UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 6-K

 


 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE

SECURITIES EXCHANGE ACT OF 1934

 


 

For the month of June 2019

 

Commission File Number: 001-38245

 

Hexindai Inc.

(Exact name of registrant as specified in its charter)

 


 

13th Floor, Block C, Shimao

No. 92 Jianguo Road

Chaoyang District, Beijing 100020

People’s Republic of China

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x                    Form 40-F o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

 


 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Hexindai Inc.

 

 

 

By:

/s/ Zhang Qisen (Johnson)

 

 

Zhang Qisen (Johnson)

 

 

Chief Financial Officer

 

 

Date: June 18, 2019

 

 

2


 

EXHIBIT INDEX

 

Exhibit No.

 

Description

 

 

 

Exhibit 99.1

 

Press Release

 

3


Exhibit 99.1

 

Hexindai Reports Unaudited Fourth Quarter and Fiscal Year 2019 Financial Results

 

BEIJING, CHINA, June 18, 2019 — Hexindai Inc. (NASDAQ: HX) (“Hexindai” or the “Company”), a fast-growing consumer lending marketplace in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended March 31, 2019.

 

Throughout the release, each ADS represents one ordinary share. Fiscal year refers to the 12 months ended March 31.

 

Fourth Quarter of Fiscal Year 2019 Operational Highlights

 

·                      Total loan volume facilitated (1) was US$61.7 million (RMB0.4 billion) during the fourth quarter of fiscal year 2019, a decrease of 84.3% from the fourth quarter of fiscal year 2018.

·                      Gross billing amount (net of VAT)(2) was US$9.0 million during the fourth quarter of fiscal year 2019, a decrease of 70.1% from the fourth quarter of fiscal year 2018.

·                      Gross billing ratio (net of VAT)(3) for credit loans was 14.5% during the fourth quarter of fiscal year 2019, an increase from 7.6% during the fourth quarter of fiscal year 2018.

·                      Number of borrowers (4) was 51,958 during the fourth quarter of fiscal year 2019, an increase of 55.9% from the fourth quarter of fiscal year 2018.

·                      Number of investors (5) was 20,894 during the fourth quarter of fiscal year 2019, a decrease of 66.3% from the fourth quarter of fiscal year 2018.

 


(1) Total loan volume facilitated is defined as the total principal amount of loans facilitated on our marketplace or recommended to other thirty-parties during the relevant period.

 

(2)“Gross billing amount” is defined as the aggregated loan facilitation fees and loan management fees charged to borrowers before cash incentives, net of value added tax. It differs from the revenue recognized at the time of recognition. For an individual secured loan transaction, the gross billing amount equals the gross accumulative loan management service revenue recognized over the term of the secured loan. For the traditional individual credit loan transaction, as the loan facilitation service fees are charged upfront upon the release of funds to borrowers, the gross billing amount equals the loan facilitation service revenue, while for the newly introduced individual credit loan we launched from third quarter of fiscal year 2018, the service fees are charged each period, the gross billing amount equals the gross accumulative loan management service revenue recognized over the estimated term of the credit loan.

 

(3)“Gross billing ratio” is defined as the gross billing amount divided by loan volume facilitated, presented in percentage. It is an operation metric we believe is a more accurate indicator of profitability.

 

(4) Refers to borrowers who recorded successful borrowing activity on our online marketplace or recommended to other third-parties during the relevant period.

 

(5) Refers to investors who made loan investments on our online marketplace during the relevant period.

 


 

Fourth Quarter of Fiscal Year 2019 Unaudited Financial Highlights

 

·                      Net revenue was US$4.1 million during the fourth quarter of fiscal year 2019, a decrease of 85.0% from the fourth quarter of fiscal year 2018.

·                      Operating costs and expenses were US$6.5 million during the fourth quarter of fiscal year 2019, a decrease of 21.6% from the fourth quarter of fiscal year 2018.

·                      Net income was US$2.8 million during the fourth quarter of fiscal year 2019, a decrease of 83.3% from the fourth quarter of fiscal year 2018.

·                      Basic earnings per common shares (“EPS”) in the fourth quarter of fiscal year 2019 was US$0.06 compared to US$0.36 in the same period of fiscal year 2018.

·                      Diluted EPS in the fourth quarter of fiscal year 2019 was US$0.05 compared to US$0.32 in the same period of fiscal year 2018.

·                      Adjusted net income attributable to Hexindai Inc.’s shareholders (Non-GAAP) in the fourth quarter of fiscal year 2019 was US$3.9 million, decreased by 78.4% from US$18.2 million in the fourth quarter of fiscal year 2018.

·                      Adjusted EBIT (Non-GAAP) in the fourth quarter of fiscal year 2019 was (US$1.4 million), decreased by 107.0% from US$20.4 million in the fourth quarter of fiscal year 2018.

 

Fiscal Year Ended March 31, 2019 Operational Highlights

 

·                      Total loan volume facilitated was US$564.9 million (RMB3.8 billion) during the fiscal year ended March 31, 2019, a decrease of 54.5% from US$1,257.6 million (RMB8.3 billion) during last fiscal year.

·                      Gross billing amount (net of VAT) was US$68.1 million during the fiscal year ended March 31, 2019, a decrease of 41.9% from last fiscal year.

·                      Gross billing ratio (net of VAT) for credit loans was 12.1% during the fiscal year ended March 31, 2019, an increase from 9.4% during last fiscal year.

·                      Number of borrowers was 84,891 during the fiscal year ended March 31, 2019, a decrease of 16.1% from last fiscal year.

·                      Number of investors was 118,247 during the fiscal year ended March 31, 2019, a decrease of 14.3% from last fiscal year.

·                      Delinquency rates (6) As of March 31, 2019, the delinquency rates for loans that are past due for 15-29 days, 30-59 days and 60-89 days were 0.257%, 0.337% and 0.367%, compared to 0.066%, 0.152% and 0.120%, as of March 31, 2018.

·                      M3+ Net Charge-Off Rates(7)As of March 31, 2019, the cumulative M3+ net charge-off rate for credit loans originated in the first vintage, from the inception to March 31, 2016, was 5.99%, compared to 5.81% as of December 31, 2018. As of March 31, 2019, the cumulative M3+ net charge-off rate for credit loans originated in the second vintage, for fiscal year 2017, was 4.94%, compared to 4.56% as of December 31, 2018. As of March 31, 2019, the cumulative M3+ net charge-off rate for credit loans originated in the third vintage, for fiscal year 2018, was 1.97%, compared to 1.35% as of December 31, 2018. As of March 31, 2019, the cumulative M3+ net charge-off rate for credit loans originated in the fourth vintage, for fiscal year 2019, was 0.63% compared to 0.24% for loans originated in the fourth vintage, for the period April 1, 2018 to December 31, 2018 as of December 31, 2018.

 


(6) We define the delinquency rates as of the end of the period as the outstanding balance of principal and interest that were 15 to 29, 30 to 59 and 60 to 89 calendar days delinquent as a percentage of the total outstanding balance of principal and interest for the relevant group of loans during such period.

 

(7) We define ‘‘M3+ Net Charge-off Rates’’, with respect to loans facilitated during a specified time period or the ‘‘vintage’’, as the total balance of outstanding principal of loans that become delinquent for over three months during a specified period and the remainder of the expected interest for the life of such loans, divided by the total principal of the loans facilitated in such vintage.

 


 

Through Hexindai’s platform, the total loan volume facilitated was approximately US$3.1 billion (RMB20.5 billion) from the inception of its business in March 2014 through March 31, 2019.

 

Fiscal Year Ended March 31, 2019 Unaudited Financial Highlights

 

·                      Net revenue was US$61.3 million in the fiscal year ended March 31, 2019, a decrease of 42.8% from last fiscal year.

·                      Operating costs and expenses were US$56.2 million in the fiscal year ended March 31, 2019, an increase of 79.2% from last fiscal year.

·                      Net income was US$5.5 million in the fiscal year ended March 31, 2019, a decrease of 91.6% from last fiscal year.

·                      Basic EPS in the fiscal year ended March 31, 2019 was US$0.11 compared to US$1.46 in last fiscal year.

·                      Diluted EPS in the fiscal year ended March 31, 2019 was US$0.10 compared to US$1.37 in last fiscal year.

·                      Adjusted net income attributable to Hexindai Inc.’s shareholders (Non-GAAP) in the fiscal year ended 2019 was US$12.1 million, decreased by 82.0% from US$67.3 million in last fiscal year.

·                      Adjusted EBIT (Non-GAAP) in the fiscal year ended 2019 was US$13.2 million, decreased by 83.1% from US$78.0 million in last fiscal year.

 

Mr. Xiaobo An, Chairman and Chief Executive Officer of Hexindai, commented, “We believe the worst is behind us as the market environment continues to gradually improve and investor confidence returns. Our outlook has remarkably improved this quarter, especially on a sequential basis. Total loans facilitated during the quarter doubled sequentially to US$61.7 million and net revenue increased to US$4.1 million. Gross billing amount, net of VAT, more than tripled sequentially to US$9.0 million. More importantly, our default rate remained low which demonstrated just how effective our cutting-edge risk management systems have been at stabilizing our business in what was a very unstable market environment. While our top line continues to feel the impact, it is gradually improving as is our cost structure and bottom line as we return our focus to new loan products as the market rebuilds.”

 

“Having made more progress in the regulatory compliance review process as the Beijing Local Financial Supervision and Administration (formerly the Beijing Municipal Bureau of Financial Work) concluded its field inspection work of the company, we are awaiting further notice to begin the registration process which we believe has already begun to rebuild confidence in our platform. We continue to diversify our funding sources with the addition of institutions and funding partners to help us develop additional growth drivers going forward. In addition to our core medium-sized credit loan business, we launched an online microfinancing loan during the quarter for smaller-size loans. Microfinancing forms a critical part of our strategy to diversify revenue streams and expand our offerings vertically. With a comprehensive strategy in place and market sentiment gradually getting better, we expect to see both our loan volume and revenue improve throughout the rest of this year. I am confident that we are well positioned to take advantage of market opportunities as the industry consolidates leveraging our strong financial resources and operational capabilities, as well as experienced management team.”

 


 

Fourth Quarter of Fiscal Year 2019 Unaudited Financial Results

 

Net revenue

 

Net revenue during the fourth quarter of fiscal year 2019 was US$4.1 million, a decrease of 85.0% compared to US$27.6 million during the same quarter of fiscal year 2018. The decrease was primarily due to the significant decrease in the volume of credit loans facilitated through Hexindai’s marketplace, which decreased from US$418.4 million (RMB2.7 billion) in the fourth quarter of fiscal year 2018 to US$61.7 million (RMB0.4 billion) in the same quarter of fiscal year 2019. The decrease in the volume of credit loans facilitated through the Company’s marketplace was primarily due to the reduction in the amount of investment available for credit loans. Such reduction in investment resulted from tightened industry regulation causing the suspension or shut down of some peers, which negatively impacted investors’ sentiment and confidence across the industry.

 

Operating costs and expenses

 

Total operating costs and expenses during the fourth quarter of fiscal year 2019 were US$6.5 million, a decrease of 21.6% from US$8.4 million in the same quarter of last fiscal year. The decrease was primarily due to decrease in sales and marketing expenses and service and development expenses.

 

Sales and marketing expenses

 

Sales and marketing expenses during the fourth quarter of fiscal year 2019 were US$1.7 million, a decrease of 50.5% from US$3.5 million during the same quarter of last fiscal year. The decrease was primarily due to the decrease of advertising expenses.

 

Service and development expenses

 

Service and development expenses during the fourth quarter of fiscal year 2019 were US$1.6 million, a decrease of 21.7% from US$2.1 million during the same quarter of last fiscal year. The decrease was primarily attributable to the decrease in custodian bank account management fees.

 

General and administrative expenses

 

General and administrative expenses during the fourth quarter of fiscal year 2019 were US$2.1 million, an increase of 25.6% from US$1.7 million during the same period of last fiscal year. The increase was primarily attributable to an increase in professional service fees.

 

Share-based compensation

 

Share-based compensation during the fourth quarter of fiscal year 2019 was US$1.1 million, remained stable when compared to the same period of last fiscal year.

 


 

Net income

 

As a result of the foregoing, a decrease of 83.3% in our net income, which decreased from US$17.0 million during the fourth quarter of fiscal year 2018 to US$2.8 million during the same quarter of fiscal year 2019.

 

Net income attributable to Hexindai Inc.’s shareholders and EPS

 

Net income attributable to the Company’s shareholders decreased by 83.3% to US$2.8 million in the fourth quarter of fiscal year 2019 from US$17.0 million in the same period of last fiscal year. Accordingly, the basic EPS decreased to US$0.06 in the fourth quarter of fiscal year 2019 from US$0.36 in the same period of fiscal year 2018 and diluted EPS decreased to US$0.05 in the fourth quarter of fiscal year 2019 from US$0.32 in the same period of fiscal year 2018.

 

Adjusted net income attributable to Hexindai Inc.’s shareholders and adjusted EPS

 

Adjusted net income attributable to the Company’s shareholders, which excluded share-based compensation expenses, decreased by 78.4% to US$3.9 million in the fourth quarter of fiscal year 2019 from US$18.2 million in the same quarter of fiscal year 2018. Accordingly, the adjusted basic EPS decreased to US$0.08 in the fourth quarter of fiscal year 2019 from US$0.38 in the same period of fiscal year 2018 and the adjusted diluted EPS decreased to US$0.07 in the fourth quarter of fiscal year 2019 from US$ 0.34 in the same quarter of fiscal year 2018.

 

Fiscal Year Ended March 31, 2019 Unaudited Financial Results

 

Net revenue

 

Net revenue during the fiscal year ended March 31, 2019 was US$61.3 million, a decrease of 42.8% from US$107.3 million in last fiscal year. The decrease was primarily due to the decrease in the volume of credit loans facilitated through Hexindai’s marketplace, which decreased from US$1,248.0 million (RMB8.3 billion) in the fiscal year ended March 31, 2018 to US$564.9 million (RMB3.8 billion) in the fiscal year ended March 31, 2019. The decrease in the volume of credit loans facilitated through the Company’s marketplace was primarily due to the reduction in the amount of investment available for credit loans. Such reduction in investment resulted from tightened industry regulation causing the suspension or shut down of some peers, which negatively impacted investors’ sentiment and confidence across the industry.

 

Operating costs and expenses

 

Total operating costs and expenses during the fiscal year ended March 31, 2019 were US$56.2 million, an increase of 79.2% from US$31.4 million in fiscal year ended March 31, 2018. The increase was primarily due to increase in sales and marketing expenses, general and administrative expenses and share-based compensation.

 


 

Sales and marketing expenses

 

Sales and marketing expense during the fiscal year ended March 31, 2019 were US$32.3 million, an increase of 112.1% from US$15.2 million from last fiscal year. The increase was primarily due to an increase in employee expenses, expenses paid to advertising vendors for online acquisition of borrowers and investors, and a series of marketing and promotional campaigns expenses in the first half of the fiscal year.

 

Service and development expenses

 

Service and development expenses during the fiscal year ended March 31, 2019 were US$7.4 million, a decrease of 12.9% from US$8.5 million during last fiscal year. The decrease was primarily attributable to the decrease in custodian bank account management fees.

 

General and administrative expenses

 

General and administrative expenses during the fiscal year ended March 31, 2019 were US$9.9 million, an increase of 70.7% from US$5.8 million during last year. The increase was primarily attributable to an increase in professional service fees and rental and property fees.

 

Share-based compensation

 

Share-based compensation during the fiscal year 2019 was US$6.6 million, increased from US$1.8 million during last fiscal year. The increase was attributable to awards granted under the 2016 Equity Incentive Plan since November 3, 2017 on which date the Company completed its IPO.

 

Net income

 

As a result of the foregoing, a decrease of 91.6% in our net income, which decreased from US$65.5 million during the fiscal year ended March 31, 2018 to US$5.5 million during this fiscal year.

 

Net income attributable to Hexindai Inc.’s shareholders and EPS

 

Net income attributable to the Company’s shareholders decreased by 91.6% to US$5.5 million in fiscal year 2019 from US$65.5 million in last fiscal year. Accordingly, the basic EPS decreased to US$0.11 in fiscal year 2019 from US$1.46 in fiscal year 2018 and diluted EPS decreased to US$0.10 in fiscal year 2019 from US$1.37 in fiscal year 2018.

 


 

Adjusted net income attributable to Hexindai Inc.’s shareholders and adjusted EPS

 

Adjusted net income attributable to the Company’s shareholders, which excluded share-based compensation expenses, decreased by 82.0% to US$12.1 million during the fiscal year ended March 31, 2019 from US$67.3 million in the fiscal year ended March 31 2018. Accordingly, the adjusted basic EPS decreased to US$0.25 during the fiscal year ended March 31, 2019 from US$1.50 in last fiscal year and the adjusted diluted EPS decreased to US$0.22 during the fiscal year ended March 31, 2019 from US$1.41 in last fiscal year.

 

Cash and Cash Flow

 

As of March 31, 2019, the Company had cash and cash equivalents of US$57.4 million. Net cash used in operating activities for the fiscal year ended March 31, 2019 was US$1.7 million, compared to net cash provided by operating activities of US$87.7 million in last fiscal year. The decrease in operating cash flow was mainly due to decreased net income as well as increased payouts of tax during fiscal year ended March 31, 2019. Net cash used in investing activities for the fiscal year end March 31, 2019 was US$68.1 million, compared to US$27.6 million in last fiscal year. The increase in investing cash flow was due to an increase in loan principal originated through our microlending business and the payment of long-term investment. Net cash used in financing activities for the fiscal year ended March 31, 2019 was US$0.03 million, compared to net cash provided by financing activities of US$47.5 million in the same period of last fiscal year. The decrease in financing activities was mainly due to the net proceeds from our IPO and repayment from related parties in fiscal year 2018.

 

Use of Non-GAAP Financial Measures

 

We used adjusted net (loss) income, adjusted EPS and adjusted EBIT, non-GAAP financial measures, in evaluating our operating results and for financial and operational decision-making purposes. “Adjusted net (loss) income” is net income before share-based compensation expenses. “Adjusted EBIT” is earnings before interest, income taxes and share-based compensation. We believed that the non-GAAP financial measures helped identify underlying trends in our business by excluding the impact of share-based compensation expenses, which were non-cash charges. We believed that the adjusted net (loss) income, adjusted EPS and adjusted EBIT provided useful information about our operating results, enhance the overall understanding of our past performance and prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.

 

The non-GAAP measures were not defined under U.S. GAAP and was not presented in accordance with U.S. GAAP. These non-GAAP financial measures had limitations as analytical tools, and when assessing our operating performance, cash flows or our liquidity, investors should not consider them in isolation, or as a substitute for net income, cash flows provided by operating activities or other consolidated statements of operation and cash flow data prepared in accordance with U.S. GAAP.

 

We mitigate these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measure, all of which should be considered when evaluating our performance.

 

For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of GAAP and non-GAAP measures” set forth at the end of this press release.

 


 

Exchange Rate Information

 

Our business was conducted in China, and our financial records were maintained in RMB, our functional currency. However, we used the U.S. dollar as our reporting currency; therefore, periodic reports made to shareholders will include current period amounts translated into U.S. dollars using the then-current exchange rates, for the convenience of the readers. The financial information was first prepared in RMB and then was translated into U.S. dollars at period-end exchange rates in the H.10 statistical release of the Federal Reserve Board as to assets and liabilities and average exchange rates as to revenue and expenses. Capital accounts were translated at their historical exchange rates when the capital transactions occurred. The effects of foreign currency translation adjustments were included as a component of accumulated other comprehensive income (loss) in shareholders’ equity. We make no representation that any RMB or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or RMB, as the case may be, at any particular rate, or at all. The PRC government imposes control over its foreign currency reserves in part through direct regulation of the conversion of RMB into foreign exchange and through restrictions on foreign trade.

 

Statement Regarding Preliminary Unaudited Financial Information

 

The unaudited financial information set out in this earnings release is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Company’s year-end audit, which could result in significant differences from this preliminary unaudited financial information.

 

Recent Developments

 

In March 2019, Hexindai issued a Senior Unsecured Note (the “Note”) to Majik Fund SPC, an exempted company managed by a subsidiary of Yunfeng Financial Group Limited (HKSE 376), an innovative financial technology group, providing comprehensive investing and financing services for individual and institutional investors and enterprise customers. Hexindai issued Majik Fund SPC a US$20 million three-year Senior Unsecured Note due 2022. The Note bears a fixed interest rate of 12.0% per annum, with interest payable semi-annually in arrears.

 

In May 2019, Mr. Xinming Zhou resigned as Hexindai’s Chief Executive Officer, effective immediately. Mr. Xiaobo An, Hexindai’s Founder and Chairman,  assumed the role of Chief Executive Officer, while Chief Operating Officer Ms. Lili Hua replaced Mr. Zhou on the board as a Director.

 

In June 2019, the company completed a key regulatory compliance milestone as the Beijing Local Financial Supervision and Administration (formerly the Beijing Municipal Bureau of Financial Work) concluded its field inspection work of the company. The National P2P Rectification Office issued a notice for regulatory compliance inspection in August 2018 and laid out detailed criteria for self-examination and correction by P2P platforms. Completing the compliance inspection is part of the prerequisites for P2P platforms in China to file for registration with authorities.

 


 

Conference Call

 

The Company will host a conference call to discuss the earnings at 8:00 a.m. Eastern Time on Tuesday, June 18, 2019 (8:00 p.m. Beijing/Hong Kong Time on the same day).

 

Dial-in numbers for the live conference call are as follows:

 

International

 

+65 6713-5090

 

 

 

U.S. Toll Free

 

+1 866-519-4004

 

 

 

Mainland China

 

4006-208038

 

 

 

Hong Kong Toll Free

 

8009-06601

 

 

 

Passcode: HX

 

 

 

A telephone replay of the call will be available two hours after the conclusion of the conference call through 9:59 p.m. Beijing/Hong Kong Time, June 26, 2019.

 

Dial-in numbers for the replay are as follows:

 

International Dial-in

 

+61 2-8199-0299

 

 

 

U.S. Toll Free

 

+1 855-452-5696

 

 

 

Passcode: 1828707

 

 

 

A live and archived webcast of the conference call will be available on the Investor Relations section of Hexindai’s website at http://ir.hexindai.com/.

 

About Hexindai Inc.

 

Hexindai Inc. (NASDAQ: HX) (“Hexindai” or the “Company”) is a fast-growing consumer lending marketplace based in Beijing, China facilitating loans to meet the increasing consumption demand of the emerging middle class in China. Hexindai provides borrowers with convenient and ready access to credit through its online marketplace. The Company offers borrowers a wide range of products designed based on customer segmentation data and tailored to the specific needs of the emerging middle class in China by matching them with investors seeking various types of investment products with appropriate risk levels and risk-adjusted returns. Hexindai’s strong online and offline user acquisition capabilities combined with an online platform with extensive offline networks, an advanced risk management system, and strong strategic cooperative relationships with a custodian bank and an insurance company to safeguard investments, allows the Company to generate higher customer satisfaction, reliance, and realize faster growth in China.

 


 

Safe Harbor Statement

 

This announcement contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “potential,” “continue,” “ongoing,” “targets,” “guidance” and similar statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: the Company’s goals and strategies; its future business development, financial condition and results of operations; the expected growth of the credit industry, and marketplace lending in particular, in China; the demand for and market acceptance of its marketplace’s products and services; its ability to attract and retain borrowers and investors on its marketplace; its relationships with its strategic cooperation partners; competition in its industry; and relevant government policies and regulations relating to the corporate structure, business and industry. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the SEC. All information provided in this announcement is current as of the date of this announcement, and the Company does not undertake any obligation to update such information, except as required under applicable law.

 

For more information, please visit ir.hexindai.com

 

For investor inquiries, please contact:

 

Hexindai

 

Ms. Daisy Wang

Tel: +86-10-5380-6196

Email: ir@hexindai.com

 

Christensen

 

In China

Mr. Christian Arnell

Phone: +86-10- 5900-1548

E-mail: carnell@christensenir.com

 

In US

Mr. Tip Fleming

Phone: +1-917-412-3333
Email: tfleming@Christensenir.com

 


 

HEXINDAI INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

 

March 31,

 

March 31,

 

 

 

2019

 

2018

 

 

 

USD

 

USD

 

ASSETS

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

Cash

 

57,372,128

 

132,622,467

 

Receivables, contract assets, prepayments and other assets

 

3,753,604

 

1,248,562

 

Loans receivable-current, net of provision for loan losses

 

36,554,913

 

28,696,234

 

Interest receivable

 

 

555,502

 

TOTAL CURRENT ASSETS

 

97,680,645

 

163,122,765

 

Loans receivable-non-current, net of provision for loan losses

 

39,810,461

 

 

Long term investments

 

30,789,836

 

 

Property, equipment and software at cost, net

 

1,253,723

 

767,087

 

Deferred tax assets

 

3,721,177

 

 

TOTAL ASSETS

 

173,255,842

 

163,889,852

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

Accrued expenses and other current liabilities

 

2,791,099

 

3,786,955

 

Consideration payable

 

14,289,371

 

 

Deferred revenue-current

 

110,726

 

 

Taxes payable

 

9,371,530

 

20,059,828

 

TOTAL CURRENT LIABILITIES

 

26,562,726

 

23,846,783

 

Note payable

 

20,000,000

 

 

Deferred revenue-non-current

 

189,958

 

 

TOTAL LIABILITIES

 

46,752,684

 

23,846,783

 

 

 

 

 

 

 

EQUITY:

 

 

 

 

 

Ordinary shares ($0.0001 par value, 500,000,000 shares authorized 49,625,303 and 47,958,550 shares issued as of March 31, 2019 and 2018;49,204,083 and 47,958,550 shares outstanding as of March 31, 2019 and 2018, respectively)

 

4,963

 

4,796

 

Treasury stock (421,220 shares and nil as of March 31, 2019 and 2018, respectively)

 

(1,320,468

)

 

Additional paid-in capital

 

66,159,813

 

58,417,971

 

Retained earnings

 

63,415,808

 

77,241,073

 

Accumulated other comprehensive (loss) income

 

(1,756,958

)

4,379,229

 

TOTAL EQUITY

 

126,503,158

 

140,043,069

 

TOTAL LIABILITIES AND EQUITY

 

173,255,842

 

163,889,852

 

 


 

HEXINDAI INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(UNAUDITED)

 

 

 

For Three Months Ended
March 31,

 

For the Years Ended
March 31,

 

 

 

2019

 

2018

 

2019

 

2018

 

 

 

USD

 

USD

 

USD

 

USD

 

REVENUE

 

 

 

 

 

 

 

 

 

Loan facilitation, post-origination and other service, net

 

4,251,156

 

27,991,650

 

62,103,886

 

108,148,255

 

Business and sales related taxes

 

(104,536

)

(377,792

)

(773,382

)

(890,414

)

NET REVENUE

 

4,146,620

 

27,613,858

 

61,330,504

 

107,257,841

 

 

 

 

 

 

 

 

 

 

 

OPERATING COSTS AND EXPENSES

 

 

 

 

 

 

 

 

 

Sales and marketing

 

1,731,520

 

3,496,941

 

32,322,003

 

15,241,637

 

Service and development

 

1,608,518

 

2,054,458

 

7,396,835

 

8,495,768

 

General and administrative

 

2,131,075

 

1,697,319

 

9,928,512

 

5,816,130

 

Share-based compensation

 

1,077,137

 

1,105,037

 

6,585,386

 

1,828,868

 

Total operating costs and expenses

 

6,548,250

 

8,353,755

 

56,232,736

 

31,382,403

 

INCOME FROM OPERATIONS

 

(2,401,630

)

19,260,103

 

5,097,768

 

75,875,438

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

Other income

 

65,678

 

169,598

 

2,336,015

 

683,393

 

Other expense

 

(2,188

)

(2,191

)

(28,530

)

(22,516

)

Total other income, net

 

63,490

 

167,407

 

2,307,485

 

660,877

 

(LOSS) INCOME BEFORE INCOME TAXES

 

(2,338,140

)

19,427,510

 

7,405,253

 

76,536,315

 

INCOME TAXES (CREDIT) EXPENSES

 

(5,185,470

)

2,382,315

 

1,872,672

 

11,025,690

 

NET INCOME

 

2,847,330

 

17,045,195

 

5,532,581

 

65,510,625

 

Less: net income attributable to non-controlling interest

 

 

 

 

28,652

 

NET INCOME ATTRIBUTABLE TO HEXINDAI’S SHAREHOLDERS

 

2,847,330

 

17,045,195

 

5,532,581

 

65,481,973

 

 

 

 

 

 

 

 

 

 

 

OTHER COMPREHENSIVE INCOME (LOSS)

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

4,589,150

 

3,419,954

 

(6,136,187

)

6,028,143

 

COMPREHENSIVE INCOME

 

7,436,480

 

20,465,149

 

(603,606

)

71,538,768

 

 

 

 

 

 

 

 

 

 

 

Less: comprehensive income attributable to non-controlling interest

 

 

 

 

132,814

 

COMPREHENSIVE INCOME ATTRIBUTABLE TO HEXINDAI’S SHAREHOLDERS

 

7,436,480

 

20,465,149

 

(603,606

)

71,405,954

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share-basic

 

0.06

 

0.36

 

0.11

 

1.46

 

Earnings per common share-diluted

 

0.05

 

0.32

 

0.10

 

1.37

 

Weighted average number of shares outstanding-basic

 

49,104,693

 

47,958,550

 

48,693,162

 

44,977,780

 

Weighted average number of shares outstanding-diluted

 

52,438,134

 

53,269,615

 

52,912,826

 

47,656,263

 

 


 

HEXINDAI INC.

RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

(UNAUDITED)

 

 

 

For Three Months Ended March 31,

 

For the Years Ended March 31,

 

 

 

2019

 

2018

 

2019

 

2018

 

 

 

USD

 

USD

 

USD

 

USD

 

Net income attributable to Hexindai Inc.’s shareholders

 

2,847,330

 

17,045,195

 

5,532,581

 

65,481,973

 

Add: Share-based compensation expenses*

 

1,077,137

 

1,105,037

 

6,585,386

 

1,828,868

 

Adjusted net income attributable to Hexindai Inc.’s shareholders

 

3,924,467

 

18,178,884

 

12,117,967

 

67,310,841

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding*-basic

 

49,104,693

 

47,958,550

 

48,693,162

 

44,977,780

 

Weighted average number of shares outstanding*-diluted

 

52,438,134

 

53,269,615

 

52,912,826

 

47,656,263

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share*-basic

 

0.06

 

0.36

 

0.11

 

1.46

 

Adjustment related to share based compensation expenses*-basic

 

0.02

 

0.02

 

0.14

 

0.04

 

Adjusted earnings per common share*-basic

 

0.08

 

0.38

 

0.25

 

1.50

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share*-diluted

 

0.05

 

0.32

 

0.10

 

1.37

 

Adjustment related to share based compensation expenses*-diluted

 

0.02

 

0.02

 

0.12

 

0.04

 

Adjusted earnings per common share*-diluted

 

0.07

 

0.34

 

0.22

 

1.41

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Hexindai Inc.’s shareholders

 

2,847,330

 

17,045,195

 

5,532,581

 

65,481,973

 

Less: Interest income

 

(165,701

)

(92,287

)

(775,551

)

(343,370

)

Add: Income tax (benefit) expense**

 

(5,185,470

)

2,382,315

 

1,872,672

 

11,025,690

 

Share-based compensation expenses*

 

1,077,137

 

1,105,037

 

6,585,386

 

1,828,868

 

Adjusted EBIT

 

(1,426,704

)

20,440,260

 

13,215,088

 

77,993,161

 

 


* Share-based compensation expenses are not tax deductible under relevant tax laws and regulations in our tax jurisdiction.

** Income tax expenses include US$24,855, US$ 13,843, US$ 116,333 and US$ 51,506 related to the current tax expenses on interest income, which was recognized for the three months period ended March 31, 2019 and 2018 and the fiscal years ended March 31, 2019 and 2018, respectively.

 


 

The following table presents our summary operating data for three months and fiscal year ended March 31, 2018 and 2019.

 

 

 

For Three Months Ended March 31,

 

For the Years Ended March 31,

 

 

 

 

 

 

 

2019

 

2018

 

2019

 

2018

 

Growth Rates (4)

 

 

 

(RMB)

 

(US$)

 

(RMB)

 

(US$)

 

(RMB)

 

(US$)

 

(RMB)

 

(US$)

 

Three months
ended March
31, 2019
compared to
March 31, 2018

 

For the fiscal year
ended March 31,
2019 compared to
March 31, 2018

 

 

 

(in thousands, except percentages and numbers)

 

(in thousands, except percentages and numbers)

 

 

 

 

 

Loan volume facilitated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit loan principal

 

416,302

 

61,723

 

2,658,495

 

418,427

 

3,788,185

 

564,895

 

8,268,844

 

1,248,033

 

-84.3

%

-54.2

%

Secured loan principal

 

 

 

 

 

 

 

63,220

 

9,542

 

 

-100.0

%

Total

 

416,302

 

61,723

 

2,658,495

 

418,427

 

3,788,185

 

564,895

 

8,332,064

 

1,257,575

 

-84.3

%

-54.5

%

Number of transactions facilitated (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit loan transactions

 

51,958

 

51,958

 

33,396

 

33,396

 

84,904

 

84,904

 

101,361

 

101,361

 

 

 

 

 

Secured loan transactions

 

 

 

 

 

 

 

49

 

49

 

 

 

 

 

Total

 

51,958

 

51,958

 

33,396

 

33,396

 

84,904

 

84,904

 

101,410

 

101,410

 

 

 

 

 

Average individual transaction amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit loan transactions

 

8

 

1

 

80

 

13

 

45

 

7

 

82

 

12

 

 

 

 

 

Secured loan transactions

 

 

 

 

 

 

 

1,290

 

195

 

 

 

 

 

Overall average

 

8

 

1

 

80

 

13

 

45

 

7

 

82

 

12

 

 

 

 

 

Gross billing amount (net of VAT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit loan

 

60,455

 

8,963

 

202,246

 

31,832

 

456,526

 

68,077

 

784,355

 

118,384

 

-70.1

%

-41.8

%

Secured loan

 

 

 

 

 

 

 

1,458

 

220

 

 

-100.0

%

Total

 

60,455

 

8,963

 

202,246

 

31,832

 

456,526

 

68,077

 

785,813

 

118,604

 

-70.1

%

-41.9

%

Gross billing ratio (net of VAT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit loan

 

14.5

%

14.5

%

7.6

%

7.6

%

12.1

%

12.1

%

9.5

%

9.5

%

 

 

 

 

Secured loan

 

 

 

 

 

 

 

2.3

%

2.3

%

 

 

 

 

Total

 

14.5

%

14.5

%

7.6

%

7.6

%

12.1

%

12.1

%

9.4

%

9.4

%

 

 

 

 

Number of borrowers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit loan transactions

 

51,958

 

51,958

 

33,322

 

33,322

 

84,891

 

84,891

 

101,137

 

101,137

 

 

 

 

 

Secured loan transactions

 

 

 

 

 

 

 

35

 

35

 

 

 

 

 

Total

 

51,958

 

51,958

 

33,322

 

33,322

 

84,891

 

84,891

 

101,172

 

101,172

 

55.9

%

-16.1

%

Number of investors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit loan transactions (2)

 

19,587

 

19,587

 

52,231

 

52,231

 

106,764

 

106,764

 

117,016

 

117,016

 

 

 

 

 

Secured loan transactions (3)

 

 

 

 

 

 

 

76

 

76

 

 

 

 

 

Credit and secured loan transactions

 

1,307

 

1,307

 

9,808

 

9,808

 

11,483

 

11,483

 

20,858

 

20,858

 

 

 

 

 

Total

 

20,894

 

20,894

 

62,039

 

62,039

 

118,247

 

118,247

 

137,950

 

137,950

 

-66.3

%

-14.3

%

 


(1) Number of transactions facilitated is defined as the total number of loans facilitated on our marketplace or recommended to third-parties during the relevant period.

(2) Refers to investors who exclusively invested in credit loan transactions during the relevant period.

(3) Refers to investors who exclusively invested in secured loan transactions during the relevant period.

(4) Growth rates are calculated by RMB and exclude the impact from exchange rate in different reporting period to reflect a real growth rate.

 


 

The following table sets forth our revenue breakdown for the periods indicated:

 

 

 

For the Three Months Ended March
31,

 

For the Fiscal Years Ended March
31,

 

 

 

2019

 

2018

 

2019

 

2018

 

 

 

US$

 

US$

 

US$

 

US$

 

Revenue (1)

 

 

 

 

 

 

 

 

 

Loan facilitation service

 

5,349,487

 

30,929,552

 

66,782,312

 

117,984,295

 

Loan management service

 

 

104,002

 

 

508,948

 

Post-origination service

 

1,240,473

 

1,819,683

 

11,418,182

 

4,213,862

 

Loan recommendation service

 

858,796

 

 

858,796

 

 

Interest income

 

1,067,138

 

590,122

 

3,552,983

 

590,122

 

Others

 

(678

)

(483

)

1,491

 

21,434

 

Business tax

 

(104,536

)

(377,792

)

(773,382

)

(890,414

)

Cash incentives

 

(4,264,060

)

(5,451,226

)

(20,509,878

)

(15,170,406

)

Net Revenue

 

4,146,620

 

27,613,858

 

61,330,504

 

107,257,841

 

 


(1) Represents amounts net of VAT

 

The following tables set forth our delinquency rates for all loans as of March 31, 2016, 2017, 2018 and 2019, respectively:

 

Delinquency Rates (1)

 

 

 

Delinquent for

 

 

 

15 - 29 days

 

30 - 59 days

 

60 - 89 days

 

March 31, 2016

 

0.092

%

0.074

%

0.061

%

March 31, 2017

 

0.091

%

0.138

%

0.331

%

March 31, 2018

 

0.066

%

0.152

%

0.120

%

March 31, 2019

 

0.257

%

0.337

%

0.367

%

 


(1) Loans that are delinquent for more than 89 days are counted towards the M3+ Net Charge-off Rates. See ‘‘—M3+ Net Charge-off Rates’’ .

 


 

The following table provides the amount of credit loans generated through our marketplace or recommended to other third-parties during each of the periods presented and the corresponding accumulated M3+ Net Charge-off and M3+ Net Charge-off Rates data as of December 31, 2018 and March 31, 2019 for the credit loans facilitated during each of the periods presented.

 

M3+ Net Charge-off Rates

 

 

 

Amount of loans facilitated
during the period

 

Accumulated M3+Net
Charge-off as of March
31, 2019

 

Total M3+Net
Charge-Off
Rate as of
March 31, 2019

 

Loan issued period

 

(RMB)

 

(USD)

 

(RMB)

 

(USD)

 

Percentage

 

 

 

(in thousands)

 

(in thousands)

 

 

 

Since inception to March 31, 2016

 

678,849

 

107,466

 

40,693

 

6,337

 

5.99

%

From April 1, 2016 to March 31, 2017

 

2,264,421

 

336,727

 

111,774

 

16,239

 

4.94

%

From April 1, 2017 to March 31, 2018

 

8,268,844

 

1,248,033

 

162,931

 

25,975

 

1.97

%

From April 1, 2018 to March 31, 2019

 

3,788,185

 

564,895

 

24,020

 

3,579

 

0.63

%

 

M3+ Net Charge-off Rates

 

 

 

Amount of loans facilitated
during the period

 

Accumulated  M3+Net
Charge-off as of
December 31, 2018

 

Total M3+Net
Charge-Off Rate
as of December
31, 2018

 

Loan issued period

 

(RMB)

 

(USD)

 

(RMB)

 

(USD)

 

Percentage

 

 

 

(in thousands)

 

(in thousands)

 

 

 

Since inception to March 31, 2016

 

678,849

 

107,466

 

39,445

 

6,143

 

5.81

%

From April 1, 2016 to March 31, 2017

 

2,264,421

 

336,727

 

103,275

 

15,004

 

4.56

%

From April 1, 2017 to March 31, 2018

 

8,268,844

 

1,248,033

 

111,535

 

17,781

 

1.35

%

From April 1, 2018 to December 31, 2018

 

3,371,882

 

503,732

 

8,172

 

1,189

 

0.24

%