PINTEC ANNOUNCES UNAUDITED FINANCIAL RESULTS FOR THE FIRST HALF OF 2022


    BEIJING, Dec. 24, 2022 /PRNewswire/ -- Pintec Technology Holdings Limited (Nasdaq: PT) ("PINTEC" or the "Company"), a leading independent technology platform enabling financial services in China, today announced its unaudited financial results for the six months ended June 30, 2022.

    First Half 2022 Financial Highlights

    • Total revenues were RMB39.82 million (US$5.93 million) for the first half of 2022 compared to total revenues of RMB91.6 million for the same period of 2021.
    • Gross profit decreased by 51.14 % to RMB20.51 million (US$3.06 million) for the first half of 2022 from RMB41.98 million for the same period of 2021. Gross margin was 51.50% for the first half of 2022 compared to 45.82% for the same period of 2021.
    • Loss from operations decreased by 30.89% to RMB23.49 million (US$3.50 million) for the first half of 2022 from RMB33.99 million for the same period of 2021.
    • Net loss increased by 201.79% to RMB123.60 million (US$18.42 million) for the first half of 2022 from RMB40.96 million for the same period of 2021.

    First Half 2022 Operating Highlights

    • Total loans facilitated decreased by 71.78% to RMB115.30 million (US$17.18 million) for the first half of 2022 from RMB0.4 billion for the same period of 2021.
    • Loan outstanding balance decreased by 73.32% to RMB92.78 million (US$13.82 million) as of June 30, 2022 from RMB0.3 billion as of December 31, 2021.
    • The following table provides delinquency rates by balance for all loans facilitated by the Company as of the dates indicated:

    Delinquent for


    16 - 30 days


    31 - 60 days


    61 - 90 days

    December 31, 2017

    1.11 %


    1.02 %


    0.74 %

    December 31, 2018

    1.27 %


    2.35 %


    2.33 %

    December 31, 2019

    1.72 %


    2.98 %


    2.86 %

    December 31, 2020

    0.77 %


    0.97 %


    0.95 %

    December 31, 2021

    1.00 %


    1.30 %


    1.18 %

    June 30, 2022

    0.81 %


    1.52 %


    1.13 %

    Mr. Victor Li, Chief Executive Officer and acting Chief Financial Officer of PINTEC, commented, "In terms of our current development strategy, we will continue to further focus on empowering small and medium economics. We launched the small and medium enterprise ("SME") technical services last year, which specifically, was to utilize our proven "SaaS + Fintech" model as a total solution in order to accelerate the digitization of SMEs, encompassing technology-based credit services and solutions to the manufacturing process and operations of these SMEs. In 2022, our efforts are focused on the development and expansion of various areas based on our SME strategy, which includes but not limited to technology empowerment, big data credit collection, and digital smart credit. As usual, we will continue to solidify our capabilities in data analytics and technology innovation, strengthen our other core competencies and improve our process of our daily operations. Besides, we are continuously devoted to initiating innovative business while optimizing out cost structure to achieve break-even. We are committed to cautious and sustainable growth, and always prepare for any potential uncertainty.

    We continue to provide superior digital services and best-in-class solutions with innovative technology, thereby strengthening our relationship with our business partners, satisfying the requirement of our customers, and improving our overall delinquency rate. We will continue to prudently review our cost measures, financial leverage and liquidity position to ensure the successful execution of our future growth plans. We are pleased with the progress we have made so far in 2022 and are committed to achieving the goals we previously set for our business transformation."

    First Half 2022 Financial Results

    Total Revenues

    Total revenues decreased by 56.53% to RMB39.82 million (US$5.93 million) for the first half of 2022 from RMB91.61 million for the same period of 2021. This decrease was mainly due to the impact of Covid-19 resulting in industry downturn, as well as the Company's overall business transformation efforts. 

    • Revenues from technical service fees decreased by 60.24% to RMB24.16 million (US$3.60 million) for the first half of 2022 from RMB60.76 million for the same period of 2021. This decrease was mainly due to the reduction of risk-sharing loan facilitation business, which in turn resulted in the decrease of off-balance sheet loans facilitated in the first half of 2022.
    • Revenues from installment service fees increased by 4.62% to RMB9.02 million (US$1.34 million) for the first half of 2022 from RMB8.62 million for the same period of 2021. This increase was mainly due to an additional volume of SMEs loans on the Company's books in the first half of 2022.
    • Revenues from wealth management service fees decreased by 70.12% to RMB6.64 million (US$0.99 million) for the first half of 2022 from RMB22.2 million for the same period of 2021. The decrease in revenue of the wealth management was mainly due to the Company's initiative to cease from providing distribution service for insurance products with low profit margin in the first half of 2022.

    Cost of Revenues

    Cost of revenues decreased by 61.09% to RMB19.31 million (US$2.88 million) for the first half of 2022 from RMB49.63 million for the same period of 2021. This decrease was mainly attributable to:

    (1) a decrease in funding cost from RMB2.00 million for the first half of 2021 to RMB0.03 million (US$5,000) for the same period of 2022, primarily due to maturity of the funding debts resulting in a significant interest expense reduction;

    (2) the provision of credit losses in the first half of 2022 was RMB0.94 million (US$0.14 million), compared to reversal of credit losses of RMB7.49 million in the first half of 2021, which was mainly due to the adjustment of the types of credit loan products that resulted in different provisions for credit losses.

    (3) a decrease in origination and servicing cost from RMB54.23million for the first half of 2021 to RMB18.67 million (US$2.78 million) for the same period of 2022, primarily attributable to a reduction in collection expenses and user acquisition costs;

    (4) a decrease in guarantee recoveries from RMB0.62 million in the first half of 2021 to RMB0.36 million (US$0.05 million) in the same period of 2022 which was mainly due to the decreasing amount of assets being guaranteed;

    (5) a decrease in price split cost to Jimu Holdings Limited and its subsidiaries and variable interest entities ("Jimu Group") from RMB1.52 million for the first half of 2021 to RMB0.03 million (US$5,000) for the same period of 2022, primarily attributable to the expiration of the loan facilitated under risk-sharing model with Jimu Group.

    Gross Profit

    Gross profit decreased to RMB20.51 million (US$3.06 million) for the first half of 2022 from RMB41.98 million for the same period of 2021. Gross margin was 51.50% in the first half of 2022 compared to 45.82% in the same period of 2021.

    Operating Expenses

    Total operating expenses decreased by 42.08% to RMB44.00 million (US$6.56 million) for the first half of 2022 from RMB75.97 million for the same period of 2021. The Company has been continuously optimizing and refining its organizational structure, marketing strategies and product matrix since the beginning of 2021.

    • Sales and marketing expenses in the first half of 2022 decreased by 30.11% to RMB13.89 million (US$2.07 million) from RMB19.87 million in the same period of 2021. This decrease was primarily driven by the decrease in payroll cost.
    • General and administrative expenses in the first half of 2022 decreased by 48.39% to RMB19.57 million (US$2.92 million) from RMB37.9 million in the same period of 2021. This decrease was primarily driven by strict overall cost control for the reduction of various items including, among other things, professional services fees and payroll cost.
    • Research and development expenses in the first half of 2022 decreased by 34.89% to RMB10.54 million (US$1.57 million) from RMB16.19 million in the same period of 2021, primarily driven by personnel structure optimization as part of the business transformation.

    Loss from operations

    Loss from operations decreased by 30.89% to RMB23.49 million (US$3.50 million) for the first half of 2022 from RMB33.99 million for the same period of 2021.

    Other income and expenses

    Other income and expenses increased by 1042.37% to RMB98.70 million (US$14.71 million) for the first half of 2022 from RMB8.64 million for the same period of 2021. The increase was primarily driven by impairment provided to long-term investments in the first half of 2022. In accordance with market changes, and after reviewing the investee's cash position, the financial and business performance, the Company assessed that impairment exists and the fair value of the long-term investments was lower than the carrying value. Therefore, the Company made impairment of the long-term investments in the amount of RMB86.60 million (US$12.90 million) in the first half of 2022, including equity investments without readily determinable fair values of RMB50.00 million and available for sale investment of RMB36.60 million.

    Net Loss

    Net loss increased by 201.79% to RMB123.60 million (US$18.42 million) for the first half of 2022 from RMB40.96 million for the same period of 2021.

    Net loss attributable to ordinary shareholders increased by 214.80% to RMB122.04 million (US$18.18 million) for the first half of 2022 from RMB38.77 million for the same period of 2021.

    Adjusted net loss increased by 207.63% to RMB119.22 million (US$17.76 million) for the first half of 2022 from RMB38.75 million for the same period of 2021.

    Net Loss Per Share

    Basic and diluted net loss per ordinary share in the first half of 2022 were both RMB0.41 (US$0.06). Basic and diluted net loss per American Depositary Share ("ADS") in the first half of 2022 were both RMB14.35 (US$2.10). Each ADS represents thirty-five of the Company's Class A ordinary shares.

    Adjusted basic and diluted net loss per ordinary share in the first half of 2022 were both RMB0.39 (US$0.06). Adjusted basic and diluted net loss per ADS in the first half of 2022 were both RMB13.65 (US$2.10).

    Balance Sheet

    The Company has combined cash and cash equivalents, short-term and long-term restricted cash of RMB293.21 million (US$43.69 million) as of June 30, 2022, compared to RMB224.79 million as of December 31, 2021.

    Liquidity

    There were recurring losses from operation since the year of 2019, and for the six months ended June 30, 2022, the Company reported a net loss of RMB123.60 million (US$18.42 million). In addition, as of June 30, 2022, the Company reported a negative working capital of RMB50 million (US$7.45 million) and had an accumulated deficit of RMB2,381.23 million (US$354.80 million). The Company's operating results in future periods are subject to numerous uncertainties, and it is uncertain whether the Company will be able to reduce or eliminate its net loss in the foreseeable future. If the management is unable to generate significant revenues from its current services provided and further reduce its expenditures, the Company may not be able to achieve profitability, and if the Company fails to achieve these goals, the Company needs additional financing to execute its business plans and maintain its operations. Substantial doubt is probable without regard to the management's plan. The Company has reached agreements with certain third parties to obtain: 1) a line of credit facility with an amount up to RMB306 million (US$45.59 million) and 2) a HKD 300 million (US$38.46 million) long-term loan, through which the substantial doubt is alleviated.

    The Company believes that available cash, together with the efforts from management plan and actions, should enable the Company to meet current anticipated cash needs for at least the next 12 months after the date that the interim financial statements are issued, and the Company has prepared the consolidated financial statements on a going concern basis.

    Use of Non-GAAP Financial Measures

    In evaluating its business, the Company considers and uses adjusted net income/loss as a supplemental measure to review and assess its operating performance. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines adjusted net income/loss as net income/loss excluding share-based compensation expenses.

    The Company believes that this non-GAAP financial measure can help management evaluate the Company's operating performance and formulate business plans. Adjusted net income/loss enables management to assess operating results without considering the impact of share-based compensation expenses. The Company also believes that this non-GAAP financial measure provides useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by management in their financial and operational decision-making.

    This non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. This non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using adjusted net income/loss is that it does not reflect all items of income and expenses that affect the Company's operations. The Company will continue to incur share-based compensation expenses in its business, which are reflected in the presentation of its adjusted net income/loss. Further, this non-GAAP financial measure may differ from non-GAAP financial information used by other companies, including peer companies, and therefore its comparability may be limited.

    The Company compensates for these limitations by reconciling this non-GAAP financial measure to the most directly comparable U.S. GAAP financial measure, net income/loss, which should be considered when evaluating the Company's performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial measure.

    Exchange Rate

    This announcement contains translations of certain RMB amounts into U.S. dollars ("USD") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.7114 to US$1.00, the noon buying rate in effect on June 30, 2022, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred to could be converted into USD or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this earnings release.

    Safe Harbor Statement

    This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of 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," "target," "confident" and similar statements. Among other things, the quotations from management in this announcement, as well as PINTEC's strategic and operational plans, contain forward-looking statements. PINTEC may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control. Forward-looking statements involve inherent risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited to, the Company's limited operating history, regulatory uncertainties relating to the markets and industries where the Company operates, and the need to further diversify its financial partners, the Company's reliance on a limited number of business partners, the impact of current or future PRC laws or regulations on wealth management financial products, and the Company's ability to meet the standards necessary to maintain the listing of its ADSs on the Nasdaq Global Market, including its ability to cure any non-compliance with Nasdaq's continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and the Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

    About PINTEC

    PINTEC is a leading independent technology platform enabling financial services in China. By connecting business and financial partners on its open platform, PINTEC enables them to provide financial services to end users efficiently and effectively. The Company offers its partners a full suite of customized solutions, ranging from digital retail lending, digital business lending, robotic process automation, to wealth management and insurance products. Leveraging its scalable and reliable technology infrastructure, PINTEC serves a wide range of industry verticals covering online travel, e-commerce, telecommunications, online education, SaaS platforms, financial technology, internet search, and online classifieds and listings, as well as various types of financial partners including banks, brokers, insurance companies, investment funds and trusts, consumer finance companies and other similar institutions. For more information, please visit ir.pintec.com.

    For further information, please contact:

    Pintec Technology Holdings Ltd.
    Phone: +86 (10) 8564-3600
    E-mail: ir@pintec.com

    Pintec Technology Holdings Ltd. 


    Condensed Consolidated Balance Sheets 




    (In thousands, except for share and per share data)


    December 31,


    June 30,


    2021

    2022






    Unaudited




    RMB


    RMB


    USD


    ASSETS








    Current assets:








    Cash and cash equivalents


    217,901


    286,734


    42,723


    Restricted cash


    1,468


    1,475


    220


    Short-term financing receivables, net


    97,200


    76,602


    11,413


    Short-term financial guarantee assets, net


    12,947


    8,781


    1,308


    Accounts receivable, net


    36,854


    35,426


    5,278


    Prepayments and other current assets, net


    155,087


    46,194


    6,886


    Amounts due from related parties, net


    5,455


    251


    37


    Total current assets


    526,912


    455,463


    67,865


    Non-current assets:








    Non-current restricted cash


    5,417


    5,000


    745


    Long‑term financing receivables, net


    571


    -


    -


    Long-term financial guarantee assets, net


    184


    -


    -


    Long‑term investments


    122,572


    35,000


    5,215


    Property, equipment and software, net


    95,695


    92,160


    13,732


    Intangible assets, net


    9,882


    9,882


    1,472


    Total non-current assets


    234,321


    142,042


    21,164


    TOTAL ASSETS


    761,233


    597,505


    89,029










    LIABILITIES








    Current liabilities:








    Short-term funding debts


    30


    -


    -


    Accounts payable


    21,400


    21,016


    3,131


    Amounts due to related parties


    289,936


    291,357


    43,412


    Tax payable


    30,901


    31,487


    4,692


    Financial guarantee liabilities


    13,736


    8,623


    1,285


    Amount due to a third party


    -


    115,179


    17,162


    Accrued expenses and other liabilities


    48,963


    38,076


    5,674


    Total current liabilities


    404,966


    505,738


    75,356


    Non-current liabilities:








    Convertible loan


    400,000


    250,000


    37,250


    Deferred tax liabilities


    1,493


    1,493


    222


    Other non-current liabilities


    19,331


    12,540


    1,868


    Amounts due to related parties, non-current


    472


    -


    -


    Total non-current liabilities


    421,296


    264,033


    39,340


    TOTAL LIABILITIES


    826,262


    769,771


    114,696










    SHAREHOLDERS' EQUITY








    Class A Ordinary Shares


    233


    233


    35


    Class B Ordinary Shares


    42


    42


    6


    Additional paid-in capital


    1,992,321


    1,998,599


    297,792


    Statutory reserves


    31,279


    32,546


    4,849


    Accumulated other comprehensive income


    9,120


    17,718


    2,640


    Accumulated deficit


    (2,257,924)


    (2,381,227)


    (354,803)


    TOTAL SHAREHOLDERS' DEFICIT


    (224,929)


    (332,089)


    (49,481)


    Non-controlling interests


    159,900


    159,823


    23,814


    TOTAL DEFICIT


    (65,029)


    (172,266)


    (25,667)


    TOTAL LIABILITIES AND DEFICIT


    761,233


    597,505


    89,029


     

     

    Pintec Technology Holdings Ltd. 

    Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss 


    (In thousands, except for share and per share data)



    2021

    2022

    2022


    RMB

    RMB

    USD

    Revenues:




    Technical service fees

    60,757

    24,158

    3,600

    Installment service fees

    8,622

    9,020

    1,344

    Wealth management service fees and others

    22,229

    6,643

    990

    Total revenues

    91,608

    39,821

    5,934

    Cost of revenues:




    Funding cost

    (1,998)

    (33)

    (5)

    Reversal (provision) of credit losses

    7,490

    (937)

    (140)

    Origination and servicing cost

    (54,228)

    (18,673)

    (2,782)

    Reversal of guarantee

    624

    364

    54

    Service cost charged by the related party

    (1,517)

    (33)

    (5)

    Cost of revenues

    (49,629)

    (19,312)

    (2,878)

    Gross profit

    41,979

    20,509

    3,056

    Operating expenses:




    Sales and marketing expenses

    (19,868)

    (13,886)

    (2,069)

    General and administrative expenses

    (37,920)

    (19,569)

    (2,916)

    Research and development expenses

    (16,193)

    (10,543)

    (1,571)

    Intangible assets impairment

    (1,984)

    -

    -

    Total operating expenses

    (75,965)

    (43,998)

    (6,556)

    Loss from operations

    (33,986)

    (23,489)

    (3,500)

    Long-term investments impairment

    -

    (86,600)

    (12,903)

    Share of loss from equity method investments

    -

    (934)

    (139)

    Other expenses, net

    (8,640)

    (11,167)

    (1,664)

    Loss before income tax expense

    (42,626)

    (122,190)

    (18,206)

    Income tax benefit/(expense)

    1,669

    (1,412)

    (210)

    Net loss

    (40,957)

    (123,602)

    (18,416)





    Net loss attributable to Non-controlling interest

    (2,191)

    (1,566)

    (233)

    Net loss attributable to Pintec Technology Holdings Limited
    shareholders

    (38,766)

    (122,036)

    (18,183)

    Other comprehensive loss:




    Fair value change in available for sale investment

    (494)

    -

    -

    Foreign currency translation adjustments, net of nil tax

    (4,220)

    (8,598)

    (1,281)

    Total other comprehensive loss

    (4,714)

    (8,598)

    (1,281)

    Total comprehensive loss

    (45,671)

    (132,200)

    (19,697)

    Total comprehensive loss attributable to Non-controlling
    interest

    (2,191)

    (1,566)

    (233)

    Total comprehensive loss attributable to Pintec Technology
    Holdings Limited shareholders

    (43,480)

    (130,634)

    (19,464)

    Net loss per ordinary share




    Basic and diluted

    (0.13)

    (0.41)

    (0.06)

    Weighted average ordinary shares outstanding




    Basic and diluted

    299,441,438

    300,059,264

    300,059,264

     

     

    Pintec Technology Holdings Ltd.

    Unaudited Reconciliations of GAAP and Non-GAAP Results


    (In thousands, except for share and per share data)


    For the Six Months Ended June 30,


    2021


    2022


    2022



    RMB


    RMB


    USD

    Net loss


    (40,957)


    (123,602)


    (18,416)

    Add: Share-based compensation expenses


    2,203


    4,383


    653

    Adjusted net loss


    (38,754)


    (119,219)


    (17,763)

    Net loss attributable to non-controlling interest


    (2,191)


    (1,566)


    (233)

    Adjusted net loss attributable to Pintec Technology Holdings Limited
    shareholders


    (36,563)


    (117,653)


    (17,530)








    Adjusted net loss per ordinary share







    Basic and diluted


    (0.12)


    (0.39)


    (0.06)

    Weighted average number of ordinary shares outstanding







    Basic and diluted


    299,441,438


    300,059,264


    300,059,264

     

     

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