Yintech Investment Holdings Limited (YIN) Tops Q1 EPS by 3c, Revenues Beat

Yintech Investment Holdings Limited (NASDAQ: YIN) reported Q1 EPS of $0.18, $0.03 better than the analyst estimate of $0.15. Revenue for the quarter came in at $69.3 million versus the consensus estimate of $66.21 million.

First Quarter 2020 Financial Results

• Total revenues for the quarter were RMB490.9 million (US$69.3 million), compared with RMB454.3 million in the same quarter last year, representing an increase of 8.1% year-over-year. The increase was mainly due to increases in commissions and fees from commodities, in particular spot commodities trading services. Revenue related to business, which comprises mainly of net commissions and fees were RMB429.5 million (US$60.7 million), compared with RMB259.7 million in the same quarter last year, representing an increase of 65.4% year-over-year.
• Net commissions and fees for the quarter were RMB416.0 million (US$58.7 million), representing an increase of 68.8% year-over-year, primarily due to the reason stated above.
• Customer trading volume for the quarter was RMB846.5 billion (US$119.5 billion), representing an increase of 134.7% year-over-year primarily due to an increase in trading volume of spot commodities.
• Customer trading volume for commodities (representing customer trading volume of spot and futures commodities) was RMB839.3 billion (US$118.5 billion) during the quarter, an increase of 166.2% year-over-year.
• Net commissions and fees from commodities services for the quarter were RMB304.4 million (US$43.0 million), representing an increase of 146.1% year-over-year, primarily attributable to an increase in customer trading volume for commodities.
• Effective fee rate for commodities (representing net commissions and fees from commodities services as a percentage of customer trading volume for commodities) for the quarter was 0.036%, compared with 0.039% in the same quarter last year.
• Customer trading volume for securities (representing customer trading volume of overseas securities brokerage) was RMB7.2 billion (US$1.0 billion) during the quarter, representing a decrease of 84.1% year-over-year. The volatility in securities trading was mainly the result of the Company's strategy shift to accommodate the market and policy environment of the corresponding quarter on an ongoing basis.
• Net commissions and fees from securities services for the quarter were RMB111.6 million (US$15.8 million), representing a decrease of 9.1% year-over-year due to the reason stated above.
• Effective fee rate for securities (representing net commissions and fees from overseas securities brokerage services as a percentage of customer trading volume for overseas securities brokerage) for the quarter was 0.128%, compared with 0.056% in the same quarter last year.
• Expenses for the quarter were RMB375.6 million (US$53.0 million), an increase of 22.6% year-over-year mainly because of increase in advertising and promotion expenses.
• Net income for the quarter was RMB89.4 million (US$12.6 million), compared with net income of RMB75.1 million in the same quarter last year.
• Net income attributable to Yintech for the quarter was RMB88.6 million (US$12.5 million), compared with RMB69.2 million in the same quarter last year.
• Non-GAAP net income attributable to Yintech (Refer to "Reconciliation of GAAP to Non-GAAP Results") for the quarter was RMB94.0 million (US$13.3 million), compared with RMB85.6 million in the same quarter last year.
• Diluted earnings per ADS for the quarter was RMB1.18 (US$0.17), compared with RMB0.92 in the same quarter last year.
• Non-GAAP diluted earnings per ADS (Refer to "Reconciliation of GAAP to Non-GAAP Results") for the quarter was RMB1.25 (US$0.18), compared with RMB1.14 in the same quarter last year.

"As COVID-19 began to spread globally in the first quarter of 2020, economies, businesses and investment encountered a great deal of uncertainty and financial markets experienced tremendous volatility as 2020 unfolded. Despite these negative impacts along with fewer trading days due to the Chinese Lunar New Year and the COVID-19 pandemic, we began this year on a strong note on our primary business. Our customer trading volume reached RMB846.5 billion, an increase of 134.7% year-over-year, and net commissions and fees were RMB416.0 million, an increase of 68.8% from the same period last year. The numbers of our active account and tradable account both grew," said Mr. Wenbin Chen, Chairman and CEO of Yintech.

"This growth was attributable to our keen insight on the Chinese financial market, our investment expertise and our deep understanding to the Chinese individual investors. As estimated in the previous quarter, the overwhelming COVID-19 pandemic caused the unusual volatility of the financial market, which virtually presented more opportunities than risks to us. This was especially true in our stellar growth of spot gold trading business, which reached an all-time high in the quarter, demonstrating our strong operational capabilities. In addition, our pure online operation enabled us to grow further and stronger under the backdrop of offline shifting to online deem to be a tendency. Further, our flexible business model and our operational agility in adjusting our business to accommodate with the market dynamics is becoming more evident."

"As a result, our total revenues once again exceeded management's high-end guidance, reaching RMB490.9 million, representing a 8.1% increase year-over-year. Our net income attributable to shareholders increased by 28% to RMB88.6 million. If comparing net income generated by our primary business from commodities and securities, or if excluding the investment gains or loss, which to a large extent, was correlated to market conditions, our bottom line improved even further. We continued to build balance sheet strength. Our total cash and investment securities remained flattish at RMB2.08 billion, and our total shareholder's equity increased to RMB2.85 billion," Mr. Wenbin Chen concluded.

For earnings history and earnings-related data on Yintech Investment Holdings Limited (YIN) click here.

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