Qudian Inc. Reports Second Quarter 2020 Unaudited Financial Results
Qudian Inc. reported its unaudited financial results for Q2 2020, revealing total revenues of RMB1,167.0 million, down 47.4% year-over-year. Net income fell 84.3% to RMB179.2 million, translating to RMB0.68 per diluted ADS. The company recorded a 12.5% decrease in outstanding borrowers, totaling 5.0 million, and a significant drop in loan balances. Despite a strategic investment in Secoo, operational challenges persist due to tightened credit assessments. Qudian's cautious approach aims to mitigate credit risks amid a challenging market environment.
- Total outstanding loan balance from transaction services decreased less severely by 25.4% to RMB9.8 billion.
- Sales income increased significantly to RMB293.3 million, mainly due to the launch of the Wanlimu e-commerce platform.
- Completed a strategic investment in Secoo for up to US$100 million.
- Total revenues decreased by 47.4% year-over-year.
- Net income dropped 84.3%, indicating severe profitability challenges.
- Outstanding borrowers decreased by 12.5% from the previous quarter.
- Total operating costs increased by 2.4%, despite falling revenues.
XIAMEN, China, Sept. 7, 2020 /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 June 30, 2020.
Second Quarter 2020 Operational Highlights:
- Total number of registered users as of June 30, 2020 reached 80.8 million, representing an increase of
6.4% from June 30, 2019 - Number of outstanding borrowers[1] from loan book business and transaction services business as of June 30, 2020 decreased by
12.5% to 5.0 million from 5.7 million as of March 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
36.4% to RMB9.7 billion as of June 30, 2020, compared to the outstanding balance as of March 31, 2020; Total outstanding loan balance from transaction serviced on open platform decreased by25.4% to RMB9.8 billion as of June 30, 2020, compared to the outstanding balance as of March 31, 2020 - Amount of transactions from loan book business for this quarter decreased by
5.9% to RMB4.2 billion from the first quarter of 2020; Amount of transactions from transaction serviced on open platform for this quarter decreased by72.3% to RMB0.7 billion from the first quarter of 2020 - Weighted average loan tenure for our loan book business was 4.7 months for this quarter, compared with 8.4 months for the first quarter of 2020; Weighted average loan tenure for transactions serviced on open platform was 10.6 months for this quarter, compared with 11.2 months for the first quarter of 2020
[1] Outstanding borrowers are borrowers who have outstanding loans as of a particular date, including outstanding borrowers from both loan book business and transaction services business. Transaction services business, relates to various services, including credit assessment, referral and post-origination services, provided through our open platform, which was launched in the second half of 2018. [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.
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Second Quarter 2020 Financial Highlights:
- Total revenues were RMB1,167.0 million (US
$165.2 million ), representing a decrease of47.4% from the same period of last year - Net income decreased by
84.3% year-on-year to RMB179.2 million (US$25.4 million ), or RMB0.68 (US$0.10) per diluted ADS - Non-GAAP net income[3] decreased by
97.4% year-on-year to RMB29.9 million (US$4.2 million ), or RMB0.12 (US$0.02) 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. |
"We continued the prudent operation of our cash credit business during the second quarter of 2020," said Mr. Min Luo, Founder, Chairman and Chief Executive Officer of Qudian. "In light of unstable market conditions during the period, we adopted an extremely stringent approach for loan approvals while keeping focused on decreasing exposure to credit market risks. As such, our loan book business, as compared with the first quarter, maintained loan transaction volume that was relatively flat during the period. Meanwhile, as some of our institutional funding partners tightened their credit assessments, transaction volume on our open platform decreased by approximately
"In the second quarter, we completed a strategic investment in Secoo. We look forward to generating synergies in the luxury consumer business," said Ms. Sissi Zhu, Vice President of Investor Relations of Qudian.
"Given the still challenging and fast-evolving market environment for our credit loan business and, in an effort to mitigate risk, we will remain strict with our credit approval standards when operating our loan book business. Despite headwinds, we are taking appropriate actions to protect our net assets while actively exploring market opportunities for future growth," Ms. Zhu concluded.
Second Quarter Financial Results
Total revenues were RMB1,167.0 million (US
Financing income totaled RMB580.9 million (US
Loan facilitation income and other related income decreased by
Transaction services fee and other related income decreased to RMB4.1 million (US
Sales income substantially increased to RMB293.3 million (US
Sales commission fee decreased by
Total operating costs and expenses increased by
Cost of revenues increased by
Sales and marketing expenses increased by
General and administrative expenses increased by
Research and development expenses decreased by
Provision for receivables and other assets increased by
As of June 30, 2020, 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 RMB1,166.5 million (US
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 decreased to RMB312.4 million (US
Net income attributable to Qudian's shareholders was RMB179.2 million (US
Non-GAAP net income attributable to Qudian's shareholders was RMB29.9 million (US
Cash Flow
As of June 30, 2020, the Company had cash and cash equivalents of RMB1,066.0 million (US
For the second quarter of 2020, net cash provided by operating activities was RMB317.3 million (US
Update on Share Repurchase and Convertible Bond Repurchase
As of the date of this release, the Company has repurchased and cancelled total principal amount of convertible senior notes of US
Strategic Investment in Secoo
In June 2020, the Company made a strategic investment in Secoo Holding Limited ("Secoo") of up to US
Regulation Update
On August 20, 2020, the Supreme People's Court of China issued the Decisions of the Supreme People's Court to Amend the Provisions on Several Issues concerning the Application of Law in the Trial of Private Lending Cases ("Decisions"), effective immediately, which set the court protected one-year interest rate cap at four times that of the Loan Prime Rate ("LPR") for private lending.
According to the Decisions, the interest rate cap is not applicable to the lending business of financial institutions and their branches that have been established with the approval of financial regulatory authorities. Rather, this new policy is generally interpreted as only being applicable to private lending, while our business almost entirely involves financial institutions. However, it is important to note that the Decisions are newly promulgated, and the policy is subject to further clarifications by courts and regulatory authorities. If the same interest rate cap were applied to our business as required by relevant courts or regulatory authorities, our profitability may suffer a material adverse impact, and we could incur net losses.
For the complete text of the Decisions, please refer to http://www.court.gov.cn/fabu-xiangqing-249031.html. The information contained on this website is not a part of this press release.
Conference Call
The Company's management will host an earnings conference call on September 7, 2020 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. Second Quarter 2020 Earnings Conference Call |
Conference ID: | 8489234 |
Registration link: |
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 September 14, 2020, by dialing the following telephone numbers:
U.S.: | +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 (toll-free) / 800-870-0205 (toll-free) | |||||
Passcode: | 8489234 | |||||
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 RMB7.0651 to US
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.
Xi Zhang
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 June 30, | ||||||
(In thousands except for number | 2019 | 2020 | ||||
of shares and per-share data) | (Unaudited) | (Unaudited) | (Unaudited) | |||
RMB | RMB | US$ | ||||
Revenues: | ||||||
Financing income | 984,446 | 580,856 | 82,215 | |||
Sales commission fee | 95,602 | 14,404 | 2,039 | |||
Sales income | 123,536 | 293,292 | 41,513 | |||
Penalty fee | 9,394 | 19,335 | 2,736 | |||
Loan facilitation income and other related income | 609,651 | 255,063 | 36,102 | |||
Transaction services fee and other related income | 398,068 | 4,098 | 580 | |||
Total revenues | 2,220,697 | 1,167,048 | 165,185 | |||
Operating cost and expenses: | ||||||
Cost of revenues | (286,135) | (366,381) | (51,858) | |||
Sales and marketing | (77,732) | (156,806) | (22,194) | |||
General and administrative | (67,326) | (75,334) | (10,663) | |||
Research and development | (62,882) | (56,265) | (7,964) | |||
Changes in guarantee liabilities and risk assurance liabilities(1) | 29,473 | 191,420 | 27,094 | |||
Provision for receivables and other assets | (494,454) | (519,014) | (73,462) | |||
Total operating cost and expenses | (959,056) | (982,380) | (139,047) | |||
Other operating income | 2,570 | 127,698 | 18,074 | |||
Income from operations | 1,264,211 | 312,366 | 44,212 | |||
Interest and investment (loss)/income, net | 11,348 | (65,758) | (9,307) | |||
Foreign exchange gain/(loss), net | (1,074) | 4,960 | 702 | |||
Other income | 21,915 | 10,059 | 1,424 | |||
Other expenses | (372) | (94) | (13) | |||
Net income before income taxes | 1,296,028 | 261,533 | 37,018 | |||
Income tax expenses | (152,622) | (82,371) | (11,659) | |||
Net income | 1,143,406 | 179,162 | 25,359 | |||
Net income attributable to Qudian Inc.'s | 1,143,406 | 179,162 | 25,359 | |||
Earnings per share for Class A and Class B | ||||||
Basic | 4.03 | 0.71 | 0.10 | |||
Diluted | 4.00 | 0.68 | 0.10 | |||
Earnings per ADS (1 Class A ordinary share | ||||||
Basic | 4.03 | 0.71 | 0.10 | |||
Diluted | 4.00 | 0.68 | 0.10 | |||
Weighted average number of Class A and Class | ||||||
Basic | 284,022,960 | 253,724,694 | 253,724,694 | |||
Diluted | 285,735,609 | 272,190,273 | 272,190,273 | |||
Other comprehensive (loss)/income: | ||||||
Foreign currency translation adjustment | 9,755 | (10,165) | (1,439) | |||
Total comprehensive income | 1,153,161 | 168,997 | 23,920 | |||
Total comprehensive income attributable | 1,153,161 | 168,997 | 23,920 | |||
Note: | ||||||
QUDIAN INC. | |||||||
Unaudited Condensed Consolidated Balance Sheets | |||||||
As of March 31, | As of June 30, | ||||||
(In thousands except for number | 2020 | 2020 | |||||
of shares and per-share data) | (Unaudited) | (Unaudited) | (Unaudited) | ||||
RMB | RMB | US$ | |||||
ASSETS: | |||||||
Current assets: | |||||||
Cash and cash equivalents | 1,516,175 | 1,065,977 | 150,879 | ||||
Restricted cash | 540,440 | 510,795 | 72,298 | ||||
Time Deposits | 235,083 | - | - | ||||
Short-term investments | 1,232,850 | 2,287,840 | 323,823 | ||||
Short-term loan principal and financing service fee receivables | 7,286,743 | 5,758,287 | 815,033 | ||||
Short-term finance lease receivables | 353,186 | 339,838 | 48,101 | ||||
Short-term contract assets | 1,543,687 | 731,478 | 103,534 | ||||
Other current assets | 1,113,298 | 1,360,474 | 192,563 | ||||
Total current assets | 13,821,462 | 12,054,689 | 1,706,231 | ||||
Non-current assets: | |||||||
Long-term finance lease receivables | 144,900 | 45,544 | 6,446 | ||||
Operating lease right-of-use assets | 142,596 | 139,039 | 19,680 | ||||
Investment in equity method investee | 23,084 | 487,618 | 69,018 | ||||
Long-term investments | 222,706 | 222,706 | 31,522 | ||||
Property and equipment, net | 113,983 | 145,910 | 20,652 | ||||
Intangible assets | 6,489 | 7,257 | 1,027 | ||||
Long-term contract assets | 98,399 | 69,494 | 9,836 | ||||
Deferred tax assets | 466,047 | 441,640 | 62,510 | ||||
Other non-current assets | 16,216 | 6,837 | 968 | ||||
Total non-current assets | 1,234,420 | 1,566,045 | 221,659 | ||||
TOTAL ASSETS | 15,055,882 | 13,620,734 | 1,927,890 | ||||
QUDIAN INC. | |||||||
Unaudited Condensed Consolidated Balance Sheets | |||||||
As of March 31, | As of June 30, | ||||||
(In thousands except for number | 2020 | 2020 | |||||
of shares and per-share data) | (Unaudited) | (Unaudited) | (Unaudited) | ||||
RMB | RMB | US$ | |||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Short-term borrowings and interest payables | 384,596 | 321,541 | 45,511 | ||||
Short-term lease liabilities | 20,378 | 21,911 | 3,101 | ||||
Accrued expenses and other current liabilities | 672,539 | 648,680 | 91,815 | ||||
Guarantee liabilities and risk assurance liabilities(1) | 1,798,603 | 715,577 | 101,283 | ||||
Income tax payable | 221,625 | 170,815 | 24,177 | ||||
Total current liabilities | 3,097,741 | 1,878,524 | 265,888 | ||||
Non-current liabilities: | |||||||
Deferred tax liabilities | 10,005 | 7,125 | 1,009 | ||||
Convertible senior notes | 1,438,448 | 1,009,992 | 142,955 | ||||
Long-term lease liabilities | 17,729 | 13,417 | 1,899 | ||||
Long-term borrowings and interest payables | 23,888 | 54,338 | 7,691 | ||||
Total non-current liabilities | 1,490,070 | 1,084,872 | 153,554 | ||||
Total liabilities | 4,587,811 | 2,963,396 | 419,442 | ||||
Shareholders' equity: | |||||||
Class A Ordinary shares | 131 | 131 | 19 | ||||
Class B Ordinary shares | 44 | 44 | 6 | ||||
Treasury shares | (369,227) | (369,227) | (52,261) | ||||
Additional paid-in capital | 3,981,385 | 4,001,654 | 566,397 | ||||
Accumulated other comprehensive loss | (14,342) | (24,506) | (3,469) | ||||
Retained earnings | 6,870,080 | 7,049,242 | 997,756 | ||||
Total shareholders' equity | 10,468,071 | 10,657,338 | 1,508,448 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 15,055,882 | 13,620,734 | 1,927,890 | ||||
Note: | |||||||
QUDIAN INC. | |||||||
Unaudited Reconciliation of GAAP And Non-GAAP Results | |||||||
Three months ended June 30, | |||||||
2019 | 2020 | ||||||
(In thousands except for number | (Unaudited) | (Unaudited) | (Unaudited) | ||||
of shares and per-share data) | RMB | RMB | US$ | ||||
Total net income attributable to Qudian Inc.'s shareholders | 1,143,406 | 179,162 | 25,359 | ||||
Add: Share-based compensation expenses | 15,162 | 20,269 | 2,869 | ||||
Less: Convertible bonds buyback income | - | 169,511 | 23,993 | ||||
Non-GAAP net income attributable to Qudian Inc.'s shareholders | 1,158,568 | 29,920 | 4,235 | ||||
Non-GAAP net income per share—basic | 4.08 | 0.12 | 0.02 | ||||
Non-GAAP net income per share—diluted | 4.05 | 0.12 | 0.02 | ||||
Weighted average shares outstanding—basic | 284,022,960 | 253,724,694 | 253,724,694 | ||||
Weighted average shares outstanding—diluted | 285,735,609 | 253,724,694 | 253,724,694 | ||||
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SOURCE Qudian Inc.
FAQ
What were Qudian's financial results for Q2 2020?
How did the number of Qudian's outstanding borrowers change in Q2 2020?
What strategic investment did Qudian make in Q2 2020?
What impact did tightened credit assessments have on Qudian's operations?
What was Qudian's approach to credit risk during Q2 2020?
