Qudian Inc. Reports First Quarter 2021 Unaudited Financial Results

Rhea-AI Summary

Qudian Inc. (NYSE: QD) reported its Q1 2021 financial results, revealing total revenues of RMB515.7 million (US$78.7 million), down 46.2% year-over-year. Notably, net income soared to RMB478.4 million (US$73.0 million) compared to a loss of RMB486.5 million in Q1 2020. The company’s cash and cash equivalents stood at RMB2.2 billion (US$333.9 million). However, the number of outstanding borrowers decreased by 8% to 3 million, reflecting a conservative lending strategy. The D1 delinquency rate improved to below 5%, indicating enhanced asset quality amidst regulatory challenges.

Positive

• Net income of RMB478.4 million (US$73.0 million) vs. loss of RMB486.5 million in Q1 2020.
• Improvement in D1 delinquency rate to below 5%.
• Cash and cash equivalents at RMB2.2 billion (US$333.9 million) indicating strong liquidity.

Negative

• Total revenues decreased by 46.2% compared to Q1 2020.
• Outstanding borrowers fell by 8% to 3 million.
• Outstanding loan balance decreased by 15.1% to RMB4.1 billion.

XIAMEN, China, June 15, 2021 /PRNewswire/ -- Qudian Inc. ("Qudian" or "the Company" or "We") (NYSE: QD), a leading technology platform empowering the enhancement of online consumer finance experience in China, today announced its unaudited financial results for the quarter ended March 31, 2021.

First Quarter 2021 Operational Highlights:

• Number of outstanding borrowers^[1] from loan book business as of March 31, 2021 decreased by 8.0% to 3.0 million from 3.2 million as of December 31, 2020 as a result of the conservative and prudent strategy which the Company has deployed
• Total outstanding loan balance from loan book business^[2] decreased by 15.1% to RMB4.1 billion as of March 31, 2021, compared to the outstanding balance as of December 31, 2020
• Amount of transactions from loan book business for this quarter decreased by 8.4% to RMB4.4 billion from the fourth quarter of 2020; Amount of transactions serviced on open platform for this quarter decreased by 15.2% to RMB210.4 million from the fourth quarter of 2020
• Weighted average loan tenure for our loan book business was 4.5 months for this quarter, compared with 4.5 months for the fourth quarter of 2020; Weighted average loan tenure for transactions serviced on open platform was 6.7 months for this quarter, compared with 6.4 months for the fourth quarter of 2020

[1] Outstanding borrowers are borrowers who have outstanding loans from the Company's loan book business as of a particular date. [2] Includes (i) off and on balance sheet loans directly or indirectly funded by our institutional funding partners or our own capital, net of cumulative write-offs and (ii) does not include auto loans from Dabai Auto business.

First Quarter 2021 Financial Highlights:

• Total revenues were RMB515.7 million (US$78.7 million), representing a decrease of 46.2% from the same period of last year
• Net income attributable to Qudian's shareholders were RMB478.4 million (US$73.0 million), compared to a loss of RMB486.5 million from the same period of last year, or RMB1.81 (US$0.28) per diluted ADS
• Non-GAAP net income attributable to Qudian's shareholders^[3] were RMB488.3 million (US$74.5 million), compared to non-GAAP net loss attributable to Qudian's shareholders of RMB907.5 million from the same period of last year, or RMB1.85 (US$0.28) per diluted ADS

[3] For more information on this Non-GAAP financial measure, please see the table captioned "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.

"In the first quarter of 2021, we continued to execute a prudent operational strategy related to our cash credit business amid an evolving regulatory environment, while making significant strides to advance our early childhood education business initiative," said Mr. Min Luo, Founder, Chairman and Chief Executive Officer of Qudian. "Our stringent credit risk control measures further improved our asset quality, evidenced by the continued decrease of the D1 delinquency rate for our loan book business^[4], which dropped to a normal level of less than 5% as of March 31. Importantly, our net assets increased to RMB12.4 billion at the end of the first quarter  with cash and cash equivalents and short-term investments of RMB7.3 billion, mainly in highly liquid wealth management products. Our ability to maintain a solid balance sheet with sufficient liquidity lays a strong foundation to navigate our loan book business through challenging market dynamics, as well as providing funds to build out new business avenues, including our investment in the massive and underserved early childhood extra-curricular enrichment education market."

"We are delighted to officially launch our first WLM KIDS activities center in January in Xiamen. The opening marked a major milestone in the development of our early childhood education business, where we strive to provide a comprehensive suite of one-stop services for children's extra-curricular enrichment. As we work to open more WLM KIDS activities centers in cities across the nation, we are advancing our mission to help children in China grow up both happy and healthy. The incremental spending in our WLM KIDS business may place pressure on our profitability in the near term, but we believe over the long term the WLM KIDS business will enjoy superior unit economics compared with many other offline businesses. Supported by our strong financial position, we remain optimistic that we can continue to grow our overall business and deliver sustainable value to our shareholders," said Ms. Sissi Zhu, Vice President of Investor Relations of Qudian.

[4] "D1 delinquency rate" is defined as (i) the total amount of principal and financing service fees that became overdue as of a specified date, divided by (ii) the total amount of principal and financing services fees that was due for repayment as of such date, in each case with respect to our loan book business.

First Quarter Financial Results

Total revenues were RMB515.7 million (US$78.7 million), representing a decrease of 46.2% from RMB957.9 million for the first quarter of 2020.

Financing income totaled RMB361.8 million (US$55.2 million), representing a decrease of 41.9% from RMB622.7 million for the first quarter of 2020, as a result of the decrease in the average on-balance sheet loan balance.

Loan facilitation income and other related income decreased by 97.1% to RMB12.2 million (US$1.9 million) from RMB422.4 million for the first quarter of 2020, as a result of the reduction in transaction volume of off-balance sheet loans during this quarter. 

Transaction services fee and other related income increased to RMB50.6 million (US$7.7 million) from a loss of RMB150.4 million for the first quarter of 2020, mainly as a result of the reassessment of variable consideration.

Sales income and others increased to RMB62.5 million (US$9.5 million) from RMB17.1 million for the first quarter of 2020, mainly due to sales related to the Wanlimu e-commerce platform.

Sales commission fee decreased by 68.1% to RMB10.7 million (US$1.6 million) from RMB33.7 million for the first quarter of 2020, due to the decrease in the amount of merchandise credit transactions.

Total operating costs and expenses decreased by 96.9% to RMB63.3 million (US$9.7 million) from RMB2,066.6 million for the first quarter of 2020.

Cost of revenues decreased by 4.8% to RMB91.0 million (US$13.9 million) from RMB95.6 million for the first quarter of 2020, primarily due to the decrease in funding costs associated with the on-balance sheet loan book business, partially offset by the increase in cost of goods sold related to the Wanlimu e-commerce platform.

Sales and marketing expenses decreased by 36.1% to RMB37.6 million (US$5.7 million) from RMB58.8 million for the first quarter of 2020, primarily due to the decrease in third-party service fees and marketing promotional expenses.

General and administrative expenses decreased by 12.9% to RMB66.7 million (US$10.2 million) from RMB76.6 million for the first quarter of 2020, as a result of the decrease in staff salaries.

Research and development expenses decreased by 28.4% to RMB39.2 million (US$6.0 million) from RMB54.7 million for the first quarter of 2020, as a result of the decrease in staff salaries.

Provision for receivables and other assets was a reversal of RMB106.8 million (US$16.3 million), compared to a loss of RMB1,108.5 million for the first quarter of 2020, mainly due to the decrease in past-due on-balance sheet outstanding principal receivables compared to the first quarter of 2020.

As of March 31, 2021, the total balance of outstanding principal and financing service fee receivables for on-balance sheet transactions for which any installment payment was more than 30 calendar days past due was RMB203.0 million (US$31.0 million), and the balance of allowance for principal and financing service fee receivables at the end of the period was RMB546.5 million (US$83.4 million), indicating M1+ Delinquency Coverage Ratio of 2.7x.

The following charts display the "vintage charge-off rate." Total potential receivables at risk vintage charge-off rate refers to, with respect to on- and off-balance sheet transactions facilitated under the loan book business during a specified time period, the total potential outstanding principal balance of the transactions that are delinquent for more than 180 days up to twelve months after origination, divided by the total initial principal of the transactions facilitated in such vintage. Delinquencies may increase or decrease after such 12-month period.

Current receivables at risk vintage charge-off rate refers to, with respect to on- and off-balance sheet transactions facilitated under the loan book business during a specified time period, the actual outstanding principal balance of the transactions that are delinquent for more than 180 days up to twelve months after origination, divided by the total initial principal of the transactions facilitated in such vintage. Delinquencies may increase or decrease after such 12-month period.

Total potential receivables at risk M1+ delinquency rate by vintage refers to, with respect to on- and off-balance sheet transactions facilitated under the loan book business during a specified time period, the total potential outstanding principal balance of the transactions that are delinquent for more than 30 days up to twelve months after origination, divided by the total initial principal of the transactions facilitated in such vintage. Delinquencies may increase or decrease after such 12-month period.

Current receivables at risk M1+ delinquency rate by vintage refers to, with respect to on- and off-balance sheet transactions facilitated under the loan book business during a specified time period, the actual outstanding principal balance of the transactions that are delinquent for more than 30 days up to twelve months after origination, divided by the total initial principal of the transactions facilitated in such vintage. Delinquencies may increase or decrease after such 12-month period.

Income from operations was RMB464.8 million (US$70.9 million), as compared to a loss of RMB961.1 million for the first quarter of 2020.

Net income attributable to Qudian's shareholders was RMB478.4 million (US$73.0 million), or RMB1.81 (US$0.28) per diluted ADS.

Non-GAAP net income attributable to Qudian's shareholders was RMB488.3 million (US$74.5 million), or RMB1.85 (US$0.28) per diluted ADS.

Cash Flow

As of March 31, 2021, the Company had cash and cash equivalents of RMB2,187.5 million (US$333.9 million) and restricted cash of RMB234.1 million (US$35.7 million). Restricted cash mainly represents (i) cash held by the consolidated trusts through segregated bank accounts; and (ii) security deposits held in designated bank accounts for the guarantee of off-balance sheet transactions. Such restricted cash is not available to fund the general liquidity needs of the Company.

For the first quarter of 2021, net cash provided by operating activities was RMB202.7 million (US$30.9 million), mainly attributable to net income of RMB478.2 million (US$73.0 million) and partially offset by the change in other current and non-current assets of RMB252.3 million (US$38.5 million). Net cash provided by investing activities was RMB499.2 million (US$76.2 million), mainly due to net proceeds from collection of loan principal and partially offset by net payments to originate loan principal. Net cash provided by financing activities was RMB43.0 million (US$6.5 million), mainly due to proceeds from borrowings.

Conference Call

The Company's management will host an earnings conference call on June 15, 2021 at 7:00 AM U.S. Eastern Time (7:00 PM Beijing/Hong Kong Time). Details for the conference call are as follows:

Title of Event:	Qudian Inc. First Quarter 2021 Earnings Conference Call
Conference ID:	8562567
Registration link:	http://apac.directeventreg.com/registration/event/8562567

For participants who wish to join the call, please complete the online registration at least 15 minutes prior to the scheduled call start time. Upon registration, participants will receive the conference call access information, including participant dial-in numbers, a Direct Event Passcode, a unique Registrant ID, and an e-mail with detailed instructions to join the conference call.

Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.qudian.com.

A replay of the conference call will be accessible approximately two hours after the conclusion of the live call until June 22, 2021, by dialing the following telephone numbers:

United States:	+1-855-452-5696 (toll-free) / +1-646-254-3697
International:	+61-2-8199-0299
Hong Kong, China:	800-963-117 (toll-free) / +852-3051-2780
Mainland China:	400-632-2162  / 800-870-0205 (toll-free)
Passcode:	8562567

About Qudian Inc.

Qudian Inc. ("Qudian") is a leading technology platform empowering the enhancement of online consumer finance experience in China. The Company's mission is to use technology to make personalized credit accessible to hundreds of millions of young, mobile-active consumers in China who need access to small credit for their discretionary spending but are underserved by traditional financial institutions due to lack of traditional credit data or high cost of servicing. Qudian's credit solutions enable licensed, regulated financial institutions and ecosystem partners to offer affordable and customized loans to this young generation of consumers.

For more information, please visit http://ir.qudian.com.

Use of Non-GAAP Financial Measures

We use adjusted net income/loss, a Non-GAAP financial measure, in evaluating our operating results and for financial and operational decision-making purposes. We believe that adjusted net income/loss helps identify underlying trends in our business by excluding the impact of share-based compensation expenses, which are non-cash charges, and convertible bonds buyback income. We believe that adjusted net income/loss provides useful information about our operating results, enhances the overall understanding of our past performance and future prospects and allows for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.

Adjusted net income/loss is not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. This Non-GAAP financial measure has limitations as analytical tools, and when assessing our operating performance, cash flows or our liquidity, investors should not consider them in isolation, or as a substitute for net loss / income, cash flows provided by operating activities or other consolidated statements of operation and cash flow data prepared in accordance with U.S. GAAP.

We mitigate these limitations by reconciling the Non-GAAP financial measure to the most comparable U.S. GAAP performance measure, all of which should be considered when evaluating our performance.

For more information on this Non-GAAP financial measure, please see the table captioned "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB6.5518 to US$1.00, the noon buying rate in effect on March 31, 2021 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.

Statement Regarding Preliminary Unaudited Financial Information

The unaudited financial information set out in this earnings release is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Company's year-end audit, which could result in significant differences from this preliminary unaudited financial information.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the expectation of its collection efficiency and delinquency, contain forward-looking statements. Qudian may also make written or oral forward-looking statements in its periodic reports to the SEC, 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 statements about Qudian's beliefs and expectations, 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, including but not limited to the following: Qudian's goal and strategies; Qudian's expansion plans; Qudian's future business development, financial condition and results of operations; Qudian's expectations regarding demand for, and market acceptance of, its credit products; Qudian's expectations regarding keeping and strengthening its relationships with borrowers, institutional funding partners, merchandise suppliers and other parties it collaborate with; general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Qudian'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 Qudian does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact:

Qudian Inc.
Tel: +86-592-591-1711
E-mail: ir@qudian.com 

The Piacente Group, Inc.
Jenny Cai
Tel: +86 (10) 6508-0677
E-mail: qudian@tpg-ir.com

The Piacente Group, Inc.
Brandi Piacente
Tel: +1-212-481-2050
E-mail: qudian@tpg-ir.com

 

 

 

QUDIAN INC.
Unaudited Condensed Consolidated Statements of Operations
			Three months ended March 31,
(In thousands except for number			2020		2021
of shares and per-share data)			(Unaudited)		(Unaudited)		(Unaudited)
			RMB		RMB		US$
Revenues:
Financing income			622,683		361,754		55,215
Sales commission fee			33,713		10,748		1,640
Sales income and others			17,056		62,530		9,544
Penalty fee			12,381		17,823		2,720
Loan facilitation income and other related income			422,443		12,200		1,862
Transaction services fee and other related income			(150,415)		50,649		7,731
Total revenues			957,861		515,704		78,712
Operating cost and expenses:
Cost of revenues			(95,615)		(91,012)		(13,891)
Sales and marketing			(58,805)		(37,559)		(5,733)
General and administrative			(76,550)		(66,693)		(10,179)
Research and development			(54,725)		(39,190)		(5,982)
Changes in guarantee liabilities and risk assurance liabilities(1)			(672,408)		64,379		9,826
Provision for receivables and other assets			(1,108,451)		106,809		16,302
Total operating cost and expenses			(2,066,554)		(63,266)		(9,657)
Other operating income			147,571		12,371		1,888
Income/(Loss) from operations			(961,122)		464,809		70,943
Interest and investment income, net			436,042		87,892		13,415
Foreign exchange loss, net			(4,635)		(219)		(33)
Other income			15,315		5,094		777
Other expenses			(189)		(206)		(31)
Net income/(loss) before income taxes			(514,588)		557,370		85,071
Income tax (expenses)/benefit			28,108		(79,175)		(12,084)
Net income/(loss)			(486,480)		478,195		72,987
Less: net loss attributable to non-controlling interest shareholders			-		(167)		(25)
Net income/(loss) attributable to Qudian Inc.'s  shareholders			(486,480)		478,362		73,012
Earnings per share for Class A and Class B ordinary shares:
Basic			(1.92)		1.89		0.29
Diluted			(1.92)		1.81		0.28
Earnings per ADS (1 Class A ordinary share equals 1 ADSs):
Basic			(1.92)		1.89		0.29
Diluted			(1.92)		1.81		0.28
Weighted average number of Class A and Class B ordinary shares outstanding:
Basic			253,874,830		253,044,009		253,044,009
Diluted			253,874,830		266,647,286		266,647,286
Other comprehensive gain/(loss):
Foreign currency translation adjustment			(1,377)		2,260		345
Total comprehensive income/(loss)			(487,857)		480,622		73,357
Total comprehensive income/(loss) attributable to Qudian Inc.'s shareholders			(487,857)		480,622		73,357
Note： (1):The amount includes the change in fair value of the guarantee liabilities accounted in accordance with ASC 815,"Derivative",  and the change in risk assurance liabilities accounted in accordance with ASC 450, "Contingencies" and ASC 460, "Guarantees".

 

 

 

QUDIAN INC.
Unaudited Condensed Consolidated Balance Sheets
			As of December 31,		As of March 31,
(In thousands except for number			2020		2021
of shares and per-share data)			(Audited)		(Unaudited)	(Unaudited)
			RMB		RMB	US$
ASSETS:
Current assets:
Cash and cash equivalents			1,537,558		2,187,502	333,878
Restricted cash			135,404		234,112	35,732
Short-term investments			5,042,314		5,079,154	775,230
Short-term loan principal and financing service fee receivables			3,940,461		3,515,293	536,539
Short-term finance lease receivables			179,613		128,830	19,663
Short-term contract assets			92,813		50,077	7,643
Other current assets			762,313		1,006,670	153,649
Total current assets			11,690,476		12,201,638	1,862,334
Non-current assets:
Long-term finance lease receivables			28,771		11,795	1,800
Operating lease right-of-use assets			210,898		296,253	45,217
Investment in equity method investee			349,276		381,287	58,196
Long-term investments			209,868		243,668	37,191
Property and equipment, net			302,969		359,955	54,940
Intangible assets			8,478		8,926	1,362
Long-term contract assets			23,094		10,317	1,575
Deferred tax assets, net			154,960		119,138	18,184
Other non-current assets			419,242		425,464	64,938
Total non-current assets			1,707,556		1,856,803	283,403
TOTAL ASSETS			13,398,032		14,058,441	2,145,737
QUDIAN INC.
Unaudited Condensed Consolidated Balance Sheets
			As of December 31,		As of March 31,
(In thousands except for number			2020		2021
of shares and per-share data)			(Audited)		(Unaudited)	(Unaudited)
			RMB		RMB	US$
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term lease liabilities			23,763		41,543	6,341
Accrued expenses and other current liabilities			336,790		351,417	53,637
Guarantee liabilities and risk assurance liabilities(1)			31,400		21,583	3,294
Income tax payable			80,656		100,054	15,271
Total current liabilities			472,609		514,597	78,543
Non-current liabilities:
Deferred tax liabilities, net			10,923		18,564	2,833
Convertible senior notes			822,005		827,555	126,310
Long-term lease liabilities			80,236		152,184	23,228
Long-term borrowings and interest payables			102,415		145,312	22,179
Total non-current liabilities			1,015,579		1,143,615	174,550
Total liabilities			1,488,188		1,658,212	253,093
Shareholders' equity:
Class A Ordinary shares			132		132	20
Class B Ordinary shares			44		44	7
Treasury shares			(371,551)		(368,681)	(56,272)
Additional paid-in capital			4,007,260		4,014,320	612,704
Accumulated other comprehensive loss			(51,420)		(49,160)	(7,503)
Retained earnings			8,315,379		8,793,741	1,342,187
Total Qudian Inc. shareholders' equity			11,899,844		12,390,396	1,891,143
Non-controlling interests			10,000		9,833	1,501
Total equity			11,909,844		12,400,229	1,892,644
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY			13,398,032		14,058,441	2,145,737
Note: (1) The amount includes the balance of the guarantee liabilities accounted in accordance with ASC 815,"Derivative", and the balance of risk assurance liabilities accounted in accordance with ASC 450, "Contingencies" and ASC 460, "Guarantees".

 

 

QUDIAN INC.
Unaudited Reconciliation of GAAP And Non-GAAP Results
			Three months ended March 31,
			2020		2021
(In thousands except for number			(Unaudited)		(Unaudited)		(Unaudited)
of shares and per-share data)			RMB		RMB		US$
Total net income/(loss) attributable to Qudian Inc.'s shareholders			(486,480)		478,362		73,012
Add: Share-based compensation expenses			13,652		9,930		1,516
Less: Convertible bonds buyback income			434,693		-		-
Non-GAAP net income/(loss) attributable to Qudian Inc.'s shareholders			(907,521)		488,292		74,528
Non-GAAP net income/(loss) per share—basic			(3.57)		1.93		0.29
Non-GAAP net income/(loss) per share—diluted			(3.57)		1.85		0.28
Weighted average shares outstanding—basic			253,874,830		253,044,009		253,044,009
Weighted average shares outstanding—diluted			253,874,830		266,647,286		266,647,286

 

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SOURCE Qudian Inc.

FAQ

What were Qudian's total revenues for Q1 2021?

Total revenues for Q1 2021 were RMB515.7 million (US$78.7 million), a decrease of 46.2% year-over-year.

How did Qudian's net income change in Q1 2021?

Qudian's net income rose to RMB478.4 million (US$73.0 million) compared to a loss of RMB486.5 million in Q1 2020.

What is the current number of outstanding borrowers for Qudian?

As of March 31, 2021, Qudian had 3 million outstanding borrowers, an 8% decrease from the previous quarter.

What was the D1 delinquency rate for Qudian in Q1 2021?

The D1 delinquency rate improved to less than 5% as of March 31, 2021.

What is Qudian's cash position as of the end of Q1 2021?

Qudian reported cash and cash equivalents of RMB2.2 billion (US$333.9 million) as of March 31, 2021.