Qudian Inc. (NYSE: QD) Q3 2021 earnings name dated Dec. 13, 2021
Company Members:
Unidentified Speaker —
Min Luo — Chairman and Chief Government Officer
Sissi Zhu — Vice President, Investor Relations
Analysts:
Frank Zheng — Credit score Suisse — Analyst
Presentation:
Operator
Whats up, girls and gents. Thanks for standing by for Qudian’s Third Quarter 2021 Earnings Convention Name. [Operator Instructions] At this time’s convention is being recorded.
I’ll now flip the decision over to our host from Qudian. Please go forward.
Unidentified Speaker —
Whats up, everybody, and welcome to Qudian’s third quarter 2021 earnings convention name. The corporate’s outcomes had been issued through Newswire providers earlier immediately and had been posted on-line. You may obtain the earnings press launch and join the corporate’s distribution checklist by visiting our web site at ir.qudian.com.
Mr. Min Luo, our Founder, Chairman and Chief Government Officer; and Ms. Sissi Zhu, our VP of Investor Relations will begin the decision with ready remarks after which we’ll open the decision to Q&A.
Earlier than we proceed, please be aware that immediately’s dialogue will include forward-looking statements made beneath the Secure Harbor provisions of the US Non-public Securities Litigation Reform Act of 1995. Ahead-looking statements contain inherent dangers and uncertainties. As such, the corporate’s outcomes could also be materially completely different from the views expressed immediately. Additional data relating to these and different dangers and uncertainties is included within the firm’s 20-F as filed with the US Securities and Alternate Fee. The corporate doesn’t assume any obligation to replace any forward-looking statements, besides as required beneath relevant regulation.
Please additionally be aware that Qudian’s earnings press launch and this convention name contains discussions of unaudited GAAP monetary data in addition to unaudited non-GAAP monetary measures. Qudian’s press launch accommodates a reconciliation of the unaudited non-GAAP measures to the unaudited most instantly comparable GAAP measures. We additionally posted a slide presentation on our IR web site offering particulars on our outcomes for the quarter. We’ll reference these ends in our ready remarks however won’t discuss with particular slides throughout our dialogue.
I’ll now flip the decision over to our CEO, Min Luo. Please go forward.
Min Luo — Chairman and Chief Government Officer
Whats up, everybody. Thanks for becoming a member of us on immediately’s name. Amid quick evolving market situations within the third quarter, we proceed to execute prudent operational technique in our money credit score enterprise, guaranteeing our asset high quality at a secure degree. The transactions quantity for our mortgage e-book enterprise decreased sequentially by 12.1% to RMB3.4 billion on this quarter. And our personal steadiness sheet mortgage steadiness decreased sequentially by 14.4% to RMB3 billion.
Throughout the quarter, we continued to make regular progress with our Wanlimu Children enterprise. As of December 12, 2021, we had seven facilities working in Xiamen, Fuzhou, Shaoguan [Phonetic] and Shenzhen, all delivering top quality extracurricular actions, providers and merchandise to kids and households. The ramp up of Wanlimu Children heart is slower than anticipated throughout the COVID-19 resurgence.
We’re persevering with to carefully monitor ongoing COVID-19 situations and proactively taking precautionary measures as our highest precedence to make sure the security and well being of youngsters, households and employees in our facilities. We additionally totally assist the latest authorities regulatory adjustments introduced for a supplemental lending business and we’re strictly complying with the relevant regulation.
Shifting ahead, we’ll proceed to give attention to enhancing the standard of our services, whereas additionally exploring new funding and enterprise alternatives.
Now, I wish to flip the decision over to Sissi for extra particulars on our outcomes.
Sissi Zhu — Vice President, Investor Relations
Thanks, Min. And good morning and good night, everybody.
Echoing Min on our mortgage e-book enterprise, we continued to uphold rigorous requirements for credit score approvals within the third quarter. We centered new mortgage originations on higher high quality debtors with stronger credit score profiles. And our D1 delinquency fee continues to stay under 5% on the finish of the quarter. Moreover, greater than 99% of our excellent mortgage steadiness had been funded by our personal capital. And our M1+ delinquency protection ratio remained excessive at 2.3 instances.
Trying forward, we’ll proceed to prudently function our money mortgage enterprise, whereas concurrently pursuing new potential progress channels. Supported by our sturdy steadiness sheet, we consider we will proceed to develop our total enterprise and ship sustainable worth to our shareholders over the long-term.
Now let me share with you some key monetary outcomes. Within the curiosity of time, I cannot go over them line by line. For a extra detailed dialogue of our third quarter 2021 outcomes, please discuss with our earnings press launch.
Our complete revenues for the third quarter had been RMB347.4 million, representing a lower of 59.1% from RMB849.4 million for the third quarter of 2020. Our financing earnings totaled RMB285.5 million, representing a lower of 41.4% from RMB487 million for the third quarter of 2020 on account of the lower within the common on-balance sheet mortgage steadiness.
Mortgage facilitation earnings and different associated earnings decreased by 95% to RMB8.8 million from RMB177 million for the third quarter of 2020 on account of the discount in transaction quantity of off-balance sheet loans throughout this quarter. Transaction providers price and different associated earnings elevated to RMB20.9 million from RMB6.6 million for the third quarter of final yr, primarily on account of the reassessment of variable consideration.
Gross sales earnings and others decreased to RMB7.3 million from RMB139 million for the third quarter of 2020, primarily because of the lower in gross sales associated to the Wanlimu e-commerce platform, which we’re within the means of winding down. Gross sales fee price decreased by 55.5% to RMB8 million from RMB18 million for the third quarter of 2020, because of the lower within the quantity of merchandise credit score transactions.
Our value of revenues decreased by 47.4% to RMB104.6 million from RMB198.8 million for the third quarter of 2020, primarily because of the lower in prices related to the mortgage e-book enterprise and a lower in value of products offered associated to Wanlimu e-commerce platform. Gross sales and advertising and marketing bills decreased by 49.3% to RMB32.9 million from RMB64.8 million for the third quarter of final yr, primarily because of the lower in advertising and marketing promotional bills.
Common and administrative bills elevated by 170.4% to RMB157.7 million from RMB58.3 million for the third quarter of 2020 on account of the rise in employees salaries primarily referring to Wanlimu Children enterprise. Analysis and improvement bills decreased by 21.6% to RMB40 million from RMB51 million for the third quarter of final yr on account of the lower in employees salaries.
Internet loss attributable to Qudian’s shareholders was RMB94.2 million. And our non-GAAP internet losses attributable to Qudian’s shareholders was RMB99 million for this quarter.
With that, I’ll conclude my ready remarks. We’ll now open the decision to questions. Operator, please go forward.
Questions and Solutions:
Operator
Actually. [Operator Instructions] Thanks. Your first query comes from the road of Frank Zheng from Credit score Suisse. Please go forward.
Frank Zheng — Credit score Suisse — Analyst
Thanks administration for taking my questions. That is Frank Zheng from Credit score Suisse. I’ve two questions. The primary one is on the Wanlimu Children program. May you please present extra shade on what number of extra within the pipeline perhaps within the subsequent yr? And in addition, how is the payback interval utilized at the moment so far as the unit economics?
And the second query is on value of income. I observed that on a sequential foundation value income elevated. Are you able to perhaps break down just a little bit on what’s driving the rise? Thanks.
Sissi Zhu — Vice President, Investor Relations
Thanks, Frank. Thanks for the questions. So, to handle your first query with regard to our of Wanlimu Children enterprise, we truly had three facilities in operation throughout the third quarter and 7 facilities now. There can be over 10 facilities within the pipeline for subsequent yr. The efficiency, as we talked about in our ready remarks, is inferior to we anticipated due to the on and off regional COVID breakouts.
Once we see constructive COVID instances within the metropolis, youngsters exercise facilities are the primary ones to be shut down and the final one to be opened. And due to this fact, our facilities have been shutdown for nearly two-month interval throughout the third quarter due to COVID. So, our — and as soon as our facilities are closed down due to COVID, we’d like one other two or three months to warmth it up once more.
It’s actually exhausting to reply the query relating to the payback interval and the stabilized UE as a result of we’re not buyers but. And our present imminent aim is to deliver our centres to breakeven level as quickly as doable earlier than we do any additional growth. Hope that solutions your questions.
With regard to our value of revenues — only a second please — so the price of revenues, as a result of we didn’t present the breakdowns in our earnings, the phase reporting is just not required beneath sure accounting guidelines. However the majority of the rise of our value of revenues is due to — after we do the Wanlimu Children enterprise, now we have to rent academics and instructors in our facilities. So their prices are in the price of income. Hope that solutions your query.
Frank Zheng — Credit score Suisse — Analyst
Thanks very a lot.
Operator
Thanks. [Operator Instructions] Thanks. As there aren’t any additional questions, now I wish to flip the decision over to the corporate for closing remarks. Thanks.
Sissi Zhu — Vice President, Investor Relations
So thanks everybody as soon as once more for becoming a member of us immediately. It’s a comparatively quick name. In case you have additional questions, please be at liberty to contact our Investor Relations workforce. Thanks.
Operator
[Operator Closing Remarks]
