Yirendai Ltd. :YRD-US: Earnings Analysis: Q1, 2017 By the Numbers : June 1, 2017

Yirendai Ltd. reports financial results for the quarter ended March 31, 2017.

We analyze the earnings along side the following peers of Yirendai Ltd. – Nicholas Financial, Inc., Mogo Finance Technology, Inc. and OneMain Holdings, Inc. (NICK-US, MOGOF-US and OMF-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 152.01 million, Net Earnings of USD 51.01 million.
  • Gross margins widened from 93.11% to 93.98% compared to the same period last year, operating (EBITDA) margins now 40.28% from 37.69%.
  • Earnings growth from operating margin improvements as well as one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2017-03-31 2016-12-31 2016-09-30 2016-06-30 2016-03-31
Relevant Numbers (Quarterly)
Revenues (mil) 152.01 158.11 132.96 112.79 83.58
Revenue Growth (%YOY) 81.87 124.95 127.88 157.46 139.55
Earnings (mil) 51.01 55.3 51.64 39.67 19.6
Earnings Growth (%YOY) 160.26 331.8 288.74 311.42 158.33
Net Margin (%) 33.56 34.97 38.84 35.17 23.45
EPS 0.84 0.92 0.85 0.68 0.39
Return on Equity (%) 60.99 77.75 88.12 83.64 48.62
Return on Assets (%) 27.79 34.22 38.89 36.62 20.99

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Market Share Versus Profits

Revenues History
Earnings History

YRD-US‘s change in revenue this period compared to the same period last year of 81.87% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that YRD-US is holding onto its market share. Also, for comparison purposes, revenues changed by -3.86% and earnings by -7.76% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s earnings growth was influenced by year-on-year improvement in gross margins from 93.11% to 93.98% as well as better cost controls. As a result, operating margins (EBITDA margins) rose from 37.69% to 40.28% compared to the same period last year. For comparison, gross margins were 93.69% and EBITDA margins were 38.76% in the last reporting period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Margins

The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from 37.34% to 39.88% and (2) one-time items. The company’s pretax margins are now 40.03% compared to 37.34% for the same period last year.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

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Company Profile

Yirendai Ltd. is engaged in the easy access to affordable credit and investors with attractive investment opportunities through its online marketplace. It operates through the following segments: Grade A, Grade B, Grade C, and Grade D. It offers online consumer finance marketplace and execute loan transactions. The company was founded by Ning Tang in September 2014 and is headquartered in Beijing, China.

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