Executive Summary

Q3 2016 delivered strong growth: revenue (total interest and fee income) rose 51.6% year over year to $9.0M, net income rose 34.6% to $3.9M, and basic EPS increased to $0.25; QoQ revenue was roughly flat versus Q2 despite a sharp increase in loan loss provisions, reflecting resilient demand and pricing power .
Net interest income grew 33.9% YoY to $6.0M; however, provision for loan losses surged to $1.86M (vs. $0.49M in Q3 2015), indicating tighter credit conditions and specific borrower issues that management views as isolated .
Management reaffirmed FY2016 guidance: revenue $32.7–$34.1M (+16–21% YoY) and net income $16.9–$17.5M (+20–25% YoY); catalysts include new segments (consulting and credit risk analysis), internet-inclusive micro-credit initiatives, and sector expansion into green energy and entertainment .
No Wall Street (S&P Global) consensus estimates were available for EPS or revenue for Q3 2016; results should be judged versus internal guidance and prior-year/prior-quarter trends (S&P Global consensus unavailable for this ticker/period).

What Went Well and What Went Wrong

What Went Well
- Revenue and net income reached record nine-month levels; Q3 2016 revenue grew 51.6% YoY to $9.0M and net income grew 34.6% YoY to $3.9M, driven by higher loan utilization, government-supported lending rates, and consulting/credit risk services .
- Pricing power improved: average annual interest rate was 23.3% for nine months 2016 vs. 19.3% last year, contributing to margin strength despite higher funding costs .
- Strategic expansion: initiatives in internet-inclusive financing (micro-loans for individuals), and entry into green energy and entertainment segments position for diversified growth and lower average loan size/duration per plan .
What Went Wrong
- Credit costs increased: provision for loan losses rose to $1.86M (Q3 2016) vs. $0.49M (Q3 2015), reflecting tougher economics and isolated borrower-specific issues; special reserves were increased in response .
- Funding costs climbed: total interest expense increased to $1.17M (Q3 2016) vs. $0.98M (Q3 2015), driven by loans from the cost investment investee and bank borrowings .
- Concentration risk: tire supply chain financing represented 57.2% of loan receivables and 57.9% of Q3 interest income, heightening sector exposure during seasonal peaks .

Financial Results

Core P&L comparison (periods ordered oldest → newest)

Metric	Q3 2015	Q2 2016	Q3 2016
Total Interest & Fee Income (Revenue) ($)	$5,946,568	$9,222,021	$9,016,806
Net Interest Income ($)	$4,473,680	$8,232,757	$5,991,676
Interest Expense ($)	$983,027	$1,129,606	$1,168,307
Provision for Loan Losses ($)	$489,861	$523,901	$1,856,823
Income Before Tax ($)	$3,364,377	$4,367,482	$4,699,646
Net Income ($)	$2,873,725	$3,723,231	$3,867,891
EPS – Basic ($)	$0.14	$0.31	$0.25
EPS – Diluted ($)	$0.14	$0.31	$0.23

Margins (derived from cited figures)

Metric	Q3 2015	Q2 2016	Q3 2016
Net Income Margin (%)	48.3% (2,873,725/5,946,568)	40.4% (3,723,231/9,222,021)	42.9% (3,867,891/9,016,806)
Net Interest Income Margin (%)	75.2% (4,473,680/5,946,568)	89.2% (8,232,757/9,222,021)	66.5% (5,991,676/9,016,806)

Segment revenue (nine months YTD)

Segment	Nine Months 2015 ($)	Nine Months 2016 ($)	Change ($)
Direct Lending	$19,669,009	$21,430,371	$1,761,362
Consulting & Credit Risk Analysis	$44,965	$5,474,542	$5,429,577
Total	$19,713,974	$26,904,913	$7,190,939

KPIs and portfolio indicators

KPI	Q3 2015	Q3 2016	Notes
Average Loan Size (Quarter)	$0.99M	$0.07M	Down 92.6% YoY per strategy to reduce ticket size
Average Loan Duration (Quarter)	5.9 months	5.7 months	Slightly shorter duration
Loans Issued (Quarter)	57	120	Volume growth
Average Annual Interest Rate (9M)	19.3%	23.3%	Pricing power
Tire Supply Chain Financing Exposure	57.2% of receivables; 57.9% of Q3 interest income	57.2% of receivables; 57.9% of Q3 interest income	Concentration risk
Historical NPL Rate	<0.1% cumulative since inception	<0.1% cumulative since inception	Management statement

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2016	$32.7M–$34.1M	$32.7M–$34.1M	Maintained
Net Income	FY 2016	$16.9M–$17.5M	$16.9M–$17.5M	Maintained
Dividends (Ordinary)	FY 2016	N/A	$2,060,435 declared Aug 29, 2016; paid Oct 17, 2016	New event

Earnings Call Themes & Trends

(No Q3 2016 earnings call transcript was available; themes below reflect press releases and filings.)

Topic	Previous Mentions (Q2: six-month release/10-Q)	Current Period (Q3: 8-K press release/10-Q)	Trend
Internet-inclusive financing (micro-credit to individuals)	Mid-term plan to develop internet banking/P2P platform	Building internet-based micro-credit department; inclusive financing via micro-loans/insurance/transfers/pensions; exploring fintech partnership	Expanding scope
Green energy/socially responsible sectors	Not highlighted	Entry into green energy and socially responsible enterprises; leveraging local policy support	New initiative
Entertainment industry expansion	Not highlighted	Pursuing funding needs in entertainment (broadcast tech, digital platforms, training) per government policy support	New initiative
Consulting & credit risk analysis segment	Generated ~23% of revenue in 1H16	Major contributor YTD; supports due diligence and enables syndicated loans beyond Xinjiang	Scaling up
Pricing power/regulatory support	Average rate 22.77% in 1H16; policy support noted	Average rate 23.3% in 9M16; policy support reiterated	Improving pricing
Supply chain financing focus	Not specified	Tire supply chain financing concentration detailed	Elevated concentration

Management Commentary

“Our revenue and net income for the 2016 nine-month period increased to a record level… due to the continued growth in funding demand in the region, additional funds obtained to serve more customers, higher utilization rate of funds… and higher interest lending rates supported by China’s government policies. Also a major revenue contributor… was our consulting and credit risk analysis business segment.” — Jingping Li, Co-Founder & CEO .
“Our average annual interest rate for the 2016 nine-month period was 23.3%, vs. 19.3%… Our net income… increased by over 30%… mainly due to higher revenue, lower operating expenses, partially offset by higher total interest expense.” — Jingping Li .
Reaffirmed 2016 guidance and highlighted progress on P2P lending and establishing the first internet banking platform in the region .

Q&A Highlights

No Q3 2016 earnings call transcript was available; the company announced a conference call for November 15, 2016, with webcast and dial-in details, but no transcript was retrievable in the document catalog .

Estimates Context

S&P Global consensus estimates (EPS, revenue) for Q3 2016 were unavailable for this ticker due to missing CIQ mapping; as a result, comparisons to Wall Street consensus cannot be provided for this period (S&P Global consensus unavailable for this ticker/period).
Given the lack of external estimates, portfolio managers should benchmark performance against management’s reaffirmed FY2016 guidance and internal trajectory (YoY/QoQ) .

Key Takeaways for Investors

Strong top-line and bottom-line growth in Q3 despite elevated provisions underscores demand resilience and pricing power; diversification via consulting and credit risk analysis is becoming a meaningful contributor .
Credit quality requires monitoring: special reserves and higher provisions reflect macro and borrower-specific factors; management views certain issues as isolated and has tightened controls, but sector concentration (tires) elevates risk .
Funding mix and cost: Interest expense increased with greater use of bank loans and loans from the cost investee; watch refinancing terms (e.g., Great Wall Assets secured loan extension) and potential impact on margins .
Strategic catalysts: execution on internet-inclusive financing, fintech partnerships, and new sector entries (green energy/entertainment) could expand TAM and reduce average loan size/duration per plan .
Guidance credibility: FY2016 revenue and net income ranges were reaffirmed; continued delivery vs. these targets should support sentiment amid limited sell-side coverage .
Dividend capacity and capital allocation signals: ordinary dividend declared/paid in Q4 indicates balance sheet flexibility; monitor preferred dividend obligations and mezzanine equity structure .
Near-term trading: headline beats vs. prior year and reaffirmed guidance are positives; watch credit costs, sector concentration, and any updates from the announced call/webcast for tone and visibility .

Roan Holdings Group Co., Ltd. (RAHGF)·Q3 2016 Earnings Summary