394 17,668,692 33,564,330 19,428,050 340,498,359 Xiaoying Housing Loan 5,780,118 1,247,846 463,129 8,290,828 9,190,257 24,972,178 Internet Channel (1) 53,874,025 8,760,054 1,182,786 41,253 9,313,276 73,171,394 Other loan products 215,763 1,509,945 732,516 40,096 1,079,296 3,577,616 Other service (2) — — — — 18,684,315 18,684,315 Total 2,957,571,967 228,272,373 131,243,431 76,103,961 147,408,312 3,540,600,044 Loan Loan facilitation facilitation service- service-Direct Intermediary Post-origination Financing Other Model Model service income revenue Total 2018 (US$) (US$) (US$) (US$) (US$) (US$) Major products Xiaoying Credit Loan 421,453,286 31,525,639 18,742,637 9,851,179 15,873,925 497,446,666 -Xiaoying Card Loan 409,700,119 4,032,599 16,172,832 4,969,450 13,048,232 447,923,232 -Xiaoying Preferred Loan 11,753,167 27,493,040 2,569,805 4,881,729 2,825,693 49,523,434 Xiaoying Housing Loan 840,683 181,492 67,359 1,205,851 1,336,667 3,632,052 Internet Channel (1) 7,835,652 1,274,097 172,029 6,000 1,354,560 10,642,338 Other loan products 31,381 219,612 106,540 5,832 156,977 520,342 Other services (2) — — — — 2,717,521 2,717,521 Total 430,161,002 33,200,840 19,088,565 11,068,862 21,439,650 514,958,919 (1) Represents loans facilitated to borrowers referred by other platforms (2) Primarily consists of service fees charged for transferring loans between investors on the Group's online platform, referral service fee for introducing borrowers to other platforms and technology service fees received from ZhongAn for promoting its insurance products on the Group's online platform. |
Schedule of accounts receivable and contract assets | Accounts Accounts receivable receivable Accounts Contract from from receivable from assets from Allowance for guarantee facilitation post-origination facilitation doubtful As of December 31, 2017 services services services services accounts Total RMB RMB RMB RMB RMB RMB Xiaoying Credit Loan 467,329,038 619,089,353 3,551,508 139,170,263 (159,791,649) 1,069,348,513 -Xiaoying Card Loan 356,644,143 473,135,151 3,308,266 139,170,263 (143,710,042) 828,547,781 -Xiaoying Preferred Loan 110,684,895 145,954,202 243,242 — (16,081,607) 240,800,732 Xiaoying Housing Loan 5,401,097 3,869,418 10,850 — (418,187) 8,863,178 Internet Channel 4,129,630 8,595,788 12,935 — (138,592) 12,599,761 Other products 6,777,336 28,796,219 14,128 — (15,451,219) 20,136,464 Total 483,637,101 660,350,778 3,589,421 139,170,263 (175,799,647) 1,110,947,916 Accounts Accounts receivable receivable Accounts Contract from from receivable from assets from Allowance for guarantee facilitation post-origination facilitation doubtful As of December 31, 2018 services services services services accounts Total RMB RMB RMB RMB RMB RMB Xiaoying Credit Loan — 1,501,967,864 59,670,931 — (206,575,845) 1,355,062,950 -Xiaoying Card Loan — 1,432,924,545 55,143,843 — (171,822,313) 1,316,246,075 -Xiaoying Preferred Loan — 69,043,319 4,527,088 — (34,753,532) 38,816,875 Xiaoying Housing Loan — 5,183,029 259,181 — (119,616) 5,322,594 Internet Channel — 17,546,683 466,662 — (133,707) 17,879,638 Other products — 14,678,225 733,994 — (14,384,158) 1,028,061 Total — 1,539,375,801 61,130,768 — (221,213,326) 1,379,293,243 Accounts Accounts receivable receivable Accounts Contract from from receivable from assets from Allowance for guarantee facilitation post-origination facilitation doubtful As of December 31, 2018 services services services services accounts Total US$ US$ US$ US$ US$ US$ Xiaoying Credit Loan — 218,452,165 8,678,777 — (30,045,211) 197,085,731 -Xiaoying Card Loan — 208,410,231 8,020,339 — (24,990,519) 191,440,051 -Xiaoying Preferred Loan — 10,041,934 658,438 — (5,054,692) 5,645,680 Xiaoying Housing Loan — 753,840 37,696 — (17,397) 774,139 Internet Channel — 2,552,059 67,873 — (19,447) 2,600,485 Other products — 2,134,859 106,755 — (2,092,087) 149,527 Total — 223,892,923 8,891,101 — (32,174,142) 200,609,882 |
Schedule of aging of past due accounts receivables | As of December 31, 2017 Aging 0 - 30 days Over 30 days Total RMB RMB RMB Xiaoying Credit Loan 11,541,391 44,605,630 56,147,021 -Xiaoying Card Loan 10,163,559 39,567,608 49,731,167 -Xiaoying Preferred Loan 1,377,832 5,038,022 6,415,854 Xiaoying Housing Loan 1,262 3,024 4,286 Internet Channel 7,654 113,999 121,653 Other products 544,115 1,538,140 2,082,255 Total 12,094,422 46,260,793 58,355,215 As of December 31, 2018 Aging 0 - 30 days Over 30 days Total RMB RMB RMB Xiaoying Credit Loan 44,653,954 43,362,892 88,016,846 -Xiaoying Card Loan 39,142,378 37,866,093 77,008,471 -Xiaoying Preferred Loan 5,511,576 5,496,799 11,008,375 Xiaoying Housing Loan — — — Internet Channel — — — Other products 1,187,522 1,176,651 2,364,173 Total 45,841,476 44,539,543 90,381,019 As of December 31, 2018 Aging 0 - 30 days Over 30 days Total US$ US$ US$ Xiaoying Credit Loan 6,494,648 6,306,871 12,801,519 -Xiaoying Card Loan 5,693,023 5,507,395 11,200,418 -Xiaoying Preferred Loan 801,625 799,476 1,601,101 Xiaoying Housing Loan — — — Internet Channel — — — Other products 172,718 171,137 343,855 Total 6,667,366 6,478,008 13,145,374 |
Schedule of movement of provision for accounts receivable and contract assets | : As of Provision for Provision for As of Provision for Charge-off for Charge-off for As of January 1, accounts contract December 31, accounts Provision for accounts receviable contract December 31, 2017 receivable asset 2017 receivable contract asset assets assets 2018 RMB RMB RMB RMB RMB RMB RMB RMB RMB Xiaoying Credit Loan 3,366,007 145,607,092 10,818,550 159,791,649 393,205,248 3,557,738 (335,602,502) (14,376,288) 206,575,845 -Xiaoying Card Loan 2,017,312 130,874,180 10,818,550 143,710,042 338,188,729 3,557,738 (299,257,908) (14,376,288) 171,822,313 -Xiaoying Preferred Loan 1,348,695 14,732,912 — 16,081,607 55,016,519 — (36,344,594) — 34,753,532 Xiaoying Housing Loan 258,462 159,725 — 418,187 51,241 — (349,812) — 119,616 Internet Channel 134,739 3,853 — 138,592 44,227 — (49,112) — 133,707 Other products 4,339,944 11,111,275 — 15,451,219 137,956 — (1,205,017) — 14,384,158 Total 8,099,152 156,881,945 10,818,550 175,799,647 393,438,672 3,557,738 (337,206,443) (14,376,288) 221,213,326 As of Provision for Charge-off for December 31, accounts Provision for accounts Charge-off for As of 2017 receivable contract asset receivable contract assets December 31, 2018 US$ US$ US$ US$ US$ US$ Xiaoying Credit Loan 23,240,731 57,189,330 517,452 (48,811,358) (2,090,944) 30,045,211 -Xiaoying Card Loan 20,901,759 49,187,509 517,452 (43,525,257) (2,090,944) 24,990,519 -Xiaoying Preferred Loan 2,338,972 8,001,821 — (5,286,101) — 5,054,692 Xiaoying Housing Loan 60,823 7,453 — (50,879) — 17,397 Internet Channel 20,157 6,433 — (7,143) — 19,447 Other products 2,247,287 20,065 — (175,265) — 2,092,087 Total 25,568,998 57,223,281 517,452 (49,044,645) (2,090,944) 32,174,142 |
Schedule of movement in provision for loans receivable | Add: Provision for Loans Receivable As of December 31, 2017 from Xiaoying Housing Loans Less: Charge-off As of December 31, 2018 RMB RMB RMB RMB — 40,347,875 14,436,508 25,911,367 Add: Provision for Loans Receivable As of December 31, 2017 from Xiaoying Housing Loans Less: Charge-off As of December 31, 2018 US$ US$ US$ US$ — 5,868,355 2,099,703 3,768,652 |
Schedule of estimated useful lives of property and equipment | Computer and transmission equipment 3 years Furniture and office equipment 5 years Motor vehicles 4 years Leasehold improvements Over the shorter of the lease term or expected useful lives |
Consolidated Trusts | |
VIEs and Consolidated Trusts | |
Schedule of financial statements | As of December 31, As of December 31, 2017 2018 2018 RMB RMB US$ Assets: Restricted cash 12,614,745 4,861,491 707,075 Loans at fair value 667,838,880 33,417,119 4,860,318 Prepaid expenses and other current assets 11,105,628 296,080 43,063 Total assets 691,559,253 38,574,690 5,610,456 Liabilities: Payable to investors at fair value of the Consolidated Trusts 667,080,871 — — Other tax payable 3,586,212 284,564 41,388 Accrued expenses and other liabilities 19,394,527 — — Total liabilities 690,061,610 284,564 41,388 Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Net revenue 20,594,271 117,684,121 61,475,364 8,941,221 Net income (loss) (368,455) 43,583,819 41,986,452 6,106,676 Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Net cash provided by (used in) operating activities (49,516,080) 26,997,889 12,547,230 1,824,919 Net cash provided by (used in) investing activities (710,000,000) 48,332,936 676,499,516 98,392,774 Net cash provided by (used in) financing activities 760,000,000 (63,200,000) (696,800,000) (101,345,357) |
VIEs and Consolidated Trusts | |
VIEs and Consolidated Trusts | |
Schedule of financial statements | As of December 31, As of December 31, 2017 2018 2018 RMB RMB US$ Assets: Cash and cash equivalents 520,450,136 236,432,366 34,387,661 Restricted cash 12,614,745 5,880,989 855,354 Accounts receivable and contract assets, net 965,333,922 1,266,169,464 184,156,711 Loans held for sale 768,638,420 — — Loans at fair value 667,838,880 33,417,119 4,860,318 Prepaid expenses and other current assets 82,099,649 60,501,113 8,799,522 Deferred tax assets, net 275,968,157 173,287,013 25,203,551 Long-term investments 54,167,615 287,222,720 41,774,812 Property and equipment, net 21,004,932 21,333,636 3,102,849 Intangible assets, net 1,616,238 1,628,117 236,800 Financial guarantee derivative — 358,249,913 52,105,289 Loan receivable from Xiaoying Housing Loans, net 197,595,942 128,101,279 18,631,558 Other non-current assets 3,751,516 6,345,345 922,892 Total assets 3,571,080,152 2,578,569,074 375,037,317 Liabilities: Payable to investors at fair value of the Consolidated Trusts 667,080,871 — — Guarantee liabilities 545,169,033 19,297,718 2,806,737 Financial guarantee derivative 53,260,916 — — Accrued payroll and welfare 20,655,199 23,329,971 3,393,204 Other tax payable 95,368,838 95,184,938 13,844,075 Income tax payable 270,342,567 93,611,597 13,615,242 Deposit payable to channel cooperators 134,262,319 — — Accrued expenses and other liabilities 132,525,198 117,547,625 17,096,593 Short-term bank borrowings — 198,000,000 28,797,906 Deferred tax liabilities — 47,145,390 6,857,013 Total liabilities 1,918,664,941 594,117,239 86,410,770 Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Net revenue 230,305,685 1,474,934,261 2,168,665,965 315,419,383 Net income (loss) (81,273,361) 325,182,393 408,242,461 59,376,403 Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Net cash provided by (used in) operating activities 277,925,076 (592,979,915) (243,451,042) (35,408,486) Net cash provided by (used in) investing activities (734,716,301) (10,809,388) 451,499,516 65,667,881 Net cash provided by (used in) financing activities 775,164,828 830,154,156 (498,800,000) (72,547,451) |
Fair value of assets and liab_2
Fair value of assets and liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair value of assets and liabilities | |
Schedule of fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | Balance at Fair Level 1 Level 2 Level 3 Value December 31, 2017 (RMB) (RMB) (RMB) (RMB) Assets Loans at fair value — — 667,838,880 667,838,880 Total assets — — 667,838,880 667,838,880 Liabilities Payable to investors at fair value — — (667,080,871) (667,080,871) Financial guarantee derivative — — (53,260,916) (53,260,916) Total liabilities — — (720,341,787) (720,341,787) Balance at Fair Level 1 Level 2 Level 3 Value December 31, 2018 (RMB) (RMB) (RMB) (RMB) Assets Loans at fair value — — 33,417,119 33,417,119 Financial guarantee derivative — — 358,249,913 358,249,913 Total assets — — 391,667,032 391,667,032 Balance at Fair Level 1 Level 2 Level 3 Value December 31, 2018 (US$) (US$) (US$) (US$) Assets Loans at fair value — — 4,860,318 4,860,318 Financial guarantee derivative — — 52,105,289 52,105,289 Total assets — — 56,965,607 56,965,607 |
Schedule of financial guarantee derivative movement activities | For loans facilitated from September 15 to December 31, 2017 Year ended December 31, 2017 RMB Balance at December 31, 2016 — Estimated payment to ZhongAn based on the pre-agreed Cap (1) 227,758,691 Less: Initially estimated net guarantee service fee to be collected (2) 209,647,939 Change in fair value of financial guarantee derivative 18,110,752 Add: Guarantee service fee received from borrowers 44,422,222 Less: Compensation paid to ZhongAn 9,272,058 Balance at December 31, 2017 53,260,916 Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31, 2017) 218,486,633 Changes in fair value related to balance outstanding at December 31, 2017 18,110,752 For loans facilitated in For loans facilitated in 2017 2018 Total Total Year ended December 31, 2018 RMB RMB RMB USD Balance at December 31, 2017 53,260,916 — 53,260,916 7,746,479 Estimated payment to ZhongAn based on the pre-agreed Cap (1) — 1,784,817,072 1,784,817,072 259,590,877 Less: Initially estimated net guarantee service fee to be collected (2) — 1,607,696,701 1,607,696,701 233,829,787 Add (Less): Subsequent changes in estimated net guarantee service fee to be collected for outstanding loans (3) 5,413,833 18,437,098 23,850,931 3,468,974 Change in fair value of financial guarantee derivative 5,413,833 195,557,469 200,971,302 29,230,064 Add: Guarantee service fee received from borrowers 159,811,884 860,051,384 1,019,863,268 148,332,960 Less: Compensation paid to ZhongAn 218,486,633 1,413,858,766 1,632,345,399 237,414,792 Balance at December 31, 2018 — (358,249,913) (358,249,913) (52,105,289) Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31, 2018) — 370,958,304 370,958,304 53,953,648 Changes in fair value related to balance outstanding at December 31, 2018 — 108,540,263 108,540,263 15,786,527 Note: (1) Amount represents estimated payment to ZhongAn which is calculated as the lesser of (1) the contractual guarantee service fees the Group is entitled to collect from the borrowers for the loans facilitated during the current period on an aggregated basis; and (2) the principal amount of such loans facilitated during the period on an annualized basis multiplied by the pre‑agreed Rate with ZhongAn. (2) Amount represents estimated guarantee service fees to be collected for loans newly facilitated during each vintage period according to the guarantee service agreement with the borrowers, net of estimated defaults and prepayments. (3) Amount represents the subsequent adjustment to update the estimated net guarantee service fees to be collected for all outstanding loans as a result of changes in estimated default or prepayment rates. |
Schedule of outstanding loan balance, remaining weighted average contractual term and estimated default rate of the outstanding loans | As of As of As of December 31, December 31, December 31, 2017 2018 2018 RMB RMB US$ Outstanding loan balance 5,239,698,805 12,811,666,471 1,863,379,604 Remaining weighted average contractual term (Month) 10.10 7.53 7.53 Estimated default rate 10.19 % 11.06 % 11.06 % |
Schedule of significant unobservable inputs | December 31, 2017 December 31, 2018 Range of Inputs Range of Inputs Financial Instrument Unobservable Input Weighted-Average Weighted-Average Loans and payable to investors at fair value Discount rates 6.75 % 7.12 % Net cumulative expected loss rates (1) 2.05 % 7.59 % (1) Represents the net of default rate and collection rate, expressed as a percentage of the loan volume. |
Schedule of loans receivable measured at fair value on recurring basis | RMB Changes in fair value related to balance Balance at Balance at outstanding at December 31, Origination of Collection of Reinvestment Change in December December 31, 2016 loan principal principal of principal fair value 31, 2017 2017 Xiaoying Credit Loan — 496,800,000 (133,104,799) 98,757,578 (35,105,777) 427,347,002 (35,105,777) -Xiaoying Card Loan — 85,000,000 (45,681,457) 53,121,380 (11,486,373) 80,953,550 (11,486,373) -Xiaoying Preferred Loan — 411,800,000 (87,423,342) 45,636,198 (23,619,404) 346,393,452 (23,619,404) Xiaoying Housing Loan 723,746,021 600,000,000 (1,359,363,422) 248,577,707 27,531,572 240,491,878 (8,722,407) Total 723,746,021 1,096,800,000 (1,492,468,221) 347,335,285 (7,574,205) 667,838,880 (43,828,184) RMB Changes in fair value related to balance Balance at Balance at outstanding at December 31, Origination of Collection of Reinvestment Change in December December 31, 2017 loan principal principal of principal fair value 31, 2018 2018 Xiaoying Credit Loan 427,347,002 49,498,710 (476,783,941) — 33,355,348 33,417,119 (1,750,429) -Xiaoying Card Loan 80,953,550 49,498,710 (106,771,085) — 9,735,944 33,417,119 (1,750,429) -Xiaoying Preferred Loan 346,393,452 — (370,012,856) — 23,619,404 — — Xiaoying Housing Loan 240,491,878 — (267,567,946) 18,353,661 8,722,407 — — Total 667,838,880 49,498,710 (744,351,887) 18,353,661 42,077,755 33,417,119 (1,750,429) USD Changes in fair value related to balance Balance at Balance at outstanding at December 31, Origination of Collection of Reinvestment Change in December December 31, 2017 loan principal principal of principal fair value 31, 2018 2018 Xiaoying Credit Loan 62,155,044 7,199,289 (69,345,348) — 4,851,333 4,860,318 (254,589) -Xiaoying Card Loan 11,774,206 7,199,289 (15,529,210) — 1,416,033 4,860,318 (254,589) -Xiaoying Preferred Loan 50,380,838 — (53,816,138) — 3,435,300 — — Xiaoying Housing Loan 34,978,093 — (38,916,144) 2,669,429 1,268,622 — — Total 97,133,137 7,199,289 (108,261,492) 2,669,429 6,119,955 4,860,318 (254,589) |
Schedule of loans payable measured at fair value on recurring basis | Payable to investors at fair value of the Consolidated Trusts RMB Balance at December 31, 2016 728,104,511 Initial contribution 1,096,800,000 Principal payment (1,160,000,000) Changes in fair value 2,176,360 Balance at December 31, 2017 667,080,871 Changes in fair value related to balance outstanding at December 31, 2017 (29,719,129) Payable to investors at fair value of the Consolidated Trusts RMB US$ Balance at December 31, 2017 667,080,871 97,022,889 Initial contribution — — Principal payment (696,800,000) (101,345,357) Changes in fair value 29,719,129 4,322,468 Balance at December 31, 2018 — — Changes in fair value related to balance outstanding at December 31, 2018 — — |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property and equipment, net | |
Schedule of property and equipment, net | As of December 31, As of December 31, 2017 2018 2018 RMB RMB US$ Computer and transmission equipment 10,191,732 15,522,913 2,257,714 Furniture and office equipment 3,324,181 3,659,047 532,186 Leasehold improvements 14,441,367 20,217,502 2,940,514 Motor vehicles 816,103 816,103 118,697 Total property and equipment 28,773,383 40,215,565 5,849,111 Accumulated depreciation (7,768,451) (17,000,768) (2,472,659) Property and equipment, net 21,004,932 23,214,797 3,376,452 |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible assets | |
Schedule of intangible assets | As of December 31, As of December 31, 2017 2018 2018 RMB RMB US$ License (1) — 26,000,000 3,781,543 Domain name and others 3,188,898 4,362,895 634,557 Accumulated amortization (1,572,660) (1,962,489) (285,432) Intangible assets, net 1,616,238 28,400,406 4,130,668 (1) During 2018, the Group acquired an insurance broker license at a cost of RMB26,000,000. |
Accrued expenses and other li_2
Accrued expenses and other liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued expenses and other liabilities | |
Schedule of accrued expenses and other liabilities | As of December 31, As of December 31, 2017 2018 2018 RMB RMB US$ Fund attributable to institutional investors (1) 58,266,669 5,776,821 840,204 Accrued interest payable of Consolidated Trusts 19,394,527 — — Payable for purchase of property and equipment 1,586,988 — — Accrued office expense 2,545,614 10,890,896 1,584,015 Professional fee payable 12,826,377 48,302,566 7,025,317 Commission fee payable (2) 35,408,781 75,280,155 10,949,044 Other accrued expenses 7,299,408 38,451,036 5,592,471 Total accrued expenses and other current liabilities 137,328,364 178,701,474 25,991,051 (1) Fund attributable to institutional investors relate to the principal and interest collected on behalf of the investors but have not yet been passed onto them as of December 31, 2017 and 2018. (2) Commission fee payable relates to the commission fees payable to channel partners who introduce investors or borrowers to the platform of the Group. The commission is typically determined based on the volume of traffic introduced, regardless of whether the introduced traffic becomes a borrower or investor on the Group’s platform. |
Guarantee liabilities (Tables)
Guarantee liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Guarantee liabilities | |
Schedule of movement of guarantee liabilities | RMB As of Provision at As of January 1, the inception Released on Contingent December 31, 2016 of new loans Net payout (1) expiration liability 2016 Xiaoying Credit Loan 1,196,197 42,591,980 (5,323,494) (96,170) — 38,368,513 -Xiaoying Card Loan — 16,330,155 — — — 16,330,155 -Xiaoying Preferred Loan 1,196,197 26,261,825 (5,323,494) (96,170) — 22,038,358 Xiaoying Housing Loan 5,820,087 7,813,106 (4,056,219) (2,278,365) — 7,298,609 Internet Channel 974,220 2,577,686 (1,003,962) (70,153) — 2,477,791 Others 1,704,523 57,197,189 (6,099,184) (285,989) — 52,516,539 Total 9,695,027 110,179,961 (16,482,859) (2,730,677) — 100,661,452 RMB As of Provision at As of January 1, the inception Released on Contingent December 31, 2017 of new loans Net payout (1) expiration liability (2) 2017 Xiaoying Credit Loan 38,368,513 797,431,715 (411,239,134) (19,172,658) 109,086,588 514,475,024 -Xiaoying Card Loan 16,330,155 616,729,990 (322,763,679) (12,740,493) 109,086,588 406,642,561 -Xiaoying Preferred Loan 22,038,358 180,701,725 (88,475,455) (6,432,165) — 107,832,463 Xiaoying Housing Loan 7,298,609 23,970,437 (1,169,476) (21,410,597) — 8,688,973 Internet Channel 2,477,791 28,924,659 (23,731,237) (4,741,527) — 2,929,686 Others 52,516,539 7,437,265 (111,092,188) (3,278,354) 73,492,088 19,075,350 Total 100,661,452 857,764,076 (547,232,035) (48,603,136) 182,578,676 545,169,033 RMB As of Provision at As of January 1, the inception Released on Contingent December 31, 2018 of new loans Net payout (1) expiration liability (2) 2018 Xiaoying Credit Loan 514,475,024 5,884,134 (667,658,887) (15,691,880) 182,289,328 19,297,719 -Xiaoying Card Loan 406,642,561 4,183,193 (395,958,527) (13,868,799) 10,874,300 11,872,728 -Xiaoying Preferred Loan 107,832,463 1,700,941 (271,700,360) (1,823,081) 171,415,028 7,424,991 Xiaoying Housing Loan 8,688,973 1,773,180 (378,694) (8,482,977) — 1,600,482 Internet Channel 2,929,686 — (12,890,754) (365,456) 10,326,524 — Others 19,075,350 — (42,688,268) (135,000) 23,747,918 — Total 545,169,033 7,657,314 (723,616,603) (24,675,313) 216,363,770 20,898,201 USD As of Provision at As of January 1, the inception Released on Contingent December 31, 2018 of new loans Net payout (1) expiration liability (2) 2018 Xiaoying Credit Loan 74,827,289 855,812 (97,106,958) (2,282,289) 26,512,883 2,806,737 -Xiaoying Card Loan 59,143,708 608,420 (57,589,779) (2,017,133) 1,581,601 1,726,817 -Xiaoying Preferred Loan 15,683,581 247,392 (39,517,179) (265,156) 24,931,282 1,079,920 Xiaoying Housing Loan 1,263,759 257,898 (55,079) (1,233,798) — 232,780 Internet Channel 426,105 — (1,874,882) (53,154) 1,501,931 — Others 2,774,395 — (6,208,751) (19,635) 3,453,991 — Total 79,291,548 1,113,710 (105,245,670) (3,588,876) 31,468,805 3,039,517 (1) Net payouts represent the amount paid to ZhongAn upon borrowers’ default net of the amount subsequently collected from the borrower if they paid back the loan. (2) The Company recognized a contingent liability of RMB182,578,676 and RMB216,363,770 (US$31,468,805) relating to certain loan products whose performances were adversely impacted by the tightened liquidity environment and release of a series of new regulations during the years ended December 31, 2017 and 2018, respectively. |
Schedule of maximum potential undiscounted future payments by product, remaining weighted average contractual loan term, and estimated net default rates | Maximum potential undiscounted future Remaining weighted payment average contractual Estimated net As of December 31, 2017 (RMB) term (Month) default rate Xiaoying Credit Loan 7,245,232,755 5.86 5.98 % -Xiaoying Card Loan 2,715,466,847 6.56 10.19 % -Xiaoying Preferred Loan 4,529,765,908 5.38 3.10 % Internet Channel 1,038,397,955 9.01 0.49 % Xiaoying Housing Loan 1,732,414,550 3.68 0.53 % Other products 540,224,362 4.23 1.76 % Total 10,556,269,622 Maximum potential Maximum potential undiscounted future undiscounted future Remaining weighted payment payment average contractual Estimated net As of December 31, 2018 (RMB) (USD) term (Month) default rate Xiaoying Credit Loan 61,705,508 8,974,694 18.02 16.57 % -Xiaoying Card Loan 42,762,991 6,219,619 17.59 17.31 % -Xiaoying Preferred Loan 18,942,517 2,755,075 19.14 14.64 % Internet Channel (1) 2,004,234,932 291,503,881 8.19 0.00 % Xiaoying Housing Loan 282,830,247 41,135,953 3.60 0.60 % Other products 1,427,397 207,606 3.67 0.00 % Total 2,350,198,084 341,822,134 (1) Relates to loans referred from third party channel cooperators that has back to back guarantee arrangements with the Group. As such, estimated net default rate is 0% as of December 31, 2018. |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income taxes | |
Schedule of current and deferred component of income tax expenses | Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Current tax 6,128,180 395,369,391 213,083,260 30,991,675 Deferred tax (33,146,384) (257,121,164) (3,162,072) (459,905) Total (27,018,204) 138,248,227 209,921,188 30,531,770 |
Schedule of reconciliation between the income taxes expense computed by applying the PRC tax rate and the actual provision for income taxes | Year ended Year ended Year ended December 31, December 31, December 31, 2016 2017 2018 2018 RMB RMB RMB US$ PRC income tax (36,799,766) 119,643,817 271,230,730 39,448,874 Other expenses not deductible for tax purposes 54,687 119,376 226,076 32,881 Share based compensation expenses not deductible for tax purposes 9,473,499 18,502,393 42,959,121 6,248,145 Effect of tax holiday and preferential tax rate (1) — — (104,548,726) (15,205,982) Effect of different tax rate of subsidiary operation in other jurisdiction 252,454 (20,242) 3,164,192 460,213 Research and Development Tax Credit — — (32,720,713) (4,759,030) Adjustment on current income tax of the previous periods (2) — — (17,208,473) (2,502,869) Withholding tax — — 46,419,145 6,751,384 Valuation allowance movement 922 2,883 399,836 58,154 Total (27,018,204) 138,248,227 209,921,188 30,531,770 (1) The aggregate amount and per share effect of the tax holiday and preferential tax rate are as follows: Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ The aggregate amount of tax holiday and preferential tax rate — — 104,548,726 15,205,982 The aggregate effect on basic and diluted net income per share: - Basic — — 0.36 0.05 - Diluted — — 0.34 0.05 Adjustment on current income tax of the previous periods represented the adjustment according to final annual income tax filing with the PRC tax authorities. |
Schedule of aggregate amount and per share effect of the tax holiday and preferential tax rate | Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ The aggregate amount of tax holiday and preferential tax rate — — 104,548,726 15,205,982 The aggregate effect on basic and diluted net income per share: - Basic — — 0.36 0.05 - Diluted — — 0.34 0.05 |
Schedule of tax effects of temporary differences that give rise to the deferred tax balances | As of December 31, As of December 31, 2017 2018 2018 Deferred tax assets: RMB RMB US$ Impairment of long-term investments 1,575,000 1,575,000 229,074 Accrued advertising 397,879 3,394,533 493,714 Guarantee liabilities 279,382,336 235,329,500 34,227,256 Fair value adjustments related to Consolidated Trusts 3,527,264 — — Fair value adjustments related to financial guarantee derivatives 4,527,688 54,770,514 7,966,041 Allowance for loan receivable from Xiaoying Housing Loans — 3,886,705 565,298 Fair value adjustments related to Loans held for sale — 853,899 124,194 Operating loss carryforwards, net 6,651,617 46,845,223 6,813,355 Others — 395,882 57,579 Deferred tax assets, gross 296,061,784 347,051,256 50,476,511 Valuation allowance (3,838) (403,674) (58,711) Total deferred tax assets, net 296,057,946 346,647,582 50,417,800 Deferred tax liabilities: Property and equipment arising from acquisitions — 1,008,419 146,668 Tax effects of distribution of VIE's earnings (1) — 46,419,145 6,751,384 Total deferred tax liabilities — 47,427,564 6,898,052 (1) A deferred tax liability was recorded for taxable temporary differences attributable to the excess of financial reporting amounts over tax basis amount in domestic VIEs. |
Schedule of movement of the valuation allowance | As of December 31, As of December 31, 2017 2018 2018 RMB RMB US$ Balance as of January 1 (955) (3,838) (558) Addition (2,883) (399,836) (58,153) Balance as of December 31 (3,838) (403,674) (58,711) |
Net income (loss) per share a_2
Net income (loss) per share and net income (loss) attributable to common stockholders (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Net income (loss) per share and net income (loss) attributable to common stockholders | |
Schedule of computation of the basic and diluted net income (loss) per share | Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Net income (loss) attributable to X Financial (119,574,250) 340,275,002 883,111,893 128,443,298 Shares (denominator): Weighted average number of ordinary shares used in computing basic EPS 238,095,238 261,219,657 286,588,402 286,588,402 Basic net income (loss) per share (0.50) 1.30 3.08 0.45 Diluted effects of stock options — 18,491,147 17,395,882 17,395,882 Weighted average number of ordinary shares used in computing diluted EPS 238,095,238 279,710,804 303,984,284 303,984,284 Diluted net income (loss) per share (0.50) 1.22 2.91 0.42 |
Schedule of instruments not included in the computation of diluted income (loss) per share | Year ended Year ended Year ended December 31, December 31, December 31, 2016 2017 2018 Stock options 21,898,645 7,857,000 56,926,054 |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share-based compensation | |
Schedule of assumptions used to determine fair value of stock options granted | January 25, June 29, May 3, October 11, April 30, May 9, October 31, 2015 2015 2016 2017 2018 2018 2018 RMB RMB RMB RMB RMB RMB RMB Fair value of underlying ordinary shares 4.91 9.66 16.98 30.29 41.33 38.14 26.74 Exercise Price 0.27 0.27 0.27 - 10.71 0.27 - 27.02 25.42 30.27 27.93 Expected Volatility per annum (“p.a.”) 43.00 % 38.00 % 42.00 % 38.60 % 45.47 % 39.3 % 43.90 % Risk-Free Rate (p.a.) 1.81 % 2.33 % 1.81 % 2.35 % 2.96 % 2.94 % 3.15 % Exercise Multiple 2.5 2.5 2.5 2.5 2.5 5.58-38.33 2.5 Dividend Yield (p.a.) NIL NIL NIL NIL NIL NIL NIL Time to Maturity (Years) 10 10 10 10 10 5 10 |
Summary of stock option activity | Intrinsic value of Number of Exercise Price Remaining options Options RMB Contractual RMB Outstanding, as of January 1, 2018 38,259,645 0.27 - 27.02 7.07 - 9.78 1,156,955,666 Granted 41,316,054 25.42 - 30.27 10 1,781,629 Forfeited 2,109,000 0.27 - 30.27 7.34 - 9.83 162,452 Outstanding, as of December 31, 2018 77,466,699 0.27 - 30.27 6.07 - 9.83 1,005,012,166 Vested and expected to vest as of December 31, 2018 77,466,699 0.27 - 30.27 6.07 - 9.83 1,005,012,166 Exercisable as of December 31, 2018 20,053,395 0.27 - 25.42 6.07 - 9.33 586,560,814 |
Schedule of allocated share-based compensation expense | Year ended Year ended December 31, December 31, Year ended December 31, 2016 2017 2018 2018 RMB RMB RMB US$ Origination and servicing 29,999,172 55,403,160 103,124,758 14,998,874 General and administrative 7,489,762 18,227,289 66,264,371 9,637,753 Sales and marketing 405,062 379,126 2,447,356 355,953 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and contingencies | |
Schedule of future minimum lease payments under non-cancellable operating leases | Years ending RMB US$ 2019 23,838,499 3,467,166 2020 20,777,968 3,022,030 2021 18,294,107 2,660,768 2022 11,836,823 1,721,595 |
Organization and principal ac_3
Organization and principal activities (Details) | Aug. 07, 2015USD ($)shares | Sep. 30, 2018$ / sharesshares | Dec. 31, 2017subsidiary | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Issuance of new shares, Consideration | $ 99,191,246 | ¥ 681,989,413 | ¥ 1,000,000,000 | |||
IPO | ADS | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Issuance of new shares | 11,763,478 | |||||
Issuance of new shares (in dollars per share) | $ / shares | $ 9.50 | |||||
IPO | Class A ordinary shares | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Issuance of new shares | 23,526,956 | |||||
Shenzhen Xiaoying | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Ownership percentage in variable interest entity's | 100.00% | 100.00% | ||||
Beijing Ying Zhong Tong | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Ownership percentage in variable interest entity's | 100.00% | 100.00% | ||||
Shenzhen Tangren | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Ownership percentage in variable interest entity's | 100.00% | 100.00% | ||||
Shenzhen Ying Zhong Tong | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Ownership percentage in variable interest entity's | 100.00% | 100.00% | ||||
Mr. Tang Yue (Founder and CEO) | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Issuance of new shares | 40,000,000 | |||||
YZT (HK) Limited | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Ownership percentage in subsidiary | 100.00% | 100.00% | ||||
Beijing WFOE | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Ownership percentage in subsidiary | 100.00% | 100.00% | ||||
Shenzhen Puhui | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Ownership percentage in subsidiary | 100.00% | 100.00% | ||||
Shenzhen Xiaoying IT | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Ownership percentage in subsidiary | 100.00% | 100.00% | ||||
Unrelated third party investor | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Issuance of new shares | 38,095,238 | |||||
Issuance of new shares, Consideration | $ | $ 60,000,000 | |||||
Shenzhen Xiaoying | Beijing WFOE | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Number of subsidiaries acquired | subsidiary | 2 |
Summary of significant accoun_4
Summary of significant accounting policies - Variable interest entity (Details) - Beijing WFOE | 12 Months Ended |
Dec. 31, 2018 | |
Shareholders' Voting Rights Proxy Agreement | |
Significant accounting policies | |
Power of attorney, term | 10 years |
Notice period for termination of agreement | 30 days |
Power of attorney, renewal period | 1 year |
Executive Call Option Agreement | |
Significant accounting policies | |
Term of agreement | 10 years |
Extended term of agreement | 10 years |
Exclusive Business Cooperation Agreements | |
Significant accounting policies | |
Term of agreement | 10 years |
Extended term of agreement | 10 years |
Percentage of consolidated profit, base for fees on technical support and consulting services | 100.00% |
Summary of significant accoun_5
Summary of significant accounting policies - Consolidated Trusts (Details) | 12 Months Ended | |||||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2015CNY (¥) | |
ASSETS | ||||||||
Cash and cash equivalents | $ 155,532,143 | ¥ 504,214,699 | ¥ 1,069,361,250 | ¥ 671,360,926 | ||||
Restricted Cash, Current | 30,302,580 | 483,920 | 208,345,389 | 12,614,745 | ||||
Accounts receivable and contract assets, net | 200,609,882 | 1,379,293,243 | 1,110,947,916 | |||||
Loans held for sale | 92,024,799 | 632,716,508 | 768,638,420 | |||||
Loans at fair value | 4,860,318 | 33,417,119 | 667,838,880 | |||||
Prepaid expenses and other current assets | 16,754,103 | 115,192,835 | 82,099,649 | |||||
Deferred tax assets, net | 50,417,800 | 346,647,582 | 296,057,946 | |||||
Long-term investments | 41,774,812 | 287,222,720 | 54,167,615 | |||||
Property and equipment, net | 3,376,452 | 23,214,797 | 21,004,932 | |||||
Intangible assets, net | 4,130,668 | 28,400,406 | 1,616,238 | |||||
Financial guarantee derivative, assets | 52,105,289 | 358,249,913 | ||||||
Loan receivable from Xiaoying Housing Loans, net | 18,631,558 | 128,101,279 | 197,595,942 | |||||
Other non-current assets | 989,957 | 6,806,456 | 3,751,516 | |||||
TOTAL ASSETS | 674,419,240 | 4,636,969,497 | 3,887,694,725 | |||||
LIABILITIES | ||||||||
Payable to investors at fair value of the Consolidated Trusts | 667,080,871 | |||||||
Guarantee liabilities | 3,039,517 | 100,661,452 | 20,898,201 | $ 79,291,548 | 545,169,033 | ¥ 9,695,027 | ||
Financial guarantee derivative, liabilities | 53,260,916 | |||||||
Accrued payroll and welfare | 13,593,764 | 93,463,926 | 77,772,326 | |||||
Other tax payable | 19,508,264 | 134,129,068 | 105,948,089 | |||||
Income tax payable | 45,413,165 | 312,238,213 | 401,331,806 | |||||
Deposit payable to channel cooperators | 19,495,629 | 134,042,199 | 134,262,319 | |||||
Accrued expenses and other liabilities | 25,991,051 | 178,701,474 | 137,328,364 | |||||
Short-term bank borrowings | 28,797,906 | 198,000,000 | ||||||
Deferred tax liabilities | 6,898,052 | 47,427,564 | ||||||
TOTAL LIABILITIES | 162,737,348 | 1,118,900,645 | 2,122,153,724 | |||||
Net revenue | 514,958,919 | ¥ 3,540,600,044 | ¥ 1,786,935,193 | 230,305,685 | ||||
Net income (loss) | 128,435,290 | 883,056,836 | 339,494,652 | (120,180,859) | ||||
Net cash provided by (used in) operating activities | 778,729 | 5,354,151 | (615,327,191) | 82,566,300 | ||||
Net cash provided by (used in) investing activities | 60,049,526 | 412,870,517 | (10,809,388) | (734,716,301) | ||||
Net cash provided by (used in) financing activities | 26,440,173 | 181,789,413 | 830,154,156 | 775,164,828 | ||||
Consolidated Trusts | ||||||||
ASSETS | ||||||||
Restricted Cash, Current | 707,075 | 4,861,491 | 12,614,745 | |||||
Loans at fair value | 4,860,318 | 33,417,119 | 667,838,880 | |||||
Prepaid expenses and other current assets | 43,063 | 296,080 | 11,105,628 | |||||
TOTAL ASSETS | 5,610,456 | 38,574,690 | 691,559,253 | |||||
LIABILITIES | ||||||||
Payable to investors at fair value of the Consolidated Trusts | 667,080,871 | |||||||
Other tax payable | 41,388 | 284,564 | 3,586,212 | |||||
Accrued expenses and other liabilities | 19,394,527 | |||||||
TOTAL LIABILITIES | 41,388 | 284,564 | 690,061,610 | |||||
Net revenue | 8,941,221 | 61,475,364 | 117,684,121 | 20,594,271 | ||||
Net income (loss) | 6,106,676 | 41,986,452 | 43,583,819 | (368,455) | ||||
Net cash provided by (used in) operating activities | 1,824,919 | 12,547,230 | 26,997,889 | (49,516,080) | ||||
Net cash provided by (used in) investing activities | 98,392,774 | 676,499,516 | 48,332,936 | (710,000,000) | ||||
Net cash provided by (used in) financing activities | (101,345,357) | (696,800,000) | (63,200,000) | 760,000,000 | ||||
Consolidated Trusts | One of the subsidiaries | ||||||||
ASSETS | ||||||||
Loans at fair value | 7,272,198 | 50,000,000 | ||||||
VIEs and Consolidated Trusts | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | 34,387,661 | 236,432,366 | 520,450,136 | |||||
Restricted Cash, Current | 855,354 | 5,880,989 | 12,614,745 | |||||
Accounts receivable and contract assets, net | 184,156,711 | 1,266,169,464 | 965,333,922 | |||||
Loans held for sale | 768,638,420 | |||||||
Loans at fair value | 4,860,318 | 33,417,119 | 667,838,880 | |||||
Prepaid expenses and other current assets | 8,799,522 | 60,501,113 | 82,099,649 | |||||
Deferred tax assets, net | 25,203,551 | 173,287,013 | 275,968,157 | |||||
Long-term investments | 41,774,812 | 287,222,720 | 54,167,615 | |||||
Property and equipment, net | 3,102,849 | 21,333,636 | 21,004,932 | |||||
Intangible assets, net | 236,800 | 1,628,117 | 1,616,238 | |||||
Financial guarantee derivative, assets | 52,105,289 | 358,249,913 | ||||||
Loan receivable from Xiaoying Housing Loans, net | 18,631,558 | 128,101,279 | 197,595,942 | |||||
Other non-current assets | 922,892 | 6,345,345 | 3,751,516 | |||||
TOTAL ASSETS | 375,037,317 | 2,578,569,074 | 3,571,080,152 | |||||
LIABILITIES | ||||||||
Payable to investors at fair value of the Consolidated Trusts | 667,080,871 | |||||||
Guarantee liabilities | 2,806,737 | 19,297,718 | 545,169,033 | |||||
Financial guarantee derivative, liabilities | 53,260,916 | |||||||
Accrued payroll and welfare | 3,393,204 | 23,329,971 | 20,655,199 | |||||
Other tax payable | 13,844,075 | 95,184,938 | 95,368,838 | |||||
Income tax payable | 13,615,242 | 93,611,597 | 270,342,567 | |||||
Deposit payable to channel cooperators | 134,262,319 | |||||||
Accrued expenses and other liabilities | 17,096,593 | 117,547,625 | 132,525,198 | |||||
Short-term bank borrowings | 28,797,906 | 198,000,000 | ||||||
Deferred tax liabilities | 6,857,013 | 47,145,390 | ||||||
TOTAL LIABILITIES | 86,410,770 | ¥ 594,117,239 | ¥ 1,918,664,941 | |||||
Net revenue | 315,419,383 | 2,168,665,965 | 1,474,934,261 | 230,305,685 | ||||
Net income (loss) | 59,376,403 | 408,242,461 | 325,182,393 | (81,273,361) | ||||
Net cash provided by (used in) operating activities | (35,408,486) | (243,451,042) | (592,979,915) | 277,925,076 | ||||
Net cash provided by (used in) investing activities | 65,667,881 | 451,499,516 | (10,809,388) | (734,716,301) | ||||
Net cash provided by (used in) financing activities | $ (72,547,451) | ¥ (498,800,000) | ¥ 830,154,156 | ¥ 775,164,828 | ||||
Percentage of consolidated revenues | 61.00% | 61.00% | 83.00% | 100.00% | ||||
Percentage of consolidated total assets | 56.00% | 56.00% | 92.00% | |||||
Percentage of consolidated total liabilities | 53.00% | 53.00% | 90.00% |
Summary of significant accoun_6
Summary of significant accounting policies - Revenue recognition (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($)item | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥)item | |
Revenue recognition | |||||
Number of business models | item | 2 | 2 | |||
Term of Loan | 12 months | 12 months | |||
Number of services provided | item | 3 | 3 | |||
Upfront fees collected | ¥ 0 | ¥ 520,952,503 | ¥ 104,104,701 | ||
Loans held for sale | $ 92,024,799 | 768,638,420 | ¥ 632,716,508 | ||
Total net revenue | 514,958,919 | 3,540,600,044 | 1,786,935,193 | 230,305,685 | |
Contract assets recognized | 0 | ||||
Contract assets | 139,170,263 | 0 | |||
Remaining unsatisfied performance obligations | 14,984,181 | 32,704,036 | 8,231,101 | ¥ 103,023,734 | |
Revenue recognized for obligations satisfied | 493,147 | 3,390,633 | 0 | 0 | |
Loan facilitation service | Direct Model | |||||
Revenue recognition | |||||
Total net revenue | 430,161,002 | 2,957,571,967 | 1,231,054,733 | 4,523,804 | |
Loan facilitation service | Intermediary Model | |||||
Revenue recognition | |||||
Total net revenue | 33,200,840 | 228,272,373 | 302,614,463 | 176,849,079 | |
Post-origination service | |||||
Revenue recognition | |||||
Total net revenue | 19,088,565 | 131,243,431 | 50,326,664 | 8,187,989 | |
Financing income | |||||
Revenue recognition | |||||
Total net revenue | 11,068,862 | 76,103,961 | 130,740,149 | 30,500,162 | |
Other revenue | |||||
Revenue recognition | |||||
Total net revenue | 21,439,650 | 147,408,312 | 72,199,184 | 10,244,651 | |
Xiaoying Credit Loan | |||||
Revenue recognition | |||||
Total net revenue | 497,446,666 | 3,420,194,541 | 1,533,068,345 | 74,511,868 | |
Xiaoying Credit Loan | Loan facilitation service | Direct Model | |||||
Revenue recognition | |||||
Total net revenue | 421,453,286 | 2,897,702,061 | 1,148,688,253 | 1,776,454 | |
Xiaoying Credit Loan | Loan facilitation service | Intermediary Model | |||||
Revenue recognition | |||||
Total net revenue | 31,525,639 | 216,754,528 | 260,278,922 | 59,386,201 | |
Xiaoying Credit Loan | Post-origination service | |||||
Revenue recognition | |||||
Total net revenue | 18,742,637 | 128,865,000 | 46,670,424 | 2,580,982 | |
Xiaoying Credit Loan | Financing income | |||||
Revenue recognition | |||||
Total net revenue | 9,851,179 | 67,731,784 | 58,258,088 | 10,027,296 | |
Xiaoying Credit Loan | Other revenue | |||||
Revenue recognition | |||||
Total net revenue | 15,873,925 | 109,141,168 | 19,172,658 | 740,935 | |
Xiaoying Card Loan | |||||
Revenue recognition | |||||
Total net revenue | 447,923,232 | 3,079,696,182 | 1,227,125,528 | 9,919,961 | |
Xiaoying Card Loan | Loan facilitation service | Direct Model | |||||
Revenue recognition | |||||
Total net revenue | 409,700,119 | 2,816,893,168 | 1,104,724,129 | ||
Xiaoying Card Loan | Loan facilitation service | Intermediary Model | |||||
Revenue recognition | |||||
Total net revenue | 4,032,599 | 27,726,134 | 52,724,493 | 8,170,938 | |
Xiaoying Card Loan | Post-origination service | |||||
Revenue recognition | |||||
Total net revenue | 16,172,832 | 111,196,308 | 38,624,854 | 9,671 | |
Xiaoying Card Loan | Financing income | |||||
Revenue recognition | |||||
Total net revenue | 4,969,450 | 34,167,454 | 18,311,559 | 1,739,352 | |
Xiaoying Card Loan | Other revenue | |||||
Revenue recognition | |||||
Total net revenue | 13,048,232 | 89,713,118 | 12,740,493 | ||
Xiaoying Preferred Loan | |||||
Revenue recognition | |||||
Total net revenue | 49,523,434 | 340,498,359 | 305,942,817 | 64,591,907 | |
Xiaoying Preferred Loan | Loan facilitation service | Direct Model | |||||
Revenue recognition | |||||
Total net revenue | 11,753,167 | 80,808,893 | 43,964,124 | 1,776,454 | |
Xiaoying Preferred Loan | Loan facilitation service | Intermediary Model | |||||
Revenue recognition | |||||
Total net revenue | 27,493,040 | 189,028,394 | 207,554,429 | 51,215,263 | |
Xiaoying Preferred Loan | Post-origination service | |||||
Revenue recognition | |||||
Total net revenue | 2,569,805 | 17,668,692 | 8,045,570 | 2,571,311 | |
Xiaoying Preferred Loan | Financing income | |||||
Revenue recognition | |||||
Total net revenue | 4,881,729 | 33,564,330 | 39,946,529 | 8,287,944 | |
Xiaoying Preferred Loan | Other revenue | |||||
Revenue recognition | |||||
Total net revenue | 2,825,693 | 19,428,050 | 6,432,165 | 740,935 | |
Xiaoying Housing Loan | |||||
Revenue recognition | |||||
Total net revenue | 3,632,052 | 24,972,178 | 104,985,946 | 52,816,685 | |
Xiaoying Housing Loan | Loan facilitation service | Direct Model | |||||
Revenue recognition | |||||
Total net revenue | 840,683 | 5,780,118 | |||
Xiaoying Housing Loan | Loan facilitation service | Intermediary Model | |||||
Revenue recognition | |||||
Total net revenue | 181,492 | 1,247,846 | 16,573,570 | 33,579,446 | |
Xiaoying Housing Loan | Post-origination service | |||||
Revenue recognition | |||||
Total net revenue | 67,359 | 463,129 | 278,234 | 1,582,306 | |
Xiaoying Housing Loan | Financing income | |||||
Revenue recognition | |||||
Total net revenue | 1,205,851 | 8,290,828 | 66,723,545 | 16,925,206 | |
Xiaoying Housing Loan | Other revenue | |||||
Revenue recognition | |||||
Total net revenue | 1,336,667 | 9,190,257 | 21,410,597 | 729,727 | |
Internet Channel | |||||
Revenue recognition | |||||
Total net revenue | 10,642,338 | 73,171,394 | 68,642,119 | 18,764,868 | |
Internet Channel | Loan facilitation service | Direct Model | |||||
Revenue recognition | |||||
Total net revenue | 7,835,652 | 53,874,025 | 56,931,619 | 508,468 | |
Internet Channel | Loan facilitation service | Intermediary Model | |||||
Revenue recognition | |||||
Total net revenue | 1,274,097 | 8,760,054 | 2,748,428 | 16,560,238 | |
Internet Channel | Post-origination service | |||||
Revenue recognition | |||||
Total net revenue | 172,029 | 1,182,786 | 1,644,517 | 682,541 | |
Internet Channel | Financing income | |||||
Revenue recognition | |||||
Total net revenue | 6,000 | 41,253 | 2,576,028 | 822,305 | |
Internet Channel | Other revenue | |||||
Revenue recognition | |||||
Total net revenue | 1,354,560 | 9,313,276 | 4,741,527 | 191,316 | |
Other loan products | |||||
Revenue recognition | |||||
Total net revenue | 520,342 | 3,577,616 | 56,642,736 | 76,698,290 | |
Other loan products | Loan facilitation service | Direct Model | |||||
Revenue recognition | |||||
Total net revenue | 31,381 | 215,763 | 25,434,861 | 2,238,882 | |
Other loan products | Loan facilitation service | Intermediary Model | |||||
Revenue recognition | |||||
Total net revenue | 219,612 | 1,509,945 | 23,013,543 | 67,323,194 | |
Other loan products | Post-origination service | |||||
Revenue recognition | |||||
Total net revenue | 106,540 | 732,516 | 1,733,489 | 3,342,160 | |
Other loan products | Financing income | |||||
Revenue recognition | |||||
Total net revenue | 5,832 | 40,096 | 3,182,488 | 2,725,355 | |
Other loan products | Other revenue | |||||
Revenue recognition | |||||
Total net revenue | 156,977 | 1,079,296 | 3,278,355 | 1,068,699 | |
Other services | |||||
Revenue recognition | |||||
Total net revenue | 2,717,521 | 18,684,315 | 23,596,047 | 7,513,974 | |
Other services | Other revenue | |||||
Revenue recognition | |||||
Total net revenue | $ 2,717,521 | ¥ 18,684,315 | ¥ 23,596,047 | ¥ 7,513,974 |
Summary of significant accoun_7
Summary of significant accounting policies - Guarantee liabilities and Financial guarantee derivative (Details) | 12 Months Ended | |||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Guarantee liabilities and Financial guarantee derivative | ||||||
Guarantee liabilities | $ 3,039,517 | ¥ 20,898,201 | $ 79,291,548 | ¥ 545,169,033 | ¥ 100,661,452 | ¥ 9,695,027 |
ZhongAn | ||||||
Guarantee liabilities and Financial guarantee derivative | ||||||
Period for compensation in case of default by borrowers | 2 days | |||||
Xiaoying Housing Loan | ||||||
Guarantee liabilities and Financial guarantee derivative | ||||||
Guarantee liabilities | $ 232,780 | ¥ 1,600,482 | $ 1,263,759 | ¥ 8,688,973 | ¥ 7,298,609 | ¥ 5,820,087 |
Summary of significant accoun_8
Summary of significant accounting policies - Accounts receivable and contract assets and allowance for uncollectible accounts receivable and contract assets (Details) | 12 Months Ended | |||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Accounts, Notes and Loans Receivables | ||||||
Contract assets gross | ¥ 139,170,263 | |||||
Allowance for doubtful accounts | $ (25,568,998) | ¥ (175,799,647) | ¥ (8,099,152) | $ (32,174,142) | ¥ (221,213,326) | (175,799,647) |
Accounts receivable and contract assets, net | 200,609,882 | 1,379,293,243 | 1,110,947,916 | |||
Past-due accounts receivables | 13,145,374 | 90,381,019 | 58,355,215 | |||
Provision for accounts receivable and contract assets | ||||||
Allowance for accounts receivable and contract assets, Beginning balance | 25,568,998 | 175,799,647 | 8,099,152 | |||
Provision for doubtful accounts | 57,223,281 | 393,438,672 | 156,881,945 | |||
Provision for contract assets | 517,452 | 3,557,738 | 10,818,550 | |||
Charge-off for accounts receivable assets | (49,044,645) | (337,206,443) | ||||
Charge-off for contract assets | (2,090,944) | (14,376,288) | ||||
Allowance for accounts receivable and contract assets, Ending balance | 32,174,142 | 221,213,326 | 175,799,647 | |||
0 - 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 6,667,366 | 45,841,476 | 12,094,422 | |||
Over 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 6,478,008 | 44,539,543 | 46,260,793 | |||
Guarantee services | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 483,637,101 | |||||
Loan facilitation service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 223,892,923 | 1,539,375,801 | 660,350,778 | |||
Post-origination service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 8,891,101 | 61,130,768 | 3,589,421 | |||
Xiaoying Credit Loan | ||||||
Accounts, Notes and Loans Receivables | ||||||
Contract assets gross | 139,170,263 | |||||
Allowance for doubtful accounts | (23,240,731) | (159,791,649) | (3,366,007) | (30,045,211) | (206,575,845) | (159,791,649) |
Accounts receivable and contract assets, net | 197,085,731 | 1,355,062,950 | 1,069,348,513 | |||
Past-due accounts receivables | 12,801,519 | 88,016,846 | 56,147,021 | |||
Provision for accounts receivable and contract assets | ||||||
Allowance for accounts receivable and contract assets, Beginning balance | 23,240,731 | 159,791,649 | 3,366,007 | |||
Provision for doubtful accounts | 57,189,330 | 393,205,248 | 145,607,092 | |||
Provision for contract assets | 517,452 | 3,557,738 | 10,818,550 | |||
Charge-off for accounts receivable assets | (48,811,358) | (335,602,502) | ||||
Charge-off for contract assets | (2,090,944) | (14,376,288) | ||||
Allowance for accounts receivable and contract assets, Ending balance | 30,045,211 | 206,575,845 | 159,791,649 | |||
Xiaoying Credit Loan | 0 - 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 6,494,648 | 44,653,954 | 11,541,391 | |||
Xiaoying Credit Loan | Over 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 6,306,871 | 43,362,892 | 44,605,630 | |||
Xiaoying Credit Loan | Guarantee services | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 467,329,038 | |||||
Xiaoying Credit Loan | Loan facilitation service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 218,452,165 | 1,501,967,864 | 619,089,353 | |||
Xiaoying Credit Loan | Post-origination service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 8,678,777 | 59,670,931 | 3,551,508 | |||
Xiaoying Card Loan | ||||||
Accounts, Notes and Loans Receivables | ||||||
Contract assets gross | 139,170,263 | |||||
Allowance for doubtful accounts | (20,901,759) | (143,710,042) | (2,017,312) | (24,990,519) | (171,822,313) | (143,710,042) |
Accounts receivable and contract assets, net | 191,440,051 | 1,316,246,075 | 828,547,781 | |||
Past-due accounts receivables | 11,200,418 | 77,008,471 | 49,731,167 | |||
Provision for accounts receivable and contract assets | ||||||
Allowance for accounts receivable and contract assets, Beginning balance | 20,901,759 | 143,710,042 | 2,017,312 | |||
Provision for doubtful accounts | 49,187,509 | 338,188,729 | 130,874,180 | |||
Provision for contract assets | 517,452 | 3,557,738 | 10,818,550 | |||
Charge-off for accounts receivable assets | (43,525,257) | (299,257,908) | ||||
Charge-off for contract assets | (2,090,944) | (14,376,288) | ||||
Allowance for accounts receivable and contract assets, Ending balance | 24,990,519 | 171,822,313 | 143,710,042 | |||
Xiaoying Card Loan | 0 - 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 5,693,023 | 39,142,378 | 10,163,559 | |||
Xiaoying Card Loan | Over 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 5,507,395 | 37,866,093 | 39,567,608 | |||
Xiaoying Card Loan | Guarantee services | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 356,644,143 | |||||
Xiaoying Card Loan | Loan facilitation service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 208,410,231 | 1,432,924,545 | 473,135,151 | |||
Xiaoying Card Loan | Post-origination service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 8,020,339 | 55,143,843 | 3,308,266 | |||
Xiaoying Preferred Loan | ||||||
Accounts, Notes and Loans Receivables | ||||||
Allowance for doubtful accounts | (2,338,972) | (16,081,607) | (1,348,695) | (5,054,692) | (34,753,532) | (16,081,607) |
Accounts receivable and contract assets, net | 5,645,680 | 38,816,875 | 240,800,732 | |||
Past-due accounts receivables | 1,601,101 | 11,008,375 | 6,415,854 | |||
Provision for accounts receivable and contract assets | ||||||
Allowance for accounts receivable and contract assets, Beginning balance | 2,338,972 | 16,081,607 | 1,348,695 | |||
Provision for doubtful accounts | 8,001,821 | 55,016,519 | 14,732,912 | |||
Charge-off for accounts receivable assets | (5,286,101) | (36,344,594) | ||||
Allowance for accounts receivable and contract assets, Ending balance | 5,054,692 | 34,753,532 | 16,081,607 | |||
Xiaoying Preferred Loan | 0 - 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 801,625 | 5,511,576 | 1,377,832 | |||
Xiaoying Preferred Loan | Over 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 799,476 | 5,496,799 | 5,038,022 | |||
Xiaoying Preferred Loan | Guarantee services | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 110,684,895 | |||||
Xiaoying Preferred Loan | Loan facilitation service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 10,041,934 | 69,043,319 | 145,954,202 | |||
Xiaoying Preferred Loan | Post-origination service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 658,438 | 4,527,088 | 243,242 | |||
Xiaoying Housing Loan | ||||||
Accounts, Notes and Loans Receivables | ||||||
Allowance for doubtful accounts | (60,823) | (418,187) | (258,462) | (17,397) | (119,616) | (418,187) |
Accounts receivable and contract assets, net | 774,139 | 5,322,594 | 8,863,178 | |||
Past-due accounts receivables | 4,286 | |||||
Provision for accounts receivable and contract assets | ||||||
Allowance for accounts receivable and contract assets, Beginning balance | 60,823 | 418,187 | 258,462 | |||
Provision for doubtful accounts | 7,453 | 51,241 | 159,725 | |||
Charge-off for accounts receivable assets | (50,879) | (349,812) | ||||
Allowance for accounts receivable and contract assets, Ending balance | 17,397 | 119,616 | 418,187 | |||
Xiaoying Housing Loan | 0 - 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 1,262 | |||||
Xiaoying Housing Loan | Over 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 3,024 | |||||
Xiaoying Housing Loan | Guarantee services | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 5,401,097 | |||||
Xiaoying Housing Loan | Loan facilitation service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 753,840 | 5,183,029 | 3,869,418 | |||
Xiaoying Housing Loan | Post-origination service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 37,696 | 259,181 | 10,850 | |||
Internet Channel | ||||||
Accounts, Notes and Loans Receivables | ||||||
Allowance for doubtful accounts | (20,157) | (138,592) | (134,739) | (19,447) | (133,707) | (138,592) |
Accounts receivable and contract assets, net | 2,600,485 | 17,879,638 | 12,599,761 | |||
Past-due accounts receivables | 121,653 | |||||
Provision for accounts receivable and contract assets | ||||||
Allowance for accounts receivable and contract assets, Beginning balance | 20,157 | 138,592 | 134,739 | |||
Provision for doubtful accounts | 6,433 | 44,227 | 3,853 | |||
Charge-off for accounts receivable assets | (7,143) | (49,112) | ||||
Allowance for accounts receivable and contract assets, Ending balance | 19,447 | 133,707 | 138,592 | |||
Internet Channel | 0 - 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 7,654 | |||||
Internet Channel | Over 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 113,999 | |||||
Internet Channel | Guarantee services | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 4,129,630 | |||||
Internet Channel | Loan facilitation service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 2,552,059 | 17,546,683 | 8,595,788 | |||
Internet Channel | Post-origination service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 67,873 | 466,662 | 12,935 | |||
Other Products | ||||||
Accounts, Notes and Loans Receivables | ||||||
Allowance for doubtful accounts | (2,247,287) | (15,451,219) | (4,339,944) | (2,092,087) | (14,384,158) | (15,451,219) |
Accounts receivable and contract assets, net | 149,527 | 1,028,061 | 20,136,464 | |||
Past-due accounts receivables | 343,855 | 2,364,173 | 2,082,255 | |||
Provision for accounts receivable and contract assets | ||||||
Allowance for accounts receivable and contract assets, Beginning balance | 2,247,287 | 15,451,219 | 4,339,944 | |||
Provision for doubtful accounts | 20,065 | 137,956 | 11,111,275 | |||
Charge-off for accounts receivable assets | (175,265) | (1,205,017) | ||||
Allowance for accounts receivable and contract assets, Ending balance | $ 2,092,087 | ¥ 14,384,158 | ¥ 15,451,219 | |||
Other Products | 0 - 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 172,718 | 1,187,522 | 544,115 | |||
Other Products | Over 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 171,137 | 1,176,651 | 1,538,140 | |||
Other Products | Guarantee services | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 6,777,336 | |||||
Other Products | Loan facilitation service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 2,134,859 | 14,678,225 | 28,796,219 | |||
Other Products | Post-origination service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | $ 106,755 | ¥ 733,994 | ¥ 14,128 |
Summary of significant accoun_9
Summary of significant accounting policies - Loan receivable from Xiaoying Housing Loans (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Loan receivable from Xiaoying Housing Loans | |||||
Loan receivable | $ 18,631,558 | ¥ 128,101,279 | ¥ 197,595,942 | ||
Provision for Loan and Lease Losses | $ 5,868,355 | ¥ 40,347,875 | |||
Xiaoying Housing Loan | |||||
Loan receivable from Xiaoying Housing Loans | |||||
Allowance for loan principal and interest receivables | 3,768,652 | 25,911,367 | 3,768,652 | 25,911,367 | |
Loan receivable | 18,631,558 | 128,101,279 | 197,595,942 | ||
Loans receivable acquired during the year | 26,881,255 | 184,822,069 | 194,912,711 | ||
Amount of outstanding undiscounted loan receivable | $ 28,372,852 | ¥ 195,077,545 | ¥ 219,450,422 | ||
Provision for Loan and Lease Losses | 5,868,355 | 40,347,875 | |||
Less: Charge-offs | 2,099,703 | 14,436,508 | |||
Allowance for loans receivable at end of the year | $ 3,768,652 | ¥ 25,911,367 |
Summary of significant accou_10
Summary of significant accounting policies - Property and equipment, net, Intangible assets and Impairment long-lived assets (Details) - CNY (¥) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property and equipment, net | |||
Impairment of long-lived assets | ¥ 0 | ¥ 0 | ¥ 0 |
Minimum | |||
Property and equipment, net | |||
Intangible assets useful life | 2 years | ||
Maximum | |||
Property and equipment, net | |||
Intangible assets useful life | 10 years | ||
Computer and transmission equipment | |||
Property and equipment, net | |||
Property and equipment useful life | 3 years | ||
Furniture and office equipment | |||
Property and equipment, net | |||
Property and equipment useful life | 5 years | ||
Motor vehicles | |||
Property and equipment, net | |||
Property and equipment useful life | 4 years |
Summary of significant accou_11
Summary of significant accounting policies - Long term investments (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($)entity | Dec. 31, 2018CNY (¥)entity | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Long-term investments | ||||
Number of significant influence entities held | entity | 2 | 2 | ||
Cash consideration on disposal of equity interest | ¥ 16,500,000 | |||
Gain on disposal of equity interest | 1,500,000 | |||
Acquired equity interest through nominee arrangement | ||||
Long-term investments | ||||
Payments to acquire equity interest | ¥ 40,000,000 | |||
Equity interest acquired (in percentage) | 40.00% | |||
Jiangxi Ruijing | ||||
Long-term investments | ||||
Payments to acquire equity interest | $ 32,724,893 | ¥ 225,000,000 | ||
Equity interest acquired (in percentage) | 15.00% | 15.00% | ||
Private entities | ||||
Long-term investments | ||||
Payments to acquire equity interest | ¥ 15,000,000 | |||
Payments to acquire cost method investment | ¥ 15,000,000 | |||
Equity interest acquired (in percentage) | 10.00% | 2.78% |
Summary of significant accou_12
Summary of significant accounting policies - Others (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($)$ / ¥ | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥)$ / ¥ | |
Summary of significant accounting policies | |||||
Deposit payable to channel cooperators | $ 19,495,629 | ¥ 134,262,319 | ¥ 134,042,199 | ||
Defined contribution plan cost | 7,560,152 | ¥ 51,979,823 | 66,739,619 | ¥ 26,219,062 | |
Advertising cost | $ 27,995,618 | ¥ 192,483,874 | 68,838,176 | 26,445,059 | |
VAT rate (as a percent) | 6.00% | 6.00% | |||
VAT | $ 43,889,021 | ¥ 301,758,965 | ¥ 171,842,393 | ¥ 19,546,622 | |
Translation into USD | 0.1454 | 0.1454 |
Fair value of assets and liab_3
Fair value of assets and liabilities - Financial Instruments Recorded at Fair Value on a Recurring Basis (Details) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) |
Assets | |||||
Loans at fair value | $ 4,860,318 | ¥ 33,417,119 | ¥ 667,838,880 | ||
Financial guarantee derivative, assets | 52,105,289 | 358,249,913 | |||
Liabilities | |||||
Payable to investors at fair value of the Consolidated Trusts | (667,080,871) | ||||
Financial guarantee derivative | (53,260,916) | ||||
Recurring | |||||
Assets | |||||
Loans at fair value | 4,860,318 | 33,417,119 | 667,838,880 | ||
Financial guarantee derivative, assets | 52,105,289 | 358,249,913 | |||
Total assets | 56,965,607 | 391,667,032 | 667,838,880 | ||
Liabilities | |||||
Payable to investors at fair value of the Consolidated Trusts | (667,080,871) | ||||
Financial guarantee derivative | (53,260,916) | ||||
Total liabilities | (720,341,787) | ||||
Level 3 | Recurring | |||||
Assets | |||||
Loans at fair value | 4,860,318 | 33,417,119 | $ 97,133,137 | 667,838,880 | ¥ 723,746,021 |
Financial guarantee derivative, assets | 52,105,289 | 358,249,913 | |||
Total assets | $ 56,965,607 | ¥ 391,667,032 | 667,838,880 | ||
Liabilities | |||||
Payable to investors at fair value of the Consolidated Trusts | $ (97,022,889) | (667,080,871) | ¥ (728,104,511) | ||
Financial guarantee derivative | (53,260,916) | ||||
Total liabilities | ¥ (720,341,787) |
Fair value of assets and liab_4
Fair value of assets and liabilities - Financial guarantee derivative movements (Details) | 12 Months Ended | ||||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Fair value of assets and liabilities | |||||||
Financial guarantee derivative, assets | $ 52,105,289 | ¥ 358,249,913 | |||||
Financial guarantee derivative, liabilities | ¥ 53,260,916 | ¥ 53,260,916 | ¥ 53,260,916 | ||||
Balance at the beginning | 53,260,916 | ||||||
Change in fair value of financial guarantee derivative | $ 29,230,064 | 200,971,302 | 18,110,752 | ||||
Balance at the end | 53,260,916 | ||||||
Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31, 2017) | 341,822,134 | 2,350,198,084 | 10,556,269,622 | ||||
Financial guarantee derivative | |||||||
Fair value of assets and liabilities | |||||||
Financial guarantee derivative, assets | 52,105,289 | 358,249,913 | |||||
Financial guarantee derivative, liabilities | (52,105,289) | 53,260,916 | 53,260,916 | (52,105,289) | (358,249,913) | 53,260,916 | |
Balance at the beginning | 53,260,916 | ||||||
Estimated payment to ZhongAn based on the pre-agreed Cap | 259,590,877 | 1,784,817,072 | $ 7,746,479 | 53,260,916 | |||
Less: Initially estimated net guarantee service fee to be collected | 233,829,787 | 1,607,696,701 | |||||
Add (Less): Subsequent changes in estimated net guarantee service fee to be collected for outstanding loans | 3,468,974 | 23,850,931 | |||||
Change in fair value of financial guarantee derivative | 29,230,064 | 200,971,302 | |||||
Add: Guarantee service fee received from borrowers | 148,332,960 | 1,019,863,268 | |||||
Less: Compensation paid to ZhongAn | 237,414,792 | 1,632,345,399 | |||||
Balance at the end | $ (52,105,289) | (358,249,913) | 53,260,916 | ||||
Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31, 2017) | 53,953,648 | 370,958,304 | 218,486,633 | ||||
Changes in fair value related to balance outstanding | $ 15,786,527 | 108,540,263 | |||||
Loans facilitated in 2017 | |||||||
Fair value of assets and liabilities | |||||||
Estimated payment to ZhongAn based on the pre-agreed Cap | 53,260,916 | ||||||
Add (Less): Subsequent changes in estimated net guarantee service fee to be collected for outstanding loans | 5,413,833 | ||||||
Change in fair value of financial guarantee derivative | 5,413,833 | ||||||
Add: Guarantee service fee received from borrowers | 159,811,884 | ||||||
Less: Compensation paid to ZhongAn | 218,486,633 | ||||||
Loans facilitated in 2018 | |||||||
Fair value of assets and liabilities | |||||||
Financial guarantee derivative, liabilities | (358,249,913) | (358,249,913) | |||||
Estimated payment to ZhongAn based on the pre-agreed Cap | 1,784,817,072 | ||||||
Less: Initially estimated net guarantee service fee to be collected | 1,607,696,701 | ||||||
Add (Less): Subsequent changes in estimated net guarantee service fee to be collected for outstanding loans | 18,437,098 | ||||||
Change in fair value of financial guarantee derivative | 195,557,469 | ||||||
Add: Guarantee service fee received from borrowers | 860,051,384 | ||||||
Less: Compensation paid to ZhongAn | 1,413,858,766 | ||||||
Balance at the end | (358,249,913) | ||||||
Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31, 2017) | 370,958,304 | ||||||
Changes in fair value related to balance outstanding | ¥ 108,540,263 | ||||||
Loans Facilitated from September 15 to December 31, 2017 [Member] | |||||||
Fair value of assets and liabilities | |||||||
Financial guarantee derivative, liabilities | 53,260,916 | 53,260,916 | 53,260,916 | ||||
Balance at the beginning | ¥ 53,260,916 | ||||||
Estimated payment to ZhongAn based on the pre-agreed Cap | 227,758,691 | ||||||
Less: Initially estimated net guarantee service fee to be collected | 209,647,939 | ||||||
Change in fair value of financial guarantee derivative | 18,110,752 | ||||||
Add: Guarantee service fee received from borrowers | 44,422,222 | ||||||
Less: Compensation paid to ZhongAn | 9,272,058 | ||||||
Balance at the end | ¥ 53,260,916 | ||||||
Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31, 2017) | 218,486,633 | ||||||
Changes in fair value related to balance outstanding | ¥ 18,110,752 | ||||||
Minimum | Default rates | Level 3 | |||||||
Fair value of assets and liabilities | |||||||
Financial guarantee derivative input | 9.89 | 9.89 | |||||
Maximum | Default rates | Level 3 | |||||||
Fair value of assets and liabilities | |||||||
Financial guarantee derivative input | 12.13 | 12.13 |
Fair value of assets and liab_5
Fair value of assets and liabilities - Xiaoying card loan products and Significant unobservable inputs (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2018CNY (¥) | |
Fair value of assets and liabilities | |||||
Financial guarantee derivative, assets | $ 52,105,289 | ¥ 358,249,913 | |||
Financial guarantee derivative, liabilities | ¥ 53,260,916 | ||||
Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31, 2017) | 341,822,134 | 10,556,269,622 | 2,350,198,084 | ||
Loans at fair value | 4,860,318 | 667,838,880 | 33,417,119 | ||
Financial guarantee derivative | |||||
Fair value of assets and liabilities | |||||
Financial guarantee derivative, assets | 52,105,289 | 358,249,913 | |||
Financial guarantee derivative, liabilities | (52,105,289) | 53,260,916 | (358,249,913) | ||
Estimated payment to ZhongAn based on the pre-agreed Cap | 259,590,877 | ¥ 1,784,817,072 | $ 7,746,479 | 53,260,916 | |
Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31, 2017) | 53,953,648 | 218,486,633 | 370,958,304 | ||
Loan products | |||||
Fair value of assets and liabilities | |||||
Financial guarantee derivative, liabilities | 3,692,742,142 | 6,091,191,209 | 25,389,448,598 | ||
Loans at fair value | $ 1,863,379,604 | ¥ 5,239,698,805 | ¥ 12,811,666,471 | ||
Remaining weighted average contractual term (Month) | 7 months 16 days | 7 months 16 days | 10 months 3 days | 10 months 3 days | |
Estimated net default rate (in percentage) | 11.06% | 10.19% | 11.06% |
Fair value of assets and liab_6
Fair value of assets and liabilities - Loans, Payables to investors at fair value (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | |
Loans at fair value | |||||
Balance at beginning of the year | ¥ 667,838,880 | ||||
Balance at the end of the year | $ 4,860,318 | 33,417,119 | ¥ 667,838,880 | ||
Changes in fair value related to balance outstanding at the end of the year | (254,589) | (43,828,184) | ¥ (1,750,429) | ||
Payables to investors at fair value | |||||
Balance at beginning of the year | 667,080,871 | ||||
Initial contribution | 1,096,800,000 | ¥ 770,000,000 | |||
Principal payment | 101,345,357 | 696,800,000 | 1,160,000,000 | 10,000,000 | |
Change in fair value | 1,797,487 | 12,358,626 | (9,750,565) | (4,358,490) | |
Balance at the end of the year | 667,080,871 | ||||
Xiaoying Credit Loan | |||||
Loans at fair value | |||||
Changes in fair value related to balance outstanding at the end of the year | (254,589) | (35,105,777) | (1,750,429) | ||
Xiaoying Card Loan | |||||
Loans at fair value | |||||
Changes in fair value related to balance outstanding at the end of the year | (254,589) | (11,486,373) | (1,750,429) | ||
Xiaoying Preferred Loan | |||||
Loans at fair value | |||||
Changes in fair value related to balance outstanding at the end of the year | (23,619,404) | ||||
Xiaoying Housing Loan | |||||
Loans at fair value | |||||
Changes in fair value related to balance outstanding at the end of the year | (8,722,407) | ||||
Recurring | |||||
Loans at fair value | |||||
Balance at beginning of the year | 667,838,880 | ||||
Balance at the end of the year | 4,860,318 | 33,417,119 | 667,838,880 | ||
Payables to investors at fair value | |||||
Balance at beginning of the year | 667,080,871 | ||||
Balance at the end of the year | 667,080,871 | ||||
Recurring | Level 3 | |||||
Loans at fair value | |||||
Balance at beginning of the year | 97,133,137 | 667,838,880 | 723,746,021 | ||
Origination of loan principal | 7,199,289 | 49,498,710 | 1,096,800,000 | ||
Collection of principal | (108,261,492) | (744,351,887) | (1,492,468,221) | ||
Reinvestment of principal | 2,669,429 | 18,353,661 | 347,335,285 | ||
Change in fair value | 6,119,955 | 42,077,755 | (7,574,205) | ||
Balance at the end of the year | 4,860,318 | 33,417,119 | 667,838,880 | 723,746,021 | |
Payables to investors at fair value | |||||
Balance at beginning of the year | 97,022,889 | 667,080,871 | 728,104,511 | ||
Initial contribution | 1,096,800,000 | ||||
Principal payment | (101,345,357) | (696,800,000) | (1,160,000,000) | ||
Change in fair value | 4,322,468 | 29,719,129 | 2,176,360 | ||
Balance at the end of the year | 667,080,871 | 728,104,511 | |||
Changes in fair value related to balance outstanding at the end of the year | 29,719,129 | ||||
Unpaid balance of loans at fair value | 5,114,908 | 711,531,067 | 35,167,548 | ||
Unpaid balance of payable to investors | 696,800,000 | ¥ 0 | |||
Recurring | Level 3 | Xiaoying Credit Loan | |||||
Loans at fair value | |||||
Balance at beginning of the year | 62,155,044 | 427,347,002 | |||
Origination of loan principal | 7,199,289 | 49,498,710 | 496,800,000 | ||
Collection of principal | (69,345,348) | (476,783,941) | (133,104,799) | ||
Reinvestment of principal | 98,757,578 | ||||
Change in fair value | 4,851,333 | 33,355,348 | (35,105,777) | ||
Balance at the end of the year | 4,860,318 | 33,417,119 | 427,347,002 | ||
Recurring | Level 3 | Xiaoying Card Loan | |||||
Loans at fair value | |||||
Balance at beginning of the year | 11,774,206 | 80,953,550 | |||
Origination of loan principal | 7,199,289 | 49,498,710 | 85,000,000 | ||
Collection of principal | (15,529,210) | (106,771,085) | (45,681,457) | ||
Reinvestment of principal | 53,121,380 | ||||
Change in fair value | 1,416,033 | 9,735,944 | (11,486,373) | ||
Balance at the end of the year | 4,860,318 | 33,417,119 | 80,953,550 | ||
Recurring | Level 3 | Xiaoying Preferred Loan | |||||
Loans at fair value | |||||
Balance at beginning of the year | 50,380,838 | 346,393,452 | |||
Origination of loan principal | 411,800,000 | ||||
Collection of principal | (53,816,138) | (370,012,856) | (87,423,342) | ||
Reinvestment of principal | 45,636,198 | ||||
Change in fair value | 3,435,300 | 23,619,404 | (23,619,404) | ||
Balance at the end of the year | 346,393,452 | ||||
Recurring | Level 3 | Xiaoying Housing Loan | |||||
Loans at fair value | |||||
Balance at beginning of the year | 34,978,093 | 240,491,878 | 723,746,021 | ||
Origination of loan principal | 600,000,000 | ||||
Collection of principal | (38,916,144) | (267,567,946) | (1,359,363,422) | ||
Reinvestment of principal | 2,669,429 | 18,353,661 | 248,577,707 | ||
Change in fair value | $ 1,268,622 | ¥ 8,722,407 | 27,531,572 | ||
Balance at the end of the year | ¥ 240,491,878 | ¥ 723,746,021 | |||
Weighted average | Discount rates | Level 3 | |||||
Fair value of assets and liabilities | |||||
Loans and payable to investors, input | 7.12 | 6.75 | 7.12 | ||
Weighted average | Net cumulative expected loss rates | Level 3 | |||||
Fair value of assets and liabilities | |||||
Loans and payable to investors, input | 7.59 | 2.05 | 7.59 |
Property and equipment, net (De
Property and equipment, net (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | |
Property and equipment, net | |||||
Total property and equipment | $ 5,849,111 | ¥ 28,773,383 | ¥ 40,215,565 | ||
Accumulated depreciation | (2,472,659) | (7,768,451) | (17,000,768) | ||
Property and equipment, net | 3,376,452 | 21,004,932 | 23,214,797 | ||
Depreciation | 1,344,659 | ¥ 9,245,203 | 4,687,503 | ¥ 2,462,035 | |
Gains from the disposal of property and equipment | 10 | ¥ 66 | 103 | ¥ 1,410 | |
Computer and transmission equipment | |||||
Property and equipment, net | |||||
Total property and equipment | 2,257,714 | 10,191,732 | 15,522,913 | ||
Furniture and office equipment | |||||
Property and equipment, net | |||||
Total property and equipment | 532,186 | 3,324,181 | 3,659,047 | ||
Leasehold improvements | |||||
Property and equipment, net | |||||
Total property and equipment | 2,940,514 | 14,441,367 | 20,217,502 | ||
Motor vehicles | |||||
Property and equipment, net | |||||
Total property and equipment | $ 118,697 | ¥ 816,103 | ¥ 816,103 |
Intangible assets (Details)
Intangible assets (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | |
Intangible assets | |||||
Accumulated amortization | $ (285,432) | ¥ (1,572,660) | ¥ (1,962,489) | ||
Intangible Assets, Net (Excluding Goodwill), Total | 4,130,668 | 1,616,238 | 28,400,406 | ||
Amortization expenses | 56,698 | ¥ 389,829 | 678,692 | ¥ 598,272 | |
Future amortization expenses | |||||
2019 | 60,159 | 413,621 | |||
2020 | 57,907 | 398,140 | |||
2021 | 33,139 | 227,845 | |||
2022 | 33,139 | 227,845 | |||
2023 | 33,139 | 227,845 | |||
License | |||||
Intangible assets | |||||
Intangible assets, Gross | 3,781,543 | 26,000,000 | |||
Insurance broker license | ¥ 26,000,000 | ||||
Domain name and others | |||||
Intangible assets | |||||
Intangible assets, Gross | $ 634,557 | ¥ 3,188,898 | ¥ 4,362,895 |
Short-term bank borrowings (Det
Short-term bank borrowings (Details) | Jan. 02, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Jan. 02, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Short-term bank borrowings and Restricted cash | |||||
Restricted cash | $ 30,500,000 | $ 29,500,000 | $ 29,500,000 | ||
Term of deposit | 1 year | ||||
PRC bank | |||||
Short-term bank borrowings and Restricted cash | |||||
Debt term | 1 year | 3 years | 1 year | ||
Maximum borrowing capacity | $ 101,810,777 | $ 101,810,777 | ¥ 700,000,000 | ||
Interest rate (in percent) | 2.08% | 2.08% | 2.08% | ||
Outstanding balances of loans drawn | $ 29,525,125 | $ 28,797,906 | $ 28,797,906 | ¥ 203,000,000 | ¥ 198,000,000 |
Term of deposit | 1 year |
Accrued expenses and other li_3
Accrued expenses and other liabilities (Details) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Accrued expenses and other liabilities | |||
Fund attributable to institutional investors | $ 840,204 | ¥ 5,776,821 | ¥ 58,266,669 |
Accrued interest payable of Consolidated Trusts | 19,394,527 | ||
Payable for purchase of property and equipment | 1,586,988 | ||
Accrued office expense | 1,584,015 | 10,890,896 | 2,545,614 |
Professional fee payable | 7,025,317 | 48,302,566 | 12,826,377 |
Commission fee payable | 10,949,044 | 75,280,155 | 35,408,781 |
Other accrued expenses | 5,592,471 | 38,451,036 | 7,299,408 |
Total accrued expenses and other current liabilities | $ 25,991,051 | ¥ 178,701,474 | ¥ 137,328,364 |
Guarantee liabilities (Details)
Guarantee liabilities (Details) | 12 Months Ended | |||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | |
Guarantee liabilities | ||||||
Guarantee liabilities at beginning of the year | $ 79,291,548 | ¥ 545,169,033 | ¥ 100,661,452 | ¥ 9,695,027 | ||
Provision at the inception of new loans | 1,113,710 | 7,657,314 | 857,764,076 | 110,179,961 | ||
Net payout | (105,245,670) | (723,616,603) | (547,232,035) | (16,482,859) | ||
Released on expiration | (3,588,876) | (24,675,313) | (48,603,136) | (2,730,677) | ||
Contingent liability | 31,468,805 | 216,363,770 | 182,578,676 | |||
Guarantee liabilities at end of the year | 3,039,517 | ¥ 20,898,201 | $ 79,291,548 | 545,169,033 | 100,661,452 | |
Maximum potential undiscounted future payment | $ 341,822,134 | 10,556,269,622 | ¥ 2,350,198,084 | |||
Portfolio amount (as a percent) | 0.60% | 0.60% | ||||
Real estate properties collateral | ||||||
Guarantee liabilities | ||||||
Maximum potential undiscounted future payment | $ 40,000,000 | 1,700,000,000 | ¥ 280,000,000 | |||
Xiaoying Credit Loan | ||||||
Guarantee liabilities | ||||||
Guarantee liabilities at beginning of the year | 74,827,289 | ¥ 514,475,024 | 38,368,513 | 1,196,197 | ||
Provision at the inception of new loans | 855,812 | 5,884,134 | 797,431,715 | 42,591,980 | ||
Net payout | (97,106,958) | (667,658,887) | (411,239,134) | (5,323,494) | ||
Released on expiration | (2,282,289) | (15,691,880) | (19,172,658) | (96,170) | ||
Contingent liability | 26,512,883 | 182,289,328 | 109,086,588 | |||
Guarantee liabilities at end of the year | $ 2,806,737 | ¥ 19,297,719 | $ 74,827,289 | ¥ 514,475,024 | 38,368,513 | |
Remaining weighted average contractual term (Month) | 18 months 1 day | 18 months 1 day | 5 months 26 days | 5 months 26 days | ||
Estimated net default rate (in percentage) | 16.57% | 5.98% | 16.57% | |||
Maximum potential undiscounted future payment | $ 8,974,694 | ¥ 7,245,232,755 | ¥ 61,705,508 | |||
Xiaoying Card Loan | ||||||
Guarantee liabilities | ||||||
Guarantee liabilities at beginning of the year | 59,143,708 | ¥ 406,642,561 | 16,330,155 | |||
Provision at the inception of new loans | 608,420 | 4,183,193 | 616,729,990 | 16,330,155 | ||
Net payout | (57,589,779) | (395,958,527) | (322,763,679) | |||
Released on expiration | (2,017,133) | (13,868,799) | (12,740,493) | |||
Contingent liability | 1,581,601 | 10,874,300 | 109,086,588 | |||
Guarantee liabilities at end of the year | $ 1,726,817 | ¥ 11,872,728 | $ 59,143,708 | ¥ 406,642,561 | 16,330,155 | |
Remaining weighted average contractual term (Month) | 17 months 18 days | 17 months 18 days | 6 months 17 days | 6 months 17 days | ||
Estimated net default rate (in percentage) | 17.31% | 10.19% | 17.31% | |||
Maximum potential undiscounted future payment | $ 6,219,619 | ¥ 2,715,466,847 | ¥ 42,762,991 | |||
Xiaoying Preferred Loan | ||||||
Guarantee liabilities | ||||||
Guarantee liabilities at beginning of the year | 15,683,581 | ¥ 107,832,463 | 22,038,358 | 1,196,197 | ||
Provision at the inception of new loans | 247,392 | 1,700,941 | 180,701,725 | 26,261,825 | ||
Net payout | (39,517,179) | (271,700,360) | (88,475,455) | (5,323,494) | ||
Released on expiration | (265,156) | (1,823,081) | (6,432,165) | (96,170) | ||
Contingent liability | 24,931,282 | 171,415,028 | ||||
Guarantee liabilities at end of the year | $ 1,079,920 | ¥ 7,424,991 | $ 15,683,581 | ¥ 107,832,463 | 22,038,358 | |
Remaining weighted average contractual term (Month) | 19 months 4 days | 19 months 4 days | 5 months 12 days | 5 months 12 days | ||
Estimated net default rate (in percentage) | 14.64% | 3.10% | 14.64% | |||
Maximum potential undiscounted future payment | $ 2,755,075 | ¥ 4,529,765,908 | ¥ 18,942,517 | |||
Xiaoying Housing Loan | ||||||
Guarantee liabilities | ||||||
Guarantee liabilities at beginning of the year | 1,263,759 | ¥ 8,688,973 | 7,298,609 | 5,820,087 | ||
Provision at the inception of new loans | 257,898 | 1,773,180 | 23,970,437 | 7,813,106 | ||
Net payout | (55,079) | (378,694) | (1,169,476) | (4,056,219) | ||
Released on expiration | (1,233,798) | (8,482,977) | (21,410,597) | (2,278,365) | ||
Guarantee liabilities at end of the year | $ 232,780 | ¥ 1,600,482 | $ 1,263,759 | ¥ 8,688,973 | 7,298,609 | |
Remaining weighted average contractual term (Month) | 3 months 18 days | 3 months 18 days | 3 months 21 days | 3 months 21 days | ||
Estimated net default rate (in percentage) | 0.60% | 0.53% | 0.60% | |||
Maximum potential undiscounted future payment | $ 41,135,953 | ¥ 1,732,414,550 | ¥ 282,830,247 | |||
Internet Channel | ||||||
Guarantee liabilities | ||||||
Guarantee liabilities at beginning of the year | 426,105 | ¥ 2,929,686 | 2,477,791 | 974,220 | ||
Provision at the inception of new loans | 28,924,659 | 2,577,686 | ||||
Net payout | (1,874,882) | (12,890,754) | (23,731,237) | (1,003,962) | ||
Released on expiration | (53,154) | (365,456) | (4,741,527) | (70,153) | ||
Contingent liability | $ 1,501,931 | ¥ 10,326,524 | ||||
Guarantee liabilities at end of the year | $ 426,105 | ¥ 2,929,686 | 2,477,791 | |||
Remaining weighted average contractual term (Month) | 8 months 6 days | 8 months 6 days | 9 months | 9 months | ||
Estimated net default rate (in percentage) | 0.00% | 0.49% | 0.00% | |||
Maximum potential undiscounted future payment | $ 291,503,881 | ¥ 1,038,397,955 | ¥ 2,004,234,932 | |||
Other Products | ||||||
Guarantee liabilities | ||||||
Guarantee liabilities at beginning of the year | 2,774,395 | ¥ 19,075,350 | 52,516,539 | 1,704,523 | ||
Provision at the inception of new loans | 7,437,265 | 57,197,189 | ||||
Net payout | (6,208,751) | (42,688,268) | (111,092,188) | (6,099,184) | ||
Released on expiration | (19,635) | (135,000) | (3,278,354) | (285,989) | ||
Contingent liability | $ 3,453,991 | ¥ 23,747,918 | 73,492,088 | |||
Guarantee liabilities at end of the year | $ 2,774,395 | ¥ 19,075,350 | ¥ 52,516,539 | |||
Remaining weighted average contractual term (Month) | 3 months 20 days | 3 months 20 days | 4 months 7 days | 4 months 7 days | ||
Estimated net default rate (in percentage) | 0.00% | 1.76% | 0.00% | |||
Maximum potential undiscounted future payment | $ 207,606 | ¥ 540,224,362 | ¥ 1,427,397 |
Related party balances and tr_2
Related party balances and transactions (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Related party balances and transactions | ||||
Loan from related parties | ¥ 285,467,540 | ¥ 325,427,200 | ||
Loan repayment to related parties | 392,113,384 | 331,216,528 | ||
Loan provided to related parties | 217,000,000 | |||
Jiangxi Ruijing | ||||
Related party balances and transactions | ||||
Guarantee provided over the worth of loans | $ 193,949,971 | ¥ 1,333,503,026 | ||
Guarantee fees received from borrowers | 3,187,957 | 21,918,796 | ||
Remittance to related party as a security deposit | $ 2,908,879 | ¥ 20,000,000 | ||
Mr. Tang Yue (Founder and CEO) | ||||
Related party balances and transactions | ||||
Loan from related parties | 285,500,000 | 325,427,200 | ||
Loan repayment to related parties | 331,216,528 | |||
Amounts due to related party | ¥ 106,645,844 | |||
Zijinzhonghao (Zhejiang) Investment Co., Ltd. | ||||
Related party balances and transactions | ||||
Loan provided to related parties | ¥ 217,000,000 |
Income taxes - Tax rates (Detai
Income taxes - Tax rates (Details) ¥ in Millions | 12 Months Ended | ||
Dec. 31, 2020subsidiaryentity | Dec. 31, 2019subsidiaryentity | Dec. 31, 2018CNY (¥)subsidiaryentity | |
Income taxes | |||
Income tax rate (as a percent) | 25.00% | ||
Hong Kong | |||
Income taxes | |||
Income tax rate (as a percent) | 16.50% | ||
PRC | |||
Income taxes | |||
Income tax rate (as a percent) | 25.00% | ||
Statute of limitations period (in years) | 3 years | ||
Extension period for statute of limitations under special circumstances (in years) | 5 years | ||
Underpayment of tax liability listed as special circumstance | ¥ | ¥ 0.1 | ||
Statute of limitations period for related party transaction (in years) | 10 years | ||
Statute of limitations period for tax evasion (in years) | 0 years | ||
VIE in Shenzhen | Subsidiaries in Shenzhen | PRC | |||
Income taxes | |||
Number of subsidiary | subsidiary | 2 | 2 | 2 |
Number of VIE | entity | 1 | 1 | 1 |
Income tax rate (as a percent) | 15.00% | 15.00% | 15.00% |
Income taxes - Current and defe
Income taxes - Current and deferred component of income tax expenses (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Income taxes | ||||
Current tax | $ 30,991,675 | ¥ 213,083,260 | ¥ 395,369,391 | ¥ 6,128,180 |
Deferred tax | (459,905) | (3,162,072) | (257,121,164) | (33,146,384) |
Total | $ 30,531,770 | ¥ 209,921,188 | ¥ 138,248,227 | ¥ (27,018,204) |
Income taxes - Reconciliation b
Income taxes - Reconciliation between the income taxes expense computed by applying the PRC tax rate and the actual provision for income taxes (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Income taxes | ||||
Income tax rate (as a percent) | 25.00% | 25.00% | ||
PRC income tax | $ 39,448,874 | ¥ 271,230,730 | ¥ 119,643,817 | ¥ (36,799,766) |
Other expenses not deductible for tax purposes | 32,881 | 226,076 | 119,376 | 54,687 |
Share based compensation expenses not deductible for tax purposes | 6,248,145 | 42,959,121 | 18,502,393 | 9,473,499 |
Effect of tax holiday and preferential tax rate | (15,205,982) | (104,548,726) | ||
Effect of different tax rate of subsidiary operation in other jurisdiction | 460,213 | 3,164,192 | (20,242) | 252,454 |
Research and Development Tax Credit | (4,759,030) | (32,720,713) | ||
Adjustment on current income tax of the previous periods | (2,502,869) | (17,208,473) | ||
Withholding tax | 6,751,384 | 46,419,145 | ||
Valuation allowance movement | 58,154 | 399,836 | 2,883 | 922 |
Total | $ 30,531,770 | ¥ 209,921,188 | ¥ 138,248,227 | ¥ (27,018,204) |
Income taxes - Effect of Taxhol
Income taxes - Effect of Taxholiday and preferential tax rate (Details) - 12 months ended Dec. 31, 2018 | USD ($)$ / shares | CNY (¥)¥ / shares |
Income taxes | ||
Aggregate amount of tax holiday and preferential tax rate | $ 15,205,982 | ¥ 104,548,726 |
Aggregate effect on basic net income per share | (per share) | $ 0.05 | ¥ 0.36 |
Aggregate effect on diluted net income per share | (per share) | $ 0.05 | ¥ 0.34 |
Income taxes - Components of th
Income taxes - Components of the deferred tax assets and liabilities (Details) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) |
Deferred tax assets: | |||||
Impairment of long-term investments | $ 229,074 | ¥ 1,575,000 | ¥ 1,575,000 | ||
Accrued advertising | 493,714 | 3,394,533 | 397,879 | ||
Guarantee liabilities | 34,227,256 | 235,329,500 | 279,382,336 | ||
Fair value adjustments related to Consolidated Trusts | 3,527,264 | ||||
Fair value adjustments related to financial guarantee derivatives | 7,966,041 | 54,770,514 | 4,527,688 | ||
Allowance for loan receivable from Xiaoying Housing Loans | 565,298 | 3,886,705 | |||
Fair value adjustments related to Loans held for sale | 124,194 | 853,899 | |||
Operating loss carryforwards, net | 6,813,355 | 46,845,223 | 6,651,617 | ||
Others | 57,579 | 395,882 | |||
Deferred tax assets, gross | 50,476,511 | 347,051,256 | 296,061,784 | ||
Valuation allowance | (58,711) | (403,674) | $ (558) | (3,838) | ¥ (955) |
Total deferred tax assets, net | 50,417,800 | 346,647,582 | 296,057,946 | ||
Deferred tax liabilities: | |||||
Property and equipment arising from acquisitions | 146,668 | 1,008,419 | |||
Tax effects of distribution of VIE's earnings(1) | 6,751,384 | 46,419,145 | ¥ 0 | ||
Total deferred tax liabilities | $ 6,898,052 | ¥ 47,427,564 |
Income taxes - Movement of the
Income taxes - Movement of the valuation allowance (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | |
Income taxes | |||||
Balance at the beginning of the year | $ 558 | ¥ 3,838 | ¥ 955 | ||
Addition | 58,153 | 399,836 | 2,883 | ¥ 922 | |
Balance at the end of the year | 58,711 | ¥ 403,674 | 3,838 | ¥ 955 | |
Operating loss carryforwards, net | $ 6,813,355 | 6,651,617 | ¥ 46,845,223 | ||
Withholding tax rate on dividends (as a percent) | 10.00% | 10.00% | |||
Withholding tax rate on dividends if investors qualifies as beneficial owner with holdings above the threshold percentage (as a percent) | 5.00% | 5.00% | |||
Threshold beneficial owner percentage determining withholding income tax rate (as a percent) | 25.00% | 25.00% | |||
Withholding tax rate on dividends if investors qualifies as beneficial owner with holdings below the threshold percentage (as a percent) | 10.00% | 10.00% | |||
Cumulative profits | $ 201,406,168 | 1,384,768,106 | |||
Tax effects of distribution of VIE's earnings | 6,751,384 | 0 | 46,419,145 | ||
Subsidiaries and VIEs and subsidiaries of the VIEs | |||||
Income taxes | |||||
Operating loss carryforwards, net | $ 27,374,402 | ¥ 26,614,377 | ¥ 188,212,704 |
Net income (loss) per share a_3
Net income (loss) per share and net income (loss) attributable to common stockholders (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | |
Net income (loss) per share and net income (loss) attributable to common stockholders | ||||
Net income (loss) attributable to X Financial | $ 128,443,298 | ¥ 883,111,893 | ¥ 340,275,002 | ¥ (119,574,250) |
Shares (denominator): | ||||
Weighted average number of ordinary shares used in computing basic EPS | 286,588,402 | 286,588,402 | 261,219,657 | 238,095,238 |
Basic net income (loss) per share | (per share) | $ 0.45 | ¥ 3.08 | ¥ 1.30 | ¥ (0.50) |
Diluted effects of stock options | 17,395,882 | 17,395,882 | 18,491,147 | |
Weighted average number of ordinary shares used in computing diluted EPS | 303,984,284 | 303,984,284 | 279,710,804 | 238,095,238 |
Diluted net income (loss) per share | (per share) | $ 0.42 | ¥ 2.91 | ¥ 1.22 | ¥ (0.50) |
Net income (loss) per share a_4
Net income (loss) per share and net income (loss) attributable to common stockholders-Anti-dilutive shares (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock options | |||
Anti-dilutive shares | |||
Anti-dilutive shares not included in the computation of diluted income (loss) per share | 56,926,054 | 7,857,000 | 21,898,645 |
Share-based compensation (Detai
Share-based compensation (Details) | Oct. 31, 2018shares | May 10, 2018USD ($) | May 10, 2018CNY (¥) | May 09, 2018USD ($)shares | May 09, 2018CNY (¥)¥ / sharesshares | Apr. 30, 2018shares | Oct. 11, 2017shares | May 03, 2016shares | Jun. 29, 2015shares | Jan. 25, 2015shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / shares | Dec. 31, 2016CNY (¥) |
Share-based compensation | ||||||||||||||
Number of shares granted | shares | 475,000 | 40,000,000 | 40,000,000 | 841,054 | 16,616,000 | 7,425,000 | 630,000 | 13,843,645 | 41,316,054 | 41,316,054 | ||||
Expiration period (in years) | 10 years | 10 years | ||||||||||||
Exercise price (in dollars per share) | ¥ 4.75 | |||||||||||||
Share-based compensation expense | $ 1,332,770 | ¥ 9,163,461 | $ 2,357,666 | ¥ 16,210,135 | $ 24,992,580 | ¥ 171,836,485 | ¥ 74,009,575 | ¥ 37,893,996 | ||||||
Service period (in years) | 5 years | 5 years | ||||||||||||
Weighted-average grant date fair value of the options | ¥ 13.08 | ¥ 16.69 | ||||||||||||
Minimum | ||||||||||||||
Share-based compensation | ||||||||||||||
Vesting period (in years) | 3 years | 3 years | ||||||||||||
Exercise price (in dollars per share) | ¥ 25.42 | |||||||||||||
Maximum | ||||||||||||||
Share-based compensation | ||||||||||||||
Vesting period (in years) | 4 years | 4 years | ||||||||||||
Exercise price (in dollars per share) | ¥ 30.27 |
Share-based compensation - Stoc
Share-based compensation - Stock option valuation (Details) - ¥ / shares | Oct. 31, 2018 | May 09, 2018 | Apr. 30, 2018 | Oct. 11, 2017 | May 03, 2016 | Jun. 29, 2015 | Jan. 25, 2015 | Dec. 31, 2018 | Dec. 31, 2017 |
Share-based compensation | |||||||||
Fair value of underlying ordinary shares (in dollars per share) | ¥ 26.74 | ¥ 38.14 | ¥ 41.33 | ¥ 30.29 | ¥ 16.98 | ¥ 9.66 | ¥ 4.91 | ||
Exercise Price (in dollars per share) | ¥ 27.93 | ¥ 30.27 | ¥ 25.42 | ¥ 0.27 | ¥ 0.27 | ||||
Expected Volatility per annum (as a percent) | 43.90% | 39.30% | 45.47% | 38.60% | 42.00% | 38.00% | 43.00% | ||
Risk-Free Rate (as a percent) | 3.15% | 2.94% | 2.96% | 2.35% | 1.81% | 2.33% | 1.81% | ||
Exercise Multiple | 2.5 | 2.5 | 2.5 | 2.5 | 2.5 | 2.5 | |||
Dividend Yield ( as a percent ) | |||||||||
Time to Maturity (Years) | 10 years | 5 years | 10 years | 10 years | 10 years | 10 years | 10 years | ||
Minimum | |||||||||
Share-based compensation | |||||||||
Exercise Price (in dollars per share) | ¥ 0.27 | ¥ 0.27 | ¥ 0.27 | ¥ 0.27 | |||||
Exercise Multiple | 5.58 | ||||||||
Maximum | |||||||||
Share-based compensation | |||||||||
Exercise Price (in dollars per share) | ¥ 27.02 | ¥ 10.71 | ¥ 30.27 | ¥ 27.02 | |||||
Exercise Multiple | (38.33) |
Share-based compensation - St_2
Share-based compensation - Stock option activity (Details) | Oct. 31, 2018¥ / sharesshares | May 09, 2018¥ / sharesshares | Apr. 30, 2018¥ / sharesshares | Oct. 11, 2017¥ / sharesshares | May 03, 2016¥ / sharesshares | Jun. 29, 2015¥ / sharesshares | Jan. 25, 2015¥ / sharesshares | Dec. 31, 2018¥ / shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2018USD ($)shares |
Number of Options | |||||||||||
Outstanding at beginning of the year (in shares) | shares | 38,259,645 | ||||||||||
Granted (in shares) | shares | 475,000 | 40,000,000 | 841,054 | 16,616,000 | 7,425,000 | 630,000 | 13,843,645 | 41,316,054 | |||
Forfeited (in shares) | shares | 2,109,000 | ||||||||||
Outstanding at end of the year (in shares) | shares | 77,466,699 | 38,259,645 | |||||||||
Vested and expected to vest, Number of Options (in shares) | shares | 77,466,699 | ||||||||||
Exercisable, Number of Options (in shares) | shares | 20,053,395 | ||||||||||
Exercise Price | |||||||||||
Granted (in dollars per share) | ¥ 4.75 | ||||||||||
Outstanding at end of the year (in dollars per share) | ¥ 27.93 | ¥ 30.27 | ¥ 25.42 | ¥ 0.27 | ¥ 0.27 | ||||||
Intrinsic value of options | |||||||||||
Outstanding at beginning of the year | $ | $ 1,156,955,666 | ||||||||||
Granted | $ | 1,781,629 | ||||||||||
Forfeited | $ | 162,452 | ||||||||||
Outstanding at end of the year | $ | $ 1,005,012,166 | $ 1,156,955,666 | |||||||||
Vested and expected to vest, Intrinsic value of options | $ | $ 1,005,012,166 | ||||||||||
Exercisable, Intrinsic value of options | $ | $ 586,560,814 | ||||||||||
Minimum | |||||||||||
Exercise Price | |||||||||||
Outstanding at beginning of the year (in dollars per share) | ¥ 0.27 | ||||||||||
Granted (in dollars per share) | 25.42 | ||||||||||
Forfeited (in dollars per share) | 0.27 | ||||||||||
Outstanding at end of the year (in dollars per share) | ¥ 0.27 | ¥ 0.27 | 0.27 | ||||||||
Vested and expected to vest, Exercise Price (in dollars per share) | 0.27 | ||||||||||
Exercisable, Exercise Price (in dollars per share) | 0.27 | ||||||||||
Remaining Contractual | |||||||||||
Outstanding remaining contractual term(in years) | 6 years 26 days | 7 years 26 days | |||||||||
Forfeited (in years) | 7 years 4 months 2 days | ||||||||||
Vested and expected to vest, Remaining Contractual (in years) | 6 years 26 days | ||||||||||
Exercisable, Remaining Contractual (in years) | 6 years 26 days | ||||||||||
Maximum | |||||||||||
Exercise Price | |||||||||||
Outstanding at beginning of the year (in dollars per share) | 27.02 | ||||||||||
Granted (in dollars per share) | 30.27 | ||||||||||
Forfeited (in dollars per share) | 30.27 | ||||||||||
Outstanding at end of the year (in dollars per share) | ¥ 27.02 | ¥ 10.71 | 30.27 | ||||||||
Vested and expected to vest, Exercise Price (in dollars per share) | 30.27 | ||||||||||
Exercisable, Exercise Price (in dollars per share) | ¥ 25.42 | ||||||||||
Remaining Contractual | |||||||||||
Outstanding remaining contractual term(in years) | 9 years 9 months 29 days | 9 years 9 months 11 days | |||||||||
Granted (in years) | 10 years | ||||||||||
Forfeited (in years) | 9 years 9 months 29 days | ||||||||||
Vested and expected to vest, Remaining Contractual (in years) | 9 years 9 months 29 days | ||||||||||
Exercisable, Remaining Contractual (in years) | 9 years 3 months 29 days |
Share-based compensation - Comp
Share-based compensation - Compensation cost (Details) | May 10, 2018USD ($) | May 10, 2018CNY (¥) | May 09, 2018USD ($) | May 09, 2018CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) |
Share-based compensation expense | |||||||||
Share-based compensation expense | $ 1,332,770 | ¥ 9,163,461 | $ 2,357,666 | ¥ 16,210,135 | $ 24,992,580 | ¥ 171,836,485 | ¥ 74,009,575 | ¥ 37,893,996 | |
Total unrecognized compensation expense | $ 61,954,865 | 477,996,293 | 77,111,690 | ¥ 425,970,675 | |||||
weighted-average period (in years) | 3 years 2 months 12 days | 3 years 2 months 12 days | |||||||
Origination and servicing | |||||||||
Share-based compensation expense | |||||||||
Share-based compensation expense | $ 14,998,874 | ¥ 103,124,758 | 55,403,160 | 29,999,172 | |||||
General and administrative | |||||||||
Share-based compensation expense | |||||||||
Share-based compensation expense | 9,637,753 | 66,264,371 | 18,227,289 | 7,489,762 | |||||
Sales and marketing | |||||||||
Share-based compensation expense | |||||||||
Share-based compensation expense | $ 355,953 | ¥ 2,447,356 | ¥ 379,126 | ¥ 405,062 |
Statutory reserves and restri_2
Statutory reserves and restricted net assets (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Statutory reserves and restricted net assets | |||
Minimum percentage of after tax profit to be allocated to statutory reserve | 10.00% | ||
Required statutory reserve registered capital ratio to deforce compulsory net profit allocation to statutory reserve | 50.00% | ||
Amounts restricted that include paid in capital and statutory reserve funds, as determined pursuant to PRC GAAP | $ 237,418,965 | ¥ 1,632,374,093 | ¥ 1,244,786,249 |
Commitments and contingencies_2
Commitments and contingencies (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | |
Operating lease as lessee | |||||
Rent expense | $ 3,466,977 | ¥ 24,006,995 | ¥ 17,543,824 | ¥ 6,162,189 | |
Future minimum lease payments under noncancelable operating leases | |||||
2019 | 3,467,166 | ¥ 23,838,499 | |||
2020 | 3,022,030 | 20,777,968 | |||
2021 | 2,660,768 | 18,294,107 | |||
2022 | $ 1,721,595 | ¥ 11,836,823 |
Subsequent events (Details)
Subsequent events (Details) | Mar. 18, 2019$ / shares |
Subsequent Event | ADS | |
Subsequent events | |
Cash dividend declared | $ 0.10 |
CONDENSED FINANCIAL INFORMATI_2
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY - BALANCE SHEETS (Details) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) |
ASSETS | ||||
Cash and cash equivalents | $ 155,532,143 | ¥ 1,069,361,250 | ¥ 671,360,926 | ¥ 504,214,699 |
Prepaid expenses and other current assets | 16,754,103 | 115,192,835 | 82,099,649 | |
TOTAL ASSETS | 674,419,240 | 4,636,969,497 | 3,887,694,725 | |
LIABILITIES | ||||
Accrued expenses and other liabilities | 25,991,051 | 178,701,474 | 137,328,364 | |
TOTAL LIABILITIES | 162,737,348 | 1,118,900,645 | 2,122,153,724 | |
Equity: | ||||
Common Shares | 27,574 | 189,586 | 173,444 | |
Additional paid-in capital | 410,766,203 | 2,824,223,031 | 1,971,701,910 | |
Retained earnings (Accumulated deficits) | 93,100,845 | 640,114,859 | (242,997,034) | |
Accumulated other comprehensive income | 7,635,046 | 52,494,757 | 33,449,640 | |
Total X Financial shareholders' equity | 511,529,668 | 3,517,022,233 | 1,762,327,960 | |
TOTAL LIABILITIES AND EQUITY | 674,419,240 | 4,636,969,497 | 3,887,694,725 | |
Parent Company | Reportable legal entity | ||||
ASSETS | ||||
Cash and cash equivalents | 45,015,503 | 309,504,088 | 117,396,413 | |
Prepaid expenses and other current assets | 846,955 | 5,823,242 | ||
Amount due from subsidiaries and VIEs | 119,074,352 | 818,695,709 | 273,684,830 | |
Investments in subsidiaries and VIEs | 354,628,672 | 2,438,249,431 | 1,371,246,717 | |
TOTAL ASSETS | 519,565,482 | 3,572,272,470 | 1,762,327,960 | |
LIABILITIES | ||||
Accrued expenses and other liabilities | 8,035,814 | 55,250,237 | ||
TOTAL LIABILITIES | 8,035,814 | 55,250,237 | ||
Equity: | ||||
Common Shares | 27,574 | 189,586 | 173,444 | |
Additional paid-in capital | 410,766,203 | 2,824,223,031 | 1,971,701,910 | |
Retained earnings (Accumulated deficits) | 93,100,845 | 640,114,859 | (242,997,034) | |
Accumulated other comprehensive income | 7,635,046 | 52,494,757 | 33,449,640 | |
Total X Financial shareholders' equity | 511,529,668 | 3,517,022,233 | 1,762,327,960 | |
TOTAL LIABILITIES AND EQUITY | $ 519,565,482 | ¥ 3,572,272,470 | ¥ 1,762,327,960 |
CONDENSED FINANCIAL INFORMATI_3
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY - STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
General and administrative | $ (32,001,132) | ¥ (220,023,783) | ¥ (98,236,038) | ¥ (61,711,596) |
Foreign exchange loss | 1,407 | 9,677 | (478,590) | (18,220) |
Equity in profit (loss) of subsidiaries and VIEs | 1,171,566 | 8,055,105 | (832,385) | |
Other income (loss), net | (858,726) | (5,904,176) | 89,690 | (9,270) |
Net income (loss) attributable to X Financial | 128,443,298 | 883,111,893 | 340,275,002 | (119,574,250) |
Comprehensive income (loss) attributable to X Financial | 131,213,295 | 902,157,010 | 315,811,046 | (91,702,634) |
Parent Company | Reportable legal entity | ||||
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
General and administrative | (11,528,694) | (79,265,535) | (74,802,853) | (38,905,856) |
Foreign exchange loss | (478,590) | (18,220) | ||
Interest income | 17,791 | 122,320 | 1,358,777 | 22,163 |
Equity in profit (loss) of subsidiaries and VIEs | 139,834,281 | 961,430,600 | 414,197,668 | (80,672,337) |
Other income (loss), net | 119,920 | 824,508 | ||
Net income (loss) attributable to X Financial | 128,443,298 | 883,111,893 | 340,275,002 | (119,574,250) |
Other comprehensive income (loss) | 2,769,997 | 19,045,117 | (24,463,956) | 27,871,616 |
Comprehensive income (loss) attributable to X Financial | $ 131,213,295 | ¥ 902,157,010 | ¥ 315,811,046 | ¥ (91,702,634) |
CONDENSED FINANCIAL INFORMATI_4
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY - STATEMENT OF CASH FLOWS (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($)$ / ¥ | Dec. 31, 2018CNY (¥)$ / ¥ | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
STATEMENT OF CASH FLOWS | ||||
Net cash provided by (used in) operating activities | $ 778,729 | ¥ 5,354,151 | ¥ (615,327,191) | ¥ 82,566,300 |
Loan to subsidiaries and VIE | (217,000,000) | |||
Net cash used in investing activities | 60,049,526 | 412,870,517 | (10,809,388) | (734,716,301) |
Contribution from shareholders | 16,354,156 | |||
Net cash provided by financing activities | 26,440,173 | 181,789,413 | 830,154,156 | 775,164,828 |
Effect of foreign exchange rate changes | (913,840) | (6,283,113) | (24,740,525) | 18,233,044 |
Net increase (decrease) in cash and cash equivalents | 86,354,588 | 593,730,968 | 179,277,052 | 141,247,871 |
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF YEAR | 99,480,135 | 683,975,671 | 504,698,619 | 363,450,748 |
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH AT YEAR END | $ 185,834,723 | ¥ 1,277,706,639 | 683,975,671 | 504,698,619 |
Currency exchange rate | $ / ¥ | 0.1454 | 0.1454 | ||
Parent Company | Reportable legal entity | ||||
STATEMENT OF CASH FLOWS | ||||
Net cash provided by (used in) operating activities | $ 5,263,322 | ¥ 36,187,975 | 15,030,828 | (14,594,973) |
Loan to subsidiaries and VIE | (75,599,825) | (519,786,600) | (69,544,598) | (131,300,255) |
Net cash used in investing activities | (75,599,825) | (519,786,600) | (69,544,598) | (131,300,255) |
Contribution from shareholders | 99,191,246 | 681,989,413 | ||
Net cash provided by financing activities | 99,191,246 | 681,989,413 | ||
Effect of foreign exchange rate changes | (913,840) | (6,283,113) | (24,740,525) | 18,233,044 |
Net increase (decrease) in cash and cash equivalents | 27,940,903 | 192,107,675 | (79,254,295) | (127,662,184) |
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF YEAR | 17,074,600 | 117,396,413 | 196,650,708 | 324,312,892 |
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH AT YEAR END | $ 45,015,503 | ¥ 309,504,088 | ¥ 117,396,413 | ¥ 196,650,708 |
Currency exchange rate | 0.1454 | 0.1454 |