Golden Bull Posts H1 2019 Net Loss of USD 6.5 Mln
Golden Bull, 1/30/20
Golden Bull (Nasdaq: DNJR), which formerly operated an online peer-to-peer (P2P) lending platform in China that provided borrowers access to short-term loans, today announced its financial results for the six months ended June 30, 2019. As previously announced, as a result of a policy change by the Chinese government, the company shut down its P2P lending business and is commencing operations in the auto rental and bitcoin mining businesses.
Six Months Ended June 30, 2019 Financial Highlights (all comparable to the prior year period):
- Total revenues for the six months ended June 30, 2019 decreased by 13% to approximately USD 4.5 mln from approximately USD 5.2 mln for the six months ended June 30, 2018.
- Total number of loans facilitated for the six months ended June 30, 2019 decreased by 15.4% to 2,615 loans facilitated from 3,090 loans facilitated for the six months ended June 30, 2018.
- Total loan volume in dollar facilitated for the six months ended June 30, 2019 decreased by 15.3% to approximately USD 66 mln from USD 77.9 mln for the six months ended June 30, 2018.
- Net loss for the six months ended June 30, 2019 increased by 769.5% to approximately USD 6.5 mln from approximately USD 0.7 mln for the six months ended June 30, 2018.
Management Commentary
From the first half of 2019, total loans decreased greatly, mainly because of the recession of the "P2P" business in China. With the policy change from the regulatory authorities, P2P companies were suffering a decrease in revenues and an increase in loan defaults. As one of the "P2P" companies, Golden Bull was affected greatly, resulting in the loss for the first half of 2019. The emergence of increasing loan defaults led to a decrease in lenders and more defaulted loans on Golden Bull's platform. Lenders' confidence was damaged, many lenders decided to stop lending, and some borrowers stopped paying on purpose given the business environment. However, Golden Bull expects its new businesses to drive growth for the company.
Recent Developments
Nasdaq Request for information
On November 11, 2019, Nasdaq Regulation requested information from Golden Bull Limited in connection with a suspension of trading in the Company's securities. The request and suspension resulted from the company's filing on October 31, 2019 of a Form 6-K, in which it disclosed, among other things, that:
"On October 31, 2019, the Pudong Branch of the Shanghai Public Security Bureau ("the Bureau") announced on its website that it has completed its investigations against Shanghai Dianniu Internet Finance Information Service co., Ltd. ("Dianniu"), the company's variable interest entity, for suspected illegal collection of public deposits. The Bureau has taken criminal enforcement measures against 17 suspects in the case, detaining 6 suspects."
The company disclosed on December 5, 2019 to Nasdaq that the reason for the shutdown of its P2P lending business in China and the ensuing investigation by the Bureau was because of a policy change of the Chinese Government. From 2015 to 2019, the guidance for this business from the government changed from supporting it, to limiting it, to finally shutting it down. This change has affected nearly 3,000 companies. Management of the company believes that it has taken the right steps since March 2018 to position the company in the car rental business and bitcoin mining business.
Editor's Note: To view Golden Bull's full H1 2019 earnings report, please click here.
Keywords: Internet loss P2P Dianniu Golden Bull DNJR H1 2019 revenue fiscal report automobile virtual currency online lending
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