Akso Health Group filing summary
Filing identity and period: The supplied filing identifies the registrant as Xiaobai Maimai Inc., formerly Hexindai Inc., not Akso Health Group. It is a Form 20-F annual report for the fiscal year ended March 31, 2021, filed July 28, 2021; it does not report 2020 Q4 as a standalone quarter. Financial figures below are in U.S. dollars unless stated otherwise.
Business context
The company shifted from P2P lending toward social e-commerce. It launched the Xiaobai Maimai platform in May 2020 and completed the disposition of its P2P marketplace business on December 30, 2020, for RMB5.0 million (approximately $727,000). P2P results are presented as discontinued operations. The company had stopped issuing new microlending loans in May 2019; it retained loans issued before then.
Key financial metrics
| Metric | FY ended March 31, 2021 | FY ended March 31, 2020 |
|---|---|---|
| Net revenue | $1.75 million | $6.91 million |
| Loss from continuing operations, after tax | $31.55 million | $47.36 million |
| Loss from discontinued operations, net | $6.44 million loss, plus $3.16 million disposal gain | $23.83 million loss |
| Net loss | $34.83 million | $71.20 million |
| Net cash from operating activities | $10.06 million | $58.28 million used |
| Cash and cash equivalents at year-end | $15.13 million | $6.67 million |
| Total assets | $31.69 million | $80.48 million |
| Total liabilities | $14.41 million | $32.38 million |
- FY2021 net revenue fell 74.6%. It comprised $1.69 million of interest income and $82,054 of e-commerce commission revenue; recommendation-service revenue was nil.
- Operating expenses were $32.66 million, including $27.22 million of general and administrative expense. The company recorded a $22.16 million provision for uncollectible loans and a $1.60 million impairment of its Musketeer investment.
- Loan receivables were $44.66 million before a $39.17 million allowance, leaving $5.49 million net, all classified as current. The allowance was $15.02 million a year earlier.
- Cash from operations improved substantially, but included significant noncash loan-loss and investment-impairment adjustments. Investing cash flow was approximately breakeven; financing used $9.04 million, including $10 million of note principal repayment.
- The remaining senior unsecured note was $10 million at March 31, 2021, bears 12% annual interest, and is described as due in March 2022. The balance sheet classifies it as current.
- The filing does not present a separate gross-margin measure. Management reported working capital of $17.3 million, excluding amounts due from related parties.
Material changes and unusual items
- Net loss narrowed from $71.20 million to $34.83 million, while continuing-operations loss narrowed from $47.36 million to $31.55 million. The improvement does not indicate established profitability: revenue contracted sharply and the company remained loss-making.
- FY2020 included a $29.19 million full impairment of the Phoenix Intelligent Credit investment; FY2021 included a $1.60 million full impairment of the Musketeer investment.
- The P2P disposition generated a reported $3.16 million gain, while discontinued operations still recorded a $6.44 million net loss in FY2021.
- The company reported $10.37 million of other receivables at year-end, related to a terminated business-development arrangement and deposit refund. It said approximately $26.2 million had been refunded by June 30, 2021; the filing also describes scheduled future repayments.
Outlook, risks and contingencies
- No quantified revenue, earnings, or margin guidance is provided. Management plans to develop social e-commerce and explore opportunities such as live-streaming commerce. It believes available cash and projected operating cash flows should fund operations for the next 12 months, while acknowledging uncertainty about the new business and COVID-19 effects.
- The social-commerce operation had a short track record and generated only $82,054 in commissions in FY2021. Its model depends on third-party platforms, merchants, social networks, influencers, and delivery providers.
- Management cites material risks from PRC regulatory uncertainty, the VIE contractual structure, data and cybersecurity rules, and possible penalties relating to historical microlending activity. The company also warns that COVID-19 may affect business and collections.
- The company reported no probable and estimable contingent liabilities at March 31, 2021. Management said internal control over financial reporting was effective; the auditor did not provide an internal-control attestation because the company qualified as an emerging growth company. The filing also describes limits on PCAOB inspection access in China.
- Management said a 2019 internal investigation of short-seller allegations found no conclusive proof of fraud; the filing reported no securities lawsuit or additional investigation notice as of its date.
Investor verification checklist
- Confirm the issuer and period: the supplied document is Xiaobai Maimai Inc.’s FY2021 annual report, not a standalone 2020 Q4 report, and the company name does not match the request metadata.
- Review the loan portfolio’s collection performance and whether the $39.17 million allowance adequately reflects expected losses.
- Reconcile the remaining note’s $10 million current classification with its stated March 2022 maturity, and verify repayment terms and interest obligations.
- Check collection of the terminated-arrangement deposit receivable, including the reported refunds and repayment schedule.
- Assess the related-party P2P disposition, including the buyer’s relationship to the chairman, and the company’s control and economic interests in its VIEs.
- Track whether social-commerce activity, commission revenue, and user engagement grew after the reported launch, and review subsequent regulatory and audit developments.