View:
November 14, 2018
Dinggui Yan
Chief Executive Officer
Jiayin Group Inc.
26th Floor, Building No. 1, Youyou Century Plaza
428 South Yanggao Road
Pudong New Area, Shanghai 200122
People's Republic of China
Re: Jiayin Group Inc.
Amendment No. 3 to
Draft Registration Statement on Form F-1
Submitted November 5, 2018
CIK No. 0001743102
Dear Mr. Yan:
We have reviewed your amended draft registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form F-1 Submitted November 5, 2018
Related Party Transactions
Transaction with Niwodai Finance, page 172
1. We note your response to comment 7 and that Niwodai Finance agreed to
pay Shanghai
Caiyin an aggregate amount of RMB700 million as the total consideration
for the
assumption of RMB 2.9 billion of other guarantee liabilities. In
addition, Shanghai Caiyin
Dinggui Yan
FirstName LastNameDinggui Yan
Jiayin Group Inc.
Comapany 14, 2018
November NameJiayin Group Inc.
November 14, 2018 Page 2
Page 2
FirstName LastName
also acquired the customer recognition of the Niwodai brand and
proprietary technology
of Niwodai Finance. Tell us how you accounted for and the values
assigned to
the Niwodai brand and proprietary technology acquired as well as the
accounting
literature followed.
Notes to the Consolidated Financial Statements
Note 2--Summary of Significant Accounting Policies
(i) Investor assurance program, page F-14
2. We note your response to comment 10 and that service fees collected
from "all the loans"
are utilized to compensate investors under the investor assurance
program as well as
the other guarantee liabilities assumed in the Niwodai transaction.
Please revise to clarify
the underlying population of "all the loans" including if you receive
service fees related to
the underlying loans for other guarantee liabilities acquired in the
Niwodai Finance
acquisition.
3. We note your response to comment 11 and that with the overall
improvement of the
Company's credit management capability, the net expected accumulative
loss rate has
declined for the periods presented. We also note from your Critical
Accounting Policies,
Judgments and Estimates on page 101 for your Investor Assurance
Program, that
expected collection rates of defaulted loans is a significant
unobservable input in the
determination of the net expected accumulative loss rate and the
estimate of the allowance
for uncollectible accounts as stated in your response to comment 15.
Please revise to
disclose estimated recoveries used in the determination of the net
expected accumulated
loss rates on the outstanding loans for each of the periods presented
as discussed in your
response to comment 12, including how these amounts are reflected in
the allowance for
uncollectible accounts receivables and contract assets.
(k) Restricted Cash, page F-14
4. We note your response to comment 8. Please address the following:
You state that contributions from both new loans and old loans are
deposited to the
designated restricted cash accounts for the investor assurance
program. Please
disaggregate the contributions from borrowers between loans
facilitated by you and
those related to the Niwodai Finance acquisition. Additionally,
explain why no asset
was recognized for contributions due to you in connection with the
Niwodai Finance
acquisition;
You state that contribution from borrowers has no direct
relationship with the
collection of assets from the investor assurance program. You also
state on page F-14,
that under the investor assurance program, you set aside a certain
percentage of service
fees into designated restricted cash accounts to be used to cover
on a portfolio basis
the principal and interest of defaulted loans, payable on a
first-loss basis up to the
balance of the investor assurance program. Disclose the nature of
the service fees set a
Dinggui Yan
FirstName LastNameDinggui Yan
Jiayin Group Inc.
Comapany 14, 2018
November NameJiayin Group Inc.
Page 3
November 14, 2018 Page 3
FirstName LastName
side into designated restricted cash accounts;
Tell us why contributions from borrowers for service fees
collected in the name of
"Post origination service fees" and "Post-loan management fees"
would be designated
as restricted cash used to satisfy your investor assurance
liabilities; and
You state that the collection of assets from the investor
assurance program represents
any service fees, regardless of their name, collected from
borrowers that are applied
against the balance of the assets from the investor assurance
program. You also state
on page F-16, that the asset from investor assurance program is
recognized initially at
loan inception corresponding to the stand-ready liability measured
at fair value at
inception, representing the fair value of service fees receivable
from the underlying
loans that are expected to be used for the estimated payout of the
corresponding
guarantee liabilities. Tell us your basis for applying service
fees other than the
guarantee service to the asset from investor assurance program.
Refer to ASC 460-10-
30-2.
Note 5. Liabilities from Investor Assurance Program, page F-34
5. We note your response to comment 17. Please disaggregate prior year
net payouts by
vintage based on the underlying original liability (e.g. 2015 and
prior, 2016, 2017 and
2018).
Unaudited Interim Condensed Consolidated Balance Sheets, page F-48
6. Please revise to separately present accounts receivable and contract
assets separately on
the face of the balance sheet for the periods presented.
Notes to the Unaudited Interim Condensed Consolidated Balance Sheets
Note 2--Summary of Significant Accounting Policies
(g) Revenue Recognition, page F-57
7. We note your response to comment 15 and that the allowance for
uncollectible accounts
for contract assets is based on estimates, historical experience and
other factors
surrounding the credit risk of specific customers which is essentially
the net expected
accumulative loss rates used in determining the fair value of
guarantee liabilities under
each product type. We also note your disclosure that the concept of
aging is not
applicable to contract assets given the nature of these assets. Please
address the following;
Tell us why write-off activity for contract assets and accounts
receivable for the six
months ending June 30, 2018 is not reflective of net payout
activity in the liabilities
from investor assurance programs for the same period since the
underlying payments
for both service fees and monthly repayment of principal and
interest are due and
made together;
Tell us why the allowance for uncollectible accounts and contract
assets of RMB
176,825 and 17.3% of total contract assets and accounts receivable
for current loan
Dinggui Yan
Jiayin Group Inc.
November 14, 2018
Page 4
products of RMB 1,021,860 is greater than the net expected
accumulative loss rate on
outstanding loans of 10.6% used in determining the fair value of
guarantee liability for
the investor assurance program as of June 30, 2018 disclosed on page
F-55;
Tell us why the allowance for uncollectible accounts and contract
assets of RMB
157,826 and 38% of total contract assets and accounts receivable for
offline and non-
standard loan products of RMB 414,709 is greater than the net
expected accumulative
loss rate on outstanding loans of 20.1% used in determining the fair
value of guarantee
liability for the investor assurance program as of June 30, 2018
disclosed on page F-
55; and
Tell us why write-offs for current loan products during the period
ending June 30,
2018 were only RMB 8,387 considering contract assets for current loan
products of
RMB 352,980 at December 31, 2017, the net expected accumulative loss
rate of 11%
and weighted average contractual term of 8 months as disclosed on
page F-55.
8. Please revise the asset activity table to disclose the movement of
accounts receivable and
contract assets separately for the periods presented. Similar disclosures
should be made
for the movement in uncollectible accounts receivable and contract
assets.
9. We note the disclosure that accounts receivable and contract assets are
identified as
uncollectible if the amount remains outstanding for 90 calendar days past
due after the
maturity of the underlying loan contract term and no other factors
evidences the
possibility of collecting delinquent amounts. Please clarify if "the
maturity of the
underlying loan contract term" as it relates to repayments, is the same
as the definition
used in determining the "M3+ Delinquency Rate By Vintage" which appears
to be the
total amount of principal for all loans in a vintage for which any
repayment was more than
90 days past due as of a particular date.
You may contact Michelle Miller at 202-551-3368 or Marc Thomas at
202-551-3452 if
you have questions regarding comments on the financial statements and related
matters. Please
contact David Gessert at 202-551-2326 or Pam Long at 202-551-3765 with any
other questions.
Sincerely,
FirstName LastNameDinggui Yan
Division of
Corporation Finance
Comapany NameJiayin Group Inc.
Office of Financial
Services
November 14, 2018 Page 4
cc: Meng Ding, Esq.
FirstName LastName