Bitauto Holdings Limited. (BITA) CEO Andy Zhang on Q1 2018 Results - Earnings Call Transcript

| About: Bitauto Holdings (BITA)

Bitauto Holdings Limited (NYSE:BITA) Q1 2018 Earnings Conference Call June 13, 2018 8:00 AM ET

Executives

Andy Zhang - CEO

Cynthia He - CFO

Catherine Liu - CFO of Yixin

Analysts

Binbin Ding - JPMorgan

Monica Chen - Credit Suisse

Liping Zhao - CICC

Hillman Chan - Citigroup

Wendy Huang - Macquarie

Operator

Hello and thank you for standing by for Bitauto's First Quarter 2018 Earnings Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time.

I will now like to turn the meeting over to your host for today's conference.

Unidentified Company Representative

Thank you, and welcome to the Bitauto's First Quarter 2018 Earnings Conference Call. Speakers from the company today are Mr. Andy Zhang, CEO; and Ms. Cynthia He, CFO of Bitauto. After their prepared remarks, Andy and Cynthia will be available to answer your questions. In addition, Catherine Liu, CFO of Yixin, will be available to answer your questions related to Yixin.

Before we proceed, please note that discussions today will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities and Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties, which may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC, including registration statement on Form F-1. Bitauto does not undertake any obligations to update any forward-looking statement, except as required under applicable law.

This call will include discussions of certain unaudited non-GAAP financial measures. Please refer to our earnings release, which was issued earlier today for reconciliations of these audited non-GAAP measures to the most directly comparable unaudited GAAP measures.

As a reminder, this conference is being recorded. In addition, a live and archived webcast of the conference will be available on our website.

I will now turn the call over to Andy Zhang, CEO of Bitauto.

Andy Zhang

Hello, everyone. Thank you for joining us for our first quarter 2018 earnings conference call. We are pleased to start the year with a set of solid first quarter results. We saw strong progress across all of our three business segments. Total revenue grew a healthy 52.3% year-over-year to RMB2.17 billion in the first quarter. Revenue from our Advertising and Subscription business continued to grow steadily, growing 16.3% year-over-year to RMB787.5 million.

More notably, revenue from our Transaction Services business expanded rapidly to achieve an impressive year-over-year growth of over 100%, reaching RMB1.17 billion. Thanks to the robust growth momentum in transaction volumes related to both of our loan facilitation and the self-funded financing-leased services.

Yixin conducted over 110,000 financed automobile transactions in the first quarter. In particular, Yixin's third-party loan facilitation transactions continued to gain momentum, contributing almost 30% penetration in the month of April. We expect to see this contribution continue to expand in the quarters ahead.

Yixin entered into a set of agreements with Yusheng, a company that is principally engaged in the used automobile transaction business. Given the recent intensifying industry competition, we believe that to build a leading used car business will require sizable investments and years of nurturing. We believe that our cooperation with and the investment in Yusheng together with strategic investors such as Tencent and JD.com will enable Yusheng to increase its competitiveness more quickly and to be better positioned to benefit from the growth potential of China's used automobile market. At the same time, Yusheng will give Yixin preferred cooperation rights for used car financing, which will strengthen Yixin's core competency in the financed used car transaction business.

Going forward, Yusheng will be focused on our fast-growing auto financing transaction business, primarily including platform loan facilitation, self-operated finance leasing, operating lease, auto insurance and other after-sales services. As auto financing transactions are the most profitable among all auto-related transactions, we believe that Yixin's strategic focus will strengthen its market leadership.

Lastly, as you have seen from our earnings announcement today, Mr. Ming Xu will be joining us as Chief Financial Officer, succeeding Cynthia. I think some of you might be familiar with Ming already. Ming possesses deep understanding of China's Internet and automobile industries as well as rich experience in the capital markets. I'm confident that he will be a valuable addition to our management team. We also greatly appreciate the contributions Cynthia has made over the last two years. Cynthia will remain with the company during the upcoming weeks to ensure a smooth transition.

With that, I will turn the call over to Cynthia to go over the financials.

Cynthia He

Thank you, Andy, and hello, everyone. Bitauto reported total revenue of RMB2.17 billion for the first quarter of 2018, representing a 52.3% increase from the corresponding period in 2017. The increase in revenue was attributable to the growth of all three of the company's revenue segments.

Now, let me go through the different segments. So, revenue from Advertising and Subscription for the first quarter of 2018 was 787.5 million. This represents a 16.3% increase. Revenue from Transaction Services was RMB1.17 billion. This represents a 101% increase. The increase is caused by fast growth of transaction volume for both loan facilitation and self-operated finance leases.

Revenue from Digital Marketing Solutions business was RMB211.3 million. This represents a 28.2% increase.

Cost of revenue for the first quarter of 2018 was RMB821.4 million, representing a year-over-year increase of 95.6%. This is primarily due to increased funding cost related to the growth of Transaction Services. Gross profit for the first quarter of 2018 was RMB1.35 billion, representing a 34.3% increase.

Selling and admin expenses was RMB1.51 billion for the first quarter. This represents a 64% increase. The increase was caused by three different factors; one, marketing efforts, two, provision for credit losses of finance receivables, and three, headcount and related expenses.

Product development expense were RMB160 million. This represents a 37.3% increase. This is mainly due to increases in headcount related to product and development. Share-based compensation, which was allocated to related operating expenses different line item, was RMB150.1 million in the first quarter of 2018. This is compared with RMB65.2 million in the corresponding period in 2017. The increase was mainly due to options granted by Yixin to employees in the third quarter of 2017.

Non-GAAP income from operations in the first quarter was RMB8 million. Non-GAAP net income in the first quarter was RMB37.1 million. Non-GAAP basic and diluted net income per ADS in the first quarter of 2018 amounted to RMB0.88 and RMB0.84, respectively. As of the end of March, the company had cash and cash equivalent and restricted cash of RMB10.21 billion.

Cash provided by operating activities in the first quarter was RMB181.8 million. Cash used in investing activities was RMB4.17 billion. And cash provided by financing activities was RMB3.35 billion. The number of employees totaled 8,962 group wide as of the end of March. This represents a 17% annual increase, and is primarily due to the increases in personnel and fast-growing Transaction Services business as well as in product development. Now given Yixin's scale and significance to Bitauto, I would like to share with you some of Yixin's operating and financial highlights in the first quarter.

Under U.S. GAAP, Yixin's total revenues reached RMB1.23 billion, gross profit reached RMB598.7 million, net loss was RMB221.4 million, and non-GAAP net was RMB62.3 million. The non-GAAP measures mainly non-GAAP net loss is calculated by net loss excluding share-based compensation of RMB109.8 million plus amortization of intangible assets resulting from assets and business acquisitions of RMB49.9 million and then offset by a tax effect of RMB0.5 million.

Also in Q1, Yixin entered into certain transactions with other subsidiaries of Bitauto. They have been eliminated upon Bitauto's consolidation of Yixin. The revenues that Yixin recorded for such transactions amounted to RMB29.3 million. At quarter end, Yixin had cash and cash equivalent and restricted cash of RMB5.44 billion.

Total finance receivables was RMB33.8 billion, and total borrowings was RMB28.49 billion. Total borrowings include bank borrowings and asset-backed securities. As of March 31, 2018, Yixin's past due ratios for 30 plus days, 90 plus days and 180 plus days was 1.45%, 0.93%, and 0.39%, respectively. We believe past due ratios will remain stable in 2018.

Before we turn to Q2 guidance, let me take a few minutes to walk you through the changes in provision and considerations for finance receivables under U.S. GAAP and on IFRS, which has become a frequently asked question from the investment community.

With regard to provisions for credit losses or finance receivables, the current U.S. GAAP standard applicable to Bitauto follows an incurred loss model while IFRS 9, the newly effective IFRS standard applicable to Yixin follows an expected loss model.

Typically, the IFRS standard applicable to Yixin is expected to yield more stringent results than the U.S. GAAP standard applicable to Bitauto. This is because efforts required for the assessment of provisions for all finance receivables including those that have not become past due.

So as of March 31, 2018, the balance of provision for credit losses under U.S. GAAP was RMB275 million, and a total of RMB179.4 million was reported as expenses in the first quarter. At the same time, while under IFRS based on our current estimates, which is subject to review and changes, the balance of provision for credit losses was RMB416 million, and a total of RMB130 million was reported as the expenses in first quarter of 2018.

IFRS 9 permits the use of retrospective approach, therefore, upon adoption of the new standard in 2018 the retrospective impact as of year-end 2017 would be recorded in equity on Yixin's consolidated balance sheet. You may find more detailed explanation for the two accounting principles' comparisons of respective results in our earnings release to help you get a closer understanding of the GAAP differential, which will likely exist until Bitauto adopts ASC Topic 326.

Again, these estimates for provisions reflect our best assessments currently considering all available information to us now and may be subject to further review and adjustments.

With that I'll turn to guidance for the second quarter of 2018. Bitauto currently expects to generate revenue in the range of RMB2.47 billion to RMB2.52 billion in the second quarter of 2018. This will represent a 23.8% to 26.3% increase from the corresponding period in 2017.

If the guidance were presented on a gross basis, which is consistent with our revenue guidance in 2017 before we were required to adopt ASC 606. The forecasted revenues would have been between RMB2.66 million to RMB2.71 billion. And this would have represented a 22.5% to a 24.9% increase from the year ago period. This forecast takes into consideration off seasonality and the impact of foreign currency fluctuation. It reflects management's current and preliminary deal subject to change.

At last, I would like to welcome Ming Xu, our new CFO to join the team. And it has been a pleasure working at Bitauto and with all of you of course over the past two years. I wish the company and everyone the best. And I hope our paths will cross again in time.

Let's now start the Q and A session. Andy, myself and Yixin CFO Catherine Liu are available to take your questions. Operator, please go ahead.

Question-and-Answer Session

Operator

Thank you. Ladies and gentlemen, the question-and-answer session of this conference will start in a moment. [Operator Instructions] Our first question comes from the line of Binbin Ding from JPMorgan. Please go ahead.

Binbin Ding

Good evening, management. Thanks for taking my question. Congratulations on a strong growth and Investor [ph] Day results. I've two questions here. First question is regarding Yixin's investment in Yusheng. You mentioned that Yixin has injected its used the car transaction business including the Taoche app and taoche.com to Yusheng. So what kind of revenue impact shall we expect on both Yixin and Bitauto going forward? Which of the business segment we will see the largest impact?

My second question on the competition within the used car transactions, can you elaborate on Yusheng's growth strategy in used car business given the intensified competition in this segment? Also how will Yusheng leverage the results that's from Bitauto and Yixin to deliver a better growth in the future? Thank you.

Andy Zhang

Thanks. I will answer the first part of the question; then Catherine will answer the later part. Well, first of all, I think recently one of our major competitor on the used car front has publicly filed their financial statements to seek a potential initial public offering in the U.S. I think that has been really revealing the real battlegrounds of the used car business in China.

We've also seen a lot of the different competitors in this particular sector, who each has been getting [ph] capital fundings range from RMB300 million to upwards of more than RMB800 million within the last six months. So that got us thinking, obviously. We also realized during the public filings of the competitor, where that the majority of the revenues are actually coming from financing related to transactions in the used car business. And given that, what we've seen today as what Yixin [ph] has been really conducting, we've also noticed a pattern where that used car financing related activities are looking to be more likely profit making. However, it will be very difficult for you to only stick to that. You need to create a setting where that you're welcoming all kinds of different consumers [ph] not only those who needs the leverage, but also those who's willing to deal a transaction on the cash basis. But unfortunately, while a cash-based transaction in the used car business in the past many, many years has been yielding losses for those who's carrying that particular setting, to create a particular environment for these transactions to be conducted. So therefore up until today we have not seen any one of the used car transaction platforms [technical difficulty] products profitable or not even close to being profitable.

So the strategy of the company from Yixin's perspective, we'd like to stick to the profitable transactions with index setting, and we're allowing along with the strategic investors like Tencent and JD, we're also getting investing in a transaction setting platform business, where that they create that particular setting, and also be able to benefit Yixin to be collaborating with them on the finance-related transactions that relates to the used car on whichever the setting may bring in the future. I think that will be the most responsible approach for the company [technical difficulty] like Yixin as well as for companies of status like Yixin.

I think that moving forward I think we indicated fairly clearly that the Yixin proceed its business focusing on the loan facilitations either new car or used car on the self-financing activities as well as leasings and the insurances and whatnot. So we're focusing on ourselves in the core business, and we are creating opportunities for Yixin to obtain additional used car related finance transactions at a reasonable cost. So this is the strategy that we're adopting to moving forward in terms of looking at a sustainable growth, looking at a sustainable profit growth as well.

In terms of the second part, I think I'll have Catherine to answer.

Catherine Liu

Yes. We believe that with the investment capital that is going to be invested on -- either through us and then also through strategic investors such as Tencent and JD.com, and the potential future financial investors. Yusheng will have the capital to grow its business at a faster rate, which we think will also benefit Yixin, because Yusheng will give preferential cooperation right to Yixin, which will enable us to enjoy the used automobile finance transaction growth.

So from that perspective, we think that Yixin will benefit from this transaction, and at the same time, Yixin can also use its resources either capital and other human resources and focus on its core business, which is also self-operated financing and as well as the loan facilitation services, particularly the loan facilitation services as well as providing the best financing products and maintaining the product -- the asset quality, so which I think is positive for Yixin.

Andy Zhang

Because Yusheng will be a running on a -- I think independently, it has [technical difficulty] full set of management team, so therefore, they have their strategy as to expand and -- on either market and market share. So what we do is we support them in that fact [ph], just like other investors, as I mentioned, strategic and the financial. So moving along -- moving forward this particular company will be fully independently operated.

Binbin Ding

Thank you.

Operator

Thank you for the question. Next question comes from the line of Monica Chen from Credit Suisse. Please ask your question.

Monica Chen

Hi, good evening, Andy, Cynthia, and Catherine. Congratulations on a solid quarter and also congratulations to Ming Xu on the new role. So, I also have two questions. The first question is regarding on the revamp efforts -- our advertising business. So what work have we done so far in terms of in content improvement for [indiscernible] business? And how we expect that will drive the revenue for the rest of the year?

And the second question is regarding our dealer subscription business. So what is our plan for that innovation and conversion improvement for this year? And how do you think about the pricing strategy given the competition and the dealers' willingness to pay for the service? Thank you.

Andy Zhang

Okay, I'll take both, I guess. Remember the stats from our last year's first quarter. I think we have only grown just shy of 5% on the advertising side of the business compared to the 16% in the first quarter of 2018. I think we've had a good first quarter. Thanks to the market. The market itself has also grown significantly, especially in January and the February.

These are the two months where that the Chinese -- right before the Chinese New Year. And this time in 2018, we had enjoyed our Chinese New Year to be one of the latest one that I can remember in the past many years. Normally before the Chinese New Year, it's a high season for auto consumption on the retail end. Consumers would like to purchase [technical difficulty] transaction before they actually go back their hometown to letting people know that I have somehow made it that with new vehicle.

So therefore, the overall stats were quite encouraging. But however, -- again I have always been optimistically cautious. I think that's not the first time I said that. In the first five months of the auto sales, I think on the passenger car side it was just little over 5% growth. I think the entire year will be similar. So that's the greater environment that's setting a tone which I wouldn't say impact which influences our businesses from quarter to quarter.

In terms from the dealer end of the business, I guess historically the EP business, easy path, has more or less purely focusing on providing leads generated on behalf of our 23 - 25,000 paid members. Moving forward, I think the new strategy is to actually to expand the realm of the services that we can provide. I think my initiative within the company is to really take that part of the business and turning that into a real SaaS-oriented business, where we can add in different components other than just a pure lead gen. And that will also help us significantly differentiate from the position currently we have compared to the other competitors in the business where that the [technical difficulty] only will be provide leads, but we can do a lot more.

If you are interested to know what more, I think we have undergone quite a few different tests in terms of the aftermarket services, in terms of in the first, second, third used car different tier dealers where they can transact the model themselves. So these are the initiatives or efforts that we -- has been undertaking in the past few months. I think at this moment, it's little bit earlier to present any numbers or to say which of these tryouts has been successful. But hopefully in the third quarter when we talk again maybe I'll have lot more color for people to see. So that's the update on the dealer side of the business. So basically, we want to build on more functionalities which will be really used and paid for by the dealers that will really bring them values that will be integrated into my easy path system, which currently is more or less a 99% a pure lead gen tool versus a -- full blown [ph] SaaS. So that's the area that we're moving into recently. So thank you for your question. Hopefully that answers both of your questions.

Monica Chen

Yes, that's very helpful and congratulations again.

Operator

Thank you. Next question comes from the line of Liping Zhao from CICC. Please ask your question.

Liping Zhao

Good evening, management. Thanks for taking my questions. I have two questions here. One is related to Yixin. As Bitauto provides guarantee liability for Yixin, so what's the risk implication for Bitauto if default happens? And my second question related to the advertising business as well, because Bitauto and Yixin both have advertising business, so is there any conflict of interest in how we look at this business in the future? Thank you.

Andy Zhang

Okay. I think a lot of people have been asking the same question in the past few months. I'll make it very clear this time. I think at the time where an opportunity came along where we were able to obtain a license on the financial guarantor company license, I think it was back in 2015 -- 2015–2016 time, obviously it sounds that will be beneficial for Yixin's business because that's where the realm of business resides.

Unfortunately at that time, Yixin has been very very young from establishment time, from the size of its revenues and the profitability and onwards. So, we've asked our parent company BITA to help to obtain this license first because BITA has a long-running history and profitability and size of revenue. So we've done that. In the past 12 months actually not only BITA has been holding a license for Yixin but also there are certain amount of business conducted within that company, which is mainly related to Yixin's loan facilitation business.

And the good part is that because back then and up until this moment the loan facilitation business has not accounted for as the majority of Yixin's business and it's my intention to have Yixin sourced out a third party who will provide same type of services on behalf of Yixin replacing the functionality of this particular company under BITA. The agreement will go as when Yixin has grown to the point where that is capable of taking over the license BITA will have - will allow Yixin to transfer this license over to Yusheng. I think the timeframe that will happen probably will be sometime in 2019. But regardless moving forward, majority or almost all of Yixin's loan facilitation business if there is any guarantees involved we will seek out a third party instead of this particular company to work with.

So moving forward let's say in the second half of the year, you will not see this company in the aggressive operating mode in general. So that significantly limits the risk that BITA has to take on part what the loan facilitation business would do. On the second part of the angle as well because historically Yusheng also sales advertising to our OEMs over its own properties, [indiscernible] as well as Taoche and et cetera, moving forward I think that Yusheng will actually help to carry out that typical business.

I think from Yusheng's perspective from BITA's perspective, it will actually sell to the OEMs as if we have acquired this particular asset from any other independent party. For example, BITA actually contracts with Baidu Aladdin so that's essentially acquiring Baidu's traffic and resale them to the OEMs or to the dealers. This will be very similar in action in between the business of the BITA with Yusheng where that BITA will also purchase similar assets from Yusheng to resell to the OEMs. So moving forward, I think in the second-half of the year that particular overlap will also ease away. So moving forward, we will not see that kind of overlapping again. So that's what will happen to the S side of the so-called conflict. Thank you.

Liping Zhao

All right, very clear. Thanks.

Operator

Thank you for the question. Next question comes from the line of Hillman Chan from Citigroup. Please go ahead.

Hillman Chan

Good evening, management. Thank you for taking my question. My first question is about your sales and marketing strategy. And could you share more color on this and a question related to that for 2018 including partnership with Baidu and [indiscernible]?

And secondly, how do we see the competition [indiscernible] so far? And have we seen any impact on our OEM and dealer subscription business so far? And lastly, for our second quarter revenue guidance, could you give some granularity within the guidance on our media business and also the transaction business as well? And what is the profit from the auto excluding Yixin in the first quarter please? Thank you.

Andy Zhang

Okay, I'll answer the first two. I think this OEM really their sales and marketing are really pretty much based on the sales forecast. There are OEMs enjoying a very high growth of sales typically people like Jillie [ph] in the first five months. And there are also who is actually taking a significant hit as well on the sales side, some of the joint venture brands. I think the overall market growing in terms of the auto sales on the passenger car side, it was about 5 point I think 9 percent for the first month -- for first five months. But for the whole year, I think it will be somewhere around 5%. So it's a -- also it's a normal year for year us and the business. Also, what we have witnessed is the new energy on vehicle companies, the rise of them.

I think the first five months of sales has been very very encouraging. And obviously the government -- central government, local government all are encouraging the sales of the energy vehicles. So, I think we actually see that will be one of our key growth strategies moving forward from the OEM standpoint. There are rumors saying that we are actually looking at about over one million new energy car sold in the year of 2018 given that they have already seen a very high number for the first five months.

So this is one of the segments that we're focusing. And me and my team are really looking into that. And hopefully we will be benefiting from that growth in the second half of the year as well as moving into the few years. Competition wise, I think again we've never seen less. It's always there. But I think the key for Total [ph] and their subsidiary is whether or not to convince the advertisers to spend double the amount of the money on both different APPs, meanwhile your -- the overlap of consumers are quite high. So, it's either you bought additional eyeballs or you bought additional time, or you just want to spend on one thing. So again that so far I think lot of the OEMs are still viewing that as a general photo kind of a competitor versus a pure vertical, but I think you know, this is definitely something that we're paying very high attention to if there will be significant move from the end of the business. So you want to answer the third one?

Cynthia He

All right. So I'll talk a little bit about the questions you asked regarding second quarter revenue guidance as well as first quarter revenue breakdown. For the second quarter revenue guidance that we have given, we take into consideration three business segments, namely Advertising and Subscription, Transaction Services Business, and CIG. So for the media business, our second quarter guidance is in line with our full-year guidance of around mid-teens, but when we do give out our quarterly guidance, we remain cautious and prudent so this guidance is slightly less than mid-teen levels.

In terms of the transaction revenue business guidance which is very similar to Yixin's total revenue, because Yixin is the primary operator of our Transaction Services. For second quarter, we are assuming somewhere around 53% to 55% increase, and the rest - the differential rest would be our Digital Marketing Business. The Digital Marketing business in the whole year in 2018 should grow about 20% year-over-year. However, because it is an agency business that is subject to large customer concentration risk, so from quarter-to-quarter the fluctuation maybe bigger than the other revenue segments, but it's reasonable to assume for the full-year revenue from Digital Marketing Services will be about 20%.

In terms of the first quarter revenue breakdown as we have…

Hillman Chan

Sorry. The net profit, I wanted to ask net profit, excluding…

Cynthia He

Oh, we don't breakdown the process from between the three different business lines. The disclosure we've made is for the whole as a group, and this is the current disclosure we can give for now.

Hillman Chan

Okay. Thank you very much Andy and Cynthia. Wish you all the best in the future. Thank you.

Cynthia He

Sure, thank you.

Operator

Thank you for the questions. Next question comes from the line of Wendy Huang from Macquarie. Please ask your question.

Wendy Huang

Thank you. Just wanted to get some clarity on the historical disclosures; so in the previous Yixin's call, you mentioned that the self-finance transaction volume in Q1 was 110,000 versus 150,000 in first-half last year. But if I look at the first-half last year disclosure data, I add up Q1, Q2, and that actually amount to 244,000. And so, obviously that's not apple to apple comparison. So I just wonder if you can give our apple to apple comparison data for the first quarter transaction number. That's the first question.

And second question, you disclosed this credit loss figure, the 170 - sorry, RMB149 million in the press release, I just wonder how should we translate this credit loss number into bad debt ratio. Is there self-financed loan amount for 2017 that you can disclose?

And also -- for your balance sheet, so is it right to say that your total loan balance as of now is about $10 billion, if I add up your financial receivables into total borrowings, should I consider that that as the total loan balance as of March? Yes, that's just some granularity questions I want to get to more color.

Cynthia He

Let me clarify the Yixin's transaction volume. So we disclosed that in the first quarter of 2018, our finance transaction is over 110 [technical difficulty]. Self-financed transaction includes our loan facilitation and self-operated financing business. This is not [technical difficulty] to the total transaction, because from total transaction there is some finance penetration rates. So if you compare a 110,000, if you look at our first -- Yixin's first-half of the followings, the finance transaction for the first six months of 2017 was 140,000, that is six months, currently we're disclosing three months numbers. So that's one clarification.

Wendy Huang

Yes, that's my question -- sorry to interrupt, I understand that, but I wanted to get a sense about total transaction in Q1?

Cynthia He

In 2018, for Yixin's total -- because I think when you are referring to the total transaction number, last year may be -- let me clarify a few things, I believe last year in Bitauto's transaction volume they also disclosed the transaction volume in their Transaction Services, which includes Yixin and some other non-Yixin business. And then for Yixin, we didn't particularly disclose the total transaction to support Q1, because due to our investments into Yusheng, we were actually focused on the financed transactions instead of total transactions. Our total transaction is bigger than financed transactions. We think from this quarter on, we don't really want to focus on total transactions; instead, we will focus on the financed transactions.

Wendy Huang

Okay, thank you. Yes…

Cynthia He

For the net debt ratio, I think one good ratio you can look at it is at our 30-day plus past due ratio, 90-day plus past due ratio, and 180-days past due ratio, which is 1.45%, 0.93% and 0.39%. We also disclosed this number compared to December 31 last year. So we think that you can see that the 30-day past due ratio was 1.48. So it kind of stabilized in the first of quarter, actually slightly decreased, and then the 90-day past due ratio…

Wendy Huang

Yes, sure. I understand that, but I just want to get a sense about the credit loss expense that will be picked up on the P&L. That number was RMB179 million in Q1, right?

Cynthia He

Yes…

Wendy Huang

I want to get a sense…

Cynthia He

Yes, please go ahead.

Wendy Huang

Yes. Or maybe I - let me rephrase this question; if you can give us color about the credit loss expense there will be a pick up for the whole year 2018 based on maybe the past due ratio you just mentioned?

Cynthia He

Let me clarify the first quarter first. Under the first quarter, due to the GAAP differences, so under the U.S. GAAP there is RMB179 million that would be pick up on our balance sheet for the provision. And under IFRS there will be roughly approximately RMB130 million that would be picked up on the P&L. So that's the on the first quarter.

And I think for the whole year, I think our estimate is similar to what we have committed before. You can also roughly estimate on [technical difficulty] using the balance of the provision as a percentage of the total finance receivable percentage to calculate. But I think roughly just in summary it should be following the wrench that we conveyed previously.

Wendy Huang

I see. How about the total loan balance as of the…

Cynthia He

The total loan balance; let me talk about Yixin first. Total borrowings for Yixin, including bank borrowings and then asset-backed securities is about RMB28 billion.

Wendy Huang

Sure. Yes, I see that number in the press release, yes. But there is also a financial receivable item, right, so…

Cynthia He

The finance receivable is our assets. And then -- so basically to -- finance receivable is our assets -- to finance the finance receivables, we can either use our cash and use our total borrowings. So roughly you can see total finance with [technical difficulty] equal to cash plus total borrowings.

Wendy Huang

The total loan balance, that includes those self-financed loan as well as the bank borrowing loan as well as the asset-backed securitized loan, right? This is my own assumption, correct?

Cynthia He

I think that you probably -- total finance receivables means the money that we lend to consumers. So this is asset on our balance sheet. And total borrowing means the money we borrow from the bank or financial institutions or through the asset-backed securitizations. This is the liability on our balance sheet.

Wendy Huang

Sure. Or maybe you can just give me a simple answer about the total loan balance?

Cynthia He

You mean finance receivable balance is RMB33.8 billion.

Wendy Huang

Okay, thank you.

Cynthia He

Yes, this is the number that you are referring to, because we are doing financial lease, so the money that we lend to consumers is not called a loan, it's called -- finance receivables.

Wendy Huang

Thank you.

Operator

Thank you for the questions. We are now approaching the end of the conference call. I will now turn the call over to Bitauto CFO Cynthia He for closing remarks.

Cynthia He

Once again, thank you for joining us today. Please don't hesitate to contact us if you have any further questions. Thank you everyone.

Operator

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.

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