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 2022

 

Commission File Number: 001-33768

 

 

FANHUA INC.

 

 

60/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/ Yinan Hu
	Name: Title:	Yinan Hu Chief Executive Officer

 

Date: November 25, 2022

 

 

Exhibit Index

 

Exhibit No.		Description.
Exhibit 99.1		Press Release
Exhibit 99.2		Press Release
Exhibit 99.3		Press Release

 

 

2

Exhibit 99.1

 

IR-362

 

Fanhua Reports Third Quarter 2022 Unaudited Financial Results

 

-- Operating Income for the Third Quarter of 2022 Grew 14.2% YOY --

 

GUANGZHOU, China, November 21, 2022, Eastern Standard Time, (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, 2022¹.

 

Financial Highlights for the Third Quarter of 2022

 

(In thousands, except per ADS data)		2021Q3 (RMB)				2022Q3 (RMB)				2022Q3 (US$)				Change %
Total net revenues			683,537				624,746				87,825				(8.6	)
Operating income			28,163				32,165				4,522				14.2
Net income attributable to the Company’s shareholders			34,250				35,371				4,972				3.3
Diluted net income per ADS			0.64				0.66				0.09				3.1
Cash, cash equivalents and short-term investments and others (as of September 30, 2021 and 2022)			1,397,727				1,296,926	2			182,319				(7.2	)

 

Mr. Yinan Hu, chairman and chief executive officer of Fanhua, commented on the financial results of third quarter of 2022, “Despite macroeconomic and industry headwinds, Fanhua maintained steady growth in the third quarter of 2022, reflecting continued resilience in our business. Gross written premiums (“GWP”) of our life insurance business grew by 6.2% year-over-year to RMB2.8 billion, of which our regular life insurance first-year premiums (“FYP”) increased by 9.1% year-over-year to RMB529.7 million. While we continued to increase investments in technology and training, we delivered an operating income of RMB32.2 million, representing a growth of 14.2% year-over-year, in line with our previous expectation.”

 

“We are pleased to witness a continuous improvement in the quality of our sales force during the third quarter. In accordance with our plan, the total number of performing agents declined, while the per capita productivity of performing agents grew by nearly 20% year-over-year. The contribution from high-performing agents increased even further, with the number of ’100K Premium Agents’³ growing by 46% year-over-year, representing 48% of our FYP during the quarter, compared to 39% for the corresponding period in 2021. This is yet another testament to the positive effects of our professionalization and career-based strategies.”

 

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 RMB7.1135 to US$1.00, the effective noon buying rate as of September 30, 2022 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

The amount includes short term loans to third parties of RMB189.0 million as recorded in other receivables and an advance payment of RMB190.0 million for the purchase of short-term investment products as recorded in other current assets.

3

“100K Premium Agents” refers to agents who have contributed more than RMB100,000 annualized premiums equivalent during the reporting period.

 

 

IR-362

 

“Centering around the needs for high-quality senior care, wealth management and inheritance solutions from the mass affluent and high-net-worth families, Fanhua continues to focus on magnifying our platform’s empowering capabilities through the following initiatives: i) supporting our agents to provide whole life journey services by offering a wide spectrum of product and services that match the demands throughout customer’s lifecycle; ii) empowering our agents to achieve professional growth through a combination of our 3F (‘Family Officer Consultant, Fanhua Retirement Planner and Family Policy Custodian’) professional trainings, scenario-based marketing and the support from 3R (‘Account Responsibility, Solution Responsibility and Fulfillment Responsibility’) marketing model, leveraging on our resources in trust and health care services and our proprietary insurance policy custody technology; and iii) improving the efficiency of customer services through our digitalization efforts.”

 

“For the fourth quarter of 2022, considering the ongoing resurgences of COVID-19 cases across the country, the growth prospect of Chinese insurance industry remains challenging. Against this backdrop, Fanhua will continue with our established development strategies to empower agents and create value for customers. “

 

Financial Results for the Third Quarter of 2022

 

Total net revenues were RMB624.7 million (US$87.8 million) for the third quarter of 2022, representing a decrease of 8.6% from RMB683.5 million for the corresponding period in 2021.

 

●

Net revenues for agency business were RMB522.7 million (US$73.5 million) for the third quarter of 2022, representing a decrease of 7.0% from RMB562.1 million for the corresponding period in 2021. In the third quarter of 2022, total GWP increased by 6.0% year-over-year to RMB2,871.1 million, of which FYP grew by 7.7% year-over-year to RMB610.9 million while renewal premiums increased by 5.6% year-over-year to RMB2,260.1 million.

 

♦

Net revenues for the life insurance business were RMB480.6 million (US$67.6 million) for the third quarter of 2022, representing a decrease of 8.5% from RMB525.2 million for the corresponding period in 2021. The decrease was mainly due to the decrease in the weighted average renewal commission rate of renewal premium collected, and to a lesser extent, due to the change in the product mix. For the long term life insurance policies that we sell, renewal commissions are paid throughout the policy payment period but the renewal commission rates are higher in the first few years after the sales of the insurance policies and recede year by year. In the third quarter of 2022, total life insurance GWP increased by 6.2% year-over-year to RMB2,789.9 million, of which FYP increased by 9.1% year-over-year to RMB529.7 million and renewal premiums increased by 5.6% year-over-year to RMB2,260.1 million.

 

 

IR-362

 

Net revenues generated from our life insurance business accounted for 76.9% of our total net revenues in the third quarter of 2022.

 

♦

Net revenues for the P&C insurance business were RMB42.1 million (US$5.9 million) for the third quarter of 2022, representing an increase of 14.1% from RMB36.9 million for the corresponding period in 2021. Net revenues for the P&C insurance business are mainly derived from commissions for medical insurance, accident insurance, travel insurance and homeowner insurance products facilitated on Baowang (www.baoxian.com). Net revenues generated from the P&C insurance business accounted for 6.8% of our total net revenues in the third quarter of 2022.

 

●

Net revenues for the claims adjusting business were RMB102.0 million (US$14.3 million) for the third quarter of 2022, representing a decrease of 16.0% from RMB121.4 million for the corresponding period in 2021. The decrease was due to the disruption to our claims adjusting business as a result of the lockdowns in response to the COVID-19 outbreaks in several areas in China and contraction of our medical-insurance related claims adjusting business. Net revenues generated from the claims adjusting business accounted for 16.3% of our total net revenues in the third quarter of 2022.

 

Total operating costs and expenses were RMB592.6 million (US$83.3 million) for the third quarter of 2022, representing a decrease of 9.6% from RMB655.4 million for the corresponding period in 2021.

 

●

Commission costs were RMB393.4 million (US$55.3 million) for the third quarter of 2022, representing a decrease of 10.8% from RMB440.9 million for the corresponding period in 2021.

 

●

Commission costs for agency business were RMB324.1 million (US$45.6 million) for the third quarter of 2022, representing a decrease of 11.8% from RMB367.5 million for the corresponding period in 2021.

 

♦

Costs of the life insurance business were RMB298.9 million (US$42.0 million) for the third quarter of 2022, representing a decrease of 12.5% from RMB341.6 million for the corresponding period in 2021. The decrease was in line with the decrease in net revenues generated from our life insurance business. Costs incurred by the life insurance business accounted for 76.0% of our total commission costs in the third quarter of 2022.

 

♦

Costs of the P&C insurance business were RMB25.2 million (US$3.5 million) for the third quarter of 2022, representing a decrease of 2.7% from RMB25.9 million for the corresponding period in 2021. The costs of the P&C insurance business mainly represent commission costs we incurred for operating Baowang (www.baoxian.com). Costs incurred by the P&C insurance business accounted for 6.4% of our total commission costs in the third quarter of 2022.

 

●

Costs of claims adjusting business were RMB69.3 million (US$9.7 million) for the third quarter of 2022, representing a decrease of 5.6% from RMB73.4 million for the corresponding period in 2021. Costs incurred by the claims adjusting business accounted for 17.6% of our total commission costs in the third quarter of 2022.

 

●

Selling expenses were RMB69.3 million (US$9.7 million) for the third quarter of 2022, representing a decrease of 3.2% from RMB71.6 million for the corresponding period in 2021.

 

●

General and administrative expenses were RMB129.8 million (US$18.3 million) for the third quarter of 2022, representing a decrease of 9.2% from RMB142.9 million for the corresponding period in 2021. The decrease was mainly due to cost savings from personnel optimization, partially offset by increased expenditures on IT infrastructure and trainings.

 

As a result of the foregoing factors, we recorded an operating income of RMB32.2 million (US$4.5 million) for the third quarter of 2022, representing an increase of 14.2% from RMB28.2 million for the corresponding period in 2021.

 

Operating margin was 5.1% for the third quarter of 2022, compared to 4.1% for the corresponding period in 2021.

 

 

IR-362

 

Investment income was RMB2.8 million (US$0.4 million) for the third quarter of 2022, as compared to investment income of RMB8.8 million for the corresponding period in 2021. The investment income in the third quarter of 2022 consisted of yields from short-term investments in financial products, and is recognized when the investment matures or is disposed of.

 

Income tax expense was RMB8.6 million (US$1.2 million) for the third quarter of 2022, representing a decrease of 7.5% from RMB9.3 million for the corresponding period in 2021. The effective tax rate for the third quarter of 2022 was 20.2% compared with 21.4% for the corresponding period in 2021.

 

Net income was RMB33.2 million (US$4.7 million) for the third quarter of 2022, representing a decrease of 9.8% from RMB36.8 million for the corresponding period in 2021.

 

Net income attributable to the Company’s shareholders was RMB35.4 million (US$5.0 million) for the third quarter of 2022, representing an increase of 3.3% from RMB34.3 million for the corresponding period in 2021.

 

Net margin was 5.7% for the third quarter of 2022 as compared to 5.0% for the corresponding period in 2021.

 

Basic and diluted net income per ADS were RMB0.66 (US$0.09) and RMB0.66 (US$0.09) for the third quarter of 2022, respectively, representing increases of 3.1% and 3.1% from RMB0.64 and RMB0.64 for the corresponding period in 2021, respectively.

 

As of September 30, 2022, the Company had RMB1,296.9 million (US$182.3 million) in cash, cash equivalents, short-term investments and others. The amount included short term loans to third parties of RMB189.0 million and an advance payment of RMB190.0 million for the purchase of short-term investment products.

 

Other Key Operational Metrics:

 

●

Lan Zhanggui - Our one-stop insurance service platform:

 

Ø

The number of active users of Lan Zhanggui4 was 17,822 in the third quarter of 2022, as compared to 16,745 in the same period of 2021 which excluded the number of active users for selling auto insurance.

 

Ø

Insurance premiums generated from Lan Zhanggui were RMB454.2 million (US$63.8 million) in the third quarter of 2022, as compared to RMB452.6 million in the corresponding period of 2021 which excluded auto insurance premiums.

 

●

Baowang (www.baoxian.com) - Our Direct-to-Consumer (“DTC”) online insurance platform for Accident & Short Term Health insurance(“A&H”), travel and homeowner insurance:

 

Ø

The number of active customer accounts5 was 57,575 in the third quarter of 2022, as compared to 116,991 in the corresponding period of 2021;

 

Ø

Insurance premiums generated on Baoxian.com were RMB88.4 million (US$12.4 million) in the third quarter of 2022, representing a decrease of 0.5% from RMB88.8 million in the corresponding period of 2021. The insurance premiums generated per active customer account were RMB1,535 in the third quarter of 2022, as compared to RMB760 in the corresponding period of 2021.

 

●

The number of performing agents6 was 32,884 in the third quarter of 2022, compared to 60,887 in the corresponding period of 2021. The number of performing agents for selling life insurance products was 7,598 in the third quarter of 2022, compared to 16,576 in the corresponding period of 2021. The decrease in the number of performing agents for selling life insurance products was primarily because we shifted focus to serving high-end customers and high-performing agents, to an elite-based agent pool. As of September 30, 2022, Fanhua’s distribution network consisted of 697 sales outlets in 23 provinces and 100 services outlets in 31 provinces, compared with 750 sales outlets in 23 provinces and 110 service outlets in 31 provinces as of September 30, 2021.

 

4

Active users of Lan Zhanggui in a given period refer to users who sold at least one insurance policy through Lan Zhanggui (through either its mobile application or WeChat public account) during such period.

5

Active customer accounts in a given period refer to customer accounts that made at least one purchase directly through www.baoxian.com, its mobile application, or WeChat public account during such period.

6

Performing agents in a given period refer to agents who sold at least one insurance policy during such period.

 

 

IR-362

 

Recent Developments

 

●

As of September 30, 2022, eHuzhu, our online mutual aid platform which serves to provide alternative risk-protection programs to lower-income group at more affordable costs, gather over 1.9 million paying members and assisted 10,323 families in raising about RMB1.2 billion funds to cover their medical costs and help them get through tough times.

 

●

On September 25th, 2022, Fanhua was selected into the Top 100 Digitalized Insurance Institutions of 2022 by virtue of its innovative RONS Open Platform at the first International Insurance Agency Summit jointly sponsored by All-gen Group, an international business communication platform builder, and InsurView, a well-known professional insurtech media in China.

 

Business Outlook

 

Fanhua expects its operating income to be no less than RMB30.0 million for the fourth quarter of 2022. This forecast is based on the current market conditions and reflects Fanhua’s preliminary estimate, which is subject to change caused by various factors.

 

Conference Call

 

The Company will host a conference call to discuss its third quarter 2022 financial results as per the following details.

 

Time: 8:00 p.m. Eastern Standard Time on November 21, 2022 or 9:00 a.m. Beijing/Hong Kong Time on November 22, 2022

 

Please pre-register online in advance to join the conference call by navigating to the link provided below and dial in 10 minutes before the call is scheduled to begin. Conference call details will be provided upon registration.

 

Conference Call Preregistration: https://register.vevent.com/register/BI1b627f239d87469890614c8be638bfd4

 

Additionally, a live and archived webcast of the conference call will be available at Fanhua’s investor relations website: https://edge.media-server.com/mmc/p/5mcc7ydk

 

About Fanhua Inc.

 

Fanhua Inc. is a leading independent 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, including life and property and casualty insurance products. We also provide insurance claims adjusting services, such as damage assessments, surveys, authentications and loss estimations, as well as value-added services, such as emergency vehicle roadside assistance. Our online platforms include: (i) Lan Zhanggui, an all-in-one platform which allows our agents to access and purchase for their policy holders 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; (ii) Baowang (www.baoxian.com), an online entry portal for comparing and purchasing short term health, accident, travel and homeowner insurance products and (iii) eHuzhu (www.ehuzhu.com), a non-profit online mutual aid platform in China.

 

 

IR-362

 

As of September 30, 2022, our distribution and service network consisted of 697 sales outlets covering 23 provinces, autonomous regions and centrally-administered municipalities and 100 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, future development of COVID-19 outbreak and their potential impact on the sales of insurance products. 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.

 

 

IR-362

 

FANHUA INC.

 

Unaudited Condensed Consolidated Balance Sheets

 

(In thousands)

 

		As of December 31,				As of September 30,				As of September 30,
		2021				2022				2022
		RMB				RMB				US$
ASSETS:
Current assets:
Cash and cash equivalents			564,624				377,310				53,041
Restricted cash			76,303				64,949				9,130
Short term investments			870,682				540,591				75,995
Accounts receivable, net			653,757				582,905				81,943
Other receivables			60,755				279,627				39,309
Other current assets			39,947				220,901				31,054
Total current assets			2,266,068				2,066,283				290,472
Non-current assets:
Restricted bank deposit – non-current			15,595				20,578				2,893
Contract assets, net - non-current			192,114				323,137				45,426
Property, plant, and equipment, net			46,800				103,233				14,512
Goodwill and intangible assets, net			109,869				109,997				15,463
Deferred tax assets			18,728				22,035				3,098
Investment in affiliates			335,808				4,877				686
Other non-current assets			31,459				31,310				4,401
Right of use assets			225,677				175,849				24,720
Total non-current assets			976,050				791,016				111,199
Total assets			3,242,118				2,857,299				401,671
Current liabilities:
Accounts payable			377,558				294,935				41,461
Insurance premium payables			24,054				18,614				2,617
Other payables and accrued expenses			178,157				184,049				25,873
Accrued payroll			111,672				94,825				13,330
Income tax payable			130,222				121,610				17,096
Current operating lease liability			87,012				72,495				10,191
Total current liabilities			908,675				786,528				110,568
Non-current liabilities:
Accounts payable – non-current			97,869				164,617				23,141
Other tax liabilities			73,213				45,788				6,437
Deferred tax liabilities			73,716				93,413				13,132
Non-current operating lease liability			128,283				93,270				13,111
Total non-current liabilities			373,081				397,088				55,821
Total liabilities			1,281,756				1,183,616				166,389
Ordinary shares			8,089				8,091				1,137
Additional Paid-in capital			—				162				23
Statutory reserves			557,221				557,221				78,333
Retained earnings			1,311,715				1,023,641				143,901
Accumulated other comprehensive loss			(39,140	)			(28,468	)			(4,002	)
Total shareholders’ equity			1,837,885				1,560,647				219,392
Non-controlling interests			122,477				113,036				15,890
Total equity			1,960,362				1,673,683				235,282
Total liabilities and equity			3,242,118				2,857,299				401,671

 

 

IR-362

 

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,
		2021				2022				2022				2021				2022				2022
		RMB				RMB				USD				RMB				RMB				US$
Net revenues:
Agency			562,127				522,702				73,480				2,139,684				1,714,096				240,964
Life insurance business			525,241				480,605				67,562				2,037,264				1,609,833				226,307
P&C insurance business			36,886				42,097				5,918				102,420				104,263				14,657
Claims adjusting			121,410				102,044				14,345				328,801				300,153				42,195
Total net revenues			683,537				624,746				87,825				2,468,485				2,014,249				283,159
Operating costs and expenses:
Agency			(367,452	)			(324,164	)			(45,570	)			(1,405,090	)			(1,098,865	)			(154,476	)
Life insurance Business			(341,577	)			(298,915	)			(42,021	)			(1,331,519	)			(1,030,418	)			(144,854	)
P&C insurance Business			(25,875	)			(25,249	)			(3,549	)			(73,571	)			(68,447	)			(9,622	)
Claims adjusting			(73,426	)			(69,253	)			(9,735	)			(205,182	)			(202,329	)			(28,443	)
Total operating costs			(440,878	)			(393,417	)			(55,305	)			(1,610,272	)			(1,301,194	)			(182,919	)
Selling expenses			(71,627	)			(69,323	)			(9,745	)			(229,352	)			(210,952	)			(29,655	)
General and administrative expenses			(142,869	)			(129,841	)			(18,253	)			(409,292	)			(418,321	)			(58,807	)
Total operating costs and expenses			(655,374	)			(592,581	)			(83,303	)			(2,248,916	)			(1,930,467	)			(271,381	)
Income from operations			28,163				32,165				4,522				219,569				83,782				11,778
Other income, net:
Investment income			8,847				2,770				389				25,388				9,044				1,271
Interest income			468				7,938				1,116				1,510				9,775				1,374
Others, net			6,116				(488	)			(69	)			24,111				8,920				1,254
Income from operations before income taxes and share of income of affiliates			43,594				42,385				5,958				270,578				111,521				15,677
Income tax expense			(9,315	)			(8,562	)			(1,204	)			(57,906	)			(22,551	)			(3,170	)
Share income of affiliates			2,486				(621	)			(87	)			28,813				(68,755	)			(9,665	)
Net income			36,765				33,202				4,667				241,485				20,215				2,842
Less: net income (loss) attributable to non-controlling interests			2,515				(2,169	)			(305	)			1,445				(9,441	)			(1,327	)
Net income attributable to the Company’s shareholders			34,250				35,371				4,972				240,040				29,656				4,169

 

 

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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,
		2021				2022				2022				2021				2022				2022
		RMB				RMB				US$				RMB				RMB				US$
Net income per share:
Basic			0.03				0.03				0.01				0.22				0.03				0.01
Diluted			0.03				0.03				0.01				0.22				0.03				0.01
Net income per ADS:
Basic			0.64				0.66				0.09				4.47				0.55				0.08
Diluted			0.64				0.66				0.09				4.47				0.55				0.08
Shares used in calculating net income per share:
Basic			1,073,891,784				1,074,291,784				1,074,291,784				1,073,891,784				1,074,193,616				1,074,193,616
Diluted			1,074,291,210				1,074,500,364				1,074,500,364				1,074,291,220				1,074,262,500				1,074,262,500
Net income			36,765				33,202				4,667				241,485				20,215				2,842
Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments			(279	)			3,950				555				(7,968	)			4,746				667
Share of other comprehensive  (loss) income of affiliates			197				—				—				(299	)			4,688				659
Unrealized net gains on available-for-sale investments			4,469				1,848				260				1,775				1,238				174
Comprehensive income			41,152				39,000				5,482				234,993				30,887				4,342
Less: Comprehensive income (loss) attributable to the non-controlling interests			2,515				(2,169	)			(305	)			1,445				(9,441	)			(1,327	)
Comprehensive income attributable to the Company’s shareholders			38,637				41,169				5,787				233,548				40,328				5,669

 

 

IR-362

 

FANHUA INC.

 

Unaudited Condensed Consolidated Statements of Cash Flow

 

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

 

		For the Three Months Ended												For the Nine Months Ended
		September 30,												September 30,
		2021				2022				2022				2021				2022				2022
		RMB				RMB				US$				RMB				RMB				US$
OPERATING ACTIVITIES
Net income			36,765				33,202				4,667				241,485				20,215				2,842
Adjustments to reconcile net income to net cash generated from operating activities:
Investment income			(1,736	)			(1,133	)			(159	)			(3,163	)			(2,931	)			(412	)
Share of income of affiliates			(2,486	)			621				87				(28,813	)			68,755				9,665
Other non-cash adjustments			38,694				35,027				4,924				102,880				115,076				16,177
Changes in operating assets and liabilities			(53,532	)			(47,929	)			(6,738	)			(254,307	)			(218,280	)			(30,685	)
Net cash generated from (used in) operating activities			17,705				19,788				2,781				58,082				(17,165	)			(2,413	)
Cash flows from investing activities:
Purchase of short term investments			(1,510,370	)			(452,760	)			(63,648	)			(7,255,010	)			(1,993,760	)			(280,278	)
Proceeds from disposal of short-term investments			1,842,576				653,531				91,872				7,798,830				2,487,862				349,738
Prepayment for acquisition of short-term investments			—				(240,000	)			(33,739	)			—				(340,000	)			(47,797	)
Cash lent to third parties			—				(105,800	)			(14,873	)			—				(205,800	)			(28,931	)
Repayment of loan receivables from a third party			—				20,000				2,812				—				20,000				2,812
Others			(2,841	)			(26,091	)			(3,668	)			(10,032	)			(94,247	)			(13,249	)
Net cash generated from (used in) investing activities			329,365				(151,120	)			(21,244	)			533,788				(125,945	)			(17,705	)
Cash flows from financing activities：
Dividends paid			(51,958	)			—				—				(191,427	)			(52,069	)			(7,320	)
Dividend distributed to non-controlling interest			—				—				—				(7,580	)			—				—
Others			—				—				—				(10,200	)			3				—
Net cash used in financing activities			(51,958	)			—				—				(209,207	)			(52,066	)			(7,320	)
Net increase (decrease) in cash, cash equivalents and restricted cash			295,112				(131,332	)			(18,463	)			382,663				(195,176	)			(27,438	)
Cash, cash equivalents and restricted cash at beginning of period			429,330				592,425				83,282				350,098				656,522				92,292
Effect of exchange rate changes on cash and cash equivalents			(343	)			1,744				245				(8,662	)			1,491				210
Cash, cash equivalents and restricted cash at end of period			724,099				462,837				65,064				724,099				462,837				65,064

 

 

IR-362

 

For more information, please contact:

 

Investor Relations

 

Tel: +86 (20) 8388-3191

 

Email: qiusr@fanhuaholdings.com

 

Source: Fanhua Inc.

 

 

Page 11 of 11

 

Exhibit 99.2

 

IR-363

 

Fanhua Announces Execution of a Term Sheet to Acquire Majority Interests in Zhongrong Smart Finance Information Technology Co., Ltd.

 

GUANGZHOU, China, November 24, 2022 (GLOBE NEWSWIRE) -- Fanhua Inc. (“Fanhua” or the “Company”) (Nasdaq: FANH), a leading independent financial services provider in China, today announced that it has signed a term sheet (the “Term Sheet”) with the existing shareholders of Zhongrong Smart Finance Information Technology Co., Ltd. (“Zhongrong”) to acquire 57.73% equity interests of Zhongrong in an all-stock transaction. The transaction is expected to be completed in January 2023, subject to certain customary conditions, including completion of satisfactory due diligence.

 

Pursuant to the Term Sheet, the proposed transaction will involve the issuance of up to 62 million new ordinary shares of Fanhua, representing 5.44% of its enlarged share capital, in exchange for 57.73% of the equity interests of Zhongrong.

 

Established in 2018, Zhongrong is a leading managing general agency in China. Zhongrong offers life insurance products through a network of nearly 300 non-affiliated regional insurance agencies. In 2021, the gross written premiums of its life insurance business reached RMB1.4 billion, of which the first-year premiums were approximately RMB730 million.

 

Mr. Hu Yinan, Chairman and CEO of Fanhua, commented on the proposed transaction, “With our experience and resources accumulated in the past two decades, Fanhua is committed to building a public infrastructure platform to support all types of independent insurance intermediaries and independent agents to operate and thrive under a unified compliance framework, by providing them with access to a full spectrum of products and services, leading technology and digital operation capacities, professional training systems and services as well as capital support.”

 

“As a leading managing general agency in China, Zhongrong has unique advantages in compliance and quality management. The acquisition of Zhongrong is expected to greatly enhance the compliance and quality management capabilities of Fanhua’s platform and rapidly increase our market influence. It also marks an important step forward in accelerating the expansion of our platform’s foothold, contributing to the sustainable, high-quality growth of the life insurance agency channel in China.”

 

About Fanhua Inc.

 

Fanhua Inc. is a leading independent 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, including life and property and casualty insurance products. We also provide insurance claims adjusting services, such as damage assessments, surveys, authentications and loss estimations, as well as value-added services, such as emergency vehicle roadside assistance.

 

 

IR-363

 

Our online platforms include: (i) Lan Zhanggui, an all-in-one platform which allows our agents to access and purchase for their policy holders 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; (ii) Baowang (www.baoxian.com), an online entry portal for comparing and purchasing short term health, accident, travel and homeowner insurance products and (iii) eHuzhu (www.ehuzhu.com), a non-profit online mutual aid platform in China.

 

As of September 30, 2022, our distribution and service network consisted of 697 sales outlets covering 23 provinces, autonomous regions and centrally-administered municipalities and 100 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, future development of COVID-19 outbreak and their potential impact on the sales of insurance products. 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.

 

For more information, please contact:

 

Investor Relations

Tel: +86 (20) 8388-3191

Email: qiusr@Fanhuaholdings.com

 

Source: Fanhua Inc.

 

 

Exhibit 99.3

 

IR-364

 

Fanhua Announces the Launch of Its Open Platform

 

GUANGZHOU, China, November 24, 2022 (GLOBE NEWSWIRE) -- Fanhua Inc. (“Fanhua” or the “Company”) (Nasdaq: FANH), a leading independent financial services provider in China, today announced the official launch of its open platform (the “Open Platform”) aiming to empower independent insurance agencies and agents on the market.

 

Fanhua’s Open Platform will provide various market participants with access to a standardized compliance framework, a full spectrum of products and services on the market, leading technology and digital operation capabilities, professional training and services, and capital support. Fanhua may also selectively invest in or acquire qualified intermediary companies to strengthen business quality control through equity ties.

 

Mr. Hu Yinan, Chairman and CEO of Fanhua, commented on the launch of the Open Platform, “China’s life insurance industry is at a stage of profound transformation. While the traditional pyramid structure of life insurance sales force is falling apart, life insurance sales teams are transforming to become more distinctly professional, career-based and elite, and are structured in a more flattened, small, disperse and personalized manner. As such, a large number of fragmented sales organizations and independent agents are in need of a public professional platform that can help them ensure compliance, achieve professional growth, offer whole life insurance services to customers, and improve business efficiency.”

 

“We believe what will happen next in the individual life insurance agency business in China is that while sales organizations are becoming increasingly fragmented, the market of supporting platforms will become increasingly concentrated.”

 

“Fanhua has been adhering to the ‘professional back office platform + individual entrepreneurship’ operation model since its inception. After 24 years of development, we have forged a strong open platform with comprehensive infrastructure. The open platform has been empowering our agents in their professional development and career progression, demonstrated by significant improvement in the number and productivity of our elite agents. We therefore believe it is high time to make the platform open to the whole industry.”

 

“Following the acquisition of Zhongrong Smart Finance Technology Information Technology Co., Ltd. (“Zhongrong”), Fanhua aims to invest in or acquire 20-30 small and medium-sized insurance agencies within the next couple of years. Through the integration with Zhongrong’s managing general agency platform, we expect to connect with 300-500 small and medium-sized insurance agencies to empower various parties in the industry, contributing to the transformation and long-term sustainable, high-quality development of the industry.”

 

 

IR-364

 

About Fanhua Inc.

 

Fanhua Inc. is a leading independent 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, including life and property and casualty insurance products. We also provide insurance claims adjusting services, such as damage assessments, surveys, authentications and loss estimations, as well as value-added services, such as emergency vehicle roadside assistance.

 

Our online platforms include: (i) Lan Zhanggui, an all-in-one platform which allows our agents to access and purchase for their policy holders 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; (ii) Baowang (www.baoxian.com), an online entry portal for comparing and purchasing short term health, accident, travel and homeowner insurance products and (iii) eHuzhu (www.ehuzhu.com), a non-profit online mutual aid platform in China.

 

As of September 30, 2022, our distribution and service network consisted of 697 sales outlets covering 23 provinces, autonomous regions and centrally-administered municipalities and 100 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, future development of COVID-19 outbreak and their potential impact on the sales of insurance products. 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.

 

For more information, please contact:

 

Investor Relations

Tel: +86 (20) 8388-3191

Email: qiusr@Fanhuaholdings.com

 

Source: Fanhua Inc.