QD - 1Q20ER 0526 Finalfinal
QD - 1Q20ER 0526 Finalfinal
QD - 1Q20ER 0526 Finalfinal
• Total number of registered users as of March 31, 2020 reached 80.2 million,
representing an increase of 9.5% from March 31, 2019
• Number of outstanding borrowers[1] from loan book business and
transaction services business as of March 31, 2020 decreased by 7.1% to 5.7
million from 6.1 million as of December 31, 2019 as a result of the
conservative and prudent strategy which the Company has deployed under the
current credit environment
• Total outstanding loan balance from loan book business[2] decreased by
32.0% to RMB15.3 billion as of March 31, 2020, compared to the outstanding
balance as of December 31, 2019; Total outstanding loan balance from
transaction serviced on open platform decreased by 15.6% to RMB13.2
billion as of March 31, 2020, compared to the outstanding balance as of
December 31, 2019
• Amount of transactions from loan book business for this quarter decreased
by 52.8% to RMB4.4 billion from the fourth quarter of 2019; Amount of
transactions from transaction serviced on open platform for this quarter
decreased by 68.0% to RMB2.6 billion from the fourth quarter of 2019
• Weighted average loan tenure for our loan book business was 8.4 months
for this quarter, compared with 10.9 months for the fourth quarter of 2019;
Weighted average loan tenure for transaction serviced on open platform
was 11.2 months for this quarter, compared with 13.8 months for the fourth
quarter of 2019
[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.
[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 2020, we continued to navigate the challenging market
environment with prudent execution of our operations,” said Mr. Min Luo, Founder,
Chairman and Chief Executive Officer of Qudian. “The COVID-19 pandemic
accelerated macroeconomic and credit cycle downtrends, which further drove up our
D1 delinquency rate[4] to approximately 20% in the first quarter. In light of the market
headwinds, we maintained a conservative deleveraging strategy to protect our net
assets. Consequently, the transaction volume in our loan book business was reduced
by approximately 53% quarter-over-quarter, and helped us maintain our leverage
ratio[5] at lower than 1.5x. Additionally, the amount of open platform transactions
decreased by approximately 68% quarter-over-quarter as a result of stricter credit
evaluation criteria by institutional funding partners on our open platform.”
“As indicated in our fourth quarter earnings report, we are utilizing increased capital
liquidity from prudent loan book operations for strategic investments in new areas of
growth. To this end, in late March, we launched Wanlimu, a luxury e-commerce
platform offering a wide spectrum of high-end products for consumers in China. We
have a positive view on the tremendous demand and growth potential of China’s
luxury consumer market,” Mr. Luo concluded.
[4] “D1 delinquency rate” is defined as (i) the total amount of principal and financing service fees
that became overdue as 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.
[5] “Leverage ratio” is defined as the ratio between (i) outstanding balance of our loan book
business and (ii) total net assets.
Transaction services fee and other related income was a loss of RMB150.4 million
(US$21.2 million) compared with an income of RMB158.7 million for the first
quarter of 2019, as a combined result of an income of RMB112.9 million for the
transactions facilitated during the first quarter of 2020, an income of RMB24.1
million for the post-origination services of transactions facilitated in the previous year,
and a revaluation loss of RMB287.4 million for contract assets incurred for the
transactions facilitated in 2019. The revaluation was due to adverse changes occurred
in the first quarter of 2020 that led to the deterioration of the estimated likelihood of
receiving borrowers’ actual repayment of service fees as of March 31, 2020.
As of March 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 RMB1,147.6 million (US$162.1
million), and the balance of allowance for principal and financing service fee
receivables at the end of the period was RMB1,971.7 million (US$278.5 million),
indicating M1+ Delinquency Coverage Ratio of 1.7x.
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 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 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 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 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.
Cash Flow
As of March 31, 2020, the Company had cash and cash equivalents of RMB1,516.2
million (US$214.1 million) and restricted cash of RMB540.4 million (US$76.3
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 2020, net cash provided by operating activities was RMB521.6
million (US$73.7 million), mainly due to the collection of repayments of service fees
from transactions facilitated in 2019, although the Company incurred net loss in the
first quarter of 2020. Net cash used in investing activities was RMB1,447.8
million (US$204.5 million), mainly due to payments to originate loan principal and
investments in short-term wealth management products. Net cash used in financing
activities was RMB1,160.6 million (US$163.9 million), mainly due to repayments of
borrowings and repurchase of convertible bonds and ordinary shares.
As of the date of this release, the Company has repurchased and cancelled total
principal amount of convertible senior notes of US$170 million. The Company has
cumulatively completed total share repurchases of approximately US$572.8 million.
As of March 31, 2020, the total number of ordinary shares outstanding was
253,719,036.
The Company has adopted the Financial Instruments – Credit Losses (ASC 326):
Measurement of Credit Losses on Financial Instruments on January 1, 2020, using the
modified retrospective transition method.
This standard 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.
The most significant impact of the standard relates to the accounting for allowance of
loan principal and financing service fee receivables and risk assurance liabilities. The
Company estimates the expected credit losses over the lifetime (the remaining
contractual life) of the related assets and incorporates reasonable and supportable
forecasts of future economic conditions into the calculation.
Conference Call
The Company's management will host an earnings conference call on May 26, 2020 at
7:00 AM U.S. Eastern Time, (7:00 PM Beijing/Hong Kong Time).
To speed up the entry process for participants, this earnings conference call requires
all participants to finish an online registration in advance.
For participants who wish to join the call, please complete the Direct Event online
registration at http://apac.directeventreg.com/registration/event/3928518 at least 15
minutes prior to the scheduled call start time. Upon registration, participants will
receive the conference call access information, including dial-in numbers, Direct
Event Passcode, unique Registrant ID, and an e-mail with detailed instructions to join
the conference call.
Once complete the registration, please dial-in at least 10 minutes before the scheduled
start time of the earnings call and enter the Direct Event Passcode and Registrant ID
as instructed to connect to the 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 1st, 2020, by dialing the following telephone
numbers:
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.
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.
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 RMB7.0808
to US$1.00, the noon buying rate in effect on March 31, 2020 in the H.10 statistical
release of the Federal Reserve Board. The Company makes no representation that the
RMB or US$ amounts referred could be converted into US$ or RMB, as the case may
be, at any particular rate or at all.
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
Qudian Inc.
Tel: +86-592-591-1711
E-mail: [email protected]
Revenues:
Loan facilitation income and other related income 644,413 422,443 59,660
Transaction services fee and other related income(1) 158,724 (150,415) (21,242)
Changes in guarantee liabilities and risk assurance liabilities(2) (108,581) (672,408) (94,962)
QUDIAN INC.
Unaudited Condensed Consolidated Balance Sheets
Non-current assets:
Long-term loan principal and financing service
fee receivables 424 - -
QUDIAN INC.
Unaudited Condensed Consolidated Balance Sheets
Non-current liabilities:
Shareholders’ equity:
Note:
(3) 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