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Qudian Inc. American Depositary Shares, each representing one Class A Ordinary Share
Q4 2020 Earnings Conference Call
3/29/2021
spk03: Hello, ladies and gentlemen. Thank you for standing by for QDN Inc. Fourth Quarter and Full Year 2020 Earnings Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to our host from QDN. Please go ahead.
spk00: Hello, everyone, and welcome to QDN's Fourth Quarter and Full Year 2020 Earnings Conference Call. The company's results were issued via NewsWare services earlier today and were posted online. You can download the earnings brief release and sign up for the company's distribution list by visiting our website at ir.qidian.com. Mr. Ming Luo, our founder, chairman, and chief executive officer, and Ms. Cici Zhu, our VP of investor relations, will start the call with their prepared remarks. Before we continue, Please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Previate Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the county's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that Shijie's earnings pre-release and this conference call includes discussions of unaudited gap financial information as well as unaudited non-gap financial measures. Shijie's pre-release contains a reconciliation of the unaudited non-gap measures to the unaudited most directly comparable guest manager. We also posted a slide presentation on our IR website, providing details on our results in a quarter. We will reference those results in our prepared remarks, but will not refer to specific slides during our discussion. I will now turn the call over to our CEO, Miluo. Please go ahead.
spk02: Hello, everyone. I would like to thank you all for joining today's call. Despite pandemic driving uncertainty and challenging market conditions as well as continuous shifting regulatory environment, we were able to conclude 2020 with further improvements in our asset quality as we remain rich in our cash, credit, business operations. In the first quarter of 2020, we generated approximately 4.8 billion RMB transactions from our own book, Business. Staying relatively flat with the previous quarter, as 2021 unfolds, we will continue to prudently operate our cash loan business while simultaneously exploring new areas for growth. Turning to our new business initiative, we remain on track to develop our early childhood education business. Now, I would like to turn the call over to Sissy for more details our list up.
spk01: Thank you Ming and good morning and good evening everyone. As Ming mentioned, given that 2020 saw the impact from a weakened global economy and intricate online lending market dynamics, we have been maintaining cautious and conservative operations in our loan business by implementing strict credit risk assessment for new transactions. As a result, our loan book transaction volume slightly decreased by 2% in the fourth quarter from the prior quarter. Meanwhile, our open platform loan transaction volume declined 50% sequentially. In order to navigate intricate market dynamics, we continue to uphold rigorous standards for credit approvals in the fourth quarter. In particular, new loans origination was focused on borrowers with strong credit profiles. Our delinquencies continued trending downwards compared to the prior quarter as evidenced by a decrease in our day one delinquency rate, which fell to approximately 11% at the end of the fourth quarter from around 17% at the end of the third quarter. We will continue to closely monitor factors that may impact our business including the evolving regulatory regime in the online lending landscape, and will proactively take swift measures in response to the rapidly changing environment. We believe that our thoughtful operating strategy, along with our solid fundamentals, will help us deliver long-term value to all stakeholders. Besides, I'd like to mention that we are gradually winding down our luxury e-commerce business. Now let me share with you some key financial results. In the interest of time, I will not go over them line by line. For a more detailed discussion of our fourth quarter and full year 2020 results, please refer to our earnings press release. Our total revenues for the fourth quarter were only $714 million, representing a decrease of 63% from the fourth quarter of 2019. Our financing income totaled RMB $412 million, representing a decrease of 43% from the fourth quarter of 2019 as a result of the decrease in the average on-balance sheet loan balance. Our loan facilitation income and other related income decreased by 78% to RMB $103 million from the fourth quarter of 2019 as a result of the reduction reduction in transaction volume of all financial loans during this quarter. Our sales income increased to maybe $162 million from the fourth quarter of 2019, mainly due to sales related to the luxury e-commerce platform, partially offset by the winding down of the Starbucks Auto business. Cost of revenues increased by 35% to maybe $202 million from the fourth quarter of 2019, primarily due to the increase in cost of goods sold related to the luxury e-commerce platform, partially offset by the decrease in funding costs associated with the only balance sheet loan bulk business and the decrease in the cost of startup auto business. Our provisions for Reservables and Other Assets reversed to negative $76 million compared to a positive $707 million for the fourth quarter of 2019. mainly due to the decrease in the past due on balance sheet outstanding principal receivables compared to the fourth quarter of 2019. Our net income attributable to 3DS shareholders was RMB $674 million and our non-GAAP net income was RMB $684 million. With that, I will conclude my prepared remarks. We will now open the call to questions. Operator, please continue.
spk03: Certainly. To ask a question, you will need to press star 1 on your telephone. To withdraw your question, please press the pound or hash key. Please stand by while we compile the Q&A roster. For the benefit of all participants on today's call, if you wish to ask a question to management in Chinese, please immediately repeat your question in English. Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. Thank you. If there's no further questions, I would like to hand the call back to the presenters.
spk01: Let's wait. Let's stay online for another three minutes and see if there's any further questions. Thank you, operator.
spk03: Once again, if you wish to ask a question, please press star 1 on your telephone keypad and wait for your name to be announced. Thank you. Once again, a quick reminder, to ask a question, please press star 1 on your telephone and wait for your name to be announced. Thank you. As I know for the questions, I would like to hand the call back to the presenters for any closing remarks. Thank you.
spk01: So thank you once again for joining us today. If you have further questions, please feel free to contact Trillium's investor relations team through our website or through the emails. We're happy to answer your questions. Thank you.
spk03: Thank you. This concludes the conference call. You may now disconnect your line. Thank you.
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