PPDAI Group Inc. Reports Fourth Quarter and Fiscal Year 2018 Unaudited Financial Results

SHANGHAI,March 14,2019 -- 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 fourth quarter and fiscal year ended December 31,2018.

As of

December31,

2017

September 30,

2018

December 31,

2018

Cumulative registered users[1]('000)

65,409

83,949

88,930

Cumulative number of borrowers[2]('000)

10,518

13,440

14,440

Cumulative number of individual investors[3]

559,760

644,376

667,738

For Three Months Ended

For Twelve Months Ended

December

31,2017

December

31,2018

YoY

Change

December

31,2018

YoY

Change

Number of unique borrowers[4]('000)

4,017

3,037

(24.4%)

8,730

6,806

(22.0%)

Loan origination volume[5]

(RMB,million)

17,567

17,617

0.3%

65,568

61,498

(6.2%)

Repeat borrowing rate[6](%)

72.8%

73.4%

0.8%

68.9%

73.6%

6.8%

Average loan size[7] (RMB)

2,590

3,423

32.2%

2,470

3,281

32.8%

Fourth Quarter 2018 Financial and Operational Highlights

Net profit was RMB774.6 million (US$112.7 million) in the fourth quarter of 2018,compared to net loss of RMB507.1 million in the fourth quarter of 2017.

Operating revenues for the fourth quarter of 2018 increased by 33.7% to RMB1,219.2 million (US$177.3 million),from RMB912.1 million in the same period of 2017.

Loan facilitation service fees increased by 35.0% to RMB837.4 million (US$121.8 million) in the fourth quarter of 2018,from RMB620.2 million in the same period of 2017.

Post-facilitation service fees further increased by 10.0% to RMB249.9 million (US$36.3 million) in the fourth quarter of 2018,from RMB227.2 million in the same period of 2017.

Operating income was RMB486.6 million (US$70.8 million) for the fourth quarter of 2018,representing an increase of 328.4% from RMB113.6 million in the same period of 2017.

Non-GAAP adjusted operating income,which excludes share-based compensation expenses before tax and a write back of provision for expected discretionary payments to investors in investment programs protected by the Company's investor reserve funds,was RMB472.1 million (US$68.7 million) for the fourth quarter of 2018,representing an increase of 44.2% from RMB327.4 million in the same period of 2017.

Cumulative registered users[1] reached 88.9 million as of December 31,2018.

Cumulative number of borrowers[2] reached 14.4 million as of December 31,2018.

Cumulative number of individual investors[3] reached 667,738 as of December 31,2018.

Number of unique borrowers[4] was 3.0 million for the fourth quarter of 2018,representing a decrease of 24.2% from the same period of 2017.

Loan origination volume[5] was RMB17.6 billion for the fourth quarter of 2018,representing an increase of 0.3% from the same period of 2017.

Average loan tenure[8] was 9.6 months for the fourth quarter of 2018.

Fiscal Year 2018 Financial and Operational Highlights:

Net profit increased by 128.0% to RMB2,469.5 million (US$359.2 million) in 2018 compared to RMB1,082.9 million in 2017.

Operating revenues in 2018 increased by 10.1% to RMB4,287.6 million (US$623.6 million),from RMB3,895.8 million in 2017.

Loan facilitation service fees increased by 2.7% to RMB2,919.2 million (US$424.6 million) in 2018,from RMB2,843.3 million in 2017.

Post-facilitation service fees increased by 38.0% to RMB922.8 million (US$134.2 million) in 2018,from RMB668.8 million in 2017.

Operating income was RMB1,846.6 million (US$268.6 million) in 2018,representing an increase of 20.8% from RMB1,529.2 million in 2017.

Non-GAAP adjusted operating income,which excludes share-based compensation expenses and a one-time provision for the expected discretionary payments to investors in investment programs protected by the Company's investor reserve funds from profit/(loss) before tax,increased by 4.9% to RMB1,828.3 million (US$265.9 million).

Number of unique borrowers[4] was 6.8 million in 2018,representing a decrease of 22% from 2017.

Loan origination volume[5] was RMB61.5 billion in 2018,representing a decrease of 6.2% from 2017.

Average loan tenure[8] was 9.4 months in 2018.

[1]On a cumulative basis,number of users registered on PPDAI platform as of December 31,2018.

[2]On a cumulative basis,number of borrowers whose loans were funded on or prior to December 31,2018.

[3]On a cumulative basis,number of individual investors who have made at least one investment in loans on or prior to December 31,2018.

[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,Chairman and Co-Chief Executive Officer of PPDAI,commented,"We delivered solid performance in the fourth quarter and fiscal year 2018 despite tightening regulations and a volatile market environment. Our outstanding operating results were highlighted by a robust 128.0% increase in net profit to RMB2,469.5 million in 2018 from RMB1,082.9 million in 2017. The progressive growth in net profit reflects our stable business operations,a culture of good compliance and our prudent track record of risk management. As of December 31,2018,we had over 88.9 million cumulative registered users,with cumulative borrowers exceeding 14.4 million and our cumulative investors reaching 667,738. Our 'technologies as a service' has been making steady progress over the course of the year as our services have been deployed to a broadening range of financial institutions.

"The stricter enforcement of regulations in the consumer lending space has led to rapid industry consolidation. In light of these industry trends,we are benefiting from our increased market share position. Additionally,we continue to work closely with the regulatory authorities and we are confident of meeting future industry compliance requirements. We firmly believe that a strengthened regulatory framework around consumer lending is crucial to supporting a healthy and sustainable industry. As a leader in the space,with strong proprietary technologies and capabilities,and the longest operating history,PPDAI is well positioned to capture the tremendous long-term growth opportunities in China's online consumer finance marketplace."

Mr. Feng Zhang,Co-Chief Executive Officer of PPDAI,said,"Benefitting from the rapid growth in institutional funding,the Company's total loan origination volume in the fourth quarter of 2018 increased by 19.2% to RMB17.6 billion from RMB14.8 billion in the third quarter of 2018. In the fourth quarter,we made solid progress in expanding our institutional funds and the proportion of loans facilitated with institutional funding partners to total loan origination volume increased to 20.4% from 14.3% in the third quarter of 2018. Looking forward,we are confident in our ability to achieve further diversification in funding sources through our institutional funding partners in 2019."

Mr. Simon Ho,Chief Financial Officer of PPDAI,"In spite of regulatory changes that impacted our industry,we are delighted to achieve strong operational results in the fourth quarter,as demonstrated by a 44.2% year-over-year increase in our non-GAAP operating income and a healthy non-GAAP operating margin of 40%. Our balance sheet remained solid with approximately RMB3.3 billion of cash and short-term liquidity. Notably,our quality assurance fund remains sufficiently funded with a total balance of RMB4.5 billion,equivalent to 23.2% of the total outstanding loans protected by the quality assurance fund. Our result highlights the strength and resilience of our operating model as we navigate through the evolving industry landscape."

Mr. Jun Zhang concluded,"As a leader in the online consumer finance industry,we remain committed toenhancing shareholder value. We are also pleased to announce our first dividend of US$0.19 per ADS as a listed company. This reflects theconfidence in our business,our capabilities and the long-term market potential. Going forward,we will maintain focus on expanding the breadth of our loan services,strengthening brand recognition,continuing to invest in and enhance proprietary technologies in addition to exploring opportunities for expansion both domestically and internationally."

Fourth Quarter 2018 Financial Results

Operating revenuesfor the fourth quarter of 2018 increasedby 33.7% to RMB1,219.2 million (US$177.3 million) from RMB912.1 million in the same period of 2017,primarily due tothe old revenue recognition standard ASC 605 used in 2017 and a write-back of provision for expected discretionary payments to investors in investment programs protected by the investor reserve funds. As a result of the adoption of ASC 606 effective January 1,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 December 31,the impact of applying the new revenue standard resulted in an increase of approximately RMB44.5 million (US$6.5 million) in revenues.

Loan facilitation service feesincreased by 35.0% to RMB837.4 million (US$121.8 million) for the fourth quarter of 2018 from RMB620.2 million in the same period of 2017,primarily due tothe old revenue recognition standard ASC 605 used in 2017. The average rate of transaction fees charged to borrowers was 7.38% in the period,compared to 7.07% in the third quarter of 2018 and 6.24% in the fourth quarter of 2017. Loan collection fees of RMB99.8 million (US$14.5 million) have been allocated from other revenue to loan facilitation service fees related to the adoption of ASC 606 effective January 1,2018.

Post-facilitation service feesincreased by 10.0% to RMB249.9 million (US$36.3 million) for the fourth quarter of 2018 from RMB227.2 million in the same period of 2017,due to the adoption of ASC 606 effective January 1,2018. Loan collection fees of RMB38.3 million (US$5.6million) have been allocated from other revenue to post facilitation service fees related to the adoption of ASC 606.

Other revenuedecreased by 37.5% to RMB107.8 million (US$15.7million) for the fourth quarter of 2018 from RMB172.4 million in the same period of 2017,primarily due to the adoption of ASC 606 effective January 1,which reallocated loan collection fees to loan facilitation fees and post facilitation fees. This was offset by an increase in management fees from investment programs that invest in loans protected by the quality assurance fund.

Net interest income/(expenses)andloan provision lossesfor the fourth quarter of 2018 were an expense of RMB9.4 million (US$1.4 million),compared to an expense of RMB13.2million in the same period of 2017,mainly due to provisions for loan losses related to consolidated investment trusts established during the period.

Origination and servicing expensesdecreased by 6.3% to RMB277.6 million (US$40.4 million) for the fourth quarter of 2018 from RMB296.3 million in the same period of 2017,primarily due to the discontinuation of consumption loan products since late 2017.

Sales and marketing expensesdecreased by 24.2% to RMB180.9 million (US$26.3million) for the fourth quarter of 2018 from RMB238.6million in the same period of 2017,primarily due to the decline in online customer acquisition expenses.

General and administrative expensesdecreased by 15.5% to RMB211.7million (US$30.8 million) for the fourth quarter of 2018 from RMB250.4 million in the same period of 2017,primarily due to the decline in share-based compensation expenses. General and administrative expenses for the period included share-based compensation of RMB9.6 million (US$1.4 million). Share-based compensation recognized in the fourth quarter of 2017 included compensation related to employee options granted historically with a performance target contingent upon IPO.

Operating incomeincreased by 328.4% to RMB486.6million (US$70.8 million) for the fourth quarter of 2018 fromRMB113.6million in the same period of 2017.

Non-GAAP adjusted operating income,which excludes share-based compensation expenses before tax and a write-back of provision for expected discretionary payments to investors in investment programs protected by the investor reserve funds,representing an increase of 44.2% from RMB327.4 million in the same period of 2017.

Other income was RMB94.4million (US$13.7million) for the fourth quarter of 2018,compared with a loss of RMB694.8 million in the same period of 2017. Other income primarily consisted of (1) a gain of RMB23.5million (US$3.4million) from the quality assurance fund,(2) a gain of RMB10.8million (US$1.6 million) from the fair value change of financial guarantee derivatives,and (3) arealized gain of RMB18.0 million (US$2.6 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 fourth quarter of 2018,RMB13.1 billion of loans facilitated on the Company's platform were protected by the quality assurance fund.

Income tax credits were RMB193.6 million (US$28.2million) for the fourth quarter of 2018,compared with income tax credits of RMB74.1million in the same period of 2017,primarily due to the write-back of accrued income tax as the Company is able to enjoy a preferential tax treatment since it was recognized as a "software enterprise" by relevant PRC government agencies.

Net profitwas RMB774.6million (US$112.7million) for the fourth quarter of 2018,compared with a net loss of RMB507.1 million in the same period of 2017.

Net profit attributable to ordinary shareholders of the Companywas RMB774.2million (US$112.6million) for the fourth quarter of 2018,compared with a net lossattributable to ordinary shareholders of RMB1,303.9 million in the same period of 2017 due to accretion of the Company's Series A,B and C preferred shares in the fourth quarter of 2017.

As ofDecember31,the Company had cash and cash equivalents of RMB1,616.2 million (US$235.1million) and short-term investments mainly in wealth management products of RMB1,694.7 million (US$246.5million).

The total balance of the quality assurance fund,which includes restricted cash of RMB2,414.4 million (US$351.2million) and the quality assurance fund receivable of RMB2,064.4million (US$300.3million),was equivalent to 23.2% of the total outstanding loans protected by the quality assurance fund.

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%

September 30,2018

1.03%

1.77%

1.49%

1.29%

1.06%

1.02%

December 31,2018

0.92%

1.63%

1.41%

1.45%

1.44%

1.34%

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 hereto 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%

7.16%

7.22%

7.26%

2017Q4

2.51%

4.12%

5.16%

5.68%

5.97%

6.18%

6.29%

6.39%

6.47%

6.50%

6.50%

2018Q1

1.35%

2.18%

2.97%

3.65%

4.30%

4.85%

5.22%

5.50%

2018Q2

1.75%

3.08%

4.35%

5.43%

6.31%

2018Q3

1.42%

2.48%

Fiscal Year 2018 Financial Results

Operating revenuesfor the fiscal year 2018 increased by 10.1% toRMB4,287.6 million (US$623.6 million) from RMB3,895.8million in 2017,primarily due to the old revenue recognition standard ASC 605 used in 2017 and the write-back of provision for expected discretionary payments to investors in investment programs protected by the investor reserve funds. For the fiscal year 2018,the impact of applying the new revenue standard ASC 606 resulted in an increase of approximately RMB511.1 million (US$74.3 million) in revenue.

Loan facilitation service feesincreased by 2.7% to RMB2,919.2 million (US$424.6 million) for the fiscal year 2018 from RMB2,843.3million in 2017,primarily due tothe old revenue recognition standard ASC 605 used in 2017. The average rate of transaction fees charged to borrowers was 6.77%,compared with 6.5% in 2017. Loan collection fees of RMB342.7 million (US$49.8 million) have been allocated from other revenue to loan facilitation service fees related to the adoption of ASC 606 effective January 1,2018.

Post-facilitation service feesincreased by 38.0% to RMB922.8 million (US$134.2 million) for the fiscal year 2018 from RMB668.8million in the prior year,primarily due to the rolling impact of deferred transaction fees and the adoption of ASC 606 effective January 1,2018. Loan collection fees of RMB125.2 million (US$18.2 million) have been allocated from other revenue to post facilitation service fees related to the adoption of ASC 606.

Other revenuedecreased by 23.3% to RMB376.9 million (US$54.8 million) for the fiscal year 2018 from RMB491.4million in 2017,which reallocated loan collection fees to loan facilitation fees and post facilitation fees. This was offset by an increase in management fees from investment programs that invest in loans protected by the quality assurance fund.

Net interest income/(expense) and loan provision lossesfor the fiscal year 2018 was an income of RMB63.4 million (US$9.2 million),compared with an expense of RMB15.2million in 2017,primarily due to income from the increased number of consolidated investment trusts.

Origination and servicing expensesincreased by 1.1% to RMB985.6 million (US$143.3 million) for the fiscal year 2018 from RMB974.5 million in the prior year,primarily due to (i) a decrease in salaries and benefits as a result of a decrease in headcount particularly for consumption loan products,and (ii) a decrease in referral fees paid to third parties for successful loan originations,which was largely offset by an increase in fees paid to third parties for loan collection services.

Sales and marketing expensesdecreased by 9.8% to RMB710.8 million (US$103.4million) for the fiscal year 2018 from RMB788.3million in 2017,primarily due to a decline in online customer acquisition expenses.

General and administrative expensesincreased by 19.1% to RMB701.4 million (US$102.0 million) for the fiscal year 2018 from RMB588.7 million in 2017,primarily due to an increase in research and development costs. General and administrative expenses for the period included share-based compensation of RMB50.3 million (US$7.3 million).

Operating incomeincreased by 20.8% to RMB1,846.6 million (US$268.6 million) for the fiscal year 2018 from RMB1,529.2 million in 2017.

Non-GAAP adjusted operating income,which excludes share-based compensation expenses and a one-time provision for expected discretionary payments to investors in investment programs protected by the Company's investor protection funds from profit/(loss) before tax,828.3 million (US$265.9 million) for the fiscal year 2018 from RMB1,743.0 million in 2017.

Other income recorded a gain of RMB774.1 million (US$112.6 million) for the fiscal year 2018,compared to a loss of RMB171.5 million in 2017. Other income primarily consisted of (1) a gain of RMB510.9 million (US$74.3 million) from the quality assurance fund resulting from the growth in loans facilitated on the Company's platform that are protected by the quality assurance fund,(2) a gain of RMB272.1 million (US$39.6 million) from fair value change of financial guarantee derivatives due to an improvement in the expected default rate for underlying loans investment programs protected by the investor reserve funds,and (3) aRMB157.2 million (US$22.9 million) realized loss from financial guarantee derivatives due to the amount of investment programs maturing during the period .

Income tax expenseswere RMB151.2 million (US$22.0 million) for the fiscal year 2018,compared with RMB274.7 million in 2017. The decrease was primarily due to the write-back of accrued income tax as the Company is able to enjoy a preferential tax treatment since it was recognized as a "software enterprise" by relevant PRC government agencies.

Net profitwas RMB2,469.5 million (US$359.2million) for the fiscal year 2018,representing a 128.0% increase from RMB1,082.9 million in 2017.

Net profit attributable to ordinary shareholders of the Companywas RMB2,469.1million (US$359.1 million) for fiscal year 2018,compared with a net loss attributable to ordinary shareholders of RMB1,990.5 million in 2017 due to the accretion losses on the Company's Series A,B and C preferred shares.

Conference Call

The Company's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on March 14,2019 (8:00 PM Beijing/Hong Kong time on March 14,2019).

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 athttp://ir.ppdai.com.

A replay of the conference call will be accessible approximately one hour after the conclusion of the live call until March 21,2019,by dialing the following telephone numbers:

United States (toll free):

1-877-344-7529

International:

1-412-317-0088

Replay Access Code:

10129178

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 December 31,the Company had over 88.9 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 RMB6.8755 to US$1.00,the rate in effect as of December 31,2018 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 share data,or otherwise noted)

As of December 31,

As of December 31,

2017

2018

RMB

RMB

USD

Assets

Cash and cash equivalents

1,891,131

1,616,164

235,061

Restricted cash

2,392,573

3,677,557

534,878

Short-term investments

1,958,910

1,694,660

246,478

Investments

12,234

167,501

24,362

Guarantee and quality assurance fund receivable

1,152,769

2,064,366

300,250

Intangible assets

63,760

68,880

10,018

Property,equipment and software,net

108,248

144,002

20,944

Loans and receivables,net of provision for loan losses

681,794

2,331,108

339,046

Accounts receivable

17,773

812,042

118,107

Deferred tax assets

128,361

122,763

17,855

Financial guarantee derivative assets

-

56,287

8,187

Due from related party

-

2,830

412

Contract assets

-

112,103

16,305

Prepaid expenses and other assets

145,699

221,793

32,259

Goodwill

50,411

50,411

7,332

Total assets

8,603,663

13,142,467

1,911,494

Liabilities and Shareholders' Equity

Payable to platform customers

1,113,966

905,034

131,632

Guarantee and quality assurance fund payable

2,062,844

3,819,379

555,506

Deferred revenue

265,094

-

-

Payroll and welfare payable

156,831

188,254

27,380

Taxes payable

257,143

225,101

32,740

Provision for payment to investor reserve fund investor

107,660

-

-

Short-term borrowings

-

25,000

3,636

Funds payable to investors of consolidated trusts

502,641

1,505,909

219,025

Contract liabilities

-

165,469

24,066

Due to related party

11,972

-

-

Deferred tax liabilities

15,940

100,064

14,554

Accrued expenses and other liabilities

211,614

222,519

32,364

Financial guarantee derivative liabilities

215,770

-

-

Total liabilities

4,921,475

7,156,729

1,040,903

Commitments and contingencies

PPDai Group Inc. Shareholder's deficit

Class A ordinary shares

56

58

8

Class B ordinary shares

44

44

7

Additional paid-in capital

5,951,044

5,896,017

857,540

Treasury stock

-

(332,121)

(48,305)

Statutory reserves

55,090

256,006

37,235

Accumulated other comprehensive income

14,917

58,210

8,466

Accumulated deficit(retained earnings)

(2,398,984)

45,668

6,643

Total PPDai Group Inc. shareholders' equity

3,622,167

5,923,882

861,594

Non-controlling interest

60,021

61,856

8,997

Total shareholders' equity

3,682,188

5,985,738

870,591

Total liabilities and shareholders' equity

8,494

PPDAI GROUP INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(All amounts in thousands,or otherwise noted)

For the Three Months Ended December 31,

For the Year Ended December 31,

2017

2018

2017

2018

RMB

RMB

USD

RMB

RMB

USD

Operating revenue:

Loan facilitation service fees

620,237

837,427

121,799

2,843,287

2,919,234

424,585

Post-facilitation service fees

227,150

249,887

36,345

668,819

922,797

134,215

Other Revenue

172,393

107,802

15,679

491,400

376,915

54,820

Changes in expected discretionary payment to IRF

investors

(107,660)

24,047

3,497

(107,660)

68,619

9,980

Total operating revenues

912,120

1,219,163

177,320

3,895,846

4,287,565

623,600

Net interest income (expense) and loan

provision losses

(13,243)

(9,410)

(1,369)

(15,209)

63,359

9,215

Net revenues

898,877

1,209,753

175,951

3,880,637

4,350,924

632,815

Operating expenses:

Origination and servicing expenses-related

party

(28,834)

(30,913)

(4,496)

(84,362)

(109,666)

(15,950)

Origination and servicing expenses

(267,443)

(246,682)

(35,878)

(890,160)

(875,905)

(127,395)

Sales and marketing expenses

(238,600)

(180,901)

(26,311)

(788,291)

(710,754)

(103,375)

General and administrative expenses

(250,369)

(211,667)

(30,786)

(588,664)

(701,353)

(102,008)

Provision for doubtful accounts

-

(53,021)

(7,712)

-

(106,652)

(15,512)

Total operating expenses

(785,246)

(723,184)

(105,183)

(2,351,477)

(2,504,330)

(364,240)

Other income (expenses)

Gain from guarantee and quality assurance fund

(271,850)

23,469

3,413

5,885

510,894

74,307

Realized gain (loss) from financial guarantee

derivatives

27,105

17,971

2,614

169,103

(157,244)

(22,870)

Fair value change of financial guarantee

derivatives

(460,428)

10,780

1,568

(383,061)

272,057

39,569

Gain from disposal of subsidiary

-

-

-

-

-

-

Other income (expense),net

10,337

42,185

6,136

36,531

148,356

21,578

Profit (loss) before income tax credit (expense)

(581,205)

580,974

84,499

1,357,618

2,620,657

381,159

Income tax credit (expenses)

74,139

193,617

28,160

(274,711)

(151,206)

(21,992)

Net profit (loss)

(507,066)

774,591

112,659

1,082,907

2,469,451

359,167

Less: net profit (loss) attributable to non-controlling

interest shareholders

(76)

417

61

(76)

377

55

Net profit (loss) attributable to PPDai Group Inc.

(506,990)

774,174

112,598

1,983

2,074

359,112

Accretion on convertible redeemable

preferred shares to redemption value

(796,874)

-

-

(3,073,471)

-

-

Net profit (loss) attributable to ordinary

shareholders

(1,303,864)

774,598

(1,990,488)

2,112

Net profit (loss) attributable to PPDai Group

Inc.

(506,112

Foreign currency translation adjustment,net of nil tax

(10,097)

(3,787)

(551)

99,934

43,293

6,297

Total comprehensive income (loss) attributable to PPDAI

Group Inc

(517,087)

770,387

112,047

1,182,917

2,512,367

365,409

PPDAI GROUP INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(All amounts in thousands,or otherwise noted) (continued)

For the Three Months Ended December 31,

2017

2018

2017

2018

RMB

RMB

USD

RMB

RMB

USD

Weighted average number of ordinary shares

used in computing net income (loss) pershare

Basic

1,120,473,462

1,486,851,379

1,379

779,804,270

1,498,780,165

1,165

Diluted

1,563,655,040

1,040

779,599,592,231

1,231

Income (loss) per share -Basic

(1.1637)

0.5207

0.0757

(2.5525)

1.6474

0.2396

Income (loss) per ADS-Basic

(5.8184)

2.6034

0.3786

(12.7627)

8.2369

1.1980

Income (loss) per share -Diluted

(1.1637)

0.4951

0.0720

(2.5525)

1.5436

0.2245

Income (loss) per ADS-Diluted

(5.8184)

2.4755

0.3600

(12.7627)

7.7178

1.1225

PPDAI GROUP INC.

UNAUDITED Reconciliation of GAAP And Non-GAAP Results

(All amounts in thousands,or otherwise noted)

For the Three Months Ended December 31,

For the Year Ended December 31,

2017

2018

2017

2018

RMB

RMB

USD

RMB

RMB

USD

Net Revenues

898,815

Less: total operating expenses

(785,240)

Operating Income

113,631

486,569

70,768

1,529,160

1,846,594

268,575

Less: Change in expected discretionary

payment to IRF investors

107,660

(24,047)

(3,497)

107,660

(68,619)

(9,980)

Add: share-based compensation

expenses

106,152

9,555

1,390

106,152

50,319

7,319

Non-GAAP adjusted operating income

327,443

472,077

68,661

1,742,972

1,828,294

265,914

PPDAI GROUP INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands,

For the Year Ended December 31,

2017

2018

2017

2018

RMB

RMB

USD

RMB

RMB

USD

Net cash provided by (used in) operating

activities

(28,173)

518,273

75,380

3,409,451

1,884,956

274,153

Net cash used in investing activities

(876,176)

(819,178)

(119,145)

(2,450,800)

(1,447,013)

(210,460)

Net cash provided by financing

activities

1,701,581

440,841

64,117

2,132,933

530,097

77,100

Effect of exchange rate changes

on cash and cash equivalents

(14,888)

(2,876)

(418)

(15,445)

41,977

6,107

Net increase in cash,cash

equivalent and restricted cash

782,344

137,060

19,934

3,076,139

1,010,017

146,900

Cash,cash equivalent and restricted

cash at beginning of period

3,501,360

5,661

750,005

1,207,565

4,283,704

623,039

Cash,cash equivalent and restricted

cash at end of period

4,704

5,293,721

769,939

4,939

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