Qudian Inc. Reports Second Quarter 2022 Unaudited Financial Results
XIAMEN, China, Sept. 6, 2022 /PRNewswire/ -- Qudian Inc. ("Qudian" or "the Company" or "We") (NYSE:QD), a consumer-oriented technology company in China, today announced its unaudited financial results for the quarter ended June 30, 2022.
Second Quarter 2022 Operational Highlights:
- Number of outstanding borrowers[1] from loan book business as of June 30, 2022 decreased by 6.7% to 2.4 million from 2.6 million as of March 31, 2022, 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 54.4% to RMB0.7 billion as of June 30, 2022 from RMB1.5 billion as of March 31, 2022
- Amount of transactions from loan book business for this quarter decreased by 31.0% to RMB1.5 billion from the first quarter of 2022
- Weighted average loan tenure for our loan book business was 2.0 months for this quarter, compared to 2.3 months for the first quarter of 2022
[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. |
Second Quarter 2022 Financial Highlights:
- Total revenues were RMB105.4 million (US$15.7 million), compared to RMB412.1 million for the same period of last year
- Net loss attributable to Qudian's shareholders was RMB61.3 million (US$9.2 million), compared to an income of RMB269.9 million for the same period of last year, or net loss of RMB0.25 (US$0.04) per diluted ADS
- Non-GAAP net loss attributable to Qudian's shareholders[3] was RMB52.8 million (US$7.9 million), compared to non-GAAP net income attributable to Qudian's shareholders of RMB282.5 million for the same period of last year, or Non-GAAP net loss of RMB0.21 (US$0.03) 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. |
Recent Developments
Loan Book Business
After careful evaluation, the Company has decided to cease new credit offerings as of September 6, 2022. As of August 31, the Company's total outstanding loan balance from the loan book business was below RMB500 million, with an average loan tenure of approximately three months. The existing outstanding loans continue to generate revenue and will be collected in an orderly manner. As a result of this business adjustment, the Company expects its revenues to significantly decline in the coming quarters compared with the previous quarters.
QD Food Business
After assessing current market conditions, the Company has decided to streamline its QD Food business. With the streamlining in QD Food operations, the Company expects to incur employee severance costs, termination fees for business partners and inventory write offs, which may adversely affect its financial condition and results of operations.
The Company will continue to explore new business opportunities and protect long term value for its shareholders.
Second Quarter Financial Results
Total revenues were RMB105.4 million (US$15.7 million), representing a decrease of 74.4% from RMB412.1 million for the second quarter of 2021.
Financing income totaled RMB66.2 million (US$9.9 million), representing a decrease of 78.8% from RMB311.8 million for the second 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 47.6% to RMB6.6 million (US$1.0 million) from RMB12.6 million for the second 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 RMB6.5 million (US$1.0 million) from RMB38.5 million for the second quarter of 2021, mainly as a result of the winding down of the transaction service business.
Sales income and others decreased to RMB8.8 million (US$1.3 million), which was mainly attributable to sales income generated by QD Food, from RMB23.7 million for the second quarter of 2021, which was mainly attributable to sales generated by the Wanlimu e-commerce platform. We have wound down the Wanlimu e-commerce platform.
Total operating costs and expenses increased to RMB135.9 million (US$20.3 million) from RMB89.3 million for the second quarter of 2021.
Cost of revenues decreased by 36.7% to RMB41.1 million (US$6.1 million) from RMB64.9 million for the second quarter of 2022, primarily due to the decrease in cost of goods sold as a result of the wind-down of the Wanlimu e-commerce platform, partially offset by the cost of goods sold relating to QD Food.
Sales and marketing expenses increased by 82.6% to RMB53.2 million (US$7.9 million) from RMB29.1 million for the second quarter of 2021, primarily due to the increase in marketing expenses related to QD Food.
General and administrative expenses decreased by 68.1% to RMB34.8 million (US$5.2 million) from RMB109.1 million for the second quarter of 2021, primarily due to the downsizing of the WLM Kids business.
Research and development expenses decreased by 52.1% to RMB18.8 million (US$2.8 million) from RMB39.2 million for the second quarter of 2021, as a result of the decrease in staff head count, which led to a corresponding decrease in staff salaries.
Provision for receivables and other assets was a reversal of RMB28.7 million (US$4.3 million) for the second quarter of 2022, mainly due to the decrease in past-due on-balance sheet outstanding principal receivables compared to the second quarter of 2021
Impairment loss from long-lived assets was RMB45.5 million (US$6.8 million) for this quarter, as a result of the downsizing of the WLM Kids business.
As of June 30, 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 RMB124.0 million (US$18.5 million), and the balance of allowance for principal and financing service fee receivables at the end of the period was RMB147.2 million (US$22.0 million), indicating M1+ Delinquency Coverage Ratio of 1.2x.
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 RMB29.4 million (US$4.4 million), compared to income from operations of RMB327.2 million for the second quarter of 2021.
Net loss attributable to Qudian's shareholders was RMB61.3 million (US$9.2 million), or net loss of RMB0.25 (US$0.04) per diluted ADS.
Non-GAAP net loss attributable to Qudian's shareholders was RMB52.8 million (US$7.9 million), or Non-GAAP net loss of RMB0.21 (US$0.03) per diluted ADS.
Cash Flow
As of June 30, 2022, the Company had cash and cash equivalents of RMB3,099.0 million (US$462.7 million) and restricted cash of RMB257.8 million (US$38.5 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 second quarter of 2022, net cash used in operating activities was RMB365.7 million (US$54.6 million), mainly due to the decrease in other current and non-current assets. Net cash provided by investing activities was RMB1,454.7 million (US$217.8 million), mainly due to the net proceeds from the redemption of short-term investments. Net cash used in financing activities was RMB227.3 million (US$33.9 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 all of the convertible senior notes of US$345 million. The Company has cumulatively completed total share repurchases of approximately US$584.8 million.
About Qudian Inc.
Qudian Inc. ("Qudian") is a consumer-oriented technology company in China. The Company historically focused on providing credit solutions to consumers. Qudian is exploring innovative consumer products and services to satisfy Chinese consumers' fundamental and daily needs by leveraging its technology capabilities. In March 2022, it launched a ready-to-cook meal business catering to working-class consumers in China.
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, which is non-cash and non-recurring. 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 is 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 RMB6.6981 to US$1.00, the noon buying rate in effect on June 30, 2022 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ 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 products; Qudian's expectations regarding keeping and strengthening its relationships with customers, business partners and other parties it collaborates 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:
In China:
Qudian Inc.
Tel: +86-592-596-8208
E-mail: ir@qudian.com
The Piacente Group, Inc.
Jenny Cai
Tel: +86 (10) 6508-0677
E-mail: qudian@tpg-ir.com
In the United States:
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 | 2021 | 2022 | |||||
of shares and per-share data) | (Unaudited) | (Unaudited) | (Unaudited) | ||||
RMB | RMB | US$ | |||||
Revenues: | |||||||
Financing income | 311,755 | 66,231 | 9,888 | ||||
Sales commission fee | 9,081 | 95 | 14 | ||||
Sales income and others | 23,655 | 8,753 | 1,307 | ||||
Penalty fee | 16,569 | 17,297 | 2,582 | ||||
Loan facilitation income and other related income | 12,565 | 6,589 | 984 | ||||
Transaction services fee and other related income | 38,462 | 6,481 | 968 | ||||
Total revenues | 412,087 | 105,446 | 15,743 | ||||
Operating cost and expenses: | |||||||
Cost of revenues | (64,890) | (41,083) | (6,134) | ||||
Sales and marketing | (29,140) | (53,211) | (7,944) | ||||
General and administrative | (109,112) | (34,828) | (5,200) | ||||
Research and development | (39,204) | (18,774) | (2,803) | ||||
Changes in guarantee liabilities and risk assurance liabilities(1) | 55,624 | 28,839 | 4,306 | ||||
Provision for receivables and other assets | 97,385 | 28,657 | 4,278 | ||||
Impairment loss from long-lived assets | - | (45,536) | (6,798) | ||||
Total operating cost and expenses | (89,337) | (135,936) | (20,295) | ||||
Other operating income | 4,482 | 1,129 | 169 | ||||
(Loss)/Income from operations | 327,232 | (29,361) | (4,383) | ||||
Interest and investment income, net | 17,713 | 4,646 | 694 | ||||
Loss from equity method investments | - | (241) | (36) | ||||
Loss on derivative instruments | - | (34,671) | (5,176) | ||||
Foreign exchange gain, net | 319 | 798 | 119 | ||||
Other income | 85 | 9,569 | 1,428 | ||||
Other expenses | (750) | (4,974) | (743) | ||||
Net (loss)/income before income taxes | 344,599 | (54,234) | (8,097) | ||||
Income tax expenses | (75,457) | (7,081) | (1,057) | ||||
Net (loss)/income | 269,142 | (61,315) | (9,154) | ||||
Net (loss)/profit attributable to non- | (805) | - | - | ||||
Net (loss)/income attributable to Qudian | 269,947 | (61,315) | (9,154) | ||||
(Loss)/Earnings per share for Class A and | |||||||
Basic | 1.07 | (0.25) | (0.04) | ||||
Diluted | 1.03 | (0.25) | (0.04) | ||||
(Loss)/Earnings per ADS (1 Class A | |||||||
Basic | 1.07 | (0.25) | (0.04) | ||||
Diluted | 1.03 | (0.25) | (0.04) | ||||
Weighted average number of Class A | |||||||
Basic | 253,370,503 | 248,458,980 | 248,458,980 | ||||
Diluted | 266,973,780 | 253,530,688 | 253,530,688 | ||||
Other comprehensive (loss)/gain: | |||||||
Foreign currency translation adjustment | (7,087) | 6,489 | 969 | ||||
Total comprehensive (loss)/income | 262,055 | (54,826) | (8,185) | ||||
Less: total comprehensive loss attributable | (805) | - | - | ||||
Total comprehensive (loss)/income | 262,860 | (54,826) | (8,185) | ||||
Note: | |||||||
QUDIAN INC. | ||||||
Unaudited Condensed Consolidated Balance Sheets | ||||||
As of March 31, | As of June 30, | |||||
(In thousands except for number | 2022 | 2022 | ||||
of shares and per-share data) | (Unaudited) | (Unaudited) | (Unaudited) | |||
RMB | RMB | US$ | ||||
ASSETS: | ||||||
Current assets: | ||||||
Cash and cash equivalents | 2,245,403 | 3,098,964 | 462,663 | |||
Restricted cash | 229,130 | 257,792 | 38,487 | |||
Derivative instruments-assets | 11,289 | 8,665 | 1,294 | |||
Short-term investments | 6,036,136 | 5,070,080 | 756,943 | |||
Short-term loan principal and financing service fee | 1,319,751 | 556,095 | 83,023 | |||
Short-term finance lease receivables | 11,875 | 5,602 | 836 | |||
Short-term contract assets | 19,001 | 13,680 | 2,042 | |||
Other current assets | 1,941,411 | 2,654,670 | 396,332 | |||
Total current assets | 11,813,996 | 11,665,548 | 1,741,620 | |||
Non-current assets: | ||||||
Long-term finance lease receivables | 15 | - | - | |||
Operating lease right-of-use assets | 271,545 | 553,161 | 82,585 | |||
Investment in equity method investee | 119,038 | 119,777 | 17,882 | |||
Long-term investments | 268,921 | 249,257 | 37,213 | |||
Property and equipment, net | 643,734 | 696,128 | 103,929 | |||
Intangible assets | 11,070 | 11,232 | 1,677 | |||
Long-term contract assets | 1 | - | - | |||
Deferred tax assets, net | 51,706 | 35,831 | 5,349 | |||
Other non-current assets | 430,551 | 426,713 | 63,707 | |||
Total non-current assets | 1,796,581 | 2,092,099 | 312,342 | |||
TOTAL ASSETS | 13,610,577 | 13,757,647 | 2,053,962 | |||
QUDIAN INC. | ||||||
Unaudited Condensed Consolidated Balance Sheets | ||||||
As of March 31, | As of June 30, | |||||
(In thousands except for number | 2022 | 2022 | ||||
of shares and per-share data) | (Unaudited) | (Unaudited) | (Unaudited) | |||
RMB | RMB | US$ | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Short-term borrowings and interest payables | - | 120,000 | 17,916 | |||
Short-term lease liabilities | 38,640 | 65,686 | 9,807 | |||
Convertible senior notes-short term | - | 133,962 | 20,000 | |||
Derivative instruments-liability | - | 77,377 | 11,552 | |||
Accrued expenses and other current liabilities | 387,372 | 527,450 | 78,746 | |||
Guarantee liabilities and risk assurance liabilities(2) | 658 | 275 | 42 | |||
Income tax payable | 115,016 | 47,396 | 7,076 | |||
Total current liabilities | 541,686 | 972,146 | 145,139 | |||
Non-current liabilities: | ||||||
Deferred tax liabilities, net | 85,495 | 90,795 | 13,555 | |||
Convertible senior notes | 300,312 | - | - | |||
Long-term lease liabilities | 160,679 | 388,474 | 57,998 | |||
Long-term borrowings and interest payables | 145,312 | 25,312 | 3,779 | |||
Other non-current liabilities | 629 | - | - | |||
Total non-current liabilities | 692,427 | 504,581 | 75,332 | |||
Total liabilities | 1,234,113 | 1,476,727 | 220,471 | |||
Shareholders' equity: | ||||||
Class A Ordinary shares | 132 | 132 | 20 | |||
Class B Ordinary shares | 44 | 44 | 7 | |||
Treasury shares | (351,436) | (390,271) | (58,266) | |||
Additional paid-in capital | 4,019,352 | 4,027,471 | 601,286 | |||
Accumulated other comprehensive loss | (60,047) | (53,559) | (7,996) | |||
Non-controlling interests | 6,765 | - | - | |||
Retained earnings | 8,761,654 | 8,697,103 | 1,298,440 | |||
Total shareholders' equity | 12,376,464 | 12,280,920 | 1,833,491 | |||
TOTAL LIABILITIES AND SHAREHOLDERS' | 13,610,577 | 13,757,647 | 2,053,962 | |||
Note: | ||||||
QUDIAN INC. | |||||||
Unaudited Reconciliation of GAAP And Non-GAAP Results | |||||||
Three months ended June 30, | |||||||
2021 | 2022 | ||||||
(In thousands except for number | (Unaudited) | (Unaudited) | (Unaudited) | ||||
of shares and per-share data) | RMB | RMB | US$ | ||||
Total net (loss)/income attributable to Qudian Inc.'s shareholders | 269,947 | (61,315) | (9,154) | ||||
Add: Share-based compensation expenses | 12,505 | 8,672 | 1,295 | ||||
Less: Convertible bonds buyback income | - | 196 | 29 | ||||
Non-GAAP net (loss)/income attributable to Qudian Inc.'s shareholders | 282,452 | (52,839) | (7,888) | ||||
Non-GAAP net (loss)/income per share—basic | 1.11 | (0.21) | (0.03) | ||||
Non-GAAP net (loss)/income per share—diluted | 1.07 | (0.21) | (0.03) | ||||
Weighted average shares outstanding—basic | 253,370,503 | 248,458,980 | 248,458,980 | ||||
Weighted average shares outstanding—diluted | 266,973,780 | 253,530,688 | 253,530,688 | ||||
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SOURCE Qudian Inc.