Weidai Ltd. Announces First Quarter 2019 Financial Results

HANGZHOU,China,June 4,2019 -- Weidai Ltd. ("Weidai" or the "Company") (NYSE: WEI),a leading auto-backed financing solution provider in China,today announced its unaudited financial results for the first quarter ended March 31,2019.

First quarter 2019 Financial Highlights:

Net revenues were RMB949.7 million (US$141.5 million) in the first quarter of 2019,an increase of 1.6% from RMB934.9 million in the same period of 2018 and a decrease of 4.4% from RMB993.5 million sequentially.

Loan facilitation service fees were RMB766.9 million (US$114.3 million) in the first quarter of 2019,an increase of 7.4% from RMB714.4 million in the same period of 2018 and a decrease of 9.2% from RMB844.7 million sequentially.

Post-facilitation service fees were RMB83.5 million (US$12.4 million) in the first quarter of 2019,an increase of 1.4% from RMB82.3 million in the same period of 2018 and a decrease of 0.8% from RMB84.2 million sequentially.

Net income was RMB109.0 million (US$16.2 million) in the first quarter of 2019,compared to RMB124.6 million in the same period of 2018 and RMB110.0 million sequentially.

Adjusted net income[1]was RMB134.6 million (US$20.1 million) in the first quarter of 2019,compared to RMB157.6 million in the same period of 2018 and RMB133.2 million sequentially.

First quarter 2019 Operational Highlights:

Loan volume

The following table sets forth the volume of loans we facilitated and originated (including loans funded by institutional funding partners) for the periods indicated:

For the three months ended,

December 31,2018

March 31,2019

RMB

% of total loan

volume

RMB

% of total

loan volume

(in millions,except for percentages)

Total loan volume

17,117

100.0

15,247

100.0

Including:

Loans funded by institutional funding

partners

891

5.2

733

4.8

Loan balance

Total loan balance decreased to RMB19.6 billion (US$2.9 billion) as of March 31,2019 from RMB19.9 billion as of December 31,2018.

First quarter 2019 Financial Results

Net revenuesdecreased by 4.4% to RMB949.7 million (US$141.5 million) in the first quarter of 2019 from RMB993.5 million in the previous quarter,primarily due to decreases in loan facilitation service fees and post-facilitation service fees. The decrease was partially offset by increases in other revenues and net financing income. The Company's take rate[2] decreased to 4.8% in the first quarter of 2019 from 5.0% in the previous quarter.

Loan facilitation service feesdecreased by 9.2% to RMB766.9 million (US$114.3 million) in the first quarter of 2019,from RMB844.7 million in the previous quarter. The decrease was primarily due to decrease in loan volume and loan balance.In the first quarter of 2019,the impact of applying ASC 606 resulted in a decrease in loan facilitation service fees of RMB21.6 million.

Post-facilitation service feesdecreased by 1.0% to RMB83.5 million (US$12.4 million) in the first quarter of 2019,from RMB84.2 million in the previous quarter. The decrease was primarily due to a decrease in loan volume and loan balance.

Other revenuesincreased by 19.2% to RMB51.6 million (US$7.7 million) in the first quarter of 2019,from RMB43.3 million in the previous quarter.

Net financing incomeincreased by 123.9% to RMB47.7 million (US$7.1 million) in the first quarter of 2019,from RMB21.3 million in the previous quarter.

Provision for loans and advancesdecreased by 25.3% to RMB244.1 million (US$36.4 million) in the first quarter of 2019,from RMB326.6 million in the previous quarter. Provision for loans and advances as a percentage of total loan volume decreased to 1.60% in the first quarter of 2019 from 1.91% in the previous quarter,but remained higher than the other quarters in 2018 (0.59%,0.47% and 1.09% in the first,second and third quarter of 2018,respectively). Provision for loans and advances as a percentage of net revenue decreased to 25.7% in the first quarter of 2019 from 32.9%in the fourth quarter of 2018.

Operating costs and expensesdecreased by 7.1% to RMB580.8 million (US$86.5 million) in the first quarter of 2019,from RMB625.3 million in the previous quarter. Operating costs and expenses as a percentage of net revenues decreased to 61.2% in the first quarter of 2019 from 62.9% in the fourth quarter of 2018.

Provision for financial guarantee liabilitiesincreased by 148.1% to RMB53.9 million (US$8.0 million) in the first quarter of 2019,from RMB21.7 million in the previous quarter.

Origination and servicing expenses decreased by 9.0% to RMB376.4 million (US$56.1 million) for the first quarter of 2019 from RMB413.8 million in the previous quarter,primarily due to continued cost optimization efforts. Origination and servicing expenses as a percentage of net revenues decreased to 39.6% in the first quarter of 2019 from 41.7% in the fourth quarter of 2018.

Sales and marketing expensesincreased by 24.8% to RMB48.9 million (US$7.3 million) for the first quarter of 2019 from RMB39.2 million in the previous quarter,which was primarily due to an increase in online marketing activities in the first quarter of 2019.

General and administrative expensesdecreased by 48.7% to RMB58.0 million (US$8.6 million) for the first quarter of 2019 from RMB112.9 million in the previous quarter. The decrease was primarily due to a decrease in staff costs.

Research and development expensesincreased by 15.7% to RMB43.7 million (US$6.5 million) in the first quarter of 2019 from RMB37.8 million in the previous quarter,primarily due to continued investment in technology infrastructure and systems.

Share-based compensation expensesincreased by 10.4% to RMB25.6 million (US$3.8 million) in the first quarter of 2019,from RMB23.2 million in the previous quarter.

Income tax expenseswere RMB38.1 million (US$5.7 million) for the first quarter of 2019,compared to RMB21.5 million income tax benefits in the previous quarter.

Net incomeremained relatively stable at RMB109.0 million (US$16.2 million) for the first quarter of 2019,compared to RMB110.0 million in the previous quarter.

Net income and comprehensive income attributable to ordinary shareholders decreased by 3.0% to RMB105.4 million (US$15.7 million) in the first quarter of 2019,fromRMB108.7 million in the previous quarter.

Adjusted net incomeremained relatively stable at RMB134.6 million (US$20.1 million) in the first quarter of 2019,compared to RMB133.2 million in the previous quarter.

Use of Non-GAAP Financial Measures

The Company uses adjusted net income,a non-GAAP financial measure,in evaluating its operating results and for financial and operational decision-making purposes. The Company believes that adjusted net income helps identify underlying trends in its business by excluding the impact of share-based compensation expenses. The Company believes that adjusted net income provides useful information about its operating results,enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision-making.

Adjusted net income 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,and when assessing the Company's operating performance,cash flows or liquidity,investors should not consider it in isolation,or as a substitute for net 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 its 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.

[1] Adjusted net income,is defined as net income before share-based compensation expenses.

[2] "Take rate" is defined as dividing net revenue of a certain period by the period end loan balance.

About Weidai Ltd.

Weidai Ltd. is a pioneer and leading auto-backed financing solution provider in China supported by sophisticated and effective risk management system and technology. The Company transforms used automobiles,a type of "non-standard" collateral,into investable assets,to provide accessible credit for China's small and micro enterprises,and connects the borrowers with both online investors and institutional funding partners through its platform.

For more information,please visit http://weidai.investorroom.com/.

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 RMB6.7112 to US$1.00,the noon buying rate on March 29,2019 set forth in the H.10 statistical release of the U.S. Federal Reserve Board.

Safe Harbor Statement

This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section21E 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. Weidai may also make written or oral forward-looking statements in its periodic reports to the SEC,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. Statements that are not historical facts,including statements about Weidai's beliefs and expectations,are forward-looking 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 the following: Weidai's goal and strategies; Weidai's expansion plans; Weidai's future business development,financial condition and results of operations; Weidai's expectations regarding demand for,and market acceptance of,its solutions and services; Weidai's expectations regarding keeping and strengthening its relationships with borrowers,investors and financial institutions and other platform participants; general economic and business conditions; Weidai's assumptions underlying or related to any of the foregoing regulations and governmental policies relating to the online consumer finance industry in China; and Weidai'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 Weidai 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:

Christensen

Mr. Christian Arnell

Tel: +86-10-5900-1548

E-mail: carnell@christensenir.com

In US:

Christensen

Ms. Linda Bergkamp

Tel: +1-480-614-3004

E-mail: lbergkamp@christensenir.com

WEIDAI LTD.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

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

As of December 31,

As of March 31,

2018

2019

RMB

RMB

US$

(in thousands)

ASSETS

Current assets:

Cash and cash equivalents

1,741,911

1,472,593

219,423

Restricted cash

1,619,937

838,961

125,009

Loans and advances,net

1,482,368

1,155,368

172,156

Contract assets

-

944,495

140,735

Short-term investments

4,100

222,920

33,216

Prepaid expenses and other assets

560,165

483,135

71,988

Amounts due from related parties

21,797

17,198

2,562

Total current assets

5,430,278

5,134,670

765,089

Non-current assets:

Restricted cash

19,368

27,901

4,157

Long-term investments

13,333

13,333

1,987

Loans and advances,net

421,564

402,260

59,939

Prepaid expenses and other assets

7,606

5,606

834

Property,equipment and software,net

88,731

81,568

12,154

Goodwill

5,812

5,812

866

Contract assets

-

366,060

54,545

Deferred tax assets

329,796

317,498

47,309

Total non-current assets

886,210

1,220,038

181,791

Total assets

6,316,488

6,354,708

946,880

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities (including current liabilities of

the consolidated VIE and subsidiaries without

recourse to the primary beneficiary of 3,571,677

and RMB2,231,239(US$332,465) as of

December 31,2018 and March 31,2019,

respectively):

Payable to institutional funding partners and

online investors

1,005,236

504,402

75,158

Current account with online investors and

borrowers.

2,605

1,197,838

178,483

Income tax payable

70,679

94,959

14,149

Accrued expenses and other liabilities

501,439

451,253

67,240

Amounts due to related parties

28,728

14,705

2,191

Deferred revenue

11,962

-

-

Contract liabilities

-

22,918

3,415

Total current liabilities

3,623,649

2,286,075

340,636

Non-current liabilities (including non-current

liabilities of the consolidated VIE and

subsidiaries without recourse to the primary

beneficiary of RMB475,613 and RMB726,598

(US$108,266) as of December 31,2018 and

March 31,respectively):

Payable to institutional funding partners and

online investors

450,160

425,875

63,457

Deferred revenue

11,343

-

-

Contract liabilities

-

6,041

900

Other non-current liabilities

14,110

14,615

2,178

Deferred tax liabilities

-

280,067

41,731

Total non-current liabilities

475,613

726,598

108,266

Total liabilities

4,099,262

3,012,673

448,902

Shareholders' equity

Class A ordinary shares (par value of

US$0.000002 per share; 35,375,777 and

35,777 shares issued and outstanding as of

December 31,

respectively)

-

-

-

Class B ordinary shares (par value of

US$0.000002 per share; 35,071,400 and

35,400 shares issued and outstanding as of

December 31,

respectively)

1

1

-

Additional paid-in capital

1,170,956

1,196,580

178,296

Accumulated other comprehensive loss

(2,700)

(8,253)

(1,230)

Retained earnings

1,040,443

2,144,968

319,610

Total Weidai Ltd. shareholders' equity

2,208,700

3,333,296

496,676

Noncontrolling interests

8,526

8,739

1,302

Total shareholders' equity

2,217,226

3,342,035

497,978

TOTAL LIABILITIES AND

SHAREHOLDERS' EQUITY

6,880

Weidai Ltd.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(All amounts in thousands,or otherwise noted)

Three Months Ended

December 31,2018

Three Months Ended

March 31,2019

RMB

RMB

US$

(in thousands,except for share,per share and per ADS data)

Net revenues:

Loan facilitation service fees

844,735

766,930

114,276

Post facilitation service fees

84,174

83,464

12,437

Other revenues

43,301

51,617

7,691

Financing income

62,164

86,666

12,914

Less: Funding costs

(40,860)

(38,977)

(5,808)

Net financing income

21,304

47,689

7,106

Total net revenues

993,514

949,700

141,510

Provision for loans and advances

(326,631)

(244,124)

(36,376)

Net revenues after provision for

loans and advances

666,883

705,576

105,134

Operating costs and expenses:

Provision for financial guarantee

liabilities

(21,712)

(53,872)

(8,027)

Origination and servicing expenses

(413,750)

(376,374)

(56,081)

Sales and marketing expenses

(39,151)

(48,873)

(7,282)

General and administrative expenses

(112,906)

(57,958)

(8,636)

Research and development expenses

(37,771)

(43,684)

(6,509)

Total operation costs and expenses

(625,290)

(580,761)

(86,535)

Income from operations

41,593

124,815

18,599

Interest income,net

21,247

12,358

1,841

Government subsidies

32,427

10,591

1,578

Other expenses,net

(6,785)

(710)

(106)

Net income before income taxes

88,482

147,054

21,912

Income tax benefits/(expenses)

21,496

(38,096)

(5,676)

Net income

109,978

108,958

16,236

Net income attributable to

noncontrolling interests

(1,304)

(3,566)

(531)

Net income and comprehensive

income attributable to Weidai

Ltd.'s ordinary shareholders

108,674

105,392

15,705

Earnings per share:

Basic

1.61

1.50

0.22

Diluted

1.61

1.49

0.22

Shares used in earnings per share

computation:

Basic

58,556,551

70,447,177

70,177

Diluted

58,929,790

70,790

Weidai Ltd.

UNAUDITED Reconciliation of GAAP And Non-GAAP Results

(All amounts in thousands,per share and per ADS data)

Net income

109,236

Add:

Share-based compensation expenses

23,216

25,624

3,818

Adjusted net income

133,194

134,582

20,054

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