Qudian Inc. (NYSE:QD) Q2 2020 Earnings Conference Call - Final Transcript

Sep 07, 2020 • 07:00 am ET


Qudian Inc. (NYSE:QD) Q2 2020 Earnings Conference Call - Final Transcript


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Hello, ladies and gentlemen. Thank you for standing by for Qudian Inc. Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference call is being recorded.

I'd now like to turn the call over to Qudian's Investor Relation representative. Please go ahead.

Unidentified Speaker

Hello, everyone, and welcome to Qudian's second quarter 2020 earnings conference call. The company's results were issued via Newswire services earlier today and were posted online. You can download the earnings press release and sign up for the company's distribution list by visiting our website at ir.qudian.com. Mr. Min Luo, our Founder, Chairman, and Chief Executive Officer; and Ms. Sissi 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 provision of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties, as such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's 20-F as filed with the US Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as under applicable law.

Please also note that Qudian's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Qudian's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures.

We also posted a slide presentation on our IR website, providing details on our results in the 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, Min Luo. Please go ahead.

Min Luo

First, I would like to thank all the investors, analysts and media who have taken an interest in joining today's call.

In a challenging second quarter of 2020, we continued to prudently operate our cash credit business. Although the COVID-19 pandemic has been gradually controlled in China, the damages from both the credit down cycle and the pandemic still lingers on vintages generated in the second half of 2019 and early 2020. As such, the D1 delinquency rate in the second quarter was sustained at a high level. As a result, in order to reduce risk, we remained stringent on risk management with rigorous credit standards and assessment. This approach kept the transaction volume of our loan book business relatively flat compared with the preceding quarter.

Let me also address the implications of the Supreme Court's decision to lower the court-protected one-year loan interest rate cap on private lending to 4 times that of the Loan Prime Rate. According to Decisions, the interest rate cap is not applicable to the lending business of financial institutions. Rather, this new policy is