GUANGZHOU, China, May 26, 2022 (GLOBE NEWSWIRE) -- Fanhua Inc. (Nasdaq: FANH), (the “Company” or “Fanhua”), a leading independent financial services provider in China, today announced its unaudited financial results for the first quarter ended March 31, 20221.
Financial Highlights for the First Quarter of 2022:
(In thousands, except per ADS) | 2021Q1(RMB) | 2022Q1(RMB) | 2022Q1(US$) | Change % | ||||
Total net revenues | 1,095,029 | 686,387 | 108,275 | (37.3 | ) | |||
Operating income | 140,401 | 20,589 | 3,248 | (85.3 | ) | |||
Impairment on investment in an affiliate | — | (78,277 | ) | (12,348 | ) | N/A | ||
Net income (loss) attributable to the Company’s shareholders | 138,385 | (37,838 | ) | (5,969 | ) | N/A | ||
Non-GAAP net income attributable to the Company’s shareholders2 | 138,385 | 40,439 | 6,379 | (70.8 | ) | |||
Basic and diluted net income (loss) per ADS | 2.58 | (0.70 | ) | (0.11 | ) | N/A | ||
Non-GAAP diluted net income per ADS3 | 2.58 | 0.75 | 0.12 | (70.9 | ) | |||
Cash, cash equivalents and short-term investments (As of March 31, 2021 and 2022) | 1,624,399 | 1,281,469 | 202,146 | (21.1 | ) |
Mr. Yinan Hu, chairman and chief executive officer of Fanhua, commented on the financial results of first quarter of 2022, “Since the beginning of 2022, the Omicron COVID-19 variant has been fueling outbreaks in certain areas in China, dealing a severe blow to offline activities and trainings of our sales teams, and in the most COVID-stricken areas, Fanhua’s claims adjusting business almost ground to a halt, leading to a loss in the segment in the first quarter of 2022.
“The COVID-19 resurgences and economic uncertainties to some extent restrained the release of consumer demands for insurance. Along with the high base effect resulted from the transition to the new critical illness definition framework in the first quarter of 2021, China’s life insurance industry reported a decline of 3.1% by gross written premiums (“GWP”) in the first quarter of 2022 from the same period in 2021. Against this backdrop, despite a decline in our first-year premiums of life insurance business, our life insurance business still managed to grow by 10.1% year over year in terms of GWP, and our operating income reached RMB20.6 million, meeting our expectations.
“Despite mounting external challenges, we have continued to execute on our ‘Professionalization, Career-based, Digitalization and Open Platform’ strategy and made steady progress in key initiatives: i) achieving cost reductions and efficiency improvements by optimizing staffing and closing low-performing outlets; ii) further tapping into the mid-to-high-net worth market by offering referral of insurance trust and family trust services; iii) completing training and certification programs for over 1500 Family Office Consultants (“FOC”) and getting ready with the training courses for Fanhua retirement planners, helping agents transform from experts on insurance products to experts on family-based asset allocation, and then to experts on elderly care and legacy management; (iv) recruiting high-performing elites; v) preparing for the launch of Lanzhanggui APP 3.0, a symbol of Fanhua’s strong technological prowess; vi) working on establishing standard operating procedures of a 3R (“Account Responsibility, Solution Responsibility and Fulfill Responsibility”) marketing model, featuring platform-supported team work to enable our agents to provide more professional and all-around services to their clients and (vii) accelerating market development of our open platform strategy.
“We still face tremendous challenges in the second quarter of 2022. COVID-19 continues to adversely affect offline activities of our sales agents. Meanwhile, the regulatory requirement for double-recording is set to be implemented in Hebei Province and other areas starting from June 2022, which may also temporarily cause adverse impact on the insurance industry. Despite the headwinds, our management team is still confident in achieving operating profit in the second quarter of 2022.”
Financial Results for the First Quarter of 2022
Total net revenues were RMB686.4 million (US$108.3 million) for the first quarter of 2022, representing a decrease of 37.3% from RMB1,095.0 million for the corresponding period in 2021.
Total operating costs and expenses were RMB665.8 million (US105.0 million) for the first quarter of 2022, representing a decrease of 30.3% from RMB954.6 million for the corresponding period in 2021.
As a result of the foregoing factors, we recorded an operating income of RMB20.6 million (US$3.2 million) for the first quarter of 2022, representing a decrease of 85.3% from RMB140.4 million for the corresponding period in 2021.
Operating margin was 3.0% for the first quarter of 2022, compared to 12.8% for the corresponding period in 2021.
Investment income was RMB4.1 million (US$0.6 million) for the first quarter of 2022, representing a decrease of 59.8% from RMB10.2 million for the corresponding period in 2021. The investment income in the first quarter of 2022 consisted of yields from short-term investments in financial products. Our investment income fluctuates from quarter to quarter as investment income is recognized when the investment matures or is disposed of.
Income tax expense was RMB6.3 million (US$1.0 million) for the first quarter of 2022, representing a decrease of 80.7% from RMB32.7 million for the corresponding period in 2021. The effective tax rate for the first quarter of 2022 was 18.0% compared with 21.4% for the corresponding period in 2021.
Share of income of affiliates, net of impairment was negative RMB70.6 million (US$11.1 million) for the first quarter of 2022, compared to RMB15.4 million for the corresponding period in 2021. The share of income of affiliates, net of impairment mainly included (i) an other than temporary impairment loss of RMB78.3 million (US$12.3 million) on investment in CNFinance Holdings Limited (“CNFinance”) in the first quarter of 2022, reflecting a write-down to the fair value of the investment as measured by its closing market price on March 31, 2022, and (ii) share of income from CNFinance of RMB8.0 million (US$1.3 million) in the first quarter of 2022, compared to share of income from CNFinance of RMB15.7 million in the same period of 2021.
Net loss was RMB41.7 million (US$6.6 million) for the first quarter of 2022, as compared to net income of RMB135.3 million for the corresponding period in 2021.
Net loss attributable to the Company’s shareholders was RMB37.8 million (US$6.0 million) for the first quarter of 2022, as compared to net income attributable to the Company’s shareholders of RMB138.4 in 2021 mainly due to the share of income of affiliates, net of impairment.
Non-GAAP net income attributable to the Company’s shareholders2 (exclusive of impairment on investment in CNFinance) was RMB40.4 million (US$6.4 million) for the first quarter of 2022, representing a decrease of 70.8% from RMB138.4 million for the corresponding period in 2021.
Net margin was negative 5.5% for the first quarter of 2022 as compared to 12.6% for the corresponding period in 2021.
Non-GAAP net margin4 was 5.9% for the first quarter of 2022 as compared to 12.6% or the corresponding period in 2021.
Basic and diluted net loss per ADS were RMB0.70 (US$0.11) and RMB0.70 (US$0.11) for the first quarter of 2022, respectively, as compared to basic and diluted net income of RMB2.58 and RMB2.58 per ADS for the corresponding period in 2021, respectively.
Non-GAAP basic and diluted net income per ADS3 were RMB0.75 (US$0.12) and RMB0.75 (US$0.12) for the first quarter of 2022, respectively, as compared to RMB2.58 and RMB2.58 per ADS for the corresponding period in 2021, respectively.
As of March 31, 2022, the Company had RMB1,281.5 million (US$202.1 million) incash, cash equivalents and short-term investments.
Key Operational Metrics for Fanhua’s Online Initiatives in 2022:
Recent Developments
Business Outlook
Fanhua expects its operating income to remain positive for the second quarter of 2022. This forecast is based on the current market conditions and reflects Fanhua’s preliminary estimate, which is subject to change caused by various factors.
Conference Call
The Company will host a conference call to discuss its first quarter 2022 financial results as per the following details.
Time: 9:00 p.m. Eastern Daylight Time on May 26, 2022or 9:00 a.m.Beijing/Hong Kong Time on May 27, 2022
The toll free dial-in numbers:
United States | 1-833-239-5565 | |
Hong Kong, China | 800-906-601 | |
South Korea | 080-850-0474 |
The toll dial-in numbers:
China (Mainland) | 400-820-5286 | |
Hong Kong, China & Other Areas | +852 30-186-771 | |
United Kingdom | +44 203-692-8125 |
Conference ID #: 4067079
Additionally, a live and archived web cast of this call will be available at: https://edge.media-server.com/mmc/p/h4u2gjx5
About Fanhua Inc.
Fanhua Inc. is a leading independent financial services provider. Through our online platforms and offline sales and service network, we offer a wide variety of financial products and services to individuals, including life and property and casualty insurance products. We also provide insurance claims adjusting services, such as damage assessments, surveys, authentications and loss estimations, as well as value-added services, such as emergency vehicle roadside assistance.
Our online platforms include: (i) Lan Zhanggui, an all-in-one platform which allows our agents to access and purchase a wide variety of insurance products, including life insurance, auto insurance, accident insurance, travel insurance and standard health insurance products from multiple insurance companies on their mobile devices; (ii) Baowang (www.baoxian.com), an online entry portal for comparing and purchasing short term health, accident, travel and homeowner insurance products and (iii) eHuzhu (www.ehuzhu.com), a non-profit online mutual aid platform in China.
As of March 31, 2022, our distribution and service network consisted of 734 sales outlets covering 23 provinces, autonomous regions and centrally-administered municipalities and 109 service outlets covering 31 provinces.
For more information about Fanhua Inc., please visit http://ir.fanhuaholdings.com/.
Forward-looking Statements
This press release contains statements of a forward-looking nature. These statements, including the statements relating to the Company’s future financial and operating results, are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as “will,” “expects,” “believes,” “anticipates,” “intends,” “estimates” and similar statements. Among other things, management's quotations and the Business Outlook section contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about Fanhua and the industry. Potential risks and uncertainties include, but are not limited to, those relating to its ability to attract and retain productive agents, especially entrepreneurial agents, its ability to maintain existing and develop new business relationships with insurance companies, its ability to execute its growth strategy, its ability to adapt to the evolving regulatory environment in the Chinese insurance industry, its ability to compete effectively against its competitors, quarterly variations in its operating results caused by factors beyond its control and macroeconomic conditions in China, future development of COVID-19 outbreak and their potential impact on the sales of insurance products. Except as otherwise indicated, all information provided in this press release speaks as of the date hereof, and Fanhua undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although Fanhua believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by Fanhua is included in Fanhua's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F.
About Non-GAAP Financial Measures
In addition to the Company’s consolidated financial results under generally accepted accounting principles in the United States (“GAAP”), the Company also provides non-GAAP net income attributable to the Company’s shareholders, non-GAAP net margin and non-GAAP basic and diluted net income per ADS, all of which are non-GAAP financial measures, as supplemental measures to review and assess operating performance. Non-GAAP net income attributable to the Company’s shareholders is defined as net income attributable to the Company’s shareholders before impairment on investment in an affiliate. Non-GAAP net margin is defined as non-GAAP net income attributable to the Company's shareholders3 as a percentage of net revenues. Non-GAAP basic net income per ADS is defined as non-GAAP net income attributable to the Company’s shareholders divided by total weighted average number of ADSs of the Company outstanding during the period. Non-GAAP diluted net income per ADS is defined as non-GAAP net income attributable to the Company’s shareholders divided by total weighted average number of diluted ADSs of the Company outstanding during the period. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company’s performance and when planning and forecasting future periods. The Company’s non-GAAP financial measures do not reflect all items of income and expenses that affect the Company’s operations. Specifically, the Company’s non-GAAP measures exclude impairment on investment in an affiliate. Further, these non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies, including peer companies. The presentation of these non-GAAP financial measures has limitations as analytical tools, and investors should not consider them in isolation from, or as a substitute for analysis of, the financial information prepared and presented in accordance with GAAP. We encourage investors and other interested persons to review our financial information in its entirety and not rely on a single financial measure.
For more information on these non-GAAP financial measures, please see the tables captioned “Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures” set forth at the end of this press release.
FANHUA INC.Unaudited Condensed Consolidated Balance Sheets(In thousands) | ||||||||
As of December 31, | As of March 31, | As of March 31, | ||||||
2,021 | 2,022 | 2,022 | ||||||
RMB | RMB | US$ | ||||||
ASSETS: | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 564,624 | 629,551 | 99,309 | |||||
Restricted cash | 76,303 | 76,229 | 12,025 | |||||
Short term investments | 870,682 | 651,918 | 102,837 | |||||
Accounts receivable and contract assets, net | 653,757 | 638,082 | 100,655 | |||||
Other receivables | 60,755 | 71,650 | 11,302 | |||||
Investment in affiliates | — | 258,419 | 40,765 | |||||
Other current assets | 39,947 | 45,120 | 7,118 | |||||
Total current assets | 2,266,068 | 2,370,969 | 374,011 | |||||
Non-current assets: | ||||||||
Restricted bank deposit - non current | 15,595 | 15,608 | 2,462 | |||||
Contract assets, net - non-current | 192,114 | 223,097 | 35,193 | |||||
Property, plant, and equipment, net | 46,800 | 103,453 | 16,319 | |||||
Goodwill and intangible assets, net | 109,869 | 109,869 | 17,332 | |||||
Deferred tax assets | 18,728 | 25,669 | 4,049 | |||||
Investment in affiliates | 335,808 | 6,342 | 1,000 | |||||
Other non-current assets | 31,459 | 31,310 | 4,939 | |||||
Right of use assets | 225,677 | 201,138 | 31,729 | |||||
Total non-current assets | 976,050 | 716,486 | 113,023 | |||||
Total assets | 3,242,118 | 3,087,455 | 487,034 | |||||
Current liabilities: | ||||||||
Accounts payable and accrued commissions | 377,558 | 315,358 | 49,746 | |||||
Insurance premium payables | 24,054 | 25,703 | 4,055 | |||||
Other payables and accrued expenses | 178,157 | 165,392 | 26,090 | |||||
Accrued payroll | 111,672 | 87,386 | 13,785 | |||||
Income tax payable | 130,222 | 132,090 | 20,837 | |||||
Dividend payable | — | 51,079 | 8,057 | |||||
Current operating lease liability | 87,012 | 87,072 | 13,735 | |||||
Total current liabilities | 908,675 | 864,080 | 136,305 | |||||
Non-current liabilities: | ||||||||
Accrued commissions – non-current | 97,869 | 113,653 | 17,929 | |||||
Other tax liabilities | 73,213 | 64,072 | 10,107 | |||||
Deferred tax liabilities | 73,716 | 76,217 | 12,023 | |||||
Non-current operating lease liability | 128,283 | 107,269 | 16,921 | |||||
Total non-current liabilities | 373,081 | 361,211 | 56,980 | |||||
Total liabilities | 1,281,756 | 1,225,291 | 193,285 | |||||
Ordinary shares | 8,089 | 8,091 | 1,276 | |||||
Statutory reserves | 557,221 | 557,221 | 87,900 | |||||
Retained earnings | 1,311,715 | 1,222,799 | 192,892 | |||||
Accumulated other comprehensive loss | (39,140 | ) | (44,575 | ) | (7,032 | ) | ||
Total shareholders’ equity | 1,837,885 | 1,743,536 | 275,036 | |||||
Non-controlling interests | 122,477 | 118,628 | 18,713 | |||||
Total equity | 1,960,362 | 1,862,164 | 293,749 | |||||
Total liabilities and equity | 3,242,118 | 3,087,455 | 487,034 | |||||
FANHUA INC.Unaudited Condensed Consolidated Statements of Income and Comprehensive Income(In thousands, except for shares and per share data) | ||||||||
For the Three Months Ended | ||||||||
March 31, | ||||||||
2021 | 2022 | 2022 | ||||||
RMB | RMB | USD | ||||||
Net revenues: | ||||||||
Agency | 1,000,104 | 587,988 | 92,753 | |||||
Life insurance business | 969,234 | 558,574 | 88,113 | |||||
P&C insurance business | 30,870 | 29,414 | 4,640 | |||||
Claims adjusting | 94,925 | 98,399 | 15,522 | |||||
Total net revenues | 1,095,029 | 686,387 | 108,275 | |||||
Operating costs and expenses: | ||||||||
Agency | (674,018 | ) | (383,443 | ) | (60,487 | ) | ||
Life insurance Business | (652,682 | ) | (363,527 | ) | (57,345 | ) | ||
P&C insurance Business | (21,336 | ) | (19,916 | ) | (3,142 | ) | ||
Claims adjusting | (63,639 | ) | (67,249 | ) | (10,608 | ) | ||
Total operating costs | (737,657 | ) | (450,692 | ) | (71,095 | ) | ||
Selling expenses | (78,403 | ) | (74,868 | ) | (11,810 | ) | ||
General and administrative expenses | (138,568 | ) | (140,238 | ) | (22,122 | ) | ||
Total operating costs and expenses | (954,628 | ) | (665,798 | ) | (105,027 | ) | ||
Income from operations | 140,401 | 20,589 | 3,248 | |||||
Other income, net: | ||||||||
Investment income | 10,233 | 4,054 | 639 | |||||
Interest income | 526 | 679 | 107 | |||||
Others, net | 1,477 | 9,973 | 1,573 | |||||
Income from operations before income taxes and share income of affiliates | 152,637 | 35,295 | 5,567 | |||||
Income tax expense | (32,701 | ) | (6,348 | ) | (1,001 | ) | ||
Share of income of affiliates, net of impairment | 15,362 | (70,634 | ) | (11,142 | ) | |||
Net income (loss) | 135,298 | (41,687 | ) | (6,576 | ) | |||
Less: net loss attributable to non-controlling interests | (3,087 | ) | (3,849 | ) | (607 | ) | ||
Net income (loss) attributable to the Company’s shareholders | 138,385 | (37,838 | ) | (5,969 | ) | |||
FANHUA INC.Unaudited Condensed Consolidated Statements of Income and Comprehensive Income-(Continued)(In thousands, except for shares and per share data) | ||||||||
For The Three Months Ended | ||||||||
March 31, | ||||||||
2021 | 2022 | 2022 | ||||||
RMB | RMB | US$ | ||||||
Net income (loss) per share: | ||||||||
Basic | 0.13 | (0.04 | ) | (0.01 | ) | |||
Diluted | 0.13 | (0.04 | ) | (0.01 | ) | |||
Net income (loss) per ADS: | ||||||||
Basic | 2.58 | (0.70 | ) | (0.11 | ) | |||
Diluted | 2.58 | (0.70 | ) | (0.11 | ) | |||
Shares used in calculating net income (loss) per share: | ||||||||
Basic | 1,073,891,784 | 1,073,994,006 | 1,073,994,006 | |||||
Diluted | 1,074,291,239 | 1,073,994,006 | 1,073,994,006 | |||||
Net income (loss) | 135,298 | (41,687 | ) | (6,576 | ) | |||
Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments | (6,378 | ) | 90 | 14 | ||||
Share of other comprehensive gain (loss) of affiliates | 542 | (413 | ) | (65 | ) | |||
Unrealized net loss on available-for-sale investments | (6,980 | ) | (5,112 | ) | (806 | ) | ||
Comprehensive income (loss) | 122,482 | (47,122 | ) | (7,433 | ) | |||
Less: Comprehensive loss attributable to the non-controlling interests | (3,087 | ) | (3,849 | ) | (607 | ) | ||
Comprehensive income (loss) attributable to the Company’s shareholders | 125,569 | (43,273 | ) | (6,826 | ) | |||
FANHUA INC.Unaudited Condensed Consolidated Statements of Cash Flow(In thousands, except for shares and per share data) | |||||||||
For The Three Months Ended | |||||||||
March 31, | |||||||||
2021 | 2022 | 2022 | |||||||
RMB | RMB | US$ | |||||||
OPERATING ACTIVITIES | |||||||||
Net income (loss) | 135,298 | (41,687 | ) | (6,576 | ) | ||||
Adjustments to reconcile net income to net cash generated from operating activities: | |||||||||
Investment income | (92 | ) | (1,649 | ) | (260 | ) | |||
Share of income of affiliates, net of impairment | (15,362 | ) | 70,634 | 11,142 | |||||
Other non-cash adjustments | 37,914 | 35,655 | 5,623 | ||||||
Changes in operating assets and liabilities | (77,307 | ) | (150,027 | ) | (23,664 | ) | |||
Net cash generated from (used in) operating activities | 80,451 | (87,074 | ) | (13,735 | ) | ||||
Cash flows from investing activities: | |||||||||
Purchase of short term investments | (2,767,430 | ) | (855,000 | ) | (134,873 | ) | |||
Proceeds from disposal of short term investments | 3,220,073 | 1,068,447 | 168,543 | ||||||
Others | 2,874 | (61,764 | ) | (9,743 | ) | ||||
Net cash generated from investing activities | 455,517 | 151,683 | 23,927 | ||||||
Cash flows from financing activities: | |||||||||
Others | (10,200 | ) | 3 | — | |||||
Net cash (used in) generated from financing activities | (10,200 | ) | 3 | — | |||||
Net increase in cash, cash equivalents and restricted cash | 525,768 | 64,612 | 10,192 | ||||||
Cash, cash equivalents and restricted cash at beginning of period | 350,098 | 656,522 | 103,564 | ||||||
Effect of exchange rate changes on cash and cash equivalents | (6,528 | ) | 254 | 40 | |||||
Cash, cash equivalents and restricted cash at end of period | 869,338 | 721,388 | 113,796 | ||||||
FANHUA INC.Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures(In RMB in thousands, except shares and per share data) | ||||||||||||||||||||
For The Three Months Ended March 31 | ||||||||||||||||||||
2021 | 2022 | |||||||||||||||||||
GAAP | Impairment on investment in affiliates | Non-GAAP | GAAP | Impairment on investment in affiliates | Non-GAAP | Change% | ||||||||||||||
Net revenues | 1,095,029 | — | 1,095,029 | 686,387 | — | 686,387 | (37.3 | ) | ||||||||||||
Income from operations | 140,401 | — | 140,401 | 20,589 | — | 20,589 | (85.3 | ) | ||||||||||||
Operating margin | 12.8 | % | — | 12.8 | % | 3.0 | % | 3.0 | % | (76.6 | ) | |||||||||
Share of income of affiliates, net of impairment | 15,362 | — | 15,362 | (70,634 | ) | (78,277 | ) | 7,643 | (50.2 | ) | ||||||||||
Netincome(loss) attributable to the Company’s shareholders | 138,385 | — | 138,385 | (37,838 | ) | (78,277 | ) | 40,439 | (70.8 | ) | ||||||||||
Net margin | 12.6 | % | 12.6 | % | (5.5 | %) | 5.9 | % | (53.2 | ) | ||||||||||
Net income (loss) per share: | ||||||||||||||||||||
Basic | 0.13 | — | 0.13 | (0.04 | ) | — | 0.04 | (69.2 | ) | |||||||||||
Diluted | 0.13 | — | 0.13 | (0.04 | ) | — | 0.04 | (69.2 | ) | |||||||||||
Net income (loss) per ADS : | ||||||||||||||||||||
Basic | 2.58 | — | 2.58 | (0.70 | ) | — | 0.75 | (70.9 | ) | |||||||||||
Diluted | 2.58 | — | 2.58 | (0.70 | ) | — | 0.75 | (70.9 | ) | |||||||||||
Shares used in calculating net income (loss) per share : | ||||||||||||||||||||
Basic | 1,073,891,784 | — | 1,073,891,784 | 1,073,994,006 | — | 1,073,994,006 | — | |||||||||||||
Diluted | 1,074,291,239 | — | 1,074,291,239 | 1,073,994,006 | — | 1,073,994,006 | — | |||||||||||||
For more information, please contact:
Investor Relations
Tel: +86 (20) 8388-3191
Email: qiusr@fanhuaholdings.com
Source: Fanhua Inc.
____________________________1 This announcement contains currency conversions of certain Renminbi (“RMB”) amounts into U.S. dollars (US$) at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.3393 to US$1.00, the effective noon buying rate as of March 31, 2022 in The City of New York for cable transfers of RMB as set forth in the H.10 weekly statistical release of the Federal Reserve Board.2 Non-GAAP net income attributable to the Company’s shareholders is defined as net income attributable to the Company’s shareholders before impairment on investment in an affiliate.3 Non-GAAP diluted net income per ADS is defined as non-GAAP net income attributable to the Company’s shareholders divided by total weighted average number of diluted ADSs of the Company outstanding during the period.4 Non-GAAP net margin is defined as non-GAAP net income attributable to the Company's shareholders as a percentage of net revenues.5 Active customer accounts are defined as customer accounts that made at least one purchase directly through www.baoxian.com, its mobile application, or WeChat public account during the specified period.6 Active users of Lan Zhanggui included users who sold at least one insurance policy through Lan Zhanggui (through either its mobile application or WeChat public account) during the specific period.7 Performing agents are defined as agents who have sold at least one insurance policy during the specified period.
Source: Fanhua Inc.