PPDAI Group Inc. Reports Second Quarter 2018 Unaudited Financial Results

SHANGHAI,Aug. 22,2018 -- PPDAI Group Inc. ("PPDAI," "Paipaidai," or the "Company") (NYSE: PPDF),a leading online consumer finance marketplace in China,today announced its unaudited financial results for the second quarter ended June 30,2018.

As of

June30, 2017

March 31,2018

June 30,2018

Cumulative registered users[1]('000)

48,300

71,424

78,144

Cumulative number of borrowers[2]('000)

6,919

11,282

12,409

Cumulative number of individual investors[3]

461,651

581,977

613,653

For the Three Months Ended

YoY Change

June 30,2017

June 30,2018

Number of unique borrowers[4]

('000)

3,823

3,252

-14.9%

Loan origination volume[5]

(RMB,million)

16,504

16,761

1.6 %

Repeat borrowing rate[6](%)

68.3%

73.3%

7.3%

Average loan size[7] (RMB)

2,284

3,212

40.6%

Second Quarter 2018 Financial Highlights

Operating revenues slightly decreased to RMB1,047.3 million (US$158.3 million) in the second quarter of 2018 from RMB1,064.9 million in the same period of 2017.

Loan facilitation service fees decreased by 7.1% to RMB753.3 million (US$113.8 million) in the second quarter of 2018 from RMB810.8 million in the same period of 2017.

Post-facilitation service fees increased by 31.8% to RMB205.9 million (US$31.1 million) in the second quarter of 2018 from RMB156.2 million in the same period of 2017.

Strong liquidity position of RMB3,925.6 million (US$593.3 million) including cash,cash equivalents and short-term investment.

High quality assurance fund coverage ratio of 17.8% for outstanding loan balances that are protected by the fund.

Improved delinquency trends quarter over quarter.

Second Quarter 2018 Operational Highlights

Cumulative registered users1 reached 78.1 million as of June 30,2018.

Cumulative number ofborrowers2 reached 12.4 million as of June 30,2018.

Cumulative number of individual investors3 reached 613,653 as of June 30,2018.

Number of unique borrowers4 was 3.2 million for the second quarter of 2018,representing a decrease of 14.9% from the same period of 2017.

Loan origination volume5 was approximately RMB16.8 billion for the second quarter of 2018,representing an increase of 1.6% from the same period of 2017.

Average loan tenure[8] was 9.4 months for the second quarter of 2018.

Among the first 15 online lenders and consumer finance companies to connect with Baihang Credit,China's first unified credit-reporting platform comprising the online lending sector and backed by China's central bank.

Continued progress in providing our range of "technologies as a service" to other third party financial service providers.

[1] On a cumulative basis,number of users registered on PPDAI platform as of June 30,2018.

[2] On a cumulative basis,number of borrowers whose loans were funded on or prior to June 30,2018.

[3] On a cumulative basis,number of individual investors who have made at least one investment in loans on or prior to June 30,2018.

[4] Represents the total number of borrowers whose loans on PPDAI platform were funded during the period presented.

[5] Represents the loan origination volume generated during the period presented.

[6] Represents percentage of loan volume generated by repeat borrowers who have successfully borrowed on PPDAI platform before.

[7] Represents the average loan size on PPDAI platform during the period presented.

[8] Represents the average loan tenure period on PPDAI platform during the period presented.

Mr. Jun Zhang,the Chairman and the Chief Executive Officer of PPDAI,commented,"We are pleased to have achieved further growth in loan origination volume quarter over quarter despite the recent market headwinds faced by the Company. The resilence of our core business has been demonstrated by our continued profitability and a further improvement in our delinquency rate in the quarter."

Mr. Zhang continued,"As we strive to invest in new engines of growth,we made positive progress in engaging a wide range of financial service providers with our "technologies as a service" offerings. The external acceptance of our financial technologies reinforces our leading-edge innovation and core capabilities. As a pioneer and industry leader,we are very proud to be among the first to be aligned with Baihang Credit,which further recognizes our industry leadership position. We remain focused on capturing the tremendous long-term growth opportunities in our industry,while maintaining compliance with regulations as they evolve.

"The industry has lately been going through significant change. We believe a strengthened regulatory framework and industry consolidation will benefit the industry's long-term growth and sustainability. As an industry leader with the longest operating history and strong proprietary technologies and core capabilities,we are confident in our ability to meet upcoming P2P registration and well positioned for future growth," concluded Mr. Zhang.

Mr. Simon Ho,the Chief Financial Officer of PPDAI,added,"During the quarter,we continued to improve our operating leverage by increasing efficiencies and maintained non-GAAP operating margin at a healthy level of 46.0%. Regulatory uncertainty and the exit of smaller players has led investors to grow more cautious,which,in additional to delays in the registration process,has caused us to temper our outlook for loan origination volume for 2018. The fundamentals of our business model remain intact as clearly evidenced by our continued profitability and strong balance sheet. Notably,we had approximately RMB3.9 billion of cash and short-term liquidity,and our quality assurance fund remain sufficiently funded and the total balance of the fund is approximately RMB3.6 billion,equivalent to 17.8% of the total outstanding loans protected by the fund. We don't have concerns for liquidity on our plarform due to our unique funding structure and relatively short loan tenor."

Second Quarter 2018 Financial Results

Operating revenues for the second quarter of 2018 slightly decreased to RMB1,047.3 million (US$158.3 million) from RMB1,064.9 million in the same period of 2017,primarily due to lower average transaction fee rate for the quarter. As a result of the adoption of the ASC 606 effective January 1,2018,revenue is generally recognized earlier in the life of the contract as there is no contingency revenue cap under the new standard. For thethree months ended June 30,the impact of applying the new revenue standard resulted in an increase of approximately RMB160.3 million (US$24.2 million) in revenues.

Loan facilitation service fees decreased by 7.1% to RMB753.3 million (US$113.8 million) for the second quarter of 2018 from RMB810.8 million in the same period of 2017,primarily due to lower average transaction fee rate in the second quarter of 2018.[9] The average rate of transaction fees charged to borrowers was 6.31% in the period,compared to 6.32% in the first quarter of 2018 and 6.83% in the second quarter of 2017. Loan collection fees of RMB72.7 million (US$11.0 million) have been allocated from other revenue to loan facilitation services fees related to the adoption of ACS 606 effective January 1,2018.

Post-facilitation service fees increased by 31.8% to RMB205.9 million (US$31.1 million) for the second quarter of 2018 from RMB156.2 million in the same period of 2017,due to the rolling impact of deferred transaction fees and the adoption of ASC 606 effective January 1,2018. Loan collection fees of RMB26.3 million (US$4.0 million) have been allocated from other revenue to post facilitation service fees related to the adoption of ASC 606.

Other revenue decreased by 9.9% to RMB88.2 million (US$13.3 million) for the second quarter of 2018 from RMB97.9 million in the same period of 2017,primarily due to the adoption of ASC 606,effective January 1,offset by an increase in management fees from investment programs that invest in loans protected by the quality assurance fund.

Net interest income and loan provision losses for the second quarter of 2018 was a gain of RMB12.5 million (US$1.9 million),compared to a gain of RMB1.0 million in the same period of 2017,mainly due to the increased number of trusts established for the purpose of serving institutional investors.

Origination and servicing expenses increased by 13.3% to RMB234.7 million (US$35.5 million) for the second quarter of 2018 from RMB207.0 million in the same period of 2017,primarily due to an increase in fees paid to third-party providers for loan collection and technology services.

Sales and marketing expenses increased by 3.8% to RMB194.3 million (US$29.4 million) for the second quarter of 2018 from RMB187.2 million in the same period of 2017,primarily due to the increase in expenses associated with online customer acquisition and brand enhancement.

General and administrative expenses increased by 38.7% to RMB161.5 million (US$24.4 million) for the second quarter of 2018 from RMB116.5 million in the same period of 2017,primarily due to the increase in research and development cost. General and administrative expenses for the period included share-based compensation of RMB17.8 million (US$2.7 million).

Operating income decreased by 15.5% to RMB469.3 million (US$70.9 million) for the second quarter of 2018 from RMB555.3 million in the same period of 2017.

Non-GAAP adjusted operating income,which excludes share-based compensation expenses before tax,was RMB487.1 million (US$73.6 million) for the second quarter of 2018,representing a decrease of 12.3% from RMB555.3 million in the same period of 2017.

Other income was RMB296.5 million (US$44.8 million) for the second quarter of 2018,compared with RMB193.2 million in the same period of 2017. Other income primarily consisted of a gain of RMB151.1 million (US$22.8 million) from the quality assurance fund resulting from the increase in loans facilitated on the Company's platform that are protected by the quality assurance fund,a gain of RMB196.5 million (US$29.7 million) from fair value change of financial guarantee derivatives due to an improvement in the expected default rate for loans invested by outstanding investment programs protected by the investor reserve funds,offset by a realized loss of RMB101.9 million (US$15.4 million) from financial guarantee derivatives due to the amount of investment programs maturing during the period. The Company re-evaluates the fair value of outstanding financial guarantee derivatives at each balance sheet date to reflect the views of market participants on the expected default rate based on the latest market changes. For the second quarter of 2018,RMB14.3 billion of loans facilitated on the Company's platform were protected by the quality assurance fund.

Income tax expenses were RMB158.0 million (US$23.9 million) for the second quarter of 2018,compared with RMB116.7 million in the same period of 2017 due to the higher effective tax rate adopted for a software subsidiary which was established in the second half of 2017.

Net profit decreased by 3.8% to RMB607.8 million (US$91.8 million) for the second quarter of 2018 from RMB631.8 million in the same period of 2017.

Net profit attributable to ordinary shareholders of the Company was RMB606.6 million (US$91.7 million) for the second quarter of 2018,compared with net loss attributable to ordinary shareholders of RMB122.8 million in the same period of 2017 due to the accretion losses on the Company's Series A,B and C preferred shares in the second quarter of 2017.

As of June 30,the Company had cash and cash equivalents of RMB2,485.1 million (US$375.6 million) and short-term investments mainly in wealth management products of RMB1,440.5 million (US$217.7 million).

The total balance of the quality assurance fund,which includes restricted cash of RMB1,564.8 million (US$236.5 million) and the quality assurance fund receivable of RMB2,043.4 million (US$308.8 million),was equivalent to 17.8% of the total outstanding loans protected by the quality assurance fund.

[9] Beginning in the second quarter 2018,the calculation of average transaction fee rate excludes loans originated on PPDAI's platform where

transaction fees are not applicable.

The following table provides the delinquency rates for all outstanding loans on the Company's platform as of the respective dates indicated.

As of

15-29

days

30-59

days

60-89

days

90-119 days

120-149 days

150-179 days

March 31,2015

0.79%

1.75%

1.10%

1.01%

0.87%

0.67%

June 30,2015

0.88%

1.06%

0.67%

0.54%

0.89%

0.67%

September 30,2015

0.67%

0.89%

0.61%

0.54%

0.44%

0.35%

December 31,2015

0.80%

0.93%

0.51%

0.49%

0.39%

0.32%

March 31,2016

0.62%

0.93%

0.72%

0.61%

0.48%

0.32%

June 30,2016

0.82%

1.01%

0.63%

0.43%

0.47%

0.44%

September 30,2016

0.83%

1.11%

0.80%

0.63%

0.49%

0.39%

December 31,2016

0.63%

0.91%

0.75%

0.79%

0.69%

0.57%

March 31,2017

0.57%

0.95%

0.79%

0.59%

0.54%

0.51%

June 30,2017

0.86%

1.11%

0.79%

0.51%

0.55%

0.52%

September 30,2017

0.89%

1.40%

1.15%

1.02%

0.79%

0.60%

December 31,2017

2.27%

2.21%

1.72%

1.63%

1.36%

1.20%

March 31,2018

0.87%

2.11%

2.43%

3.83%

2.29%

1.89%

June 30,2018

0.83%

1.21%

1.05%

0.98%

1.60%

2.03%

The following chart and table display the historical cumulative 30-day plus past due delinquency rates by loan origination vintage for all continuing loan products facilitated through the Company's online marketplace.

Click here to view the chart.

Month on Book

Vintage

2nd

3rd

4th

5th

6th

7th

8th

9th

10th

11th

12th

2015Q1 . . . .

1.95%

2.75%

3.46%

3.98%

4.36%

4.58%

4.67%

4.69%

4.73%

4.76%

4.74%

2015Q2 . . . .

1.74%

2.66%

3.38%

3.75%

4.02%

4.15%

4.30%

4.38%

4.45%

4.46%

4.46%

2015Q3 . . . .

1.46%

2.13%

2.70%

3.15%

3.47%

3.68%

3.77%

3.85%

3.93%

4.01%

4.02%

2015Q4 . . . .

1.54%

2.27%

2.88%

3.17%

3.53%

3.77%

3.97%

4.12%

4.26%

4.32%

4.33%

2016Q1 . . . .

1.00%

1.57%

2.21%

2.82%

3.33%

3.77%

4.09%

4.33%

4.45%

4.57%

4.59%

2016Q2 . . . .

1.75%

2.49%

3.21%

3.77%

4.17%

4.39%

4.59%

4.76%

4.88%

4.94%

4.96%

2016Q3 . . . .

1.67%

2.45%

2.96%

3.47%

3.87%

4.11%

4.27%

4.44%

4.59%

4.70%

4.77%

2016Q4 . . . .

1.29%

2.07%

2.66%

3.15%

3.59%

3.97%

4.32%

4.62%

4.88%

5.07%

5.18%

2017Q1 . . . .

1.20%

2.01%

2.68%

3.32%

3.87%

4.33%

4.68%

4.98%

5.33%

5.61%

5.80%

2017Q2 . . . .

1.72%

2.89%

3.81%

4.55%

5.14%

5.78%

6.32%

6.79%

7.05%

7.19%

7.24%

2017Q3 . . . .

1.82%

2.93%

4.08%

5.16%

6.13%

6.64%

6.88%

7.04%

—

—

—

2017Q4 . . . .

2.51%

4.12%

5.16%

5.68%

5.97%

—

—

—

—

—

2018Q1

1.35%

2.18%

—

Changes in Board of Directors

The Board of Directors of the Company (the "Board") has approved the appointment of Mr. Kai Deng as a member of the Board and a member of the compensation committee of the Board,effective immediately. Mr. Nanpeng Shen will step down from the Board with immediate effect.

Mr. Kai Deng is an associate with Sequoia Capital China and focuses on financial services and other TMT sector investments. Prior to joining Sequoia in 2015,Mr. Deng served as a consultant and a manager at Ernst & Young from 2007 to 2014. Mr. Deng received his bachelor's degree in Accounting from Peking University and is also a member of the Chinese Institute of Certified Public Accounts.

Conference Call

The Company's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on August 22,2018 (8:00 PM Beijing/Hong Kong time on August 22,2018).

Dial-in details for the earnings conference call are as follows:

United States (toll free):

1-888-346-8982

International:

1-412-902-4272

Hong Kong (toll free):

800-905-945

Hong Kong:

852-3018-4992

China:

400-120-1203

Participants should dial-in at least 5 minutes before the scheduled start time and ask to be connected to the call for "PPDAI Group."

Additionally,a live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.ppdai.com.

A replay of the conference call will be accessible approximately one hour after the conclusion of the live call until August 29,by dialing the following telephone numbers:

United States (toll free):

1-877-344-7529

International:

1-412-317-0088

Replay Access Code:

10122845

About PPDAI Group Inc.

PPDAI is a leading online consumer finance marketplace in China with strong brand recognition. Launched in 2007,the Company is the first online consumer finance marketplace in China connecting borrowers and investors. As a pioneer in China's online consumer finance marketplace,the Company benefits from both its early-mover advantages and the invaluable data and experience accumulated throughout multiple complete loan lifecycles. The Company's platform,empowered by its proprietary,cutting-edge technologies,features a highly automated loan transaction process,which enables a superior user experience,as evidenced by the rapid growth of the Company's user base and loan origination volume. As of June 30,the Company had over 78 million cumulative registered users.

For more information,please visit http://ir.ppdai.com.

Use of Non-GAAP Financial Measures

We use Non-GAAP operating income,a Non-GAAP financial measure,in evaluating our operating results and for financial and operational decision-making purposes. We believe that adjusted operating income help identify underlying trends in our business by excluding the impact of share-based compensation expenses and expected discretionary measures. We believe that adjusted operating income provide useful information about our operating results,enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.

Non-GAAP adjusted operating income is not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. This Non-GAAP financial measure has limitations as analytical tools,and when assessing our operating performance,cash flows or our liquidity,investors should not consider them in isolation,or as a substitute for net (loss)/income,cash flows provided by operating activities or other consolidated statements of operation and cash flow data prepared in accordance with U.S. GAAP. The Company encourages investors and others to review our financial information in its entirety and not rely on a single financial measure.

For more information on this Non-GAAP financial measure,please see the table captioned "Reconciliations of GAAP and Non-GAAP results" set forth at the end of this press release.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a 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 RMB6.6171 to US$1.00,the rate in effect as of June 29,2018 as certified for customs purposes by the Federal Reserve Bank of New York.

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. 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 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,uncertainties as to the Company's ability to attract and retain borrowers and investors on its marketplace,its ability to increase volume of loans facilitated through the Company's marketplace,its ability to introduce new loan products and platform enhancements,its ability to compete effectively,laws,regulations and governmental policies relating to the online consumer finance industry in China,general economic conditions in China,and the Company's ability to meet the standards necessary to maintain listing of its ADSs on the NYSE,including its ability to cure any non-compliance with the NYSE'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 PPDAI 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.

For investor and media inquiries,please contact:

In China:

PPDAI Group Inc.

Jimmy Tan / Sally Huo

Tel: +86 (21) 8030 3200-8601

E-mail:ir@ppdai.com

The Piacente Group,Inc.

Ross Warner

Tel: +86 (10) 5730-6200

E-mail: paipaidai@tpg-ir.com

In the United States:

The Piacente Group,Inc.

Brandi Piacente

Tel: +1-212-481-2050

E-mail: paipaidai@tpg-ir.com

PPDAI GROUP INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands,except for share data,or otherwise noted)

As of December 31,

As of June 30,

2017

2018

RMB

RMB

USD

Assets

Cash and cash equivalents

1,891,131

2,485,054

375,550

Restricted cash

2,392,573

2,361,996

356,953

Short-term investments

1,958,910

1,440,540

217,700

Available for sale securities

3,377

4,935

746

Quality assurance fund receivable

1,152,769

2,043,394

308,805

Intangible asset

63,760

64,280

9,714

Property,equipment and software,net

108,248

131,322

19,846

Loans receivable,net of provision for loan losses

681,794

784,299

118,526

Investment in equity investees

8,857

12,872

1,945

Accounts receivable

17,773

473,660

71,581

Deferred tax assets

128,361

50,406

7,617

Financial guarantee derivative assets

-

52,303

7,904

Contract asset

-

76,013

11,487

Prepaid expenses and other assets

145,699

146,128

22,083

Goodwill

50,411

50,411

7,618

Total assets

8,603,663

10,177,613

1,538,075

Liabilities and Shareholders' Equity

Payable to platform customers

1,113,966

688,967

104,119

Quality assurance fund payable

2,062,844

3,248,858

490,979

Deferred revenue

265,094

-

-

Payroll and welfare payable

156,831

113,888

17,211

Taxes payable

257,143

307,055

46,403

Provision for payment to investor reserve fund investor

107,660

107,660

16,270

Short-term borrowing loan

-

29,950

4,526

Funds payable to investors of consolidated trusts

502,641

437,728

66,151

Contract liability

-

154,792

23,393

Due to related party

11,972

2,023

306

Deferred tax liabilities

15,940

15,940

2,409

Accrued expenses and other liabilities

211,614

241,210

36,453

Financial guarantee derivative liabilities

215,770

-

-

Total liabilities

4,921,475

5,348,071

808,220

Commitments and contingencies

PPDAI Group Inc. Shareholders' deficits

Ordinary shares

100

102

15

Additional paid-in capital

5,951,044

5,866,091

886,505

Treasury stock

-

(2)

-

Statutory reserves

55,090

55,090

8,325

Accumulated other comprehensive income

14,917

25,372

3,834

Accumulated deficit

(2,398,984)

(1,176,885)

(177,857)

Total PPDai Group Inc. shareholders' equity

3,622,167

4,769,768

720,822

Non-controlling interest

60,021

59,774

9,033

Total shareholders' equity

3,682,188

4,829,542

729,855

Total liabilities and shareholders' equity

8,075

PPDAI GROUP INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME (LOSS)

(All amounts in thousands,or otherwise noted)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

2017

2018

2017

2018

RMB

RMB USD

RMB

RMB

USD

Operating revenues:

Loan facilitation service fees

810,792

753,260

113,835

1,316,136

1,374,069

207,654

Post-facilitation service fees

156,178

205,866

31,111

241,576

433,030

65,441

Other Revenue

97,925

88,214

13,331

175,695

157,021

23,730

Total operating revenues

1,064,895

1,047,340

158,277

1,733,407

1,964,120

296,825

Net interest income and loan

provision losses

984

12,462

1,883

1,449

39,453

5,962

Net revenues

1,065,879

1,059,802

160,160

1,734,856

2,003,573

302,787

Operating expenses:

Origination and servicing expenses-related

party

(19,617)

(27,557)

(4,165)

(35,554)

(52,890)

(7,993)

Origination and servicing expenses

(187,404)

(207,093)

(31,297)

(344,873)

(428,859)

(64,811)

Sales and marketing expenses

(187,150)

(194,309)

(29,365)

(324,357)

(345,372)

(52,194)

General and administrative expenses

(116,452)

(161,495)

(24,406)

(193,570)

(307,034)

(46,400)

Total operating expenses

(510,623)

(590,454)

(89,233)

(898,354)

(1,134,155)

(171,398)

Other income (expenses)

Gain from quality assurance fund

47,656

151,089

22,833

146,439

210,832

31,862

Realized gain (loss) from financial guarantee

derivatives

36,078

(101,885)

(15,397)

99,639

(147,107)

(22,231)

Fair value change of financial guarantee

derivatives

101,402

196,543

29,702

144,747

268,073

40,512

Other income,net

8,109

50,748

7,669

11,578

96,776

14,625

Profit before income tax expense

748,501

765,843

115,734

1,238,905

1,297,992

196,157

Income tax expenses

(116,701)

(158,049)

(23,885)

(190,305)

(252,634)

(38,179)

Net profit

631,800

607,794

91,849

1,048,600

1,045,358

157,978

Net profit (loss) attributable to non-controlling

interest shareholders

-

1,235

187

-

(247)

(37)

Net profit attributable to PPDai Group Inc.

631,800

606,559

91,662

1048,605

158,015

Accretion on Series A convertible redeemable

preferred shares to redemption value

(340,016)

-

-

(620,026)

-

-

Accretion on Series B convertible redeemable

preferred shares to redemption value

(219,882)

-

-

(424,146)

-

-

Accretion on Series C convertible redeemable

preferred shares to redemption value

(194,676)

-

-

(412,314)

-

-

Net profit (loss) attributable to ordinary

shareholders

(122,774)

606,662

(407,886)

1,015

Net profit attributable to PPDai Group

Inc.

631,662

1,015

Foreign currency translation adjustment,net of

nil tax

40,806

51,751

7,821

49,141

10,455

1,580

Total comprehensive income attributable

to PPDAIGroup Inc.

672,606

658,310

99,483

1,097,741

1,056,060

159,595

Weighted average number of ordinary shares

used in computing net income/(loss) per

share

Basic

665,000,000

1,505,581,042

1,042

665,504,315,031

1,031

Diluted

665,621,402,274

1,274

665,612,638,809

1,809

Income (loss) per share -Basic

(0.1847)

0.4029

0.0609

(0.6134)

0.6951

0.1050

Income (loss) per ADS-Basic

(0.9236)

2.0144

0.3044

(3.0668)

3.4754

0.5252

Income (loss) per share -Diluted

(0.1847)

0.3741

0.0565

(0.6134)

0.6484

0.0980

Income (loss) per ADS-Diluted

(0.9236)

1.8705

0.2827

(3.0668)

3.2419

0.4899

PPDAI GROUP INC.

UNAUDITED Reconciliation of GAAP And Non-GAAP Results

(All amounts in thousands,

For the Six Months Ended June 30,

2017

2018

2017

2018

RMB

RMB

USD

RMB

RMB

USD

Net Revenues

1,787

Less: total operating expenses

(510,398)

Operating Income

555,256

469,348

70,927

836,502

869,418

131,389

Less: Expected discretionary payment to

IRF investors

-

-

-

-

-

-

Add: share-based compensation

expenses

-

17,765

2,685

-

32,443

4,903

Non-GAAP adjusted operating income

555,256

487,113

73,612

836,502

901,861

136,292

PPDAI GROUP INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands,except share data,or otherwise noted)

Three Months Ended June 30

Six Months Ended June 30,

2017

2018

2017

2018

RMB

RMB

USD

RMB

RMB

USD

Net cash provided by operating

activities

775,790

152,204

23,001

1,890,002

240,294

36,314

Net cash provided by (used in)

investing activities

286,690

716,167

108,230

(78,463)

489,418

73,963

Net cash used in financing activities

(31,250)

(110,254)

(16,662)

(32,000)

(174,226)

(26,329)

Effect of exchange rate changes on cash

and cash equivalents

(148)

48,988

7,403

(288)

7,860

1,186

Net increase in cash,cash

equivalent and restricted cash

1,031,082

807,105

121,972

1,779,251

563,346

85,134

Cash,cash equivalent and restricted

cash at beginning of period

1,955,734

4,039,945

610,531

1,207,565

4,283,704

647,369

Cash,cash equivalent and restricted

cash at end of period

2,986,816

4,847,050

732,503

2,503

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