CNFinance Holdings Ltd. (CNF) Reports Q1 Loss of $0.14

CNFinance Holdings Ltd. (NYSE: CNF) reported Q1 EPS of ($0.14). Revenue for the quarter came in at $5.72 million.

First Quarter 2020 Operational and Financial Highlights

• Total loan origination volume[1] was RMB1,166.9 million (US$164.7 million) during the first quarter of 2020.
• Total outstanding loan principal[2] was RMB10.8 billion as of March 31, 2020, compared to RMB11.3 billion as of December 31, 2019.
• Total interest and fees income were RMB493.7 million (US$69.6 million) in the first quarter of 2020, a decrease of 44.7% from RMB892.3 million in the same period of 2019.
• Net income/(loss) was a net loss of RMB65.7 million (US$9.3 million) in the first quarter of 2020, a decrease of 148.5% from the net gain of RMB135.5 million in the same period of 2019.
• Basic earnings/(losses) per ADS and diluted earnings/(losses) per ADS were RMB(0.96) (US$(0.14)) and RMB(0.96) (US$(0.14)), respectively, in the first quarter of 2020, compared to RMB1.98 and RMB1.80, respectively, in the same period of 2019.

"The first quarter brings unique challenges to our business in various aspects. In the first quarter, to follow government's plan to fight the virus, enterprises all over China either had temporary closure or were operating on a very limited basis. On one hand, the production and operation activities of micro- and small- enterprises were severely limited, it was very difficult for our sales partners to introduce borrowers as usual. On the other hand, our employees could not conduct any on-site activities. As a result, our aggregate delinquency ratio increased accordingly in the first quarter. However, we have always believed that with challenge comes opportunity. After the outbreak of COVID-19 pandemic, we immediately communicated with sales partners and trust company partners, optimized our product design and adjusted loan management to take into account the difficulties and financing needs of borrowers. We implemented various measures to ensure our services were in line with the customer needs in this special period. Thanks to the collaboration model that we have been constantly improving, despite the difficulties, we were able to record a year-over-year growth in our loan origination volume and number of effective sales partners in the first quarter of 2020. We also believe that micro- and small- enterprises in China will emerge stronger from this challenging environment with increased capital need in the near future. Our goal is to seize this opportunity, continue to expand and strengthen the collaboration model, and to drive our numbers of effective sales partners and scale of loans up to another level."

Business Outlook

A novel strain of coronavirus known as COVID-19, spread throughout China and the entire globe during the first quarter of 2020. The outbreak of COVID-19 pandemic has caused, and is likely to continue to cause, companies in China to implement adjustment of work schemes, impose additional quarantine measures or even temporary or permanent business closure. Results of operations for MSEs, our primary customer group, may be materially and adversely impacted. As a result of the COVID-19 outbreak, our normal work schedule and results of operations have been, and may continue to be adversely impacted, and our future revenues under the impact of this pandemic may be difficult to predict. The COVID-19 outbreak may also have a material adverse effect on China's real estate market, which may increase the risks of the loans we facilitate. Many cities in China were subject to temporary lockdown, travel restriction or other forms of quarantine. Since late March, however, most of our city branches and sales partners which were less severely affected by the pandemic have resumed normal work. The city branches which were more severely affected by the pandemic also gradually resume normal work by complying with the government's quarantine and lockdown policies. Although the situation has been gradually improving, the extent to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain or minimize its impact.

For the second quarter of 2020, based on the information available as of the date of this press release and after taking into consideration of the COVID-19 pandemic, which will continuously affect the operation of MSEs whose owners are our main customers, we expect net loss to be between RMB0 million and RMB50 million for the second quarter of 2020.

The above outlook is based on the current market conditions and reflects our current and preliminary estimates of market and operating conditions, which are all subject to substantial uncertainty.

For earnings history and earnings-related data on CNFinance Holdings Ltd. (CNF) click here.

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