Fintech Qudian Reports $63.8M in Q2 2021 Revenue, with $41.8M in Income Attributed to Shareholders

Qudian Inc. (NYSE: QD), an established technology platform that aims to improve the online consumer finance experience for Chinese consumers, recently revealed its “unaudited” financial results for the quarter and “ended June 30, 2021.”

As noted in a release by Qudian, some of the Q2 2021 Operational Highlights are as follows:

  • Number of outstanding borrowers from loan book business “as of June 30, 2021 decreased by 3.8% to 2.9 million from 3.0 million as of March 31, 2021, as a result of the Company’s deployment of a conservative and prudent strategy”
  • Total outstanding loan balance from loan book business “decreased by 13.8% to RMB3.5 billion as of June 30, 2021, compared to the outstanding balance as of March 31, 2021”
  • Amount of transactions from loan book business for this quarter “decreased by 12.1% to RMB3.9 billion from the first quarter of 2021;” Amount of transactions “serviced on open platform for this quarter decreased by 32.5% to RMB142.0 million from the first quarter of 2021”
  • Weighted average loan tenure for our loan book business “was 4.4 months for this quarter, compared with 4.5 months in the first quarter of 2021;” Weighted average loan tenure “for transactions serviced on open platform was 6.2 months for this quarter, compared with 6.7 months in the first quarter of 2021”

Second Quarter 2021 Financial Highlights:

  • Total revenues “were RMB412.1 million (US$63.8 million), compared to RMB1,167.0 million from the same period of last year”
  • Net income attributable to Qudian’s shareholders “was RMB269.9 million (US$41.8 million), representing an increase of 50.7% from the same period of last year, or RMB1.03 (US$0.16) per diluted ADS”
  • Non-GAAP net income attributable to Qudian’s shareholders “was RMB282.5 million (US$43.7 million), representing an increase of 844.0% from the same period of last year, or RMB1.07 (US$0.17) per diluted ADS”

Min Luo, Founder, Chair and CEO at Qudian, stated:

“During the second quarter of 2021, we analyzed evolving market dynamics and maintained a prudent approach to our cash credit business, ultimately generating total transaction volume of approximately RMB3.9 billion during the period,”

Min Luo added:

“We are also delighted with WLM KIDS’ steady progress. We opened two new WLM KIDS activities centers in Fuzhou and Xiamen. As of August 24, 2021, we have three WLM KIDS activities centers in operation, and we have signed the lease agreements for another 37 WLM KIDS activities centers, of which 24 WLM KIDS activities centers are currently under renovation. Going forward, we will prudently manage WLM KIDS’ expansion and continue to deliver state-of-the-art extra-curriculum activities services and products to China’s children and families.”

Sissi Zhu, Vice President of Investor Relations of Qudian, remarked:

“As we continued to implement stringent credit approval standards and strategically shifted toward higher-quality borrowers, our asset quality further improved and the D1 delinquency rate for our loan book business decreased to below 5% at the end of the second quarter. Looking ahead, we remain dedicated to controlling credit risk in our loan book business and committed to creating and delivering value to children, families and society with our extra-curriculum activities business.”

Second Quarter Financial Results

  • Total revenues were RMB412.1 million (US$63.8 million), “representing a decrease of 64.7% from RMB1,167.0 million for the second quarter of 2020.”
  • Financing income “totaled RMB311.8 million (US$48.3 million), representing a decrease of 46.3% from RMB580.9 million for the second quarter of 2020, as a result of the decrease in the average on-balance sheet loan balance.”
  • Loan facilitation income and other related income “decreased by 95.1% to RMB12.6 million (US$1.9 million) from RMB255.1 million for the second quarter of 2020, as a result of the reduction in transaction volume of off-balance sheet loans during this quarter.”
  • Transaction services fee and other related income “increased to RMB38.5 million (US$6.0 million) from RMB4.1 million for the second quarter of 2020, mainly as a result of the reassessment of variable consideration.”
  • Sales income and others “decreased to RMB23.7 million (US$3.7 million) from RMB293.3 million for the second quarter of 2020, mainly due to sales related to the Wanlimu e-commerce platform, which we are in the process of winding down.”
  • Sales commission fee “decreased by 37.0% to RMB9.1 million (US$1.4 million) from RMB14.4 million for the second quarter of 2020, due to the decrease in the amount of merchandise credit transactions.”
  • Total operating costs and expenses “decreased by 90.9% to RMB89.3 million (US$13.8 million) from RMB982.4 million for the second quarter of 2020.”
  • Cost of revenues “decreased by 82.3% to RMB64.9 million (US$10.1 million) from RMB366.4 million for the second quarter of 2020, primarily due to the decrease in costs associated with the loan book business and the decrease in cost of goods sold related to the Wanlimu e-commerce platform.”
  • Sales and marketing expenses “decreased by 81.4% to RMB29.1 million (US$4.5 million) from RMB156.8 million for the second quarter of 2020, primarily due to the decrease in marketing promotional expenses.”
  • General and administrative expenses “increased by 44.8% to RMB109.1 million (US$16.9 million) from RMB75.3 million for the second quarter of 2020, as a result of the increase in staff salaries primarily relating to WLM Kids business.”
  • Research and development expenses “decreased by 30.3% to RMB39.2 million (US$6.1 million) from RMB56.3 million for the second quarter of 2020, as a result of the decrease in staff salaries.”
  • Provision for receivables and other assets “was a reversal of RMB97.4 million (US$15.1 million), compared to a loss of RMB519.0 million for the second quarter of 2020, mainly due to the decrease in past-due on-balance sheet outstanding principal receivables compared to the second quarter of 2020.”

As confirmed in the update:

“As of June 30, 2021, 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 RMB147.5 million (US$22.8 million), and the balance of allowance for principal and financing service fee receivables at the end of the period was RMB374.3 million (US$58.0 million), indicating M1+ Delinquency Coverage Ratio of 2.5x.”

For more details on this announcement, check here.

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