Qudian Inc. (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 and full year ended December 31, 2020.
Fourth Quarter 2020 Operational Highlights:
— Number of outstanding borrowers[1] from loan book business and
transaction services business as of December 31, 2020 decreased by 14.7%
to 3.5 million from 4.1 million as of September 30, 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 24.8% to RMB4.8 billion as of December 31, 2020, compared to the
outstanding balance as of September 30, 2020; Total outstanding loan
balance from transactions serviced on open platform decreased by 25.7% to
RMB5.1 billion as of December 31, 2020, compared to the outstanding
balance as of September 30, 2020
— Amount of transactions from loan book business for this quarter decreased
by 2.3% to RMB4.8 billion from the third quarter of 2020; Amount of
transactions serviced on open platform for this quarter decreased by
50.2% to RMB248.0 million from the third quarter of 2020
— Weighted average loan tenure for our loan book business was 4.5 months
for this quarter, compared with 4.6 months for the third quarter of 2020;
Weighted average loan tenure for transactions serviced on open platform
was 6.4 months for this quarter, compared with 6.8 months for the third
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.
Fourth Quarter 2020 Financial Highlights:
— Total revenues were RMB713.6 million (US$109.4 million), representing a
decrease of 63.1% from the same period of last year
— Net income increased by 427.0% year-on-year to RMB673.9 million (US$103.3
million), or RMB2.54 (US$0.39) per diluted ADS
— Non-GAAP net income[3] increased by 335.6% year-on-year to RMB683.5
million (US$104.8 million), or RMB2.57 (US$0.39) per diluted ADS
Full Year 2020 Financial Highlights:
— Total revenues were RMB3,688.0 million (US$565.2 million) in 2020,
representing a decrease of 58.3% from 2019, primarily due to the decrease
in the amount of transactions
– Loan facilitation income and other related income decreased by 58.3% year-on-year to RMB957.8 million (US$146.8 million) from RMB2,297.4 million for 2019
– Transaction services fee and other related income which relate to transaction services and traffic referral services provided by the Company’s open platform, was a loss of RMB136.5 million (US$20.9 million)
– Financing income decreased by 40.1% to RMB2,102.7 million (US$322.2 million) from RMB3,510.1 million in 2019 as a result of the decrease in the average on-balance sheet loan balance
— Net income decreased by 70.6% year-on-year to RMB958.8 million (US$146.9
million), or RMB3.59 (US$0.55) per diluted ADS
— Non-GAAP net income[3] decreased by 88.6% year-on-year to RMB382.3
million (US$58.6 million), or RMB1.49 (US$0.23) 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.
“Despite pandemic-driven uncertainty and challenging market conditions as well as a continuously shifting regulatory environment, we were able to conclude 2020 with further improvements in our asset quality as we remained vigilant in our cash credit business operation,” said Mr. Min Luo, Founder, Chairman and Chief Executive Officer of Qudian. “During the fourth quarter of 2020, we maintained strict credit approval standards as we focused on borrowers with strong credit profiles. By the end of the fourth quarter, our overall D1 delinquency rate([4]) fell to approximately 11%, from around 17% at the end of the third quarter, reflecting the effectiveness of our strategy. As 2021 unfolds, we will continue to prudently operate our cash loan business while simultaneously exploring new areas for growth.”
“Given that 2020 saw the impact from a weakened global economy and intricate online lending market dynamics, we upheld stringent credit risk assessments for new loans originated on our platform. At the same time, we remain dedicated to pursuing new investment opportunities. Supported by ample cash reserves and a healthy financial position, our core strengths and solid fundamentals can bolster the long-term sustainability of our overall business,” 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 and transaction services business.
Fourth Quarter Financial Results
Total revenues were RMB713.6 million (US$109.4 million), representing a decrease of 63.1% from RMB1,931.6 million for the fourth quarter of 2019.
Financing income totaled RMB411.8 million (US$63.1 million), representing a decrease of 42.6% from RMB717.0 million for the fourth quarter of 2019, as a result of the decrease in the average on-balance sheet loan balance.
Loan facilitation income and other related income decreased by 77.6% to RMB103.2 million (US$15.8 million) from RMB460.0 million for the fourth quarter of 2019, as a result of the reduction in transaction volume of off-balance sheet loans during this quarter.
Transaction services fee and other related income decreased to RMB3.1 million (US$0.5 million) from RMB649.4 million for the fourth quarter of 2019, mainly as a result of the substantial decrease in the transaction amounts of open platform.
Sales income increased to RMB161.5 million (US$24.7 million) from RMB35.9 million for the fourth quarter of 2019, mainly due to sales related to the Wanlimu e-commerce platform, partially offset by winding down the Dabai Auto business.
Sales commission fee decreased by 73.3% to RMB14.8 million (US$2.3 million) from RMB55.5 million for the fourth quarter of 2019, due to the decrease in the amount of merchandise credit transactions.
Total operating costs and expenses decreased by 99.0% to RMB16.7 million (US$2.6 million) from RMB1,754.3 million for the fourth quarter of 2019.
Cost of revenues increased by 35.4% to RMB201.6 million (US$30.9 million) from RMB148.8 million for the fourth quarter of 2019, primarily due to the increase in cost of goods sold related to the Wanlimu e-commerce platform, partially offset by the decrease in funding costs associated with the on-balance sheet loan book business and the decrease in costs of the Dabai Auto business.
Sales and marketing expenses decreased by 77.6% to RMB12.9 million (US$2.0 million) from RMB57.5 million for the fourth quarter of 2019, primarily due to the decrease in third-party service fees.
General and administrative expenses increased by 7.0% to RMB75.7 million (US$11.6 million) from RMB70.8 million for the fourth quarter of 2019.
Research and development expenses decreased by 74.9% to RMB8.6 million (US$1.3 million) from RMB34.3 million for the fourth quarter of 2019, as a result of the decrease in staff salaries.
Provision for receivables and other assets reversed to RMB-75.6 million (US$-11.6 million), compared to RMB707.2 million for the fourth quarter of 2019, mainly due to the decrease in past-due on-balance sheet outstanding principal receivables compared to the fourth quarter of 2019.
As of December 31, 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 RMB358.2 million (US$54.9 million), and the balance of allowance for principal and financing service fee receivables at the end of the period was RMB849.2 million (US$130.2 million), indicating M1+ Delinquency Coverage Ratio of 2.4x.
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.
2021-03-29 09:00:00 GMT Qudian Inc. Reports Fourth Quarter and Full Year -2-
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 increased to RMB746.6 million (US$114.4 million) from RMB226.8 million for the fourth quarter of 2019.
Net income attributable to Qudian’s shareholders was RMB673.9 million (US$103.3 million), or RMB2.54 (US$0.39) per diluted ADS.
Non-GAAP net income attributable to Qudian’s shareholders was RMB683.5 million (US$104.8 million), or RMB2.57 (US$0.39) per diluted ADS.
Full Year 2020 Financial Results
Total revenues were RMB3,688.0 million (US$565.2 million), a decrease of 58.3% from RMB8,840.0 million for 2019.
Financing income totaled RMB2,102.7 million (US$322.2 million), a decrease of 40.1% from RMB3,510.1 million for 2019.
Loan facilitation income and other related income decreased by 58.3% to RMB 957.8 million (US$146.8 million) from RMB2,297.4 million for 2019, as a result of the decrease in the amount of off-balance sheet transactions.
Transaction services fee and other related income was a loss of RMB136.5 million (US$20.9 million), primarily due to a revaluation loss for contract assets incurred for the transactions facilitated in the past year.
Sales income substantially increased to RMB610.8 million (US$93.6 million) from RMB431.9 million for 2019, mainly due to the launch of the Wanlimu e-commerce platform, partially offset by winding down the Dabai Auto business.
Sales commission fee decreased by 77.3% to RMB81.0 million (US$12.4 million) from RMB356.8 million for 2019, due to the decrease in the amount of merchandise credit transactions.
Total operating costs and expenses decreased by 37.9% to RMB3,165.7 million (US$485.2 million) from RMB5,099.8 million for 2019.
Cost of revenues decreased by 4.4% to RMB862.4 million (US$132.2 million) from RMB901.8 million for 2019, primarily due to the decrease in funding costs associated with the on-balance sheet loan book business and the decrease in costs of Dabai Auto business, partially offset by the increase in cost of goods sold related to the Wanlimu e-commerce platform.
Sales and marketing expenses increased by 4.5% to RMB293.3 million (US$44.9 million) from RMB280.6 million for 2019. The increase was primarily due to marketing expenses incurred by the Wanlimu e-commerce platform.
General and administrative expenses decreased by 0.1% to RMB285.9 million (US$43.8 million) from RMB286.1 million for 2019.
Research and development expenses decreased by 16.6% to RMB170.7 million (US$26.2 million) from RMB204.8 million for 2019. The decrease was primarily due to the decrease in staff salaries.
Provision for receivables and other assets decreased by 28.1% to RMB1,641.4 million (US$251.6 million) from RMB2,283.1 million for 2019. The decrease was primarily due to the decrease in past-due on-balance sheet outstanding principal receivables compared to 2019.
Income from operations decreased by 77.5% to RMB865.6 million (US$132.7 million) from RMB3,848.8 million for 2019.
Net income attributable to Qudian’s shareholders decreased by 70.6% to RMB958.8 million (US$146.9 million), or RMB3.59 (US$0.55) per diluted ADS.
Non-GAAP net income attributable to Qudian’s shareholders decreased by 88.6% to RMB382.3 million (US$58.6 million), or RMB1.49 (US$0.23) per diluted ADS.
Cash Flow
As of December 31, 2020, the Company had cash and cash equivalents of RMB1,537.6 million (US$235.6 million) and restricted cash of RMB135.4 million (US$20.8 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 fourth quarter of 2020, net cash provided by operating activities was RMB437.5 million (US$67.1 million), mainly attributable to net income of RMB673.9 million (US$103.3 million) and partially offset by the change in other current and non-current liabilities of RMB377.9 million (US$57.9 million). Net cash used in investing activities was RMB355.0 million (US$54.4 million), mainly due to investments in short-term wealth management products and partially offset by net proceeds from collection of loan principal. Net cash used in financing activities was RMB50.2 million (US$7.7 million), mainly due to repurchases of convertible senior notes.
For the full year of 2020, net cash provided by operating activities was RMB2,471.7 million (US$378.8 million), mainly attributable to net income of RMB958.8 million (US$146.9 million) and the adjustment of provision for receivables and other assets of RMB1,641.4 million (US$251.6 million). Net cash used in investing activities was RMB3,269.9 million (US$501.1 million), mainly due to investments in short-term wealth management products of RMB16,802.9 million (US$2,575.2 million), partially offset by proceeds from redemption of short-term investments of RMB 11,815.2 million (US$1,810.8 million). Net cash used in financing activities was RMB1,591.3 million (US$243.9 million), mainly due to repayments of borrowings of RMB1,038.7 million (US$159.2 million) and repurchases of convertible senior notes of RMB859.2 million (US$131.7 million).
Update on Share Repurchase and Convertible Bond Repurchase
As of the date of this release, the Company has repurchased total principal amount of convertible senior notes of US$217.0 million. The Company has cumulatively completed total share repurchases of approximately US$574.0 million.
Conference Call
The Company’s management will host an earnings conference call on March 29, 2021 at 7:00 AM U.S. Eastern Time (7:00 PM Beijing/Hong Kong Time). Details for the conference call are as follows:
Qudian Inc. Fourth Quarter and Full Year 2020 Earnings
Title of Event: Conference Call
Conference ID: 4155829
Registration link: http://apac.directeventreg.com/registration/event/4155829
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 April 5, 2021, 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 / 800-870-0205 (toll-free)
Passcode: 4155829
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.
