Wins Finance Posts Income Decline; Shares Drop 3%

The asset management firm posted weakened financials for the second half of 2018, sending its shares lower Thursday.

Author: Binwei Wang   

Asset management firm Wins Finance Holdings Inc. (Nasdaq: WINS) reported a 68 percent decline in income in the six months through Dec. 31, sending its shares down 3 percent to $15.61 apiece Thursday.

The Beijing-based company said Wednesday after the markets closed that its income reached a disappointing $3 million compared with $9.2 million a year ago in the second half of 2018, while net revenue fell by $100,000 year-over-year.

"Our net income fell 67.5%, primarily due to the $8.0 million increase in the accounting provision for lease payment receivables attributable to the risk of potential defaults due to the slowdown of the Chinese economy," Wins' chairman and chief executive officer, Renhui Mu, said in a statement Wednesday evening.

"For many Chinese SME's, 2018 was a challenging year, and subsequently some of our financing leasing clients defaulted on their interest and principal payments. While we are considering taking various measures to protect our rights, we made a $10.5 million allowance on our financial statements related to our financial leasing customers as of December 31, 2018," he added. 

Gross revenue of Wins Finance decreased to $5.2 million, down from $5.3 million in the year prior. The majority of that amount, $4,3 million, was generated from direct financing lease interest, while the rest came from financial guarantee services and financial advisory and lease agency income, the firm said.

Looking forward, the company said, "We continue to believe that the financial leasing business offers substantial growth opportunities as SMEs have become an indispensable driver of economic and employment growth and continue to contribute to China's economic transformation."