Qudian Inc. (QD), a consumer-oriented technology company in China, today announced its unaudited financial results for the quarter ended September 30, 2022.
Third Quarter 2022 Operational Highlights:
- Number of outstanding borrowers[1] from loan book business as of September 30, 2022 decreased by 1.7% to 2.39 million from 2.43 million as of June 30, 2022, as a result of the Company's previously announced decision to cease new credit offerings after September 6, 2022
- Total outstanding loan balance from loan book business[2] decreased by 81.1% to RMB0.1 billion as of September 30, 2022 from RMB0.7 billion as of June 30, 2022
- Amount of transactions from loan book business for this quarter decreased by 73.8% to RMB0.4 billion from the second quarter of 2022
- Weighted average loan tenure for our loan book business was 3.0 months for this quarter, compared to 2.0 months for the second 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. |
Third Quarter 2022 Financial Highlights:
- Total revenues were RMB110.2 million (US$15.5 million), compared to RMB347.4 million for the same period of last year
- Net loss attributable to Qudian's shareholders was RMB648.0 million (US$91.1 million), compared to RMB94.2 million for the same period of last year, or net loss of RMB2.64 (US$0.37) per diluted ADS
- Non-GAAP net loss attributable to Qudian's shareholders[3] was RMB643.9 million (US$90.5 million), compared to RMB99.1 million for the same period of last year, or Non-GAAP net loss of RMB2.63 (US$0.37) 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. |
"In the third quarter of 2022, as the Company continued to undergo a business transition, we dedicated our efforts to smoothly winding down the loan book business and streamlining QD Food in an orderly manner while preserving the health of our balance sheet by pursuing efficient cash management," said Mr. Min Luo, Founder, Chairman and Chief Executive Officer of Qudian. "Moving forward, we will remain focused on exploring new business propositions and investment opportunities, including those overseas, in order to create new growth engines and drive sustainable value for all our stakeholders in the long run."
Third Quarter Financial Results
Total revenues were RMB110.2 million (US$15.5 million), representing a decrease of 68.3% from RMB347.4 million for the third quarter of 2021.
Financing income totaled RMB35.3 million (US$5.0 million), representing a decrease of 87.6% from RMB285.5 million for the third 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 22.4% to RMB6.8 million (US$1.0 million) from RMB8.8 million for the third 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 RMB2.8 million (US$0.4 million) from RMB20.9 million for the third quarter of 2021, mainly as a result of the winding down of the transaction service business.
Sales income and others increased to RMB50.4 million (US$7.1 million), which was mainly attributable to sales income generated by QD Food, from RMB7.3 million for the third quarter of 2021, which was mainly attributable to sales generated by the Wanlimu e-commerce platform. We have streamlined the QD Food business.
Total operating costs and expenses increased to RMB410.6 million (US$57.7 million) from RMB273.2 million for the third quarter of 2021.
Cost of revenues increased by 125.9% to RMB236.2 million (US$33.2 million) from RMB104.6 million for the third quarter of 2021, primarily due to the increase in the cost of goods sold relating to QD Food.
Sales and marketing expenses increased by 437.7% to RMB176.8 million (US$24.9 million) from RMB32.9 million for the third quarter of 2021, primarily due to the increase in marketing expenses related to QD Food.
General and administrative expenses decreased by 60.0% to RMB63.1 million (US$8.9 million) from RMB157.7 million for the third quarter of 2021, primarily due to the downsizing of the WLM Kids business.
Research and development expenses decreased by 56.6% to RMB17.4 million (US$2.4 million) from RMB40.1 million for the third 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 RMB63.6 million (US$8.9 million) for the third quarter of 2022, mainly due to the decrease in past-due on-balance sheet outstanding principal receivables compared to the third quarter of 2021.
Impairment loss from long-lived assets was RMB5.9 million (US$0.8 million) for the third quarter of 2022, as a result of the streamlining in QD Food operations.
As of September 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 RMB51.8 million (US$7.3 million), and the balance of allowance for principal and financing service fee receivables at the end of the period was RMB61.1 million (US$8.6 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 RMB299.8 million (US$42.1 million), compared to income from operations of RMB82.8 million for the third quarter of 2021.
Net loss attributable to Qudian's shareholders was RMB648.0 million (US$91.1 million), or net loss of RMB2.64 (US$0.37) per diluted ADS.
Non-GAAP net loss attributable to Qudian's shareholders was RMB643.9 million (US$90.5 million), or Non-GAAP net loss of RMB2.63 (US$0.37) per diluted ADS.
Cash Flow
As of September 30, 2022, the Company had cash and cash equivalents of RMB3,002.9 million (US$422.1 million) and restricted cash of RMB224.4 million (US$31.6 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 third quarter of 2022, net cash used in operating activities was RMB469.2 million (US$66.0 million), mainly due to payments paid to suppliers and employees, and partially offset by cash received from investment gain. Net cash provided by investing activities was RMB500.1 million (US$70.3 million), mainly due to the net proceeds from the collection of loan principal. Net cash used in financing activities was RMB178.4 million (US$25.1 million), mainly due to the repurchase of ordinary shares and convertible senior notes.
Update on Share Repurchase
As of the date of this release, the Company has cumulatively completed total share repurchases of approximately US$591.3 million.