Fanhua Reports First Half 2024 Unaudited Financial Results

GUANGZHOU, China, Sept. 18, 2024 (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 half ended June 30, 2024(1) .

Financial Highlights for the First Half of 2024:

 
(In thousands, 
except per ADS 
data and              2023H1      2024H1     2024H1 
percentages)           (RMB)       (RMB)      (US$)    Change % 
------------------  ----------  ----------  --------  ---------- 
Total net revenues   1,960,377  1,123,178   154,555     (42.7) 
-------------------  ---------  ---------   -------   ------- 
Operating income       146,387     54,910     7,557     (62.5) 
-------------------  ---------  ---------   -------   ------- 
Loss from fair 
 value change               --    (73,761)  (10,150)       -- 
-------------------  ---------  ---------   -------   ------- 
Net income 
 attributable to 
 shareholders          136,967      4,738       653     (96.5) 
-------------------  ---------  ---------   -------   ------- 
Adjusted EBITDA(2)     178,221     77,665    10,687     (56.4) 
-------------------  ---------  ---------   -------   ------- 
Diluted net income 
 per ADS                  2.54       0.09      0.01     (96.5) 
-------------------  ---------  ---------   -------   ------- 
Diluted adjusted 
 EBITDA per ADS(3)        3.31       1.45      0.20     (55.2) 
-------------------  ---------  ---------   -------   ------- 
Cash, cash 
 equivalent, 
 short-term 
 investments at end 
 of the period       1,611,554    770,133   105,974     (52.2) 
-------------------  ---------  ---------   -------   ------- 
 

Key operating metrics for the First Half of 2024:

 
(In thousands, 
except percentages 
and number of         2023H1      2024H1    2024H1 
agents)                (RMB)      (RMB)      (US$)     Change % 
------------------  ----------  ---------  ---------  ---------- 
Total life gross 
 written premiums 
 ("GWP")             8,703,510  8,642,319  1,189,223     (0.7) 
------------------- 
      - First year 
       premium 
       ("FYP")       2,329,504  1,205,417    165,871    (48.3) 
-------------------  ---------  ---------  ---------  ------- 
      - Renewal 
       premium       6,374,006  7,436,902  1,023,352     16.7 
-------------------  ---------  ---------  ---------  ------- 
Number of life 
 insurance 
 performing agents      11,855      7,723         --    (34.9) 
-------------------  ---------  ---------  ---------  ------- 
FYP per life 
 insurance 
 performing agent          196        156         --    (20.6) 
-------------------  ---------  ---------  ---------  ------- 
 

________________________

 
(1)    This announcement contains currency conversions of 
        certain Renminbi ("RMB") amounts into U.S. dollars 
        (US$) at specified rate solely for the convenience 
        of the reader. Unless otherwise noted, all translations 
        from RMB to U.S. dollars are made at a rate of RMB7.2672 
        to US$1.00, the effective noon buying rate as of June 
        28, 2024 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)    Adjusted EBITDA is defined as net income before income 
        tax expense, share of loss of affiliates, investment 
        income, interest income, financial cost, depreciation, 
        amortization of intangible assets, share-based compensation 
        expenses and change in fair value of equity investments 
        and contingent consideration. 
(3)    Diluted adjusted EBITDA per ADS is defined as adjusted 
        EBITDA divided by total weighted average number of 
        diluted ADSs of the Company outstanding during the 
        period. 
 
 

Mr. Yinan Hu, Founder and Chief Executive Officer, commented: "In the first half of 2024, the implementation of the 'Unified Commissions and Fees in Reporting and Underwriting' policy in the agency and broker channel has caused unprecedented disruption in the sector. Against this backdrop, we took a series of proactive measures and steadily advanced our strategy of 'professionalization, service ecosystem development, intelligence, open platform, and internationalization' to ensure stable business operations. In the first half of 2024, we achieved gross written premiums of RMB8.8 billion, with first year premiums of RMB1.4 billion, fully demonstrating our resilience.

"We are pleased that the first AI model in the insurance industry, 'Du Xiaobao' L2, co-developed by Fanhua and Baidu Smart Cloud, was launched for trial operation and has been well received among sales agents. We firmly believe that artificial intelligence will play an increasingly important role in insurance distribution. It will not only enhance the overall customer experience but also reshape the traditional insurance sales model, bringing new growth momentum to the industry. 'Du XiaoBao' is central to our intelligence strategy and will play a crucial role in driving our future competitiveness, propelling the Company toward greater growth and new breakthroughs.

Open Platform and M&A Contributions over the First Half of 2024

   -- The number of platform professional users who used our Open Platform 
      reached 963 as of June 30, 2024, generating RMB322.7 million in first 
      year premiums, which accounted for 26.8% of our life insurance FYP. 

Share Repurchase Program

On July 4, 2024, the Board authorized the expansion of the Company's share repurchase program by an additional US$20 million, bringing the total authorized amount of share repurchase to US$40 million. Under the Company's previously authorized share repurchase program, as of June 30, 2024, the Company had repurchased an aggregate of 726,616 ADSs, at an average price of approximately US$7.5 per ADS for a total amount of approximately US$5.4 million.

Analysis of our Financial Results for the First Half of 2024

Revenues

Total net revenues were RMB1.1 billion (US$154.0 million) for the first half of 2024, representing a decrease of 42.7% from RMB2.0 billion for the corresponding period in 2023.

   -- Net revenues for agency business were RMB901.0 million (US$124.0 million) 
      for the first half of 2024, representing a decrease of 48.6% from RMB1.8 
      billion for the corresponding period in 2023. Total GWP was RMB8.8 
      billion for the first half of 2024, remaining stable compared to the same 
      period of 2023, of which FYP decreased by 43.7% year-over-year to RMB1.4 
      billion while renewal premiums grew by 16.7% year-over-year to RMB7.4 
      billion. 
 
          -- Net revenues for the life insurance business were RMB828.6 million 
             (US$114.0 million) for the first half of 2024, representing a 
             decrease of 50.2% from RMB1.7 billion for the corresponding period 
             in 2023. The decrease was mainly due to i) the decrease in 
             commission rates paid by insurance companies and decline in sales 
             volume as the result of the implementation of the "Unified 
             Commissions and Fees in Reporting and Underwriting" policy which 
             imposed a commission cap in the broker and agency channel and ii) 
             a relatively high base from the sales spike before the downward 
             pricing rate adjustment of life insurance products from 3.5% to 
             3%. Total life insurance GWP decreased by 0.7% year-over-year to 
             RMB8.6 billion, of which life insurance FYP decreased by 48.3% 
             year-over-year to RMB1.2 billion while renewal premiums grew by 
             16.7% year-over-year to RMB7.4 billion.Net revenues generated from 
             our life insurance business accounted for 73.8% of our total net 
             revenues in the first half of 2024, as compared to 84.8% in the 
             same period of 2023. 
 
          -- Net revenues for the non-life insurance business (formerly 
             categorized as "property and casualty insurance business") were 
             RMB72.4 million (US$10.0 million) for the first half of 2024, 
             representing a decrease of 18.9% from RMB89.3 million for the 
             corresponding period in 2023. Net revenues generated from the 
             non-life insurance business accounted for 6.4% of our total net 
             revenues in the first half of 2024, as compared to 4.6% in the 
             same period of 2023. 
   -- Net revenues for the claims adjusting business were RMB222.1 million 
      (US$30.6 million) for the first half of 2024, representing an increase of 
      7.0% from RMB207.6 million for the corresponding period in 2023. The 
      increase was mainly due to the growth in auto insurance claims adjusting 
      business. Net revenues generated from the claims adjusting business 
      accounted for 19.8% of our total net revenues in the first half of 2024, 
      as compared to 10.6% in the same period of 2023. 

Gross profit

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