Qudian Inc . (NYSE:QD) today announced its unaudited financial results for the quarter ended March 31, 2022.
First Quarter 2022 Operational Highlights:
- Number of outstanding borrowers[1] from loan book business as of March 31, 2022 decreased by 3.5% to 2.6 million from 2.7 million as of December 31, 2021, as a result of the Company's deployment of a conservative and prudent strategy
- Total outstanding loan balance from loan book business[2] decreased by 41.3% to RMB1.5 billion as of March 31, 2022 from RMB2.6 billion as of December 31, 2021
- Amount of transactions from loan book business for this quarter decreased by 29.8% to RMB2.1 billion from the fourth quarter of 2021
- Weighted average loan tenure for our loan book business was 2.3 months for this quarter, compared to 3.9 months for the fourth quarter of 2021
[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 2022 Financial Highlights:
- Total revenues were RMB201.8 million (US$31.8 million), compared to RMB515.7 million for the same period of last year
- Net loss attributable to Qudian's shareholders was RMB142.8 million (US$22.5 million), compared to an income of RMB478.4 million for the same period of last year, or net loss of RMB0.56 (US$0.09) per diluted ADS
- Non-GAAP net loss attributable to Qudian's shareholders[3] was RMB144.5 million (US$22.8 million), compared to non-GAAP net income attributable to Qudian's shareholders of RMB488.3 million for the same period of last year, or Non-GAAP net loss of RMB0.57 (US$0.09) 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. |
"During the first quarter of 2022, we maintained our stringent approach toward our cash credit business amid the complex macro-environment, funding all transactions by our on-balance sheet capital," said Mr. Min Luo, Founder, Chairman and Chief Executive Officer of Qudian. "Furthermore, our new ready-to-cook meals business, QD Food, has made steady progress since it launched in March 2022 in Guangdong province. We expect to expand its footprint across the nation and will provide more details on the development of this business as we continue to build it. Moving forward, we will maintain our prudent operating strategy for the cash credit business, focus on advancing our ready-to-cook food business and strive to create new engines for sustainable development."
"Driven by our consistent efforts to control credit risk, our asset quality has remained stable, evidenced by the D1 delinquency rate[4] maintaining a steady level at around 5% as of the end of May 2022. In parallel with our efforts to reinforce the health of our balance sheet, we keep persevering with safeguarding the interests of our stakeholders. We will continue implementing our share repurchase program, reflecting our confidence in the robustness of our financial position. As always, we are committed to driving sustainable value for all of our stakeholders in the long run," 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 RMB201.8 million (US$31.8 million), representing a decrease of 60.9% from RMB515.7 million for the first quarter of 2021.
Financing income totaled RMB177.9 million (US$28.1 million), representing a decrease of 50.8% from RMB361.8 million for the first quarter of 2021, as a result of the decrease in the average on-balance sheet loan balance.
Loan facilitation income and other related income decreased by 96.1% to RMB0.5 million (US$0.1 million) from RMB12.2 million for the first quarter of 2021, 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 RMB2.0 million (US$0.3 million) from RMB50.6 million for the first quarter of 2021, mainly as a result of the winding down of the transaction service business.
Sales income and others decreased to RMB4.1 million (US$0.7 million) from RMB62.5 million for the first quarter of 2021, mainly due to the decrease in sales related to the Wanlimu e-commerce platform, which we are in the process of winding down.
Total operating costs and expenses increased to RMB285.5 million (US$45.0 million) from RMB63.3 million for the first quarter of 2021.
Cost of revenues decreased by 64.7% to RMB32.1 million (US$5.1 million) from RMB91.0 million for the first quarter of 2021, primarily due to the decrease in cost of goods sold related to the Wanlimu e-commerce platform.
Sales and marketing expenses decreased by 38.5% to RMB23.1 million (US$3.6 million) from RMB37.6 million for the first quarter of 2021, primarily due to the decrease in marketing expenses related to the Wanlimu e-commerce platform.
General and administrative expenses increased by 77.6% to RMB118.4 million (US$18.7 million) from RMB66.7 million for the first quarter of 2021, primarily due to the increase in the milestone payments relating to construction contracts for the WLM Kids business which were signed in 2021. We are in the process of downsizing the WLM Kids business.
Research and development expenses decreased by 50.0% to RMB19.6 million (US$3.1 million) from RMB39.2 million for the first quarter of 2021, as a result of the decrease in staff salaries.
Provision for receivables and other assets was RMB11.9 million (US$1.9 million) for the first quarter of 2022, mainly as a result of the impairment of current assets related to the WLM Kids business compared to a reversal of RMB106.8 million regarding on-balance sheet loan book business for the same period of last year.
Impairment loss from long-lived assets was RMB113.5 million (US$17.9 million) for this quarter, as the results of the downsizing of the WLM Kids business.
As of March 31, 2022, 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 RMB154.7 million (US$24.4 million), and the balance of allowance for principal and financing service fee receivables at the end of the period was RMB230.9 million (US$36.4 million), indicating M1+ Delinquency Coverage Ratio of 1.5x.
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.
Loss from operations was RMB66.4 million (US$10.5 million), compared to income from operations of RMB464.8 million for the first quarter of 2021.
Net loss attributable to Qudian's shareholders was RMB142.8 million (US$22.5 million), or net loss of RMB0.56 (US$0.09) per diluted ADS.
Non-GAAP net loss attributable to Qudian's shareholders was RMB144.5 million (US$22.8 million), or Non-GAAP net loss of RMB0.57 (US$0.09) per diluted ADS.
Cash Flow
As of March 31, 2022, the Company had cash and cash equivalents of RMB2,245.4 million (US$354.2 million) and restricted cash of RMB229.1 million (US$36.1 million). Restricted cash mainly represents security deposits held in designated bank accounts for the guarantee of on-and-off balance sheet transactions. Such restricted cash is not available to fund the general liquidity needs of the Company.
For the first quarter of 2022, net cash provided by operating activities was RMB567.2 million (US$89.5 million), mainly due to the cash withdrawal from third-party payment service providers. Net cash provided by investing activities was RMB43.1 million (US$6.8 million), mainly due to the net proceeds of loan principal and partially offset by the payments of deposit pledged as collateral for derivative instruments. Net cash used in financing activities was RMB377.8 million (US$59.6 million), mainly due to the repurchase of ordinary shares and convertible senior notes.
Update on Share Repurchase and Convertible Bond Repurchase
As of the date of this release, the Company has repurchased and cancelled a total principal amount of convertible senior notes of US$297.5 million. The Company has cumulatively completed total share repurchases of approximately US$581.2 million.