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 November 2018

 

Commission File Number: 001-33768

 

 

FANHUA INC.

 

 

27/F, Pearl River Tower
No.15 West Zhujiang Road
Tianhe District, Guangzhou 510623
People’s Republic of China
(Address of principal executive offices)

 

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 ☒        Form 40-F ☐

 

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): ☐

 

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): ☐

 

  

  

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.

 

	Fanhua Inc.
	By:	/s/ Chunlin Wang
	Name: Title:	Chunlin Wang Chief Executive Officer

  

Date: November 21, 2018

  

  

Exhibit Index

 

Exhibit No.		Description.
Exhibit 99.1		Press Release

  

 

Exhibit 99.1

 

 

Fanhua Reports Third Quarter 2018 Unaudited Financial Results

And

Declares Quarterly Dividend of US$0.25 per ADS

— Quarterly Operating Income Up 48.7% YoY

— Quarterly Diluted Net Income Per ADS Up 69.5% YoY

 

GUANGZHOU, November 20, 2018 (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 third quarter ended September 30, 2018¹ and declared a quarterly dividend.

 

Quarterly Dividend:

 

On November 17, 2018, Fanhua’s Board of Directors declared a quarterly dividend of US$0.0125 per ordinary share, or US$0.25 per American Depositary Shares (“ADSs”), amounting to a total of US$16.0 million. The dividend will be payable on or around December 20, 2018 to shareholders of record on December 5, 2018.

 

Share Buyback Program:

 

As part of the share buyback program previously announced to repurchase up to 6.5 million ADSs from the open market by December 31, 2018, Fanhua has repurchased 1,289,496 ADSs in the period from August 28, 2018 to November 19, 2018. The ADSs were repurchased at an average price of US$25.6 per ADS for a total amount of US$33.1 million.

 

Financial Highlights for the Third Quarter of 2018:

 

(In thousands, except per ADS)		2017Q3 (RMB)				2018Q3 (RMB)				2018Q3 (US$)				Change %
Total net revenues			1,061,928				783,948				114,145				(26.2	)
Operating income			83,755				124,573				18,138				48.7
Net income attributable to the Company’s shareholders			112,268				195,248				28,429				73.9
Diluted net income per ADS			1.77				3.00				0.44				69.5
Net cash generated from (used in) operating activities			(25,677	)			305,657				44,505				/

 

Commenting on the third quarter of 2018 financial results, Chunlin Wang, chairman and chief executive officer of the Company, said, “We continued to report strong profits in the third quarter of 2018, with operating income increasing 48.7% year-over-year to RMB124.6 million, once again beating guidance, and net income attributable to shareholders growing 73.9% year-over-year to RMB195.2 million.

 

 

 

 

1

This announcement contains currency conversions of certain Renminbi (RMB) amounts into U.S. dollars (US$) at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.868 to US$1.00, the effective noon buying rate as of September 28, 2018 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.

 

 

“Total life insurance premiums grew 10.6% year-over-year to RMB1.5 billion, of which annualized premiums equivalent (“APE²”), dropped 28.9% year-over-year to approximately RMB394.5 million, as the management had previously estimated, primarily due to the high base in the same period last year. However, our health insurance business, in terms of APE, still recorded stellar growth of 101.4% year-over-year, accounting for 82.1% of total life insurance APE in the third quarter of 2018 as compared to 28.0% a year-ago.

 

“In the meantime, our consistent focus on long term regular protection insurance business continued to pay dividends. Renewal premiums maintained strong growth, increasing by 101.5% year-over-year to RMB960.7 million, which is one of the major drivers behind the rapid increase of the Company’s operating income during the quarter. It fully reflects the intrinsic value of our regular life insurance business and demonstrates the sustainability of our operating profit growth in the long term as our renewal businesses continue to accumulate.

 

“Net operating cash flow increased significantly during the third quarter of 2018 to RMB305.7 million, as Fanhua Lianxin Insurance Sales Co., Ltd., (“Lianxin”), a wholly-owned subsidiary of the Company, completed the relocation of its headoffice on August 27, 2018 and has since resumed collection of headquarters-to-headquarters commissions receivable from our life insurance company business partners which had been temporarily suspended due to the relocation since February 2018. We expect our operating cashflow will return to normal level in the next quarter.

 

“Looking ahead to the fourth quarter of 2018, we expect APE of our life insurance business to grow no less than 35% year-over-year to RMB460 million, with operating income of no less than RMB80 million. For full year 2018, we expect APE of our life insurance business to achieve positive growth year-over-year and operating income to increase by no less than 50% year-over-year. We have full confidence in achieving these operating targets.”

 

Financial Results for the Third Quarter of 2018

 

Total net revenues were RMB783.9 million (US$114.1 million) for the third quarter of 2018, representing a decrease of 26.2% from RMB1,061.9 million for the corresponding period in 2017.

 

●

Net revenues for the life insurance business were RMB654.5 million (US$95.3 million) for the third quarter of 2018, representing a decrease of 10.4% from RMB730.5 million for the corresponding period in 2017. The decrease was mainly due to the decrease in first year premiums due to the high base in the same period last year. Revenues generated from our life insurance business accounted for 83.5% of our total net revenues in the third quarter of 2018.

 

 

 

 

2

Annualized premiums equivalent is a measure used by Fanhua to compare annual premiums received from life insurance policies with differing tenures by normalizing annual premiums into the equivalent annual premium of a policy with a tenure of 20 years.

 

 

●

Net revenues for the P&C insurance business were RMB49.5 million (US$7.2million) for the third quarter of 2018, representing a decrease of 80.9% from RMB258.8 million for the corresponding period in 2017. The decrease was primarily due to i) the disposal of the equity interests of some entities in the P&C insurance division in October 2017; and ii) the transition of our auto insurance business from a commission-based business model towards a platform business model starting from the fourth quarter of 2017. Revenues for the P&C insurance business are mainly derived from commissions generated from Baoxian.com and the technology service fees based on the volume of insurance premiums transacted through CNpad. Revenues generated from the P&C insurance business accounted for 6.3% of our total net revenues in the third quarter of 2018.

 

●

Net revenues for the claims adjusting business were RMB79.9million (US$11.6 million) for the third quarter of 2018, representing an increase of 9.9% from RMB72.7 million for the corresponding period in 2017. Revenues generated from the claims adjusting business accounted for 10.2% of our total net revenues in the third quarter of 2018.

 

Total operating costs and expenses were RMB659.4 million (US$96.0 million) for the third quarter of 2018, representing a decrease of 32.6% from RMB978.2 million for the corresponding period in 2017.

 

●

Commission costs were RMB481.4 million (US$70.1 million) for the third quarter of 2018, representing a decrease of 38.0% from RMB776.7 million for the corresponding period in 2017. The decrease was mainly due to the decrease in commission costs of P&C insurance business and life insurance business.

 

♦

Costs of the life insurance business were RMB404.7 million (US$58.9 million) for the third quarter of 2018, representing a decrease of 20.9% from RMB511.4 million for the corresponding period in 2017. The decrease was in line with the decrease in the first year premiums. Costs incurred by the life insurance business accounted for 84.1% of our total commission costs in the third quarter of 2018.

 

♦

Costs of the P&C insurance business were RMB32.5 million (US$4.7 million) for the third quarter of 2018, representing a decrease of 85.3% from RMB221.7 million for the corresponding period in 2017. The decrease was in line with the decrease in sales, and primarily caused by i) the disposal of the equity interests of some entities in the P&C insurance division in October 2017; and ii) the transition of our P&C insurance business from a commission-based business model towards a platform business model starting from the fourth quarter of 2017. The costs of the P&C insurance business mainly represent commission costs incurred for business on Baoxian.com. Costs incurred by the P&C insurance business accounted for 6.8% of our total commission costs in the third quarter of 2018.

 

♦

Costs of claims adjusting business were RMB44.1 million (US$6.4 million) for the third quarter of 2018, representing an increase of 1.4% from RMB43.5 million for the corresponding period in 2017. Costs incurred by the claims adjusting business accounted for 9.1% of our total commission costs in the third quarter of 2018.

 

 

●

Selling expenses were RMB57.0 million (US$8.3 million) for the third quarter of 2018, representing an increase of 5.2% from RMB54.2 million for the corresponding period in 2017.

 

●

General and administrative expenses were RMB121.0 million (US$17.6 million) for the third quarter of 2018, representing a decrease of 17.9% from RMB147.3 million for the corresponding period in 2017. The decrease was mainly due to a significant reduction in expenses incurred by our P&C insurance agencies as a result of the migration to the platform business model since the fourth quarter of 2017 as well as the disposal of certain P&C insurance agencies, though partially offset by an increase in expenses incurred by new office setup and staff recruitment in relation to regional expansion.

 

As a result of the preceding factors, we had an operating income of RMB124.6 million (US$18.1 million) for the third quarter of 2018, representing an increase of 48.7% from RMB83.8 million for the corresponding period in 2017.

 

Operating margin was 15.9% for the third quarter of 2018, compared to 7.9% for the corresponding period in 2017. The increase was primarily due to (i) the increased contribution of life insurance business, which have higher profit margins and (ii) the disposal of lower-profit business of the P&C insurance division in October 2017.

 

Investment income was RMB75.5 million (US$11.0 million) for the third quarter of 2018, representing an increase of 70.8% from RMB44.2 million for the corresponding period in 2017. The investment income represented yields from short-term investments in financial products which mainly consist of inter-bank deposits or collective trust products with terms ranging from half a year to two years and interest payable on a quarterly, semi-annual or annual basis. Our investment income fluctuates from quarter to quarter because these investments are classified as available for sales and investment income is recognized when received.

 

Interest income was RMB13.5 million (US$2.0million) for the third quarter of 2018, representing an increase of 22.7% from RMB11.0 million for the corresponding period in 2017, primarily due to interest related to amounts due from Shenzhen Chuangjia Investment Limited Partnership (“Chuangjia”) which previously held 84.59% of the equity interests in Fanhua Puyi Fund Sales Co. Ltd. The principle and interests receivable related to the loan to Chuangjia were fully collected in August 2018.

 

Income tax expense was RMB66.4million (US$9.7 million) for the third quarter of 2018, representing an increase of 30.5% from RMB50.9 million for the corresponding period in 2017.

 

Share of income of affiliates was RMB48.3 million (US$7.0 million) for the third quarter of 2018, representing an increase of 100.4% from RMB24.1 million for the corresponding period in 2017 mainly attributable to an increase of profits from CNFinance Holdings Limited (“CNfinance”).

 

 

Net income from continuing operations was RMB196.6 million (US$28.6 million) for the third quarter of 2018, representing an increase of 72.9% from RMB113.7 million for the corresponding period in 2017.

 

Net income from discontinued operations³ was nil for the third quarter of 2018, as compared to a net income of RMB0.01 million for the corresponding period in 2017, representing the net income from the Company’s brokerage segment, which was disposed of in November 2017.

 

Net income attributable to the Company’s shareholders was RMB195.2million (US$28.4 million) for the third quarter of 2018, representing an increase of 73.9% from RMB112.3 million for the corresponding period in 2017.

 

Net margin was 24.9% for the third quarter of 2018 compared with 10.6% for the corresponding period in 2017.

 

Basic and diluted net income per ADS were RMB3.01 (US$0.44) and RMB3.00(US$0.44) for the third quarter of 2018, respectively, representing increases of 67.2% and 69.5% from RMB1.80 and RMB1.77 for the corresponding period in 2017.

 

As of September 30, 2018, the Company had RMB2.3 billion (US$340.9 million) in cash, cash equivalents and short term investments.

 

Key Operational Metrics for Fanhua’s Online Initiatives for the Third Quarter of 2018:

 

●

Lan Zhanggui - Our one-stop insurance service platform that integrates the key functions of both CNpad Auto Insurance and CNpad Life Insurance App, which was launched in October 2017. All CNpad Life Insurance App accounts have been converted to Lan Zhanggui.

 

Ø

Lan Zhanggui had been downloaded and activated 716,397 times as of September 30, 2018, representing an increase of 114.7% from 333,744 downloads of CNpad Life Insurance App as of September 30, 2017;

 

Ø

The number of active users of Lan Zhanggui4 was 53,713 including 44,686 users who have sold at least one life insurance policy and 11,342 users who have sold at least one P&C insurance policy through Lan Zhanggui in the third quarter of 2018. The number of active users of CNpad Life Insurance App was 45,988 in the third quarter of 2017;

 

Ø

Insurance premiums generated through Lan Zhanggui were RMB 482.6 million (US$70.2 million) in the third quarter of 2018, among which life insurance premiums accounted for RMB 445.3 million (US$64.8 million) and property and casualty insurance premiums were RMB37.3 million (US$5.4 million).

 

 

 

 

3

Due to the disposal of Fanhua Bocheng Insurance Brokerage Co., Ltd. (“Bocheng”) in November 2017, the Company is required to present its financial results on a continuing and discontinued basis. The company’s results of operations related to discontinued operations have been restated as discontinued operations on a retrospective basis for all periods presented accordingly. Profits and losses related to Bocheng are presented as discontinued operations while profits and losses for the remaining business are presented as continuing operations.

4

Active users of Lan Zhanggui included users who sold at least one life insurance policy and/or P&C insurance policy through Lan Zhanggui (including both its mobile application or WeChat public account) during the specific period and at least sold one life insurance policy through CNpad Life Insurance App in the same period of 2017.

 

 

●

CNpad Auto Insurance Mobile Application(“CNpad Auto Insurance App”) - Our proprietary mobile sales support system:

 

Ø

CNpad App had been downloaded and activated 496,930 times as of September 30, 2018, representing an increase of 49.0% from 333,595 times as of September 30, 2017;

 

Ø

The number of active users of CNpad App5 was 56,304 in the third quarter of 2018, representing a decrease of 2.9% from 57,974 in the third quarter of 2017:

 

Ø

Insurance premiums generated through CNpad App were RMB 490.0million (US$71.3 million) in the third quarter of 2018, representing a decrease of 5.2% from RMB516.9 million for the corresponding period of 2017.

 

●

eHuzhu - Our online non-profit mutual aid platform:

 

Ø

The number of registered members was 3.8 million as of September 30, 2018, representing an increase of 72.7% from 2.2 million as of September 30, 2017.

 

●

Baoxian.com - Our online insurance platform:

 

Ø

The number of registered customer accounts was 2.0 million as of September 30, 2018, representing an increase of 66.7 % from approximately 1.2 million as of September 30, 2017.

 

Ø

The number of active customer accounts6 was 140,300 in the third quarter of 2018, representing an increase of 98.3% from 70,765 in the corresponding period of 2017;

 

Ø

Insurance premiums generated on or through Baoxian.com was RMB72.4 million (US$10.5 million) in the third quarter of 2018, representing a decrease of 37.0% from RMB114.9 million in the corresponding period of 2017.

 

Recent Development

 

●

On September 3, 2018, Fanhua Fanlian Investment Co., Ltd. (“Fanlian”), a wholly-owned subsidiary of Fanhua, entered into a share transfer agreement with Puyi Inc., a wealth management service provider, which beneficially owned 84.59% equity interests in Fanhua Puyi Fund Sales Co., Ltd. (“Puyi Fund Sales Company”). Pursuant to the agreement, Fanlian agreed to transfer the 15.41% equity interests in Puyi Fund Sales Company held by Fanlian to Puyi Inc.. In exchange, on September 5, 2018, Puyi Inc. issued 4,033,600 new ordinary shares to Fanhua. After the transactions, Fanhua now holds 4.8% of the equity interests in Puyi Inc. which beneficially owns 100% of Puyi Fund Sales Company.

 

 

 

 

5

Active users of CNpad App included users who sold at least one auto insurance policy during the specific period.

6

Active customer accounts are defined as customer accounts that made at least one purchase directly through www.baoxian.com, its mobile application, or Wechat public account during the specified period.

 

 

●

On November 7, 2018, CNfinance, a leading home equity service provider in China, completed its initial public offering of 6.5 million ADSs, at a price of US$7.5 per ADS for a total offering price of US$48.75 million. CNfinance is now listed on the New York Stock Exchange under the ticker symbol of CNF. Immediately after the offering, Fanhua’s shareholdings in CNfinance were diluted from 20.58% to 18.6%.

 

●

As of September 30, 2018, Fanhua had 716,397 sales agents and 1,169 professional claims adjustors, compared with 413,946 sales agents and 1,264 claims adjustors as of September 30, 2017. As of September 30, 2018, Fanhua’s distribution network consisted of 626 sales outlets in 22 provinces and 128 services outlets in 31 provinces, compared with 897 sales outlets in 21 provinces and 156 service outlets in 29 provinces as of September 30, 2017.

 

Business Outlook

 

Fanhua expects its operating income to be no less than RMB80.0 million for the fourth quarter of 2018. This forecast reflects Fanhua’s current view, which is subject to change.

 

Conference Call

 

The Company will host a conference call to discuss its third quarter 2018 financial results as per the following details.

 

Time: 20:00 PM Eastern Daylight Time on November 20, 2018
or 9:00 AM Beijing/Hong Kong Time on November 21, 2018

 

The toll free dial-in numbers:

 

United States	1-855-500-8701
United Kingdom	0800-015-9724
France	0800-918-648
Germany	0800-184-4876
Australia	1-300-713-759
Canada	1-855-757-1565
Taiwan	0080-665-1951
Hong Kong	800-906-606

 

The toll dial-in numbers:

 

China (Mainland)	400-120-0654
Singapore & Other Areas	+65-6713-5440

 

Conference ID #: 3447409

 

Additionally, a live and archived web cast of this call will be available at:

 

http://ir.fanhuaholdings.com/events-and-presentations

 

 

About Fanhua Inc.

 

Fanhua Inc. is a leading independent online-to-offline financial services provider. Through our online platforms and offline sales and service network, we offer a wide variety of financial products and services to individuals and businesses, including property and casualty and life insurance products. We also provide insurance claims adjusting services, such as damage assessments, surveys, authentications and loss estimations.

 

Our online platforms include: (1) Lan Zhanggui, an all-in-one platform which allows our agents to access and purchase a wide variety of insurance products, including life insurance, auto insurance, accident insurance, travel insurance and standard health insurance products from multiple insurance companies on their mobile devices; (2) CNpad, a mobile sales support application; (3) Baoxian.com, an online entry portal for comparing and purchasing health, accident, travel and homeowner insurance products; and (4) eHuzhu (www.ehuzhu.com), a non-profit online mutual aid platform in China.

 

As of September 30, 2018, our distribution and service network is consisted of 754 sales and service outlets covering 31 provinces.

 

For more information about Fanhua Inc., please visit http://ir.fanhuaholdings.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 and macroeconomic conditions in China and their potential impact on the sales of insurance products. All information provided in this press release is 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.

 

 

FANHUA INC.
Unaudited Condensed Consolidated Balance Sheets
(In thousands)

 

		As of December 31,				As of September 30,				As of September 30,
		2017				2018				2018
		RMB				RMB				US$
ASSETS:
Current assets:
Cash and cash equivalents			363,746				661,056				96,251
Restricted cash			75,287				80,552				11,729
Short term investments			2,498,730				1,680,560				244,694
Accounts receivable, net			515,194				551,444				80,292
Insurance premium receivables			4,325				5,214				759
Other receivables			631,381				128,096				18,651
Amount due from related party			—				50,547				7,360
Other current assets			43,864				55,982				8,151
Total current assets			4,132,527				3,213,451				467,887
Non-current assets:
Property, plant, and equipment, net			26,075				34,849				5,074
Goodwill and intangible assets, net			127,079				111,368				16,216
Deferred tax assets			2,091				9,446				1,375
Investment in affiliates			404,783				546,841				79,622
Other non-current assets			45,187				60,226				8,769
Total non-current assets			605,215				762,730				111,056
Total assets			4,737,742				3,976,181				578,943

 

 

FANHUA INC.

Unaudited Condensed Consolidated Balance Sheets-(Continued)

(In thousands)

 

		As of December 31,				As of September 30,				As of  September 30,
		2017				2018				2018
		RMB				RMB				US$
Current liabilities:
Accounts payable			203,024				312,212				45,459
Insurance premium payables			9,553				29,480				4,292
Other payables and accrued expenses			241,894				238,152				34,676
Accrued payroll			77,424				80,101				11,663
Income tax payable			129,965				204,466				29,771
Dividend payable			—				4,791				698
Total current liabilities			661,860				869,202				126,559
Non-current liabilities:
Other non-current liabilities*			—				125,024				18,204
Other tax liabilities			70,350				70,350				10,243
Deferred tax liabilities			17,139				10,478				1,526
Total non-current liabilities			87,489				205,852				29,973
Total liabilities			749,349				1,075,054				156,532
Total shareholders’ equity*			3,877,051				2,792,989				406,666
Non-controlling interests			111,342				108,138				15,745
Total equity			3,988,393				2,901,127				422,411
Total liabilities and equity			4,737,742				3,976,181				578,943

 

*

The decrease in shareholders’ equity was mainly attributable to the purchase of 6.4 million ADSs from Master Trend Limited at a consideration of RMB1,250 million. The share purchase was executed under the 521 development plan and these shares will be subject to a five-year lock-up period.

 

 

FANHUA INC.

Unaudited Condensed Consolidated Statements of Income and Comprehensive Income

(In thousands, except for shares and per share data)

 

		For The Three Months Ended												For The Nine Months Ended
		September 30,												September 30,
		2017				2018				2018				2017				2018				2018
		RMB				RMB				US$				RMB				RMB				US$
Net revenues:
Agency			989,244				704,052				102,512				3,188,040				2,369,570				345,016
Life insurance Business			730,476				654,513				95,299				1,934,125				2,135,788				310,977
P&C insurance Business			258,768				49,539				7,213				1,253,915				233,782				34,039
Claims adjusting			72,684				79,896				11,633				209,957				229,757				33,453
Total net revenues			1,061,928				783,948				114,145				3,397,997				2,599,327				378,469
Operating costs and expenses:
Agency			(733,103	)			(437,264	)			(63,667	)			(2,466,128	)			(1,612,137	)			(234,731	)
Life insurance Business			(511,412	)			(404,719	)			(58,928	)			(1,321,804	)			(1,426,396	)			(207,687	)
P&C insurance Business			(221,691	)			(32,545	)			(4,739	)			(1,144,324	)			(185,741	)			(27,044	)
Claims adjusting			(43,547	)			(44,118	)			(6,424	)			(136,883	)			(138,319	)			(20,140	)
Total operating costs			(776,650	)			(481,382	)			(70,091	)			(2,603,011	)			(1,750,456	)			(254,871	)
Selling expenses			(54,236	)			(56,959	)			(8,293	)			(160,246	)			(159,556	)			(23,232	)
General and administrative expenses			(147,287	)			(121,034	)			(17,623	)			(423,747	)			(346,964	)			(50,519	)
Total operating costs and expenses			(978,173	)			(659,375	)			(96,007	)			(3,187,004	)			(2,256,976	)			(328,622	)
Income from operations			83,755				124,573				18,138				210,993				342,351				49,847
Other income, net:
Investment income			44,152				75,458				10,987				152,330				152,510				22,206
Interest income			10,983				13,502				1,966				13,490				33,386				4,861
Others, net			1,620				1,234				180				12,421				(74	)			(11	)
Income before income taxes and income of affiliates			140,510				214,767				31,271				389,234				528,173				76,903
Income tax expense			(50,885	)			(66,423	)			(9,671	)			(129,677	)			(167,511	)			(24,390	)
Share of income of affiliates			24,059				48,275				7,029				53,752				138,421				20,154
Net income from continuing operations			113,684				196,619				28,629				313,309				499,083				72,667
Net income from discontinued operations, net of tax			10				—				—				6,655				—				—
Net income			113,694				196,619				28,629				319,964				499,083				72,667
less: net income (loss) attributable to noncontrolling interests			1,426				1,371				200				(2,391	)			1,775				258
Net income attributable to the Company’s shareholders			112,268				195,248				28,429				322,355				497,308				72,409

 

 

FANHUA INC.

Unaudited Condensed Consolidated Statements of Income and Comprehensive Income-(Continued)

(In thousands, except for shares and per share data)

 

		For The Three Months Ended												For The Nine Months Ended
		September 30,												September 30,
		2017				2018				2018				2017				2018				2018
		RMB				RMB				US$				RMB				RMB				US$
Net income per share:
Basic
Net income from continuing operations			0.09				0.15				0.02				0.26				0.38				0.06
Net income from discontinued operation			—				—				—				0.01				—				—
Net income			0.09				0.15				0.02				0.27				0. 38				0.06
Diluted
Net income from continuing operations			0.09				0.15				0.02				0.25				0. 38				0.06
Net income from discontinued operation			—				—				—				0.01				—				—
Net income			0.09				0.15				0.02				0.26				0. 38				0.06
Net income per ADS:
Basic			1.80				3.01				0.44				5.20				7.65				1.11
Net income from continuing operations
Net income from discontinued operation			—				—				—				0.11				—				—
Net income			1.80				3.01				0.44				5.31				7.65				1.11
Diluted
Net income from continuing operations			1.77				3.00				0.44				5.04				7.64				1.11
Net income from discontinued operation			—				—				—				0.11				—				—
Net income			1.77				3.00				0.44				5.15				7.64				1.11
Shares used in calculating net income per share:
Basic			1,247,356,127				1,299,349,068				1,299,349,068				1,214,639,385				1,299,944,226				1,299,944,226
Diluted			1,269,932,904				1,300,948,198				1,300,948,198				1,252,939,633				1,301,809,669				1,301,809,669
Net income			113,694				196,619				28,629				319,964				499,083				72,667
Other comprehensive income (loss), net of tax: Foreign currency translation adjustments			(8,367	)			5,160				751				(11,346	)			2,906				423
Fair value changes			—				—				—				(632	)			—				—
Share of other comprehensive gain (loss) of affiliates			889				(4,666	)			(679	)			343				(6,392	)			(931	)
Comprehensive income			106,216				197,113				28,701				308,329				495,597				72,159
Less: Comprehensive income (loss) attributable to the noncontrolling interests			1,426				1,371				200				(2,391	)			1,775				258
Comprehensive income attributable to the Company’s shareholders			104,790				195,742				28,501				310,720				493,822				71,901

 

 

FANHUA INC.

Unaudited Condensed Consolidated Statements of Cash Flow

(In thousands)

 

		For The Three Months Ended												For The Nine Months Ended
		September 30,												September 30,
		2017				2018				2018				2017				2018				2018
		RMB				RMB				US$				RMB				RMB				US$
OPERATING ACTIVITIES
Net cash generated from(used in) operating activities			(25,677	)			305,657				44,505				92,276				331,871				48,321
Net cash generated from (used in) investing activities			(189,812	)			1,466,148				213,475				(67,392	)			1,553,449				226,187
Net cash generated from  (used in) financing activities			154				(1,414,663	)			(205,979	)			198,009				(1,578,072	)			(229,772	)
Net increase (decrease) in cash, cash equivalents and restricted cash			(215,335	)			357,142				52,001				222,893				307,248				44,736
Cash, cash equivalents and restricted cash at beginning of period			709,133				379,306				55,228				273,979				439,033				63,924
Effect of exchange rate changes on cash and cash equivalents			(3,903	)			5,160				751				(6,977	)			(4,673	)			(680	)
Cash, cash equivalents and restricted cash at end of period			489,895				741,608				107,980				489,895				741,608				107,980

 

 

For more information, please contact:

 

Oasis Qiu

Investor Relations Manager

Tel: +86 (20) 8388-3191

Email: qiusr@fanhuaholdings.com

 

Source: Fanhua Inc.