Qudian Inc. Reports Second Quarter 2020 Unaudited Financial Results

XIAMEN,China,Sept. 7,2020 -- Qudian Inc. ("Qudian" or "the Company" or "We") (NYSE: QD),a leading technology platform empowering the enhancement of online consumer finance experience in China,today announced its unaudited financial results for the quarter ended June 30,2020.

Second Quarter 2020 Operational Highlights:

Total number of registered users as ofJune 30,2020 reached 80.8million,representing an increase of 6.4%from June 30,2019

Number of outstanding borrowers[1] from loan book business and transaction services business as of June 30,2020 decreased by 12.5% to 5.0 million from 5.7million as of March 31,2020 as a result of the conservative and prudent strategy which the Company has deployed

Total outstanding loan balance from loan book business[2] decreased by36.4% toRMB9.7 billion as of June 30,2020,compared to the outstanding balance as of March 31,2020; Total outstanding loan balance from transaction serviced on open platform decreased by 25.4% to RMB9.8 billion as of June 30,2020

Amount of transactions from loan book businessfor this quarter decreased by 5.9% to RMB4.2 billion from the first quarter of 2020; Amount of transactions from transaction serviced on open platform for this quarter decreased by 72.3% to RMB0.7 billion from the first quarter of 2020

Weighted average loan tenure for our loan book business was 4.7 months for this quarter,compared with 8.4 months for the first quarter of 2020; Weighted average loan tenure for transactions serviced on open platform was 10.6 months for this quarter,compared with 11.2 months for the first quarter of 2020

[1]Outstanding borrowers are borrowers who have outstanding loans as of a particular date,including outstanding borrowers from both loan book business and transaction services business. Transaction services business,relates to various services,including credit assessment,referral and post-origination services,provided through our open platform,which was launched in the second half of 2018.

[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.

Second Quarter 2020 Financial Highlights:

Total revenues were RMB1,167.0 million (US$165.2 million),representing a decrease of 47.4% from the same period of last year

Net income decreased by 84.3% year-on-year to RMB179.2 million (US$25.4 million),or RMB0.68 (US$0.10) per diluted ADS

Non-GAAP net income[3] decreased by 97.4% year-on-year to RMB29.9 million (US$4.2 million),or RMB0.12 (US$0.02) 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.

"We continued the prudent operation of our cash credit business during the second quarter of 2020," said Mr. Min Luo,Founder,Chairman and Chief Executive Officer of Qudian. "In light of unstable market conditions during the period,we adopted an extremely stringent approach for loan approvals while keeping focused on decreasing exposure to credit market risks. As such,our loan book business,as compared with the first quarter,maintained loan transaction volume that was relatively flat during the period. Meanwhile,as some of our institutional funding partners tightened their credit assessments,transaction volume on our open platform decreased by approximately 70% sequentially."

"In the second quarter,we completed a strategic investment in Secoo. We look forward to generating synergies in the luxury consumer business," said Ms. Sissi Zhu,Vice President of Investor Relations of Qudian.

"Given the still challenging and fast-evolving market environment for our credit loan business and,in an effort to mitigate risk,we will remain strict with our credit approval standards when operating our loan book business. Despite headwinds,we are taking appropriate actions to protect our net assets while actively exploring market opportunities for future growth," Ms. Zhu concluded.

SecondQuarter Financial Results

Total revenueswere RMB1,representing a decrease of 47.4% from RMB2,220.7 million for the second quarter of 2019.

Financing incometotaled RMB580.9 million (US$82.2 million),representing a decrease of41.0% from RMB984.4 million for the secondquarter of 2019,as a result of a decrease in average on-balance sheet loan balance.

Loan facilitation income and other related income decreased by 58.2% to RMB255.1 million (US$36.1 million) from RMB609.7 million for the second quarter of 2019,as a result of the reduction of transaction volume of off-balance sheet loans this quarter,partially offset by reclassification of guarantee income in accordance with ASC326.

Transaction services fee and other related income decreased to RMB4.1 million (US$0.6 million) from RMB398.1 million for thesecondquarter of 2019,mainly as a result of a substantial decrease in the transaction amount of open platform.

Sales income substantially increased to RMB293.3 million (US$41.5 million) from RMB123.5 million for the secondquarter of 2019,mainly due to the launch of the Wanlimu e-commerce platform.

Sales commission fee decreasedby 84.9% to RMB14.4 million (US$2.0 million) from RMB95.6 million for the secondquarter of 2019,due to a decrease in the amount of merchandise credit transaction.

Total operating costs and expenses increased by 2.4% to RMB982.4 million (US$139.0 million) from RMB959.1 million for the secondquarter of 2019.

Cost of revenuesincreased by 28.0% to RMB366.4 million (US$51.9 million) from RMB286.1 million for the second quarter of 2019,primarily due to an increase in cost of goods soldrelated tothe Wanlimu e-commerce platform.

Sales and marketing expensesincreased by 101.7% to RMB156.8 million (US$22.2 million) from RMB77.7 million for the secondquarter of 2019,primarily due to marketing expenses incurred by the Wanlimu e-commerce platform.

General and administrative expensesincreased by 11.9% to RMB75.3 million(US$10.7 million) fromRMB67.3 millionfor the second quarter of 2019.

Research and development expensesdecreased by 10.5% to RMB56.3 million(US$8.0 million) from RMB62.9 millionfor the second quarter of 2019.

Provision for receivables and other assetsincreased by 5.0% toRMB519.0 million(US$73.5 million) fromRMB494.5 millionfor the second quarter of 2019.The increase was primarily due to an increase in past-due on-balance sheet outstanding principal receivables compared to the second quarter of 2019.

As ofJune 30,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 wasRMB1,166.5 million(US$165.1 million),and the balance of allowance for principal and financing service fee receivables at the end of the period wasRMB2,050.3 million(US$290.2 million),indicating M1+ Delinquency Coverage Ratio of 1.8x.

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.

M6+ Charge-off Rate by Vintage: Include Total Potential Receivables at Risk

Current receivables at risk vintage charge-off rate refers to,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.

M6+ Charge-off Rate by Vintage: Only Include Current Receivables at Risk

Total potential receivables at risk M1+ delinquency rate by vintage refers to,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.

M1+ Delinquency by Vintage: Include Total Potential Receivables at Risk

Current receivables at risk M1+ delinquency rate by vintage refers to,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.

M1+ Delinquency by Vintage: Only Include Current Receivables at Risk

Income from operationsdecreased to RMB312.4 million(US$44.2 million) from RMB1,264.2 million for the second quarter of 2019.

Net income attributable to Qudian's shareholderswasRMB179.2 million(US$25.4 million),or RMB0.68 (US$0.10) per diluted ADS.

Non-GAAP net income attributable to Qudian's shareholderswasRMB29.9 million(US$4.2 million),or RMB0.12 (US$0.02) per diluted ADS.

Cash Flow

As of June 30,the Company had cash and cash equivalents ofRMB1,066.0 million(US$150.9 million) and restricted cash ofRMB510.8million(US$72.3million). Restricted cash mainly represents (i) cash held by the consolidated trusts through segregated bank accounts; and (ii) security deposits held in designated bank accounts for the guarantee of off-balance sheet transactions. Such restricted cash is not available to fund the general liquidity needs of the Company.

For the secondquarter of 2020,net cash provided by operating activities wasRMB317.3 million(US$44.9 million),mainly attributable to net income of RMB179.2 million (US$25.4 million) and the collection of repayments ofservice fees from transactions facilitated in 2019. Net cash used in investing activities was RMB724.9 million(US$102.6 million),mainly due to investments in short-term wealth management products and purchase of equity method investments. Net cash used in financing activities was RMB53.9 million(US$7.6 million),mainly due to repurchase of convertible bond.

Update on Share Repurchase and Convertible Bond Repurchase

As of the date of this release,the Company has repurchased and cancelled total principal amount of convertible senior notes of US$199 million. The Company has cumulatively completed total share repurchases of approximately US$572.8million. As of June 30,the total number of ordinary shares outstanding was 253,729,349.

Strategic Investment in Secoo

In June 2020,the Company made a strategic investment in Secoo Holding Limited ("Secoo") of up to US$100 million. As of June 30,the total amounts had been fully paid. The Company has elected the fair value option to measure its equity method investment in Secoo. All subsequent changes in fair value are reported in earnings.

Regulation Update

On August 20,the Supreme People's Court of China issued the Decisions of the Supreme People's Court to Amend the Provisions on Several Issues concerning the Application of Law in the Trial of Private Lending Cases ("Decisions"),effective immediately,which set the court protected one-year interest rate cap at four times that of the Loan Prime Rate ("LPR") for private lending.

According to the Decisions,the interest rate cap is not applicable to the lending business of financial institutions and their branches that have been established with the approval of financial regulatory authorities. Rather,this new policy is generally interpreted as only being applicable to private lending,while our business almost entirely involves financial institutions. However,it is important to note that the Decisions are newly promulgated,and the policy is subject to further clarifications by courts and regulatory authorities. If the same interest rate cap were applied to our business as required by relevant courts or regulatory authorities,our profitability may suffer a material adverse impact,and we could incur net losses.

For the complete text of the Decisions,please refer to http://www.court.gov.cn/fabu-xiangqing-249031.html. The information contained on this website is not a part of this press release.

Conference Call

The Company's management will host an earnings conference call on September 7,2020 at 7:00 AM U.S. Eastern Time,(7:00 PM Beijing/Hong Kong Time).Details for the conference call are as follows:

Title of Event:

Qudian Inc. Second Quarter 2020 Earnings Conference Call

Conference ID:

8489234

Registration link:

http://apac.directeventreg.com/registration/event/8489234

For participants who wish to join the call,please complete the online registration at least 15 minutes prior to the scheduled call start time. Upon registration,participants will receive the conference call access information,including participant dial-in numbers,a Direct Event Passcode,a unique Registrant ID,and an e-mail with detailed instructions to join the conference call.

Additionally,a live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.qudian.com.

A replay of the conference call will be accessible approximately two hours after the conclusion of the live call until September 14,by dialing the following telephone numbers:

U.S.:

+1-855-452-5696 (toll-free) / +1-646-254-3697

International:

+61-2-8199-0299

Hong Kong,China:

800-963-117 (toll-free) / +852-3051-2780

Mainland China:

400-632-2162 (toll-free) / 800-870-0205 (toll-free)

Passcode:

8489234

About Qudian Inc.

Qudian Inc. ("Qudian") is a leading technology platform empowering the enhancement of online consumer finance experience in China. The Company's mission is to use technology to make personalized credit accessible to hundreds of millions of young,mobile-active consumers in China who need access to small credit for their discretionary spending but are underserved by traditional financial institutions due to lack of traditional credit data or high cost of servicing. Qudian's credit solutions enable licensed,regulated financial institutions and ecosystem partners to offer affordable and customized loans to this young generation of consumers.

For more information,please visithttp://ir.qudian.com.

Use of Non-GAAP Financial Measures

We use adjusted net income/loss,a Non-GAAP financial measure,in evaluating our operating results and for financial and operational decision-making purposes. We believe that adjusted net income/loss helps identify underlying trends in our business by excluding the impact of share-based compensation expenses,which are non-cash charges,and convertible bonds buyback income. We believe that adjusted net income/loss provides useful information about our operating results,enhances the overall understanding of our past performance and future prospects and allows for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.

Adjusted net income/loss is not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. This Non-GAAP financial measure has limitations as analytical tools,and when assessing our operating performance,cash flows or our liquidity,investors should not consider them in isolation,or as a substitute for net loss / income,cash flows provided by operating activities or other consolidated statements of operation and cash flow data prepared in accordance with U.S. GAAP.

We mitigate these limitations by reconciling the Non-GAAP financial measure to the most comparable U.S. GAAP performance measure,all of which should be considered when evaluating our performance.

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.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated,all translations from RMB to US$ were made at the rate ofRMB7.0651 toUS$1.00,the noon buying rate in effect on June 30,2020in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB,as the case may be,at any particular rate or at all.

Statement Regarding Preliminary Unaudited Financial Information

The unaudited financial information set out in this earnings release is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Company's year-end audit,which could result in significant differences from this preliminary unaudited financial information.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things,the expectation of its collection efficiency and delinquency,contain forward-looking statements. Qudian may also make written or oral forward-looking statements in its periodic reports to the SEC,in its annual report to shareholders,in press releases and other written materials and in oral statements made by its officers,directors or employees to third parties. Statements that are not historical facts,including statements about Qudian's beliefs and expectations,are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement,including but not limited to the following: Qudian's goal and strategies; Qudian's expansion plans; Qudian's future business development,financial condition and results of operations; Qudian's expectations regarding demand for,and market acceptance of,its credit products; Qudian's expectations regarding keeping and strengthening its relationships with borrowers,institutional funding partners,merchandise suppliers and other parties it collaborate with; general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Qudian's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release,and Qudian does not undertake any obligation to update any forward-looking statement,except as required under applicable law.

For investor and media inquiries,please contact:

Qudian Inc.

Tel: +86-592-591-1711

E-mail:ir@qudian.com

The Piacente Group,Inc.

Xi Zhang

Tel: +86 (10) 6508-0677

E-mail: qudian@tpg-ir.com

The Piacente Group,Inc.

Brandi Piacente

Tel: +1-212-481-2050

E-mail: qudian@tpg-ir.com

QUDIAN INC.

Unaudited Condensed Consolidated Statements of Operations

Three months ended June 30,

(In thousands except for number

2019

2020

of shares and per-share data)

(Unaudited)

(Unaudited)

(Unaudited)

RMB

RMB

US$

Revenues:

Financing income

984,446

580,856

82,215

Sales commission fee

95,602

14,404

2,039

Sales income

123,536

293,292

41,513

Penalty fee

9,394

19,335

2,736

Loan facilitation income and other related income

609,651

255,063

36,102

Transaction services fee and other related income

398,068

4,098

580

Total revenues

2,220,697

1,167,048

165,185

Operating cost and expenses:

Cost of revenues

(286,135)

(366,381)

(51,858)

Sales and marketing

(77,732)

(156,806)

(22,194)

General and administrative

(67,326)

(75,334)

(10,663)

Research and development

(62,882)

(56,265)

(7,964)

Changes in guarantee liabilities and risk assurance liabilities(1)

29,473

191,420

27,094

Provision for receivables and other assets

(494,454)

(519,014)

(73,462)

Total operating cost and expenses

(959,056)

(982,380)

(139,047)

Other operating income

2,570

127,698

18,074

Income from operations

1,264,211

312,366

44,212

Interest and investment (loss)/income,net

11,348

(65,758)

(9,307)

Foreign exchange gain/(loss),net

(1,074)

4,960

702

Other income

21,915

10,059

1,424

Other expenses

(372)

(94)

(13)

Net income before income taxes

1,296,028

261,533

37,018

Income tax expenses

(152,622)

(82,371)

(11,659)

Net income

1,143,406

179,162

25,359

Net income attributable to Qudian Inc.'s

shareholders

1,359

Earnings per share for Class A and Class B

ordinary shares:

Basic

4.03

0.71

0.10

Diluted

4.00

0.68

0.10

Earnings per ADS (1 Class A ordinary share

equals 1 ADSs):

Basic

4.03

0.71

0.10

Diluted

4.00

0.68

0.10

Weighted average number of Class A and Class

B ordinary shares outstanding:

Basic

284,022,960

253,724,694

253,694

Diluted

285,735,609

272,190,273

272,273

Other comprehensive (loss)/income:

Foreign currency translation adjustment

9,755

(10,165)

(1,439)

Total comprehensive income

1,153,161

168,997

23,920

Total comprehensive income attributable

to Qudian Inc.'s shareholders

1,920

Note:

(1): The amount includes the change in fair value of the guarantee liabilities accounted in accordance with ASC

815,"Derivative",and the change in risk assurance liabilities accounted in accordance with ASC 450,"Contingencies" and

ASC 460,"Guarantees".

QUDIAN INC.

Unaudited Condensed Consolidated Balance Sheets

As of March 31,

As of June 30,

(In thousands except for number

2020

2020

of shares and per-share data)

(Unaudited)

(Unaudited)

(Unaudited)

RMB

RMB

US$

ASSETS:

Current assets:

Cash and cash equivalents

1,516,175

1,065,977

150,879

Restricted cash

540,440

510,795

72,298

Time Deposits

235,083

-

-

Short-term investments

1,232,850

2,287,840

323,823

Short-term loan principal and financing service fee receivables

7,286,743

5,758,287

815,033

Short-term finance lease receivables

353,186

339,838

48,101

Short-term contract assets

1,543,687

731,478

103,534

Other current assets

1,113,298

1,360,474

192,563

Total current assets

13,821,462

12,054,689

1,706,231

Non-current assets:

Long-term finance lease receivables

144,900

45,544

6,446

Operating lease right-of-use assets

142,596

139,039

19,680

Investment in equity method investee

23,084

487,618

69,018

Long-term investments

222,706

222,706

31,522

Property and equipment,net

113,983

145,910

20,652

Intangible assets

6,489

7,257

1,027

Long-term contract assets

98,399

69,494

9,836

Deferred tax assets

466,047

441,640

62,510

Other non-current assets

16,216

6,837

968

Total non-current assets

1,234,420

1,566,045

221,659

TOTAL ASSETS

15,055,882

13,620,734

1,927,890

QUDIAN INC.

Unaudited Condensed Consolidated Balance Sheets

As of March 31,

(In thousands except for number

2020

2020

of shares and per-share data)

(Unaudited)

(Unaudited)

(Unaudited)

RMB

RMB

US$

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Short-term borrowings and interest payables

384,596

321,541

45,511

Short-term lease liabilities

20,378

21,911

3,101

Accrued expenses and other current liabilities

672,539

648,680

91,815

Guarantee liabilities and risk assurance liabilities(1)

1,798,603

715,577

101,283

Income tax payable

221,625

170,815

24,177

Total current liabilities

3,097,741

1,878,524

265,888

Non-current liabilities:

Deferred tax liabilities

10,005

7,125

1,009

Convertible senior notes

1,438,448

1,009,992

142,955

Long-term lease liabilities

17,729

13,417

1,899

Long-term borrowings and interest payables

23,888

54,338

7,691

Total non-current liabilities

1,490,070

1,084,872

153,554

Total liabilities

4,587,811

2,963,396

419,442

Shareholders' equity:

Class A Ordinary shares

131

131

19

Class B Ordinary shares

44

44

6

Treasury shares

(369,227)

(369,227)

(52,261)

Additional paid-in capital

3,981,385

4,001,654

566,397

Accumulated other comprehensive loss

(14,342)

(24,506)

(3,469)

Retained earnings

6,870,080

7,049,242

997,756

Total shareholders' equity

10,468,071

10,657,338

1,508,448

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

15,890

Note:

(1) The amount includes the balance of the guarantee liabilities accounted in accordance with ASC 815,and the balance of risk assurance liabilities accounted in accordance with ASC 450,"Contingencies" and ASC 460,"Guarantees".

QUDIAN INC.

Unaudited Reconciliation of GAAP And Non-GAAP Results

Three months ended June 30,

2019

2020

(In thousands except for number

(Unaudited)

(Unaudited)

(Unaudited)

of shares and per-share data)

RMB

RMB

US$

Total net income attributable to Qudian Inc.'s shareholders

1,162

25,359

Add: Share-based compensation expenses

15,162

20,269

2,869

Less: Convertible bonds buyback income

-

169,511

23,993

Non-GAAP net income attributable to Qudian Inc.'s shareholders

1,158,568

29,920

4,235

Non-GAAP net income per share—basic

4.08

0.12

0.02

Non-GAAP net income per share—diluted

4.05

0.12

0.02

Weighted average shares outstanding—basic

284,694

253,694

Weighted average shares outstanding—diluted

285,609

253,694

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