NEW YORK--(BUSINESS WIRE)--China Lending Corporation (NASDAQ: CLDC; CLDCW) (“China Lending” or the “Company”), a leading non-bank direct lending corporation servicing micro, small and medium sized enterprises (MSME), currently underserved by commercial banks in China, today reported its financial results for the three and nine month periods ending September 30, 2016.
Third Quarter 2016 vs. Third Quarter 2015
- Total interest and fee income (revenue) increased 51.6% to $9.0 million from $5.9 million.
- Total interest expense was $1.2 million compared to $1.0 million.
- Net interest income increased 33.9% to $6.0 million, compared to $4.5 million.
- Net income increased 34.6% to $3.9 million, compared to $2.9 million.
- Earnings per basic share to ordinary shareholders increased 74% to $0.25, compared to $0.14, mainly due to higher net interest income and the 24.6% decrease in the total number of basic shares outstanding for the period.
- Earnings per diluted share to ordinary shareholders increased 60.1% to $0.23, compared to $0.14, mainly due to higher net interest income and the 20.9% decrease in the total number of diluted shares outstanding for the period.
Nine Months 2016 vs. Nine Months 2015
- Total interest and fee income (revenue) increased 36.5% to $26.9 million from $19.7 million.
- Interest expense was $3.9 million compared to $2.6 million.
- Net interest income increased 21.2% to $19.5 million, compared to $16.1 million.
- Net income increased 31.4% to $13.7 million, compared to $10.4 million.
- Earnings per basic share to ordinary shareholders increased 41.8% to $0.74, compared to $0.52, mainly due to higher net interest income and the 8.3% decrease in the total number of basic shares outstanding for the period.
- Earnings per diluted share to ordinary shareholders increased 34.1% to $0.70, compared to $0.52, mainly due to higher net interest income and the 3.6% decrease in the total number of diluted shares outstanding for the period.
As of September 30, 2016
- Registered capital was $127.7 million.
- Total assets were $158.7 million.
- Total liabilities were $41.1 million.
Jingping Li, Co-Founder & CEO of China Lending, stated, "Our revenue and net income for the 2016 nine-month period increased to a record level, which is an indication of the strength of our business across all segments. The 36.5% increase in revenue for the 2016 nine-month period as compared to same period of last year was due to the continued growth in funding demand in the region, additional funds obtained to serve more customers, higher utilization rate of funds due to the scientific risk analysis and control system designed by our team, and higher interest lending rates supported by China’s government policies. Also a major revenue contributor for the 2016 nine-month period was our consulting and credit risk analysis business segment, which we launched in August of 2015. This newly established segment not only supports our core non-bank lending business and due diligence efforts in Xinjiang, but most importantly is offering us significant expansion opportunities beyond the province through syndicated loans in cooperation with locally based non-bank lenders.”
The table below summarizes revenue by business segment:
| Revenue by segment | nine-month 2016 | nine-month 2015 | Change | ||||||||
| Direct lending | $21,430,371 | $19,669,009 | $1,761,362 | ||||||||
| Consulting and credit risk analysis | 5,474,542 | 44,965 | 5,429,577 | ||||||||
| Other | - | - | - | ||||||||
| Total | $26,904,913 | $19,713,974 | $7,190,939 | ||||||||
Ms. Li continued, “Our average annual interest rate for the 2016 nine-month period was 23.3%, vs. 19.3% in the same period of last year. Our net income for the current nine-month period increased by over 30% as compared to the same period of last year mainly due to higher revenue, lower operating expenses, partially offset by higher total interest expense.”
Recent Initiatives
Building upon the expertise and know-how we have gained over the years, we are now expanding in new areas and industries beyond our traditional ones. Our business model has always been based on four basic pillars: short term, small size, high collateral and diversified loans for small and medium size enterprises. While we continue to operate a fast growing, efficient, high margin and low risk business, we are looking to further diversify our customer base, lower loan average size below current size of $0.7 million and lower the average loan duration below current length of 5.7 months.
Using the same principals, we are now expanding our lending services in two new sectors:
| - |
Green energy and social responsible enterprises: we are taking advantage of local government support in technologies that promote sustainable energy including renewable energy sources, such as hydroelectricity, solar energy and wind energy, designed to improve energy efficiency and protect environment. |
||
|
- |
Entertainment industry: supported by the Xinjiang government policies, the entertainment industry is growing and is in great need for funding to acquire new broadcasting technologies, digital platforms, support talent training for creative film and program makers, etc. |
||
Pioneer of internet inclusive financing in Xinjiang
Without increasing our overall risk exposure, we are building up our internet based micro credit department with a special focus on consumption lending for individuals. In addition to our core operation, our goal is to also become an internet inclusive financing enterprise by providing an entire gamut of financial products and services such as micro-loans, micro-insurance, money transfers, micro-pensions and savings products to low-income individuals with big-data, internet and mobile technologies. Currently we are exploring a partnership arrangement with a leading internet based Fintech payment service provider.
Using our accurate, effective and interactive platform based on big-data cloud model, we are building an internet financing platform. This platform will be based on international micro credit risk control model known as “Know Your Customer” principle which will allow us to identify and evaluate our clients’ true financial needs and minimize risks.
Mid-term growth plan
As previously announced, we continue to make progress in developing a peer-to-peer (P2P) lending platform and the establishment of the first internet banking platform operating out of the region. We will provide additional information as these initiatives mature.
Reaffirming 2016 Guidance
For full year 2016, China Lending expects to generate revenue of between $32.7 million and $34.1 million representing an increase of 16% to 21%, as compared to full year 2015. Also, the Company expects to generate net income of between $16.9 million and $17.5 million, or an increase of 20% to 25%. as compared to 2015.
Conference Call
Jingping Li, Co-Founder & CEO and Stephen Chan, CFO, will conduct a conference call focusing on operating performance and financial results at 9:00 am ET (10:00 pm China Time) on Tuesday, November 15, 2016. Interested parties may participate in the call by dialing +1 (201) 493-6749. Please dial in 10 minutes before the call is scheduled to begin, and ask for the China Lending call.
The conference call will also be webcast live via the Events / News and Media section of the Company’s website at www.chinalending.com or at http://www.investorcalendar.com/IC/CEPage.asp?ID=175470. To listen to the live webcast, go to the website at least 15 minutes early to register, download and install any necessary audio software. If you are unable to listen live, the conference call will be archived on the Company’s web site.
About China Lending
Founded in 2009, China Lending is a non-bank direct lending corporation and provides services to micro, small and medium sized enterprises, farmers, and individuals, who are currently underserved by commercial banks in China. Headquartered in Urumqi, the capital of Xinjiang Autonomous Region, with a registered capital of $127.7 million as of September 30, 2016, China Lending is one of the largest direct lending companies in the region in terms of registered capital.
Forward-Looking Statements
This press release may include forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that China Lending expects or anticipates will or may occur in the future are forward-looking statements and are identified with, but not limited to, words such as “may,” “believe” and “expect.” These statements are based on certain assumptions and analyses made by China Lending in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. Actual results may differ materially from those expressed herein due to many factors such as, but not limited to, (1) the ability to obtain or maintain the listing of the Company’s securities on the NASDAQ Capital Market; (2) the risk that our recent business combination disrupts the Company’s current plans and operations; (3) the ability to recognize the anticipated benefits of our recent business combination, which may be affected by, among other things, closing proceeds, competition and the ability of the business to grow and manage growth profitably; (4) the outcome of any legal proceedings that may be instituted against the Company; (5) changes in applicable laws or regulations; (6) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; and (7) other risks and uncertainties indicated from time to time in the proxy statement filed by the Company in connection with the business combination, including those under “Risk Factors” therein, and other factors identified in the Company’s prior and future filings with the SEC, available at www.sec.gov.
These forward-looking statements are based on information available as of the date of this press release and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date and the Company undertakes no obligation to update any forward-looking statements contained herein to reflect events or circumstances which arise after the date of this press release, whether as a result of new information, future events or otherwise, except as may be required under applicable securities law.
|
CHINA LENDING CORPORATION CONSOLIDATED BALANCE SHEETS |
||||||||
| September 30, | December 31, | |||||||
| 2016 | 2015 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 8,088,049 | $ | 6,732,601 | ||||
| Loans receivable - third parties | 143,878,127 | 137,602,481 | ||||||
| Loans receivable - related parties | - | 1,102,593 | ||||||
| Interest and fee receivable | 1,186,692 | 673,626 | ||||||
| Amount due from a related party | - | 1,653,839 | ||||||
| Other current assets | 629,807 | - | ||||||
| Total current assets | 153,782,675 | 148,139,527 | ||||||
| Cost method investment | 3,749,475 | 3,851,071 | ||||||
| Property and equipment, net | 100,970 | 116,298 | ||||||
| Intangible asset, net | 59,330 | - | ||||||
| Deferred tax assets | 920,915 | 243,440 | ||||||
| Other non-current assets | 34,024 | 374,387 | ||||||
| Total Assets | $ | 158,647,389 | $ | 152,350,336 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Liabilities | ||||||||
| Short-term bank loans, net of financing fee | $ | 6,608,450 | $ | - | ||||
| Loans from a cost investment investee - current portion | 3,749,475 | 15,404,285 | ||||||
| Secured loan | 14,967,904 | 24,739,282 | ||||||
| Dividends payable | 2,060,435 | 6,623,843 | ||||||
| Taxes payable | 1,261,397 | 1,235,241 | ||||||
| Convertible promissory note payable | 650,000 | - | ||||||
| Other current liabilities | 542,744 | 977,831 | ||||||
| Total current liabilities | 29,840,405 | 48,980,482 | ||||||
| Loans from a cost investment investee – non-current portion | 11,248,425 | - | ||||||
| Other non-current liabilities | 832 | - | ||||||
| Total liabilities | 41,089,662 | 48,980,482 | ||||||
| Commitments and Contingencies | ||||||||
| Convertible Redeemable Class A Preferred Shares | ||||||||
| Preferred Shares, no par value, unlimited shares authorized; 715,000 and nil shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively | 8,741,727 | - | ||||||
| Shareholders' Equity | ||||||||
| Ordinary Shares, no par value; unlimited shares authorized; 22,896,765 and 20,000,000 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively | - | - | ||||||
| Additional paid-in capital | 91,606,418 | 94,723,964 | ||||||
| Statutory reserves | 4,667,254 | 4,667,254 | ||||||
| Retained earnings | 17,560,804 | 6,064,526 | ||||||
| Accumulated other comprehensive loss | (5,018,476 | ) | (2,085,890 | ) | ||||
| Total Shareholders' Equity | 108,816,000 | 103,369,854 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 158,647,389 | $ | 152,350,336 | ||||
|
CHINA LENDING CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME |
||||||||||||||||
| For The Three Months Ended September 30, | For The Nine Months Ended September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Interest and fee income | ||||||||||||||||
| Interest and fees on loans | $ | 8,994,392 | $ | 5,643,675 | $ | 26,767,437 | $ | 18,642,841 | ||||||||
| Interest and fees on loans-related parties | 21,666 | 302,094 | 133,891 | 1,068,518 | ||||||||||||
| Interest on deposits with banks | 748 | 799 | 3,585 | 2,615 | ||||||||||||
| Total interest and fee income | 9,016,806 | 5,946,568 | 26,904,913 | 19,713,974 | ||||||||||||
| Interest expense | ||||||||||||||||
| Interest expense on short-term bank loans | (211,124 | ) | (126,328 | ) | (500,301 | ) | (255,970 | ) | ||||||||
| Interest expense and fees on secured loan | (514,738 | ) | (527,514 | ) | (1,979,478 | ) | (1,635,023 | ) | ||||||||
| Interest expense on loans from related parties | - | (329,185 | ) | - | (61,542 | ) | ||||||||||
| Interest expense on loans from a cost investment investee | (442,445 | ) | - | (1,375,684 | ) | (647,447 | ) | |||||||||
| Total interest expense | (1,168,307 | ) | (983,027 | ) | (3,855,463 | ) | (2,599,982 | ) | ||||||||
| Provision for loan losses | (1,856,823 | ) | (489,861 | ) | (3,513,946 | ) | (991,749 | ) | ||||||||
| Net Interest Income | 5,991,676 | 4,473,680 | 19,535,504 | 16,122,243 | ||||||||||||
| Non-interest income | 37,495 | - | 37,590 | 13,393 | ||||||||||||
| Non-interest expense | ||||||||||||||||
| Salaries and employee surcharge | (318,631 | ) | (257,256 | ) | (792,130 | ) | (558,243 | ) | ||||||||
| Business taxes and other taxes | (64,520 | ) | (331,504 | ) | (638,441 | ) | (1,102,472 | ) | ||||||||
| Other operating expenses | (946,374 | ) | (520,543 | ) | (1,402,567 | ) | (2,039,648 | ) | ||||||||
| Total non-interest expense | (1,329,525 | ) | (1,109,303 | ) | (2,833,138 | ) | (3,700,363 | ) | ||||||||
| Income Before Tax | 4,699,646 | 3,364,377 | 16,739,956 | 12,435,273 | ||||||||||||
| Income tax expense | (831,755 | ) | (490,652 | ) | (3,021,516 | ) | (1,998,457 | ) | ||||||||
| Net Income | $ | 3,867,891 | $ | 2,873,725 | $ | 13,718,440 | $ | 10,436,816 | ||||||||
| Dividend – Convertible Redeemable Class A preferred stock | (161,727 | ) | - | (161,727 | ) | - | ||||||||||
| Net income allocated to ordinary shareholders | $ | 3,706,164 | $ | 2,873,725 | $ | 13,556,713 | $ | 10,436,816 | ||||||||
| Other comprehensive income | ||||||||||||||||
| Foreign currency translation adjustments | (389,459 | ) | (4,432,888 | ) | (2,932,586 | ) | (3,794,505 | ) | ||||||||
| Comprehensive Income | $ | 3,478,432 | $ | (1,559,163 | ) | $ | 10,785,854 | $ | 6,642,311 | |||||||
| Weighted-average common shares outstanding – basic | 15,078,111 | 20,000,000 | 18,347,395 | 20,000,000 | ||||||||||||
| Weighted-average common shares outstanding –diluted |
15,793,111 |
20,000,000 |
19,249,503 |
20,000,000 | ||||||||||||
| Earnings per share to ordinary shareholders – Basic | $ | 0.25 | $ | 0.14 | $ | 0.74 | $ | 0.52 | ||||||||
| Earnings per share to ordinary shareholders – Diluted | $ | 0.23 | $ | 0.14 | $ | 0.70 | $ | 0.52 | ||||||||
