GlobeNewswire Inc | Nov 19, 2020 05:00PM EST

November 19, 2020

SHANGHAI, Nov. 19, 2020 (GLOBE NEWSWIRE) -- 360 DigiTech, Inc. (QFIN) (360 DigiTech or the Company), a data driven, technology empowered digital platform, today announced its unaudited financial results for the third quarter ended September 30, 2020.

Third Quarter Operational Highlights

-- Total loan origination volume*1 was RMB66,000 million, representing an increase of 17.9% from RMB55,965 million in the same period of 2019. Loan origination volume under capital-light model within Platform Services was RMB16,908 million, an increase of 48.7% from RMB11,373 million in the same period of 2019. -- Total outstanding loan balance*2 was RMB84,214 million as of September 30, 2020, an increase of 19.3% from RMB70,568 million as of September 30, 2019. Outstanding loan balance under capital-light model within Platform Services was RMB21,453 million as of September 30, 2020, an increase of 97.2% from RMB10,877 million as of September 30, 2019. -- The weighted average tenor of loans*3 originated in the third quarter of 2020 was approximately 8.40 months, compared with 7.90 months in the same period of 2019, and 8.54 months in the second quarter of 2020. -- Cumulative registered users was 155.96 million, an increase of 23.8% from 126.00 million as of September 30, 2019, and an increase of 4.7% from 148.98 million as of June 30, 2020. -- Users with approved credit lines*4 was 29.28 million as of September 30, 2020, an increase of 28.3% from 22.83 million as of September 30, 2019, and an increase of 5.7% from 27.71 million as of June 30, 2020. -- Cumulative borrowers with successful drawdown, including repeat borrowers was 18.71 million as of September 30, 2020, an increase of 27.0% from 14.73 million as of September 30, 2019, and an increase of 5.3% from 17.77 million as of June 30, 2020. -- 90 day+ delinquency ratio*5 was 1.96% as of September 30, 2020. -- The percentage of funding from financial institutions*6 in the third quarter of 2020 was 99%. -- Repeat borrower contribution*7 for the third quarter of 2020 was 86.7%.

1 Total loan origination volume refers to the total principal amount of loans originated through the Companys platform during the given period, including loans volume originated through Intelligence Credit Engine (ICE). ICE is an open platform on our 360 Jietiao APP, we match borrowers and financial institutions through big data and cloud computing technology on ICE, and provide pre-loan investigation report of borrowers. For loans originated through ICE, the Company do not provide post-loan risk management nor bear principal risk. 2 Total outstanding loan balance refers to the total amount of principal outstanding for loans originated through the Companys platform at the end of each period, including loan balance for ICE, excluding loans delinquent for more than 180 days.3 For loan facilitated in 2020, we use the actual term for extinguished loans and use the contractual term for outstanding loans to calculate the weighted average tenor.4 Users with approved credit lines refers to the total number of users who had submitted their credit applications and were approved with a credit line by the Company at the end of each period.5 90 day+ delinquency ratio refers to the outstanding principal balance of on- and off-balance sheet loans that were 90 to 179 calendar days past due as a percentage of the total outstanding principal balance of on- and off-balance sheet loans on our platform as of a specific date. Loans that are charged-off and loans under ICE are not included in the delinquency rate calculation.6 The percentage of funding from financial institutions is based on cumulative loan origination during the given period, excluding loans originated by our own funds. 7 Repeat borrower contribution for a given period refers to (i) the principal amount of loans borrowed during that period by borrowers who had historically made at least one successful drawdown, divided by (ii) the total loan origination volume through our platform during that period.

Third Quarter 2020 Financial Highlights

-- Total net revenue increased by 43.4% to RMB3,703.5 million (US$545.5 million) from RMB2,583.0 million in the same period of 2019. -- Income from operations increased by 45.5% to RMB1,371.4 million (US$202.0 million) from RMB942.4 million in the same period of 2019. -- Non-GAAP*8 income from operations increased by 48.0% to RMB1,427.8 million (US$210.3 million) from RMB964.7 million in the same period of 2019. -- Operating margin was 37.0%. Non-GAAP operating margin was 38.6%. -- Net income increased by 67.9% to RMB1,231.7 million (US$181.4 million) from RMB733.5 million in the same period of 2019. -- Non-GAAP net income increased by 70.4% to RMB1,288.1 million (US$189.7 million) from RMB755.8 million in the same period of 2019. -- Net income margin was 33.3%. Non-GAAP net income margin was 34.8%.

8 Non-GAAP income from operations (Adjusted Income from operations) and Non-GAAP net income (Adjusted net income) are non-GAAP financial measures. For more information on this non-GAAP financial measure, please see the section of Use of Non-GAAP Financial Measures Statement and the table captioned "Unaudited Reconciliations of GAAP and Non-GAAP Results" set forth at the end of this press release.

Mr. Haisheng Wu, Chief Executive Officer and Director of 360 DigiTech, commented, We are very pleased to report yet another strong quarter with best ever operational metrics and record setting financial results. In the third quarter, loans originated through our digital platform grew nearly 18% year-on-year to reach RMB66.0 billion despite some regulatory headwinds late in the quarter. During the quarter approximately 28% of the loan origination was under the capital-light model and other technology solutions*9, for which we bear no or limited principal risk. As part of our long-term strategy to build a data driven, technology empowered digital platform, we expect to accelerate the growth of those platform solutions in the coming quarters.

Throughout the quarter, we have witnessed continued recovery in consumer demand for credit and further improvement in asset quality. In fact, some key leading indicators of asset quality of our customers are at the best levels ever, a strong testimony for our effective risk management and solid overall execution. As the domestic outbreak of COVID-19 has been largely contained and the macro economy is on a recovery track, we are well positioned to benefit from the positive trends and to further strengthen our leadership position in the industry.

It has been a quite busy period over last few months on the regulation front. In July, the official release of the Interim Measures for Administration of Internet Loans Issued by Commercial Banks by the CBIRC clearly validated our business model and provided detailed guidelines for the industry. In August, the Supreme Peoples Court of China issued Guidelines on Laws Applicable to Trials of Private Lending Cases setting a series of rules for private lending, including an interest rate cap. In early November, the CBIRC issued a draft version of Interim Administrative Measures for Online Micro-credit Business aiming to cap leverage ratios in micro lending and joint-lending activities. We believe this new set of rules are consistent with the regulators effort in recent years to deleverage the financial system and mitigate potential systematic risk. We have marginal exposure in micro lending and joint-lending. Also in November, the CBIRC issued Notice on Promoting the Sustainable Development Capability of Consumer Finance and Auto Finance Companies and Improving Quality and Efficiency of Financial Services, which clearly set out specific practices for the cooperation between consumer finance companies and loan facilitation platforms. Such regulatory changes appeared favoring leading platform with strong risk management and regulatory compliance capability. We see opportunities to expand the service scope and depth of our data driven technology empowered digital platform to reach our long-term strategic goals.

We are very excited to report our first ever billion RMB quarter in term of non-GAAP net income. During the quarter, total revenue reached RMB3.70 billion and non-GAAP net income reached RMB1.29 billion. The robust financial performance was driven by noticeable improvement in macro environment and continued optimization of our operations. Mr. Alex Xu, Chief Financial Officer, commented We are particularly pleased to see the initial impact of the latest interest rate cap was partially offset by improved operational efficiency. Unit customer acquisition cost remained relatively stable and weighted average funding cost reached another new low in the quarter. At the end of the quarter we had approximately RMB7.9 billion in cash and cash equivalent on the balance sheet, of which approximately RMB4.8 billion was non-restricted. While there are still some uncertainties concerning our industry, we are highly confident to exceed the stated operational targets we set out earlier this year.

Mr. Yan Zheng, Chief Risk Officer, added, The noticeable improvement in asset quality continued in the quarter. Among the key leading indicators, Day-1 delinquency*10 decreased to approximately 5.3% at the end of the third quarter from approximately 6.2% at the end of the second quarter. Meanwhile the 30-day collection rate*11 also improved to approximately 90% at the end of the third quarter, compared to approximately 88% at the end of the second quarter. Furthermore we are encouraged to see some of these metrics continue to improve into the current quarter and some are already at the best level ever. This further demonstrates the strength and effectiveness of our risk management systems. While we have seen clear indications of macro improvement, we will continue to take prudent approach in overall risk management operations to ensure sustainable enhancement in asset quality.

9 "We've used mainly data technology tools and AI risk management systems in the process of providing such services as loan facilitation, post-origination and borrowers' referral to our customers. Revenue from these technology powered services amount to 53% of our total net revenue. "10 "D1 delinquency rate" is defined as (i) the total amount of principal that became overdue as a specified date, divided by (ii) the total amount of principal that was due for repayment as of such date.11 "M1 collection rate" is defined as (i) the amount of principal that was repaid in one month among the total amount of principal that became overdue as a specified date, divided by (ii) the total amount of principal that became overdue as a specified date.

Third Quarter 2020 Financial Results

Total net revenues was RMB3,703.5 million (US$545.5 million), compared to RMB2,583.0 million in the same period of 2019, and RMB3,340.1 million in the prior quarter.

Net revenue from Credit Driven Services was RMB2,955.4 million (US$435.3 million), compared to RMB2,129.3 million in the same period of 2019, and RMB3,081.1 million in the prior quarter. The year-over-year growth was mainly due to the releasing of guarantee liabilities under the new accounting standard, and the increase in loan origination.

Loan facilitation and servicing fees-capital heavy were RMB1,220.7 million (US$179.8 million), compared to RMB1,555.1 million in the same period of 2019 and RMB1,353.9 million in the prior quarter. The year-over-year and sequential decrease was primarily due to a decline in interest rates of the loans, partially offset by increase of origination volume.

Financing income*12 was RMB530.8 million (US$78.2 million), compared to RMB409.8 million in the same period of 2019 and RMB628.1 million in the prior quarter. The year-over-year growth and sequential decline were primarily due to the changes in volume of on-balance sheet loans.

Revenue from releasing of guarantee liabilities was RMB1,172.6 million (US$172.7 million), compared to RMB119.6 million in the same period of 2019, and RMB1,076.6 million in the prior quarter. The year-over-year increase was mainly due to the change of accounting standard, and the sequential growth was due to increase in origination volume.

Other services fees were RMB31.2 million (US$4.6 million), compared to RMB44.8 million in the same period of 2019, and RMB22.6 million in the prior quarter. The year-over-year and sequential changes were primarily due to fluctuation of late payment fees.

Net revenue from Platform Services was RMB748.1 million (US$110.2 million), compared to RMB453.8 million in the same period of 2019 and RMB258.9 million in the prior quarter.

Loan facilitation and servicing fees-capital light were RMB663.4 million (US$97.7 million), compared to RMB336.3 million in the same period of 2019 and RMB178.6 million in the prior quarter. The year-over-year increase was primarily due to growth in loan origination volume under capital-light model. The robust sequential growth was in part due a reversal of the take rate reduction in the second quarter related to higher projected delinquency of certain capital light assets. The actual performance of such assets turned out better than expected in the third quarter.

Referral services fees were RMB68.1 million (US$10.0 million), compared to RMB113.0 million in the same period of 2019 and RMB64.5 million in the prior quarter. The year-over-year decline was primarily due to a decrease in volume of referral business as a result of a more conservative customer acquisition strategy adopted during the first half of 2020 in the backdrop of the COVID-19.

Other services fees were RMB16.7 million (US$2.5 million), compared to RMB4.5 million in the same period of 2019 and RMB15.9 million in the prior quarter. The year-over-year and sequential increases were mainly due to growth in late payment fees as loan origination volume under capital-light model increases.

Total operating costs and expenses were RMB2,332.1 million (US$343.5 million), compared to RMB1,640.7 million in the same period of 2019 and RMB2,346.8 million in the prior quarter.

Origination and servicing expenses were RMB408.7 million (US$60.2 million), compared to RMB290.0 million in the same period of 2019 and RMB399.8 million in the prior quarter. The year-over-year increase was primarily due to growth in loan origination volume and an increase in collection fees as we proactively expanded our collection operations early this year. The sequential increase was partially offset by improvement in operational efficiency.

Funding costs were RMB144.6 million (US$21.3 million), compared to RMB118.4 million in the same period of 2019 and RMB161.1 million in the prior quarter. The year-over-year increase was mainly driven by growth in loan origination volume while funding cost percentage continued to decline. The sequential decrease was mainly due to funding cost percentage decline.

Sales and marketing expenses were RMB271.1 million (US$39.9 million), compared to RMB896.9 million in the same period of 2019 and RMB269.1 million in the prior quarter. The year-over-year decline was primarily due to a more conservative customer acquisition strategy and more effective customer acquisition operations.

General and administrative expenses were RMB102.4 million (US$15.1 million), compared to RMB85.6 million in the same period of 2019 and RMB109.5 million in the prior quarter. The year-over-year increase was due to expanded business operations, partially offset by our continued effort to improve operational efficiency, which also resulted in sequential decline in general and administrative expenses.

Provision for loans receivable was RMB67.4 million (US$9.9 million), compared to RMB151.0 million in the same period of 2019 and RMB218.6 million in the prior quarter. The year-over-year and sequential decline was in part due to the reversal of provision for previous quarters on balance sheet loans as asset quality improved.

Provision for financial assets receivable was RMB81.6 million (US$12.0 million), compared to RMB44.6 million in the same period of 2019 and RMB79.2 million in the prior quarter. The year-over-year increase was due to growth in loan facilitation volume and higher projected default rates. The sequential increase is mainly due to the growth in loan volume and partially offset by the decreased projected default rates.

Provision for accounts receivable and contract assets was RMB66.2 million (US$9.7 million), compared to RMB54.2 million in the same period of 2019 and RMB90.8 million in the prior quarter. The year-over-year increase was due to growth in loan origination under capital light and higher projected default rates. The sequential decline was driven by improving asset quality.

Provision for contingent liability was RMB1,190.2 million (US$175.3 million), compared to RMB1,018.9 million in the prior quarter. The sequential increase was mainly due to growth in loan origination, partially offset by the reversal of provision for loans originated in prior quarters as those loans performed better than initially expected.

Income from operations was RMB1,371.4 million (US$202.0 million), compared to RMB942.4 million in the same period of 2019 and RMB993.2 million in the prior quarter.

Non-GAAP income from operations was RMB1,427.8 million (US$210.3 million), compared to RMB964.7 million in the same period of 2019 and RMB1,058.9 million in the prior quarter.

Operating margin was 37.0%. Non-GAAP operating margin was 38.6%.

Income before income tax expense was RMB1,459.0 million (US$214.9 million), compared to RMB922.4 million in the same period of 2019 and RMB1,042.7 million in the prior quarter.

Income taxes expense was RMB227.3 million (US$33.5 million). Effective tax rate was 15%, compared to 20% in the same period of 2019 and 15% in the prior quarter.

Net income attributed to the Company was RMB1,231.9 million (US$181.4 million), compared to RMB733.6 million in the same period of 2019 and RMB876.5 million in the prior quarter.

Non-GAAP net income attributed to the Company was RMB1,288.3 million (US$189.7 million), compared to RMB755.9 million in the same period of 2019 and RMB942.2 million in the prior quarter.

Net income margin was 33.3%. Non-GAAP net income margin was 34.8%.

Net income per fully diluted ADS was RMB7.98 (US$1.18).

Non-GAAP net income per fully diluted ADS was RMB8.35 (US$1.23).

Weighted average basic ADS used in calculating GAAP and non-GAAP net income per ADS was 150.09 million.

Weighted average diluted ADS used in calculating GAAP and non-GAAP net income per ADS was 154.32 million.

12 Financing income is generated from loans originated through the Companys platform funded by the consolidated trusts and Fuzhou Microcredit, which charge fees and interests from borrowers.

M1+ Delinquency Rate by Vintage and M6+ Delinquency Rate by Vintage

The following charts and tables display the historical cumulative M1+ delinquency rates by loan origination vintage and M6+ delinquency rates by loan origination vintage for all loans originated through the companys platform:

http://ml.globenewswire.com/Resource/Download/f3cac188-719e-4204-86ae-79c9c00f0e97

http://ml.globenewswire.com/Resource/Download/56137440-b531-4b7d-9629-16301f0aa360

Business Outlook

While it is still prudent to take a conservative approach in business and financial planning given the fast changing regulatory environment as well as some residual impact from the COVID-19, we are encouraged by the strong business momentum.As such the Company would like to raise its total loan origination volume target for fiscal year 2020 to the range of RMB 242 billion to RMB 244 billion, from previous guidance of RMB 200 billion to RMB 220 billion. This forecast reflects the Companys current and preliminary views, which is subject to change.

Recently Adopted Accounting Guidance

In June 2016, the FASB issued ASU No. 2016-13, Financial InstrumentsCredit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which has subsequently been amended by ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11 and ASU 2020-03. This ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. For public business entities, the guidance is effective for fiscal years beginning after December 15, 2019, including final periods within those fiscal years.

We have adopted the new standard effective January 1, 2020, using the modified retrospective transition method. The new guidance requires the recognition of credit losses to be measured using an expected credit loss model (referred to as the current expected credit loss (CECL) model). ASC 326 establishes a new accounting principle which requires gross accounting for guarantee liability. That is, to record both a guarantee obligation and an allowance for credit losses, calculated using the CECL impairment model, in addition to the guarantee obligation under ASC 460. As a result, at inception of the guarantee, we have recognized both a stand-ready guarantee liability under ASC 460 with an associated financial assets receivable, and a contingent guarantee liability with an allowance for credit losses under CECL model. Subsequent to the initial recognition, the ASC 460 stand-ready guarantee is recognized into guarantee revenue over the term of the guarantee, while the contingent guarantee is reduced by the payouts made by the company to compensate the investors upon borrowers' default. Upon adoption, we recognized the cumulative effect of approximately RMB1.43 billion after tax as a decrease to the opening balance of retained earnings and RMB1.9 billion as an increase to the opening balance of guarantee liabilities as of January 1, 2020.

Move from Nasdaq Global Market to Nasdaq Global Select Market

The Companys application to move the listing of its ADSs from The Nasdaq Global Market to the higher tier of The Nasdaq Global Select Market has been approved by Nasdaq, and its ADSs has begun trading on The Nasdaq Global Select Market from November 19, 2020.

Conference Call

360 DigiTechs management team will host an earnings conference call at 8:00 PM U.S. Eastern Time on Thursday, November 19, 2020 (9:00 AM Beijing Time on November 20).

Dial-in details for the earnings conference call are as follows:

United States: +1-646-722-4977Hong Kong: +852-3027-6500Mainland China: 400-821-0637International: +65-6408-5782PIN: 60180978#

Please dial in 15 minutes before the call is scheduled to begin and provide the PIN to join the call.

A telephone replay of the call will be available after the conclusion of the conference call until November 27, 2020:

United States: +1-646-982-0473International: +65-6408-5781Access code: 319338659#

Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of the Company's website at ir.360shuke.com.

About 360 DigiTech

360 DigiTech, Inc. (NASDAQ: QFIN) (360 DigiTech or the Company) is a data driven, technology empowered digital platform. Through its platform the Company enables financial institutions to provide better and targeted products and services to a broader consumer base. The Company also offers standardized risk management service, in the form of SaaS modules to institutional clients. When coupled with its partnership with 360 Group, the Companys solutions created noticeable advantages in customer acquisition, funding optimization, risk assessment and post-lending management.

For more information, please visit: ir.360shuke.com

Use of Non-GAAP Financial Measures Statement

To supplement our financial results presented in accordance with U.S. GAAP, we use non-GAAP financial measure, which is adjusted from results based on U.S. GAAP to exclude share-based compensation expenses. Reconciliations of our non-GAAP financial measures to our U.S. GAAP financial measures are set forth in tables at the end of this earnings release, which provide more details on the non-GAAP financial measures.

We use non-GAAP income from operation, non-GAAP operation margin, non-GAAP net income and non-GAAP net income margin in evaluating our operating results and for financial and operational decision-making purposes. Non-GAAP income from operation represents income from operation excluding share-based compensation expenses, and non-GAAP net income represents net income excluding share-based compensation expenses. Such adjustments have no impact on income tax. We believe that non-GAAP income from operation and non-GAAP net income help identify underlying trends in our business that could otherwise be distorted by the effect of certain expenses that we include in results based on U.S. GAAP. We believe that non-GAAP income from operation and non-GAAP net income provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making. Our non-GAAP financial information should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for or superior to U.S. GAAP results. In addition, our calculation of non-GAAP financial information may be different from the calculation used by other companies, and therefore comparability may be limited.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.7896 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of September 30, 2020.

Safe Harbor Statement

Any forward-looking statements contained in this announcement are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. 360 Finance may also make written or oral forward-looking statements in its reports to the U.S. Securities and Exchange Commission ("SEC") on Forms 20-F and 6-K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including the Companys business outlook for 2019, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Further information regarding such risks and uncertainties is included in 360 Finance's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and 360 Finance does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For more information, please contact:

360 DigiTech E-mail: ir@360shuke.com

Christensen

In ChinaMr. Eric YuanPhone: +86-138-0111-0739E-mail: Eyuan@christensenir.com

In US Ms. Linda BergkampPhone: +1-480-614-3004Email: lbergkamp@christensenir.com

Unaudited Condensed Consolidated Balance Sheets(Amounts in thousands of Renminbi (RMB) and U.S. dollars (USD)except for number of shares and per share data, or otherwise noted)

December 31, September 30, September 30, 2019 2020 2020 RMB RMB USDASSETS Current assets: Cash and cash 2,108,123 4,821,031 710,061 equivalentsRestricted cash 1,727,727 2,400,617 353,573 Security deposit prepaidto third-party guarantee 932,983 654,633 96,417 companiesFunds receivable fromthird party payment 118,860 149,436 22,010 service providersAccounts receivable and 2,332,364 2,225,995 327,854 contract assets, netFinancial assets 1,912,554 3,023,254 445,277 receivable, netAmounts due from related 478,767 244,687 36,039 partiesLoans receivable, net 9,239,565 8,164,168 1,202,452 Prepaid expenses and 652,545 457,484 67,380 other assetsTotal current assets 19,503,488 22,141,305 3,261,063 Non-current assets: Accounts receivable andcontract assets, net-non 19,508 314,967 46,390 currentFinancial assetsreceivable, net-non 59,270 551,607 81,243 currentProperty and equipment, 17,113 20,706 3,050 netIntangible assets 3,512 3,547 522 Deferred tax assets 697,348 1,150,562 169,459 Other non-current assets 55,362 54,766 8,066 Total non-current assets 852,113 2,096,155 308,730 TOTAL ASSETS 20,355,601 24,237,460 3,569,793 LIABILITIES AND EQUITY LIABILITIESCurrent liabilities: Payable to investors ofthe consolidated 4,423,717 3,498,751 515,310 trusts-currentAccrued expenses andother current 720,918 829,935 122,238 liabilitiesAmounts due to related 55,622 53,794 7,923 partiesShort term loans 200,000 184,870 27,228 Guaranteeliabilities-stand 2,212,125 3,647,546 537,225 readyGuarantee 734,730 3,525,452 519,243 liabilities-contingentIncome tax payable 1,056,219 935,778 137,825 Other tax payable 263,856 156,614 23,067 Total current 9,667,187 12,832,740 1,890,059 liabilitiesNon-current liabilities: Deferred tax liabilities - 14,825 2,183Payable to investors ofthe consolidated 3,442,500 3,138,526 462,255 trusts-noncurrentOther long-term 31,184 3,026 liabilities 20,544Total non-current 3,473,684 3,173,895 467,464 liabilitiesTOTAL LIABILITIES 13,140,871 16,006,635 2,357,523 Ordinary shares 20 21 3 Additional paid-in 5,117,184 5,309,654 782,028 capitalRetained earnings 2,071,332 2,932,733 431,945 Other comprehensive 24,906 (12,540 ) (1,847 )income (loss)TOTAL 360 DIGITECH INC 7,213,442 8,229,868 1,212,129 EQUITYNoncontrolling interests 1,288 957 141 TOTAL EQUITY 7,214,730 8,230,825 1,212,270 TOTAL LIABILITIES AND 20,355,601 24,237,460 3,569,793 EQUITY

Unaudited Condensed Consolidated Statements of Operations(Amounts in thousands of Renminbi (RMB) and U.S. dollars (USD)except for number of shares and per share data, or otherwise noted)

Three months ended September 30, Nine months ended September 30, 2019 2020 2020 2019 2020 2020 RMB RMB USD RMB RMB USDCredit driven 2,129,275 2,955,392 435,282 6,034,567 8,846,546 1,302,954 services Loanfacilitationand servicing 1,555,089 1,220,748 179,797 4,994,681 3,741,738 551,098 fees-capitalheavy

Financing 409,763 530,766 78,173 724,223 1,768,279 260,439 income Revenuefrom releasing 119,579 1,172,640 172,711 204,261 3,255,371 479,464 of guaranteeliabilities Other 44,844 31,238 4,601 111,402 81,158 11,953 services feesPlatform 453,764 748,129 110,187 784,399 1,379,922 203,240 services Loanfacilitationand servicing 336,269 663,354 97,701 465,007 1,145,564 168,723 fees-capitallight Referral 113,004 68,086 10,028 312,720 187,149 27,564 services fees Other 4,491 16,689 2,458 6,672 47,209 6,953 services feesTotal net 2,583,039 3,703,521 545,469 6,818,966 10,226,468 1,506,194 revenue

Origination and 290,003 408,693 60,194 753,789 1,156,112 170,277 servicing Funding 118,402 144,596 21,297 209,148 464,272 68,380 costs Sales 896,907 271,082 39,926 2,424,948 763,144 112,399 and marketing Generaland 85,584 102,387 15,080 309,230 320,606 47,220 administrative

Provision for 151,010 67,383 9,924 205,808 593,211 87,371 loansreceivable

Provision forfinancial 44,607 81,642 12,025 101,517 254,565 37,493 assetsreceivable

Provision foraccounts 54,156 66,163 9,745 183,149 213,950 31,511 receivable andcontract assets

Provision for 1,190,176 175,294 3,911,793 576,145 contingent - -liabilitiesTotal operatingcosts and 1,640,669 2,332,122 343,485 4,187,589 7,677,653 1,130,796 expensesIncome from 942,370 1,371,399 201,984 2,631,377 2,548,815 375,398 operations Interest(expense) (25,546 ) 19,623 2,890 (27,478 ) 44,601 6,569 income, net Foreignexchange (loss) (64,793 ) 63,408 9,339 (67,521 ) 39,521 5,821 gain Other 70,409 4,609 679 94,305 96,899 14,272 income, netIncome beforeincome tax 922,440 1,459,039 214,892 2,630,683 2,729,836 402,060 expense Income (188,952 ) (227,315 ) (33,480 ) (559,077 ) (438,492 ) (64,583 )taxes expenseNet income 733,488 1,231,724 181,412 2,071,606 2,291,344 337,477 Net lossattributable to 73 151 22 73 453 67 noncontrollinginterestsNet incomeattributable toordinary 733,561 1,231,875 181,434 2,071,679 2,291,797 337,544 shareholders ofthe CompanyNet income perordinary shareattributable toordinary shareholders of360 DigiTech,Inc.Basic 2.55 7.20 4.10 0.60 7.73 1.14Diluted 2.45 6.88 3.99 0.59 7.50 1.10 Net income perADSattributable toordinary shareholders of360 DigiTech,Inc.Basic 5.10 14.40 15.46 8.20 1.20 2.28Diluted 4.90 13.76 15.00 7.98 1.18 2.20 Weightedaverage sharesused in calculating netincome perordinary shareBasic 288,054,825 300,174,655 300,174,655 287,788,219 296,518,120 296,518,120 Diluted 299,107,729 308,646,862 308,646,862 301,306,666 305,520,538 305,520,538



Unaudited Condensed Consolidated Statements of Comprehensive (Loss)/Income(Amounts in thousands of Renminbi (RMB) and U.S. dollars (USD)except for number of shares and per share data, or otherwise noted)

Three months ended September 30, 2019 2020 2020 RMB RMB USDNet income 733,488 1,231,724 181,412 Other comprehensive income, net of tax of nil:Foreign currency translation adjustment 68,476 (64,847 ) (9,551 )Other comprehensive income (loss) 68,476 (64,847 ) (9,551 )Total comprehensive income 801,964 1,166,877 171,861 Net loss attributable to noncontrolling 73 151 22 interestsComprehensive income attributable to ordinary 802,037 1,167,028 171,883 shareholders Nine months ended September 30, 2019 2020 2020 RMB RMB USDNet income 2,071,606 2,291,344 337,477 Other comprehensive income, net of tax of nil:Foreign currency translation adjustment 65,946 (37,446 ) (5,515 )Other comprehensive income (loss) 65,946 (37,446 ) (5,515 )Total comprehensive income 2,137,552 2,253,898 331,962 Net loss attributable to noncontrolling 73 453 67 interestsComprehensive income attributable to ordinary 2,137,625 2,254,351 332,029 shareholders



Unaudited Reconciliations of GAAP and Non-GAAP Results(Amounts in thousands of Renminbi (RMB) and U.S. dollars (USD)except for number of shares and per share data, or otherwise noted)

Three months ended September 30, 2019 2020 2020 RMB RMB USDReconciliation of Non-GAAP Net Income to Net IncomeNet income 733,488 1,231,724 181,412Add: Share-based compensation 22,320 56,396 8,306expensesNon-GAAP net income 755,808 1,288,120 189,718Non-GAAP net income margin 29.3 % 34.8 % GAAP net income margin 28.4 % 33.3 % Net income attributable to 733,561 1,231,875 181,434shareholders of 360 DigiTech, IncAdd: Share-based compensation 22,320 56,396 8,306expensesNon-GAAP net income attributable to 755,881 1,288,271 189,740shareholders of 360 DigiTech, IncWeighted average ADS used incalculating net income per ordinary 149,553,865 154,323,431 154,323,431share -dilutedNet income per ADS attributable toordinary shareholders of 360 4.90 7.98 1.18DigiTech, Inc. -dilutedNon-GAAP net income per ADSattributable to ordinary shareholders 5.05 8.35 1.23of 360 DigiTech, Inc. -diluted Reconciliation of Non-GAAP Incomefrom operations to Income from operationsIncome from operations 942,370 1,371,399 201,984Add: Share-based compensation 22,320 56,396 8,306expensesNon-GAAP Income from operations 964,690 1,427,795 210,290Non-GAAP operating margin 37.3 % 38.6 % GAAP operating margin 36.5 % 37.0 % Nine months ended September 30, 2019 2020 2020 RMB RMB USDReconciliation of Non-GAAP Net Income to Net IncomeNet income 2,071,606 2,291,344 337,477Add: Share-based compensation 164,702 193,447 28,492expensesNon-GAAP net income 2,236,308 2,484,791 365,969Non-GAAP net income margin 32.8 % 24.3 % GAAP net income margin 30.4 % 22.4 % Net income attributable to 2,071,679 2,291,797 337,544shareholders of 360 DigiTech, IncAdd: Share-based compensation 164,702 193,447 28,492expensesNon-GAAP net income attributable to 2,236,381 2,485,244 366,036shareholders of 360 DigiTech, IncWeighted average ADS used incalculating net income per ordinary 150,653,333 152,760,269 152,760,269share -dilutedNet income per ADS attributable toordinary shareholders of 360 13.76 15.00 2.20DigiTech, Inc. -dilutedNon-GAAP net income per ADSattributable to ordinary shareholders 14.84 16.27 2.40of 360 DigiTech, Inc. -diluted Reconciliation of Non-GAAP Incomefrom operations to Income from operationsIncome from operations 2,631,377 2,548,815 375,398Add: Share-based compensation 164,702 193,447 28,492expensesNon-GAAP Income from operations 2,796,079 2,742,262 403,890Non-GAAP operating margin 41.0 % 26.8 % GAAP operating margin 38.6 % 24.9 %