BEIJING and NEW YORK, May 18,
2018 /PRNewswire/ -- Wins Finance Holdings Inc. ("Wins
Finance" or the "Company") (NASDAQ: WINS), a diversified investment
and asset management company that provides integrated financing
solutions to small and medium enterprises ("SMEs") in China, today announced its unaudited financial
results for the fiscal six months ended December 31, 2017.
Fiscal Six Months Financial and Operational
Highlights
- Gross revenue was $5.3 million,
compared to $4.8 million for the
corresponding period ended December 31,
2016.
- Interest income on short-term investments was $7.5 million, compared to $6.8 million for the corresponding period ended
December 31, 2016.
- Net income attributable to Wins Finance was $9.2 million, compared to $11.0 million for the corresponding period ended
December 31, 2016.
"Our gross revenue increased 10% for the first six months of
fiscal 2018 as compared to same period a year ago as our financial
advisory business increased by 227%, though this was offset by a
26% decrease in our financial guarantee business. However, our net
income fell 17%, primarily due an increase in our expenses," said
Renhui Mu, Chairman and Chief
Executive Officer of Wins Finance.
"We continue to work to optimize the company's business and
operating structure. The economic slowdown in Shanxi Province's economy, our main market for
our guarantee business, could lead to an increased risk of
potential loan default despite our extensive screening process, so
we plan to make fewer loan guarantees. Instead, we plan to focus on
growing our financing lease business, which we believe will
continue to expand in the future."
"In order to plan for growth and reduce the cost of bank
financing, we plan to increase our capital and strive to improve
the Company's credit rating with our lenders. This could take the
form of an issuance of securities as outlined in our registration
statement on Form F-3," added Mr. Mu
Six Months Ended December 31,
2017 Financial Results
Gross revenue
Gross revenue for Wins Finance for the six months ended
December 31, 2017 was $5.3 million, which was comprised of $1.2 million of commissions and fees generated
from our financial guarantee services, $3.0
million of direct financing lease interest income and
$1.2 million of financial advisory
and lease agency income.
Commissions and fees from financial guarantee services decreased
$0.4 million, or 26.4%, to
$1.2 million for the six months ended
December 31, 2017, compared to
$1.6 million for the six months ended
December 31, 2016. The decrease was
primarily attributable to reduced lending activities due to the
economic slowdown in Shanxi
Province, where most of our existing SME clients are
located, and, as a result, fewer potential clients were able to
pass our screening process. Concurrent with a slowdown of
China's economy, competition in
our lending business has intensified in the region. These factors
are expected to negatively impact our guarantee business in the
foreseeable future.
Direct financing lease interest income generated from payments
under direct financing leases with customers increased by
$0.1 million, or 3.6%, to
$3.0 million for the six months ended
December 31, 2017, compared to
$2.9 million for the six months ended
December 31, 2016.
Financial advisory and lease agency income increased by
$0.8 million, or 226.8%, to
$1.2 million for the six months ended
December 31, 2017, compared to
$0.4 million for the six months ended
December 31, 2016. The increase was
primarily attributable to new contracts secured under our financing
advisory services.
Interest income on short-term investment
Interest income from short-term investments increased by
$0.6 million to $7.5 million for the six months ended
December 31, 2017, compared to
$6.8 million for the six months ended
December 31, 2016. The increase was
primarily due to an increase in the average balance of our
short-term investments.
Non-interest expenses
Non-interest expense was $2.1
million for the six months ended December 31, 2017, as compared to non-interest
income of $0.06 million for the six
months ended December 31, 2016. In
connection with the grant of stock options to employees, we
recorded share-based compensation charges of $nil and a gain of
$1.5 million for the six months ended
December 31, 2017 and 2016,
respectively. The gain in 2016 resulted from the reversal of
share-based compensation expense for our stock options that were
cancelled in 2016 due to the termination of the holders' employment
prior to vesting.
Income taxes
Income tax expense decreased by $0.6
million, to $0.6 million for
the six months ended December 31,
2017, compared to $1.2 million
for the six months ended December 31,
2016. The decrease was attributable to the decrease in
taxable income, which excluded tax exempt interest income from
short-term investments.
Net income
Net income decreased by $1.8
million, or 16.6%, to $9.2
million for the six months ended December 31, 2017, compared to $11.0 million for the six months ended
December 31, 2016.
Current Outlook
Management continues to be cautious as to its operating results
in future periods in view of the slowdown of the Chinese economy in
those regions where the Company operates and which directly effects
China's financial sector. The
Company believes that its financial guarantee services business
could especially be adversely affected since its exposure to
defaulted loans is expected to increase and counter guarantees or
collateral provided may become insufficient to cover repayments.
Management is undergoing a review of the risk controls for the
Company's financial guarantee business and may reduce the operation
of this business in order to minimize the risks of the Company's
exposure.
Conversely, we believe that the financial leasing business
offers substantial growth opportunities as SMEs have become an
indispensable driver of promoting economic and employment growth
and continue to contribute to China's economic transformation. Many SMEs
need to upgrade their equipment and adopt new technologies but have
limited access to capital. Although the Company's financial
advisory and agency services are important as they focus on SMEs
and have the potential to diversify the Company's client base, the
period-to-period financial results of this sector is affected by
the complexity, uncertainties and changes in China's economic conditions and the
regulations governing the industry.
Other Significant Events
The Company's registration statement on Form F-3, which
registers the issuance of ordinary shares, preferred shares,
warrants, rights, debt securities and debentures by the Company,
was declared effective by the SEC on March
30, 2018. The Company may sell such securities from
time to time pursuant to the registration statement. As we
have previously disclosed, we have advised NASDAQ that we will seek
to increase the public float and potentially the liquidity of our
ordinary shares in an attempt to limit the volatility in the
trading price of our ordinary shares. If we undertake any offering
under the registration statement, it will be, in part, an effort to
increase the liquidity of our ordinary shares. However, we cannot
guarantee that any actions we take will have the intended effect of
reducing market volatility and improving liquidity, and such share
issuances could result in significant dilution for current
shareholders.
About Wins Finance
Wins Finance is a diversified investment and asset management
company listed on NASDAQ. The Company is focused on identifying
value accretive investment opportunities and assets in China and the United
States that can be enhanced through the strategic
involvement of its established management team and its familiarity
with the Chinese investment community to help generate long-term
value for shareholders. Wins Finance is well positioned to leverage
its expertise and existing operations in China to build a comprehensive platform for
the provision of lending and other financing solutions to the
under-served small and medium enterprise segment. For more
information, please visit www.winsholdings.com.
Forward Looking Statements
This news release contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended, and as defined in the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can
be identified by terminology such as "will," "expects,"
"anticipates," "future," "intends," "plans," "believes,"
"estimates" and similar statements. All statements other than
statements of historical fact in this press release are
forward-looking statements and involve certain risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. These forward-looking
statements are based on management's current expectations,
assumptions, estimates and projections about the Company and the
industry in which the Company operates, but involve a number of
unknown risks and uncertainties. Further information regarding
these and other risks are described in the Company's Annual Report
on Form 20-F for the year ended June 30,
2017 and in the Company's other filings with the U.S.
Securities and Exchange Commission. The Company undertakes no
obligation to update forward-looking statements to reflect
subsequent occurring events or circumstances, or changes in its
expectations, except as may be required by law. Although the
Company believes that the expectations expressed in these forward
looking statements are reasonable, it cannot assure you that such
expectations will turn out to be correct, and actual results may
differ materially from the anticipated results. You are urged to
consider these factors carefully in evaluating the forward-looking
statements contained herein and are cautioned not to place undue
reliance on such forward-looking statements, which are qualified in
their entirety by these cautionary statements.
Company Contacts:
Wins Finance Holdings Inc.
1177 Avenue of the Americas
5th Floor
New York, NY 10036
Tel: 646-694-8538
E-mail: info@winsholdings.com
WINS FINANCE
HOLDINGS INC.
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
As
of
|
|
|
December 31,
2017
|
|
June 30,
2017
|
|
|
US$
|
|
US$
|
ASSETS
|
|
|
|
|
Cash
|
|
9,183,365
|
|
17,002,282
|
Restricted
cash
|
|
23,482,118
|
|
24,282,208
|
Short-term
investments
|
|
206,490,674
|
|
187,944,184
|
Accounts
receivable
|
|
1,011,363
|
|
-
|
Guarantee paid on
behalf of guarantee service customers
|
|
3,005,346
|
|
1,560,615
|
Net investment in
direct financing leases
|
|
70,289,761
|
|
76,723,457
|
Interest
receivable
|
|
10,726,006
|
|
3,514,075
|
Property and
equipment, net
|
|
395,483
|
|
594,148
|
Deferred tax assets,
net
|
|
164,580
|
|
327,137
|
Other
assets
|
|
666,420
|
|
815,984
|
TOTAL
ASSETS
|
|
325,415,116
|
|
312,764,090
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Liabilities
|
|
|
|
|
Bank loans for
capital lease business
|
|
21,801,814
|
|
28,281,541
|
Other loans for
capital lease business
|
|
7,420,859
|
|
9,509,597
|
Interest
payable
|
|
200,435
|
|
222,510
|
Income tax
payable
|
|
2,784,517
|
|
2,772,631
|
Unearned income from
financial guarantee services
|
|
361,974
|
|
538,215
|
Allowance on
guarantee
|
|
672,202
|
|
673,147
|
Other
liabilities
|
|
1,167,033
|
|
893,569
|
Deposit from direct
financing leases
|
|
11,736,635
|
|
10,854,121
10,854,121
|
Due to related
party
|
|
464,000
|
|
464,000
|
Deferred tax
liabilities
|
|
899,223
|
|
746,884
|
Total
Liabilities
|
|
47,508,692
|
|
54,956,215
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
Common stock (par
value $0.0001 per share, 100,000,000 shares
authorized; 19,837,642 issued and outstanding at
December 31,
2017 and June 30, 2017)
|
|
1,984
|
|
1,984
|
Additional paid-in
capital
|
|
211,934,432
|
|
211,934,432
|
Statutory
reserve
|
|
3,530,458
|
|
3,530,458
|
Retained
earnings
|
|
71,627,391
|
|
62,427,622
|
Accumulated other
comprehensive loss
|
|
(9,187,841)
|
|
(20,086,621)
|
Total
Stockholders' Equity
|
|
277,906,424
|
|
257,807,875
|
TOTAL LIABILITIES
AND EQUITY
|
|
325,415,116
|
|
312,764,090
|
WINS FINANCE
HOLDINGS INC.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE
INCOME (LOSS)
|
|
|
|
Six months ended
December 31,
|
|
|
|
2017
|
|
2016
|
|
|
|
US$
|
|
US$
|
Guarantee
service income
|
|
|
|
|
|
Commissions and
fees on financial guarantee services
|
|
|
1,159,002
|
|
1,575,208
|
Reversal of
provision on financial guarantee services
|
|
|
28,397
|
|
2,248,283
|
Commission
and fees on guarantee services, net
|
|
|
1,187,399
|
|
3,823,491
|
|
|
|
|
|
|
Direct
financing lease income
|
|
|
|
|
|
Direct
financing lease interest income
|
|
|
2,959,175
|
|
2,857,051
|
Interest
expense for direct financing lease
|
|
|
(920,873)
|
|
(1,544,164)
|
Reversal of
provision (provision) for lease payment receivable
|
|
|
116,506
|
|
(120,587)
|
Net direct
financing lease interest income after provision for
receivables
|
|
2,154,808
|
|
1,192,300
|
|
|
|
|
|
|
Financial
advisory and lease agency income
|
|
|
1,163,776
|
|
356,137
|
Net
revenue
|
|
|
4,505,983
|
|
5,371,928
|
|
|
|
|
|
|
Non-interest
income
|
|
|
|
|
|
Interest on
short-term investment
|
|
|
7,451,918
|
|
6,838,031
|
Total
non-interest income
|
|
|
7,451,918
|
|
6,838,031
|
|
|
|
|
|
|
Non-interest
expense
|
|
|
|
|
|
Business taxes
and surcharge
|
|
|
(2,057)
|
|
(1,473)
|
Salaries and
employees surcharge
|
|
|
(387,959)
|
|
(612,926)
|
Rental
expenses
|
|
|
(127,027)
|
|
(115,187)
|
Other operating
expenses
|
|
|
(1,592,811)
|
|
788,790
|
Total
non-interest expense
|
|
|
(2,109,854)
|
|
59,204
|
|
|
|
|
|
|
Income
before taxes
|
|
|
9,848,047
|
|
12,269,163
|
|
|
|
|
|
|
Income tax
expense
|
|
|
(648,278)
|
|
(1,237,708)
|
NET
INCOME
|
|
|
9,199,769
|
|
11,031,455
|
|
|
|
|
|
|
Other
comprehensive income (loss)
|
|
|
|
|
|
Foreign
currency translation adjustment
|
|
|
10,898,780
|
|
(11,196,403)
|
COMPREHENSIVE INCOME
(LOSS)
|
|
|
20,098,549
|
|
(164,948)
|
|
|
|
|
|
|
Weighted average
ordinary shares outstanding:
|
|
|
|
|
|
Basic
|
|
|
19,837,642
|
|
20,041,647
|
Diluted
|
|
|
19,837,642
|
|
20,297,832
|
Earnings per
share:
|
|
|
|
|
|
Basic
|
|
|
0.46
|
|
0.55
|
Diluted
|
|
|
0.46
|
|
0.54
|
|
|
|
|
|
|
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SOURCE Wins Finance Holdings Inc.