Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
Entity Registrant Name | X Financial |
Entity Central Index Key | 0001725033 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2019 |
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 |
Entity Interactive Data Current | Yes |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Class A ordinary shares | |
Entity Common Stock, Shares Outstanding | 223,067,943 |
Class B ordinary shares | |
Entity Common Stock, Shares Outstanding | 97,600,000 |
Common share | |
Entity Common Stock, Shares Outstanding | 320,667,943 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
ASSETS | |||
Cash and cash equivalents | $ 144,500,022 | ¥ 1,005,980,251 | ¥ 1,069,361,250 |
Restricted cash (including RMB4, 861, 491 and RMB449,978,760 from Consolidated Trusts as of December 31, 2018 and 2019, respectively) | 73,877,902 | 514,323,181 | 208,345,389 |
Accounts receivable and contract assets, net of allowance for doubtful accounts of RMB221,213,326 and RMB192,909,907 as of December 31, 2018 and 2019, respectively | 110,769,377 | 771,154,249 | 1,379,293,243 |
Loans receivable from Xiaoying Credit Loans and Revolving Loans, net | 41,591,688 | 289,553,016 | |
Loan receivable from Xiaoying Housing Loans, net | 41,591,688 | 289,553,016 | |
Loans held for sale | 41,591,688 | 289,553,016 | 632,716,508 |
Loans at fair value (including RMB33,417,119 and RMB2,782,332,885 from Consolidated Trusts as of December 31, 2018 and 2019, respectively) | 399,657,112 | 2,782,332,885 | 33,417,119 |
Prepaid expenses and other current assets (including RMB296,080 and RMB37,073,985 from Consolidated Trusts as of December 31, 2018 and 2019, respectively) | 176,128,276 | 1,226,169,830 | 115,192,835 |
Financial guarantee derivative | 103,416,108 | 719,962,262 | 358,249,913 |
Amount due from related party | 20,000,000 | ||
Deferred tax assets, net | 66,856,477 | 465,441,419 | 346,647,582 |
Long-term investments | 41,963,622 | 292,142,341 | 287,222,720 |
Property and equipment, net | 2,892,779 | 20,138,951 | 23,214,797 |
Intangible assets, net | 5,045,635 | 35,126,704 | 28,400,406 |
Other non-current assets | 9,878,440 | 68,771,724 | 6,806,456 |
TOTAL ASSETS | 1,189,438,432 | 8,280,632,478 | 4,636,969,497 |
LIABILITIES | |||
Payable to investors at fair value of the Consolidated Trusts (including nil and RMB3,006,349,475 from the consolidated VIEs, without recourse to the Company as of December 31, 2018 and 2019, respectively) | (431,835,082) | (3,006,349,475) | |
Guarantee liabilities (including RMB19,297,718 and RMB11,106,620 from the consolidated VIEs, without recourse to the Company as of December 31, 2018 and 2019, respectively) | 2,510,170 | 17,475,303 | 20,898,201 |
Short-term bank borrowings (including 198,000,000 and nil from the consolidated VIEs, without recourse to the Company as of December 31, 2018 and 2019, respectively) | 198,000,000 | ||
Accrued payroll and welfare (including RMB23,329,971 and RMB22,677,991 from the consolidated VIEs, without recourse to the Company as of December 31, 2018 and 2019, respectively) | 9,142,532 | 63,648,476 | 93,463,926 |
Other tax payable (including RMB95,184,938 and RMB34,725,447 from the consolidated VIEs, without recourse to the Company as of December 31, 2018 and 2019, respectively) | 8,343,500 | 58,085,777 | 134,129,068 |
Income tax payable (including RMB93,611,597 and RMB227,047,349 from the consolidated VIEs, without recourse to the Company as of December 31, 2018 and 2019, respectively) | 48,980,931 | 340,995,447 | 312,238,213 |
Deposit payable to channel cooperators | 15,645,876 | 108,923,460 | 134,042,199 |
Accrued expenses and other liabilities (including RMB117,547,625 and RMB103,479,695 from the consolidated VIEs, without recourse to the Company as of December 31, 2018 and 2019, respectively) | 39,420,765 | 274,439,480 | 178,701,474 |
Other non-current liabilities (including nil and RMB26,683,382 from the consolidated VIEs, without recourse to the Company as of December 31, 2018 and 2019, respectively) | 6,076,005 | 42,299,924 | |
Deferred tax liabilities(including nil and RMB198,000,000 from the consolidated VIEs, without recourse to the Company as of December 31, 2017 and 2018 respectively) | 188,093 | 1,309,468 | 47,427,564 |
TOTAL LIABILITIES | 562,142,954 | 3,913,526,810 | 1,118,900,645 |
Commitments and Contingencies (Note 15) | |||
Equity: | |||
Common shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized, 303,614,298 and 320,667,943 shares issued and outstanding as of December 31, 2018 and 2019, respectively) | 28,906 | 201,240 | 189,586 |
Additional paid-in capital | 429,107,865 | 2,987,363,137 | 2,824,223,031 |
Retained earnings | 188,341,234 | 1,311,194,007 | 640,114,859 |
Other comprehensive income | 9,638,427 | 67,100,802 | 52,494,757 |
Total X Financial shareholders' equity | 627,116,432 | 4,365,859,186 | 3,517,022,233 |
Non-controlling interests | 179,046 | 1,246,482 | 1,046,619 |
TOTAL EQUITY | 627,295,478 | 4,367,105,668 | 3,518,068,852 |
TOTAL LIABILITIES AND EQUITY | 1,189,438,432 | 8,280,632,478 | 4,636,969,497 |
Xiaoying Housing Loan | |||
ASSETS | |||
Accounts receivable and contract assets, net of allowance for doubtful accounts of RMB221,213,326 and RMB192,909,907 as of December 31, 2018 and 2019, respectively | 134,267 | 934,741 | 5,322,594 |
Loans receivable from Xiaoying Credit Loans and Revolving Loans, net | 12,860,994 | 89,535,665 | 128,101,279 |
Loan receivable from Xiaoying Housing Loans, net | 12,860,994 | 89,535,665 | 128,101,279 |
LIABILITIES | |||
Guarantee liabilities (including RMB19,297,718 and RMB11,106,620 from the consolidated VIEs, without recourse to the Company as of December 31, 2018 and 2019, respectively) | $ 18,672 | ¥ 129,996 | ¥ 1,600,482 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)shares |
Restricted cash | $ 73,877,902 | ¥ 514,323,181 | ¥ 208,345,389 | |
Allowance for doubtful accounts of accounts receivable and contract assets | 27,709,775 | 192,909,907 | $ 31,775,307 | 221,213,326 |
Loans at fair value | 399,657,112 | 2,782,332,885 | 33,417,119 | |
Prepaid expenses and other current assets | 176,128,276 | 1,226,169,830 | 115,192,835 | |
Payable to investors at fair value of the Consolidated Trusts | 431,835,082 | 3,006,349,475 | ||
Guarantee liabilities | 2,510,170 | 17,475,303 | $ 3,001,839 | 20,898,201 |
Short-term bank borrowings | 198,000,000 | |||
Accrued payroll and welfare | 9,142,532 | 63,648,476 | 93,463,926 | |
Other tax payable | 8,343,500 | 58,085,777 | 134,129,068 | |
Income tax payable | 48,980,931 | 340,995,447 | 312,238,213 | |
Deposit payable to channel cooperators | 15,645,876 | 108,923,460 | 134,042,199 | |
Accrued expenses and other liabilities | 39,420,765 | 274,439,480 | 178,701,474 | |
Other non-current liabilities | 6,076,005 | 42,299,924 | ||
Deferred tax liabilities | $ 188,093 | ¥ 1,309,468 | ¥ 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 | 1,000,000,000 | 1,000,000,000 |
Common shares, shares issued (in shares) | shares | 320,667,943 | 320,667,943 | 303,614,298 | 303,614,298 |
Common shares, shares outstanding (in shares) | shares | 320,667,943 | 320,667,943 | 303,614,298 | 303,614,298 |
Consolidated Trusts | ||||
Restricted cash | $ 64,635,405 | ¥ 449,978,760 | ¥ 4,861,491 | |
Loans at fair value | 399,657,112 | 2,782,332,885 | 33,417,119 | |
Prepaid expenses and other current assets | 5,325,345 | 37,073,985 | 296,080 | |
Payable to investors at fair value of the Consolidated Trusts | 431,835,082 | 3,006,349,475 | ||
Other tax payable | 378,712 | 2,636,517 | 284,564 | |
Accrued expenses and other liabilities | $ 1,821,737 | 12,682,569 | ||
Consolidated VIEs | ||||
Payable to investors at fair value of the Consolidated Trusts | 3,006,349,475 | 0 | ||
Guarantee liabilities | 11,140,899 | 19,297,718 | ||
Short-term bank borrowings | 0 | 198,000,000 | ||
Accrued payroll and welfare | 22,677,991 | 23,329,971 | ||
Other tax payable | 34,725,447 | 95,184,938 | ||
Income tax payable | 227,047,349 | 93,611,597 | ||
Accrued expenses and other liabilities | 103,479,695 | 117,547,625 | ||
Other non-current liabilities | 26,683,382 | 0 | ||
Deferred tax liabilities | ¥ 688,209 | ¥ 47,145,390 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | 12 Months Ended | |||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | |
Net revenues | ||||
Total net revenue | $ 443,570,627 | ¥ 3,088,049,995 | ¥ 3,540,600,044 | ¥ 1,786,935,193 |
Operating costs and expenses: | ||||
Origination and servicing | 234,827,551 | 1,634,822,450 | 1,185,937,128 | 760,143,348 |
General and administrative | 32,675,712 | 227,481,772 | 220,023,783 | 98,236,038 |
Sales and marketing | 14,817,664 | 103,157,613 | 205,725,801 | 76,584,015 |
Provision for contingent guarantee liabilities | 1,112,868 | 7,747,561 | 216,363,770 | 182,578,676 |
Provision for accounts receivable and contract assets | 34,644,319 | 241,186,823 | 396,996,410 | 167,700,495 |
Income from operations | 116,719,798 | 812,579,891 | 1,275,205,277 | 501,692,621 |
Interest income, net | 2,784,621 | 19,385,973 | 4,224,817 | 3,632,860 |
Foreign exchange gain (loss) | 88,540 | 616,395 | 9,677 | (478,590) |
Investment income (loss), net | (1,801,011) | (12,538,280) | 1,500,000 | |
Change in fair value of financial guarantee derivative | (35,389,099) | (246,371,828) | (200,971,302) | (18,110,752) |
Fair value adjustments related to Consolidated Trusts | (9,216,371) | (64,162,533) | (12,358,626) | 9,750,565 |
Other income (loss), net | 3,746,268 | 26,080,766 | (5,904,176) | 89,690 |
Income before income taxes and gain (loss) from equity in affiliates | 95,365,488 | 663,915,450 | 1,084,922,919 | 478,575,264 |
Income tax benefit (expense) | (13,373,358) | (93,102,643) | 209,921,188 | 138,248,227 |
Gain (loss) from equity in affiliates, net of tax | 2,507,670 | 17,457,899 | 8,055,105 | (832,385) |
Net income | 111,246,516 | 774,475,992 | 883,056,836 | 339,494,652 |
Less: net gain (loss) attributable to non-controlling interests | 28,709 | 199,863 | (55,057) | (780,350) |
Net income attributable to X Financial | $ 111,217,807 | ¥ 774,276,129 | ¥ 883,111,893 | ¥ 340,275,002 |
Net income per share-basic | (per share) | $ 0.35 | ¥ 2.47 | ¥ 3.08 | ¥ 1.30 |
Weighted average number of ordinary shares outstanding-basic | 313,757,887 | 313,757,887 | 286,588,402 | 261,219,657 |
Net income (loss) per share-diluted (In dollars per share) | (per share) | $ 0.35 | ¥ 2.42 | ¥ 2.91 | ¥ 1.22 |
Weighted average number of ordinary shares outstanding-diluted (In shares) | 319,747,392 | 319,747,392 | 303,984,284 | 279,710,804 |
Net income | $ 111,246,516 | ¥ 774,475,992 | ¥ 883,056,836 | ¥ 339,494,652 |
Other comprehensive income (loss), net of tax of nil: | ||||
Foreign currency translation adjustments | 2,098,027 | 14,606,045 | 19,045,117 | (24,463,956) |
Comprehensive income | 113,344,543 | 789,082,037 | 902,101,953 | 315,030,696 |
Less: comprehensive loss attributable to non-controlling interests | 28,709 | 199,863 | (55,057) | (780,350) |
Comprehensive income attributable to X Financial | 113,315,834 | 788,882,174 | 902,157,010 | 315,811,046 |
Xiaoying Credit Loans And Revolving Loans | ||||
Operating costs and expenses: | ||||
Provision for loan receivable | 5,407,114 | 37,643,244 | ||
Total operating expenses | 326,850,829 | 2,275,470,104 | 2,265,394,767 | 1,285,242,572 |
Xiaoying Housing Loan | ||||
Net revenues | ||||
Total net revenue | 152,812 | 1,063,849 | 24,972,178 | 104,985,946 |
Operating costs and expenses: | ||||
Provision for loan receivable | 3,365,601 | 23,430,641 | 40,347,875 | |
Loan facilitation service | Direct Model | ||||
Net revenues | ||||
Total net revenue | 285,271,530 | 1,986,003,343 | 2,957,571,967 | 1,231,054,733 |
Loan facilitation service | Direct Model | Xiaoying Housing Loan | ||||
Net revenues | ||||
Total net revenue | 83,110 | 578,598 | 5,780,118 | |
Loan facilitation service | Intermediary Model | ||||
Net revenues | ||||
Total net revenue | 34,311,105 | 238,867,054 | 228,272,373 | 302,614,463 |
Loan facilitation service | Intermediary Model | Xiaoying Housing Loan | ||||
Net revenues | ||||
Total net revenue | 12,673 | 88,225 | 1,247,846 | 16,573,570 |
Post-origination service | ||||
Net revenues | ||||
Total net revenue | 47,501,395 | 330,695,212 | 131,243,431 | 50,326,664 |
Post-origination service | Xiaoying Housing Loan | ||||
Net revenues | ||||
Total net revenue | 19,015 | 132,382 | 463,129 | 278,234 |
Financing income | ||||
Net revenues | ||||
Total net revenue | 58,663,104 | 408,400,792 | 76,103,961 | 130,740,149 |
Financing income | Xiaoying Housing Loan | ||||
Net revenues | ||||
Total net revenue | ¥ | 8,290,828 | 66,723,545 | ||
Other revenue | ||||
Net revenues | ||||
Total net revenue | 17,823,493 | 124,083,594 | 147,408,312 | 72,199,184 |
Other revenue | Xiaoying Housing Loan | ||||
Net revenues | ||||
Total net revenue | $ 38,014 | ¥ 264,644 | ¥ 9,190,257 | ¥ 21,410,597 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
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 | Equity Attributable to X FinancialUSD ($) | Equity Attributable to X FinancialCNY (¥) | Common shareUSD ($)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 ($) | Accumulated other comprehensive incomeCNY (¥) | Non-controlling InterestUSD ($) | Non-controlling InterestCNY (¥) | USD ($)shares | CNY (¥)shares |
Balance at Dec. 31, 2016 | ¥ 372,507,339 | ¥ 145,624 | ¥ 897,720,155 | ¥ (583,272,036) | ¥ 57,913,596 | ¥ 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) | 1,000,000,000 | ¥ 27,820 | 999,972,180 | 1,000,000,000 | ||||||||||
Issuance of new shares (in shares) (Note 1) | shares | 41,992,104 | 41,992,104 | ||||||||||||
Sharebased compensation (Note 13) | 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 | 1,762,327,960 | ¥ 173,444 | 1,971,701,910 | (242,997,034) | 33,449,640 | 3,213,041 | 1,765,541,001 | |||||||
Balance (in shares) at Dec. 31, 2017 | shares | 280,087,342 | 280,087,342 | ||||||||||||
Issuance of new shares (Note 1) | 681,989,413 | ¥ 16,142 | 681,973,271 | 681,989,413 | ||||||||||
Issuance of new shares (in shares) (Note 1) | shares | 23,526,956 | 23,526,956 | ||||||||||||
Sharebased compensation (Note 13) | 171,836,485 | 171,836,485 | 171,836,485 | |||||||||||
Net income (loss) | 883,111,893 | 883,111,893 | (55,057) | 883,056,836 | ||||||||||
Foreign currency translation adjustments | 19,045,117 | 19,045,117 | 19,045,117 | |||||||||||
Acquisition in additional interest of subsidiary | (1,288,635) | (1,288,635) | (2,111,365) | (3,400,000) | ||||||||||
Balance at Dec. 31, 2018 | $ 505,188,633 | 3,517,022,233 | $ 27,232 | ¥ 189,586 | $ 405,674,255 | 2,824,223,031 | $ 91,946,746 | 640,114,859 | $ 7,540,400 | 52,494,757 | $ 150,337 | 1,046,619 | $ 505,338,970 | ¥ 3,518,068,852 |
Balance (in shares) at Dec. 31, 2018 | shares | 303,614,298 | 303,614,298 | 303,614,298 | 303,614,298 | ||||||||||
Retained Earnings (Accumulated Deficit) | ¥ 640,114,859 | |||||||||||||
Stockholders' Equity Attributable to Parent | 3,517,022,233 | |||||||||||||
Issuance of new shares (Note 1) | 6,035,665 | ¥ 11,654 | 6,024,011 | ¥ 6,035,665 | ||||||||||
Issuance of new shares (in shares) (Note 1) | shares | 17,053,645 | 17,053,645 | ||||||||||||
Exercise of share option | $ | 866,969 | $ 1,674 | 865,295 | $ 866,969 | ||||||||||
Exercise of share option (in shares) | shares | 17,053,645 | 17,053,645 | 14,007,474 | 14,007,474 | ||||||||||
Sharebased compensation (Note 13) | 22,568,315 | 157,116,095 | 22,568,315 | 157,116,095 | $ 22,568,315 | ¥ 157,116,095 | ||||||||
Issuance of RSU | $ | 111,217,807 | 111,217,807 | 28,709 | 111,246,516 | ||||||||||
Net income (loss) | 774,276,129 | 774,276,129 | 199,863 | 111,246,516 | 774,475,992 | |||||||||
Foreign currency translation adjustments | 14,606,045 | 14,606,045 | 2,098,027 | 14,606,045 | ||||||||||
Distribution of dividend | (14,823,319) | (103,196,981) | (14,823,319) | (103,196,981) | (14,823,319) | (103,196,981) | ||||||||
Acquisition in additional interest of subsidiary | $ | 2,098,027 | 2,098,027 | 2,098,027 | |||||||||||
Balance at Dec. 31, 2019 | $ 627,116,432 | ¥ 4,365,859,186 | $ 28,906 | ¥ 201,240 | $ 429,107,865 | ¥ 2,987,363,137 | $ 188,341,234 | ¥ 1,311,194,007 | $ 9,638,427 | ¥ 67,100,802 | $ 179,046 | ¥ 1,246,482 | $ 627,295,478 | ¥ 4,367,105,668 |
Balance (in shares) at Dec. 31, 2019 | shares | 320,667,943 | 320,667,943 | 320,667,943 | 320,667,943 | ||||||||||
Retained Earnings (Accumulated Deficit) | $ 188,341,234 | ¥ 1,311,194,007 | ||||||||||||
Stockholders' Equity Attributable to Parent | $ 627,116,432 | ¥ 4,365,859,186 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net income | $ 111,246,516 | ¥ 774,475,992 | ¥ 883,056,836 | ¥ 339,494,652 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Depreciation and amortization | 1,634,591 | 11,379,697 | 9,635,032 | 5,366,195 |
Share-based compensation | 22,568,315 | 157,116,095 | 171,836,485 | 74,009,575 |
Impairment of long-term investments | 1,801,011 | 12,538,280 | ||
Gain on disposal of investment | (1,500,000) | |||
Loss (gain) from equity in affiliates | (2,507,670) | (17,457,899) | (8,055,105) | 832,385 |
Gain from disposal of property and equipment | (343) | (2,389) | (66) | (103) |
Fair value adjustments related to Consolidated Trusts | (9,216,371) | (64,162,533) | (12,358,626) | 9,750,565 |
Change in fair value of financial guarantee derivative | 35,389,099 | 246,371,828 | 200,971,302 | 18,110,752 |
Provision for accounts receivable and contract assets | 34,644,319 | 241,186,823 | 396,996,410 | 167,700,495 |
Interest income | (3,894,331) | (27,111,557) | ||
Deferred tax benefits | (23,688,117) | (164,911,933) | (3,162,072) | (257,121,164) |
Other non-cash expenses | 35,616 | 247,954 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable and contract assets | 52,709,381 | 366,952,171 | (665,341,737) | (1,138,792,125) |
Prepaid expenses and other current assets | (102,827,141) | (715,861,991) | (6,440,698) | (11,850,168) |
Amount due from related party | 2,872,820 | 20,000,000 | (20,000,000) | |
Origination of loans held for sale | (1,157,267,466) | (8,056,664,647) | (5,096,651,671) | (15,072,262,146) |
Sales and maturity of loans held for sale | 1,201,152,704 | 8,362,184,896 | 5,232,573,583 | 14,461,175,264 |
Loan receivable from loans receivables Xiaoying Housing Loans | 2,174,003 | 15,134,973 | 29,146,788 | (176,499,046) |
Other non-current assets | 43,082 | 299,925 | (3,054,940) | (1,400,688) |
Guarantee liabilities | (491,669) | (3,422,898) | (524,270,832) | 444,507,581 |
Financial guarantee derivative | (87,345,827) | (608,084,177) | (612,482,131) | 35,150,164 |
Accrued payroll and welfare | (4,282,721) | (29,815,450) | 15,691,600 | 30,959,302 |
Other tax payable | (10,922,935) | (76,043,291) | 28,180,979 | 89,845,696 |
Income tax payable | 4,130,718 | 28,757,234 | (89,093,593) | 395,221,541 |
Deposit payable to channel cooperators | (3,608,081) | (25,118,739) | (220,120) | (57,232,429) |
Accrued expenses and other current liabilities | 9,249,467 | 64,392,936 | 38,048,852 | 29,206,511 |
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 86,266,016 | 600,566,742 | 5,354,151 | (615,327,191) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchase of property and equipment and intangible assets | (2,175,179) | (15,143,162) | (38,634,331) | (20,645,321) |
Disposal of property and equipment | 16,576 | 115,402 | 5,332 | 2,997 |
Loan to shareholder | (217,000,000) | |||
Loan collected from shareholder | 217,000,000 | |||
Principal payment of loans at fair value | (811,092,815) | (5,646,665,956) | (67,852,371) | (1,444,135,285) |
Principal collection of loans at fair value | 425,452,142 | 2,961,912,723 | 744,351,887 | 1,492,468,221 |
Purchase of long-term investments | (225,000,000) | (55,000,000) | ||
Disposal of long-term investments | 16,500,000 | |||
Purchase of loans' earnings rights from related party | (54,583,585) | (380,000,000) | ||
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (442,382,861) | (3,079,780,993) | 412,870,517 | (10,809,388) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from exercise of options | 866,969 | 6,035,665 | ||
Proceeds from initial public offering | 713,089,781 | |||
Payments of initial public offering cost | (31,100,368) | |||
Proceeds from equity financing | 1,000,000,000 | |||
Dividends to shareholders | (14,823,319) | (103,196,981) | ||
Acquisition of additional interest in subsidiary | (1,400,000) | |||
Proceeds from short-term bank borrowings | 29,159,126 | 203,000,000 | 198,000,000 | |
Repayments of short-term bank borrowings | (57,600,046) | (401,000,000) | ||
Loan from related parties | 285,467,540 | |||
Loan repayment to related parties | (392,113,384) | |||
Cash received from investors- Consolidated Trusts | 619,532,305 | 4,313,060,000 | 1,096,800,000 | |
Cash paid to investors- Consolidated Trusts | (187,697,223) | (1,306,710,525) | (696,800,000) | (1,160,000,000) |
CASH PROVIDED BY FINANCING ACTIVITIES | 389,437,812 | 2,711,188,159 | 181,789,413 | 830,154,156 |
Effect of foreign exchange rate changes | 1,525,882 | 10,622,885 | (6,283,113) | (24,740,525) |
NET INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 34,846,849 | 242,596,793 | 593,730,968 | 179,277,052 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR | 183,531,075 | 1,277,706,639 | 683,975,671 | 504,698,619 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT YEAR END | 218,377,924 | 1,520,303,432 | 1,277,706,639 | 683,975,671 |
Supplemental disclosures of cash flow information: | ||||
Income taxes paid, net of refunds | 6,184,041 | 43,052,057 | 302,176,854 | 147,849 |
Interest paid | 499,116 | 3,474,745 | ||
Non-cash investing activities: | ||||
Payable for purchase of property and equipment and intangible assets | 1,586,987 | |||
Reconciliation to amounts on consolidated balance sheets: | ||||
Total cash and cash equivalents and restricted cash | 218,377,924 | 1,520,303,432 | 1,277,706,639 | ¥ 683,975,671 |
Xiaoying Credit Loans And Revolving Loans | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Provision for loan receivable | 5,407,114 | 37,643,244 | ||
Provision for Loan and Lease Losses | 5,407,114 | 37,643,244 | ||
Xiaoying Housing Loan | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Provision for loan receivable | 3,365,601 | 23,430,641 | 40,347,875 | |
Provision for Loan and Lease Losses | $ 3,365,601 | ¥ 23,430,641 | ¥ 40,347,875 |
Organization and principal acti
Organization and principal activities | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019, 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 Shenzhen Beier Asset Management Co., Ltd ("Shenzhen Beier") July 1, 2018 Shenzhen 100% Capital management 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 Shenzhen Ying Ai Gou Trading Co., Ltd. ("Shenzhen Ying Ai Gou") October 25, 2018 Shenzhen 100% E-commerce services |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2019 | |
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. For the arrangements among Beijing WFOE, each of the VIEs other than Shenzhen Beier, and their shareholders, 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.The arrangement among Beijing WFOE, Shenzhen Beier and its shareholder does not specify its effective term. (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. For the agreements among Beijing WFOE, each of the VIEs other than Shenzhen Beier, and their shareholders, these arrangements will remain effective for ten years. Unless notified by Beijing WFOE, the parties to these agreements shall extend the term of these agreements for another ten years. The agreement among Beijing WFOE, Shenzhen Beier and its shareholder does not specify its effective term. (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. For the agreements between Beijing WFOE and each of the VIEs other than Shenzhen Beier, unless Beijing WFOE terminates these agreements in advance, these agreements will remain effective for ten years. Unless agreed by both parties in writing, this agreement shall be automatically renewed for another ten years upon its expiration. The agreement between Beijing WFOE and Shenzhen Beier will remain effective permanently, unless early erminated by Beijing WFOE in writing pursuant to this agreement or otherwise required by PRC laws. (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. Both direct model and intermediary model are adopted for these trusts. Under direct model, loans are originated from trusts to borrowers while under intermediary model, 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 determines to consolidate these trusts as the Group is the primary beneficiary, due to the following reasons: 1. the Group has the power to direct the operating activities of the trusts; 2. the Group absorbs or enjoys the potential residual losses or returns of these trusts. Under intermediary model, 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 liabilities to investors to emphasize the relevancy of the accounting information of its consolidated financial statements. 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 and 2019, one of the subsidiaries of the Group funded RMB50,000,000 and RMB93,000,000 (US$13,358,614) to loan products facilitated on the Group’s platform through third-party trust companies. The trusts are consolidated by the Group and the underlying loans are recorded on the Group’s consolidated balance sheets as loans held for investment under “Loans at fair value”. The following financial statement amounts and balances of the Consolidated Trust are included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: As of December 31, As of December 31, 2018 2019 2019 RMB RMB US$ Assets: Restricted cash 4,861,491 449,978,760 64,635,405 Loans at fair value 33,417,119 2,782,332,885 399,657,112 Prepaid expenses and other current assets 296,080 37,073,985 5,325,345 Total assets 38,574,690 3,269,385,630 469,617,862 Liabilities: Payable to investors at fair value of the Consolidated Trusts — 3,006,349,475 431,835,082 Accrued interest payable — 39,994,897 5,744,907 Other tax payable 284,564 2,636,517 378,712 Accrued expenses and other liabilities — 12,682,569 1,821,737 Total liabilities 284,564 3,061,663,458 439,780,438 Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Net revenue 117,684,121 61,475,364 340,613,941 48,926,131 Net income 43,583,819 41,986,452 227,051,351 32,613,886 Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Net cash provided by (used in) operating activities 26,997,889 12,547,230 123,521,027 17,742,685 Net cash provided by (used in) investing activities 48,332,936 676,499,516 (2,684,753,233) (385,640,672) Net cash provided by (used in) financing activities (63,200,000) (696,800,000) 3,006,349,475 431,835,082 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, 2018 2019 2019 RMB RMB US$ Assets: Cash and cash equivalents 236,432,366 336,512,754 48,337,033 Restricted cash 5,880,989 449,978,760 64,635,405 Accounts receivable and contract assets, net 1,266,169,464 466,630,408 67,027,264 Loans at fair value 33,417,119 2,782,332,885 399,657,112 Prepaid expenses and other current assets 60,501,113 429,093,130 61,635,372 Deferred tax assets, net 173,287,013 420,822,781 60,447,410 Long-term investments 287,222,720 277,126,560 39,806,740 Property and equipment, net 21,333,636 14,396,986 2,067,998 Intangible assets, net 1,628,117 6,091,145 874,938 Financial guarantee derivative 358,249,913 719,962,262 103,416,108 Loan receivable from Xiaoying Housing Loans, net 128,101,279 89,535,665 12,860,994 Other non-current assets 6,345,345 44,169,105 6,344,495 Total assets 2,578,569,074 6,036,652,441 867,110,869 Liabilities: Payable to investors at fair value of the Consolidated Trusts — 3,006,349,475 431,835,082 Guarantee liabilities 19,297,718 11,140,899 1,600,290 Accrued payroll and welfare 23,329,971 22,677,991 3,257,490 Other tax payable 95,184,938 34,725,447 4,987,998 Income tax payable 93,611,597 227,047,349 32,613,311 Accrued expenses and other liabilities 117,547,625 103,479,695 14,863,928 Short-term bank borrowings 198,000,000 — — Other non-current liabilities — 26,683,382 3,832,828 Deferred tax liabilities 47,145,390 688,209 98,855 Total liabilities 594,117,239 3,432,792,447 493,089,782 Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Net revenue 1,474,934,261 2,168,665,965 2,650,594,409 380,734,064 Net income (loss) 325,182,393 408,242,461 (14,609,225) (2,098,484) Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Net cash provided by (used in) operating activities (592,979,915) (243,451,042) 442,501,953 63,561,429 Net cash provided by (used in) investing activities (10,809,388) 451,499,516 (2,706,673,269) (388,789,289) Net cash provided by (used in) financing activities 830,154,156 (498,800,000) 2,808,349,475 403,394,162 The VIEs and Consolidated Trusts contributed 83%, 61% and 86% of the Group’s consolidated revenue for the years ended December 31, 2017, 2018 and 2019 respectively. As of December 31, 2018 and 2019, the VIEs and Consolidated Trusts accounted for an aggregate of 56% and 73% of the consolidated total assets, and 53% and 88% 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 14 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, unrecognized tax benefits, the indefinite reinvestment assertion, 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 Revolving Loan. Xiaoying Credit Loan consists of Xiaoying Card Loan and Xiaoying Preferred Loan products. Xiaoying Revolving Loan refers to the loans with revolving credit, including Yaoqianhua which was previously named as Xiaoying Wallet. 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 less than 1 year. 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 RMB520,952,503, nil and nil during the years ended December 31, 2017, 2018 and 2019, 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 most of the loans facilitated by the Group’s platform, either borrowers or institutional investors 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. As of December 31, 2018 and 2019, 90% and 77% of loans, respectively, have signed credit insurance agreement with ZhongAn. 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, and the Group’s contractual obligation is at any time it 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 contractual guarantee fees in (1) is not influenced by default or early repayment of borrowers. 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, 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 |
Fair value of assets and liabil
Fair value of assets and liabilities | 12 Months Ended |
Dec. 31, 2019 | |
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, 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, 2019 (RMB) (RMB) (RMB) (RMB) Assets Loans at fair value — — 2,782,332,885 2,782,332,885 Financial guarantee derivative — — 719,962,262 719,962,262 Total assets — — 3,502,295,147 3,502,295,147 Payable to investors at fair value — — 3,006,349,475 3,006,349,475 Total liabilities — — Balance at Fair Level 1 Level 2 Level 3 Value December 31, 2019 (US$) (US$) (US$) (US$) Assets Loans at fair value — — 399,657,112 399,657,112 Financial guarantee derivative — — 103,416,108 103,416,108 Total assets — — 503,073,220 503,073,220 Payable to investors at fair value — — 431,835,082 431,835,082 Total liabilities 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 9.62% to 16.79% for the year ended December 31, 2019. The following table sets forth the Group’s financial guarantee derivative movement activities for the years ended December 31, 2018 and 2019. 2018 2018 2019 2019 RMB USD RMB USD Balance at January 1 53,260,916 7,746,479 (358,249,913) (51,459,380) Estimated payment to ZhongAn based on the pre-agreed Cap (1) 1,784,817,072 259,590,877 2,270,629,689 326,155,547 Less: Initially estimated net guarantee service fee to be collected (2) 1,607,696,701 233,829,787 2,039,737,713 292,989,990 Add (Less): Subsequent changes in estimated net guarantee service fee to be collected for outstanding loans (3) 23,850,931 3,468,974 15,479,852 2,223,542 Change in fair value of financial guarantee derivative 200,971,302 29,230,064 246,371,828 35,389,099 Add: Guarantee service fee received from borrowers 1,019,863,268 148,332,960 1,877,885,497 269,741,374 Less: Compensation paid to ZhongAn 1,632,345,399 237,414,792 2,485,969,674 357,087,201 Balance at December 31 (358,249,913) (52,105,289) (719,962,262) (103,416,108) Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31) 370,958,304 53,953,648 155,618,319 22,353,173 Changes in fair value related to balance outstanding at December 31 108,540,263 15,786,527 120,363,772 17,289,174 Note: (1) Amount represents estimated payment to ZhongAn which is the aggregated amount of guarantee fees, which would be the amount of loan principle multiplied by annualized guarantee fee ratio. The obligation is not influenced by default and early repayment of borrowers. (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 corresponding amount. The total loan products related to guarantee derivatives facilitated during the years ended December 31, 2018 and 2019 were RMB25,389,448,598 and RMB27,942,291,698 (US$ 4,013,659,068), respectively. As of December 31, 2019, financial guarantee derivatives has an asset position of RMB719,962,262 (US$103,416,108) in comparison with it being an asset position of RMB358,249,913 as of December 31, 2018, 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, 2019, 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, 2018 and 2019, the maximum potential undiscounted future payment the Group would be required to make is RMB370,958,304 and RMB155,618,319 (US$22,353,173) respectively which also reflects the maximum potential payment to ZhongAn based on the pre-agreed Cap. The following table represents the outstanding loan balance, remaining weighted average contractual term and estimated default rate of the outstanding loans as of December 31, 2018 and 2019, respectively. As of As of As of December 31, December 31, December 31, 2018 2019 2019 RMB RMB US$ Outstanding loan balance 12,811,666,471 12,492,069,873 1,794,373,563 Remaining weighted average contractual term (Month) 7.53 7.13 7.13 Estimated default rate 11.06 % 10.13 % 10.13 % 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, 2018 and 2019, the discounted cash flow methodology is used to estimate the fair value of loans and payables to investors. As of December 31, 2018 and 2019, 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, 2018 December 31, 2019 Range of Inputs Range of Inputs Financial Instrument Unobservable Input Weighted-Average Weighted-Average Loans and payable to investors at fair value Discount rates 7.12 % 8.28 % Net cumulative expected loss rates (1) 7.59 % 9.99 % (1) Represents the net of default rate, prepayment 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, 2018 and 2019. 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, 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 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) 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, 2018 loan principal principal of principal fair value 31, 2019 2019 Xiaoying Credit Loan 33,417,119 4,938,191,061 (2,961,912,723) 708,474,895 64,162,533 2,782,332,885 62,412,104 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, 2018 loan principal principal of principal fair value 31, 2019 2019 Xiaoying Credit Loan 4,800,069 709,326,763 (425,452,142) 101,766,051 9,216,371 399,657,112 8,964,938 Payable to investors at fair value of the Consolidated Trusts RMB Balance at December 31, 2017 667,080,871 Initial contribution — Principal payment (696,800,000) Changes in fair value 29,719,129 Balance at December 31, 2018 — Changes in fair value related to balance outstanding at December 31, 2018 — Payable to investors at fair value of the Consolidated Trusts RMB US$ Balance at December 31, 2018 — — Initial contribution 4,313,060,000 619,532,305 Principal payment (1,306,710,525) (187,697,223) Changes in fair value — — Balance at December 31, 2019 3,006,349,475 431,835,082 Changes in fair value related to balance outstanding at December 31, 2019 — — The unpaid balance of loans at fair value as of December 31, 2018 and 2019 were RMB35,167,548 and RMB2,719,920,781 (US$390,692,174). 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 RMB1,750,429 and RMB62,412,104 (US$8,964,938) as of December 31, 2018 and 2019, respectively. The unpaid balance of payable to investors as of December 31, 2018 and 2019 were nil and RMB3,006,349,475 (US$431,835,082). The difference between the aggregate fair value and unpaid principal balance for payable to investors at fair value of the Consolidated Trusts is primarily due to the time value of money, amounted nil and nil respectively as of December 31, 2018 and 2019. The difference between the aggregate fair value and unpaid principal balance for both loans at fair value and payable to investors at fair value was recorded in Fair value adjustments related to Consolidated Trusts in the consolidated statements of comprehensive income. Financial Instruments Recorded at Fair Value on a non‑recurring basis The Group records its loans held for sale at fair value on a non-recurring basis when the fair value is less than the carrying amount. Given most of loans held for sale are traded with unrelated third party investors in a short period of time at face value, the Group determines that the face value of loans approximate its fair value upon origination and are classified as level 2 fair value measurement. Financial Instruments Not Recorded at Fair Value Financial instruments, including cash and cash equivalents, accounts receivable and contract assets, accounts payable and amounts due from related party. The carrying values of cash and cash equivalents, accounts receivable and contract assets, accounts payable, and amounts due from related party approximate their fair value reported in the consolidated balance sheets due to the short term nature of these assets and liabilities. |
Prepaid expense and other curre
Prepaid expense and other current assets | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid expense and other current assets | |
Prepaid expense and other current assets | 4. Prepaid expenses and other current assets Prepaid expenses and other current assets consist of the following: As of As of December 31, December 31, 2018 2019 2019 RMB RMB US$ Deposits to cooperators(1) 40,000,000 518,720,216 74,509,497 Earnings rights associated with loan assets(2) — 380,000,000 54,583,585 Prepaid expenses(3) 43,312,139 160,697,858 23,082,803 Input VAT to be deducted — 79,150,506 11,369,259 Interest receivable of consolidated trusts 296,080 35,451,817 5,092,335 Advance to employee 4,401,076 6,330,011 909,249 Receivables from borrowers 2,173,292 1,206,974 173,371 Others Total prepaid expenses and other current assets (1) (2) The original maturity for Loan#1 was from January 31, 2019 to January 30, 2020, and the interest rate applied is 15.6%. On January 30, 2020, Loan#1 had been partially repaid by RMB30 million, and the maturity date of remaining RMB70 million had been extended to October 30, 2020. The loan was secured by pledged shares provided by the borrower's controlling shareholder. The original maturity for Loan#2 was from May 9, 2019 to November 9, 2019, and the interest rate applied is 8%. As of date of this report, the maturity date of the entire Loan#2 had been extended to November 9, 2020. The loan was guaranteed by borrower's shareholder. As of December 31, 2019, the Group considered there was no impairment allowance needed for the earnings rights associated with loan assets. (3) |
Property and equipment, net
Property and equipment, net | 12 Months Ended |
Dec. 31, 2019 | |
Property and equipment, net | |
Property and equipment, net | 5. Property and equipment, net Property and equipment, net consists of the following: As of December 31, As of December 31, 2018 2019 2019 RMB RMB US$ Computer and transmission equipment 15,522,913 21,552,895 3,095,880 Furniture and office equipment 3,659,047 3,732,638 536,160 Leasehold improvements 20,217,502 20,842,929 2,993,899 Motor vehicles 816,103 816,103 117,226 Total property and equipment 40,215,565 46,944,565 6,743,165 Accumulated depreciation (17,000,768) (26,805,614) (3,850,386) Property and equipment, net 23,214,797 20,138,951 2,892,779 Depreciation expense was RMB4,687,503, RMB9,245,203 and RMB10,544,813 (US$1,514,668) for the years ended December 31, 2017, 2018 and 2019 respectively. Gains from the disposal of property and equipment during the years ended December 31, 2017, 2018 and 2019 were RMB103, RMB66 and RMB2,389 (US$343) respectively. |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2019 | |
Intangible assets | |
Intangible assets | 6. Intangible assets Intangible assets, net consists of the following: As of December 31, As of December 31, 2018 2019 2019 RMB RMB US$ Licenses (1) 26,000,000 26,600,000 3,820,851 Software and others 4,362,895 11,324,077 1,626,602 Accumulated amortization (1,962,489) (2,797,373) (401,818) Intangible assets, net 28,400,406 35,126,704 5,045,635 (1) During 2018, the Group acquired an insurance broker license at a cost of RMB26,000,000. During 2019, the Group further acquired an insurance sale on line license at a cost of RMB 600,000 (US$86,185). Amortization expenses were RMB678,692, RMB389,829 and RMB834,884 (US$119,924) for the years ended December 31, 2017, 2018 and 2019 respectively. The Group expects to record amortization expenses of RMB1,206,846 (US$173,353), RMB963,277 (US$138,366), RMB906,974 (US$130,279), RMB888,206 (US$127,583) and RMB888,206 (US$127,583) for the years ending December 31, 2020, 2021, 2022 ,2023 and 2024 respectively. |
Short-term bank borrowings
Short-term bank borrowings | 12 Months Ended |
Dec. 31, 2019 | |
Short-term bank borrowings | |
Short-term bank borrowings | 7. 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 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 while in 2019, the Group additionally drew a short-term loan amounting to RMB203,000,000(US$29,159,126). The short-term loans were repaid in the fourth quarter of 2019. |
Accrued expenses and other liab
Accrued expenses and other liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Accrued expenses and other liabilities | |
Accrued expenses and other liabilities | 8. Accrued expenses and other liabilities Accrued expenses and other current liabilities consist of the following: As of December 31, As of December 31, 2018 2019 2019 RMB RMB US$ Fund attributable to institutional investors(1) 5,776,821 50,888,482 7,309,673 Accrued interest payable of Consolidated Trusts — 39,994,898 5,744,908 Accrued office expense 10,890,896 1,036,656 148,906 Professional fee payable 48,302,566 26,101,318 3,749,220 Commission fee payable(2) 75,280,155 63,384,314 9,104,587 Lease liabilities — 20,213,070 2,903,426 Other accrued expenses 38,451,036 72,820,742 10,460,045 Total accrued expenses and other current liabilities 178,701,474 274,439,480 39,420,765 (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, 2018 and 2019. (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, 2019 | |
Guarantee liabilities | |
Guarantee liabilities | 9. Guarantee liabilities The movement of guarantee liabilities during the years ended December 31, 2017, 2018 and 2019 are as follows: 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 2017 Xiaoying Credit Loan 38,368,513 797,431,715 (411,239,134) (19,172,658) 109,086,588 514,475,024 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 2018 Xiaoying Credit Loan 514,475,024 5,884,134 (667,658,887) (15,691,880) 182,289,328 19,297,719 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 RMB As of Provision at As of January 1, the inception Released on Contingent December 31, 2019 of new loans Net payout (1) expiration liability (2) 2019 Xiaoying Credit Loan 19,297,719 — (6,333,472) (3,366,501) 289,211 9,886,957 Xiaoying Housing Loan 1,600,482 184,036 97,593 (1,752,115) — 129,996 Internet Channel — — — — 7,458,350 7,458,350 Others — — — — — — Total 20,898,201 184,036 (6,235,879) (5,118,616) 7,747,561 17,475,303 USD As of Provision at As of January 1, the inception Released on Contingent December 31, 2019 of new loans Net payout (1) expiration liability (2) 2019 Xiaoying Credit Loan 2,771,944 — (909,746) (483,568) 41,543 1,420,173 Xiaoying Housing Loan 229,895 26,435 14,018 (251,676) — 18,672 Internet Channel — — — — 1,071,325 1,071,325 Others — — — — — — Total 3,001,839 26,435 (895,728) (735,244) 1,112,868 2,510,170 (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 Group recognized a contingent liability of RMB7,458,350 (US$1,071,325) relating to expected default loans referred by a cooperated Fintech channel partner who experiences business difficulties. In order to maintain the reputation among investors, the Group decided at its sole discretion to reimburse investors if the channel partner fails to fulfill its obligation to make the reimbursement. 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, 2018 and 2019, respectively: Maximum potential undiscounted future Remaining weighted payment average contractual Estimated net As of December 31, 2018 (RMB) term (Month) default rate Xiaoying Credit Loan 61,705,508 18.02 16.57 % Internet Channel 2,004,234,932 8.19 % Xiaoying Housing Loan 282,830,247 3.60 0.60 % Other products 1,427,397 3.67 % Total 2,350,198,084 Maximum potential Maximum potential undiscounted future undiscounted future Remaining weighted payment payment average contractual Estimated net As of December 31, 2019 (RMB) (USD) term (Month) default rate Xiaoying Credit Loan 20,314,823 2,918,042 13.07 15.7 % Internet Channel (1) 1,399,671,106 201,050,175 0.43 — Xiaoying Housing Loan 21,666,185 3,112,153 7.9 0.60 % Other products — — — — Total 1,441,652,114 207,080,370 (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, 2019. As of December 31, 2018 and 2019, the maximum potential undiscounted future payment that had been collateralized by real estate was estimated to be RMB0.28 billion and RMB21.67 million (US$3.11 million)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 2018, the Group entered into a series of arrangements with various external asset management companies to provide 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 companies. Upon the default of the borrower, the asset management companies directly compensate 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 the asset management companies. 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. Though it is the selected companies who provide credit enhancements on the loans facilitated to the borrowers, since 2019, the Group voluntarily provides guarantee service to the investors from its platform for reputational maintenance, if any indication of operational deterioration is found among these selected companies. |
Related party balances and tran
Related party balances and transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related party balances and transactions | |
Related party balances and transactions | 10 . Related party balances and transactions In 2018, Jiangxi Ruijing, one of the Group's associates, provided guarantee over loans facilitated with a principal amount of RMB1,333,503,026 through the Company's platform and received RMB21,918,796 guarantee fees from the borrowers. In 2018, the Group remitted RMB20,000,000 to Jiangxi Ruijing as a form of security deposit to cover for any circumstances in which the loans referred by Company were fictitious. In 2019, Jiangxi Ruijing ceased guarantee service to the company's platform and refunded the security deposit in full amount. In 2019, the Group purchased earnings rights of two loans from Jiangxi Ruijin. The considerations paid amounted to RMB100,000,000(US$14,364,101) and RMB280,000,000(US$40,219,483), respectively, which equal to the principal amounts of the underlying loans (Note 4(2)). The associated interest income amounted to RMB27,111,557(US$3,894,331). In 2019, the Group transferred loan portfolios with an aggregate amount of RMB108.7 million (US$15.6 million) to Zijinzhonghao (Zhejiang) Investment Co., Ltd. ("ZJZH"), an entity controlled by Mr. Tang Yue. The considerations received by the Group were determined based on the outstanding loan balances on the transaction dates. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income taxes | |
Income taxes | 11. 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 income tax expense for this entity has been recognized in the consolidated financial statements as it has no assessable income for the years ended December 31, 2017, 2018 and 2019. 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 the PRC, entities founded in certain industrial cooperation zones can be subject to a reduced enterprise income tax rate of 15%. One subsidiary and one VIE in Shenzhen became qualified enterprises to enjoy the preferential income tax rate of 15% from 2018 to 2020. Moreover, a qualified software enterprise is entitled to a tax holiday consisting of two-year exemption starting from the first profit-making year and 50% reduction for the subsequent three years. One subsidiary became a qualified software enterprise and was subject to a tax exemption in 2018 and the preferential tax rate of 12.5% from 2019 to 2021. 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%. According to PRC Tax Administration and Collection Law, the statute of limitations is three years if an 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 2019, the Group is subject to examination of the PRC tax authorities. Current tax expense and deferred tax expense which are substantially all 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, 2017 2018 2019 2019 RMB RMB RMB US$ Current tax 395,369,391 213,083,260 71,809,290 10,314,759 Deferred tax (257,121,164) (3,162,072) (164, 911,933) (23,688,117) Total 138,248,227 209,921,188 (93,102,643) (13,373,358) The pre-tax income for different jurisdiction is shown as follows: Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Cayman Islands 86,909 (11,832,862) (9,978,594) (1,433,335) Hong Kong entities (17,470) (2,423,249) (140,208) (20,140) PRC entities 478,505,825 1,099,179,030 674,034,252 96,818,963 Total 478,575,264 1,084,922,919 663,915,450 95,365,488 A reconciliation between income tax expense computed by applying the PRC tax rate of 25% to income before income tax expense and the reported amount of income tax expense is as follows: Year ended Year ended Year ended December 31, December 31, December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Expected tax at PRC rate 119,643,817 271,230,730 165,978,862 23,841,372 Other expenses not deductible for tax purposes 119,376 226,076 27,243,710 3,913,314 Share based compensation expenses not deductible for tax purposes 18,502,393 42,959,121 39,101,140 5,616,527 Effect of tax holiday and preferential tax rate(1) — (104,548,726) (279,823,276) (40,194,099) Effect of different tax rate of subsidiary operation in other jurisdiction (20,242) 3,164,192 2,853,547 409,886 Research and development tax deduction — (32,720,713) (12,657,389) (1,818,120) Adjustment on income tax of the previous periods (2) — (17,208,473) 961,418 Tax on undistributed earnings/(loss) of VIEs — 46,419,145 (46,419,145) (6,667,693) Valuation allowance movement 2,883 399,836 4,451,281 639,387 Others — — 5,207,209 747,969 Total 138,248,227 209,921,188 (93,102,643) (13,373,358) (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, 2017 2018 2019 2019 RMB RMB RMB US$ The aggregate amount tax benefit of the tax holiday and preferential tax rate — 104,548,726 279,823,276 40,194,099 The aggregate effect on basic and diluted net income per share: —Basic — 0.36 0.89 0.13 —Diluted — 0.34 0.88 0.13 (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 and carryforwards that give rise to the deferred tax balances at December 31, 2018 and 2019 are as follows: As of December 31, As of December 31, 2018 2019 2019 Deferred tax assets: RMB RMB US$ Long-term investments 1,575,000 3,455,742 496,386 Accrued expenses 3,394,533 30,867,551 4,433,846 Accounts receivables — 105,168,108 15,106,454 Guarantee liabilities 235,329,500 210,014,843 30,166,745 Financial guarantee derivatives 54,770,514 116,363,471 16,714,567 Loan receivable from Xiaoying Housing Loans 3,886,705 7,231,727 1,038,773 Loans held for sale 853,899 — — Loans receivable from Xiaoying Credit Loans and Xiaoying Revolving Loans — 10,264,710 1,474,433 Operating loss carry forwards 46,845,223 5,631,764 808,952 Lease liabilities — 13,226,632 1,899,887 Others 395,882 149,079 21,413 Deferred tax assets, gross 347,051,256 502,373,627 72,161,456 Valuation allowance (403,674) (4,854,955) (697,371) Total deferred tax assets, net 346,647,582 497,518,672 71,464,085 Deferred tax liabilities: Property and equipment 1,008,419 662,682 95,187 Long-term investments — 646,786 92,905 Investment in Consolidated Trusts — 18,953,213 2,722,459 Right-of-use assets — 13,124,040 1,885,150 Investment in VIEs(1) 46,419,145 — — Total deferred tax liabilities 47,427,564 33,386,721 4,795,701 (1) A deferred tax liability was recorded for taxable temporary differences attributable to the excess of financial reporting amounts over tax basis for investments in domestic VIEs. Movement of the valuation allowance is as follows: As of December 31, As of December 31, 2018 2019 2019 RMB RMB US$ Balance as of January 1 (3,838) (403,674) (57,984) Addition (399,836) (4,451,281) (639,387) Balance as of December 31 (403,674) (4,854,955) (697,371) 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, 2018 and 2019, the Company had tax operating loss carry forwards of RMB188,212,704 and RMB38,990,106 (US$5,600,578) 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 2022 to 2024 if not utilized. 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, including consideration of specific known trend of profits expected to be reflected within the industry and (iii) future taxable income arising from implementing tax planning strategies. On the basis of this evaluation, as of December 31, 2018 and 2019 a valuation allowance of RMB403,674 and RMB4,854,955(US$697,371) 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 is given to subjective evidence such as our projections for growth. In 2019, the Group reassessed the business plan and profit forecast for one of its subsidiaries and concluded that it is not more likely than not to achieve sufficient future taxable income to realize its deferred tax assets. Accordingly, the Group has recognized an increase in the valuation allowance against the ability to utilize beginning-of-year deferred tax assets in future years of RMB4,451,281(US$639,387) for the years ended December 31, 2019. 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. As of December 31, 2019, the FIE of the Group had cumulative profits of RMB2,327,155,384 (US$334,274,955). The related unrecognized deferred tax liabilities were RMB232,715,538(US$33,427,495) as of December 31, 2019. A deferred tax liability should be recorded for taxable temporary differences attributable to the excess of financial reporting amounts over tax basis amounts, including those differences attributable to a more than 50% interest in a domestic subsidiary. However, recognition is not required in situations where the tax law provides a means by which the reported amount of that investment can be recovered tax-free and the enterprise expects that it will ultimately use that means. The Group accrued deferred tax liabilities on the earnings of the VIEs of RMB46,419,145 and nil as of December 31, 2018 and 2019. Unrecognized tax benefit A roll-forward of unrecognized tax benefits are as follows: Year ended December 31, Year ended December 31, 2018 2019 2019 RMB RMB US$ Balance at beginning of the year — — — Additions for tax positions — 319,206,371 45,851,126 Reductions for tax position — (72,811,764) (10,458,755) Balance at end of the year — 246,394,607 35,392,371 The accrued interest and penalties related to income taxes at December 31, 2018 and 2019 is set forth below: Year ended December 31, Year ended December 31, 2018 2019 2019 RMB RMB US$ Accrued interest — 3,805,963 546,692 As of December 31, 2019, the Group considered that a tax impact of RMB138,076,827 (US$19,833,495) arising from impairment losses and charge-offs of accounts receivable and contract assets and a tax impact of RMB181,129,544(US$26,017,631) related to the provision for contingent guarantee liabilities, should be reflected as unrecognized tax benefit, as the Group would not file or settle such amounts in the future income tax return. The Group has presented the unrecognized tax benefit in the income tax payable balances as at December 31, 2019. As at December 31, 2019, the unrecognized tax benefit of RMB 246,394,607 (US$ 35,392,371), if recognized upon audit settlement or statute expiration, would not affect the Group's effective tax rate. As of and for the year ended December 31, 2019 interest related to unrecognized tax benefits was RMB3,805,963(US$546,692), which was recorded as part of the income tax payable and income tax expense in the consolidated financial statements. |
Net income per share and net in
Net income per share and net income attributable to common stockholders | 12 Months Ended |
Dec. 31, 2019 | |
Net income per share and net income attributable to common stockholders | |
Net income per share and net income attributable to common stockholders | 12. Net income per share and net income attributable to common stockholders The following table details the computation of the basic and diluted net income per share: Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Net income attributable to X Financial 340,275,002 883,111,893 774,276,129 111,217,807 Shares (denominator): Weighted average number of ordinary shares used in computing basic EPS 261,219,657 286,588,402 313,757,887 313,757,887 Basic net income per share 1.30 3.08 2.47 0.35 Diluted effects of stock options and RSUs 18,491,147 17,395,882 5,989,505 5,989,505 Weighted average number of ordinary shares used in computing diluted EPS 279,710,804 303,984,284 319,747,392 319,747,392 Diluted net income per share 1.22 2.91 2.42 0.35 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, 2017 2018 2019 Stock options 7,857,000 56,926,054 52,405,826 Restricted stocks units — — 3,689,400 |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based compensation | |
Share-based compensation | 13. Share-based compensation Share options 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, October 31, 2018 and April 30, 2019, the Board of Directors of X Financial granted 630,000, 7,425,000, 16,616,000, 841,054, 475,000 and 155,000 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, 2018 and 2019 were RMB13.08 and RMB10.33 per share respectively. January 25, June 29, May 3, October 11, April 30, May 9, October 31, April 30, 2015 2015 2016 2017 2018 2018 2018 2019 RMB 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 16.65 Exercise Price 0.27 0.27 0.27 - 10.71 0.27 - 27.02 25.42 30.27 27.93 31.96 Expected Volatility per annum (“p.a.”) 43.00 % 38.00 % 42.00 % 38.60 % 45.47 % 39.3 % 43.90 % 30.15 % Risk-Free Rate (p.a.) 1.81 % 2.33 % 1.81 % 2.35 % 2.96 % 2.94 % 3.15 % 2.97 % Exercise Multiple 2.5 2.5 2.5 2.5 2.5 5.58-38.33 2.5 NIL Dividend Yield (p.a.) NIL NIL NIL NIL NIL NIL NIL NIL Time to Maturity (Years) 10 10 10 10 10 5 10 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, 2019 is presented below: Intrinsic value of Number of Exercise Price Remaining options Options RMB Contractual RMB Outstanding, as of January 1, 2019 77,466,699 0.27 - 30.27 6.07 - 9.83 457,386,371 Granted 155,000 31.96 9.33 — Exercised 14,007,474 0.27 - 10.71 5.07 - 7.78 — Forfeited/Cancelled 3,452,998 0.27 - 31.96 5.49 - 9.33 — Outstanding, as of December 31, 2019 60,161,227 0.27 - 31.96 5.07 - 9.33 74,834,115 Vested and expected to vest as of December 31, 2019 60,161,227 0.27 - 31.96 5.07 - 9.33 74,834,115 Exercisable as of December 31, 2019 9,959,062 0.27 - 25.42 5.07 - 9.93 30,925,254 The Group recognized the compensation cost for the stock options on a straight line basis. For the years ended December 31, 2017, 2018 and 2019 the Group recorded compensation expenses of RMB74,009,575, RMB171,836,485 and RMB150,943,580 (US$21,681,689) respectively for the stock options granted to the Group’s employees. The Group allocated share‑based compensation expense for share option as follows: Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Origination and servicing 55,403,160 103,124,758 88,671,136 12,736,812 General and administrative 18,227,289 66,264,371 60,445,030 8,682,385 Sales and marketing 379,126 2,447,356 1,827,414 262,492 As of December 31, 2017, 2018 and 2019, there were RMB477,996,293, RMB425,970,675 and RMB232,061,272 (US$33,333,516) respectively of total unrecognized compensation expense related to unvested stock options granted. As of December 31, 2019 that cost is expected to be recognized over a weighted‑average period of 2.43 years. There was no deferred tax benefits recognized for the year ended December 31, 2017, 2018 and 2019. Restricted stocks unit On April 15, 2019, the Board of Directors of X Financial granted 150,000 of restricted stock units to certain directors. The restricted stock units shall vest over a period from two to three years. The restricted stock unites have no expiration period. On November 20, 2019, the Board of Directors of X Financial granted 1,789,400 of restricted stock units to certain employees. The restricted stocks shall expire 10 years from the date of grant and vest over a period from three to four years. On August 13, 2019 and November 20, 2019, the Board of Directors decided to cancel 1,500,000 and 250,000 of unvested options of certain senior managements and concurrently granted 1,500,000 and 250,000 of restricted stock units as replacement awards to the senior managements. The incremental compensation expenses of RMB360,592 (US$51,796) was equal to the excess of the fair value of the modified award immediately after the modification over the fair value of the original award immediately before the modification. A summary of restricted share units activity during the year ended December 31, 2019 is presented below: Weighted-Average Number of Grant-Date Restricted Shares Fair Value RMB Outstanding, as of January 1, 2019 — — Granted 3,689,400 8.21 Vested 49,998 17.60 Forfeited — — Outstanding, as of December 31, 2019 3,639,402 8.21 The total grant date fair value of restricted shares vested in 2019 was RMB4,332,911 (US$622,384). For the year ended December 31, 2019, the Group recorded compensation expenses of RMB6,172,515 (US$886,626) for the restricted shares granted to the Group's directors and employees. The Group allocated share-based compensation expense for restricted share as follows: Year ended December 31, 2019 2019 RMB US$ Origination and servicing 446,808 64,180 General and administrative 5,717,025 821,199 Sales and marketing 8,682 1,247 As of December 31, 2019, there was RMB34,246,159 (US$4,919,153) of total unrecognized compensation expense related to unvested restricted shares granted. As of December 31, 2019 that cost is expected to be recognized over a weighted-average period of 2.51 years. |
Statutory reserves and restrict
Statutory reserves and restricted net assets | 12 Months Ended |
Dec. 31, 2019 | |
Statutory reserves and restricted net assets | |
Statutory reserves and restricted net assets | 14. 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, additional paid-in capital and statutory reserve funds, as determined pursuant to PRC GAAP, are RMB1,632,374,093 and RMB2,621,559,394 (US$376,563,445) as of December 31, 2018 and 2019 respectively. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and contingencies | |
Commitments and contingencies | 15. Commitments and contingencies Operating lease as lessee As disclosed in note 2, the Group has adopted ASC Topic 842 on 1 January, 2019. These lease payments have been recognized as “Other non-current assets” and the current and non-current portions of lease liabilities have been recorded as “Accrued expenses and other current liabilities” and “Other non-current liabilities” in the balance sheet as at 31 December 2019, except for short-term leases. Contingencies On November 26, 2019, a putative class action complaint captioned Shivakumar Ningappa v. X Financial, et al., No. 657033/2019, was filed in the Supreme Court of the State of New York, New York County against the Company, certain of our officers and directors, and the underwriters of our initial public offering, asserting violations of the Securities Act of 1933 based on our September 2018 initial public offering. Two additional lawsuits were subsequently filed in the same court, containing substantially identical allegations. On February 5, 2020, all three lawsuits were consolidated under the caption "In re X Financial Securities Litigation," No. 657033/2019, and a consolidated amended complaint was filed on February 14, 2020. On December 9, 2019 a putative class action complaint captioned Xiangdong Chen v. X Financial, et al., No. 1:19-cv-06908-KAM-SJB, was filed in the Eastern District of New York against the Company and certain of our officers and directors, asserting violations of the Securities Act of 1933 based on our September 2018 initial public offering. 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, 2019 | |
Subsequent events | |
Subsequent events | 16. Subsequent events In January 2020, a novel strain of coronavirus, known as COVID-19, was reported to have surfaced in China, which soon spread throughout the country and other continents. The COVID-19 outbreak may impose disruptions on China's macroeconomy, and it is difficult to estimate the duration and extent of it. The COVID-19 outbreak has adversely impacted on the business operation of companies in a variety of industries in China. Consequently, the COVID-19 outbreak may adversely affect the Company's financial condition and operating results for 2020, including but not limited to negative impact to the Company's total revenues, credit drawdowns, proceeds from collection of loan principal, additional allowance for loan receivables and guarantee liabilities. In the first quarter of 2020, our total loan facilitation amount showed a decrease from the same period in 2019. The default rate of our borrowers showed an increase in the first quarter of 2020. The extent to which the Company's results are impacted will depend on the future developments of COVID-19, which are highly uncertain and cannot be predicted. The Company will continue to hold close attention to it to assess the potential effects on the business operation and financial position. As of the issue date of this report, the assessment is still in progress. Mainly due to the outbreak of COVID-19, a selected channel cooperator of the Group falls into business difficulties and to maintain its reputation, the Group voluntarily provides guarantee services to individual investors from its own platform. In January and March, 2020, the Group enters into short-term loan agreements with two different PRC banks and draws short-term bank borrowings amounting to RMB161,000,000(US$23,126,203) and RMB180,495,000(US$25,926,485) with interest rates of 3.95% and 4.15% per annum and deposits of US$25,500,000 and US$28,650,000, respectively. |
CONDENSED FINANCIAL INFORMATION
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | 12 Months Ended |
Dec. 31, 2019 | |
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | |
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | SCHEDULE I CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY BALANCE SHEETS (in Renminbi “RMB”, except share and per share data) As of December 31, As of December 31, 2018 2019 2019 RMB RMB US$ Assets: Cash and cash equivalents 309,504,088 14,051,790 2,018,413 Prepaid expenses and other current assets 5,823,242 4,762,941 684,154 Amount due from subsidiaries and VIEs 818,695,709 1,017,874,882 146,208,579 Investments in subsidiaries and VIEs 2,438,249,431 3,378,505,504 485,291,951 Total assets 3,572,272,470 4,415,195,117 634,203,097 Liabilities: Accrued expenses and other liabilities 55,250,237 49,335,931 7,086,665 Total liabilities 55,250,237 49,335,931 7,086,665 Equity: Common shares 189,586 201,240 28,906 Additional paid-in capital 2,824,223,031 2,987,363,137 429,107,865 Retained earnings (Accumulated deficits) 640,114,859 1,311,194,007 188,341,234 Accumulated other comprehensive income 52,494,757 67,100,802 9,638,427 Total equity 3,517,022,233 4,365,859,186 627,116,432 Total liabilities and equity 3,572,272,470 4,415,195,117 634,203,097 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, 2017 2018 2019 2019 RMB RMB RMB US$ General and administrative (74,802,853) (79,265,535) (14,451,949) (2,075,893) Foreign exchange loss (478,590) — — — Interest income 1,358,777 122,320 77,030 11,065 Equity in profit (loss) of subsidiaries and VIEs 414,197,668 961,430,600 785,350,473 112,808,537 Other income (loss), net — 824,508 3,300,575 474,098 Net income (loss) 340,275,002 883,111,893 774,276,129 111,217,807 Other comprehensive income (loss) (24,463,956) 19,045,117 14,606,045 2,098,027 Comprehensive income (loss) 315,811,046 902,157,010 788,882,174 113,315,834 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, 2017 2018 2019 2019 RMB RMB RMB US$ Net cash provided by (used in) operating activities 15,030,828 36,187,975 (10,004,797) (1,437,099) Loan to subsidiaries and VIE (69,544,598) (519,786,600) (199,179,173) (28,610,298) Net cash used in investing activities (69,544,598) (519,786,600) (199,179,173) (28,610,298) Contribution from shareholders — 681,989,413 6,035,665 866,969 Dividend paid — — (103,196,981) (14,823,319) Net cash provided by (used in) financing activities — 681,989,413 (97,161,316) (13,956,350) Effect of foreign exchange rate changes (24,740,525) (6,283,113) 10,892,988 1,564,680 Net increase (decrease) in cash and cash equivalents (79,254,295) 192,107,675 (295,452,298) (42,439,067) Cash and cash equivalents, beginning of year 196,650,708 117,396,413 309,504,088 44,457,481 Cash and cash equivalents, end of year 117,396,413 309,504,088 14,051,790 2,018,414 |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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. For the arrangements among Beijing WFOE, each of the VIEs other than Shenzhen Beier, and their shareholders, 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.The arrangement among Beijing WFOE, Shenzhen Beier and its shareholder does not specify its effective term. (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. For the agreements among Beijing WFOE, each of the VIEs other than Shenzhen Beier, and their shareholders, these arrangements will remain effective for ten years. Unless notified by Beijing WFOE, the parties to these agreements shall extend the term of these agreements for another ten years. The agreement among Beijing WFOE, Shenzhen Beier and its shareholder does not specify its effective term. (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. For the agreements between Beijing WFOE and each of the VIEs other than Shenzhen Beier, unless Beijing WFOE terminates these agreements in advance, these agreements will remain effective for ten years. Unless agreed by both parties in writing, this agreement shall be automatically renewed for another ten years upon its expiration. The agreement between Beijing WFOE and Shenzhen Beier will remain effective permanently, unless early erminated by Beijing WFOE in writing pursuant to this agreement or otherwise required by PRC laws. (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. Both direct model and intermediary model are adopted for these trusts. Under direct model, loans are originated from trusts to borrowers while under intermediary model, 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 determines to consolidate these trusts as the Group is the primary beneficiary, due to the following reasons: 1. the Group has the power to direct the operating activities of the trusts; 2. the Group absorbs or enjoys the potential residual losses or returns of these trusts. Under intermediary model, 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 liabilities to investors to emphasize the relevancy of the accounting information of its consolidated financial statements. 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 and 2019, one of the subsidiaries of the Group funded RMB50,000,000 and RMB93,000,000 (US$13,358,614) to loan products facilitated on the Group’s platform through third-party trust companies. The trusts are consolidated by the Group and the underlying loans are recorded on the Group’s consolidated balance sheets as loans held for investment under “Loans at fair value”. The following financial statement amounts and balances of the Consolidated Trust are included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: As of December 31, As of December 31, 2018 2019 2019 RMB RMB US$ Assets: Restricted cash 4,861,491 449,978,760 64,635,405 Loans at fair value 33,417,119 2,782,332,885 399,657,112 Prepaid expenses and other current assets 296,080 37,073,985 5,325,345 Total assets 38,574,690 3,269,385,630 469,617,862 Liabilities: Payable to investors at fair value of the Consolidated Trusts — 3,006,349,475 431,835,082 Accrued interest payable — 39,994,897 5,744,907 Other tax payable 284,564 2,636,517 378,712 Accrued expenses and other liabilities — 12,682,569 1,821,737 Total liabilities 284,564 3,061,663,458 439,780,438 Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Net revenue 117,684,121 61,475,364 340,613,941 48,926,131 Net income 43,583,819 41,986,452 227,051,351 32,613,886 Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Net cash provided by (used in) operating activities 26,997,889 12,547,230 123,521,027 17,742,685 Net cash provided by (used in) investing activities 48,332,936 676,499,516 (2,684,753,233) (385,640,672) Net cash provided by (used in) financing activities (63,200,000) (696,800,000) 3,006,349,475 431,835,082 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, 2018 2019 2019 RMB RMB US$ Assets: Cash and cash equivalents 236,432,366 336,512,754 48,337,033 Restricted cash 5,880,989 449,978,760 64,635,405 Accounts receivable and contract assets, net 1,266,169,464 466,630,408 67,027,264 Loans at fair value 33,417,119 2,782,332,885 399,657,112 Prepaid expenses and other current assets 60,501,113 429,093,130 61,635,372 Deferred tax assets, net 173,287,013 420,822,781 60,447,410 Long-term investments 287,222,720 277,126,560 39,806,740 Property and equipment, net 21,333,636 14,396,986 2,067,998 Intangible assets, net 1,628,117 6,091,145 874,938 Financial guarantee derivative 358,249,913 719,962,262 103,416,108 Loan receivable from Xiaoying Housing Loans, net 128,101,279 89,535,665 12,860,994 Other non-current assets 6,345,345 44,169,105 6,344,495 Total assets 2,578,569,074 6,036,652,441 867,110,869 Liabilities: Payable to investors at fair value of the Consolidated Trusts — 3,006,349,475 431,835,082 Guarantee liabilities 19,297,718 11,140,899 1,600,290 Accrued payroll and welfare 23,329,971 22,677,991 3,257,490 Other tax payable 95,184,938 34,725,447 4,987,998 Income tax payable 93,611,597 227,047,349 32,613,311 Accrued expenses and other liabilities 117,547,625 103,479,695 14,863,928 Short-term bank borrowings 198,000,000 — — Other non-current liabilities — 26,683,382 3,832,828 Deferred tax liabilities 47,145,390 688,209 98,855 Total liabilities 594,117,239 3,432,792,447 493,089,782 Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Net revenue 1,474,934,261 2,168,665,965 2,650,594,409 380,734,064 Net income (loss) 325,182,393 408,242,461 (14,609,225) (2,098,484) Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Net cash provided by (used in) operating activities (592,979,915) (243,451,042) 442,501,953 63,561,429 Net cash provided by (used in) investing activities (10,809,388) 451,499,516 (2,706,673,269) (388,789,289) Net cash provided by (used in) financing activities 830,154,156 (498,800,000) 2,808,349,475 403,394,162 The VIEs and Consolidated Trusts contributed 83%, 61% and 86% of the Group’s consolidated revenue for the years ended December 31, 2017, 2018 and 2019 respectively. As of December 31, 2018 and 2019, the VIEs and Consolidated Trusts accounted for an aggregate of 56% and 73% of the consolidated total assets, and 53% and 88% 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 14 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, unrecognized tax benefits, the indefinite reinvestment assertion, 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 Revolving Loan. Xiaoying Credit Loan consists of Xiaoying Card Loan and Xiaoying Preferred Loan products. Xiaoying Revolving Loan refers to the loans with revolving credit, including Yaoqianhua which was previously named as Xiaoying Wallet. 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 less than 1 year. 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 RMB520,952,503, nil and nil during the years ended December 31, 2017, 2018 and 2019, 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 most of the loans facilitated by the Group’s platform, either borrowers or institutional investors 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. As of December 31, 2018 and 2019, 90% and 77% of loans, respectively, have signed credit insurance agreement with ZhongAn. 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, and the Group’s contractual obligation is at any time it 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 contractual guarantee fees in (1) is not influenced by default or early repayment of borrowers. 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, 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 the 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. During the years ended December 31, 2018 and 2019, the Group cooperate with several micro credit companies who use their own funds to provide credit to borrowers first; the Group provide facilitation and post-origination services for these loans and receive service fee from borrowers. These micro credit companies transfer their rights as creditors shortly to SPVs controlled by the Group at the price of the carrying amount of the outstanding loan principal balance and accumulated accrued interest not paid by the borrowers as of the day on which the creditor’s rights is legally transferred to SPVs. The SPVs usually further transfer their creditor’s rights to third party investors including individual investors, corporations, institutional funding partners in a short period at the price of the carrying amount of the outstanding loan principal balance and the accumulated accrued interest not paid by the borrowers as of the day on which the creditor’s rights is legally transferred to investors. The Group accounts the interests paid by the borrowers during the period of holding the creditor’s rights as the financing income and the fee charged by the micro credit companies, which is proportionate to the loans facilitated as the origination and servicing cost in its consolidated financial statements. In this case, the SPVs are deemed as the Intermediary. 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. 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, 2018 and 2019 amounted to RMB632,716,508 and RMB289,553,016 (US$41,591,688) respectively and was recorded in “Loans held for sale” and “Loans receivable from Xiaoying Credit Loans and Xiaoying Revolving Loans” 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, 2017, 2018 and 2019 were generated from the PRC. As the remaining duration of the Group’s performance obligations of the contracts is one year or less, the Group elects to apply the exemption of disclosing the aggregate amount of transaction price allocated to the performance obligations at the end of 31 December, 2017, 2018 and 2019, The following table illustrates the disaggregation of revenue by product the Group offered in 2017, 2018 and 2019: 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 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 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 2019 (RMB) (RMB) (RMB) (RMB) (RMB) (RMB) Major products Xiaoying Credit Loan 1,834,813,952 223,668,549 314,767,947 396,039,771 71,024,093 2,840,314,312 Xiaoying Revolving Loan 63,667,334 13,174,930 8,163,362 12,361,021 9,069,408 106,436,055 Xiaoying Housing Loan 578,598 88,225 132,382 — 264,644 1,063,849 Internet Channel (1) 86,733,843 1,703,032 7,568,757 — 1,890,227 97,895,859 Other loan products 209,616 232,318 62,764 — 10,403 515,101 Other service (2) — — — — 41,824,819 41,824,819 Total 1,986,003,343 238,867,054 330,695,212 408,400,792 124,083,594 3,088,049,995 Loan Loan facilitation facilitation service- service-Direct Intermediary Post-origination Financing Other Model Model service income revenue Total 2019 (US$) (US$) (US$) (US$) (US$) (US$) Major products Xiaoying Credit Loan 263,554,534 32,127,977 45,213,587 56,887,554 10,201,973 407,985,625 Xiaoying Revolving Loan 9,145,240 1,892,460 1,172,594 1,775,550 1,302,739 15,288,583 Xiaoying Housing Loan 83,110 12,673 19,015 — 38,014 152,812 Internet Channel (1) 12,458,537 244,625 1,087,184 — 271,514 14,061,860 Other loan products 30,109 33,370 9,015 — 1,494 73,988 Other services (2) — — — — 6,007,759 6,007,759 Total 285,271,530 34,311,105 47,501,395 58,663,104 17,823,493 443,570,627 (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, 2017, 2018 and 2019. The Group historically did not record any contract liabilities for both 2018 and 2019 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. Since 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, 2018 and 2019 are nil and nil respectively. Remaining unsatisfied performance obligations as of December 31, 2017, 2018 and 2019 pertained to post-origination service in the amount of RMB32,704,036, RMB103,023,734 and RMB106,147,877 (US$ 15,247,189) respectively. All remaining unsatisfied performance obligations would be recognized as revenue in the subsequent year. The revenues recognized in 2017, 2018 and 2019 from performance obligations satisfied (or partially satisfied) in prior periods are nil, RMB3,390,633 and RMB2,240,572 (US$ 320,292), 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 receivables from Xiaoying Credit Loans and Xiaoying Revolving Loans and 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, commission fees for introducing borrowers to other platforms, membership fee and commission fees from Xiaoying Online Mall. 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. Membership fee, which are fees paid to the Group when registered members purchase certain benefits on the platform, are recognized ratably over the terms of the membership packages as our performance obligation is satisfied over time. Xiaoying Online Mall launched in March 2019 is a product that provides loan installments to our individual customers enabling them to purchase goods online. The loan installment revenue is recognized as loan facilitation revenue and post origination revenue. The gross amount of product sales and related costs or the net amount earned is recorded as commissions. The Group was evaluated as an agent and its obligation is to facilitate third parties in fulfilling their performance obligation for specified goods or services, revenues should be recognized in the net amount for the amount of commission which the Group earns in exchange for arranging for the specified goods or services to be provided by other parties. Revenue is recorded net of value-added taxes. 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 9 for additional information about guarantee liabilities for the years ended December 31, 2017, 2018 and 2019. 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 Credit Loans and Xiaoying Revolving 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. The Group considers that the impact of discount rate to the fair value of financial guarantee derivatives is immaterial. 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, 2019, cash equivalents were comprised of current deposits 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 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. Restricted cash also includes the pledged deposit held at bank as collateral for the issuance of a guarantee letter for our marketing and sponsorship with National Basketball Association of North America. |
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, 2018 and 2019, respectively: Accounts receivable Accounts from receivable from Allowance for facilitation post-origination doubtful As of December 31, 2018 services services accounts Total RMB RMB RMB RMB Xiaoying Credit Loan 1,501,967,864 59,670,931 (206,575,845) 1,355,062,950 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 receivable Accounts from receivable from Allowance for facilitation post-origination doubtful As of December 31, 2019 services services accounts Total RMB RMB RMB RMB Xiaoying Credit Loan 884,954,449 17,906,149 (185,085,029) 717,775,569 Xiaoying Revolving Loan 28,961,624 129,661 (7,824,878) 21,266,407 Xiaoying Housing Loan 890,225 44,516 — 934,741 Internet Channel 31,169,383 8,149 — 31,177,532 Other products — — — — Total 945,975,681 18,088,475 (192,909,907) 771,154,249 Accounts receivable Accounts from receivable from Allowance for facilitation post-origination doubtful As of December 31, 2019 services services accounts Total US$ US$ US$ US$ Xiaoying Credit Loan 127,115,753 2,572,057 (26,585,802) 103,102,008 Xiaoying Revolving Loan 4,160,077 18,625 (1,123,973) 3,054,729 Xiaoying Housing Loan 127,873 6,394 — 134,267 Internet Channel 4,477,202 1,171 — 4,478,373 Other products — — — — Total 135,880,905 2,598,247 (27,709,775) 110,769,377 The following tables present the aging of accounts receivable as of December 31, 2018 and 2019 respectively. The Group charges off accounts receivable overdue more than 60 days. As of December 31, 2018 Aging Not past-due 1 - 30 days 30 - 60 days Total RMB RMB RMB RMB Xiaoying Credit Loan 44,653,954 43,362,892 1,561,638,795 Xiaoying Housing Loan — — 5,442,210 Internet Channel — — 18,013,345 Other products 1,187,522 1,176,651 15,412,219 Total 45,841,476 44,539,543 1,600,506,569 As of December 31, 2019 Aging Not past-due 1 - 30 days 30 - 60 days Total RMB RMB RMB RMB Xiaoying Credit Loan 32,739,296 32,413,413 902,860,598 Xiaoying Revolving Loan 792,577 636,860 29,091,285 Xiaoying Housing Loan — — 934,741 Internet Channel — — 31,177,532 Other products — — — — Total 33,531,873 33,050,273 964,064,156 As of December 31, 2019 Aging Not past-due 1 - 30 days 30 - 60 days Total US$ US$ US$ US$ Xiaoying Credit Loan 4,702,706 4,655,895 129,687,810 Xiaoying Revolving Loan 113,847 91,479 4,178,702 Xiaoying Housing Loan — — 134,267 Internet Channel — — 4,478,373 Other products — — — — Total 4,816,553 4,747,374 138,479,152 The following tables present the movement of provision for accounts receivable and contract assets as of December 31, 2018 and 2019 respectively: As of Provision for Provision for Charge-off for Provision for Provision for Charge-off for As of January 1, accounts contract accounts Charge-off for As of accounts contract accounts Charge-off for December 31, 2018 receivable asset receviable contract assets December 31, 2018 receivable asset receviable contract assets 2019 RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB Xiaoying Credit Loan 159,791,649 393,205,248 3,557,738 (335,602,502) (14,376,288) 206,575,845 230,589,301 — (252,080,117) — 185,085,029 Xiaoying Revolving Loan — — — — — — 10,303,996 — (2,479,118) — 7,824,878 Xiaoying Housing Loan 418,187 51,241 — (349,812) — 119,616 — — (119,616) — — Internet Channel 138,592 44,227 — (49,112) — 133,707 — — (133,707) — — Other products 15,451,219 137,956 — (1,205,017) — 14,384,158 293,526 — (14,677,684) — — Total 175,799,647 393,438,672 3,557,738 (337,206,443) (14,376,288) 221,213,326 241,186,823 — (269,490,242) — 192,909,907 As of Provision for Charge-off for December 31, accounts Provision for accounts Charge-off for As of 2018 receivable contract asset receviable contract assets December 31, 2019 US$ US$ US$ US$ US$ US$ Xiaoying Credit Loan 29,672,764 33,122,081 — (36,209,043) — 26,585,802 Xiaoying Revoving Loan — 1,480,076 — (356,103) — 1,123,973 Xiaoying Housing Loan 17,182 — — (17,182) — — Internet Channel 19,206 — — (19,206) — — Other products 2,066,155 42,162 — (2,108,317) — — Total 31,775,307 34,644,319 — (38,709,851) — 27,709,775 |
Loans held for sale | Loans held for sale From time to time, the Group provides credits to borrowers through an intermediary 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 has a clear marketing plan to transfer these loans to external investors, mainly personal investors through our P2P platform and does not have intention to hold loans for the foreseeable future. During the period presented, the direct origination costs were inconsequential and were expensed as incurred. As at December 31, 2019, the Group reclassified loans held for sale to loans receivables from Xiaoying Credit Loans and Xiaoying Revolving loans after reassessing its intent and ability to transfer these loans. |
Loans receivables from Xiaoying Credit Loans and Xiaoying Revolving Loans | Loans receivables from Xiaoying Credit Loans and Xiaoying Revolving Loans For those loans that the Group provides credits to borrowers using its own fund but fail to have certain marketing plans to transfer, they are accounted for as loans receivables from Xiaoying Credit Loans and Xiaoying Revolving Loans at amortized cost. |
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, prepayment 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 and 2019. 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 Group also institutes proceedings to collect the payout amount from collaterals. The outstanding balance of loan receivable from Xiaoying Housing Loans were RMB128,101,279 and RMB89,535,665 (US$12,860,994) as of December 31, 2018 and 2019, respectively. The contractually required payments that are receivable for loans acquired during 2018 and 2019 were RMB184,822,069 and RMB67,668,067 (US$9,719,909), respectively. The outstanding undiscounted balance including the principal, interest, fees, penalties under Xiaoying Housing Loans receivable were RMB195,077,545 and RMB170,806,499 (US$24,534,818), as of December 31, 2018 and 2019, respectively. The following table presents the movement in provision for loans receivable from Xiaoying Housing Loans for the year ended December 31, 2019. Add: Provision for Loans Receivable As of December 31, 2018 from Xiaoying Housing Loans Less: Charge-off As of December 31, 2019 RMB RMB RMB RMB 25,911,367 23,430,641 (1,130,496) 48,211,512 Add: Provision for Loans Receivable As of December 31, 2018 from Xiaoying Housing Loans Less: Charge-off As of December 31, 2019 US$ US$ US$ US$ 3,721,935 3,365,601 (162,386) 6,925,150 |
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 and insurance sale on line license authorized in 2019. See Note 6. 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. If circumstances require a long-lived asset or asset group be tested for possible impairment, 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, 2017, 2018 and 2019. Intangible assets with an indefinite useful life are tested for impairment annually or more frequently, if events or changes in circumstances indicate that they might be impaired accordance with ASC subtopic 350-30, Intangibles-Goodwill and Other: General Intangibles Other than Goodwill("ASC 350-30"). |
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, 2019, the Group impaired an equity investment in a private entity amounting to RMB12,538,280(US$1,801,011). During the year ended December 31, 2018, the Group invested RMB225,000,000 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. |
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, 2018 and 2019 the total deposit amount that the Group received from Fintech and other financial companies were RMB134,042,199 and RMB108,923,460 (US$15,645,876) 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 RMB66,739,619, RMB51,979,823 and RMB53,997,224 (US$7,756,216) for the years ended December 31, 2017, 2018 and 2019 respectively. |
Advertising cost | Advertising cost Advertising costs are expensed as incurred in accordance with ASC 720‑35 Other Expense—Advertising costs. Advertising costs were RMB68,838,176, RMB192,483,874 and RMB64,357,939 (US$9,244,440) for the years ended December 31, 2017, 2018 and 2019 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 taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred taxes are provided using the asset and liability 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 recognized for the differences between financial statement carrying amount and the 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 then evaluated to determine the extent to which they are more likely than not to be realized. In making such a determination, management considers all positive and negative evidence, including future reversals of existing taxable temporary differences and projected future taxable income exclusive of reversing temporary differences and carryforwards. Deferred tax assets are then reduced by a valuation allowance to the amount, in the opinion of management, that is more like than not to 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 percent likelihood of being realized upon settlement. Interest and penalties on income taxes are classified as a component of income taxes. |
Value added taxes ("VAT") | Value added taxes (“VAT”) The Group is subject to VAT at the rate of 6% and 13% given that they are classified as a general tax payer. VAT is reported as a deduction to revenue when incurred and amounted to RMB 171,842,393, RMB301,758,965 and RMB231,454,037 (US$33,246,292) for the years ended December 31, 2017, 2018 and 2019 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, 2017, 2018 and 2019 were generated from the PRC. As of December 31, 2018 and 2019, 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. |
Leases | Leases The Group adopted ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) from January 1, 2019 by using the modified retrospective method and did not restate the comparable periods. The Group has elected the package of practical expedients, which allows the Group not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any expired or existing leases as of the adoption date. The Group also elected the practical expedient not to separate lease and non-lease components of contracts. Lastly, the Group elected the short-term lease exemption for all contracts with lease terms of 12 months or less. The Group determines if an arrangement is a lease or contains a lease at lease inception. For operating leases, the Group recognizes an ROU asset and a lease liability based on the present value of the lease payments over the lease term on the consolidated balance sheets at commencement date. For finance leases, assets are included in property and equipment on the consolidated balance sheets. As most of the Group’s leases do not provide an implicit rate, the Group estimates its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The Group’s leases often include options to extend and lease terms include such extended terms when the Group is reasonably certain to exercise those options. Lease terms also include periods covered by options to terminate the leases when the Group is reasonably certain not to exercise those options. Lease expense is recorded on a straight-line basis over the lease term. The ROU assets were recorded as “Other non-current assets”, and the current and non-current portions of the lease liabilities were recorded as “Accrued expenses and other current liabilities” and “Other non-current liabilities” in the Consolidated Balance Sheets. Upon adoption, the Group recognized ROU assets of RMB65,203,798 (US$9,365,940) and total lease liabilities (including current and non-current) RMB65,203,798 (US$9,365,940) for operating leases as of January 1, 2019. The impact of adopting ASU 2016-02 on the Group’s opening retained earnings and current year net income was insignificant. As of December 31, 2019, the Group recognized operating lease ROU assets of RMB62,265,193 (US$8,943,835) and total lease liabilities RMB62,513,147 (US$8,979,452), including current portion of RMB20,213,223 (US$2,903,448) for operating leases. The Group’s operating leases mainly related to office facilitates. As of December 31 2019, the weighted average remaining lease term was 1.92 years and the weighted average discount rate was 6.2% for the Group’s operating leases. Operating lease cost for the year ended 31 December, 2019 was RMB22,660,022(US$3,254,909), which excluded cost of short-term contracts. Short-term lease cost for the year ended 31 December, 2019 was insignificant. For the year ended 31 December, 2019, no lease cost for operating or finance leases was capitalized. Supplemental cash flow information related to operating leases was as follows: For the year ended December 31, 2019 RMB US$ Cash payments for operating leases 21,432,442 3,078,578 ROU assets obtained in exchange for operating lease liabilities 31,958,216 4,590,511 Future lease payments under operating leases as of December 31, 2019 were as follows: Operating leases RMB US$ Year ending December 31, 2020 25,351,439 3,641,507 2021 24,794,120 3,561,452 2022 18,945,931 2,721,413 Total future lease payments 69,091,490 9,924,372 Less: Imputed interest 6,578,343 944,920 Total lease liability balance 62,513,147 8,979,452 As of December 31, 2019, additional operating leases that have not yet commenced were immaterial. |
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 and restricted stocks, 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. No investor represented greater than 10% or more of the total net revenues for the years ended December 31, 2017, 2018 and 2019. 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, 2019, most of the loans facilitated by the Group were insured by ZhongAn. |
Recent accounting pronouncements | Recent accounting pronouncements 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. After evaluation, the impact of the adoption of this guidance on the Group’s consolidated statements of comprehensive income after tax amounts to RMB17.24 million(US$2.48 million) as of 31 December, 2019 . 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. After evaluation, the Group considers that the impact of adoption of this guidance on its consolidated financial statements is immaterial. In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in accounting standards. The amendments in the ASU are effective for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Group does not plan to early adopt this ASU. The ASU is currently not expected to have a material impact on the Group's consolidated financial statements. |
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 6.9618, on December 31, 2019, 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, 2019, or at any other rate. |
Organization and principal ac_2
Organization and principal activities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization and principal activities | |
Schedule of principal subsidiaries, VIEs and subsidiaries of the VIEs | As of December 31, 2019, 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 Shenzhen Beier Asset Management Co., Ltd ("Shenzhen Beier") July 1, 2018 Shenzhen 100% Capital management 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 Shenzhen Ying Ai Gou Trading Co., Ltd. ("Shenzhen Ying Ai Gou") October 25, 2018 Shenzhen 100% E-commerce services |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 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 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 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 2019 (RMB) (RMB) (RMB) (RMB) (RMB) (RMB) Major products Xiaoying Credit Loan 1,834,813,952 223,668,549 314,767,947 396,039,771 71,024,093 2,840,314,312 Xiaoying Revolving Loan 63,667,334 13,174,930 8,163,362 12,361,021 9,069,408 106,436,055 Xiaoying Housing Loan 578,598 88,225 132,382 — 264,644 1,063,849 Internet Channel (1) 86,733,843 1,703,032 7,568,757 — 1,890,227 97,895,859 Other loan products 209,616 232,318 62,764 — 10,403 515,101 Other service (2) — — — — 41,824,819 41,824,819 Total 1,986,003,343 238,867,054 330,695,212 408,400,792 124,083,594 3,088,049,995 Loan Loan facilitation facilitation service- service-Direct Intermediary Post-origination Financing Other Model Model service income revenue Total 2019 (US$) (US$) (US$) (US$) (US$) (US$) Major products Xiaoying Credit Loan 263,554,534 32,127,977 45,213,587 56,887,554 10,201,973 407,985,625 Xiaoying Revolving Loan 9,145,240 1,892,460 1,172,594 1,775,550 1,302,739 15,288,583 Xiaoying Housing Loan 83,110 12,673 19,015 — 38,014 152,812 Internet Channel (1) 12,458,537 244,625 1,087,184 — 271,514 14,061,860 Other loan products 30,109 33,370 9,015 — 1,494 73,988 Other services (2) — — — — 6,007,759 6,007,759 Total 285,271,530 34,311,105 47,501,395 58,663,104 17,823,493 443,570,627 (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 receivable Accounts from receivable from Allowance for facilitation post-origination doubtful As of December 31, 2018 services services accounts Total RMB RMB RMB RMB Xiaoying Credit Loan 1,501,967,864 59,670,931 (206,575,845) 1,355,062,950 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 receivable Accounts from receivable from Allowance for facilitation post-origination doubtful As of December 31, 2019 services services accounts Total RMB RMB RMB RMB Xiaoying Credit Loan 884,954,449 17,906,149 (185,085,029) 717,775,569 Xiaoying Revolving Loan 28,961,624 129,661 (7,824,878) 21,266,407 Xiaoying Housing Loan 890,225 44,516 — 934,741 Internet Channel 31,169,383 8,149 — 31,177,532 Other products — — — — Total 945,975,681 18,088,475 (192,909,907) 771,154,249 Accounts receivable Accounts from receivable from Allowance for facilitation post-origination doubtful As of December 31, 2019 services services accounts Total US$ US$ US$ US$ Xiaoying Credit Loan 127,115,753 2,572,057 (26,585,802) 103,102,008 Xiaoying Revolving Loan 4,160,077 18,625 (1,123,973) 3,054,729 Xiaoying Housing Loan 127,873 6,394 — 134,267 Internet Channel 4,477,202 1,171 — 4,478,373 Other products — — — — Total 135,880,905 2,598,247 (27,709,775) 110,769,377 |
Schedule of aging of past due accounts receivables | As of December 31, 2018 Aging Not past-due 1 - 30 days 30 - 60 days Total RMB RMB RMB RMB Xiaoying Credit Loan 44,653,954 43,362,892 1,561,638,795 Xiaoying Housing Loan — — 5,442,210 Internet Channel — — 18,013,345 Other products 1,187,522 1,176,651 15,412,219 Total 45,841,476 44,539,543 1,600,506,569 As of December 31, 2019 Aging Not past-due 1 - 30 days 30 - 60 days Total RMB RMB RMB RMB Xiaoying Credit Loan 32,739,296 32,413,413 902,860,598 Xiaoying Revolving Loan 792,577 636,860 29,091,285 Xiaoying Housing Loan — — 934,741 Internet Channel — — 31,177,532 Other products — — — — Total 33,531,873 33,050,273 964,064,156 As of December 31, 2019 Aging Not past-due 1 - 30 days 30 - 60 days Total US$ US$ US$ US$ Xiaoying Credit Loan 4,702,706 4,655,895 129,687,810 Xiaoying Revolving Loan 113,847 91,479 4,178,702 Xiaoying Housing Loan — — 134,267 Internet Channel — — 4,478,373 Other products — — — — Total 4,816,553 4,747,374 138,479,152 |
Schedule of movement of provision for accounts receivable and contract assets | : As of Provision for Provision for Charge-off for Provision for Provision for Charge-off for As of January 1, accounts contract accounts Charge-off for As of accounts contract accounts Charge-off for December 31, 2018 receivable asset receviable contract assets December 31, 2018 receivable asset receviable contract assets 2019 RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB Xiaoying Credit Loan 159,791,649 393,205,248 3,557,738 (335,602,502) (14,376,288) 206,575,845 230,589,301 — (252,080,117) — 185,085,029 Xiaoying Revolving Loan — — — — — — 10,303,996 — (2,479,118) — 7,824,878 Xiaoying Housing Loan 418,187 51,241 — (349,812) — 119,616 — — (119,616) — — Internet Channel 138,592 44,227 — (49,112) — 133,707 — — (133,707) — — Other products 15,451,219 137,956 — (1,205,017) — 14,384,158 293,526 — (14,677,684) — — Total 175,799,647 393,438,672 3,557,738 (337,206,443) (14,376,288) 221,213,326 241,186,823 — (269,490,242) — 192,909,907 As of Provision for Charge-off for December 31, accounts Provision for accounts Charge-off for As of 2018 receivable contract asset receviable contract assets December 31, 2019 US$ US$ US$ US$ US$ US$ Xiaoying Credit Loan 29,672,764 33,122,081 — (36,209,043) — 26,585,802 Xiaoying Revoving Loan — 1,480,076 — (356,103) — 1,123,973 Xiaoying Housing Loan 17,182 — — (17,182) — — Internet Channel 19,206 — — (19,206) — — Other products 2,066,155 42,162 — (2,108,317) — — Total 31,775,307 34,644,319 — (38,709,851) — 27,709,775 |
Schedule of movement in provision for loans receivable | Add: Provision for Loans Receivable As of December 31, 2018 from Xiaoying Housing Loans Less: Charge-off As of December 31, 2019 RMB RMB RMB RMB 25,911,367 23,430,641 (1,130,496) 48,211,512 Add: Provision for Loans Receivable As of December 31, 2018 from Xiaoying Housing Loans Less: Charge-off As of December 31, 2019 US$ US$ US$ US$ 3,721,935 3,365,601 (162,386) 6,925,150 |
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 |
Summary of remaining contractual maturities of the group's lease liabilities at the end of the current reporting period | Future lease payments under operating leases as of December 31, 2019 were as follows: Operating leases RMB US$ Year ending December 31, 2020 25,351,439 3,641,507 2021 24,794,120 3,561,452 2022 18,945,931 2,721,413 Total future lease payments 69,091,490 9,924,372 Less: Imputed interest 6,578,343 944,920 Total lease liability balance 62,513,147 8,979,452 |
Summary of remaining contractual maturities of the group's lease liabilities at the date of transition | For the year ended December 31, 2019 RMB US$ Cash payments for operating leases 21,432,442 3,078,578 ROU assets obtained in exchange for operating lease liabilities 31,958,216 4,590,511 |
Consolidated Trusts | |
VIEs and Consolidated Trusts | |
Schedule of financial statements | As of December 31, As of December 31, 2018 2019 2019 RMB RMB US$ Assets: Restricted cash 4,861,491 449,978,760 64,635,405 Loans at fair value 33,417,119 2,782,332,885 399,657,112 Prepaid expenses and other current assets 296,080 37,073,985 5,325,345 Total assets 38,574,690 3,269,385,630 469,617,862 Liabilities: Payable to investors at fair value of the Consolidated Trusts — 3,006,349,475 431,835,082 Accrued interest payable — 39,994,897 5,744,907 Other tax payable 284,564 2,636,517 378,712 Accrued expenses and other liabilities — 12,682,569 1,821,737 Total liabilities 284,564 3,061,663,458 439,780,438 Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Net revenue 117,684,121 61,475,364 340,613,941 48,926,131 Net income 43,583,819 41,986,452 227,051,351 32,613,886 Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Net cash provided by (used in) operating activities 26,997,889 12,547,230 123,521,027 17,742,685 Net cash provided by (used in) investing activities 48,332,936 676,499,516 (2,684,753,233) (385,640,672) Net cash provided by (used in) financing activities (63,200,000) (696,800,000) 3,006,349,475 431,835,082 |
VIEs and Consolidated Trusts | |
VIEs and Consolidated Trusts | |
Schedule of financial statements | As of December 31, As of December 31, 2018 2019 2019 RMB RMB US$ Assets: Cash and cash equivalents 236,432,366 336,512,754 48,337,033 Restricted cash 5,880,989 449,978,760 64,635,405 Accounts receivable and contract assets, net 1,266,169,464 466,630,408 67,027,264 Loans at fair value 33,417,119 2,782,332,885 399,657,112 Prepaid expenses and other current assets 60,501,113 429,093,130 61,635,372 Deferred tax assets, net 173,287,013 420,822,781 60,447,410 Long-term investments 287,222,720 277,126,560 39,806,740 Property and equipment, net 21,333,636 14,396,986 2,067,998 Intangible assets, net 1,628,117 6,091,145 874,938 Financial guarantee derivative 358,249,913 719,962,262 103,416,108 Loan receivable from Xiaoying Housing Loans, net 128,101,279 89,535,665 12,860,994 Other non-current assets 6,345,345 44,169,105 6,344,495 Total assets 2,578,569,074 6,036,652,441 867,110,869 Liabilities: Payable to investors at fair value of the Consolidated Trusts — 3,006,349,475 431,835,082 Guarantee liabilities 19,297,718 11,140,899 1,600,290 Accrued payroll and welfare 23,329,971 22,677,991 3,257,490 Other tax payable 95,184,938 34,725,447 4,987,998 Income tax payable 93,611,597 227,047,349 32,613,311 Accrued expenses and other liabilities 117,547,625 103,479,695 14,863,928 Short-term bank borrowings 198,000,000 — — Other non-current liabilities — 26,683,382 3,832,828 Deferred tax liabilities 47,145,390 688,209 98,855 Total liabilities 594,117,239 3,432,792,447 493,089,782 Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Net revenue 1,474,934,261 2,168,665,965 2,650,594,409 380,734,064 Net income (loss) 325,182,393 408,242,461 (14,609,225) (2,098,484) Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Net cash provided by (used in) operating activities (592,979,915) (243,451,042) 442,501,953 63,561,429 Net cash provided by (used in) investing activities (10,809,388) 451,499,516 (2,706,673,269) (388,789,289) Net cash provided by (used in) financing activities 830,154,156 (498,800,000) 2,808,349,475 403,394,162 |
Fair value of assets and liab_2
Fair value of assets and liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 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, 2019 (RMB) (RMB) (RMB) (RMB) Assets Loans at fair value — — 2,782,332,885 2,782,332,885 Financial guarantee derivative — — 719,962,262 719,962,262 Total assets — — 3,502,295,147 3,502,295,147 Payable to investors at fair value — — 3,006,349,475 3,006,349,475 Total liabilities — — Balance at Fair Level 1 Level 2 Level 3 Value December 31, 2019 (US$) (US$) (US$) (US$) Assets Loans at fair value — — 399,657,112 399,657,112 Financial guarantee derivative — — 103,416,108 103,416,108 Total assets — — 503,073,220 503,073,220 Payable to investors at fair value — — 431,835,082 431,835,082 Total liabilities |
Schedule of financial guarantee derivative movement activities | 2018 2018 2019 2019 RMB USD RMB USD Balance at January 1 53,260,916 7,746,479 (358,249,913) (51,459,380) Estimated payment to ZhongAn based on the pre-agreed Cap (1) 1,784,817,072 259,590,877 2,270,629,689 326,155,547 Less: Initially estimated net guarantee service fee to be collected (2) 1,607,696,701 233,829,787 2,039,737,713 292,989,990 Add (Less): Subsequent changes in estimated net guarantee service fee to be collected for outstanding loans (3) 23,850,931 3,468,974 15,479,852 2,223,542 Change in fair value of financial guarantee derivative 200,971,302 29,230,064 246,371,828 35,389,099 Add: Guarantee service fee received from borrowers 1,019,863,268 148,332,960 1,877,885,497 269,741,374 Less: Compensation paid to ZhongAn 1,632,345,399 237,414,792 2,485,969,674 357,087,201 Balance at December 31 (358,249,913) (52,105,289) (719,962,262) (103,416,108) Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31) 370,958,304 53,953,648 155,618,319 22,353,173 Changes in fair value related to balance outstanding at December 31 108,540,263 15,786,527 120,363,772 17,289,174 Note: (1) Amount represents estimated payment to ZhongAn which is the aggregated amount of guarantee fees, which would be the amount of loan principle multiplied by annualized guarantee fee ratio. The obligation is not influenced by default and early repayment of borrowers. (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, 2018 2019 2019 RMB RMB US$ Outstanding loan balance 12,811,666,471 12,492,069,873 1,794,373,563 Remaining weighted average contractual term (Month) 7.53 7.13 7.13 Estimated default rate 11.06 % 10.13 % 10.13 % |
Schedule of significant unobservable inputs | December 31, 2018 December 31, 2019 Range of Inputs Range of Inputs Financial Instrument Unobservable Input Weighted-Average Weighted-Average Loans and payable to investors at fair value Discount rates 7.12 % 8.28 % Net cumulative expected loss rates (1) 7.59 % 9.99 % (1) Represents the net of default rate, prepayment 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, 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 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) 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, 2018 loan principal principal of principal fair value 31, 2019 2019 Xiaoying Credit Loan 33,417,119 4,938,191,061 (2,961,912,723) 708,474,895 64,162,533 2,782,332,885 62,412,104 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, 2018 loan principal principal of principal fair value 31, 2019 2019 Xiaoying Credit Loan 4,800,069 709,326,763 (425,452,142) 101,766,051 9,216,371 399,657,112 8,964,938 |
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, 2017 667,080,871 Initial contribution — Principal payment (696,800,000) Changes in fair value 29,719,129 Balance at December 31, 2018 — Changes in fair value related to balance outstanding at December 31, 2018 — Payable to investors at fair value of the Consolidated Trusts RMB US$ Balance at December 31, 2018 — — Initial contribution 4,313,060,000 619,532,305 Principal payment (1,306,710,525) (187,697,223) Changes in fair value — — Balance at December 31, 2019 3,006,349,475 431,835,082 Changes in fair value related to balance outstanding at December 31, 2019 — — |
Prepaid expense and other cur_2
Prepaid expense and other current assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid expense and other current assets | |
Summary of prepaid expenses and other current assets | As of As of December 31, December 31, 2018 2019 2019 RMB RMB US$ Deposits to cooperators(1) 40,000,000 518,720,216 74,509,497 Earnings rights associated with loan assets(2) — 380,000,000 54,583,585 Prepaid expenses(3) 43,312,139 160,697,858 23,082,803 Input VAT to be deducted — 79,150,506 11,369,259 Interest receivable of consolidated trusts 296,080 35,451,817 5,092,335 Advance to employee 4,401,076 6,330,011 909,249 Receivables from borrowers 2,173,292 1,206,974 173,371 Others Total prepaid expenses and other current assets (1) (2) The original maturity for Loan#1 was from January 31, 2019 to January 30, 2020, and the interest rate applied is 15.6%. On January 30, 2020, Loan#1 had been partially repaid by RMB30 million, and the maturity date of remaining RMB70 million had been extended to October 30, 2020. The loan was secured by pledged shares provided by the borrower's controlling shareholder. The original maturity for Loan#2 was from May 9, 2019 to November 9, 2019, and the interest rate applied is 8%. As of date of this report, the maturity date of the entire Loan#2 had been extended to November 9, 2020. The loan was guaranteed by borrower's shareholder. As of December 31, 2019, the Group considered there was no impairment allowance needed for the earnings rights associated with loan assets. (3) |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property and equipment, net | |
Schedule of property and equipment, net | As of December 31, As of December 31, 2018 2019 2019 RMB RMB US$ Computer and transmission equipment 15,522,913 21,552,895 3,095,880 Furniture and office equipment 3,659,047 3,732,638 536,160 Leasehold improvements 20,217,502 20,842,929 2,993,899 Motor vehicles 816,103 816,103 117,226 Total property and equipment 40,215,565 46,944,565 6,743,165 Accumulated depreciation (17,000,768) (26,805,614) (3,850,386) Property and equipment, net 23,214,797 20,138,951 2,892,779 |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible assets | |
Schedule of intangible assets | As of December 31, As of December 31, 2018 2019 2019 RMB RMB US$ Licenses (1) 26,000,000 26,600,000 3,820,851 Software and others 4,362,895 11,324,077 1,626,602 Accumulated amortization (1,962,489) (2,797,373) (401,818) Intangible assets, net 28,400,406 35,126,704 5,045,635 (1) During 2018, the Group acquired an insurance broker license at a cost of RMB26,000,000. During 2019, the Group further acquired an insurance sale on line license at a cost of RMB 600,000 (US$86,185). |
Accrued expenses and other li_2
Accrued expenses and other liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accrued expenses and other liabilities | |
Schedule of accrued expenses and other liabilities | As of December 31, As of December 31, 2018 2019 2019 RMB RMB US$ Fund attributable to institutional investors(1) 5,776,821 50,888,482 7,309,673 Accrued interest payable of Consolidated Trusts — 39,994,898 5,744,908 Accrued office expense 10,890,896 1,036,656 148,906 Professional fee payable 48,302,566 26,101,318 3,749,220 Commission fee payable(2) 75,280,155 63,384,314 9,104,587 Lease liabilities — 20,213,070 2,903,426 Other accrued expenses 38,451,036 72,820,742 10,460,045 Total accrued expenses and other current liabilities 178,701,474 274,439,480 39,420,765 (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, 2018 and 2019. (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, 2019 | |
Guarantee liabilities | |
Schedule of movement of guarantee liabilities | 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 2017 Xiaoying Credit Loan 38,368,513 797,431,715 (411,239,134) (19,172,658) 109,086,588 514,475,024 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 2018 Xiaoying Credit Loan 514,475,024 5,884,134 (667,658,887) (15,691,880) 182,289,328 19,297,719 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 RMB As of Provision at As of January 1, the inception Released on Contingent December 31, 2019 of new loans Net payout (1) expiration liability (2) 2019 Xiaoying Credit Loan 19,297,719 — (6,333,472) (3,366,501) 289,211 9,886,957 Xiaoying Housing Loan 1,600,482 184,036 97,593 (1,752,115) — 129,996 Internet Channel — — — — 7,458,350 7,458,350 Others — — — — — — Total 20,898,201 184,036 (6,235,879) (5,118,616) 7,747,561 17,475,303 USD As of Provision at As of January 1, the inception Released on Contingent December 31, 2019 of new loans Net payout (1) expiration liability (2) 2019 Xiaoying Credit Loan 2,771,944 — (909,746) (483,568) 41,543 1,420,173 Xiaoying Housing Loan 229,895 26,435 14,018 (251,676) — 18,672 Internet Channel — — — — 1,071,325 1,071,325 Others — — — — — — Total 3,001,839 26,435 (895,728) (735,244) 1,112,868 2,510,170 (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 Group recognized a contingent liability of RMB7,458,350 (US$1,071,325) relating to expected default loans referred by a cooperated Fintech channel partner who experiences business difficulties. In order to maintain the reputation among investors, the Group decided at its sole discretion to reimburse investors if the channel partner fails to fulfill its obligation to make the reimbursement. |
Schedule of maximum potential undiscounted future payments by product, remaining weighted average contractual loan term, and estimated net default rates | Maximum potential undiscounted future Remaining weighted payment average contractual Estimated net As of December 31, 2018 (RMB) term (Month) default rate Xiaoying Credit Loan 61,705,508 18.02 16.57 % Internet Channel 2,004,234,932 8.19 % Xiaoying Housing Loan 282,830,247 3.60 0.60 % Other products 1,427,397 3.67 % Total 2,350,198,084 Maximum potential Maximum potential undiscounted future undiscounted future Remaining weighted payment payment average contractual Estimated net As of December 31, 2019 (RMB) (USD) term (Month) default rate Xiaoying Credit Loan 20,314,823 2,918,042 13.07 15.7 % Internet Channel (1) 1,399,671,106 201,050,175 0.43 — Xiaoying Housing Loan 21,666,185 3,112,153 7.9 0.60 % Other products — — — — Total 1,441,652,114 207,080,370 (1) Relates to loans referred from third party channel cooperators that has back to back guarantee arrangements with the Group. As such, estimated net default rate is 0% as of December 31, 2019. |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income taxes | |
Schedule of current and deferred component of income tax expenses | Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Current tax 395,369,391 213,083,260 71,809,290 10,314,759 Deferred tax (257,121,164) (3,162,072) (164, 911,933) (23,688,117) Total 138,248,227 209,921,188 (93,102,643) (13,373,358) |
Schedule of pre-tax income for different jurisdiction | Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Cayman Islands 86,909 (11,832,862) (9,978,594) (1,433,335) Hong Kong entities (17,470) (2,423,249) (140,208) (20,140) PRC entities 478,505,825 1,099,179,030 674,034,252 96,818,963 Total 478,575,264 1,084,922,919 663,915,450 95,365,488 |
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, 2017 2018 2019 2019 RMB RMB RMB US$ Expected tax at PRC rate 119,643,817 271,230,730 165,978,862 23,841,372 Other expenses not deductible for tax purposes 119,376 226,076 27,243,710 3,913,314 Share based compensation expenses not deductible for tax purposes 18,502,393 42,959,121 39,101,140 5,616,527 Effect of tax holiday and preferential tax rate(1) — (104,548,726) (279,823,276) (40,194,099) Effect of different tax rate of subsidiary operation in other jurisdiction (20,242) 3,164,192 2,853,547 409,886 Research and development tax deduction — (32,720,713) (12,657,389) (1,818,120) Adjustment on income tax of the previous periods (2) — (17,208,473) 961,418 Tax on undistributed earnings/(loss) of VIEs — 46,419,145 (46,419,145) (6,667,693) Valuation allowance movement 2,883 399,836 4,451,281 639,387 Others — — 5,207,209 747,969 Total 138,248,227 209,921,188 (93,102,643) (13,373,358) (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, 2017 2018 2019 2019 RMB RMB RMB US$ The aggregate amount tax benefit of the tax holiday and preferential tax rate — 104,548,726 279,823,276 40,194,099 The aggregate effect on basic and diluted net income per share: —Basic — 0.36 0.89 0.13 —Diluted — 0.34 0.88 0.13 (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. |
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, 2017 2018 2019 2019 RMB RMB RMB US$ The aggregate amount tax benefit of the tax holiday and preferential tax rate — 104,548,726 279,823,276 40,194,099 The aggregate effect on basic and diluted net income per share: —Basic — 0.36 0.89 0.13 —Diluted — 0.34 0.88 0.13 |
Schedule of tax effects of temporary differences that give rise to the deferred tax balances | As of December 31, As of December 31, 2018 2019 2019 Deferred tax assets: RMB RMB US$ Long-term investments 1,575,000 3,455,742 496,386 Accrued expenses 3,394,533 30,867,551 4,433,846 Accounts receivables — 105,168,108 15,106,454 Guarantee liabilities 235,329,500 210,014,843 30,166,745 Financial guarantee derivatives 54,770,514 116,363,471 16,714,567 Loan receivable from Xiaoying Housing Loans 3,886,705 7,231,727 1,038,773 Loans held for sale 853,899 — — Loans receivable from Xiaoying Credit Loans and Xiaoying Revolving Loans — 10,264,710 1,474,433 Operating loss carry forwards 46,845,223 5,631,764 808,952 Lease liabilities — 13,226,632 1,899,887 Others 395,882 149,079 21,413 Deferred tax assets, gross 347,051,256 502,373,627 72,161,456 Valuation allowance (403,674) (4,854,955) (697,371) Total deferred tax assets, net 346,647,582 497,518,672 71,464,085 Deferred tax liabilities: Property and equipment 1,008,419 662,682 95,187 Long-term investments — 646,786 92,905 Investment in Consolidated Trusts — 18,953,213 2,722,459 Right-of-use assets — 13,124,040 1,885,150 Investment in VIEs(1) 46,419,145 — — Total deferred tax liabilities 47,427,564 33,386,721 4,795,701 (1) A deferred tax liability was recorded for taxable temporary differences attributable to the excess of financial reporting amounts over tax basis for investments in domestic VIEs. |
Schedule of movement of the valuation allowance | As of December 31, As of December 31, 2018 2019 2019 RMB RMB US$ Balance as of January 1 (3,838) (403,674) (57,984) Addition (399,836) (4,451,281) (639,387) Balance as of December 31 (403,674) (4,854,955) (697,371) |
Schedule of roll-forward of unrecognized tax benefits | Year ended December 31, Year ended December 31, 2018 2019 2019 RMB RMB US$ Balance at beginning of the year — — — Additions for tax positions — 319,206,371 45,851,126 Reductions for tax position — (72,811,764) (10,458,755) Balance at end of the year — 246,394,607 35,392,371 |
Schedule of accrued interest and penalties related to income taxes | Year ended December 31, Year ended December 31, 2018 2019 2019 RMB RMB US$ Accrued interest — 3,805,963 546,692 As of |
Net income per share and net _2
Net income per share and net income attributable to common stockholders (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Net income per share and net income 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, 2017 2018 2019 2019 RMB RMB RMB US$ Net income attributable to X Financial 340,275,002 883,111,893 774,276,129 111,217,807 Shares (denominator): Weighted average number of ordinary shares used in computing basic EPS 261,219,657 286,588,402 313,757,887 313,757,887 Basic net income per share 1.30 3.08 2.47 0.35 Diluted effects of stock options and RSUs 18,491,147 17,395,882 5,989,505 5,989,505 Weighted average number of ordinary shares used in computing diluted EPS 279,710,804 303,984,284 319,747,392 319,747,392 Diluted net income per share 1.22 2.91 2.42 0.35 |
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, 2017 2018 2019 Stock options 7,857,000 56,926,054 52,405,826 Restricted stocks units — — 3,689,400 |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
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, April 30, 2015 2015 2016 2017 2018 2018 2018 2019 RMB 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 16.65 Exercise Price 0.27 0.27 0.27 - 10.71 0.27 - 27.02 25.42 30.27 27.93 31.96 Expected Volatility per annum (“p.a.”) 43.00 % 38.00 % 42.00 % 38.60 % 45.47 % 39.3 % 43.90 % 30.15 % Risk-Free Rate (p.a.) 1.81 % 2.33 % 1.81 % 2.35 % 2.96 % 2.94 % 3.15 % 2.97 % Exercise Multiple 2.5 2.5 2.5 2.5 2.5 5.58-38.33 2.5 NIL Dividend Yield (p.a.) NIL NIL NIL NIL NIL NIL NIL NIL Time to Maturity (Years) 10 10 10 10 10 5 10 10 |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of stock option activity | Intrinsic value of Number of Exercise Price Remaining options Options RMB Contractual RMB Outstanding, as of January 1, 2019 77,466,699 0.27 - 30.27 6.07 - 9.83 457,386,371 Granted 155,000 31.96 9.33 — Exercised 14,007,474 0.27 - 10.71 5.07 - 7.78 — Forfeited/Cancelled 3,452,998 0.27 - 31.96 5.49 - 9.33 — Outstanding, as of December 31, 2019 60,161,227 0.27 - 31.96 5.07 - 9.33 74,834,115 Vested and expected to vest as of December 31, 2019 60,161,227 0.27 - 31.96 5.07 - 9.33 74,834,115 Exercisable as of December 31, 2019 9,959,062 0.27 - 25.42 5.07 - 9.93 30,925,254 |
Schedule of allocated share-based compensation expense | Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Origination and servicing 55,403,160 103,124,758 88,671,136 12,736,812 General and administrative 18,227,289 66,264,371 60,445,030 8,682,385 Sales and marketing 379,126 2,447,356 1,827,414 262,492 |
Restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of stock option activity | Weighted-Average Number of Grant-Date Restricted Shares Fair Value RMB Outstanding, as of January 1, 2019 — — Granted 3,689,400 8.21 Vested 49,998 17.60 Forfeited — — Outstanding, as of December 31, 2019 3,639,402 8.21 |
Schedule of allocated share-based compensation expense | Year ended December 31, 2019 2019 RMB US$ Origination and servicing 446,808 64,180 General and administrative 5,717,025 821,199 Sales and marketing 8,682 1,247 |
CONDENSED FINANCIAL INFORMATI_2
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY | |
CONDENSED BALANCE SHEETS OF PARENT COMPANY | As of December 31, As of December 31, 2018 2019 2019 RMB RMB US$ Assets: Cash and cash equivalents 309,504,088 14,051,790 2,018,413 Prepaid expenses and other current assets 5,823,242 4,762,941 684,154 Amount due from subsidiaries and VIEs 818,695,709 1,017,874,882 146,208,579 Investments in subsidiaries and VIEs 2,438,249,431 3,378,505,504 485,291,951 Total assets 3,572,272,470 4,415,195,117 634,203,097 Liabilities: Accrued expenses and other liabilities 55,250,237 49,335,931 7,086,665 Total liabilities 55,250,237 49,335,931 7,086,665 Equity: Common shares 189,586 201,240 28,906 Additional paid-in capital 2,824,223,031 2,987,363,137 429,107,865 Retained earnings (Accumulated deficits) 640,114,859 1,311,194,007 188,341,234 Accumulated other comprehensive income 52,494,757 67,100,802 9,638,427 Total equity 3,517,022,233 4,365,859,186 627,116,432 Total liabilities and equity 3,572,272,470 4,415,195,117 634,203,097 |
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) OF PARENT COMPANY | Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ General and administrative (74,802,853) (79,265,535) (14,451,949) (2,075,893) Foreign exchange loss (478,590) — — — Interest income 1,358,777 122,320 77,030 11,065 Equity in profit (loss) of subsidiaries and VIEs 414,197,668 961,430,600 785,350,473 112,808,537 Other income (loss), net — 824,508 3,300,575 474,098 Net income (loss) 340,275,002 883,111,893 774,276,129 111,217,807 Other comprehensive income (loss) (24,463,956) 19,045,117 14,606,045 2,098,027 Comprehensive income (loss) 315,811,046 902,157,010 788,882,174 113,315,834 |
CONDENSED STATEMENT OF CASH FLOWS OF PARENT COMPANY | Year ended Year ended December 31, December 31, Year ended December 31, 2017 2018 2019 2019 RMB RMB RMB US$ Net cash provided by (used in) operating activities 15,030,828 36,187,975 (10,004,797) (1,437,099) Loan to subsidiaries and VIE (69,544,598) (519,786,600) (199,179,173) (28,610,298) Net cash used in investing activities (69,544,598) (519,786,600) (199,179,173) (28,610,298) Contribution from shareholders — 681,989,413 6,035,665 866,969 Dividend paid — — (103,196,981) (14,823,319) Net cash provided by (used in) financing activities — 681,989,413 (97,161,316) (13,956,350) Effect of foreign exchange rate changes (24,740,525) (6,283,113) 10,892,988 1,564,680 Net increase (decrease) in cash and cash equivalents (79,254,295) 192,107,675 (295,452,298) (42,439,067) Cash and cash equivalents, beginning of year 196,650,708 117,396,413 309,504,088 44,457,481 Cash and cash equivalents, end of year 117,396,413 309,504,088 14,051,790 2,018,414 |
Organization and principal ac_3
Organization and principal activities (Details) | Aug. 07, 2015USD ($)shares | Sep. 30, 2018$ / sharesshares | Dec. 31, 2017subsidiary | Dec. 31, 2019CNY (¥)subsidiary | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Issuance of new shares, Consideration | ¥ | ¥ 6,035,665 | ¥ 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% | |||||
Beijing Ying Zhong Tong | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Ownership percentage in variable interest entity's | 100.00% | |||||
Shenzhen Tangren | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Ownership percentage in variable interest entity's | 100.00% | |||||
Shenzhen Beier | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Ownership percentage in variable interest entity's | 100.00% | |||||
Shenzhen Ying Zhong Tong | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Ownership percentage in variable interest entity's | 100.00% | |||||
Shenzhen Ying Ai Gou | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Ownership percentage in variable interest entity's | 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% | |||||
Beijing WFOE | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Ownership percentage in subsidiary | 100.00% | |||||
Shenzhen Puhui | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Ownership percentage in subsidiary | 100.00% | |||||
Shenzhen Xiaoying IT | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Ownership percentage in subsidiary | 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 | |||||
Shenzhen Ying Zhong Tong | Shenzhen Puhui | ||||||
Subsidiaries, VIEs and subsidiaries of the VIEs | ||||||
Number of subsidiaries acquired | subsidiary | 4 |
Summary of significant accoun_4
Summary of significant accounting policies - Variable interest entity (Details) - Beijing WFOE | 12 Months Ended |
Dec. 31, 2019 | |
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 |
Exclusive Business Cooperation Agreements | |
Significant accounting policies | |
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, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2016CNY (¥) | |
Assets: | ||||||||
Cash and cash equivalents | $ 144,500,022 | ¥ 671,360,926 | ¥ 1,005,980,251 | ¥ 1,069,361,250 | ||||
Restricted cash | 73,877,902 | 12,614,745 | 514,323,181 | 208,345,389 | ||||
Accounts receivable and contract assets, net | 110,769,377 | 771,154,249 | 1,379,293,243 | |||||
Loans held for sale | 41,591,688 | 289,553,016 | 632,716,508 | |||||
Loans at fair value | 399,657,112 | 2,782,332,885 | 33,417,119 | |||||
Prepaid expenses and other current assets | 176,128,276 | 1,226,169,830 | 115,192,835 | |||||
Deferred tax assets, net | 71,464,085 | 497,518,672 | 346,647,582 | |||||
Long-term investments | 41,963,622 | 292,142,341 | 287,222,720 | |||||
Property and equipment, net | 2,892,779 | 20,138,951 | 23,214,797 | |||||
Intangible assets, net | 5,045,635 | 35,126,704 | 28,400,406 | |||||
Financial guarantee derivative | 103,416,108 | 719,962,262 | 358,249,913 | |||||
Loan receivable from Xiaoying Housing Loans, net | 41,591,688 | 289,553,016 | ||||||
Other non-current assets | 9,878,440 | 68,771,724 | 6,806,456 | |||||
TOTAL ASSETS | 1,189,438,432 | 8,280,632,478 | 4,636,969,497 | |||||
Liabilities: | ||||||||
Payable to investors at fair value of the Consolidated Trusts | 431,835,082 | 3,006,349,475 | ||||||
Accrued interest payable | 5,744,908 | 39,994,898 | ||||||
Guarantee liabilities | 2,510,170 | 545,169,033 | 17,475,303 | $ 3,001,839 | 20,898,201 | ¥ 100,661,452 | ||
Accrued payroll and welfare | 9,142,532 | 63,648,476 | 93,463,926 | |||||
Other tax payable | 8,343,500 | 58,085,777 | 134,129,068 | |||||
Income tax payable | 48,980,931 | 340,995,447 | 312,238,213 | |||||
Deposit payable to channel cooperators | 15,645,876 | 108,923,460 | 134,042,199 | |||||
Accrued expenses and other liabilities | 39,420,765 | 274,439,480 | 178,701,474 | |||||
Short-term bank borrowings | 198,000,000 | |||||||
Other non-current liabilities | 6,076,005 | 42,299,924 | ||||||
Deferred tax liabilities | 188,093 | 1,309,468 | 47,427,564 | |||||
TOTAL LIABILITIES | 562,142,954 | 3,913,526,810 | 1,118,900,645 | |||||
Net revenue | 443,570,627 | ¥ 3,088,049,995 | ¥ 3,540,600,044 | 1,786,935,193 | ||||
Net income | 111,246,516 | 774,475,992 | 883,056,836 | 339,494,652 | ||||
Net cash provided by (used in) operating activities | 86,266,016 | 600,566,742 | 5,354,151 | (615,327,191) | ||||
Net cash provided by (used in) investing activities | (442,382,861) | (3,079,780,993) | 412,870,517 | (10,809,388) | ||||
Net cash provided by (used in) financing activities | 389,437,812 | 2,711,188,159 | 181,789,413 | 830,154,156 | ||||
Consolidated Trusts | ||||||||
Assets: | ||||||||
Restricted cash | 64,635,405 | 449,978,760 | 4,861,491 | |||||
Loans at fair value | 399,657,112 | 2,782,332,885 | 33,417,119 | |||||
Prepaid expenses and other current assets | 5,325,345 | 37,073,985 | 296,080 | |||||
TOTAL ASSETS | 469,617,862 | 3,269,385,630 | 38,574,690 | |||||
Liabilities: | ||||||||
Payable to investors at fair value of the Consolidated Trusts | 431,835,082 | 3,006,349,475 | ||||||
Accrued interest payable | 5,744,907 | 39,994,897 | ||||||
Other tax payable | 378,712 | 2,636,517 | 284,564 | |||||
Accrued expenses and other liabilities | 1,821,737 | 12,682,569 | ||||||
TOTAL LIABILITIES | 439,780,438 | 3,061,663,458 | 284,564 | |||||
Net revenue | 48,926,131 | 340,613,941 | 61,475,364 | 117,684,121 | ||||
Net income | 32,613,886 | 227,051,351 | 41,986,452 | 43,583,819 | ||||
Net cash provided by (used in) operating activities | 17,742,685 | 123,521,027 | 12,547,230 | 26,997,889 | ||||
Net cash provided by (used in) investing activities | (385,640,672) | (2,684,753,233) | 676,499,516 | 48,332,936 | ||||
Net cash provided by (used in) financing activities | 431,835,082 | 3,006,349,475 | (696,800,000) | (63,200,000) | ||||
Consolidated Trusts | One of the subsidiaries | ||||||||
Assets: | ||||||||
Loans at fair value | 13,358,614 | 93,000,000 | 50,000,000 | |||||
VIEs and Consolidated Trusts | ||||||||
Assets: | ||||||||
Cash and cash equivalents | 48,337,033 | 336,512,754 | 236,432,366 | |||||
Restricted cash | 64,635,405 | 449,978,760 | 5,880,989 | |||||
Accounts receivable and contract assets, net | 67,027,264 | 466,630,408 | 1,266,169,464 | |||||
Loans at fair value | 399,657,112 | 2,782,332,885 | 33,417,119 | |||||
Prepaid expenses and other current assets | 61,635,372 | 429,093,130 | 60,501,113 | |||||
Deferred tax assets, net | 60,447,410 | 420,822,781 | 173,287,013 | |||||
Long-term investments | 39,806,740 | 277,126,560 | 287,222,720 | |||||
Property and equipment, net | 2,067,998 | 14,396,986 | 21,333,636 | |||||
Intangible assets, net | 874,938 | 6,091,145 | 1,628,117 | |||||
Financial guarantee derivative | 103,416,108 | 719,962,262 | 358,249,913 | |||||
Loan receivable from Xiaoying Housing Loans, net | 12,860,994 | 89,535,665 | 128,101,279 | |||||
Other non-current assets | 6,344,495 | 44,169,105 | 6,345,345 | |||||
TOTAL ASSETS | 867,110,869 | 6,036,652,441 | 2,578,569,074 | |||||
Liabilities: | ||||||||
Payable to investors at fair value of the Consolidated Trusts | 431,835,082 | 3,006,349,475 | ||||||
Guarantee liabilities | 1,600,290 | 11,140,899 | 19,297,718 | |||||
Accrued payroll and welfare | 3,257,490 | 22,677,991 | 23,329,971 | |||||
Other tax payable | 4,987,998 | 34,725,447 | 95,184,938 | |||||
Income tax payable | 32,613,311 | 227,047,349 | 93,611,597 | |||||
Accrued expenses and other liabilities | 14,863,928 | 103,479,695 | 117,547,625 | |||||
Short-term bank borrowings | 198,000,000 | |||||||
Other non-current liabilities | 3,832,828 | 26,683,382 | ||||||
Deferred tax liabilities | 98,855 | 688,209 | 47,145,390 | |||||
TOTAL LIABILITIES | 493,089,782 | ¥ 3,432,792,447 | ¥ 594,117,239 | |||||
Net revenue | 380,734,064 | 2,650,594,409 | 2,168,665,965 | 1,474,934,261 | ||||
Net income | (2,098,484) | (14,609,225) | 408,242,461 | 325,182,393 | ||||
Net cash provided by (used in) operating activities | 63,561,429 | 442,501,953 | (243,451,042) | (592,979,915) | ||||
Net cash provided by (used in) investing activities | (388,789,289) | (2,706,673,269) | 451,499,516 | (10,809,388) | ||||
Net cash provided by (used in) financing activities | $ 403,394,162 | ¥ 2,808,349,475 | ¥ (498,800,000) | ¥ 830,154,156 | ||||
Percentage of consolidated revenues | 86.00% | 86.00% | 61.00% | 83.00% | ||||
Percentage of consolidated total assets | 73.00% | 73.00% | 56.00% | |||||
Percentage of consolidated total liabilities | 88.00% | 88.00% | 53.00% |
Summary of significant accoun_6
Summary of significant accounting policies - Revenue recognition (Details) | 12 Months Ended | ||||
Dec. 31, 2019USD ($)item | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥)item | |
Revenue recognition | |||||
Number of business models | item | 2 | 2 | |||
Number of services provided | item | 3 | 3 | |||
Upfront fees collected | ¥ 0 | ¥ 0 | ¥ 520,952,503 | ||
Loans held for sale | $ 41,591,688 | 632,716,508 | ¥ 289,553,016 | ||
Total net revenue | 443,570,627 | 3,088,049,995 | 3,540,600,044 | 1,786,935,193 | |
Contract assets recognized | 0 | ||||
Contract assets | 0 | 0 | |||
Remaining unsatisfied performance obligations | 15,247,189 | 103,023,734 | 32,704,036 | ¥ 106,147,877 | |
Revenue recognized for obligations satisfied | $ 320,292 | 2,240,572 | ¥ 3,390,633 | 0 | |
Percentage of loans that have signed credit insurance agreement with ZhongAn | 77.00% | 90.00% | 77.00% | ||
Loan facilitation service | Direct Model | |||||
Revenue recognition | |||||
Total net revenue | $ 285,271,530 | 1,986,003,343 | ¥ 2,957,571,967 | 1,231,054,733 | |
Loan facilitation service | Intermediary Model | |||||
Revenue recognition | |||||
Total net revenue | 34,311,105 | 238,867,054 | 228,272,373 | 302,614,463 | |
Post-origination service | |||||
Revenue recognition | |||||
Total net revenue | 47,501,395 | 330,695,212 | 131,243,431 | 50,326,664 | |
Financing income | |||||
Revenue recognition | |||||
Total net revenue | 58,663,104 | 408,400,792 | 76,103,961 | 130,740,149 | |
Other revenue | |||||
Revenue recognition | |||||
Total net revenue | 17,823,493 | 124,083,594 | 147,408,312 | 72,199,184 | |
Xiaoying Credit Loan | |||||
Revenue recognition | |||||
Total net revenue | 407,985,625 | 2,840,314,312 | 3,420,194,541 | 1,533,068,345 | |
Xiaoying Credit Loan | Loan facilitation service | Direct Model | |||||
Revenue recognition | |||||
Total net revenue | 263,554,534 | 1,834,813,952 | 2,897,702,061 | 1,148,688,253 | |
Xiaoying Credit Loan | Loan facilitation service | Intermediary Model | |||||
Revenue recognition | |||||
Total net revenue | 32,127,977 | 223,668,549 | 216,754,528 | 260,278,922 | |
Xiaoying Credit Loan | Post-origination service | |||||
Revenue recognition | |||||
Total net revenue | 45,213,587 | 314,767,947 | 128,865,000 | 46,670,424 | |
Xiaoying Credit Loan | Financing income | |||||
Revenue recognition | |||||
Total net revenue | 56,887,554 | 396,039,771 | 67,731,784 | 58,258,088 | |
Xiaoying Credit Loan | Other revenue | |||||
Revenue recognition | |||||
Total net revenue | 10,201,973 | 71,024,093 | 109,141,168 | 19,172,658 | |
Xiaoying Revolving Loan | |||||
Revenue recognition | |||||
Total net revenue | 15,288,583 | 106,436,055 | |||
Xiaoying Revolving Loan | Loan facilitation service | Direct Model | |||||
Revenue recognition | |||||
Total net revenue | 9,145,240 | 63,667,334 | |||
Xiaoying Revolving Loan | Loan facilitation service | Intermediary Model | |||||
Revenue recognition | |||||
Total net revenue | 1,892,460 | 13,174,930 | |||
Xiaoying Revolving Loan | Post-origination service | |||||
Revenue recognition | |||||
Total net revenue | 1,172,594 | 8,163,362 | |||
Xiaoying Revolving Loan | Financing income | |||||
Revenue recognition | |||||
Total net revenue | 1,775,550 | 12,361,021 | |||
Xiaoying Revolving Loan | Other revenue | |||||
Revenue recognition | |||||
Total net revenue | 1,302,739 | 9,069,408 | |||
Xiaoying Housing Loan | |||||
Revenue recognition | |||||
Total net revenue | 152,812 | 1,063,849 | 24,972,178 | 104,985,946 | |
Xiaoying Housing Loan | Loan facilitation service | Direct Model | |||||
Revenue recognition | |||||
Total net revenue | 83,110 | 578,598 | 5,780,118 | ||
Xiaoying Housing Loan | Loan facilitation service | Intermediary Model | |||||
Revenue recognition | |||||
Total net revenue | 12,673 | 88,225 | 1,247,846 | 16,573,570 | |
Xiaoying Housing Loan | Post-origination service | |||||
Revenue recognition | |||||
Total net revenue | 19,015 | 132,382 | 463,129 | 278,234 | |
Xiaoying Housing Loan | Financing income | |||||
Revenue recognition | |||||
Total net revenue | 8,290,828 | 66,723,545 | |||
Xiaoying Housing Loan | Other revenue | |||||
Revenue recognition | |||||
Total net revenue | 38,014 | 264,644 | 9,190,257 | 21,410,597 | |
Internet Channel | |||||
Revenue recognition | |||||
Total net revenue | 14,061,860 | 97,895,859 | 73,171,394 | 68,642,119 | |
Internet Channel | Loan facilitation service | Direct Model | |||||
Revenue recognition | |||||
Total net revenue | 12,458,537 | 86,733,843 | 53,874,025 | 56,931,619 | |
Internet Channel | Loan facilitation service | Intermediary Model | |||||
Revenue recognition | |||||
Total net revenue | 244,625 | 1,703,032 | 8,760,054 | 2,748,428 | |
Internet Channel | Post-origination service | |||||
Revenue recognition | |||||
Total net revenue | 1,087,184 | 7,568,757 | 1,182,786 | 1,644,517 | |
Internet Channel | Financing income | |||||
Revenue recognition | |||||
Total net revenue | 41,253 | 2,576,028 | |||
Internet Channel | Other revenue | |||||
Revenue recognition | |||||
Total net revenue | 271,514 | 1,890,227 | 9,313,276 | 4,741,527 | |
Other loan products | |||||
Revenue recognition | |||||
Total net revenue | 73,988 | 515,101 | 3,577,616 | 56,642,736 | |
Other loan products | Loan facilitation service | Direct Model | |||||
Revenue recognition | |||||
Total net revenue | 30,109 | 209,616 | 215,763 | 25,434,861 | |
Other loan products | Loan facilitation service | Intermediary Model | |||||
Revenue recognition | |||||
Total net revenue | 33,370 | 232,318 | 1,509,945 | 23,013,543 | |
Other loan products | Post-origination service | |||||
Revenue recognition | |||||
Total net revenue | 9,015 | 62,764 | 732,516 | 1,733,489 | |
Other loan products | Financing income | |||||
Revenue recognition | |||||
Total net revenue | 40,096 | 3,182,488 | |||
Other loan products | Other revenue | |||||
Revenue recognition | |||||
Total net revenue | 1,494 | 10,403 | 1,079,296 | 3,278,355 | |
Other services | |||||
Revenue recognition | |||||
Total net revenue | 6,007,759 | 41,824,819 | 18,684,315 | 23,596,047 | |
Other services | Other revenue | |||||
Revenue recognition | |||||
Total net revenue | $ 6,007,759 | ¥ 41,824,819 | ¥ 18,684,315 | ¥ 23,596,047 |
Summary of significant accoun_7
Summary of significant accounting policies - Guarantee liabilities and Financial guarantee derivative (Details) | 12 Months Ended | |||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Guarantee liabilities and Financial guarantee derivative | ||||||
Guarantee liabilities | $ 2,510,170 | ¥ 17,475,303 | $ 3,001,839 | ¥ 20,898,201 | ¥ 545,169,033 | ¥ 100,661,452 |
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 | $ 18,672 | ¥ 129,996 | $ 229,895 | ¥ 1,600,482 | ¥ 8,688,973 | ¥ 7,298,609 |
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, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | $ 138,479,152 | ¥ 964,064,156 | ¥ 1,600,506,569 | |||
Allowance for doubtful accounts | $ (27,709,775) | ¥ (192,909,907) | ¥ (221,213,326) | (27,709,775) | (192,909,907) | (221,213,326) |
Accounts receivable and contract assets, net | 110,769,377 | 771,154,249 | 1,379,293,243 | |||
Provision for accounts receivable and contract assets | ||||||
Allowance for accounts receivable and contract assets, Beginning balance | 31,775,307 | 221,213,326 | 175,799,647 | |||
Provision for doubtful accounts | 34,644,319 | 241,186,823 | 393,438,672 | |||
Provision for contract assets | 3,557,738 | |||||
Charge-off for accounts receivable | 38,709,851 | 269,490,242 | 337,206,443 | |||
Charge-off for contract assets | (14,376,288) | |||||
Allowance for accounts receivable and contract assets, Ending balance | 27,709,775 | 192,909,907 | 221,213,326 | |||
Not past-due accounts receivables | 128,915,225 | 897,482,010 | 1,510,125,550 | |||
1 - 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 4,816,553 | 33,531,873 | 45,841,476 | |||
30 - 60 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 4,747,374 | 33,050,273 | 44,539,543 | |||
Loan facilitation service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 135,880,905 | 945,975,681 | 1,539,375,801 | |||
Post-origination service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 2,598,247 | 18,088,475 | 61,130,768 | |||
Xiaoying Credit Loan | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 129,687,810 | 902,860,598 | 1,561,638,795 | |||
Allowance for doubtful accounts | (26,585,802) | (185,085,029) | (206,575,845) | (26,585,802) | (185,085,029) | (206,575,845) |
Accounts receivable and contract assets, net | 103,102,008 | 717,775,569 | 1,355,062,950 | |||
Provision for accounts receivable and contract assets | ||||||
Allowance for accounts receivable and contract assets, Beginning balance | 29,672,764 | 206,575,845 | 159,791,649 | |||
Provision for doubtful accounts | 33,122,081 | 230,589,301 | 393,205,248 | |||
Provision for contract assets | 3,557,738 | |||||
Charge-off for accounts receivable | 36,209,043 | 252,080,117 | 335,602,502 | |||
Charge-off for contract assets | (14,376,288) | |||||
Allowance for accounts receivable and contract assets, Ending balance | 26,585,802 | 185,085,029 | 206,575,845 | |||
Not past-due accounts receivables | 120,329,209 | 837,707,889 | 1,473,621,949 | |||
Xiaoying Credit Loan | 1 - 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 4,702,706 | 32,739,296 | 44,653,954 | |||
Xiaoying Credit Loan | 30 - 60 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 4,655,895 | 32,413,413 | 43,362,892 | |||
Xiaoying Credit Loan | Loan facilitation service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 127,115,753 | 884,954,449 | 1,501,967,864 | |||
Xiaoying Credit Loan | Post-origination service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 2,572,057 | 17,906,149 | 59,670,931 | |||
Xiaoying Revolving Loan | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 4,178,702 | 29,091,285 | ||||
Allowance for doubtful accounts | (1,123,973) | (7,824,878) | (1,123,973) | (7,824,878) | ||
Accounts receivable and contract assets, net | 3,054,729 | 21,266,407 | ||||
Provision for accounts receivable and contract assets | ||||||
Provision for doubtful accounts | 1,480,076 | 10,303,996 | ||||
Charge-off for accounts receivable | 356,103 | 2,479,118 | ||||
Allowance for accounts receivable and contract assets, Ending balance | 1,123,973 | 7,824,878 | ||||
Not past-due accounts receivables | 3,973,376 | 27,661,848 | ||||
Xiaoying Revolving Loan | 1 - 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 113,847 | 792,577 | ||||
Xiaoying Revolving Loan | 30 - 60 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 91,479 | 636,860 | ||||
Xiaoying Revolving Loan | Loan facilitation service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 4,160,077 | 28,961,624 | ||||
Xiaoying Revolving Loan | Post-origination service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 18,625 | 129,661 | ||||
Xiaoying Housing Loan | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 134,267 | 934,741 | 5,442,210 | |||
Allowance for doubtful accounts | (17,182) | (119,616) | (119,616) | (119,616) | ||
Accounts receivable and contract assets, net | 134,267 | 934,741 | 5,322,594 | |||
Provision for accounts receivable and contract assets | ||||||
Allowance for accounts receivable and contract assets, Beginning balance | 17,182 | 119,616 | 418,187 | |||
Provision for doubtful accounts | 51,241 | |||||
Charge-off for accounts receivable | 17,182 | 119,616 | 349,812 | |||
Allowance for accounts receivable and contract assets, Ending balance | 119,616 | |||||
Not past-due accounts receivables | 134,267 | 934,741 | 5,442,210 | |||
Xiaoying Housing Loan | Loan facilitation service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 127,873 | 890,225 | 5,183,029 | |||
Xiaoying Housing Loan | Post-origination service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 6,394 | 44,516 | 259,181 | |||
Internet Channel | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 4,478,373 | 31,177,532 | 18,013,345 | |||
Allowance for doubtful accounts | (19,206) | (133,707) | (133,707) | (133,707) | ||
Accounts receivable and contract assets, net | 4,478,373 | 31,177,532 | 17,879,638 | |||
Provision for accounts receivable and contract assets | ||||||
Allowance for accounts receivable and contract assets, Beginning balance | 19,206 | 133,707 | 138,592 | |||
Provision for doubtful accounts | 44,227 | |||||
Charge-off for accounts receivable | 19,206 | 133,707 | 49,112 | |||
Allowance for accounts receivable and contract assets, Ending balance | 133,707 | |||||
Not past-due accounts receivables | 4,478,373 | 31,177,532 | 18,013,345 | |||
Internet Channel | Loan facilitation service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 4,477,202 | 31,169,383 | 17,546,683 | |||
Internet Channel | Post-origination service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | $ 1,171 | ¥ 8,149 | 466,662 | |||
Other Products | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 15,412,219 | |||||
Allowance for doubtful accounts | (2,066,155) | (14,384,158) | (14,384,158) | (14,384,158) | ||
Accounts receivable and contract assets, net | 1,028,061 | |||||
Provision for accounts receivable and contract assets | ||||||
Allowance for accounts receivable and contract assets, Beginning balance | 2,066,155 | 14,384,158 | 15,451,219 | |||
Provision for doubtful accounts | 42,162 | 293,526 | 137,956 | |||
Charge-off for accounts receivable | $ 2,108,317 | ¥ 14,677,684 | 1,205,017 | |||
Allowance for accounts receivable and contract assets, Ending balance | ¥ 14,384,158 | |||||
Not past-due accounts receivables | 13,048,046 | |||||
Other Products | 1 - 30 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 1,187,522 | |||||
Other Products | 30 - 60 days | ||||||
Accounts, Notes and Loans Receivables | ||||||
Past-due accounts receivables | 1,176,651 | |||||
Other Products | Loan facilitation service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | 14,678,225 | |||||
Other Products | Post-origination service | ||||||
Accounts, Notes and Loans Receivables | ||||||
Accounts receivable gross | ¥ 733,994 |
Summary of significant accoun_9
Summary of significant accounting policies - Loan receivable from Xiaoying Housing Loans (Details) | 12 Months Ended | |||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Loan receivable from Xiaoying Housing Loans | ||||||
Loans receivable from Xiaoying Credit Loans and Revolving Loans, net | $ 41,591,688 | ¥ 289,553,016 | ||||
Xiaoying Housing Loan | ||||||
Loan receivable from Xiaoying Housing Loans | ||||||
Allowance for loan principal and interest receivables | $ 6,925,150 | ¥ 48,211,512 | ¥ 25,911,367 | 6,925,150 | 48,211,512 | ¥ 25,911,367 |
Loans receivable from Xiaoying Credit Loans and Revolving Loans, net | 12,860,994 | 89,535,665 | 128,101,279 | |||
Loans receivable acquired during the year | 9,719,909 | 67,668,067 | 184,822,069 | |||
Amount of outstanding undiscounted loan receivable | $ 24,534,818 | ¥ 170,806,499 | ¥ 195,077,545 | |||
Allowance for loans receivable at beginning of the year | 3,721,935 | 25,911,367 | ||||
Provision for loan receivable from Xiaoying Housing Loans | 3,365,601 | 23,430,641 | 40,347,875 | |||
Less: Charge-offs | (162,386) | (1,130,496) | ||||
Allowance for loans receivable at end of the year | $ 6,925,150 | ¥ 48,211,512 | ¥ 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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
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, 2019entity | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Long-term investments | |||
Number of significant influence entities held | entity | 2 | ||
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 | ¥ 225,000,000 | ||
Equity interest acquired (in percentage) | 15.00% | ||
Private entities | |||
Long-term investments | |||
Payments to acquire equity interest | ¥ 15,000,000 | ||
Equity interest acquired (in percentage) | 10.00% |
Summary of significant accou_12
Summary of significant accounting policies - Others (Details) | 12 Months Ended | ||||
Dec. 31, 2019USD ($)$ / ¥ | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥)$ / ¥ | |
Other disclosures | |||||
Deposit payable to channel cooperators | $ 15,645,876 | ¥ 134,042,199 | ¥ 108,923,460 | ||
Defined contribution plan cost | 7,756,216 | ¥ 53,997,224 | 51,979,823 | ¥ 66,739,619 | |
Advertising cost | $ 9,244,440 | ¥ 64,357,939 | 192,483,874 | 68,838,176 | |
VAT rate (as a percent) | 6.00% | 6.00% | |||
VAT | $ 33,246,292 | ¥ 231,454,037 | ¥ 301,758,965 | ¥ 171,842,393 | |
Translation into USD | 6.9618 | 6.9618 | |||
ZhongAn | |||||
Other disclosures | |||||
VAT rate (as a percent) | 13.00% | 13.00% |
Summary of significant accou_13
Summary of significant accounting policies (Details) | 12 Months Ended | |||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2019CNY (¥) | Jan. 01, 2019USD ($) | Jan. 01, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Lessee, Lease, Description [Line Items] | ||||||
Right-of-use assets, net | $ 8,943,835 | ¥ 62,265,193 | ||||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||||
2020 | 3,641,507 | 25,351,439 | ||||
2021 | 3,561,452 | 24,794,120 | ||||
2022 | 2,721,413 | 18,945,931 | ||||
Total future lease payments | 9,924,372 | 69,091,490 | ||||
Less: Imputed interest | 944,920 | 6,578,343 | ||||
Total lease liability balance | 8,979,452 | ¥ 62,513,147 | ||||
Total cash outflows for leases | $ 3,078,578 | ¥ 21,432,442 | ||||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets, Noncurrent | Other Assets, Noncurrent | ||||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Assets, Noncurrent | Other Assets, Noncurrent | ||||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent | ||||
ROU assets | $ 8,943,835 | ¥ 62,265,193 | ||||
Current lease liabilities | $ 2,903,426 | ¥ 20,213,070 | ||||
Weighted average remaining lease term (in years) | 1 year 11 months 1 day | 1 year 11 months 1 day | ||||
Weighted average discount rate (as a percent) | 6.20% | 6.20% | ||||
Operating lease cost | $ 3,254,909 | 22,660,022 | ||||
Other comprehensive income | 9,638,427 | ¥ 67,100,802 | ¥ 52,494,757 | |||
Supplemental cash flow information related to operating leases | ||||||
ROU assets obtained in exchange for operating lease liabilities | 4,590,511 | ¥ 31,958,216 | ||||
ASU 2016-02 Leases (Topic 842) | Restatement adjustment | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Right-of-use assets, net | $ 9,365,940 | ¥ 65,203,798 | ||||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||||
Total lease liability balance | 9,365,940 | 65,203,798 | ||||
ROU assets | $ 9,365,940 | ¥ 65,203,798 | ||||
Current lease liabilities | 2,903,448 | 20,213,223 | ||||
ASU 2016-13 Financial Instruments-Credit Losses (Topic 326) | Restatement adjustment | ||||||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||||
Other comprehensive income | $ 2,480,000 | ¥ 17,240,000 |
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, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Assets | ||||
Loans at fair value | $ 399,657,112 | ¥ 2,782,332,885 | ¥ 33,417,119 | |
Financial guarantee derivative | 103,416,108 | 719,962,262 | 358,249,913 | |
Total assets | 503,073,220 | 3,502,295,147 | ||
Liabilities | ||||
Payable to investors at fair value | 431,835,082 | 3,006,349,475 | ||
Recurring | ||||
Assets | ||||
Loans at fair value | 399,657,112 | 2,782,332,885 | 33,417,119 | |
Financial guarantee derivative | 103,416,108 | 719,962,262 | 358,249,913 | |
Total assets | 391,667,032 | |||
Liabilities | ||||
Payable to investors at fair value | 431,835,082 | 3,006,349,475 | ||
Total liabilities | (431,835,082) | (3,006,349,475) | ||
Level 3 | ||||
Assets | ||||
Total assets | 503,073,220 | 3,502,295,147 | ||
Level 3 | Recurring | ||||
Assets | ||||
Loans at fair value | 399,657,112 | 2,782,332,885 | 33,417,119 | ¥ 667,838,880 |
Financial guarantee derivative | 103,416,108 | 719,962,262 | 358,249,913 | |
Total assets | ¥ 391,667,032 | |||
Liabilities | ||||
Payable to investors at fair value | 431,835,082 | 3,006,349,475 | ¥ 667,080,871 | |
Total liabilities | $ (431,835,082) | ¥ (3,006,349,475) |
Fair value of assets and liab_4
Fair value of assets and liabilities - Financial guarantee derivative movements (Details) | 12 Months Ended | |||||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Fair value of assets and liabilities | ||||||||
Financial guarantee derivative | $ 103,416,108 | ¥ 719,962,262 | ¥ 358,249,913 | |||||
Change in fair value of financial guarantee derivative | $ 35,389,099 | ¥ 246,371,828 | ¥ 200,971,302 | ¥ 18,110,752 | ||||
Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31, 2019) | 207,080,370 | 1,441,652,114 | 2,350,198,084 | |||||
Financial guarantee derivative | ||||||||
Fair value of assets and liabilities | ||||||||
Financial guarantee derivative | 103,416,108 | 719,962,262 | ||||||
Financial guarantee derivative | (103,416,108) | (719,962,262) | 358,249,913 | (103,416,108) | (719,962,262) | 358,249,913 | ||
Balance at the beginning | 358,249,913 | |||||||
Estimated payment to ZhongAn based on the pre-agreed Cap | 326,155,547 | 2,270,629,689 | $ (51,459,380) | (358,249,913) | ||||
Less: Initially estimated net guarantee service fee to be collected | 292,989,990 | 2,039,737,713 | ||||||
Add (Less): Subsequent changes in estimated net guarantee service fee to be collected for outstanding loans | 2,223,542 | 15,479,852 | ||||||
Change in fair value of financial guarantee derivative | 35,389,099 | 246,371,828 | ||||||
Add: Guarantee service fee received from borrowers | 269,741,374 | 1,877,885,497 | ||||||
Less: Compensation paid to ZhongAn | 357,087,201 | 2,485,969,674 | ||||||
Balance at the end | $ (103,416,108) | (719,962,262) | 358,249,913 | |||||
Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31, 2019) | 22,353,173 | 155,618,319 | 370,958,304 | |||||
Changes in fair value related to balance outstanding | $ 17,289,174 | ¥ 120,363,772 | ||||||
Loans facilitated in 2018 | ||||||||
Fair value of assets and liabilities | ||||||||
Financial guarantee derivative | (358,249,913) | (358,249,913) | (358,249,913) | |||||
Balance at the beginning | (358,249,913) | |||||||
Estimated payment to ZhongAn based on the pre-agreed Cap | 1,784,817,072 | 53,260,916 | ||||||
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 | 23,850,931 | |||||||
Change in fair value of financial guarantee derivative | 200,971,302 | |||||||
Add: Guarantee service fee received from borrowers | 1,019,863,268 | |||||||
Less: Compensation paid to ZhongAn | 1,632,345,399 | |||||||
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, 2019) | 370,958,304 | |||||||
Changes in fair value related to balance outstanding | 108,540,263 | |||||||
Loans facilitated in 2019 | ||||||||
Fair value of assets and liabilities | ||||||||
Financial guarantee derivative | (52,105,289) | (52,105,289) | (52,105,289) | |||||
Balance at the beginning | ¥ (52,105,289) | |||||||
Estimated payment to ZhongAn based on the pre-agreed Cap | 259,590,877 | ¥ 7,746,479 | ||||||
Less: Initially estimated net guarantee service fee to be collected | 233,829,787 | |||||||
Add (Less): Subsequent changes in estimated net guarantee service fee to be collected for outstanding loans | 3,468,974 | |||||||
Change in fair value of financial guarantee derivative | 29,230,064 | |||||||
Add: Guarantee service fee received from borrowers | 148,332,960 | |||||||
Less: Compensation paid to ZhongAn | 237,414,792 | |||||||
Balance at the end | ¥ (52,105,289) | |||||||
Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31, 2019) | 53,953,648 | |||||||
Changes in fair value related to balance outstanding | ¥ 15,786,527 | |||||||
Minimum | Default rates | Level 3 | ||||||||
Fair value of assets and liabilities | ||||||||
Financial guarantee derivative input | 9.62 | 9.62 | ||||||
Maximum | Default rates | Level 3 | ||||||||
Fair value of assets and liabilities | ||||||||
Financial guarantee derivative input | 16.79 | 16.79 |
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, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2019CNY (¥) | |
Fair value of assets and liabilities | |||||
Financial guarantee derivative | $ 103,416,108 | ¥ 358,249,913 | ¥ 719,962,262 | ||
Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31, 2019) | 207,080,370 | 2,350,198,084 | 1,441,652,114 | ||
Loans at fair value | 399,657,112 | 33,417,119 | 2,782,332,885 | ||
Financial guarantee derivative | |||||
Fair value of assets and liabilities | |||||
Financial guarantee derivative | 103,416,108 | 719,962,262 | |||
Financial guarantee derivative | (103,416,108) | 358,249,913 | (719,962,262) | ||
Estimated payment to ZhongAn based on the pre-agreed Cap | 326,155,547 | ¥ 2,270,629,689 | $ (51,459,380) | (358,249,913) | |
Potential maximum undiscounted amount payable (Remaining estimated payment to ZhongAn based on the pre-agreed Cap at December 31, 2019) | 22,353,173 | 370,958,304 | 155,618,319 | ||
Loan products | |||||
Fair value of assets and liabilities | |||||
Financial guarantee derivative | 4,013,659,068 | 25,389,448,598 | 27,942,291,698 | ||
Loans at fair value | $ 1,794,373,563 | ¥ 12,811,666,471 | ¥ 12,492,069,873 | ||
Remaining weighted average contractual term (Month) | 7 months 4 days | 7 months 4 days | 7 months 16 days | 7 months 16 days | |
Estimated net default rate (in percentage) | 10.13% | 11.06% | 10.13% |
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, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | |
Loans at fair value | |||||
Balance at beginning of the year | ¥ 33,417,119 | ||||
Balance at the end of the year | $ 399,657,112 | 2,782,332,885 | ¥ 33,417,119 | ||
Changes in fair value related to balance outstanding at the end of the year | (8,964,938) | (1,750,429) | ¥ (62,412,104) | ||
Payables to investors at fair value | |||||
Initial contribution | 619,532,305 | 4,313,060,000 | ¥ 1,096,800,000 | ||
Principal payment | (187,697,223) | (1,306,710,525) | (696,800,000) | (1,160,000,000) | |
Change in fair value | (9,216,371) | (64,162,533) | (12,358,626) | 9,750,565 | |
Balance at the end of the year | 431,835,082 | 3,006,349,475 | |||
Xiaoying Credit Loan | |||||
Loans at fair value | |||||
Changes in fair value related to balance outstanding at the end of the year | (8,964,938) | (1,750,429) | (62,412,104) | ||
Recurring | |||||
Loans at fair value | |||||
Balance at beginning of the year | 33,417,119 | ||||
Balance at the end of the year | 399,657,112 | 2,782,332,885 | 33,417,119 | ||
Payables to investors at fair value | |||||
Balance at the end of the year | 431,835,082 | 3,006,349,475 | |||
Recurring | Level 3 | |||||
Loans at fair value | |||||
Balance at beginning of the year | 33,417,119 | 667,838,880 | |||
Origination of loan principal | 49,498,710 | ||||
Collection of principal | (744,351,887) | ||||
Reinvestment of principal | 18,353,661 | ||||
Change in fair value | 42,077,755 | ||||
Balance at the end of the year | 399,657,112 | 2,782,332,885 | 33,417,119 | 667,838,880 | |
Payables to investors at fair value | |||||
Balance at beginning of the year | 667,080,871 | ||||
Initial contribution | 619,532,305 | 4,313,060,000 | |||
Principal payment | (187,697,223) | (1,306,710,525) | (696,800,000) | ||
Change in fair value | 29,719,129 | ||||
Balance at the end of the year | 431,835,082 | 3,006,349,475 | 667,080,871 | ||
Unpaid balance of loans at fair value | 390,692,174 | 35,167,548 | 2,719,920,781 | ||
Unpaid balance of payable to investors | 431,835,082 | 0 | ¥ 3,006,349,475 | ||
Recurring | Level 3 | Xiaoying Credit Loan | |||||
Loans at fair value | |||||
Balance at beginning of the year | 4,800,069 | 33,417,119 | 427,347,002 | ||
Origination of loan principal | 709,326,763 | 4,938,191,061 | 49,498,710 | ||
Collection of principal | (425,452,142) | (2,961,912,723) | (476,783,941) | ||
Reinvestment of principal | 101,766,051 | 708,474,895 | |||
Change in fair value | 9,216,371 | 64,162,533 | 33,355,348 | ||
Balance at the end of the year | $ 399,657,112 | ¥ 2,782,332,885 | 33,417,119 | 427,347,002 | |
Recurring | Level 3 | Xiaoying Housing Loan | |||||
Loans at fair value | |||||
Balance at beginning of the year | 240,491,878 | ||||
Collection of principal | (267,567,946) | ||||
Reinvestment of principal | 18,353,661 | ||||
Change in fair value | ¥ 8,722,407 | ||||
Balance at the end of the year | ¥ 240,491,878 | ||||
Weighted average | Discount rates | Level 3 | |||||
Fair value of assets and liabilities | |||||
Loans and payable to investors, input | 8.28 | 7.12 | 8.28 | ||
Weighted average | Net cumulative expected loss rates | Level 3 | |||||
Fair value of assets and liabilities | |||||
Loans and payable to investors, input | 9.99 | 7.59 | 9.99 |
Prepaid expense and other cur_3
Prepaid expense and other current assets (Details) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Prepaid expense and other current assets | |||
Deposits to cooperators(2) | $ 74,509,497 | ¥ 518,720,216 | ¥ 40,000,000 |
Earnings rights associated with loan assets | 54,583,585 | 380,000,000 | |
Prepaid expense(1) | 23,082,803 | 160,697,858 | 43,312,139 |
Input VAT to be deducted | 11,369,259 | 79,150,506 | |
Interest receivable of consolidated trusts | 5,092,335 | 35,451,817 | 296,080 |
Advance to employee | 909,249 | 6,330,011 | 4,401,076 |
Receivables from borrowers | 173,371 | 1,206,974 | 2,173,292 |
Others | 6,408,177 | 44,612,448 | 25,010,248 |
Total prepaid expenses and other current assets | $ 176,128,276 | ¥ 1,226,169,830 | ¥ 115,192,835 |
Prepaid expense and other cur_4
Prepaid expense and other current assets - Additional information (Details) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 31, 2020CNY (¥) | Nov. 09, 2019 | Dec. 31, 2019USD ($)item | Dec. 31, 2019CNY (¥)item | Jan. 30, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | |
Prepaid Expense and Other Assets, Current, Disclosure [Line Items] | ||||||
Principal amount of loan assets | $ | $ 15,600,000 | |||||
Remaining amount receivable | $ 54,583,585 | ¥ 380,000,000 | ||||
Jiangxi Ruijing | ||||||
Prepaid Expense and Other Assets, Current, Disclosure [Line Items] | ||||||
Number of earnings rights purchased | item | 2 | 2 | ||||
Jiangxi Ruijing | Loan 1 | ||||||
Prepaid Expense and Other Assets, Current, Disclosure [Line Items] | ||||||
Principal amount of loan assets | $ 14,364,101 | ¥ 100,000,000 | ||||
Interest rate (as a percent) | 15.60% | |||||
Jiangxi Ruijing | Loan 1 | Subsequent Event | ||||||
Prepaid Expense and Other Assets, Current, Disclosure [Line Items] | ||||||
Amount received from repayments | ¥ 30,000,000 | |||||
Remaining amount receivable | ¥ 70,000,000 | |||||
Jiangxi Ruijing | Loan 2 | ||||||
Prepaid Expense and Other Assets, Current, Disclosure [Line Items] | ||||||
Principal amount of loan assets | $ 40,219,483 | ¥ 280,000,000 | ||||
Interest rate (as a percent) | 8.00% |
Property and equipment, net (De
Property and equipment, net (Details) | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | |
Property and equipment, net | |||||
Total property and equipment | $ 6,743,165 | ¥ 40,215,565 | ¥ 46,944,565 | ||
Accumulated depreciation | (3,850,386) | (17,000,768) | (26,805,614) | ||
Property and equipment, net | 2,892,779 | 23,214,797 | 20,138,951 | ||
Depreciation | 1,514,668 | ¥ 10,544,813 | 9,245,203 | ¥ 4,687,503 | |
Gains from the disposal of property and equipment | 343 | ¥ 2,389 | 66 | ¥ 103 | |
Computer and transmission equipment | |||||
Property and equipment, net | |||||
Total property and equipment | 3,095,880 | 15,522,913 | 21,552,895 | ||
Furniture and office equipment | |||||
Property and equipment, net | |||||
Total property and equipment | 536,160 | 3,659,047 | 3,732,638 | ||
Leasehold improvements | |||||
Property and equipment, net | |||||
Total property and equipment | 2,993,899 | 20,217,502 | 20,842,929 | ||
Motor vehicles | |||||
Property and equipment, net | |||||
Total property and equipment | $ 117,226 | ¥ 816,103 | ¥ 816,103 |
Intangible assets (Details)
Intangible assets (Details) | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | |
Intangible assets | |||||
Accumulated amortization | $ (401,818) | ¥ (1,962,489) | ¥ (2,797,373) | ||
Intangible assets, net | 5,045,635 | 28,400,406 | 35,126,704 | ||
Insurance broker license | 86,185 | ¥ 600,000 | 26,000,000 | ||
Amortization expenses | 119,924 | ¥ 834,884 | 389,829 | ¥ 678,692 | |
Future amortization expenses | |||||
2020 | 173,353 | 1,206,846 | |||
2021 | 138,366 | 963,277 | |||
2022 | 130,279 | 906,974 | |||
2023 | 127,583 | 888,206 | |||
2024 | 127,583 | 888,206 | |||
License | |||||
Intangible assets | |||||
Intangible assets, Gross | 3,820,851 | 26,000,000 | 26,600,000 | ||
Software and others | |||||
Intangible assets | |||||
Intangible assets, Gross | $ 1,626,602 | ¥ 4,362,895 | ¥ 11,324,077 |
Short-term bank borrowings (Det
Short-term bank borrowings (Details) - PRC bank | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2018CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | |
Short-term bank borrowings and Restricted cash | ||||
Debt term | 3 years | 1 year | ||
Maximum borrowing capacity | ¥ 700,000,000 | ¥ 700,000,000 | ||
Interest rate (in percent) | 2.08% | 2.08% | ||
Outstanding balances of loans drawn | ¥ 198,000,000 | ¥ 198,000,000 | $ 29,159,126 | ¥ 203,000,000 |
Accrued expenses and other li_3
Accrued expenses and other liabilities (Details) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Accrued expenses and other liabilities | |||
Fund attributable to institutional investors(1) | $ 7,309,673 | ¥ 50,888,482 | ¥ 5,776,821 |
Accrued interest payable of Consolidated Trusts | 5,744,908 | 39,994,898 | |
Accrued office expense | 148,906 | 1,036,656 | 10,890,896 |
Professional fee payable | 3,749,220 | 26,101,318 | 48,302,566 |
Commission fee payable(2) | 9,104,587 | 63,384,314 | 75,280,155 |
Lease liabilities | 2,903,426 | 20,213,070 | |
Other accrued expenses | 10,460,045 | 72,820,742 | 38,451,036 |
Total accrued expenses and other current liabilities | $ 39,420,765 | ¥ 274,439,480 | ¥ 178,701,474 |
Guarantee liabilities (Details)
Guarantee liabilities (Details) | 12 Months Ended | |||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | |
Guarantee liabilities | ||||||
Guarantee liabilities at beginning of the year | $ 3,001,839 | ¥ 20,898,201 | ¥ 545,169,033 | ¥ 100,661,452 | ||
Provision at the inception of new loans | 26,435 | 184,036 | 7,657,314 | 857,764,076 | ||
Net payout | (895,728) | (6,235,879) | (723,616,603) | (547,232,035) | ||
Released on expiration | (735,244) | (5,118,616) | (24,675,313) | (48,603,136) | ||
Contingent liability | 1,112,868 | 7,747,561 | 216,363,770 | 182,578,676 | ||
Guarantee liabilities at end of the year | 2,510,170 | ¥ 17,475,303 | $ 3,001,839 | 20,898,201 | 545,169,033 | |
Maximum potential undiscounted future payment | $ 207,080,370 | 2,350,198,084 | ¥ 1,441,652,114 | |||
Portfolio amount (as a percent) | 0.60% | 0.60% | ||||
Real estate properties collateral | ||||||
Guarantee liabilities | ||||||
Maximum potential undiscounted future payment | $ 3,110,000,000 | 280,000,000 | ¥ 21,670,000,000 | |||
Xiaoying Credit Loan | ||||||
Guarantee liabilities | ||||||
Guarantee liabilities at beginning of the year | 2,771,944 | ¥ 19,297,719 | 514,475,024 | 38,368,513 | ||
Provision at the inception of new loans | 5,884,134 | 797,431,715 | ||||
Net payout | (909,746) | (6,333,472) | (667,658,887) | (411,239,134) | ||
Released on expiration | (483,568) | (3,366,501) | (15,691,880) | (19,172,658) | ||
Contingent liability | 41,543 | 289,211 | 182,289,328 | 109,086,588 | ||
Guarantee liabilities at end of the year | $ 1,420,173 | ¥ 9,886,957 | $ 2,771,944 | ¥ 19,297,719 | 514,475,024 | |
Remaining weighted average contractual term (Month) | 13 months 2 days | 13 months 2 days | 18 months 1 day | 18 months 1 day | ||
Estimated net default rate (in percentage) | 15.70% | 16.57% | 15.70% | |||
Maximum potential undiscounted future payment | $ 2,918,042 | ¥ 61,705,508 | ¥ 20,314,823 | |||
Xiaoying Housing Loan | ||||||
Guarantee liabilities | ||||||
Guarantee liabilities at beginning of the year | 229,895 | ¥ 1,600,482 | 8,688,973 | 7,298,609 | ||
Provision at the inception of new loans | 26,435 | 184,036 | 1,773,180 | 23,970,437 | ||
Net payout | 14,018 | 97,593 | (378,694) | (1,169,476) | ||
Released on expiration | (251,676) | (1,752,115) | (8,482,977) | (21,410,597) | ||
Guarantee liabilities at end of the year | $ 18,672 | ¥ 129,996 | $ 229,895 | ¥ 1,600,482 | 8,688,973 | |
Remaining weighted average contractual term (Month) | 7 months 27 days | 7 months 27 days | 3 months 18 days | 3 months 18 days | ||
Estimated net default rate (in percentage) | 0.60% | 0.60% | 0.60% | |||
Maximum potential undiscounted future payment | $ 3,112,153 | ¥ 282,830,247 | ¥ 21,666,185 | |||
Internet Channel | ||||||
Guarantee liabilities | ||||||
Guarantee liabilities at beginning of the year | 2,929,686 | 2,477,791 | ||||
Provision at the inception of new loans | 28,924,659 | |||||
Net payout | (12,890,754) | (23,731,237) | ||||
Released on expiration | (365,456) | (4,741,527) | ||||
Contingent liability | 1,071,325 | ¥ 7,458,350 | ¥ 10,326,524 | |||
Guarantee liabilities at end of the year | $ 1,071,325 | ¥ 7,458,350 | 2,929,686 | |||
Remaining weighted average contractual term (Month) | 0 months | 0 months | 8 months 6 days | 8 months 6 days | ||
Estimated net default rate (in percentage) | 0.00% | |||||
Maximum potential undiscounted future payment | $ 201,050,175 | ¥ 2,004,234,932 | ¥ 1,399,671,106 | |||
Other Products | ||||||
Guarantee liabilities | ||||||
Guarantee liabilities at beginning of the year | 19,075,350 | 52,516,539 | ||||
Provision at the inception of new loans | 7,437,265 | |||||
Net payout | (42,688,268) | (111,092,188) | ||||
Released on expiration | (135,000) | (3,278,354) | ||||
Contingent liability | ¥ 23,747,918 | 73,492,088 | ||||
Guarantee liabilities at end of the year | ¥ 19,075,350 | |||||
Remaining weighted average contractual term (Month) | 0 months | 0 months | 3 months 20 days | 3 months 20 days | ||
Estimated net default rate (in percentage) | 0.00% | |||||
Maximum potential undiscounted future payment | ¥ 1,427,397 |
Related party balances and tr_2
Related party balances and transactions (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($)item | Dec. 31, 2019CNY (¥)item | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Related party balances and transactions | ||||
Loan from related parties | ¥ 285,467,540 | |||
Loan repayment to related parties | 392,113,384 | |||
Loan provided to related parties | ¥ 217,000,000 | |||
Consideration paid equal to principal amount of loan assets | $ 54,583,585 | ¥ 380,000,000 | ||
Interest income | 3,894,331 | ¥ 27,111,557 | ||
Loan portfolios transferred | $ | $ 15,600,000 | |||
Jiangxi Ruijing | ||||
Related party balances and transactions | ||||
Guarantee provided over the worth of loans | ¥ 1,333,503,026 | |||
Guarantee fees received from borrowers | 21,918,796 | |||
Remittance to related party as a security deposit | ¥ 20,000,000 | |||
Number of earnings rights purchased | item | 2 | 2 | ||
Jiangxi Ruijing | Loan 1 | ||||
Related party balances and transactions | ||||
Loan portfolios transferred | $ 14,364,101 | ¥ 100,000,000 | ||
Jiangxi Ruijing | Loan 2 | ||||
Related party balances and transactions | ||||
Loan portfolios transferred | $ 40,219,483 | 280,000,000 | ||
Zijinzhonghao (Zhejiang) Investment Co., Ltd. | ||||
Related party balances and transactions | ||||
Loan portfolios transferred | ¥ 108,700,000 |
Income taxes - Tax rates (Detai
Income taxes - Tax rates (Details) | 12 Months Ended | 36 Months Ended | |||
Dec. 31, 2019USD ($)subsidiary | Dec. 31, 2019CNY (¥)subsidiary | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019USD ($) | |
Income taxes | |||||
Income tax rate (as a percent) | 25.00% | 25.00% | |||
Income tax benefit (expense) | $ (13,373,358) | ¥ (93,102,643) | ¥ 209,921,188 | ¥ 138,248,227 | |
Tax holiday period (in years) | 2 years | 2 years | |||
Subsidiaries in Shenzhen | Tax year 2019 to 2021 | PRC | |||||
Income taxes | |||||
Income tax rate (as a percent) | 12.50% | 12.50% | |||
Hong Kong | |||||
Income taxes | |||||
Income tax rate (as a percent) | 16.50% | 16.50% | |||
Income tax benefit (expense) | $ | $ 0 | ||||
PRC | |||||
Income taxes | |||||
Income tax rate (as a percent) | 25.00% | 25.00% | |||
Statute of limitations period (in years) | 3 years | 3 years | |||
Extension period for statute of limitations under special circumstances (in years) | 5 years | 5 years | |||
Underpayment of tax liability listed as special circumstance | ¥ | ¥ 100,000 | ||||
Statute of limitations period for related party transaction (in years) | 10 years | 10 years | |||
Statute of limitations period for tax evasion (in years) | 0 years | 0 years | |||
Qualified software enterprise | PRC | |||||
Income taxes | |||||
Number of subsidiary | subsidiary | 1 | 1 | |||
Tax reduction (as a percent) | 50.00% | 50.00% | |||
Tax reduction period (in years) | 3 years | 3 years |
Income taxes - Current and defe
Income taxes - Current and deferred component of income tax expenses (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Income taxes | ||||
Current tax | $ 10,314,759 | ¥ 71,809,290 | ¥ 213,083,260 | ¥ 395,369,391 |
Deferred tax | (23,688,117) | (164,911,933) | (3,162,072) | (257,121,164) |
Total | $ (13,373,358) | ¥ (93,102,643) | ¥ 209,921,188 | ¥ 138,248,227 |
Income taxes - Pre-tax income (
Income taxes - Pre-tax income (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Income taxes [Line Items] | ||||
Pre-tax income | $ 95,365,488 | ¥ 663,915,450 | ¥ 1,084,922,919 | ¥ 478,575,264 |
Cayman Islands | ||||
Income taxes [Line Items] | ||||
Pre-tax income | (1,433,335) | (9,978,594) | (11,832,862) | 86,909 |
Hong Kong | ||||
Income taxes [Line Items] | ||||
Pre-tax income | (20,140) | (140,208) | (2,423,249) | (17,470) |
PRC | ||||
Income taxes [Line Items] | ||||
Pre-tax income | $ 96,818,963 | ¥ 674,034,252 | ¥ 1,099,179,030 | ¥ 478,505,825 |
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, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Income taxes | ||||
Income tax rate (as a percent) | 25.00% | 25.00% | ||
Expected tax at PRC rate | $ 23,841,372 | ¥ 165,978,862 | ¥ 271,230,730 | ¥ 119,643,817 |
Other expenses not deductible for tax purposes | 3,913,314 | 27,243,710 | 226,076 | 119,376 |
Share based compensation expenses not deductible for tax purposes | 5,616,527 | 39,101,140 | 42,959,121 | 18,502,393 |
Effect of tax holiday and preferential tax rate | (40,194,099) | (279,823,276) | (104,548,726) | |
Effect of different tax rate of subsidiary operation in other jurisdiction | 409,886 | 2,853,547 | 3,164,192 | (20,242) |
Research and development tax deduction | (1,818,120) | (12,657,389) | (32,720,713) | |
Adjustment on income tax of the previous periods | 138,099 | 961,418 | (17,208,473) | |
Tax on undistributed earnings/(loss) of VIEs | (6,667,693) | (46,419,145) | 46,419,145 | |
Valuation allowance movement | 639,387 | 4,451,281 | 399,836 | 2,883 |
Others | 747,969 | 5,207,209 | ||
Total | $ (13,373,358) | ¥ (93,102,643) | ¥ 209,921,188 | ¥ 138,248,227 |
Income taxes - Effect of Tax ho
Income taxes - Effect of Tax holiday and preferential tax rate (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2019CNY (¥)¥ / shares | Dec. 31, 2018CNY (¥)¥ / shares | |
Income taxes | |||
Aggregate amount of tax holiday and preferential tax rate | $ 40,194,099 | ¥ 279,823,276 | ¥ 104,548,726 |
Aggregate effect on basic net income per share | (per share) | $ 0.13 | ¥ 0.89 | ¥ 0.36 |
Aggregate effect on diluted net income per share | (per share) | $ 0.13 | ¥ 0.88 | ¥ 0.34 |
Income taxes - Components of th
Income taxes - Components of the deferred tax assets and liabilities (Details) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Deferred tax assets: | |||||
Long-term investments | $ 496,386 | ¥ 3,455,742 | ¥ 1,575,000 | ||
Accrued expenses | 4,433,846 | 30,867,551 | 3,394,533 | ||
Accounts receivables | 15,106,454 | 105,168,108 | |||
Guarantee liabilities | 30,166,745 | 210,014,843 | 235,329,500 | ||
Financial guarantee derivatives | 16,714,567 | 116,363,471 | 54,770,514 | ||
Loan receivable from Xiaoying Housing Loans | 1,038,773 | 7,231,727 | 3,886,705 | ||
Loans held for sale | 853,899 | ||||
Loans receivable from Xiaoying Credit Loans and Xiaoying Revolving Loans | 1,474,433 | 10,264,710 | |||
Operating loss carryforwards, net | 808,952 | 5,631,764 | 46,845,223 | ||
Lease liabilities | 1,899,887 | 13,226,632 | |||
Others | 21,413 | 149,079 | 395,882 | ||
Deferred tax assets, gross | 72,161,456 | 502,373,627 | 347,051,256 | ||
Valuation allowance | (697,371) | (4,854,955) | $ (57,984) | (403,674) | ¥ (3,838) |
Total deferred tax assets, net | 71,464,085 | 497,518,672 | 346,647,582 | ||
Deferred tax liabilities: | |||||
Property and equipment | 95,187 | 662,682 | 1,008,419 | ||
Long-term investments | 92,905 | 646,786 | |||
Investment in Consolidated Trusts | 2,722,459 | 18,953,213 | |||
Right-of-use assets | 1,885,150 | 13,124,040 | |||
Investment in VIEs | 46,419,145 | ||||
Total deferred tax liabilities | $ 4,795,701 | ¥ 33,386,721 | ¥ 47,427,564 |
Income taxes - Movement of the
Income taxes - Movement of the valuation allowance (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2019CNY (¥) | |
Income taxes | ||||
Balance at the beginning of the year | $ 57,984 | ¥ 403,674 | ¥ 3,838 | |
(Addition)/Reverse | 639,387 | 4,451,281 | 399,836 | |
Balance at the end of the year | 697,371 | ¥ 4,854,955 | 403,674 | |
Operating loss carryforwards, net | $ 808,952 | 46,845,223 | ¥ 5,631,764 | |
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 | $ 334,274,955 | 2,327,155,384 | ||
Unrecognized deferred tax liabilities | 33,427,495 | 232,715,538 | ||
Tax effects of distribution of VIE's earnings | 46,419,145 | 0 | ||
Subsidiaries and VIEs and subsidiaries of the VIEs | ||||
Income taxes | ||||
Operating loss carryforwards, net | $ 5,600,578 | ¥ 188,212,704 | ¥ 38,990,106 |
Income taxes - Unrecognized tax
Income taxes - Unrecognized tax benefit (Details) - 12 months ended Dec. 31, 2019 | USD ($) | CNY (¥) | CNY (¥) |
Roll-forward of unrecognized tax benefits | |||
Additions for tax positions | $ 45,851,126 | ¥ 319,206,371 | |
Reductions for tax position | (10,458,755) | (72,811,764) | |
Balance at end of the year | 35,392,371 | 246,394,607 | |
Accrued interest | 546,692 | ¥ 3,805,963 | |
Tax impact arising from impairment losses and charge-offs of accounts receivable and contract assets | 19,833,495 | 138,076,827 | |
Tax impact related to the provision for contingent guarantee liabilities | $ 26,017,631 | ¥ 181,129,544 |
Net income per share and net _3
Net income per share and net income attributable to common stockholders (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | |
Net income per share and net income attributable to common stockholders | ||||
Net income attributable to X Financial | $ 111,217,807 | ¥ 774,276,129 | ¥ 883,111,893 | ¥ 340,275,002 |
Shares (denominator): | ||||
Weighted average number of ordinary shares used in computing basic EPS | 313,757,887 | 313,757,887 | 286,588,402 | 261,219,657 |
Basic net income per share | (per share) | $ 0.35 | ¥ 2.47 | ¥ 3.08 | ¥ 1.30 |
Diluted effects of stock options and RSUs | 5,989,505 | 5,989,505 | 17,395,882 | 18,491,147 |
Weighted average number of ordinary shares used in computing diluted EPS | 319,747,392 | 319,747,392 | 303,984,284 | 279,710,804 |
Diluted net income per share | (per share) | $ 0.35 | ¥ 2.42 | ¥ 2.91 | ¥ 1.22 |
Net income per share and net _4
Net income per share and net income attributable to common stockholders - Anti-dilutive shares (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock options | |||
Anti-dilutive shares | |||
Anti-dilutive shares not included in the computation of diluted income (loss) per share | 52,405,826 | 56,926,054 | 7,857,000 |
Restricted stock units | |||
Anti-dilutive shares | |||
Anti-dilutive shares not included in the computation of diluted income (loss) per share | 3,689,400 |
Share-based compensation (Detai
Share-based compensation (Details) | Apr. 30, 2019shares | 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, 2019USD ($)shares | Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥)¥ / shares | Dec. 31, 2017CNY (¥) |
Share-based compensation | |||||||||||||||
Number of shares granted | shares | 155,000 | 475,000 | 40,000,000 | 40,000,000 | 841,054 | 16,616,000 | 7,425,000 | 630,000 | 13,843,645 | 155,000 | 155,000 | ||||
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 | $ 21,681,689 | ¥ 150,943,580 | ¥ 171,836,485 | ¥ 74,009,575 | |||||||
Service period (in years) | 5 years | 5 years | |||||||||||||
Weighted-average grant date fair value of the options | ¥ 10.33 | ¥ 13.08 | |||||||||||||
Minimum | |||||||||||||||
Share-based compensation | |||||||||||||||
Vesting period (in years) | 3 years | 3 years | |||||||||||||
Maximum | |||||||||||||||
Share-based compensation | |||||||||||||||
Vesting period (in years) | 4 years | 4 years | |||||||||||||
Exercise price (in dollars per share) | ¥ 31.96 |
Share-based compensation - Stoc
Share-based compensation - Stock option valuation (Details) - ¥ / shares | Apr. 30, 2019 | Oct. 31, 2018 | May 09, 2018 | Apr. 30, 2018 | Oct. 11, 2017 | May 03, 2016 | Jun. 29, 2015 | Jan. 25, 2015 | Dec. 31, 2019 | Dec. 31, 2018 |
Share-based compensation | ||||||||||
Fair value of underlying ordinary shares (in dollars per share) | ¥ 16.65 | ¥ 26.74 | ¥ 38.14 | ¥ 41.33 | ¥ 30.29 | ¥ 16.98 | ¥ 9.66 | ¥ 4.91 | ||
Exercise Price (in dollars per share) | ¥ 31.96 | ¥ 27.93 | ¥ 30.27 | ¥ 25.42 | ¥ 0.27 | ¥ 0.27 | ||||
Expected Volatility per annum (as a percent) | 30.15% | 43.90% | 39.30% | 45.47% | 38.60% | 42.00% | 38.00% | 43.00% | ||
Risk-Free Rate (as a percent) | 2.97% | 3.15% | 2.94% | 2.96% | 2.35% | 1.81% | 2.33% | 1.81% | ||
Exercise Multiple | 0 | 2.5 | 2.5 | 2.5 | 2.5 | 2.5 | 2.5 | |||
Dividend Yield ( as a percent ) | ||||||||||
Time to Maturity (Years) | 10 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 | ¥ 31.96 | ¥ 30.27 | ||||||
Exercise Multiple | (38.33) |
Share-based compensation - St_2
Share-based compensation - Stock option activity (Details) - CNY (¥) | Apr. 30, 2019 | Oct. 31, 2018 | May 09, 2018 | Apr. 30, 2018 | Oct. 11, 2017 | May 03, 2016 | Jun. 29, 2015 | Jan. 25, 2015 | Dec. 31, 2019 | Dec. 31, 2018 |
Number of Options | ||||||||||
Outstanding at beginning of the year (in shares) | 77,466,699 | |||||||||
Granted (in shares) | 155,000 | 475,000 | 40,000,000 | 841,054 | 16,616,000 | 7,425,000 | 630,000 | 13,843,645 | 155,000 | |
Exercised (in shares) | 14,007,474 | |||||||||
Forfeited/Cancelled (in shares) | 3,452,998 | |||||||||
Outstanding at end of the year (in shares) | 60,161,227 | 77,466,699 | ||||||||
Vested and expected to vest, Number of Options (in shares) | 60,161,227 | |||||||||
Exercisable, Number of Options (in shares) | 9,959,062 | |||||||||
Exercise Price | ||||||||||
Granted (in dollars per share) | ¥ 4.75 | |||||||||
Outstanding at end of the year (in dollars per share) | ¥ 31.96 | ¥ 27.93 | ¥ 30.27 | ¥ 25.42 | ¥ 0.27 | ¥ 0.27 | ||||
Intrinsic value of options | ||||||||||
Outstanding at beginning of the year | ¥ 457,386,371 | |||||||||
Outstanding at end of the year | 74,834,115 | ¥ 457,386,371 | ||||||||
Vested and expected to vest, Intrinsic value of options | 74,834,115 | |||||||||
Exercisable, Intrinsic value of options | ¥ 30,925,254 | |||||||||
Minimum | ||||||||||
Exercise Price | ||||||||||
Outstanding at beginning of the year (in dollars per share) | ¥ 0.27 | |||||||||
Exercised (in dollars per share) | 0.27 | |||||||||
Forfeited/Cancelled (in dollars per share) | 0.27 | |||||||||
Outstanding at end of the year (in dollars per share) | ¥ 0.27 | ¥ 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) | 5 years 26 days | 6 years 26 days | ||||||||
Exercised (in years) | 5 years 26 days | |||||||||
Forfeited/Cancelled (in years) | 5 years 5 months 27 days | |||||||||
Vested and expected to vest, Remaining Contractual (in years) | 5 years 26 days | |||||||||
Exercisable, Remaining Contractual (in years) | 5 years 26 days | |||||||||
Maximum | ||||||||||
Exercise Price | ||||||||||
Outstanding at beginning of the year (in dollars per share) | ¥ 30.27 | |||||||||
Granted (in dollars per share) | 31.96 | |||||||||
Exercised (in dollars per share) | 10.71 | |||||||||
Forfeited/Cancelled (in dollars per share) | 31.96 | |||||||||
Outstanding at end of the year (in dollars per share) | ¥ 27.02 | ¥ 10.71 | 31.96 | ¥ 30.27 | ||||||
Vested and expected to vest, Exercise Price (in dollars per share) | 31.96 | |||||||||
Exercisable, Exercise Price (in dollars per share) | ¥ 25.42 | |||||||||
Remaining Contractual | ||||||||||
Outstanding remaining contractual term(in years) | 9 years 3 months 29 days | 9 years 9 months 29 days | ||||||||
Granted (in years) | 9 years 3 months 29 days | |||||||||
Exercised (in years) | 7 years 9 months 11 days | |||||||||
Forfeited/Cancelled (in years) | 9 years 3 months 29 days | |||||||||
Vested and expected to vest, Remaining Contractual (in years) | 9 years 3 months 29 days | |||||||||
Exercisable, Remaining Contractual (in years) | 9 years 11 months 5 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, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) |
Share-based compensation expense | |||||||||||
Share-based compensation expense | $ 1,332,770 | ¥ 9,163,461 | $ 2,357,666 | ¥ 16,210,135 | $ 21,681,689 | ¥ 150,943,580 | ¥ 171,836,485 | ¥ 74,009,575 | |||
Total unrecognized compensation expense | $ 33,333,516 | 425,970,675 | 477,996,293 | ¥ 232,061,272 | |||||||
weighted-average period (in years) | 2 years 5 months 5 days | 2 years 5 months 5 days | |||||||||
Deferred tax benefit recognized | $ 0 | $ 0 | $ 0 | ||||||||
Origination and servicing | |||||||||||
Share-based compensation expense | |||||||||||
Share-based compensation expense | 12,736,812 | ¥ 88,671,136 | 103,124,758 | 55,403,160 | |||||||
General and administrative | |||||||||||
Share-based compensation expense | |||||||||||
Share-based compensation expense | 8,682,385 | 60,445,030 | 66,264,371 | 18,227,289 | |||||||
Sales and marketing | |||||||||||
Share-based compensation expense | |||||||||||
Share-based compensation expense | 262,492 | 1,827,414 | ¥ 2,447,356 | ¥ 379,126 | |||||||
Stock options | Origination and servicing | |||||||||||
Share-based compensation expense | |||||||||||
Share-based compensation expense | 64,180 | 446,808 | |||||||||
Stock options | General and administrative | |||||||||||
Share-based compensation expense | |||||||||||
Share-based compensation expense | 821,199 | 5,717,025 | |||||||||
Stock options | Sales and marketing | |||||||||||
Share-based compensation expense | |||||||||||
Share-based compensation expense | 1,247 | 8,682 | |||||||||
Restricted stock units | |||||||||||
Share-based compensation expense | |||||||||||
Total grant date fair value | 622,384 | 4,332,911 | |||||||||
Share-based compensation expense | 886,626 | ¥ 6,172,515 | |||||||||
Total unrecognized compensation expense | $ 4,919,153 | ¥ 34,246,159 | |||||||||
weighted-average period (in years) | 2 years 6 months 4 days | 2 years 6 months 4 days |
Share-based compensation - Rest
Share-based compensation - Restricted stocks unit (Details) | Nov. 20, 2019shares | Aug. 13, 2019shares | Apr. 15, 2019shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2019CNY (¥)¥ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expiration term | 10 years | 10 years | |||
Stock options cancelled (in shares) | 3,452,998 | 3,452,998 | |||
Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting term | 3 years | 3 years | |||
Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting term | 4 years | 4 years | |||
Restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted | 3,689,400 | 3,689,400 | |||
Expiration term | 0 years | 10 years | 10 years | ||
Share-based Goods and Nonemployee Services Transaction, Modification of Terms, Incremental Compensation Cost | $ 51,796 | ¥ 360,592 | |||
Number of Restricted Shares | |||||
Granted (in shares) | 3,689,400 | 3,689,400 | |||
Vested (in shares) | 49,998 | 49,998 | |||
Outstanding ending balance (in shares) | 3,639,402 | 3,639,402 | |||
Weighted-Average Grant-Date Fair Value | |||||
Granted (in dollars per share) | ¥ / shares | ¥ 8.21 | ||||
Vested (in dollars per share) | ¥ / shares | 17.60 | ||||
Outstanding ending balance (in dollars per share) | ¥ / shares | ¥ 8.21 | ||||
Restricted stock units | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting term | 2 years | 3 years | 3 years | ||
Restricted stock units | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting term | 3 years | 4 years | 4 years | ||
Restricted stock units | Directors | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted | 150,000 | ||||
Number of Restricted Shares | |||||
Granted (in shares) | 150,000 | ||||
Restricted stock units | Certain employees | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted | 1,789,400 | ||||
Number of Restricted Shares | |||||
Granted (in shares) | 1,789,400 | ||||
Restricted stock units | Certain senior managements | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted | 250,000 | 1,500,000 | |||
Stock options cancelled (in shares) | 250,000 | 1,500,000 | |||
Number of Restricted Shares | |||||
Granted (in shares) | 250,000 | 1,500,000 |
Statutory reserves and restri_2
Statutory reserves and restricted net assets (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
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, additional paid-in capital and statutory reserve funds, as determined pursuant to PRC GAAP | $ 376,563,445 | ¥ 2,621,559,394 | ¥ 1,632,374,093 |
Subsequent events (Details)
Subsequent events (Details) | 1 Months Ended | 3 Months Ended | |||||
Jan. 31, 2020USD ($)item | Mar. 31, 2020USD ($)loanfacility | Mar. 31, 2020CNY (¥) | Jan. 31, 2020CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Subsequent events | |||||||
Deposits | $ 74,509,497 | ¥ 518,720,216 | ¥ 40,000,000 | ||||
PRC bank | |||||||
Subsequent events | |||||||
Outstanding balances of loans drawn | $ 29,159,126 | ¥ 203,000,000 | ¥ 198,000,000 | ||||
Interest rate (in percent) | 2.08% | ||||||
Subsequent Event | PRC bank | |||||||
Subsequent events | |||||||
Number of banks with whom short-term loan agreements were entered | 2 | 2 | |||||
Outstanding balances of loans drawn | $ 23,126,203 | $ 25,926,485 | ¥ 180,495,000 | ¥ 161,000,000 | |||
Interest rate (in percent) | 3.95% | 4.15% | 4.15% | 3.95% | |||
Deposits | $ 25,500,000 | $ 28,650,000 |
CONDENSED FINANCIAL INFORMATI_3
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY - BALANCE SHEETS (Details) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
ASSETS | ||||
Cash and cash equivalents | $ 144,500,022 | ¥ 1,005,980,251 | ¥ 1,069,361,250 | ¥ 671,360,926 |
Prepaid expenses and other current assets | 176,128,276 | 1,226,169,830 | 115,192,835 | |
TOTAL ASSETS | 1,189,438,432 | 8,280,632,478 | 4,636,969,497 | |
LIABILITIES | ||||
Accrued expenses and other liabilities | 39,420,765 | 274,439,480 | 178,701,474 | |
TOTAL LIABILITIES | 562,142,954 | 3,913,526,810 | 1,118,900,645 | |
Equity: | ||||
Common Shares | 28,906 | 201,240 | 189,586 | |
Additional paid-in capital | 429,107,865 | 2,987,363,137 | 2,824,223,031 | |
Retained earnings | 188,341,234 | 1,311,194,007 | 640,114,859 | |
Accumulated other comprehensive income | 9,638,427 | 67,100,802 | 52,494,757 | |
Total X Financial shareholders' equity | 627,116,432 | 4,365,859,186 | 3,517,022,233 | |
TOTAL LIABILITIES AND EQUITY | 1,189,438,432 | 8,280,632,478 | 4,636,969,497 | |
Parent Company | Reportable legal entity | ||||
ASSETS | ||||
Cash and cash equivalents | 2,018,413 | 14,051,790 | 309,504,088 | |
Prepaid expenses and other current assets | 684,154 | 4,762,941 | 5,823,242 | |
Amount due from subsidiaries and VIEs | 146,208,579 | 1,017,874,882 | 818,695,709 | |
Investments in subsidiaries and VIEs | 485,291,951 | 3,378,505,504 | 2,438,249,431 | |
TOTAL ASSETS | 634,203,097 | 4,415,195,117 | 3,572,272,470 | |
LIABILITIES | ||||
Accrued expenses and other liabilities | 7,086,665 | 49,335,931 | 55,250,237 | |
TOTAL LIABILITIES | 7,086,665 | 49,335,931 | 55,250,237 | |
Equity: | ||||
Common Shares | 28,906 | 201,240 | 189,586 | |
Additional paid-in capital | 429,107,865 | 2,987,363,137 | 2,824,223,031 | |
Retained earnings | 188,341,234 | 1,311,194,007 | 640,114,859 | |
Accumulated other comprehensive income | 9,638,427 | 67,100,802 | 52,494,757 | |
Total X Financial shareholders' equity | 627,116,432 | 4,365,859,186 | 3,517,022,233 | |
TOTAL LIABILITIES AND EQUITY | $ 634,203,097 | ¥ 4,415,195,117 | ¥ 3,572,272,470 |
CONDENSED FINANCIAL INFORMATI_4
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY - STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
General and administrative | $ (32,675,712) | ¥ (227,481,772) | ¥ (220,023,783) | ¥ (98,236,038) |
Foreign exchange loss | 88,540 | 616,395 | 9,677 | (478,590) |
Equity in profit (loss) of subsidiaries and VIEs | 2,507,670 | 17,457,899 | 8,055,105 | (832,385) |
Other income (loss), net | 3,746,268 | 26,080,766 | (5,904,176) | 89,690 |
Net income attributable to X Financial | 111,217,807 | 774,276,129 | 883,111,893 | 340,275,002 |
Comprehensive income attributable to X Financial | 113,315,834 | 788,882,174 | 902,157,010 | 315,811,046 |
Parent Company | Reportable legal entity | ||||
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
General and administrative | (2,075,893) | (14,451,949) | (79,265,535) | (74,802,853) |
Foreign exchange loss | (478,590) | |||
Interest income | 11,065 | 77,030 | 122,320 | 1,358,777 |
Equity in profit (loss) of subsidiaries and VIEs | 112,808,537 | 785,350,473 | 961,430,600 | 414,197,668 |
Other income (loss), net | 474,098 | 3,300,575 | 824,508 | |
Net income attributable to X Financial | 111,217,807 | 774,276,129 | 883,111,893 | 340,275,002 |
Other comprehensive income (loss) | 2,098,027 | 14,606,045 | 19,045,117 | (24,463,956) |
Comprehensive income attributable to X Financial | $ 113,315,834 | ¥ 788,882,174 | ¥ 902,157,010 | ¥ 315,811,046 |
CONDENSED FINANCIAL INFORMATI_5
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY - STATEMENT OF CASH FLOWS (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($)$ / ¥ | Dec. 31, 2019CNY (¥)$ / ¥ | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
STATEMENT OF CASH FLOWS | ||||
Net cash provided by (used in) operating activities | $ 86,266,016 | ¥ 600,566,742 | ¥ 5,354,151 | ¥ (615,327,191) |
Loan to subsidiaries and VIE | ¥ | (217,000,000) | |||
Net cash used in investing activities | (442,382,861) | (3,079,780,993) | 412,870,517 | (10,809,388) |
Dividend paid | (14,823,319) | (103,196,981) | ||
Net cash provided by (used in) financing activities | 389,437,812 | 2,711,188,159 | 181,789,413 | 830,154,156 |
Effect of foreign exchange rate changes | 1,525,882 | 10,622,885 | (6,283,113) | (24,740,525) |
Net increase (decrease) in cash and cash equivalents | 34,846,849 | 242,596,793 | 593,730,968 | 179,277,052 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR | 183,531,075 | 1,277,706,639 | 683,975,671 | 504,698,619 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT YEAR END | $ 218,377,924 | ¥ 1,520,303,432 | 1,277,706,639 | 683,975,671 |
Currency exchange rate | $ / ¥ | 6.9618 | 6.9618 | ||
Parent Company | Reportable legal entity | ||||
STATEMENT OF CASH FLOWS | ||||
Net cash provided by (used in) operating activities | $ (1,437,099) | ¥ (10,004,797) | 36,187,975 | 15,030,828 |
Loan to subsidiaries and VIE | (28,610,298) | (199,179,173) | (519,786,600) | (69,544,598) |
Net cash used in investing activities | (28,610,298) | (199,179,173) | (519,786,600) | (69,544,598) |
Contribution from shareholders | 866,969 | 6,035,665 | 681,989,413 | |
Dividend paid | (14,823,319) | (103,196,981) | ||
Net cash provided by (used in) financing activities | (13,956,350) | (97,161,316) | 681,989,413 | |
Effect of foreign exchange rate changes | 1,564,680 | 10,892,988 | (6,283,113) | (24,740,525) |
Net increase (decrease) in cash and cash equivalents | (42,439,067) | (295,452,298) | 192,107,675 | (79,254,295) |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR | 44,457,481 | 309,504,088 | 117,396,413 | 196,650,708 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT YEAR END | $ 2,018,414 | ¥ 14,051,790 | ¥ 309,504,088 | ¥ 117,396,413 |
Currency exchange rate | 0.1454 | 0.1454 |