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Fanhua Inc. (Nasdaq: FANH) reported its unaudited financial results for the first half of 2024. Key highlights include:
– Total net revenues decreased by 42.7% to RMB1.1 billion (US$154.6 million)
– Operating income decreased by 62.5% to RMB54.9 million (US$7.6 million)
– Net income attributable to shareholders decreased by 96.5% to RMB4.7 million (US$653,000)
– Total life insurance gross written premiums (GWP) decreased slightly by 0.7% to RMB8.6 billion
– First year premiums (FYP) decreased by 48.3% to RMB1.2 billion
– Renewal premiums increased by 16.7% to RMB7.4 billion
The company faced challenges due to the implementation of the ‘Unified Commissions and Fees in Reporting and Underwriting’ policy, which disrupted the sector. Despite this, Fanhua continued to advance its strategy and launched an AI model for insurance distribution called ‘Du Xiaobao’ L2.
Fanhua Inc. (Nasdaq: FANH) ha riportato i risultati finanziari non verificati per la prima metà del 2024. I principali punti salienti includono:
– I ricavi netti totali sono diminuiti del 42,7% a RMB 1,1 miliardi (US$ 154,6 milioni)
– L’utile operativo è calato del 62,5% a RMB 54,9 milioni (US$ 7,6 milioni)
– L’utile netto attribuibile agli azionisti è diminuito del 96,5% a RMB 4,7 milioni (US$ 653.000)
– I premi lordi totali delle assicurazioni sulla vita (GWP) sono diminuiti leggermente dello 0,7% a RMB 8,6 miliardi
– I premi del primo anno (FYP) sono calati del 48,3% a RMB 1,2 miliardi
– I premi di rinnovo sono aumentati del 16,7% a RMB 7,4 miliardi
La società ha affrontato sfide a causa dell’attuazione della politica ‘Commissioni e Spese Unificate nella Reportistica e nelle Sottoscrizioni’, che ha sconvolto il settore. Nonostante ciò, Fanhua ha continuato a portare avanti la sua strategia e ha lanciato un modello AI per la distribuzione delle assicurazioni chiamato ‘Du Xiaobao’ L2.
Fanhua Inc. (Nasdaq: FANH) reportó sus resultados financieros no auditados para la primera mitad de 2024. Los aspectos más destacados incluyen:
– Los ingresos netos totales disminuyeron un 42,7% a RMB 1.1 mil millones (US$ 154,6 millones)
– El ingreso operativo disminuyó un 62,5% a RMB 54,9 millones (US$ 7,6 millones)
– El ingreso neto atribuible a los accionistas disminuyó un 96,5% a RMB 4,7 millones (US$ 653,000)
– Las primas brutas de seguros de vida (GWP) disminuyeron ligeramente un 0,7% a RMB 8,6 mil millones
– Las primas del primer año (FYP) disminuyeron un 48,3% a RMB 1,2 mil millones
– Las primas de renovación aumentaron un 16,7% a RMB 7,4 mil millones
La empresa enfrentó desafíos debido a la implementación de la política ‘Comisiones y Tarifas Unificadas en Reporte y Suscripción’, lo que perturbó el sector. A pesar de esto, Fanhua continuó avanzando en su estrategia y lanzó un modelo de IA para la distribución de seguros llamado ‘Du Xiaobao’ L2.
Fanhua Inc. (Nasdaq: FANH)는 2024년 상반기 비감사 재무 결과를 발표했습니다. 주요 하이라이트는 다음과 같습니다:
– 총 순매출이 42.7% 감소한 RMB 11억 (미화 1억 5,460만 달러)
– 운영 수익이 62.5% 감소한 RMB 5,490만 (미화 760만 달러)
– 주주에게 귀속되는 순이익이 96.5% 감소한 RMB 470만 (미화 65만 3천 달러)
– 생명보험 총 서명 보험료(GWP)가 0.7% 감소하여 RMB 86억
– 첫 해 보험료(FYP)가 48.3% 감소하여 RMB 12억
– 갱신 보험료가 16.7% 증가하여 RMB 74억
회사는 ‘보고 및 인수의 통합 수수료 및 요금’ 정책의 시행으로 인해 어려움에 직면했습니다. 그럼에도 불구하고 Fanhua는 전략을 지속적으로 추진하고 ‘Du Xiaobao’ L2라는 보험 배급을 위한 AI 모델을 출시했습니다.
Fanhua Inc. (Nasdaq: FANH) a publié ses résultats financiers non vérifiés pour la première moitié de 2024. Les points clés comprennent :
– Les revenus nets totaux ont diminué de 42,7 % pour atteindre 1,1 milliard de RMB (154,6 millions de dollars US)
– Le revenu d’exploitation a chuté de 62,5 % pour atteindre 54,9 millions de RMB (7,6 millions de dollars US)
– Le revenu net attribuable aux actionnaires a diminué de 96,5 % pour atteindre 4,7 millions de RMB (653 000 dollars US)
– Les primes brutes totales d’assurance vie (GWP) ont légèrement diminué de 0,7 % pour atteindre 8,6 milliards de RMB
– Les primes de première année (FYP) ont chuté de 48,3 % pour atteindre 1,2 milliard de RMB
– Les primes de renouvellement ont augmenté de 16,7 % pour atteindre 7,4 milliards de RMB
L’entreprise a fait face à des défis en raison de la mise en œuvre de la politique ‘Commissions et Frais Unifiés dans le Reporting et la Souscription’, qui a perturbé le secteur. Malgré cela, Fanhua a continué à faire avancer sa stratégie et a lancé un modèle d’IA pour la distribution d’assurance appelé ‘Du Xiaobao’ L2.
Fanhua Inc. (Nasdaq: FANH) hat seine ungeprüften finanziellen Ergebnisse für die erste Hälfte des Jahres 2024 veröffentlicht. Zu den wichtigsten Punkten gehören:
– Die gesamten Nettoeinnahmen sanken um 42,7% auf 1,1 Milliarden RMB (154,6 Millionen USD)
– Das Betriebsergebnis fiel um 62,5% auf 54,9 Millionen RMB (7,6 Millionen USD)
– Der den Aktionären zurechenbare Nettogewinn ging um 96,5% auf 4,7 Millionen RMB (653.000 USD) zurück
– Die gesamten Brutto-Prämien für Lebensversicherungen (GWP) sanken leicht um 0,7% auf 8,6 Milliarden RMB
– Die Erstprämien (FYP) fielen um 48,3% auf 1,2 Milliarden RMB
– Die Erneuerungsprämien stiegen um 16,7% auf 7,4 Milliarden RMB
Das Unternehmen war aufgrund der Umsetzung der Politik ‘Vereinigte Provisionen und Gebühren in der Berichterstattung und Zeichnung’ mit Herausforderungen konfrontiert, die den Sektor gestört hat. Trotz dieser Herausforderungen setzte Fanhua seine Strategie fort und brachte ein KI-Modell für die Versicherungsverteilung namens ‘Du Xiaobao’ L2 auf den Markt.
Positive
- Renewal premiums grew by 16.7% year-over-year to RMB7.4 billion
- Claims adjusting business net revenues increased by 7.0% to RMB222.1 million
- Non-life insurance business gross profit increased by 10.6% to RMB26.1 million
- Launch of ‘Du Xiaobao’ L2 AI model for insurance distribution
- Board authorized expansion of share repurchase program by additional US$20 million
Negative
- Total net revenues decreased by 42.7% to RMB1.1 billion
- Operating income decreased by 62.5% to RMB54.9 million
- Net income attributable to shareholders decreased by 96.5% to RMB4.7 million
- First year premiums (FYP) decreased by 48.3% to RMB1.2 billion
- Number of life insurance performing agents decreased by 34.9% to 7,723
- Cash, cash equivalents, and short-term investments decreased by 52.2% to RMB770.1 million
Fanhua’s H1 2024 results reveal significant challenges, with total net revenues down 42.7% year-over-year to RMB1.1 billion. The stark 96.5% decrease in net income to RMB4.7 million is particularly concerning. This dramatic decline is primarily attributed to the implementation of the “Unified Commissions and Fees in Reporting and Underwriting” policy, which has disrupted the sector by imposing commission caps.
Despite these headwinds, there are some positive indicators. The company maintained stable total GWP at RMB8.8 billion, with renewal premiums growing 16.7%. This suggests a resilient existing customer base. The claims adjusting business also showed growth, increasing 7% year-over-year.
However, the 52.2% decrease in cash and short-term investments to RMB770.1 million is worrying, especially considering the RMB705 million in loans to third parties. While these loans are collateralized, they represent a significant risk exposure in the current economic climate.
The implementation of the “Unified Commissions and Fees in Reporting and Underwriting” policy has clearly had a seismic impact on Fanhua’s business model. The 48.3% decrease in first-year premiums (FYP) for life insurance is particularly telling, indicating a significant struggle in new customer acquisition.
However, the 16.7% growth in renewal premiums is a silver lining, suggesting strong customer retention. This shift emphasizes the importance of cultivating long-term client relationships in the face of regulatory changes.
The decrease in the number of life insurance performing agents by 34.9% to 7,723 is concerning, but the smaller 20.6% decrease in FYP per agent indicates improved efficiency among remaining agents. Fanhua’s pivot towards an open platform strategy and AI integration with “Du Xiaobao” L2 could be important in adapting to this new landscape, potentially offsetting the impact of reduced human capital.
Fanhua’s collaboration with Baidu Smart Cloud to develop “Du Xiaobao” L2, an AI model for insurance distribution, is a significant step towards digital transformation. This move aligns with the global trend of AI integration in financial services and could be a game-changer for Fanhua’s operations.
The AI model has the potential to enhance customer experience, streamline sales processes and improve operational efficiency. It could be particularly valuable in the context of reduced human capital, potentially compensating for the 34.9% decrease in life insurance performing agents.
Moreover, the open platform strategy, which has attracted 963 professional users and generated 26.8% of life insurance FYP, demonstrates Fanhua’s adaptability. This tech-driven approach could be important in navigating the challenging regulatory environment and could position Fanhua as an innovator in the Chinese insurance market.
GUANGZHOU, China, Sept. 18, 2024 (GLOBE NEWSWIRE) — Fanhua Inc. (Nasdaq: FANH) (the “Company” or “Fanhua”), a leading independent financial services provider in China, today announced its unaudited financial results for the first half ended June 30, 20241.
Financial Highlights for the First Half of 2024:
| (In thousands, except per ADS data and percentages) | 2023H1 (RMB) |
2024H1 (RMB) |
2024H1 (US$) |
Change % | ||||||||
| Total net revenues | 1,960,377 | 1,123,178 | 154,555 | (42.7 | ) | |||||||
| Operating income | 146,387 | 54,910 | 7,557 | (62.5 | ) | |||||||
| Loss from fair value change | — | (73,761 | ) | (10,150 | ) | — | ||||||
| Net income attributable to shareholders | 136,967 | 4,738 | 653 | (96.5 | ) | |||||||
| Adjusted EBITDA2 | 178,221 | 77,665 | 10,687 | (56.4 | ) | |||||||
| Diluted net income per ADS | 2.54 | 0.09 | 0.01 | (96.5 | ) | |||||||
| Diluted adjusted EBITDA per ADS3 | 3.31 | 1.45 | 0.20 | (55.2 | ) | |||||||
| Cash, cash equivalent, short-term investments at end of the period | 1,611,554 | 770,133 | 105,974 | (52.2 | ) | |||||||
Key operating metrics for the First Half of 2024:
| (In thousands, except percentages and number of agents) | 2023H1 (RMB) |
2024H1 (RMB) |
2024H1 (US$) |
Change % | ||||||||
| Total life gross written premiums (“GWP”) | 8,703,510 | 8,642,319 | 1,189,223 | (0.7 | ) | |||||||
| – First year premium (“FYP”) | 2,329,504 | 1,205,417 | 165,871 | (48.3 | ) | |||||||
| – Renewal premium | 6,374,006 | 7,436,902 | 1,023,352 | 16.7 | ||||||||
| Number of life insurance performing agents | 11,855 | 7,723 | — | (34.9 | ) | |||||||
| FYP per life insurance performing agent | 196 | 156 | — | (20.6 | ) | |||||||
________________________
| 1 | This announcement contains currency conversions of certain Renminbi (“RMB”) amounts into U.S. dollars (US$) at specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.2672 to US$1.00, the effective noon buying rate as of June 28, 2024 in The City of New York for cable transfers of RMB as set forth in the H.10 weekly statistical release of the Federal Reserve Board | |
| 2 | Adjusted EBITDA is defined as net income before income tax expense, share of loss of affiliates, investment income, interest income, financial cost, depreciation, amortization of intangible assets, share-based compensation expenses and change in fair value of equity investments and contingent consideration. | |
| 3 | Diluted adjusted EBITDA per ADS is defined as adjusted EBITDA divided by total weighted average number of diluted ADSs of the Company outstanding during the period. | |
Mr. Yinan Hu, Founder and Chief Executive Officer, commented: “In the first half of 2024, the implementation of the ‘Unified Commissions and Fees in Reporting and Underwriting’ policy in the agency and broker channel has caused unprecedented disruption in the sector. Against this backdrop, we took a series of proactive measures and steadily advanced our strategy of ‘professionalization, service ecosystem development, intelligence, open platform, and internationalization’ to ensure stable business operations. In the first half of 2024, we achieved gross written premiums of RMB8.8 billion, with first year premiums of RMB1.4 billion, fully demonstrating our resilience.
“We are pleased that the first AI model in the insurance industry, ‘Du Xiaobao’ L2, co-developed by Fanhua and Baidu Smart Cloud, was launched for trial operation and has been well received among sales agents. We firmly believe that artificial intelligence will play an increasingly important role in insurance distribution. It will not only enhance the overall customer experience but also reshape the traditional insurance sales model, bringing new growth momentum to the industry. ‘Du XiaoBao’ is central to our intelligence strategy and will play a crucial role in driving our future competitiveness, propelling the Company toward greater growth and new breakthroughs.
Open Platform and M&A Contributions over the First Half of 2024
- The number of platform professional users who used our Open Platform reached 963 as of June 30, 2024, generating RMB322.7 million in first year premiums, which accounted for 26.8% of our life insurance FYP.
Share Repurchase Program
On July 4, 2024, the Board authorized the expansion of the Company’s share repurchase program by an additional US$20 million, bringing the total authorized amount of share repurchase to US$40 million. Under the Company’s previously authorized share repurchase program, as of June 30, 2024, the Company had repurchased an aggregate of 726,616 ADSs, at an average price of approximately US$7.5 per ADS for a total amount of approximately US$5.4 million.
Analysis of our Financial Results for the First Half of 2024
Revenues
Total net revenues were RMB1.1 billion (US$154.0 million) for the first half of 2024, representing a decrease of 42.7% from RMB2.0 billion for the corresponding period in 2023.
- Net revenues for agency business were RMB901.0 million (US$124.0 million) for the first half of 2024, representing a decrease of 48.6% from RMB1.8 billion for the corresponding period in 2023. Total GWP was RMB8.8 billion for the first half of 2024, remaining stable compared to the same period of 2023, of which FYP decreased by 43.7% year-over-year to RMB1.4 billion while renewal premiums grew by 16.7% year-over-year to RMB7.4 billion.
- Net revenues for the claims adjusting business were RMB222.1 million (US$30.6 million) for the first half of 2024, representing an increase of 7.0% from RMB207.6 million for the corresponding period in 2023. The increase was mainly due to the growth in auto insurance claims adjusting business. Net revenues generated from the claims adjusting business accounted for 19.8% of our total net revenues in the first half of 2024, as compared to 10.6% in the same period of 2023.
Gross profit
Total gross profit was RMB424.6 million (US$58.4 million) for the first half of 2024, representing a decrease of 29.0% from RMB597.7 million for the corresponding period in 2023. By product line, the results were:
- Life insurance business recorded a gross profit of RMB323.8 million (US$44.6 million), representing a decrease of 35.2% from RMB500.0 million for the first half of 2023. The decrease was largely in line with the decrease in net revenues. Gross margin for the period was 39.1%, as compared with 30.1% in the same period of 2023.
- Non-life insurance business recorded a gross profit of RMB26.1 million (US$3.6 million), representing an increase of 10.6% from RMB23.6 million for the first half of 2023, primarily due to the increased contribution from higher margin insurance brokerage business. Gross margin for the period was 36.0%, as compared with 26.4% in the same period of 2023.
- Claims adjusting business recorded a gross profit of RMB74.8 million (US$10.3 million), representing an increase of 0.8% from RMB74.2 million for the first half of 2023. Gross margin for the period was 33.8%, as compared with 35.7% in the same period of 2023.
Operating expenses
Selling expenses were RMB110.1 million (US$15.2 million) for the first half of 2024, representing a decrease of 15.8% from RMB130.8 million for the corresponding period in 2023. The decrease was primarily due to cost savings from personnel optimization and decreased number of our sales outlets.
General and administrative expenses were RMB259.6 million (US$35.7 million) for the first half of 2024, representing a decrease of 19.0% from RMB320.5 million for the corresponding period in 2023. The decrease was mainly due to personnel optimization and decreased rental costs of branch offices at provincial level.
As a result of the foregoing factors, we recorded operating income of RMB54.9 million (US$7.6 million) for the first half of 2024, representing a decrease of 62.5% from RMB146.4 million for the corresponding period in 2023.
Operating margin was 4.9% for the first half of 2024, compared to 7.5% for the corresponding period in 2023.
Loss from fair value change was RMB73.7 million (US$10.2 million) for the first half of 2024, which primarily represented an unrealized holding loss of RMB82.5 million (US$11.4 million) in the first half of 2024, to reflect the change in the fair value of the Company’s 2.8% equity interests in Cheche Group Inc. (“Cheche”), which was partially offset by an unrealized income of RMB8.8 million (US$1.2 million) representing the fair value change of the contingent consideration in regards to business combinations in the first quarter of 2023.
Investment income was RMB24.5 million (US$3.4 million) for the first half of 2024, representing a decrease of 2.0% from RMB25.0 million for the corresponding period in 2023. The decrease reflects the periodic fluctuation in yields from short-term investments in financial products as it is recognized when the investment matures or is disposed of.
Income tax expense was RMB6.7 million (US$0.9 million) for the first half of 2024, representing a decrease of 82.5% from RMB38.3 million for the corresponding period in 2023.
As a result of the foregoing factors, net income attributable to the Company’s shareholders was RMB4.7 million (US$0.7 million) for the first half of 2024, representing a decrease of 96.6% from RMB137.0 million for the corresponding period in 2023.
Net margin was 0.4% for the first half of 2024, as compared to 7.0% for the corresponding period in 2023.
Adjusted EBITDA2 was RMB77.7 million (US$10.7 million) for the first half of 2024, representing a decrease of 56.4% from RMB178.2 million for the corresponding period in 2023.
Adjusted EBITDA margin4 was 6.9% for the first half of 2024, as compared to 9.1% for the corresponding period in 2023.
Basic and diluted net income per ADS were RMB0.09 (US$0.01) and RMB0.09 (US$0.01) for the first half of 2024, respectively, representing a decrease of 96.5% and 96.5% from RMB2.54 and RMB2.54 for the corresponding period in 2023, respectively.
Basic5 and diluted adjusted EBITDA per ADS were RMB1.45 (US$0.20) and RMB1.45 (US$0.20) for the first half of 2024, representing a decrease of 56.2% and 56.2% from RMB3.31 and RMB3.31 for the corresponding period in 2023, respectively.
As of June 30, 2024, the Company had RMB770.1 million (US$106.0 million) in cash, cash equivalents and short-term investments, as compared with RMB1.6 billion as of June 30, 2023. The decrease was due to loans provided to third parties amounting to RMB705 million in the aggregate, among which loans of RMB610 million have been pledged with equity interests as collaterals and fully guaranteed by the controlling shareholder of the debtor as of the date of this announcement. The loans to third parties all have one-year term with an average annual interest rate of 5%.
Fanhua’s Insurance Sales and Service Distribution Network:
- As of June 30, 2024, excluding newly acquired entities, Fanhua’s distribution network consisted of 539 sales outlets in 24 provinces and 69 services outlets in 31 provinces as of June 30, 2024, compared with 606 sales outlets in 24 provinces and 89 services outlets in 31 provinces as of June 30, 2023. The decrease in the number of sales outlets reflected our focus on growing profitable branches, coupled with the challenging decisions to close those which were not yielding profits. The number of the Company’s in-house claims adjustors was 2,457 as of June 30, 2024, compared with 2,120 as of June 30, 2023.
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| 4 | Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of net revenues. | |
| 5 | Basic adjusted EBITDA per ADS is defined as adjusted EBITDA divided by total weighted average number of ADSs of the Company outstanding during the period. | |
About Fanhua Inc.
Driven by its digital technologies and professional expertise in the insurance industry, Fanhua Inc. is the leading independent financial service provider in China, focusing on providing insurance-oriented family asset allocation services that covers customers’ full lifecycle and a one-stop service platform for individual sales agents and independent insurance intermediaries.
With strategic focus on long-term life insurance products, we offer a broad range of insurance products, claims adjusting services and various value-added services to meet customers’ diverse needs, through an extensive network of digitally empowered sales agents and professional claims adjustors. We also operate Baowang (www.baoxian.com), an online insurance platform that provides customers with a one-stop insurance shopping experience.
For more information about Fanhua Inc., please visit https://ir.fanhgroup.com
Forward-looking Statements
This press release contains statements of a forward-looking nature. These statements, including the statements relating to the Company’s future financial and operating results, are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as “will,” “expects,” “believes,” “anticipates,” “intends,” “estimates” and similar statements. Among other things, management’s quotations and the Business Outlook section contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about Fanhua and the industry. Potential risks and uncertainties include, but are not limited to, those relating to its ability to attract and retain productive agents, especially entrepreneurial agents, its ability to maintain existing and develop new business relationships with insurance companies, its ability to execute its growth strategy, its ability to adapt to the evolving regulatory environment in the Chinese insurance industry, its ability to compete effectively against its competitors, quarterly variations in its operating results caused by factors beyond its control including macroeconomic conditions in China. Except as otherwise indicated, all information provided in this press release speaks as of the date hereof, and Fanhua undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although Fanhua believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by Fanhua is included in Fanhua’s filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F.
About Non-GAAP Financial Measures
In addition to the Company’s consolidated financial results under generally accepted accounting principles in the United States (“GAAP”), the Company also provides adjusted EBITDA, adjusted EBITDA margin and basic and diluted adjusted EBITDA per ADS, all of which are non-GAAP financial measures, as supplemental measures to review and assess operating performance. Adjusted EBITDA is defined as net income before income tax expense, share of loss of affiliates, investment income, interest income, financial cost, depreciation, amortization of intangible assets, share-based compensation expenses and change in fair value of equity investments and contingent consideration. Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of net revenues. Basic adjusted EBITDA per ADS is defined as adjusted EBITDA divided by total weighted average number of ADSs of the Company outstanding during the period. Diluted adjusted EBITDA per ADS is defined as adjusted EBITDA divided by total weighted average number of diluted ADSs of the Company outstanding during the period. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company’s performance and when planning and forecasting future periods. The Company’s non-GAAP financial measures do not reflect all items of income and expenses that affect the Company’s operations. Specifically, the Company’s non-GAAP measures exclude interest income, investment income, financial cost, income tax expense, depreciation, amortization of intangible assets, share of loss of affiliates, share-based compensation expenses and change in fair value of equity investments and contingent consideration. Further, these non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies, including peer companies. The presentation of these non-GAAP financial measures has limitations as analytical tools, and investors should not consider them in isolation from, or as a substitute for analysis of, the financial information prepared and presented in accordance with GAAP. We encourage investors and other interested persons to review our financial information in its entirety and not rely on a single financial measure.
For more information on these non-GAAP financial measures, please see the tables captioned “Reconciliations of Net Income to Adjusted EBITDA and Adjusted EBITDA Margin” set forth at the end of this press release.
| FANHUA INC. Unaudited Condensed Consolidated Balance Sheets (In thousands) |
|||||||||||
| As of December 31, | As of June 30, | As of June 30, | |||||||||
| 2023 | 2024 | 2024 | |||||||||
| RMB | RMB | US$ | |||||||||
| ASSETS: | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | 521,538 | 189,527 | 26,080 | ||||||||
| Restricted cash | 53,238 | 47,920 | 6,594 | ||||||||
| Short term investments | 928,270 | 580,606 | 79,894 | ||||||||
| Accounts receivable, net | 639,418 | 582,516 | 80,157 | ||||||||
| Other receivables | 111,770 | 714,383 | 98,302 | ||||||||
| Other current assets | 121,331 | 44,344 | 6,102 | ||||||||
| Total current assets | 2,375,565 | 2,159,296 | 297,129 | ||||||||
| Non-current assets: | |||||||||||
| Restricted bank deposit – non-current | 27,228 | 26,783 | 3,685 | ||||||||
| Contract assets, net – non-current | 711,424 | 726,879 | 100,022 | ||||||||
| Property, plant, and equipment, net | 91,659 | 86,223 | 11,865 | ||||||||
| Goodwill and intangible assets, net | 432,465 | 421,851 | 58,050 | ||||||||
| Deferred tax assets | 40,735 | 35,250 | 4,851 | ||||||||
| Investment in affiliates | － | 8,614 | 1,185 | ||||||||
| Other non-current assets | 235,752 | 244,166 | 33,598 | ||||||||
| Right of use assets | 136,056 | 112,011 | 15,413 | ||||||||
| Total non-current assets | 1,675,319 | 1,661,777 | 228,669 | ||||||||
| Total assets | 4,050,884 | 3,821,073 | 525,798 | ||||||||
| Current liabilities: | |||||||||||
| Short-term loan | 164,300 | 98,375 | 13,537 | ||||||||
| Accounts payable | 406,807 | 337,807 | 46,484 | ||||||||
| Insurance premium payables | 14,943 | 10,418 | 1,434 | ||||||||
| Other payables and accrued expenses | 185,999 | 177,787 | 24,464 | ||||||||
| Accrued payroll | 94,305 | 62,566 | 8,609 | ||||||||
| Income tax payable | 100,260 | 96,780 | 13,317 | ||||||||
| Current operating lease liability | 57,164 | 49,521 | 6,814 | ||||||||
| Total current liabilities | 1,023,778 | 833,254 | 114,659 | ||||||||
| Non-current liabilities: | |||||||||||
| Accounts payable – non-current | 401,385 | 408,416 | 56,200 | ||||||||
| Other tax liabilities | 34,368 | 29,722 | 4,090 | ||||||||
| Deferred tax liabilities | 149,151 | 144,808 | 19,926 | ||||||||
| Non-current operating lease liability | 71,311 | 57,707 | 7,941 | ||||||||
| Other non-current liabilities | 33,373 | 33,375 | 4,593 | ||||||||
| Total non-current liabilities | 689,588 | 674,028 | 92,750 | ||||||||
| Total liabilities | 1,713,366 | 1,507,282 | 207,409 | ||||||||
| Ordinary shares | 8,675 | 8,675 | 1,194 | ||||||||
| Treasury stock | (178 | ) | (197 | ) | (27 | ) | |||||
| Additional Paid-in capital | 162,721 | 177,993 | 24,493 | ||||||||
| Statutory reserves | 608,376 | 608,376 | 83,715 | ||||||||
| Retained earnings | 1,319,605 | 1,324,343 | 182,236 | ||||||||
| Accumulated other comprehensive loss | (27,936 | ) | (33,208 | ) | (4,570 | ) | |||||
| Total shareholders’ equity | 2,071,263 | 2,085,982 | 287,041 | ||||||||
| Non-controlling interests | 266,255 | 227,809 | 31,348 | ||||||||
| Total equity | 2,337,518 | 2,313,791 | 318,389 | ||||||||
| Total liabilities and equity | 4,050,884 | 3,821,073 | 525,798 | ||||||||
| FANHUA INC. Unaudited Condensed Consolidated Statements of Income and Comprehensive Income (In thousands, except for shares and per share data) |
|||||||||||
| For the Six Months Ended | |||||||||||
| December 31, | |||||||||||
| 2023 | 2024 | 2024 | |||||||||
| RMB | RMB | US$ | |||||||||
| Net revenues: | |||||||||||
| Agency | 1,752,742 | 901,064 | 123,990 | ||||||||
| Life insurance business | 1,663,463 | 828,621 | 114,022 | ||||||||
| Non-life insurance business | 89,279 | 72,443 | 9,968 | ||||||||
| Claims adjusting | 207,635 | 222,114 | 30,565 | ||||||||
| Total net revenues | 1,960,377 | 1,123,178 | 154,555 | ||||||||
| Operating costs and expenses: | |||||||||||
| Agency | (1,229,172 | ) | (551,247 | ) | (75,854 | ) | |||||
| Life insurance business | (1,163,502 | ) | (504,866 | ) | (69,472 | ) | |||||
| Non-life insurance business | (65,670 | ) | (46,381 | ) | (6,382 | ) | |||||
| Claims adjusting | (133,479 | ) | (147,333 | ) | (20,274 | ) | |||||
| Total operating costs | (1,362,651 | ) | (698,580 | ) | (96,128 | ) | |||||
| Selling expenses | (130,802 | ) | (110,122 | ) | (15,153 | ) | |||||
| General and administrative expenses | (320,537 | ) | (259,566 | ) | (35,717 | ) | |||||
| Total operating costs and expenses | (1,813,990 | ) | (1,068,268 | ) | (146,998 | ) | |||||
| Income from operations | 146,387 | 54,910 | 7,557 | ||||||||
| Other income (loss), net: | |||||||||||
| Loss from fair value change | — | (73,761 | ) | (10,150 | ) | ||||||
| Investment income | 24,957 | 24,451 | 3,365 | ||||||||
| Interest income | 9,097 | 8,586 | 1,180 | ||||||||
| Financial cost | (4,682 | ) | (960 | ) | (132 | ) | |||||
| Others, net | 6,482 | (3,216 | ) | (443 | ) | ||||||
| Income from operations before income taxes and share income of affiliates | 182,241 | 10,010 | 1,377 | ||||||||
| Income tax expense | (38,289 | ) | (6,659 | ) | (916 | ) | |||||
| Share of loss of affiliates | (540 | ) | (1,121 | ) | (154 | ) | |||||
| Net income | 143,412 | 2,230 | 307 | ||||||||
| Less: net (loss) income attributable to non-controlling interests | 6,445 | (2,508 | ) | (345 | ) | ||||||
| Net income attributable to the Company’s shareholders | 136,967 | 4,738 | 652 | ||||||||
| FANHUA INC. Unaudited Condensed Consolidated Statements of Income and Comprehensive Income-(Continued) (In thousands, except for shares and per share data) |
|||||||||||
| For The Six Months Ended | |||||||||||
| June 30, | |||||||||||
| 2023 | 2024 | 2024 | |||||||||
| RMB | RMB | US$ | |||||||||
| Net incomeper share: | |||||||||||
| Basic | 0.13 | 0.01 | — | ||||||||
| Diluted | 0.13 | 0.01 | — | ||||||||
| Net incomeper ADS: | |||||||||||
| Bsic | 2.54 | 0.09 | 0.01 | ||||||||
| Diluted | 2.54 | 0.09 | 0.01 | ||||||||
| Shares used in calculating net income per share: | |||||||||||
| Basic | 1,077,103,934 | 1,066,793,835 | 1,066,793,835 | ||||||||
| Diluted | 1,077,451,347 | 1,069,840,827 | 1,069,840,827 | ||||||||
| Net income | 143,412 | 2,230 | 307 | ||||||||
| Other comprehensive income, net of tax: Foreign currency translation adjustments | 8,880 | 783 | 108 | ||||||||
| Unrealized net (losses) gains on available-for-sale investments | 2,695 | (6,054 | ) | (833 | ) | ||||||
| Comprehensive income (loss) | 154,987 | (3,041 | ) | (418 | ) | ||||||
| Less: | |||||||||||
| Comprehensive (loss) income attributable to the non-controlling interests | 6,445 | (2,508 | ) | (345 | ) | ||||||
| Comprehensive income (loss) attributable to the Company’s shareholders | 148,542 | (533 | ) | (73 | ) | ||||||
| FANHUA INC. Unaudited Condensed Consolidated Statements of Cash Flow (In thousands, except for shares and per share data) |
|||||||||||
| For the Six Months Ended | |||||||||||
| June 30, | |||||||||||
| 2023 | 2024 | 2024 | |||||||||
| RMB | RMB | US$ | |||||||||
| OPERATING ACTIVITIES | |||||||||||
| Net income | 143,412 | 2,230 | 307 | ||||||||
| Adjustments to reconcile net income to net cash generated from operating activities: | |||||||||||
| Investment income | (6,989 | ) | (5,256 | ) | (723 | ) | |||||
| Share of loss of affiliates | 540 | 1,121 | 154 | ||||||||
| Other non-cash adjustments | 74,859 | 145,765 | 20,058 | ||||||||
| Changes in operating assets and liabilities | (178,173 | ) | (110,934 | ) | (15,265 | ) | |||||
| Net cash generated from operating activities | 33,649 | 32,926 | 4,531 | ||||||||
| Cash flows from investing activities: | |||||||||||
| Purchase of short-term investments | (2,103,010 | ) | (1,617,780 | ) | (222,614 | ) | |||||
| Proceeds from disposal of short-term investments | 1,823,149 | 1,962,588 | 270,061 | ||||||||
| Cash rendered for loan receivables from third parties | (80,000 | ) | (728,800 | ) | (100,286 | ) | |||||
| Cash received for loan receivables from third parties | 180,000 | 130,500 | 17,957 | ||||||||
| Cash acquired from business acquisitions | 21,208 | — | — | ||||||||
| Disposal of subsidiaries, net of cash disposed | — | (12,761 | ) | (1,756 | ) | ||||||
| Others | (6,185 | ) | (3,982 | ) | (548 | ) | |||||
| Net cash used in investing activities | (164,838 | ) | (270,235 | ) | (37,186 | ) | |||||
| Cash flows from financing activities： | |||||||||||
| Proceeds from bank and other borrowings | 182,268 | 98,375 | 13,537 | ||||||||
| Repayment of bank and other borrowings | (18,026 | ) | (164,300 | ) | (22,608 | ) | |||||
| Repurchase of ordinary shares from open market | (22,107 | ) | (5,734 | ) | (789 | ) | |||||
| Dividend distributed to non-controlling interest | — | (29,500 | ) | (4,059 | ) | ||||||
| Others | (4,238 | ) | — | — | |||||||
| Net cash generated from (used in) financing activities | 137,897 | (101,159 | ) | (13,919 | ) | ||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 6,708 | (338,468 | ) | (46,574 | ) | ||||||
| Cash, cash equivalents and restricted cash at beginning of period | 648,211 | 602,004 | 82,839 | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | 6,668 | 694 | 94 | ||||||||
| Cash, cash equivalents and restricted cash at end of period | 661,587 | 264,230 | 36,359 | ||||||||
| FANHUA INC. Reconciliations of Net Income to Adjusted EBITDA and Adjusted EBITDA Margin (In thousands, except for shares and per share data) |
|||||||||||
| For The Six Months Ended | |||||||||||
| June 30 | |||||||||||
| 2023 | 2024 | 2024 | |||||||||
| RMB | RMB | USD | |||||||||
| Net income | 143,412 | 4,738 | 652 | ||||||||
| Income tax expense……………………………………… | 38,289 | 6,659 | 916 | ||||||||
| Share of loss of affiliates………………………………. | 540 | 1,121 | 154 | ||||||||
| Investment income……………………………………….. | (24,957 | ) | (24,451 | ) | (3,365 | ) | |||||
| Interest income…………………………………………….. | (9,097 | ) | (8,586 | ) | (1,180 | ) | |||||
| Financial cost………………………………………………. | 4,682 | 960 | 132 | ||||||||
| Depreciation……………………………………………….. | 8,371 | 7,339 | 1,010 | ||||||||
| Amortization of intangible assets…………………… | 8,797 | 8,395 | 1,155 | ||||||||
| Share-based compensation expenses………………. | 8,184 | 7,729 | 1,064 | ||||||||
| Change in fair value of equity investments and contingent consideration……………………………… | — | 73,761 | 10,150 | ||||||||
| Adjusted EBITDA | 178,221 | 77,665 | 10,687 | ||||||||
| Total net revenues………………………………………… | 1,960,377 | 1,123,177 | 154,554 | ||||||||
| Adjusted EBITDA Margin……………………………. | 9.1 | % | 6.9 | % | 6.9 | % | |||||
| Adjusted EBITDA per ADS： | |||||||||||
| Basic | 3.31 | 1.46 | 0.20 | ||||||||
| Diluted | 3.31 | 1.45 | 0.20 | ||||||||
| Shares used in calculating adjusted EBITDA per share: | |||||||||||
| Basic | 1,077,103,934 | 1,066,793,835 | 1,066,793,835 | ||||||||
| Diluted | 1,077,451,347 | 1,069,840,827 | 1,069,840,827 | ||||||||
Source: Fanhua Inc.
FAQ
What was Fanhua’s (FANH) total net revenue for the first half of 2024?
Fanhua’s total net revenue for the first half of 2024 was RMB1.1 billion (US$154.6 million), representing a decrease of 42.7% from the corresponding period in 2023.
How did Fanhua’s (FANH) life insurance gross written premiums (GWP) perform in H1 2024?
Fanhua’s total life insurance gross written premiums (GWP) decreased slightly by 0.7% to RMB8.6 billion in the first half of 2024 compared to the same period in 2023.
What was the impact of the ‘Unified Commissions and Fees in Reporting and Underwriting’ policy on Fanhua (FANH) in H1 2024?
The policy caused disruption in the sector, leading to decreased commission rates paid by insurance companies and a decline in sales volume for Fanhua (FANH) in the first half of 2024.
What new AI model did Fanhua (FANH) launch in H1 2024?
Fanhua (FANH) launched ‘Du Xiaobao’ L2, an AI model co-developed with Baidu Smart Cloud for insurance distribution, which has been well received among sales agents.
