Quadian Inc. (NYSE: QD) reported first quarter financial results ended March 31st, 2019. Revenues increased to USD 312.4 Million or 22.2% compared to a year ago. Financing income has risen 30.1% or USD 150.6 Million compared to a year prior. Net income has increased 200.7% year over year to USD 141.5 Million.
“We’re pleased to report another record quarter,” said Mr. Min Luo, Founder, Chairman and Chief Executive Officer of Qudian. “We remained focused on growing our loan book steadily looking for exceptional risk-adjusted profits, while investing in our open-platform initiative launched in the third quarter of 2018 to drive additional profit growth. Leveraging our affordable and streamlined product and service offerings as well as strong brand recognition, our registered users grew to 73.3 million during the quarter with minimal incremental marketing costs. Notably, new active borrowers grew to 523,979 from the fourth quarter of 2018.”
“Supported by overwhelming user demand, we successfully diversified our institutional funding base and expect to secure sufficient funding for the year. Meanwhile, with our massive transactional and behavioral data accumulated through over RMB201 billion worth of transactions as well as external partnerships, we maintained asset quality at our target level while continuing to lead the industry in big data analytics.”
“Beyond income from our loan book business, our open-platform initiative showed encouraging developments in terms of revenue contribution and funding partnerships. As of end of the first quarter, we accumulatively referred over 136 thousand users to our open-platform partners for transaction referral service. As of today, two partners have signed up for our transaction referral service. Looking ahead, we will continue to invest in our open platform and expand partnerships in funding and user engagement, fueling growth above and beyond the capacity of our balance sheet. Given the exciting and visible growth throughout these core business lines, we will stay focused on our technology-based consumption credit services and have discontinued efforts outside of consumption credit opportunities, including winding down of the Dabai auto business beginning in the second quarter of 2019.”
“Coming off a record year of 2018, we started 2019 with another new milestone by achieving record Non-GAAP net income of RMB974.3 million, an 187.9% year-to-year increase as a result of successfully growing our loan balance while managing risk appropriately,” said Mr. Carl Yeung, Chief Financial Officer of Qudian. “Our loan book saw growth of 91.2% year-on-year, which further demonstrated strong demand from our users and ample institutional funding. During the quarter, we added five more licensed funding partners and obtained a new RMB10 billion loan facilitation credit balance from one of the largest direct banks at a competitive cost. During this quarter, through successful efforts in testing and activating our dormant user base, new active borrowers increased by 16.6% from last quarter, contributing 18.0% of total active borrowers.”
“Our open-platform initiative introduced last year is already showing strong profit potential, generating RMB158.7 million in revenue for the first quarter with little marginal operational cost and zero credit cost. We believe our credit analytics technology and brand influence is more than ample to support the full commercialization of our open-platform. Therefore, we intend to build a traffic ecosystem combining our internal user base with users across other leading mobile apps and utilize our leading credit big data analytics to refer quality transactions to a large range of licensed financial institutions. One recent effort to build traffic ecosystem for credit services is our strategic minority stake investment in a leading mobile app with more than 15 million monthly active users, with exclusive user engagement access to Qudian on their app to provide credit and credit referral services.
“With solid first quarter results and ample external funding, we remain confident in achieving our guidance announced in December 2018 and expect full year 2019 Non-GAAP net income to exceed RMB3.5 billion. Against this healthy outlook, we recently bought back all our remaining shares held by Kunlun Group Limited for US$103.2 million and subsequently cancelled the related 18,173,885 ADSs in order to further enhance our EPS, demonstrating our long-standing commitment to delivering shareholder value.”