Organization

1. Organization

Qudian Inc. (the “Company”, and where appropriate, the term “Company” also refers to its subsidiaries, variable interest entities and subsidiaries of the variable interest entities as a whole) is a limited company incorporated in the Cayman Islands under the laws of the Cayman Islands on November 16, 2016. The Company, through its subsidiaries, variable interest entities (“VIEs”) and subsidiaries of the VIEs, are principally engaged in the operation of online platforms to provide small consumer credit products in the People’s Republic of China (the “PRC”). The Company does not conduct any substantive operations of its own. As PRC law and regulations prohibit foreign control of companies involved in internet value-added business, the Company conducts its primary business operations through its VIEs and the subsidiaries of the VIEs.

As of December 31, 2017, the Company’s subsidiaries and VIEs are as follows:


Entity	Date of incorporation	Place of incorporation	Percentage of legal ownership by the Company			Principal activities
Subsidiaries
QD Data Limited (“Qudian HK”)	December 2, 2016	Hong Kong (“HK”)		100	%	Investment holding
QD Technology Limited (“Qudian BVI”)	November 23, 2016	British Virgin Islands (“BVI”)		100	%	Investment holding
Qufenqi (Ganzhou) Information Technology Co., Ltd. (“Qufenqi Ganzhou”)	September 5, 2016	PRC		100	%	Investment holding, research and development
Qudian Inc. Equity Incentive Trust (“Share Based Payment Trust”)	December 30, 2016	HK		Nil		Employee benefits
Qufenqi (HK) Limited (“Qufenqi HK”)	April 28, 2014	HK		100	%	Investment holding
Xiamen Qudian Financial Lease Ltd. (“Xiamen Financial Lease”)	April 21, 2017	PRC		100	%	Financial lease

VIEs
Beijing Happy Time Technology Development Co., Ltd. (“Beijing Happy Time”)	April 9, 2014	PRC		Nil		Technology development and service, sale of products
Ganzhou Qudian Technology Co., Ltd. (“Ganzhou Qudian”)	November 25, 2016	PRC		Nil		Technology development and service, sale of products
Hunan Qudian Technology Development Co., Ltd.(“Hunan Qudian”)	November 2, 2016	PRC		Nil		Technology development and service, sale of products
Xiamen Qudian Technology Co., Ltd. (“Xiamen Qudian”)	April 1, 2017	PRC		Nil		Technology development and service, sale of products

Additionally, Beijing Happy Time, Ganzhou Qudian and Hunan Qudian have several subsidiaries incorporated in the PRC.

On November 23, 2016, the Company set up a wholly-owned subsidiary, Qudian BVI in the BVI. On December 2, 2016, the Company set up another wholly-owned subsidiary, Qudian HK in Hong Kong. On December 5, 2016, the Company transferred all of its shares of Qudian HK to Qudian BVI. On December 9, 2016, Qudian HK acquired all the equity interests of Qufenqi Ganzhou from Qufenqi HK, for a consideration of US$100,000. On December 9, 2016, Beijing Happy Time signed a series of contractual agreements with Qufenqi Ganzhou and its shareholders. On May 1, 2017, Hunan Qudian and Ganzhou Qudian signed a series of contractual agreements with Qufenqi Ganzhou and their shareholders. On June 20, 2017, Xiamen Qudian signed a series of contractual agreements with Qufenqi Ganzhou and its shareholders (collectively, the “VIE Agreements”).

The Company, through Qufenqi Ganzhou entered into power of attorney and an exclusive call option agreement with the nominee shareholders of the VIEs that gave Qufenqi Ganzhou the power to direct the activities that most significantly affect the economic performance of the VIEs and acquire the equity interests in the VIEs when permitted by the PRC laws, respectively. Certain exclusive agreements have been entered into with the VIEs through Qufenqi Ganzhou, which obligate Qufenqi Ganzhou to absorb a majority of the risk of loss from the VIEs’ activities and entitle Qufenqi Ganzhou to receive a majority of their residual returns. In addition, the Company has entered into share pledge agreements for the equity interests in the VIEs held by the nominee shareholders of the VIEs. The Company agreed to provide unlimited financial support to the VIEs for their operations. In addition, pursuant to the resolutions of all shareholders of the Company and the resolutions of the board of directors of the Company (the “Resolutions”), the board of directors of the Company (the “Board of Directors”) or any officer authorized by the Board of Directors (the “Authorized Officer”) shall cause Qufenqi Ganzhou to exercise the rights under the power of attorney entered into among Qufenqi Ganzhou, the VIEs and the nominee shareholders of the VIEs and Qufenqi Ganzhou’s rights under the exclusive call option agreement between Qufenqi Ganzhou and the VIEs. As a result of the Resolutions and the provision of unlimited financial support from the Company to the VIEs, the Company has been determined to be most closely associated with the VIEs within the group of related parties and was considered to be the Primary Beneficiary.

Despite the lack of technical majority ownership, the Company has effective control of the VIEs through the VIE Agreements and a parent-subsidiary relationship exists between the Company and the VIEs. Through the VIE Agreements, the shareholders of the VIEs effectively assigned all of their voting rights underlying their equity interest in the VIEs to the Company. In addition, through the other exclusive agreements, which consist of exclusive option agreement, exclusive business cooperation agreement, and equity pledge agreement, the Company, through its wholly-owned subsidiaries in the PRC, have the right to receive economic benefits from the VIEs that potentially could be significant to the VIEs. Lastly, through the financial support undertaking letter, the Company has the obligation to absorb losses of the VIEs that could potentially be significant to the VIEs. Therefore, the Company is considered the primary beneficiary of the VIEs and consolidates the VIEs and its consolidated subsidiaries as required by SEC Regulation S-X Rule 3A-02 and ASC topic 810 (“ASC 810”), Consolidation.

The following is a summary of the VIE Agreements:

(1) Power of Attorney Agreements:

Pursuant to the power of attorney agreements signed between the VIEs’ nominee shareholders and Qufenqi Ganzhou, each nominee shareholder irrevocably appointed Qufenqi Ganzhou as its attorney-in-fact to exercise on each shareholder’s behalf any and all rights that each shareholder has in respect of its equity interest in the VIEs (including but not limited to executing the exclusive right to purchase agreements, the voting rights and the right to appoint directors and executive officers of the VIEs). The agreements are effective and irrevocable as long as the nominee shareholder remains a shareholder of the VIEs.

(2) Exclusive Call Option Agreements:

Pursuant to the exclusive call option agreements entered into between the VIEs’ nominee shareholders and Qufenqi Ganzhou, the nominee shareholders irrevocably granted Qufenqi Ganzhou a call option to request the nominee shareholders to transfer or sell any part or all of its equity interests in the VIEs, or any or all of the assets of the VIEs, to Qufenqi Ganzhou, or their designees. The purchase price of the equity interests in the VIEs shall be equal to the minimum price required by PRC law. As for the assets of the VIEs, the purchase price should be equal to the book value of the assets or the minimum price as permitted by applicable PRC law, whichever is higher. Without Qufenqi Ganzhou’s prior written consent, the VIEs and their nominee shareholders shall not amend their articles of association, increase or decrease the registered capital, sell or otherwise dispose of their assets or beneficial interests, create or allow any encumbrance on their assets or other beneficial interests and provide any loans or guarantees, etc. The nominee shareholders cannot request any dividends or other form of assets. If dividends or other form of assets were distributed, the nominee shareholders shall transfer all received distribution to Qufenqi Ganzhou or their designees. The agreements are not terminated until all of the equity interests of the VIEs have been transferred to Qufenqi Ganzhou or the person(s) designated by Qufenqi Ganzhou. None of the nominee shareholders have the right to terminate or revoke the agreements under any circumstance unless otherwise regulated by law.

(3) Exclusive Business Cooperation Agreements:

Pursuant to the exclusive business cooperation agreements entered into by Qufenqi Ganzhou and the VIEs and their subsidiaries, Qufenqi Ganzhou provides exclusive technical support and consulting services in return for fees based on 100% of the VIEs’ profit before tax, which is adjustable at the sole discretion of Qufenqi Ganzhou. Without Qufenqi Ganzhou’s consent, the VIEs and their subsidiaries cannot procure services from any third party or enter into similar service arrangements with any other third party, except for those from Qufenqi Ganzhou. In addition, the profitable consolidated VIEs and their subsidiaries have granted Qufenqi Ganzhou an exclusive right to purchase any or all of the business or assets of each of the profitable consolidated VIEs and their subsidiaries at the lowest price permitted under PRC law. The agreements are irrevocable or can only be unilaterally revoked/amended by Qufenqi Ganzhou.

(4) Equity Pledge Agreements:

Pursuant to the equity interest pledge agreements, each nominee shareholder of the VIEs has pledged all of its respective equity interests in the VIEs to Qufenqi Ganzhou as continuing first priority security interest to guarantee the performance of their and the VIEs’ obligations under the power of attorney agreements, the exclusive call option agreements and the exclusive business cooperation agreements. Qufenqi Ganzhou is entitled to all dividends during the effective period of the share pledge except as it agrees otherwise in writing. If the VIEs or any of the nominee shareholder breaches its contractual obligations, Qufenqi Ganzhou will be entitled to certain rights regarding the pledged equity interests, including receiving proceeds from the auction or sale of all or part of the pledged equity interests of the VIEs in accordance with PRC law. None of the nominee shareholders shall, without the prior written consent of Qufenqi Ganzhou, assign or transfer to any third party, distribute dividends and create or cause any security interest and any liability in whatsoever form to be created on, all or any part of the equity interests it holds in the VIEs. The agreements are not terminated until all of the technical support and consulting and service fees have been fully paid under the exclusive business cooperation agreements and all of VIEs’ obligations have been terminated under the other controlling agreements.

In addition, the Company entered into following agreements:

(1) Financial support undertaking letters

Pursuant to the financial support undertaking letters, the Company is obligated and hereby undertakes to provide unlimited financial support to the VIEs, to the extent permissible under the applicable PRC laws and regulations, whether or not any such operational loss is actually incurred. The Company will not request repayment of the loans or borrowings if the VIEs or their shareholders do not have sufficient funds or are unable to repay.

(2) Resolutions of all shareholders and resolution of the board of directors of Qudian Inc.

The shareholders and the Board of Directors resolved that the Board of Directors or any officer authorized by the Board of Directors shall cause Qufenqi Ganzhou to exercise its rights under the power of attorney agreements and the exclusive call option agreements when the Board of Directors or the Authorized Officer determines that such exercise is in the best interests of the Company and Qufenqi Ganzhou to do so.

In the opinion of the Company’s legal counsel, (i) the ownership structure of the PRC subsidiaries and the VIEs, both currently does not violate applicable PRC laws and regulations; (ii) each of the VIE Agreements is valid, binding and enforceable in accordance with its terms and applicable PRC laws or regulations and will not violate applicable PRC laws or regulations; (iii) the financial support letters issued by the Company to the VIEs, does not violate the PRC laws and regulations (iv) the resolutions are valid in accordance with the articles of association of the Company and Cayman Island Law.

However, uncertainties in the PRC legal system could cause the Company’s current ownership structure to be found in violation of existing and/or future PRC laws or regulations and could limit the Company’s ability to enforce its rights under these contractual arrangements. Furthermore, the nominee shareholders of the VIEs may have interests that are different than those of the Company, which could potentially increase the risk that they would seek to act contrary to the terms of the contractual agreements with the VIEs.

In addition, if the current structure or any of the contractual arrangements were found to be in violation of any existing or future PRC laws or regulations, the Company could be subject to penalties, which could include, but not be limited to, revocation of business and operating licenses, discontinuing or restricting business operations, restricting the Company’s right to collect revenues, temporary or permanent blocking of the Company’s internet financial services platforms, restructuring of the Company’s operations, imposition of additional conditions or requirements with which the Company may not be able to comply, or other regulatory or enforcement actions against the Company that could be harmful to its business. The imposition of any of these or other penalties could have a material adverse effect on the Company’s ability to conduct its business.

Except for the deposits that were held by Peer-to-Peer lending platforms (“P2P platforms”), banks and other institutions, private financial assets trading platform, trust beneficiaries and other funding partners (collectively referred as the “Funding Partners”) as guarantee deposits, there was no other pledge or collateralization of the VIEs’ assets. Creditors of the VIEs have no recourse to the general credit of the Company, who is the primary beneficiary of the VIEs, through its 100% controlled subsidiary Qufenqi Ganzhou. The Company has not provided any financial or other support that it was not previously contractually required to provide to the VIEs during the periods presented. The table sets forth the assets and liabilities of the VIEs included in the Company’s consolidated balance sheets:


	As of December 31,
	2016		2017
	RMB		RMB		US$
Short-term loan principal and financing service fee receivables		4,826,790,951		8,758,544,694		1,346,163,672
Other current assets		2,096,813,435		5,801,157,313		891,621,552

Total current assets		6,923,604,386		14,559,702,007		2,237,785,224

Total non-current assets		188,655,748		165,191,933		25,389,535

Total assets		7,112,260,134		14,724,893,940		2,263,174,759

Total current liabilities		4,470,189,070		9,403,402,527		1,445,276,505
Total non-current liabilities		76,052,124		510,023,905		78,389,239

Total liabilities		4,546,241,194		9,913,426,432		1,523,665,744

The following table sets forth the results of operations of the VIEs included in the Company’s consolidated statements of comprehensive (loss)/ income:


	For the years ended December 31,
	2015			2016		2017
	RMB			RMB		RMB		US$
Revenues		235,007,431			1,442,846,339		4,749,249,922		729,946,348
Net (loss)/ income		(233,163,744	)		650,872,408		2,222,086,399		341,528,426

The table sets forth the cash flows of the VIEs included in the Company’s consolidated statements of cash flows:


	For the years ended December 31,
	2015			2016			2017
	RMB			RMB			RMB			US$
Net cash (used in)/ provided by operating activities		(102,319,756	)		793,604,997			3,060,570,502			470,401,073
Net cash used in investing activities		(1,864,954,612	)		(3,598,136,678	)		(578,926,690	)		(88,979,403	)
Net cash provided by/ (used in) financing activities		2,175,459,545			3,380,179,509			(996,112,745	)		(153,099,726	)

As of December 31, 2016 and 2017, except for all assets of the consolidated trusts, the deposits that were held by the Funding Partners as guarantee deposits, there was no pledge or collateralization of the VIEs’ assets. The amount of the net assets of the VIEs were RMB 2,566 million and RMB 4,811 million (US$ 740 million) as of December 31, 2016 and 2017. The creditors of the VIEs’ third-party liabilities did not have recourse to the general credit of the Primary Beneficiary in the normal course of business. The Company did not provide or intend to provide financial or other supports not previously contractually required to the VIEs during the periods presented.

Consolidated Trusts

Since November 2016, the Company established several trusts to invest in loans through the Company’s platform using both funds from third party and the Company. Such trusts are administered by third party trust companies as the trustees. The Company provides loan facilitation service and financial guarantee to the trusts.

All assets of the consolidated trusts are collateral for the trusts’ obligations and can only be used to settle the trusts’ obligations.

Share Based Payment Trust

On December 30, 2016, the board of the Company approved and set up Qudian Inc. Equity Incentive Trust (the “Share Based Payment Trust”) for the purpose of holding options awarded to certain employees and the underlying shares before they are exercised as instructed by the employees. Upon the exercise of the options, the shares will be transferred to the relevant employees. As the Company has the power to govern the financial and operating policies of the Share Based Payment Trust and derives benefits from the contributions of the employees who have been awarded the options of the Company through their continued employment with the Company, the assets and liabilities of the Share Based Payment Trust are included in the consolidated balance sheets.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of presentation

The consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).

Principles of consolidation

The consolidated financial statements include the financial statements of the Company, its subsidiaries, VIEs and the subsidiaries of the VIEs. All inter-company transactions and balances have been eliminated.

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates reflected in the Company’s consolidated financial statements include, but are not limited to, allowance for loan principal and financing service fee receivables, allowance for other receivables, share-based compensation, valuation allowance for deferred tax assets, uncertain tax positions and fair value of investments and guarantee liabilities. Actual results could differ from these estimates.

Revenue recognition

Credit Services

The Company generates revenues primarily by providing borrowers with merchandise and cash installment credit financing. The Company records financing service fee relating to loan principal derived from these credit services over the life of the underlying loan principal using the effective interest method on unpaid principal amounts. Incentives provided to certain borrowers and deferred origination costs are recorded as a reduction in financing service fees using the effective interest method. Such financing service fees are recorded as financing income in the consolidated statements of comprehensive (loss)/income.

The incentives are provided to certain borrowers and can only be applied as a reduction to the borrower’s repayments and cannot be withdrawn by the borrowers in cash.

The loan origination costs primarily include payments to vendors for individual credit assessments and commissions to individuals directly involved in the successful loan origination.

Financing income

Borrowers can withdraw cash (“cash installment credit services”) or purchase products (e.g. personal consumer electronics) (“merchandise installment credit services”) up to their approved credit limit and elect the installment repayment period, mainly ranging from 1 to 12 installments (either weekly or monthly) through the Company’s online website and application (collectively “financing platform”) or via borrowers’ Alipay accounts. The Company charges financing service fees for facilitating the financing, managing the financing platform and for acting as a guarantor for the financing. The financing service fees are recorded as financing income in the statement of comprehensive (loss)/ income in accordance with ASC 310.

Penalty fees

The Company charges borrowers penalty fees for late repayment of credit services. The penalty fee is calculated based on the number of overdue days of loan principals and the late payment rate. As collectability is not reasonably assured, the penalty fee is recorded on a cash basis. Penalty fees are recorded in revenue in the consolidated statements of comprehensive (loss)/income.

Sales commission fees

In addition to financing income, the Company earns a margin from its merchandise installment credit services on the products purchased from suppliers on behalf of the borrowers. The margin earned is fixed based on the retail sales price without considering the financing terms chosen by the borrower.

Sales commission fees is recorded net of the related cost on delivery date, as the Company does not assume inventory risk for the products and is considered to be an agent in accordance with ASC 605, Revenue Recognition (“ASC 605”). Additionally, the Company is not responsible for providing any post-sale support to the borrowers nor does the Company make any changes to the products purchased by the borrowers. Accordingly, the Company recognizes the sales commission fees when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collection is probable.

Sales-type lease

The legal title of the leased assets is with the Company until the leasing period ends. The fair value of the leased assets at lease inception is greater than its cost or carrying amount. Consequently, the Company has classified the leases as sales-type finance leases for financial accounting purposes. The Company reports the discounted present value of future minimum lease payments as a finance lease receivable on its balance sheet and accrues interest on the balance of the finance lease receivable based on the interest rate inherent in the applicable lease over the term of the lease. The interest earned on finance lease receivables is recognized using the effective interest method. The Company recognized interest earned on finance leases receivables as “financing income” in the amount of RMB 32,658 and in 2017.

The Company recognized the sales price (the present value of the minimum lease payments) as “revenue from sales-type lease”.

Multiple element revenue recognition

The Company entered into the credit facilitation arrangement with financial institutions. The Company matches borrowers with the financial institutions which directly funds the credit drawdowns to the borrowers and provides post-origination services, for example, short messaging reminder services throughout the term of the loans. For each successful match, the Company earns an initial intermediary fee and a recurring service fee throughout the term of the loans. Borrowers make repayments directly to the consumer finance company and the consumer finance company will then remit the initial intermediary fees and recurring service fees to the Company on a periodic basis. The two deliverables provided by the Company are loan facilitation services and post origination services. In addition, the Company provides a guarantee to the financial institutions which requires the Company to make payments to the financial institutions based on the overdue rate of the credit portfolio under this arrangement. The Company considers the loan facilitation services and the post origination services as a multiple element revenue arrangement, and the financial institutions as the sole customer in the arrangement. The Company first allocates the consideration to the guarantee liability equaling to the fair value of the guarantee liability. The remaining consideration is allocated to the loan facilitation services and post origination services. The Company does not have vendor specific objective evidence, or VSOE, of selling price for the loan facilitation services and post origination services because the Company does not provide loan facilitation services or post origination services on a standalone basis. There is also no third-party evidence of the prices charged by third-party service providers when such services are sold separately as the basis of revenue allocation. As a result, the Company uses the best estimate of selling prices of loan facilitation services and post origination services as the basis of revenue allocation. Nevertheless, the amount allocated to the delivered loan facilitation services is limited to the amount that is not contingent on the delivery of the undelivered post origination services in accordance with ASC 605-25. The loan facilitation services and post origination services are recorded as loan facilitation income and others in the consolidated statements of comprehensive (loss)/income.

For loan facilitation services, post origination services and sales commission fees, the Company recognizes revenue when the following four revenue recognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) services have been rendered, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured, in accordance with ASC 605. As collectability is uncertain in relation to the remaining loan facilitation services income due to the potential default by borrowers such that they are not considered to be fixed or determinable, the remaining loan facilitation service income is recorded on a cash basis.

Foreign currency translation and transactions

The functional currency of the Company, Qudian BVI and Qudian HK is US$. The Company’s subsidiaries, VIEs and subsidiaries of the VIEs with operations in the PRC adopted RMB as their functional currencies. The determination of the respective functional currency is based on the criteria stated in ASC 830, Foreign Currency Matters. The Company uses RMB as its reporting currency. The financial statements of the Company, Qudian BVI and Qudian HK are translated into RMB using the exchange rate as of the balance sheet date for assets and liabilities and average exchange rate for the year for income and expense items. Translation gains and losses are recorded in accumulated other comprehensive (loss)/income, as a component of shareholders’ equity/ (deficit). Transactions in currencies other than the functional currency are measured and recorded in the functional currency at the exchange rate prevailing on the transaction date.

Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured into the functional currency at the rates of exchange prevailing at the balance sheet dates. Transaction gains and losses are recognized in the consolidated statements of comprehensive (loss)/income during the period or year in which they occur.

Cash and cash equivalents

Cash and cash equivalents primarily consist of cash and demand deposits which are highly liquid. The Company considers highly liquid investments that are readily convertible to known amounts of cash and with original maturities from the date of purchase of three months or less to be cash equivalents. All cash and cash equivalents are unrestricted as to withdrawal and use.

Guarantee deposits

In the ordinary course of business, the loan principal advanced by the Company to borrowers are transferred to certain Funding Partners. The Company is required to guarantee the recoverability of the loan principal and interest. As a result, the Company may provide a cash deposit to the respective Funding Partners. The cash deposits are released only after the loan principal and interest are settled. Guarantee deposits represent cash that cannot be withdrawn without the permission of the Funding Partners. These guarantee deposits qualify as compensating balance arrangements under SEC Regulation S-X Rule 5-02, and are classified as current or non-current assets in the consolidated balance sheets based on the terms of the underlying borrowing arrangements.

Loan principal and financing service fee receivables

Loan principal and financing service fee receivables represent payments due from borrowers that utilize the Company’s credit services. Loan principal and financing service fee receivables are recorded at amortized cost (i.e. unpaid principal and deferred origination costs), net of allowance for loan principal. Deferred origination costs are netted against revenue and amortized over the financing term using the effective interest method.

Allowance for loan principal and financing service fee receivables

The Company considers the loans to be homogenous as they are all unsecured consumer loans of similar principal amounts. The profile of the borrowers are also similar i.e. age, credit histories and employment status. Therefore, the Company applies a consistent credit risk management framework to the entire portfolio of loans in accordance with ASC 450-20, Loss Contingencies.

The allowance for loan principal and financing service fee receivables losses is calculated based on historical loss experience using a roll rate-based model. The roll rate-based model stratifies the loan principal and financing service fee receivables by delinquency stages (i.e., current, 1-30 days past due, and 31-60 days past due etc.) and projected forward in one-month increments using historical roll rates. In each month of the simulation, losses on the loan principal and financing service fee receivables types are captured, and the ending delinquency stratification serves as the beginning point of the next iteration. This process is repeated on a monthly rolling basis. The loss rate calculated for each delinquency stage is then applied to the respective loan principal and service fees balance. The Company adjusts the allowance that is determined by the roll rate-based model for various Chinese macroeconomic factors i.e. gross-domestic product rates, per capita disposable income, interest rates and consumer price indexes. Each of these macroeconomic factors are equally weighted, and a score is applied to each factor based on year-on-year increases and decreases in that respective factor.

Loan principal and financing service fee receivables are charged off when a settlement is reached for an amount that is less than the outstanding balance or when the Company has determined the balance is uncollectable. In general, the Company considers loan principal and financing service fee receivables meeting any of the following conditions as uncollectable and charged-off: (i) death of the borrower; (ii) identification of fraud, and the fraud is officially reported to and filed with relevant law enforcement departments or (iii) the amount remained outstanding 180 days past due and therefore deemed uncollectible.

For the year ended December 31, 2016, the Company considered loan principal and financing service fee receivables meeting any of the following conditions as uncollectible and charged off: (1) death of the borrower; (ii) identification of fraud, and the fraud is officially reported to and filed with relevant law enforcement departments or (iii) the amount remained outstanding 180 days past due and after the Company concludes that it has exhausted its collection efforts.

In order to align the Company’s charge-off policy with ASC 310-10-35-41, the Company revised its charge-off policy such that all loans that are 180 days past due are therefore deemed uncollectible and charged-off.

The change in the charge-off policy had no impact the Company’s provision for loan losses for the year ended December 31, 2016 as the balance of loans 180 days past due was fully offset by the allowance before charge-off and only results in a net off of the loan principal and financing service fee receivables and its allowance balance. The change in the charge-off policy as a result of the correction of an error did not have a material impact on the Company’s 2016 audited consolidated financial statements.

Nonaccrual loan principal

The Company does not accrue financing service fee on loan principals that are considered impaired or are more than 90 days past due. A corresponding allowance is determined under ASC 450-20 and allocated accordingly. After an impaired financing service fee receivable has been placed on nonaccrual status, financing service fee will be recognized when cash is received on a cash basis cost recovery method by applying first to reduce principal and then to financing income thereafter. Financing service fee accrued but not received is generally reversed against financing income. Financing service fee receivables may be returned to accrual status after all of the borrower’s delinquent balances of loan principal and financing service fee have been settled and the borrower remains current for an appropriate period.

Finance lease receivables

Finance lease receivables represent the discounted present value of future minimum lease payments. Finance lease receivables are recorded at amortized cost, including the gross amount of minimum lease payments receivable, net of allowance and unearned revenue.

Borrowings

The Company facilitates credit to borrowers and then transfers certain loan principals to certain Funding Partners. The payment terms with the Funding Partners range from 14 days to 34 months at varying annual interest rates. Although the loan principals are transferred to the Funding Partners, the loan principals are not derecognized upon transfer, as they are not legally isolated in accordance with ASC 860, Transfers and Servicing. In accordance with PRC law, the Company should give a notice regarding the loan transfer to the borrower, otherwise the transfer will not be effective for the borrower. As the Company did not provide such notice to the borrower, the transfer of the loan cannot be effective for the borrower. Therefore, the borrower is still obligated to repay the loan to the Company. Additionally, the terms of the transfer require the Company to guarantee the principal and interest, in case of default by the borrowers. As a result, the transfer of the loan principal is not accounted for as a sale, and the loan principal remains on the Company’s consolidated balance sheets, whilst the funds received from the Funding Partners are recorded as Borrowings in the Company’s consolidated balance sheets. Borrowings are initially recognized at fair value which is the cash received from Funding Partners, and measured subsequently at amortized cost using the effective interest method.

The Company’s consolidated trust’s payable to the third party beneficiary is initially recognized equaling to the cash received from the beneficiary and measured subsequently at amortized cost using the effective interest method.

Guarantee liabilities

As part of the Company’s cooperation with various financial institutions, the Company provides guarantee on the principal and accrued interest repayment of the defaulted loans to the financial institutions, even in the event the loans are subsequently sold by the financial institutions.

The financial guarantee is accounted for as a credit derivative under ASC 815 because the scope exemption in ASC 815-10-15-58(c) is not met. The guarantee liabilities are remeasured at each reporting period. The change in fair value of the guarantee liabilities is recorded as loss on guarantee liabilities in the consolidated statements of comprehensive (loss)/income. When the Company settles the guarantee liabilities through performance of the guarantee by making requisite payments on the respective defaulted loans, the Company records a corresponding deduction to the guarantee liabilities. Subsequent collection from the borrower through the financial institutions will be recognized as a reversal of the deduction to guarantee liabilities.

Treasury shares

The Company accounts for treasury shares using the cost method. Under this method, the cost incurred to purchase the shares is recorded in the treasury shares account on the consolidated balance sheets. At retirement, the ordinary shares account is charged only for the aggregate par value of the shares. The excess of the acquisition cost of treasury shares over the aggregate par value is allocated between additional paid-in capital (up to the amount credited to the additional paid-in capital upon original issuance of the shares) and retained earnings.

Fair value measurements of financial instruments

Financial instruments include guarantee deposits, short-term investments, loan principal and financing service fee receivables, finance lease receivables, amounts due to related parties, short-term and long-term borrowings, and guarantee liabilities. The carrying amount of the financial instruments, except for long-term loan principal and financing service fee receivables, long term finance lease receivables and long-term borrowings, approximate fair value because of their short maturities. The short-term investments are carried at fair value. The Company’s short-term investments comprise of monetary wealth management products which are classified as held for trading. The fair value of such monetary wealth management products are determined based on the quoted subscription/ redemption price published by the investment manager of the products. The carrying amount of the long-term loan principal and financing service fee receivables and long-term borrowings, approximate their fair values due to the fact that the related interest rates approximate rates currently offered by financial institutions for similar debt instruments of comparable maturities.

Fair value of guarantee liabilities

The fair value of the guarantee liabilities recorded at the inception of the loan was estimated using a discounted cash flow model based on expected payouts from the arrangement with the financial institutions. The Company estimates its expected future payouts based on estimates of expected delinquency rate and a discount rate for time value.

Property and equipment, net

Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided using the straight-line method with the residual value based on the estimated useful lives of the class of asset, which range as follows:


Category:	Estimated Useful Life	Estimated Residual
Office and electronic equipment	3-5 years		Nil%-5	%
Leasehold improvements	Over the shorter of the expected life of leasehold improvements or the lease term		Nil	%

Costs associated with the repair and maintenance of property and equipment are expensed as incurred.

Intangible assets

Intangible assets represent purchased computer software. These intangible assets are amortized on a straight line basis over their estimated useful lives of the respective assets, which varies from 1-10 years.

Research and development

Research and development expenses are primarily incurred in the development of new services, new features and general improvement of the Company’s technology infrastructure to support its business operations. Research and development costs are expensed as incurred unless such costs qualify for capitalization as software development costs. In order to qualify for capitalization, (i) the preliminary project should be completed, (ii) management has committed to funding the project and it is probable that the project will be completed and the software will be used to perform the function intended, and (iii) it will result in significant additional functionality in the Company’s services. No research and development costs were capitalized during any year presented as the Company has not met all of the necessary capitalization requirements.

Impairment of long-lived assets and intangible assets with definite lives

Long-lived assets including intangible assets with definite lives, are assessed for impairment, whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable in accordance with ASC 360 Property, Plant and Equipment. The Company measures the carrying amount of long-lived assets against the estimated undiscounted future cash flows associated with it. Impairment exists when the estimated undiscounted future cash flows are less than the carrying value of the asset being evaluated. Impairment loss is calculated as the amount by which the carrying value of the asset exceeds its fair value. No impairment loss was recognized, for the years ended December 31, 2015, 2016 and 2017, respectively.

Employee defined contribution plan

Full time employees of the Company in the PRC participate in a government mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require that the Company make contributions to the government for these benefits based on a certain percentage of the employee’s salaries. The Company has no legal obligation for the benefits beyond the contributions. The total amount that was expensed as incurred, was RMB 14,510,236, RMB 16,070,410 and RMB 35,004,467 (US$ 5,380,088) for the years ended December 31, 2015, 2016 and 2017, respectively.

Advertising costs

Advertising costs are expensed as incurred in accordance with ASC 720-35, Other Expense-Advertising costs. Advertising costs were RMB 56,366,748, RMB 67,258,213 and RMB 43,470,301 (US$ 6,681,263) for the years ended December 31, 2015, 2016 and 2017, respectively. Advertising costs are included in sales and marketing expense in the consolidated statements of comprehensive (loss)/income.

Government grants

Government grants include cash subsidies received by the Company’s entities in the PRC from local governments as incentives for investing in certain local districts, and are typically granted based on the amount of investment made by the Company in form of registered capital or taxable income generated by the Company in these local districts. Such grants allow the Company full discretion in utilizing the funds and are used by the Company for general corporate purposes. The local governments have final discretion as to whether the Company met all of the criteria to be entitled to the subsidies. The Company does not in all instances receive written confirmation from local governments indicating the approval of the cash subsidies before cash is received. Cash subsidies of RMB730,000, RMB nil and RMB 127,800 (US$ 19,643) are included in other non-operating income for the years ended December 31, 2015, 2016 and 2017, respectively. Refunds for the value-added taxes paid of RMB nil, RMB 14,646,251 and RMB 50,702,352 (US$ 7,792,809) are included in other operating income. Refunds for the corporate income taxes paid of RMB nil, RMB 12,123,338 and RMB 32,929,930 (US$ 5,061,237) are recognized as deduction of income tax expense. Cash subsidies are recognized as other non-operating income when received and all the conditions for their receipt have been satisfied.

Value added taxes

Since its inception, Beijing Happy Time was certified as a small-scale VAT taxpayer whose applicable tax rate was 3%. In February 2015, it changed its status to a general VAT taxpayer (applicable tax rate: 6%), as approved by Chaoyang District Bureau of State Taxation. Beijing Happy Fenqi, a subsidiary of Beijing Happy Time, is a small-scale VAT taxpayer with an applicable VAT rate of 3%. The other subsidiaries of the VIEs are all general VAT taxpayers. VAT is reported as a deduction to revenue when incurred and amounted to RMB 16,750,495, RMB 107,065,470 and RMB 280,586,358 (US$ 43,125,334) for the years ended December 31, 2015, 2016 and 2017, respectively. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in accrued expenses and other current liabilities on the consolidated balance sheets.

Income taxes

The Company accounts for income taxes using the liability approach and recognizes deferred tax assets and liabilities for the expected future consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are recognized on the basis of the temporary differences that exist between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in earnings. Deferred tax assets are reduced by a valuation allowance through a charge to income tax expense when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The components of the deferred tax assets and liabilities are classified as non-current.

The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two-step process to determine the amount of the benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained (defined as a likelihood of more than fifty percent of being sustained upon an audit, based on the technical merits of the tax position), the tax position is then assessed to determine the amount of benefits to recognize in the consolidated financial statements. The amount of the benefits that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. The Company did not recognize any income tax due to uncertain tax position or incur any interest and penalties related to potential underpaid income tax expenses for the years ended December 31, 2015, 2016 and 2017.

Segment information

The Company historically had only one single reportable segment because the Company’s chief operating decision maker (“CODM”) formerly relied on the consolidated results of operations when making decisions on allocating resources and assessing performance of the Company. Beginning in the quarter ended December 31, 2017, the Company changed its reportable segments due to expansion of leasing operations. The Company’s chief executive officer, who has been identified as the CODM, now reviews the operating results of two different service lines in order to allocate resources and assess the Company’s performance. Accordingly, the financial statements include segment information which reflects the current composition of the reportable segments in accordance with ASC topic 280 (“ASC 280”), Segment Reporting.

As the Company generates substantially all of its revenues in the PRC, no geographical segments are presented.

Operating Leases

Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Rentals applicable to such operating leases are recognized on a straight-line basis over the lease term. Certain of the operating lease agreements contain rent holidays. Rent holidays are considered in determining the straight-line rent expense to be recorded over the lease term.

Fair value measurements

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and the market-based risk measurement or assumptions that market participants would use when pricing the asset or liability.

Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

•

Level 1 Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets

•

Level 2 Include observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

•

Level 3 Unobservable inputs which are supported by little or no market activity

Share-based payments

Share-based payment transactions with employees and independent directors, such as share options are measured based on the grant date fair value of the equity instrument. The Company recognizes the compensation costs net of estimated forfeitures using the straight-line method, over the applicable vesting period for each separately vesting portion of the award. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of share-based compensation expense to be recognized in future periods.

A change in any of the terms or conditions of share options is accounted for as a modification of share options. The Company calculates the incremental compensation cost of a modification as the excess of the fair value of the modified option over the fair value of the original option immediately before its terms are modified, measured based on the share price and other pertinent factors at the modification date. For vested options, the Company recognizes incremental compensation cost in the period the modification occurred. For unvested options, the Company recognizes, over the remaining requisite service period, the sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date.

The Company accounts for share options issued to non-employees in accordance with the provisions of ASC 505-50, Equity: Equity-based Payments to Non-Employees. The Company uses the Black-Scholes-Merton option pricing model method to measure the value of options granted to non-employees at each vesting date to determine the appropriate charge to share-based compensation. ASC 718 requires share-based compensation to be presented in the same manner as cash compensation rather than as a separate line item.

Earnings (loss) per share

Basic earnings (loss) per share is computed by dividing net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period and year presented.

Diluted earnings (loss) per ordinary share reflect the potential dilution that could occur if securities were exercised or converted into ordinary shares.

Convenience translation for financial statements presentation

Translations of amounts from RMB into US$ for the convenience of the reader have been calculated at the exchange rate of RMB6.5063 per US$1.00 on December 29, 2017, as published on the website of the United States Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be converted into US$ at such rate.

Investment in equity method investee

The Company uses the equity method to account for an equity investment over which it has significant influence but does not own a majority equity interest or otherwise control, generally accompanying a shareholding of between 20% and 50% of the voting rights. The share of earnings or losses of the investee are recognized in the consolidated statements of comprehensive (loss)/income. Equity method adjustments include the company’s proportionate share of investee income or loss and other adjustments required by the equity method.

The Company assesses its equity investment for other-than-temporary impairment by considering factors as well as relevant and available information including, but not limited to, current economic and market conditions, the operating performance of the investees including current earning trends, the general market conditions in the investee’s industry or geographic area, factors related to the investee’s ability to remain in business, such as the investee’s liquidity, debt ratios, and cash burn rate and other company-specific information.

Significant risks and uncertainties

Currency convertibility risk

Substantially all of the Company’s businesses are transacted in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China (“PBOC”) or other authorized financial institution at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts.

Concentration of credit risk

Financial assets that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, guarantee deposits, short-term investment, loan principal and financing service fee receivables, finance lease receivables and other receivables.

The Company places its cash and cash equivalents and short-term investments, with reputable financial institutions that have high-credit ratings and quality. There has been no recent history of default in relation to these financial institutions.

The Company manages credit risk of loan principal and financing service fee receivables by performing credit assessments on its borrowers and its ongoing monitoring of the outstanding balances.

No borrower represented 10% or more of total revenues and loan receivable and financing service fee receivable for the years ended December 31, 2015, 2016 and 2017.

Credit Derivatives

The Company enters into guarantee arrangements with financial institutions classified as a credit derivative contract to facilitate borrowing transactions, under which the Company provides the financial institutions protection against the risk of default on a set of loans invested by them. The Company will have to perform the guarantee obligation if a default event as defined under the contract occurs. The contractual or notional amounts of these credit derivatives represent the maximum potential amounts of future payments without consideration of possible recoveries under recourse provisions.

The Company manages current payment/performance risk of the credit derivatives through self-developed risk management model. The rating scale of risk management model takes into account factors such as identity characteristics, credit history, payment overdue history, payment capacity, behavioral characteristics and online social network activity.

Interest rate risk

The Company is exposed to interest rate risk on its interest-bearing assets and liabilities. As part of its asset and liability risk management, the Company reviews and takes appropriate steps to manage its interest rate exposures on its interest-bearing assets and liabilities. The Company has not been exposed to material risks due to changes in market interest rates, and not used any derivative financial instruments to manage the interest risk exposure during the years presented.

Business and economic risk

The Company believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations or cash flows: changes in the overall demand for services; competitive pressures due to new entrants; advances and new trends in new technologies and industry standards; changes in certain strategic relationships; regulatory considerations and risks associated with the Company’s ability to attract employees necessary to support its growth. The Company’s operations could also be adversely affected by significant political, regulatory, economic and social uncertainties in the PRC.

Recent accounting pronouncements

In May 2014, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance substantially converges final standards on revenue recognition between the FASB and the International Accounting Standards Board providing a framework on addressing revenue recognition issues and, upon its effective date, replaces almost all exiting revenue recognition guidance, including industry-specific guidance, in current U.S. GAAP.

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

In August 2015, FASB issued its final standard formally amending the effective date of the new revenue recognition guidance. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period.

The standard will be effective for the Company beginning January 1, 2018. The Company is in the process of evaluating the impact of adoption of this guidance on its consolidated financial statements. The most significant impact of the standard relates to the accounting for loan facilitation income and others. Specifically, under the standard the Company expect to recognize the revenue of the loan facilitation services predominantly at the time of billing rather than on a cash basis.

The Company will adopt the new standard effective January 1, 2018, using the modified retrospective transition method. The revenue would have been approximately RMB118 million (US$ 18 million) higher in the year 2017 under the new standard primarily due to the net change in loan facilitation services revenue recognition.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10). The amendments require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instruments-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities and the requirement for to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. This updated guidance is effective for the annual period beginning after December 15, 2017, including interim periods within the year. Early adoption is permitted. The Company does not believe this standard will have a material impact on the results of operations or financial condition.

In February 2016, the FASB issued ASU No. 2016-02, Leases, which requires lessees to recognize assets and liabilities related to lease arrangements longer than 12 months on the balance sheet. This standard also requires additional disclosures by lessees and contains targeted changes to accounting by lessors. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous GAAP. The Company is in the process of evaluating the impact of adoption of this guidance on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of the Company’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. All entities may adopt the amendments in this Update earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is in the process of evaluating the impact of adoption of this guidance on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of the Company’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. All entities may adopt the amendments in this Update earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is in the process of evaluating the impact of adoption of this guidance on its consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU do not provide a definition of restricted cash or restricted cash equivalents. This ASU is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is in the process of evaluating the impact of adoption of this guidance on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying Definition of a Business. This ASU clarifies the framework for determining whether an integrated set of assets and activities meets the definition of a business. The revised framework establishes a screen for determining whether an integrated set of assets and activities is a business and narrows the definition of a business, which is expected to result in fewer transactions being accounted for as business combinations. Acquisitions of integrated sets of assets and activities that do not meet the definition of a business are accounted for as asset acquisitions. This update is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. The Company does not believe this standard will have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairment by eliminating Step two from the goodwill impairment test. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, as opposed to determining an implied fair value in Step two to measure the impairment loss. The guidance is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019. Early adoption is permitted for all entities for annual and interim goodwill impairment testing dates on or after January 1, 2017. The guidance should be applied on a prospective basis. The Company does not believe this standard will have a material impact on its consolidated financial statements.

In February 2017, the FASB issued ASU No. 2017-05, Other income – Gains and Losses from the Derecognition of Nonfinancial assets, which clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The amendments in this update also clarify that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. This update is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period. The Company is in the process of evaluating the impact of adoption of this guidance on its consolidated financial statements.

Short-term Investments	12 Months Ended
Short-term Investments	Dec. 31, 2017
Cash and Cash Equivalents [Abstract]
Short-term Investments	4. Short-term investments Short-term investments consists of wealth management products issued by China Merchants Bank and China CITIC Bank which are redeemable by the Company at any time. The wealth management products are primarily invested in debt securities issued by the PRC government, corporate debt securities and central bank bills. The Company valued the short-term investments based on the quoted subscription/redemption price published by China Merchants Bank and China CITIC Bank. As of December 31, 2016 and 2017, the net adjustment to unrealized holding gains/losses on short-term investments is nil, respectively.

Loan Principal and Financing Service Fee Receivables

12 Months Ended

Dec. 31, 2017

Receivables [Abstract]

Loan Principal and Financing Service Fee Receivables

5. Loan principal and financing service fee receivables

5.1 Loan principal and financing service fee receivables consists of the following:


	As of December 31,
	2016			2017
	RMB			RMB			US$
Short-term loan principal and financing service fee receivables:
Loan principal and financing service fee receivables		4,930,315,057			9,277,798,700			1,425,971,551
Deferred origination costs		100,598			—			—
Less: allowance for loan principal and financing service fee receivables		(103,624,704	)		(519,254,006	)		(79,807,879	)

Short-term loan principal and financing service fee receivables, net		4,826,790,951			8,758,544,694			1,346,163,672

Long-term loan principal and financing service fee receivables:
Loan principal and financing service fee receivables		89,311,102			—			—
Less: allowance for loan principal and financing service fee receivables		(1,489,035	)		—			—

Long-term loan principal and financing service fee receivables, net		87,822,067			—			—

As of December 31, 2016 and 2017, RMB 3,733,945,521 and RMB 2,334,820,237 (US$ 358,855,300), respectively, have been transferred to certain Funding Partners, but were not derecognized upon transfer, as the loan principal and financing service fee receivables are not legally isolated in accordance with ASC 860, Transfers and Servicing.

5.2 The following table presents nonaccrual loan principal as of December 31, 2016 and 2017, respectively.


	As of December 31,
	2016			2017
	RMB			RMB			US$
Nonaccrual loan principal		29,770,427			181,193,812			27,848,979
Less: allowance for nonaccrual loan principal		(25,312,490	)		(147,790,782	)		(22,715,027	)

Nonaccrual loan principal, net		4,457,937			33,403,030			5,133,952

5.3 The following table presents the aging of past-due loan principal and financing service fee receivables as of December 31, 2016:


	1-30 days		31-60 days		61-90 days		91-120 days		121-150 days		151-180 days		Total past due		Current		Total
	RMB		RMB		RMB		RMB		RMB		RMB		RMB		RMB		RMB
Domestic consumer loans (uncollateralized)
– Loan principal		74,833,461		19,548,573		14,677,810		11,429,365		9,186,682		9,154,380		138,830,271		4,831,016,428		4,969,846,699
– Financing service fee receivables		1,850,790		756,907		679,930		—		—		—		3,287,627		46,491,833		49,779,460

		76,684,251		20,305,480		15,357,740		11,429,365		9,186,682		9,154,380		142,117,898		4,877,508,261		5,019,626,159

The following table presents the aging of past-due loan principal and financing service fee receivables as of December 31, 2017:


	1-30 days		31-60 days		61-90 days		91-120 days		121-150 days		151-180 days		Total past due		Current		Total		Total
	RMB		RMB		RMB		RMB		RMB		RMB		RMB		RMB		RMB		US$
Domestic consumer loans (uncollateralized)
– Loan principal		401,975,318		124,456,568		98,289,049		81,133,077		60,811,562		39,249,173		805,914,747		8,343,133,619		9,149,048,366		1,406,182,987
– Financing service fee receivables		11,110,556		5,410,177		5,375,791		—		—		—		21,896,524		106,853,810		128,750,334		19,788,564

		413,085,874		129,866,745		103,664,840		81,133,077		60,811,562		39,249,173		827,811,271		8,449,987,429		9,277,798,700		1,425,971,551

As of December 31, 2016 and 2017, all loans which are past due 90 days or more are nonaccrual.

5.4 Movement of allowance for loan principal and financing service fee receivables is as follows:


	As of December 31,
	2016								2017
	Loan principal			Financing sevice fee receivables		Total			Loan principal			Financing service fee receivables		Total
	RMB			RMB		RMB			RMB			RMB		RMB			US$
Balance at the beginning of the year		33,803,140			384,345		34,187,485			103,111,134			2,002,605		105,113,739			16,155,686
Additions		118,735,466			1,618,260		120,353,726			594,209,005			10,954,711		605,163,716			93,011,960
Charge-offs		(49,427,472	)		—		(49,427,472	)		(191,023,449	)		—		(191,023,449	)		(29,359,767	)

Balance at the end of the year		103,111,134			2,002,605		105,113,739			506,296,690			12,957,316		519,254,006			79,807,879

Evaluated for impairment on a portfolio basis		103,111,134			2,002,605		105,113,739			506,296,690			12,957,316		519,254,006			79,807,879

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References + Details

Other Current Assets

12 Months Ended

Dec. 31, 2017

Other Current Assets

6. Other current assets

Other current assets consist of the following:


		As of December 31,
		2016			2017
		RMB			RMB			US$
Prepaid expenses			14,387,545			52,989,718			8,144,371
Prepayments for vehicles	6.1		—			141,082,860			21,684,038
Deposits in trust protection fund	6.2		—			72,490,890			11,141,646
Guarantee deposits held by Funding Partners			241,669,750			121,731,691			18,709,818
Others			56,042,148			105,878,639			16,273,247

Total			312,099,443			494,173,798			75,953,120
Less: Allowance for the receivables from suppliers			(11,822,819	)		(11,822,819	)		(1,817,134	)

			300,276,624			482,350,979			74,135,986

6.1 The Company prepaid vehicle vendors for its finance lease operations.

6.2 According to the relevant regulations, the consolidated trusts are required to deposit 1% of the trust’s capital to the trust protection fund, which will be released at the trust’s expiration date.

Investment in Equity Method Investee	12 Months Ended
Investment in Equity Method Investee	Dec. 31, 2017
Equity Method Investments and Joint Ventures [Abstract]
Investment in Equity Method Investee	7. Investment in equity method investee On October 17, 2016, the Company made a commitment to invest RMB 190 million in cash for 45.9% of the equity interest in Ganzhou QuCampus Technology Co., Ltd (“Ganzhou QuCampus”) which mainly operates computer services, advisory, and online merchandise services. As of December 31, 2017, the Company contributed RMB 70 million in Ganzhou QuCampus and held a 45.9% equity interest in Ganzhou QuCampus. As the Company has significant influence over Ganzhou QuCampus, Ganzhou QuCampus was accounted for as an equity method investment. The cost of the investment over the proportional fair value of the assets and liabilities of the investee is reflected in the Company’s memo accounts as “equity method goodwill”. The equity method goodwill is not subsequently amortized and is not tested for impairment under ASC 350. Equity method investments shall continue to be reviewed for impairment in accordance with paragraph ASC 323-10-35-32. The Company’s share of loss in Ganzhou QuCampus for the years ended December 31, 2016 and 2017 was RMB 4,805,183 and RMB 20,676,273 (US$ 3,177,885), respectively, which was recognized in the consolidated statements of comprehensive income. Due to the short operating history of Ganzhou QuCampus, the Company determined that the investment is not impaired as of December 31, 2016 and 2017.

Other Non-current Assets

12 Months Ended

Dec. 31, 2017

Short-term and Long-term Borrowings

Other Non-current Assets

8. Other non-current assets

Other non-current assets consist of the following:


	As of December 31,
	2016		2017
	RMB		RMB		US$
Guarantee deposits held by Funding Partners		5,675,452		2,390		367
Prepaid expenses		2,466,199		3,048,127		468,489
Others		3,695,329		3,394,154		521,672

		11,836,980		6,444,671		990,528

Short-term and Long-term Borrowings

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

9. Short-term and long-term borrowings

In the ordinary course of business, the Company transfers loan principals to certain Funding Partners. However, in accordance with ASC 860 Transfers and Servicing the loan principals are not derecognized upon transfer as they are not legally isolated. Hence, the Company continues to report the transferred loan principal in the consolidated balance sheets and account for the proceeds from the transfer as a secured borrowing with pledge of collateral.

The following table presents short-term borrowings from the Funding Partners as of December 31, 2016 and 2017. Short-term borrowings includes borrowings with terms shorter than one year, the current portion of the long-term borrowings and long-term borrowings with early repayment options that are exercisable by the Funding Partners on demand:


			As of December 31,
Funding Partners	Fixed annual rate (%)	Term*	2016		2017
			RMB		RMB		US$
P2P platforms	6% to 12%	28 days to 27 months		3,141,161,270		79,410,422		12,205,158
Other institutions	5.5% to 12%	27 to 698 days		177,019,905		1,227,347,947		188,639,925
Trust beneficiaries	6% to 16%	12 to 24 months		506,719,178		5,389,958,760		828,421,494
Private financial assets trading platform	7.8% to 12%	14 to 365 days		358,330,505		1,087,388,643		167,128,574
Bank	5.70%	1 year		—		195,308,750		30,018,405

				4,183,230,858		7,979,414,522		1,226,413,556

*	Includes current portion of borrowings greater than 1 year.

The following table presents long-term borrowings from Funding Partners as of December 31, 2016 and 2017:


			As of December 31,
Funding Partners	Fixed annual rate (%)	Term	2016		2017
			RMB		RMB		US$
P2P platforms	6% to 12%	13 to 34 months		76,052,124		23,905		3,674
Trust beneficiaries	7.4% to 7.5%	18 months		—		510,000,000		78,385,565

				76,052,124		510,023,905		78,389,239

The weighted average interest rate for the outstanding borrowings was approximately 9.15% and 9.40% as of December 31, 2016 and 2017, respectively.

The following table sets forth the contractual obligations which has not included impact of discount of time value as of December 31, 2016 and 2017:


	Payment due by period
	Less than 1 year		1 – 2 years		Greater than 2 years		Total
As of December 31, 2016 Long-term borrowings and interest payables (RMB)		217,633,327		78,081,207		—		295,714,534

As of December 31, 2017 Long-term borrowings and interest payables (RMB)		38,017,759		520,336,141		1,959		558,355,859

As of December 31, 2017 Long-term borrowings and interest payables (US$)		5,843,223		79,974,200		301		85,817,724

Accrued Expenses and Other Current Liabilities

12 Months Ended

Dec. 31, 2017

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

10. Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following:


	As of December 31,
	2016		2017
	RMB		RMB		US$
Accrued payroll and welfare		16,033,703		81,623,990		12,545,378
Tax payables		90,478,748		32,262,859		4,958,711
Payable to suppliers		75,160,792		85,772,102		13,182,931
Payable to external service providers		16,347,014		45,122,393		6,935,185
Others		17,644,662		70,911,451		10,898,890

		215,664,919		315,692,795		48,521,095

Guarantee Liabilities

12 Months Ended

Dec. 31, 2017

Guarantees and Product Warranties [Abstract]

Guarantee Liabilities

11. Guarantee liabilities

The movement of guarantee liabilities is as follows:


	For the years ended December 31,
	2016			2017
	RMB			RMB			US$
Balance at beginning of the year		—			6,207,812			954,123
Fair value of guarantee liabilities upon the inception of new loans		5,496,085			119,683,496			18,395,017
Performed guarantee		(149,262	)		(124,798,134	)		(19,181,122	)
Change in fair value of guarantee liabilities		860,989			45,888,151			7,052,879

Balance at end of the year		6,207,812			46,981,325			7,220,897

As of December 31, 2016 and 2017, the maximum potential undiscounted future payment the Company would be required to make was RMB1,373 million and RMB2,082 million (US$ 320 million), respectively. The term of the guarantee is the same as the term of loans facilitated under the arrangements with the financial institutions, which ranges from 7 days to 1 year, as of December 31, 2017.

Cost of Revenues

12 Months Ended

Dec. 31, 2017

Other Income and Expenses [Abstract]

Cost of Revenues

12. Cost of revenues

Cost of revenues consists of the following:


	For the years ended December 31,
	2015		2016		2017
	RMB		RMB		RMB		US$
Interest expenses on borrowings		122,705,588		210,950,030		686,889,761		105,573,023
Sales-type lease		—		—		23,895,186		3,672,623
Other lending related costs		25,711,093		56,911,976		170,060,910		26,137,883

		148,416,681		267,862,006		880,845,857		135,383,529

Interest and Investment Income, Net

12 Months Ended

Dec. 31, 2017

Interest and Investment Income, Net

13. Interest and investment income, net

Interest and investment income, net consists of the following:


	For the years ended December 31,
	2015		2016			2017
	RMB		RMB			RMB			US$
Share of loss from equity method investment		—		(4,805,183	)		(20,676,273	)		(3,177,885	)
Investment income of short-term investments		764,538		3,406,166			3,526,506			542,014
Interest income		2,124,373		3,256,345			21,360,670			3,283,075

		2,888,911		1,857,328			4,210,903			647,204

Income Taxes

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

14. Income taxes

The Company was incorporated in the Cayman Islands. It is tax-exempted under the tax laws of the Cayman Islands. Qudian BVI is domiciled in the British Virgin Islands, which is also tax-exempted. Qudian HK is domiciled in Hong Kong, and is subject to 16.5% statutory income tax rate in the periods presented.

The VIEs and their subsidiaries domiciled in the PRC were subject to 25% statutory income tax rate in the years presented. As stipulated by the Taxation Law of PRC, the subsidiaries in Ganzhou are qualified enterprises engaged in industry under the Western Development Strategy and are therefore entitled to preferential tax rate of 15%, and the subsidiary in Xinjiang is qualified enterprise engaged in industry as a company established in the special economic development zone and is therefore entitled to an exemption from income tax for first five years and 50% reduction for the next five years from its first profitable year.

The Enterprise Income Tax Law (the “EIT Law”) of the PRC includes a provision specifying that legal entities organized outside PRC will be considered residents for Chinese income tax purposes if their place of effective management or control is within PRC. If legal entities organized outside PRC were considered residents for Chinese income tax purpose, they would become subject to the EIT Law on their worldwide income. This would cause any income from legal entities organized outside PRC earned to be subject to PRC’s 25% EIT. The Implementation Rules to the EIT Law provides that non-resident legal entities will be considered as PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting, and properties, etc. reside within PRC.

Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Company does not believe that the legal entities organized outside PRC should be characterized as PRC residents for EIT Law purposes.

The current and deferred component of income tax expenses which were substantially attributable to the Company’s PRC subsidiaries, VIEs and subsidiaries of the VIEs, are as follows:


	For the years ended December 31,
	2015		2016			2017
	RMB		RMB			RMB			US$
Current income tax expenses		—		144,628,149			353,218,915			54,288,754
Deferred income tax expenses		—		(17,787,699	)		(97,672,912	)		(15,012,052	)

Total income tax expenses		—		126,840,450			255,546,003			39,276,702

The principal components of the deferred tax assets and liabilities are as follows:


	As of December 31,
	2016			2017
	RMB			RMB			US$
Non-current deferred tax assets
Allowance for loan principal and financing service fee receivables		33,430,952			138,683,016			21,315,189
Allowance for other receivables		2,082,694			2,300,135			353,524
Guarantee liabilities		931,172			3,700,872			568,814
Share-based compensation		18,087,929			26,240,241			4,033,051
Investment loss under equity method		1,201,296			6,370,364			979,107
Net operating loss carry forwards		55,764,192			80,539,001			12,378,618
Less: valuation allowance		(93,710,536	)		(142,373,018	)		(21,882,332	)

Non-current deferred tax assets, net		17,787,699			115,460,611			17,745,971

Non-current deferred tax liabilities		—			—			—

The Company operates through its subsidiaries, VIEs and subsidiaries of the VIEs. The valuation allowance is considered on an individual entity basis. As of December 31, 2016 and 2017, the Company had deferred tax assets related to net operating loss carry forwards of RMB 55,764,192 and RMB 80,539,001 (US$ 12,378,618), respectively, from its subsidiaries, VIEs and subsidiaries of the VIEs registered in the PRC, which can be carried forward to offset taxable income. The net operating loss will expire in years 2018 to 2022 if not utilized. The Company assessed the available evidence to estimate if sufficient future taxable income would be generated to use the existing deferred tax assets.

Reconciliation between the income taxes expense computed by applying the PRC tax rate to loss before income taxes and the actual provision for income taxes is as follows:


	For the years ended December 31,
	2015			2016			2017
	RMB			RMB			RMB			US$
(Loss)/ income before income tax		(233,163,744	)		703,493,068			2,420,004,823			371,947,932
PRC statutory income tax rate		25	%		25	%		25	%		25	%
Income tax at statutory tax rate		(58,290,936	)		175,873,268			605,001,206			92,986,983
Effect of different tax rates		—			(72,661,772	)		(367,422,131	)		(56,471,748	)
Exempt Income		—			—			(2,064,183	)		(317,259	)
Expenses not deductible for tax purposes		10,341,003			183,808			4,298,559			660,677
Income tax refund		—			(12,123,338	)		(32,929,930	)		(5,061,237	)
Changes in valuation allowance		47,949,933			35,568,484			48,662,482			7,479,286

Income tax expenses		—			126,840,450			255,546,003			39,276,702

The Company did not incur any interest and penalties related to potential underpaid income tax expenses.

The relevant tax authorities have not conducted a tax examination on PRC entities. In accordance with relevant PRC tax administration laws, the tax for the years ended December 31, 2015, 2016 and 2017 of the Company’s PRC subsidiaries, VIEs and subsidiaries of the VIEs remain subject to tax audits by the relevant tax authorities as of December 31, 2017.

Management has asserted to indefinitely reinvest the undistributed earnings of the subsidiaries located in the PRC. The cumulative amount of the temporary differences in respect of investments in foreign subsidiaries is RMB 3,033 million (US$ 466 million) as of December 31, 2017. Upon repatriation of the foreign subsidiaries and the VIEs’ earnings, in the form of dividends or otherwise, the Company would be subject to various PRC income taxes including withholding income tax. The related unrecognized deferred tax liabilities were approximately RMB 1,213 million (US$ 186 million).

(Loss)/Earnings per Share

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

(Loss)/Earnings per Share

15. (Loss)/earnings per share

The following table sets forth the computation of basic and diluted net (loss)/income per share for the years ended December 31, 2015, 2016 and 2017:


	For the years ended December 31,
	2015			2016		2017
	RMB			RMB		RMB		US$		RMB		US$
	Ordinary share			Ordinary share		Class A		Class A		Class B		Class B
(Loss)/earnings per share – basic:
*Numerator:*
Allocation of net (loss)/income attributable to Qudian Inc. for basic computation		(233,163,744	)		576,652,618		1,077,159,077		165,556,319		1,087,299,743		167,114,911

*Millions of Shares (denominator):*
Weighted average number of ordinary share outstanding – basic		79.31			79.31		62.90		62.90		63.49		63.49
Denominator used for basic (loss)/earnings per share		79.31			79.31		62.90		62.90		63.49		63.49

(Loss)/earnings per share – basic		(2.94	)		7.27		17.13		2.63		17.13		2.63


(Loss)/earnings per share – diluted:
*Numerator:*
Allocation of net (loss)/income attributable to Qudian Inc. for diluted computation		(233,163,744	)		576,652,618		1,714,215,136		263,470,043		450,243,684		69,201,187
Reallocation of net income attributable to Qudian Inc. as a result of conversion of Class B to Class A shares		—			—		450,243,684		69,201,187		—		—

Allocation of net (loss)/income attributable to Qudian Inc.		(233,163,744	)		576,652,618		2,164,548,820		332,671,230		450,243,684		69,201,187

*Millions of Shares (denominator):*
Weighted average number of ordinary share outstanding – basic		79.31			79.31		62.90		62.90		63.49		63.49
Dilutive effect of preferred shares		—			222.46		177.36		177.36		—		—
Conversion of Class B to Class A ordinary shares		—			—		63.49		63.49		—		—
Adjustments for dilutive share options		—			2.01		1.47		1.47		—		—

Denominator used for diluted (loss)/earnings per share		79.31			303.78		305.22		305.22		63.49		63.49

(Loss)/earnings per share – diluted		(2.94	)		1.90		7.09		1.09		7.09		1.09


Earnings per share – ADS:
Denominator used for earnings per ADS – basic							41.44		41.44
Denominator used for earnings per ADS – diluted							41.44		41.44
Earnings per ADS – basic							17.13		2.63

Earnings per ADS – diluted							7.09		1.09

Fair Value Measurements

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

16. Fair value measurements

Assets and liabilities disclosed at fair value

The Company measures its cash and cash equivalents, restricted cash, loan principal and financing service fee receivables, finance lease receivables and borrowings at amortized cost. The carrying value of loan principal and financing service fee receivables approximate their fair value due to their short-term nature and are considered a level 3 measurement. The fair value was estimated by discounting the scheduled cash flows through to estimated maturity using estimated discount rates based on current offering rates of comparable institutions with similar services. The carrying value of the Company’s debt obligations approximate fair value as the borrowing rates are similar to the market rates that are currently available to the Company for financing obligations with similar terms and credit risks and represent a level 2 measurement. The guarantee liabilities are presented as a level 3 measurement, with fair value estimated by discounting expected future payouts, net charge off rates, expected collection rates and a discount rate for time value.

Assets measured at fair value on a nonrecurring basis

The Company measured its property and equipment, intangible assets and equity method investment at fair value on a nonrecurring basis whenever events or changes in circumstances indicate that the carrying value may no longer be recoverable.

Assets and liabilities measured at fair value on a recurring basis

The Company measured its short-term investments at fair value on a recurring basis. The short-term investments were wealth management products issued by China Merchants Bank and China CITIC Bank that are redeemable at any time. The Company valued the short-term investments based on the quoted subscription/redemption price published by China Merchants Bank and China CITIC Bank.

The Company measured its guarantee liabilities at fair value on a recurring basis. As the Company’s guarantee liabilities are not traded in an active market with readily observable prices, the Company uses significant unobservable inputs to measure the fair value of guarantee liabilities. Guarantee liabilities are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. The Company did not transfer any assets or liabilities in or out of level 3 during the years ended December 31, 2016 and 2017.

The following table summarizes the Company’s financial assets and liabilities measured and recorded at fair value on recurring basis as of December 31, 2016 and 2017:

As of December 31, 2016

Active market
(Level 1)

Observable
input (Level 2)

Non-observable

input (Level 3)

Total

RMB

Assets:

Short-term investments

Monetary wealth management products

430,200,000

—

430,200,000

Liabilities:

Guarantee liabilities

—

6,207,812

The following table summarizes the Company’s financial assets and liabilities measured and recorded at fair value on recurring basis as of December 31, 2016 and 2017: - continued

As of December 31, 2017

Active market
(Level 1)

Observable input
(Level 2)

Non-observable input
(Level 3)

Total

RMB

Assets:

Short-term investments

Monetary wealth management products

—

300,000,000

—

300,000,000

Liabilities:

Guarantee liabilities

—

46,981,325

As of December 31, 2017

Active market
(Level 1)

Observable input
(Level 2)

Non-observable input
(Level 3)

Total

US$

Assets:

Short-term investments

Monetary wealth management products

—

46,109,156

—

46,109,156

Liabilities:

Guarantee liabilities

—

7,220,897

At December 31, 2016 and 2017, the discounted cash flow methodology is used to estimate the fair value of guarantee liabilities. The significant unobservable inputs used in the fair value measurement of guarantee liabilities include the discount rate and expected delinquency rates applied in the valuation models. These inputs in isolation can cause significant increases or decreases in fair value. Specifically, when a discounted cash flow model is used to determine fair value, the significant input used in the valuation model is the discount rate applied to present value the projected cash flows. Increases in the discount rate can significantly lower the fair value of guarantee liabilities; conversely a decrease in the discount rate can significantly increase the fair value of the guarantee liabilities. The discount rate is determined based on the market rates. Increase in the expected delinquency rates can significantly increase the fair value of guarantee liabilities; conversely a decrease in the expected delinquency rates can significantly decrease the fair value of guarantee liabilities.

Significant Unobservable Inputs


		Range of Inputs Weighted - Average As of December 31,
Financial Liabilities	Unobservable Input	2016		2017
Guarantee liabilities	Discount rates		5.20%		5.87%
	Expected delinquency rates		0.25%-0.51%		0.70%-6.24%

Refer to Note 11 for additional information about Level 3 guarantee liabilities measured at fair value on a recurring basis for the years ended December 31, 2016 and 2017.

Related Party Balances and Transactions

12 Months Ended

Dec. 31, 2017

Related Party Balances and Transactions

17. Related party balances and transactions


Name of related parties		Relationship with the Company
Luo Min		Founder, chief executive officer and controlling shareholder of the Company
Qufenqi Inc.		Ultimate legal holding company of Beijing Happy Time prior to December 31, 2015
Qufenqi (HK) Limited		Holding company of Beijing Happy Time prior to December 17, 2015, and a subsidiary of the Company since April 27, 2017
Alipay.com Co., Ltd.		Subsidiary of shareholder of the Company
Ganzhou Qu Campus		The Company’s equity method investee
Ganzhou Happy Share Capital Management LLP		Company controlled by Founder
Zhima Credit Management Co., Ltd.		Subsidiary of shareholder of the Company
Chongqing Alibaba Small Loan Co., Ltd.		Subsidiary of shareholder of the Company
Guosheng Financial Holding Inc.		Company controlled by Director
Guosheng Securities Asset Management Co., Ltd.		Company controlled by Director
Alibaba Cloud Computing Co. Ltd.		Company controlled by the ultimate controlling individual of shareholder
Key management and their immediate families		The Company’s key management and their immediate families

17.1 Amounts due to related parties


		As of December 31,
	Note	2016		2017
		RMB		RMB		US$
Qufenqi Inc.	(i)		867,874		813,326		125,006
Guosheng Financial Holding Inc.	(ii)		—		631,746,787		97,097,703
Guosheng Securities Asset Management Co., Ltd.	(ii)		—		83,475,455		12,829,943
Alipay.com Co., Ltd.			—		418,597		64,337
Zhima Credit Management Co., Ltd.	(iii)		19,605,313		3,108,873		477,825

Total			20,473,187		719,563,038		110,594,814

(i)	The balance represents the transactions from daily operations, which is interest free and payable on demand.

(ii)	The balance represents the borrowings and interests payable arising from consolidated trusts.

(iii)

The balance represents the credit assessment and advertising platform service fee payables.

17.2 Amounts due from related parties


				As of December 31,
	Note			2016		2017
				RMB		RMB		US$
Short-term amounts due from related parties
Qufenqi Inc.					180,000,000		27,475		4,223
Qufenqi (HK) Limited					4,860		—		—
Ganzhou Qu Campus					157,673		23,714		3,645
Ganzhou Happy Share Capital Management LLP					770		770		118
Alipay.com Co., Ltd.		(i	)		404,631,249		549,842,011		84,509,170
Zhima Credit Management Co., Ltd.					778,837		—		—
Alibaba Cloud Computing Co. Ltd.					—		320,853		49,314
Key management and their immediate families
Employee advances					60,000		—		—
Loan principal and financing service fee receivables		(ii	)		272,318		1,000,000		153,697

Total short-term amounts due from related parties					585,905,707		551,214,823		84,720,167

Long-term amounts due from related parties
Key management and their immediate families
Loan principal and financing service fee receivables		(ii	)		1,000,000		—		—

Total long-term amounts due from related parties					1,000,000		—		—

Total amounts due from related parties					586,905,707		551,214,823		84,720,167

(i)	The balance represents the amount deposited in the Company’s Alipay account. Such amount is unrestricted as to withdrawal and use and readily available to the Company on demand.

(ii)	Key management and their immediate families borrowed funds through the Company’s financing platform.

The movement of the loan principal and financing service fee receivables due from key management and their immediate families is as follows:


	As of December 31,
	2016			2017
	RMB			RMB			US$
Balance at beginning of the year		2,705,053			1,272,318			195,552
Loan principal and financing service fee receivables		2,700,000			—			—
Payments		(4,132,735	)		(272,318	)		(41,855	)

Balance at end of the year		1,272,318			1,000,000			153,697

As of December 31, 2016 and 2017, the total outstanding balance, which was due on demand, interest free and uncollateralized due from these related parties, was RMB1,000,000 and RMB1,000,000 (US$153,697), respectively. The remaining interest free loans will be repaid in full by May 2018.

The Company intends to settle the interest free loans extended to related parties and does not plan to enter into similar transactions with related parties in the future.

17.3 Transactions with related parties


	For the years ended December 31,
	2015		2016		2017
	RMB		RMB		RMB		US$
Service income
Key management and their immediate families		133,380		90,539		4,551		699

Cost of revenue
Alipay.com Co., Ltd.		8,185,069		41,186,645		114,175,547		17,548,460
Zhima Credit Management Co., Ltd.		—		6,150,041		21,435,176		3,294,526
Alibaba Cloud Computing Co. Ltd.		—		—		23,173,116		3,561,643
Chongqing Alibaba Small Loan Co., Ltd.		—		—		3,151,324		484,350
Guosheng Financial Holding Inc.		—		—		56,746,787		8,721,821
Guosheng Securities Asset Management Co., Ltd.		—		—		2,327,277		357,696

		8,185,069		47,336,686		221,009,227		33,968,496

Sales and marketing
Zhima Credit Management Co., Ltd.		—		36,149,807		16,033,107		2,464,243
Alipay.com Co., Ltd.		—		—		222,081,862		34,133,357

		—		36,149,807		238,114,969		36,597,600

Share-based Compensation

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation

18. Share-based compensation

Stock options

On August 29, 2014, the Board of Directors of the former holding company of Beijing Happy Time approved the 2014 Share Plan (the “2014 Plan”) for the purpose of providing incentives and rewards to employees and executives who contribute to the success of the Company’s operations, and approved 20,824,447 of share options under the 2014 Plan. These share options do not have an exercise price and vest over four years. 25% of the share options could be vested on the first anniversary, while the remaining could be vested 1/3 yearly when the participant completes each 1-year period of continuous service thereafter. The share options expire 10 years from the date of grant. Upon execution of the share options, shares owned by Mr. Luo Min will be transferred to the option holders.

On December 26, 2015, the 2014 Plan was terminated. On the same day, the Board of Directors of Beijing Happy Time approved the 2015 Share Plan (the “2015 Plan”) which replaced the 2014 Plan. Under the 2015 Plan, Beijing Happy Time was entitled to grant a total of 15,814,019 share options in virtual shares of Tianjin Happy Share to employees, officers, directors and individuals. Tianjin Happy Share is a limited partnership established under the laws of PRC, which owns 5.24% of the equity interest in Beijing Happy Time as of December 26, 2015. Beijing Happy Time divided the partnership interest in Tianjin Happy Share into 15,814,019 virtual shares and awarded the share options to purchase the virtual shares to grantees of the 2015 Plan. Beijing Happy Time granted 13,373,019 share options under the 2015 Plan to the employees as replacement awards for the 2014 plan and all the share options granted were immediately vested on December 26, 2015. The 2015 Plan expires 10 years from the date of the grant.

As part of the restructuring in 2016, Tianjin Happy Share entered into a share entrustment agreement with Qufenqi Holding Limited, pursuant to which Qufenqi Holding Limited holds 15,814,019 ordinary shares of Qudian Inc. as the nominal shareholder on behalf of Tianjin Happy Share. As such, grantees of the 2015 Share Incentive Plan enjoy the pecuniary interests of the 15,814,019 shares, representing 5.24% of the equity interest of Qudian Inc. in proportion to their relevant numbers of options to purchase virtual shares of Tianjin Happy Share.

On May 1, 2016, the Board of Directors of Beijing Happy Time approved the 2015 Incentive Plan Supplementary Agreement (“Supplemental 2015 Incentive Plan”), which canceled 1,080,000 share options granted under the 2015 Plan. In addition, the Company will issue share options to certain management and employees equivalent to the numbers of shares canceled within the next three years (with the first performance review in January 2017) based on the periodic performance reviews of those individuals.

As part of the restructuring, the Board of Directors of Qudian Inc. approved the cancelation of the 2015 Plan and the Supplemental 2015 Incentive Plan as well as the adoption of the 2016 Equity Incentive Plan (the “2016 Plan”) on December 9 2016. During the year ended December 31 2016, the Company granted a total of 15,299,019 of share options for the ordinary shares of Qudian Inc. under 2016 Plan. The Company granted 12,364,319 share options under the 2016 Plan to the employees as replacement awards for the 2015 plan. All the share options granted under 2016 Plan were vested over 3 to 5 years. The 2016 Plan expires 10 years from the date of the grant.

The Company has set up the Share Based Payment Trust for the purpose of holding options awarded to certain employees and underlying shares before they are exercised as instructed by the employees. As of December 31, 2016, 13,865,219 options are held by the trustee of the Share Based Payment Trust.

On May 3, 2017, the Company granted 494,904 options under the 2016 Plan.

On August 17, 2017, the Company granted 200,000 options under the 2016 Plan. 20,000 of the options were granted to two independent non-executive directors. 25% of the options will vest upon each subsequent anniversary of the Company’s IPO.

The Company calculated the estimated fair value of the options on the respective grant dates using the binomial option pricing model with assistance from an independent valuation firm. Assumptions used to determine the fair value of share options granted during 2015, 2016 and 2017 are summarized in the following table:

For the years ended December 31,

2015

2016

2017

Risk-free interest rate (%)

2.00 to 2.43

2.47

1.56 to 2.33

Volatility (%)

46.6 to 50.3

49.8 to 49.9

50.9 to 52.4

Expected exercise multiple

2.2 to 2.8

Dividend yield

Nil

Expected life (in years)

Exercise price

Nil

Fair value of ordinary shares (RMB)

3.82 to 12.63

25.89 to 26.04

81.94 to 94.22

The Company recognized compensation cost for the share options on a graded vesting basis. The total fair value of the vested share options were RMB 55,607,170, RMB 22,133,620 and RMB 64,055,851 (US$ 9,845,204) for the years ended December 31, 2015, 2016 and 2017, respectively.

A summary of share option activity under the 2014 Plan is as follows:


	Number of shares			Weighted average exercise price		Weighted average grant date fair value
				RMB		RMB
Balance, April 9, 2014 (date of inception)		—			—		—

Granted		18,373,219			—		1.30
Exercised		—			—		—
Forfeited		—			—		—

Balance, December 31, 2014		18,373,219			—		1.30

Granted		2,449,800			—		3.63
Exercised		—			—		—
Canceled		(13,373,019	)		—		2.08
Forfeited		(7,450,000	)		—		0.68

Balance, December 31, 2015		—			—		—

Exercisable, December 31, 2015		—			—		—

Expected to vest, December 31, 2015		—			—		—

A summary of share option activity under the 2015 Plan is as follows:


	Number of shares			Weighted average exercise price		Weighted average grant date fair value
				RMB		RMB
Balance, December 31, 2014		—			—		—

Granted		15,814,019			—		12.62
Exercised		—			—		—
Surrendered		(3,000	)		—		12.62

Balance, December 31, 2015		15,811,019			—		12.62

Exercised and forfeited		(3,446,700	)		—		12.62
Exercised and replaced		(12,364,319	)		—		12.62

Balance, December 31, 2016		—			—		—

Exercisable, December 31, 2016		—			—		—

Expected to vest, December 31, 2016		—			—		—

A summary of share option activity under the 2016 Plan is as follows:


	Number of shares			Weighted average exercise price		Weighted average grant date fair value
				RMB		RMB
Balance, December 31, 2015		—			—		—
Granted		15,299,019			—		25.89
Exercised		—			—		—
Forfeited		—			—		—

Balance, December 31, 2016		15,299,019			—		25.89

Granted		694,904			—		88.33
Exercised		—			—		—
Forfeited		(241,650	)		—		34.38

Balance, December 31, 2017		15,752,273			—		28.51

Exercisable, December 31, 2017		9,551,437			—		24.52

Expected to vest, December 31, 2017		6,200,836			—		34.66

As of December 31, 2017, total unrecognized compensation expense relating to unvested share options was RMB 63,890,517 (US$ 9,819,793). The expense is expected to be recognized over a weighted-average period of 2.33 years.

For the years ended December 31, 2015, 2016 and 2017, the Company allocated share-based compensation expense as follows:


	For the years ended December 31,
	2015		2016		2017
	RMB		RMB		RMB		US$
Sales and marketing		23,690,916		690,486		1,890,690		290,594
General and administrative		11,424,573		18,986,103		42,848,932		6,585,760
Research and development		20,491,681		2,457,031		19,316,229		2,968,850

		55,607,170		22,133,620		64,055,851		9,845,204

Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

19. Commitments and contingencies

Operating lease commitments

The Company leases certain office premises under non-cancelable leases. Rental expenses under operating leases for the years ended December 31, 2015, 2016 and 2017 were RMB 7,332,721, RMB 11,253,841 and RMB 15,931,076 (US$ 2,448,561), respectively.

Future minimum lease payments under non-cancelable operating leases agreements consist of the following as of December 31, 2017:


	RMB		US$
Year ending December 31:
2018		43,905,311		6,748,123
2019		40,490,584		6,223,289
2020 and after		8,789,893		1,350,982

Total		93,185,788		14,322,394

The Company’s operating lease commitments have no renewal options, rent escalation clauses and restriction or contingent rents.

Convertible Preferred Shares

12 Months Ended

Dec. 31, 2017

Convertible Preferred Shares

20. Convertible Preferred Shares

The Company’s preferred shares activities for the years ended December 31, 2015, 2016 and 2017 are summarized below:


	Series A-1 and A-2 preferred shares						Series B-1, B-2 and B-3 preferred shares						Series C-1, C-2, C-3, C-4 and C-5 preferred shares
	Number of shares			Amount			Number of shares			Amount			Number of shares			Amount
				RMB						RMB						RMB
Balance as of December 31, 2015 and 2016		7,396,437			197,627,279			75,585,589			2,019,590,551			139,478,460			3,726,760,400
Conversion to Class A ordinary shares		(7,396,437	)		(197,627,279	)		(75,585,589	)		(2,019,590,551	)		(139,478,460	)		(3,726,760,400	)

Balance as of December 31, 2017		—			—			—			—			—			—

The Company issued Series A, Series B and Series C preferred shares (collectively, the “Preferred Shares”) to the same group of third party shareholders of the VIE on the restructuring date i.e. December 9, 2016. The Preferred Shares are recorded at fair value on the issue date and are presented on a retroactive basis. The conversion ratio was one Preferred Share convertible into one ordinary share.

Upon completion of the IPO in October 18, 2017, each convertible preferred share automatically converted into one Class A ordinary share. The number of Class A ordinary shares that have been issued upon conversion of all convertible preferred shares was 222,460,486. Therefore, the redeemable convertible preferred shares balance as of December 31, 2017 was nil.

The following is a summary of the significant terms of the Preferred Shares:

Conversion rights

The holders of the Preferred Shares are entitled to convert, at the option of the holder thereof, at any time the date of the first issuance of the respective Preferred Shares applicable to such Preferred Share, into such number of fully paid and non-assessable ordinary shares as is determined by dividing the deemed issue price (“Adjusted Issue Price”) applicable to such series of Preferred Shares by the conversion price applicable to such series of Preferred Shares (the “Conversion Price”), in effect on the date the certificate is surrendered for conversion. The initial Conversion Price shall initially equal the Adjusted Issue Price applicable to such Preferred Share, and shall be adjusted from time to time. The initial conversion ratio for Preferred Shares to Ordinary Shares shall be 1:1. As of December 31, 2016 and October 17, 2017, this conversion ratio was one Preferred Share convertible into one ordinary share.

The conversion ratio for any series of Preferred Shares shall be subject to adjustment only as provided in accordance with items (a), (b), (c), (d), (e) and (f) below in order to adjust the number of ordinary shares into which such series of the Preferred Shares is convertible.

(a)	Adjustments for share splits and combinations

(b)	Adjustments to ordinary shares dividends and distributions

(c)	Adjustments for other dividends

(d)	Reorganizations, mergers, consolidations, reclassifications, exchanges and substitutions

(e)	Sale of shares below the conversion price

(f)	Deemed issuance of additional stock

Automatic Conversion

Each Preferred Share or such series of Preferred Shares, as applicable, shall automatically be converted into ordinary shares at the then-effective conversion ratio applicable to such Preferred Share upon either (a) the closing of a firm commitment underwritten public offering pursuant to an effective registration statement under the United States Securities Act of 1933 covering the offer and sale of ordinary shares for the account of the Company to the public at a public offering price per share corresponding to a pre-money, at-IPO valuation of the Company of at least US$1,000,000,000 with net proceeds to the Company in excess of US$30 million (after deduction for underwriting discounts, commissions and expenses) (the “Qualified IPO”); or (b) with respect to Series A Shares at the election of the holders of eighty percent (80%) of Series A Shareholders; with respect to Series B Shares at the election of the holders of seventy-five percent (75%) of the Series B Shares (voting together as a separate class); and with respect to Series C Shares at the election of fifty percent (50%) of Series C Shareholders.

Dividends

The holders of Preferred Shares shall be entitled to receive non-cumulative dividends at an annual rate of 8% as and when declared by the Board of Directors, prior and in preference to any declaration or payment of any dividend on the ordinary shares and all other classes of shares of the Company.

No dividends have been declared for the Preferred Shares for the periods presented.

After the preferential dividends relating to the Preferred Shares above have been paid in full or declared and set apart in any fiscal year of the Company, any additional dividends available may be declared in that fiscal year for the ordinary shares. Such additional dividends shall be declared pro rata on the ordinary shares and Preferred Shares on an as-converted basis.

Voting rights

The holders of each Preferred Shares are entitled to the number of votes equal to the number of ordinary shares into which such Preferred Shares could be converted at the voting date.

Redemption

The Preferred Shares are redeemable by the holders at any time after the earlier of the occurrence of the following event: (i) the Company fails to complete a Qualified IPO before September 30, 2020, (ii) any material adverse change in the regulatory environment, (iii) any material breach of the Preferred Share Purchase Agreement, at an amount equal to the sum of the Adjusted Issue Price, plus an amount accruing daily at 8% per annum and all declared but unpaid dividends.

Liquidation Preference

In the event of liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution shall be made as follows:

•

The holders of Series C Preferred Shares are entitled to receive an amount equal to issue price plus all declared but unpaid dividends and distributions, in preference to any distribution to the holders of the Series B Shares, the Series A Shares and the ordinary shareholders of the Company;

•

After the payment to the holders of Series C Preferred Shares, the holders of Series B Preferred Shares are entitled to receive an amount equal to issue price plus all declared but unpaid dividends and distributions, in preference to any distribution to the holders of the Series A Preferred Shares and the ordinary shareholders of the Company;

•

After the payment to the holders of Series C and Series B Preferred Shares, the holders of Series A Preferred Shares are entitled to receive an amount equal to issue price plus all declared but unpaid dividends and distributions, in preference to any distribution to the holders of the ordinary shareholders of the Company.

After payment has been made to the holders of the Preferred Shares in accordance with the above, the remaining assets of the Company available for distribution to shareholders shall be distributed ratably among the holders of ordinary shares and Preferred Shares based on the number of ordinary shares into which such Preferred Shares are convertible.

Initial Measurement and Subsequent Accounting for Preferred Shares

The Preferred Shares do not meet the criteria of mandatorily redeemable financial instruments specified in ASC 480-10-S99, and have been classified as mezzanine equity in the consolidated balance sheets. The Preferred Shares were initially measured at fair value. Beneficial conversion features exist when the conversion price of the convertible preferred shares is lower than the fair value of the ordinary shares at the commitment date, which is the issuance date in the Company’s case. When a beneficial conversion feature exists as of the commitment date, its intrinsic value is bifurcated from the carrying value of the convertible preferred shares as a contribution to additional paid-in capital. On the commitment date, the most favorable conversion price used to measure the beneficial conversion feature of the Preferred Shares was higher than the fair value per ordinary share and therefore no bifurcation of beneficial conversion feature was recognized. The Company determined the fair value of ordinary shares with the assistance of an independent third party valuation firm.

The Company has elected to recognize the changes in redemption value immediately as they occur and adjust the carrying amount of the Preferred Shares to equal the redemption value at each reporting period. The changes in redemption value including cumulative dividends shall be recorded as a reduction of income available to ordinary shareholders in accordance with ASC 480-10-S99 3A.

The Company concluded that there is no accretion to be recognized because the carrying amount of the Preferred Shares is greater than the redemption value. Therefore, no adjustment will be made to the initial carrying amount of the Preferred Shares until the redemption amount exceeds the carrying amount of the Preferred Shares.

Treasury Shares	12 Months Ended
Treasury Shares	Dec. 31, 2017
Equity [Abstract]
Treasury Shares	21. Treasury shares On November 11, 2017, the Board of Directors of the Company authorized a share repurchase program (“Share Repurchase Program”), pursuant to which the Company was authorized to repurchase its own issued and outstanding American depositary shares (“ADSs”) up to an aggregate value of US$100 million from the open market, in negotiated transactions off the market, or through other legally permissible means in accordance with applicable securities laws from time to time. On November 25, 2017, the Board of Directors of the Company authorized an amendment to the Share Repurchase Program by increasing the maximum amount from US$100 million to US$300 million. As of December 31, 2017, the Company had repurchased under the Share Repurchase Program an aggregate of 4,537,115 ADSs, representing 4,537,115 Class A ordinary shares, at an average price of $14.00 per ADS, for US$63,658,143 (RMB 421,164,802). These shares were recorded at their purchase cost on the consolidated balance sheets and have not been canceled as of December 31, 2017.

Ordinary Shares	12 Months Ended
Ordinary Shares	Dec. 31, 2017
Equity [Abstract]
Ordinary Shares	22. Ordinary shares On December 9, 2016, the Company’s shareholders approved an Amended and Restated Memorandum and Articles of Associations, pursuant to which 577,539,514 shares were authorized as ordinary shares, and 222,460,486 shares were authorized and re-designated into convertible preferred shares with a nominal or par value of US$0.0001 each share. As of December 31, 2016, there were 79,305,191 shares legally outstanding as of December 31, 2016. On April 28, 2017, the Company’s shareholders and the Board of Directors resolved that the Company accepted from Qufenqi Holding Limited the surrender of 15,814,019 of the said issued ordinary shares (the “Surrendered Shares”) at no consideration and all the Surrendered Shares was canceled. Upon completion of the IPO in October 18, 2017, 222,460,486 Class A ordinary shares were issued upon conversion of all convertible preferred shares. Meanwhile, 266,559,398 Class A ordinary shares and 63,491,172 Class B ordinary shares were issued and outstanding. In addition, immediately following the closing of the IPO, the Memorandum and Articles of Association was amended and restated such that the authorized share capital increased to 800,000,000 ordinary shares at a par value of US$0.0001 per share, of which 656,508,828 shares as Class A ordinary shares and 63,491,172 as Class B ordinary shares. The rights of the holders of Class A and Class B ordinary shares are identical, except with respect to voting and conversion rights. Each share of Class A ordinary shares is entitled to one vote per share and is not convertible into Class B ordinary shares under any circumstances. Each share of Class B ordinary shares is entitled to ten votes per share and is convertible into one Class A ordinary share at any time by the holder thereof. Upon any transfer of Class B ordinary shares by the holder thereof to any person or entity which is not an affiliate of such holder, such Class B ordinary shares would be automatically converted into equal number of Class A ordinary shares. As at December 31, 2017 there were 262,347,283 and 63,491,172 Class A and Class B ordinary shares outstanding respectively.

Segment Reporting

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Segment Reporting

23. Segment reporting

The operations of the Company are organized into two segments, consisting of installment credit services and automobile leasing services. Installment credit services represents traditional online installment credit business, including cash installment credit services and merchandise installment credit services. Automobile leasing services represents the business of automobile leasing started in November 2017.

The Company derives the results of the segments directly from its internal management reporting system. The CODM measures the performance of each segment based on metrics of revenue and earnings from operations and uses these results to evaluate the performance of, and to allocate resources to, each of the segments. The Company does not allocate any share-based compensation expenses to its segments as the CODM does not use this information to measure the performance of the operating segments. Because substantially all of the Company’s long-lived assets and revenues are located in and derived from the PRC, geographical segments are not presented.

The table below provides a summary of the Comany’s operating segment results for the years ended December 31, 2015, 2016 and 2017.


	For the years ended December 31,
	2015			2016			2017
	RMB			RMB			RMB			US$
Revenues:
Installment credit services		235,007,431			1,442,846,339			4,749,249,922			729,946,349
Automobile leasing services		—			—			26,116,130			4,013,976

Total consolidated revenues		235,007,431			1,442,846,339			4,775,366,052			733,960,325
(Loss)/income from operations:
Installment credit services		(231,078,478	)		713,074,210			2,454,048,135			377,180,292
Automobile leasing services		—			—			(32,396,552	)		(4,979,259	)

Total segment (loss)/income from operations		(231,078,478	)		713,074,210			2,421,651,583			372,201,033
Unallocated expenses		—			—			(425,780	)		(65,439	)

Total consolidated (loss)/income from operations		(231,078,478	)		713,074,210			2,421,225,803			372,135,594
Total other expense		(2,085,266	)		(9,581,142	)		(1,220,980	)		(187,662	)

Net (loss)/income before income taxes		(233,163,744	)		703,493,068			2,420,004,823			371,947,932

Restricted Net Assets	12 Months Ended
Restricted Net Assets	Dec. 31, 2017
Receivables [Abstract]
Restricted Net Assets	24. Restricted net assets The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the VIEs and subsidiaries of the VIEs incorporated in PRC only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The consolidated results of operations reflected in the consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s subsidiaries. Under PRC law, the Company’s subsidiaries, VIEs and the subsidiaries of the VIEs located in the PRC (collectively referred as the “PRC entities”) are required to provide for certain statutory reserves, namely a general reserve, an enterprise expansion fund and a staff welfare and bonus fund. The PRC entities are required to allocate at least 10% of their after tax profits on an individual company basis as determined under PRC accounting standards to the statutory reserve and has the right to discontinue allocations to the statutory reserve if such reserve has reached 50% of registered capital on an individual company basis. In addition, the registered capital of the PRC entities is also restricted. Under PRC regulations, the subsidiaries of the VIEs in the PRC with microloan license are required to provide a statutory reserve, which is appropriated from net income as reported in the Company’s statutory accounts. The Company is required to allocate 1.5% of its balance of loan principal to the statutory reserve. The statutory reserves can only be used for specific purposes and not distributable as cash dividends. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the Board of Directors of the subsidiaries. The PRC entities are also subject to similar statutory reserve requirements. These reserves can only be used for specific purposes and are not transferable to the Company in the form of loans, advances or cash dividends. Amounts restricted that include paid-in capital and statutory reserve funds, as determined pursuant to PRC GAAP, were RMB 3,371 million and RMB 4,666 million (US$ 717 million) as of December 31, 2016 and 2017.

Condensed Financial Information of the Parent Company

12 Months Ended

Dec. 31, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Financial Information of the Parent Company

25. Condensed financial information of the parent company

The following is the condensed financial information of the Company on a parent company only basis.

Condensed balance sheets


	As of December 31,
	2016		2017
	RMB		RMB		US$
ASSETS:
Current assets:
Cash and cash equivalents		—		2,511,803,710		386,057,161
Short-term amounts due from related parties		—		2,277,228,227		350,003,570
Other current assets		—		4,564,046		701,481

Total current assets		—		4,793,595,983		736,762,212

Non-current assets:
Investments in subsidiaries, VIEs and VIEs’ subsidiaries		2,513,589,444		4,585,078,902		704,713,724

Total non-current assets		2,513,589,444		4,585,078,902		704,713,724

TOTAL ASSETS		2,513,589,444		9,378,674,885		1,441,475,936

LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ (DEFICIT)/ EQUITY
Current liabilities:
Accrued expenses and other current liabilities		—		1,378,058		211,804
Short-term amounts due to related parties		—		4,971,082		764,041

Total current liabilities		—		6,349,140		975,845

TOTAL LIABILITIES		—		6,349,140		975,845


	As of December 31,
	2016		2017
	RMB		RMB		US$
Mezzanine equity
Convertible Preferred Shares
Series A-1 (US$0.0001 par value; 2,616,641 shares authorized, and outstanding as of December 31, 2016)		69,914,696		—		—
Series A-2 (US$0.0001 par value; 4,779,796 shares authorized, and outstanding as of December 31, 2016)		127,712,583		—		—
Series B-1 (US$0.0001 par value; 38,487,004 shares authorized, and outstanding as of December 31, 2016)		1,028,344,036		—		—
Series B-2 (US$0.0001 par value; 5,233,281 shares authorized, and outstanding as of December 31, 2016)		139,829,364		—		—
Series B-3 (US$0.0001 par value; 31,865,304 shares authorized, and outstanding as of December 31, 2016)		851,417,151		—		—
Series C-1 (US$0.0001 par value; 37,720,709 shares authorized, and outstanding as of December 31, 2016)		1,007,869,205		—		—
Series C-2 (US$0.0001 par value; 19,469,603 shares authorized, and outstanding as of December 31, 2016)		520,213,268		—		—
Series C-3 (US$0.0001 par value; 13,391,793 shares authorized, and outstanding as of December 31, 2016)		357,818,719		—		—
Series C-4 (US$0.0001 par value; 10,823,841 shares authorized, and outstanding as of December 31, 2016)		289,204,957		—		—
Series C-5 (US$0.0001 par value; 58,072,514 shares authorized, and outstanding as of December 31, 2016)		1,551,654,251		—		—

Total mezzanine equity		5,943,978,230		—		—


	As of December 31,
	2016			2017
	RMB			RMB			US$
Shareholders’ (deficit)/ equity
Ordinary shares (US$0.0001 par value; 577,539,514 shares authorized, and 79,305,191 shares issued outstanding as of December 31, 2016)		54,754			—			—
Class A Ordinary shares (US$0.0001 par value; nil shares authorized, issued, and outstanding as of December 31, 2016; 656,508,828 shares authorized, 262,347,283 shares issued and outstanding, as of December 31, 2017)		—			177,140			27,226
Class B Ordinary shares (US$0.0001 par value; nil shares authorized, issued, and outstanding as of December 31, 2016; 63,491,172 shares authorized, 63,491,172 shares issued and outstanding, as of December 31, 2017)		—			43,836			6,737
Treasury stock		—			(421,164,802	)		(64,731,845	)
Additional paid-in capital		80,458,209			5,441,668,033			836,369,063
Accumulated other comprehensive loss		—			(329,387,410	)		(50,625,918	)
Accumulated (deficit)/ retained earnings		(3,510,901,749	)		4,680,988,948			719,454,828

Total shareholders’ (deficit)/ equity		(3,430,388,786	)		9,372,325,745			1,440,500,091

TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ (DEFICIT)/ EQUITY		2,513,589,444			9,378,674,885			1,441,475,936

Condensed statements of comprehensive income


	For the years ended December 31,
	2015			2016			2017
	RMB			RMB			RMB			US$
Share-based compensation expense		(55,607,170	)		(22,133,620	)		(66,522,766	)		(10,224,362	)
Cost of revenue		—			—			(61,028	)		(9,380	)
General and administrative		—			—			(7,202,222	)		(1,106,961	)
Interest and investment income, net		—			—			6,189,009			951,233
Share of (loss)/profit in subsidiaries, VIEs and VIEs’ subsidiaries		(177,556,574	)		598,786,238			2,315,454,720			355,878,874

Net (loss)/income before income taxes		(233,163,744	)		576,652,618			2,247,857,713			345,489,404

Income tax expense		—			—			—			—

Net (loss)/income and comprehensive (loss)/income		(233,163,744	)		576,652,618			2,247,857,713			345,489,404

Condensed statements of cash flows


	For the years ended December 31,
	2015			2016			2017
	RMB			RMB			RMB			US$
Cash Flows from Operating Activities:
Net (loss)/income		(233,163,744	)		576,652,618			2,247,857,713			345,489,404
Adjustments to reconcile net (loss)/income to net cash used in operating activities: Share of loss/ (profit) in subsidiaries, VIEs and VIEs’ subsidiaries		177,556,574			(598,786,238	)		(2,315,454,720	)		(355,878,874	)
Share-based compensation expense		55,607,170			22,133,620			66,522,766			10,224,362
Changes in operating assets and liabilities:
Receivables from related party		—			—			(22,577	)		(3,470	)
Other current receivables		—			—			(4,564,046	)		(701,482	)
Other current payables		—			—			1,378,058			211,804

Net cash used in operating activities		—			—			(4,282,807	)		(658,256	)
Net cash used in investing activities		—			—			(2,033,240,388	)		(312,503,326	)
Net cash provided by financing activities		—			—			4,881,181,230			750,223,819
Effect of exchange rate changes on cash and cash equivalents		—			—			(331,854,326	)		(51,005,076	)

Net increase in cash and cash equivalents		—			—			2,511,803,710			386,057,161
Cash and cash equivalents at beginning of the year		—			—			—			—

Cash and cash equivalents at end of the year		—			—			2,511,803,710			386,057,161

Basis of presentation

Condensed financial information is used for the presentation of the Company, or the parent company. The condensed financial information of the parent company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the parent company used the equity method to account for investment in its subsidiaries and VIEs.

The parent company records its investment in its subsidiaries and VIEs under the equity method of accounting as prescribed in ASC 323, Investments-Equity Method and Joint Ventures. Such investments are presented on the condensed balance sheets as “Investment in subsidiaries and VIEs” and their respective profit or loss as “Equity in profits of subsidiaries and VIEs” on the condensed statements of comprehensive income. Equity method accounting ceases when the carrying amount of the investment, including any additional financial support, in a subsidiary and VIEs is reduced to zero unless the parent company has guaranteed obligations of the subsidiary and VIEs or is otherwise committed to provide further financial support. If the subsidiary and VIEs subsequently reports net income, the parent company shall resume applying the equity method only after its share of that net income equals the share of net losses not recognized during the period the equity method was suspended.

The parent company’s condensed financial statements should be read in conjunction with the Company’s consolidated financial statements.

Principles of consolidation

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

+ References + Details

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Basis of presentation

Basis of presentation

The consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).

Principles of consolidation

Use of estimates

Use of estimates

Revenue recognition

Revenue recognition

Credit Services

The incentives are provided to certain borrowers and can only be applied as a reduction to the borrower’s repayments and cannot be withdrawn by the borrowers in cash.

The loan origination costs primarily include payments to vendors for individual credit assessments and commissions to individuals directly involved in the successful loan origination.

Financing income

Penalty fees

Sales commission fees

Sales-type lease

The Company recognized the sales price (the present value of the minimum lease payments) as “revenue from sales-type lease”.

Multiple element revenue recognition

Foreign currency translation and transactions

Cash and cash equivalents

Cash and cash equivalents

Guarantee deposits

Guarantee deposits

Loan principal and financing service fee receivables

Loan principal and financing service fee receivables

Allowance for loan principal and financing service fee receivables

Allowance for loan principal and financing service fee receivables

Nonaccrual loan principal

Nonaccrual loan principal

Finance lease receivables

Finance lease receivables

Borrowings

Borrowings

Guarantee liabilities

Guarantee liabilities

Treasury shares

Treasury shares

Fair value measurements of financial instruments

Fair value measurements of financial instruments

Fair value of guarantee liabilities

Fair value of guarantee liabilities

Property and equipment, net

Property and equipment, net


Category:	Estimated Useful Life	Estimated Residual
Office and electronic equipment	3-5 years		Nil%-5	%
Leasehold improvements	Over the shorter of the expected life of leasehold improvements or the lease term		Nil	%

Costs associated with the repair and maintenance of property and equipment are expensed as incurred.

Intangible assets

Intangible assets

Research and development

Research and development

Impairment of long-lived assets and intangible assets with definite lives

Impairment of long-lived assets and intangible assets with definite lives

Employee defined contribution plan

Employee defined contribution plan

Advertising costs

Advertising costs

Government grants

Government grants

Value added taxes

Value added taxes

Income taxes

Income taxes

Segment information

Segment information

As the Company generates substantially all of its revenues in the PRC, no geographical segments are presented.

Operating Leases

Operating Leases

Fair value measurements

Fair value measurements

•

Level 1 Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets

•

Level 3 Unobservable inputs which are supported by little or no market activity

Share-based payments

Share-based payments

Earnings (loss) per share

Earnings (loss) per share

Diluted earnings (loss) per ordinary share reflect the potential dilution that could occur if securities were exercised or converted into ordinary shares.

Convenience translation for financial statements presentation

Convenience translation for financial statements presentation

Investment in equity method investee

Investment in equity method investee

Significant risks and uncertainties

Significant risks and uncertainties

Currency convertibility risk

Concentration of credit risk

The Company manages credit risk of loan principal and financing service fee receivables by performing credit assessments on its borrowers and its ongoing monitoring of the outstanding balances.

No borrower represented 10% or more of total revenues and loan receivable and financing service fee receivable for the years ended December 31, 2015, 2016 and 2017.

Credit Derivatives

Interest rate risk

Business and economic risk

Recent accounting pronouncements

Recent accounting pronouncements

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

Parent Company [Member]

Basis of presentation

Basis of presentation

The parent company’s condensed financial statements should be read in conjunction with the Company’s consolidated financial statements.

Organization (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Company's Subsidiaries, VIE and Subsidiaries of VIE

As of December 31, 2017, the Company’s subsidiaries and VIEs are as follows:


Entity	Date of incorporation	Place of incorporation	Percentage of legal ownership by the Company			Principal activities
Subsidiaries
QD Data Limited (“Qudian HK”)	December 2, 2016	Hong Kong (“HK”)		100	%	Investment holding
QD Technology Limited (“Qudian BVI”)	November 23, 2016	British Virgin Islands (“BVI”)		100	%	Investment holding
Qufenqi (Ganzhou) Information Technology Co., Ltd. (“Qufenqi Ganzhou”)	September 5, 2016	PRC		100	%	Investment holding, research and development
Qudian Inc. Equity Incentive Trust (“Share Based Payment Trust”)	December 30, 2016	HK		Nil		Employee benefits
Qufenqi (HK) Limited (“Qufenqi HK”)	April 28, 2014	HK		100	%	Investment holding
Xiamen Qudian Financial Lease Ltd. (“Xiamen Financial Lease”)	April 21, 2017	PRC		100	%	Financial lease

VIEs
Beijing Happy Time Technology Development Co., Ltd. (“Beijing Happy Time”)	April 9, 2014	PRC		Nil		Technology development and service, sale of products
Ganzhou Qudian Technology Co., Ltd. (“Ganzhou Qudian”)	November 25, 2016	PRC		Nil		Technology development and service, sale of products
Hunan Qudian Technology Development Co., Ltd.(“Hunan Qudian”)	November 2, 2016	PRC		Nil		Technology development and service, sale of products
Xiamen Qudian Technology Co., Ltd. (“Xiamen Qudian”)	April 1, 2017	PRC		Nil		Technology development and service, sale of products

Schedule of Financial Statements Information of VIEs

. The table sets forth the assets and liabilities of the VIEs included in the Company’s consolidated balance sheets:


	As of December 31,
	2016		2017
	RMB		RMB		US$
Short-term loan principal and financing service fee receivables		4,826,790,951		8,758,544,694		1,346,163,672
Other current assets		2,096,813,435		5,801,157,313		891,621,552

Total current assets		6,923,604,386		14,559,702,007		2,237,785,224

Total non-current assets		188,655,748		165,191,933		25,389,535

Total assets		7,112,260,134		14,724,893,940		2,263,174,759

Total current liabilities		4,470,189,070		9,403,402,527		1,445,276,505
Total non-current liabilities		76,052,124		510,023,905		78,389,239

Total liabilities		4,546,241,194		9,913,426,432		1,523,665,744

The following table sets forth the results of operations of the VIEs included in the Company’s consolidated statements of comprehensive (loss)/ income:


	For the years ended December 31,
	2015			2016		2017
	RMB			RMB		RMB		US$
Revenues		235,007,431			1,442,846,339		4,749,249,922		729,946,348
Net (loss)/ income		(233,163,744	)		650,872,408		2,222,086,399		341,528,426

The table sets forth the cash flows of the VIEs included in the Company’s consolidated statements of cash flows:


	For the years ended December 31,
	2015			2016			2017
	RMB			RMB			RMB			US$
Net cash (used in)/ provided by operating activities		(102,319,756	)		793,604,997			3,060,570,502			470,401,073
Net cash used in investing activities		(1,864,954,612	)		(3,598,136,678	)		(578,926,690	)		(88,979,403	)
Net cash provided by/ (used in) financing activities		2,175,459,545			3,380,179,509			(996,112,745	)		(153,099,726	)

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Estimated Useful Lives of Class of Asset


Category:	Estimated Useful Life	Estimated Residual
Office and electronic equipment	3-5 years		Nil%-5	%
Leasehold improvements	Over the shorter of the expected life of leasehold improvements or the lease term		Nil	%

Loan Principal and Financing Service Fee Receivables (Tables)

12 Months Ended

Dec. 31, 2017

Receivables [Abstract]

Loan Principal and Financing Service Fee Receivables

Loan principal and financing service fee receivables consists of the following:


	As of December 31,
	2016			2017
	RMB			RMB			US$
Short-term loan principal and financing service fee receivables:
Loan principal and financing service fee receivables		4,930,315,057			9,277,798,700			1,425,971,551
Deferred origination costs		100,598			—			—
Less: allowance for loan principal and financing service fee receivables		(103,624,704	)		(519,254,006	)		(79,807,879	)

Short-term loan principal and financing service fee receivables, net		4,826,790,951			8,758,544,694			1,346,163,672

Long-term loan principal and financing service fee receivables:
Loan principal and financing service fee receivables		89,311,102			—			—
Less: allowance for loan principal and financing service fee receivables		(1,489,035	)		—			—

Long-term loan principal and financing service fee receivables, net		87,822,067			—			—

Summary of Nonaccrual Loan Principal

The following table presents nonaccrual loan principal as of December 31, 2016 and 2017, respectively.


	As of December 31,
	2016			2017
	RMB			RMB			US$
Nonaccrual loan principal		29,770,427			181,193,812			27,848,979
Less: allowance for nonaccrual loan principal		(25,312,490	)		(147,790,782	)		(22,715,027	)

Nonaccrual loan principal, net		4,457,937			33,403,030			5,133,952

Schedule of Aging of Past-Due Loan Principal and Financing Service Fee Receivables

The following table presents the aging of past-due loan principal and financing service fee receivables as of December 31, 2016:


	1-30 days		31-60 days		61-90 days		91-120 days		121-150 days		151-180 days		Total past due		Current		Total
	RMB		RMB		RMB		RMB		RMB		RMB		RMB		RMB		RMB
Domestic consumer loans (uncollateralized)
– Loan principal		74,833,461		19,548,573		14,677,810		11,429,365		9,186,682		9,154,380		138,830,271		4,831,016,428		4,969,846,699
– Financing service fee receivables		1,850,790		756,907		679,930		—		—		—		3,287,627		46,491,833		49,779,460

		76,684,251		20,305,480		15,357,740		11,429,365		9,186,682		9,154,380		142,117,898		4,877,508,261		5,019,626,159

The following table presents the aging of past-due loan principal and financing service fee receivables as of December 31, 2017:


	1-30 days		31-60 days		61-90 days		91-120 days		121-150 days		151-180 days		Total past due		Current		Total		Total
	RMB		RMB		RMB		RMB		RMB		RMB		RMB		RMB		RMB		US$
Domestic consumer loans (uncollateralized)
– Loan principal		401,975,318		124,456,568		98,289,049		81,133,077		60,811,562		39,249,173		805,914,747		8,343,133,619		9,149,048,366		1,406,182,987
– Financing service fee receivables		11,110,556		5,410,177		5,375,791		—		—		—		21,896,524		106,853,810		128,750,334		19,788,564

		413,085,874		129,866,745		103,664,840		81,133,077		60,811,562		39,249,173		827,811,271		8,449,987,429		9,277,798,700		1,425,971,551

Summary of Movement of Allowance for Loan Principal and Financing Service Fee Receivables

Movement of allowance for loan principal and financing service fee receivables is as follows:


	As of December 31,
	2016								2017
	Loan principal			Financing sevice fee receivables		Total			Loan principal			Financing service fee receivables		Total
	RMB			RMB		RMB			RMB			RMB		RMB			US$
Balance at the beginning of the year		33,803,140			384,345		34,187,485			103,111,134			2,002,605		105,113,739			16,155,686
Additions		118,735,466			1,618,260		120,353,726			594,209,005			10,954,711		605,163,716			93,011,960
Charge-offs		(49,427,472	)		—		(49,427,472	)		(191,023,449	)		—		(191,023,449	)		(29,359,767	)

Balance at the end of the year		103,111,134			2,002,605		105,113,739			506,296,690			12,957,316		519,254,006			79,807,879

Evaluated for impairment on a portfolio basis		103,111,134			2,002,605		105,113,739			506,296,690			12,957,316		519,254,006			79,807,879

Other Current Assets (Tables)

12 Months Ended

Dec. 31, 2017

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Summary of Other Current Assets

Other current assets consist of the following:


		As of December 31,
		2016			2017
		RMB			RMB			US$
Prepaid expenses			14,387,545			52,989,718			8,144,371
Prepayments for vehicles	6.1		—			141,082,860			21,684,038
Deposits in trust protection fund	6.2		—			72,490,890			11,141,646
Guarantee deposits held by Funding Partners			241,669,750			121,731,691			18,709,818
Others			56,042,148			105,878,639			16,273,247

Total			312,099,443			494,173,798			75,953,120
Less: Allowance for the receivables from suppliers			(11,822,819	)		(11,822,819	)		(1,817,134	)

			300,276,624			482,350,979			74,135,986

Other Non-current Assets (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Other Non-current Assets

Other non-current assets consist of the following:


	As of December 31,
	2016		2017
	RMB		RMB		US$
Guarantee deposits held by Funding Partners		5,675,452		2,390		367
Prepaid expenses		2,466,199		3,048,127		468,489
Others		3,695,329		3,394,154		521,672

		11,836,980		6,444,671		990,528

Short-term and Long-term Borrowings (Tables)

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Schedule of Short-term Borrowings


			As of December 31,
Funding Partners	Fixed annual rate (%)	Term*	2016		2017
			RMB		RMB		US$
P2P platforms	6% to 12%	28 days to 27 months		3,141,161,270		79,410,422		12,205,158
Other institutions	5.5% to 12%	27 to 698 days		177,019,905		1,227,347,947		188,639,925
Trust beneficiaries	6% to 16%	12 to 24 months		506,719,178		5,389,958,760		828,421,494
Private financial assets trading platform	7.8% to 12%	14 to 365 days		358,330,505		1,087,388,643		167,128,574
Bank	5.70%	1 year		—		195,308,750		30,018,405

				4,183,230,858		7,979,414,522		1,226,413,556

*	Includes current portion of borrowings greater than 1 year.

Schedule of Long-term Borrowings

The following table presents long-term borrowings from Funding Partners as of December 31, 2016 and 2017:


			As of December 31,
Funding Partners	Fixed annual rate (%)	Term	2016		2017
			RMB		RMB		US$
P2P platforms	6% to 12%	13 to 34 months		76,052,124		23,905		3,674
Trust beneficiaries	7.4% to 7.5%	18 months		—		510,000,000		78,385,565

				76,052,124		510,023,905		78,389,239

Schedule of Contractual Obligations

The following table sets forth the contractual obligations which has not included impact of discount of time value as of December 31, 2016 and 2017:


	Payment due by period
	Less than 1 year		1 – 2 years		Greater than 2 years		Total
As of December 31, 2016 Long-term borrowings and interest payables (RMB)		217,633,327		78,081,207		—		295,714,534

As of December 31, 2017 Long-term borrowings and interest payables (RMB)		38,017,759		520,336,141		1,959		558,355,859

As of December 31, 2017 Long-term borrowings and interest payables (US$)		5,843,223		79,974,200		301		85,817,724

Schedule of Accrued Expenses and Other Current Liabilities

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21475-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=64930739&loc=d3e28878-108400

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21538-112644

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28541-108399

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28551-108399

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21521-112644

+ Details

Accrued Expenses and Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 2017

Payables and Accruals [Abstract]

Accrued expenses and other current liabilities consist of the following:


	As of December 31,
	2016		2017
	RMB		RMB		US$
Accrued payroll and welfare		16,033,703		81,623,990		12,545,378
Tax payables		90,478,748		32,262,859		4,958,711
Payable to suppliers		75,160,792		85,772,102		13,182,931
Payable to external service providers		16,347,014		45,122,393		6,935,185
Others		17,644,662		70,911,451		10,898,890

		215,664,919		315,692,795		48,521,095

Guarantee Liabilities (Tables)

12 Months Ended

Dec. 31, 2017

Guarantees and Product Warranties [Abstract]

Summary of Movement of Guarantee Liabilities

The movement of guarantee liabilities is as follows:


	For the years ended December 31,
	2016			2017
	RMB			RMB			US$
Balance at beginning of the year		—			6,207,812			954,123
Fair value of guarantee liabilities upon the inception of new loans		5,496,085			119,683,496			18,395,017
Performed guarantee		(149,262	)		(124,798,134	)		(19,181,122	)
Change in fair value of guarantee liabilities		860,989			45,888,151			7,052,879

Balance at end of the year		6,207,812			46,981,325			7,220,897

Cost of Revenues (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Cost of Revenues

Cost of revenues consists of the following:


	For the years ended December 31,
	2015		2016		2017
	RMB		RMB		RMB		US$
Interest expenses on borrowings		122,705,588		210,950,030		686,889,761		105,573,023
Sales-type lease		—		—		23,895,186		3,672,623
Other lending related costs		25,711,093		56,911,976		170,060,910		26,137,883

		148,416,681		267,862,006		880,845,857		135,383,529

Interest and Investment Income, Net (Tables)

12 Months Ended

Dec. 31, 2017

Other Income and Expenses [Abstract]

Summary of Interest and Investment Income, Net

Interest and investment income, net consists of the following:


	For the years ended December 31,
	2015		2016			2017
	RMB		RMB			RMB			US$
Share of loss from equity method investment		—		(4,805,183	)		(20,676,273	)		(3,177,885	)
Investment income of short-term investments		764,538		3,406,166			3,526,506			542,014
Interest income		2,124,373		3,256,345			21,360,670			3,283,075

		2,888,911		1,857,328			4,210,903			647,204

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Summary of Current and Deferred Component of Income Tax Expenses

The current and deferred component of income tax expenses which were substantially attributable to the Company’s PRC subsidiaries, VIEs and subsidiaries of the VIEs, are as follows:


	For the years ended December 31,
	2015		2016			2017
	RMB		RMB			RMB			US$
Current income tax expenses		—		144,628,149			353,218,915			54,288,754
Deferred income tax expenses		—		(17,787,699	)		(97,672,912	)		(15,012,052	)

Total income tax expenses		—		126,840,450			255,546,003			39,276,702

Summary of Principal Components of Deferred Tax Assets and Liabilities

The principal components of the deferred tax assets and liabilities are as follows:


	As of December 31,
	2016			2017
	RMB			RMB			US$
Non-current deferred tax assets
Allowance for loan principal and financing service fee receivables		33,430,952			138,683,016			21,315,189
Allowance for other receivables		2,082,694			2,300,135			353,524
Guarantee liabilities		931,172			3,700,872			568,814
Share-based compensation		18,087,929			26,240,241			4,033,051
Investment loss under equity method		1,201,296			6,370,364			979,107
Net operating loss carry forwards		55,764,192			80,539,001			12,378,618
Less: valuation allowance		(93,710,536	)		(142,373,018	)		(21,882,332	)

Non-current deferred tax assets, net		17,787,699			115,460,611			17,745,971

Non-current deferred tax liabilities		—			—			—

Summary of Reconciliation of Income Taxes Expense

Reconciliation between the income taxes expense computed by applying the PRC tax rate to loss before income taxes and the actual provision for income taxes is as follows:


	For the years ended December 31,
	2015			2016			2017
	RMB			RMB			RMB			US$
(Loss)/ income before income tax		(233,163,744	)		703,493,068			2,420,004,823			371,947,932
PRC statutory income tax rate		25	%		25	%		25	%		25	%
Income tax at statutory tax rate		(58,290,936	)		175,873,268			605,001,206			92,986,983
Effect of different tax rates		—			(72,661,772	)		(367,422,131	)		(56,471,748	)
Exempt Income		—			—			(2,064,183	)		(317,259	)
Expenses not deductible for tax purposes		10,341,003			183,808			4,298,559			660,677
Income tax refund		—			(12,123,338	)		(32,929,930	)		(5,061,237	)
Changes in valuation allowance		47,949,933			35,568,484			48,662,482			7,479,286

Income tax expenses		—			126,840,450			255,546,003			39,276,702

(Loss)/Earnings per Share (Tables)

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net (Loss) Income per Share

The following table sets forth the computation of basic and diluted net (loss)/income per share for the years ended December 31, 2015, 2016 and 2017:


	For the years ended December 31,
	2015			2016		2017
	RMB			RMB		RMB		US$		RMB		US$
	Ordinary share			Ordinary share		Class A		Class A		Class B		Class B
(Loss)/earnings per share – basic:
*Numerator:*
Allocation of net (loss)/income attributable to Qudian Inc. for basic computation		(233,163,744	)		576,652,618		1,077,159,077		165,556,319		1,087,299,743		167,114,911

*Millions of Shares (denominator):*
Weighted average number of ordinary share outstanding – basic		79.31			79.31		62.90		62.90		63.49		63.49
Denominator used for basic (loss)/earnings per share		79.31			79.31		62.90		62.90		63.49		63.49

(Loss)/earnings per share – basic		(2.94	)		7.27		17.13		2.63		17.13		2.63


(Loss)/earnings per share – diluted:
*Numerator:*
Allocation of net (loss)/income attributable to Qudian Inc. for diluted computation		(233,163,744	)		576,652,618		1,714,215,136		263,470,043		450,243,684		69,201,187
Reallocation of net income attributable to Qudian Inc. as a result of conversion of Class B to Class A shares		—			—		450,243,684		69,201,187		—		—

Allocation of net (loss)/income attributable to Qudian Inc.		(233,163,744	)		576,652,618		2,164,548,820		332,671,230		450,243,684		69,201,187

*Millions of Shares (denominator):*
Weighted average number of ordinary share outstanding – basic		79.31			79.31		62.90		62.90		63.49		63.49
Dilutive effect of preferred shares		—			222.46		177.36		177.36		—		—
Conversion of Class B to Class A ordinary shares		—			—		63.49		63.49		—		—
Adjustments for dilutive share options		—			2.01		1.47		1.47		—		—

Denominator used for diluted (loss)/earnings per share		79.31			303.78		305.22		305.22		63.49		63.49

(Loss)/earnings per share – diluted		(2.94	)		1.90		7.09		1.09		7.09		1.09


Earnings per share – ADS:
Denominator used for earnings per ADS – basic							41.44		41.44
Denominator used for earnings per ADS – diluted							41.44		41.44
Earnings per ADS – basic							17.13		2.63

Earnings per ADS – diluted							7.09		1.09

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Summary of Financial Assets and Liabilities Measured and Recorded at Fair Value on Recurring Basis

The following table summarizes the Company’s financial assets and liabilities measured and recorded at fair value on recurring basis as of December 31, 2016 and 2017:

As of December 31, 2016

Active market
(Level 1)

Observable
input (Level 2)

Non-observable

input (Level 3)

Total

RMB

Assets:

Short-term investments

Monetary wealth management products

430,200,000

—

430,200,000

Liabilities:

Guarantee liabilities

—

6,207,812

The following table summarizes the Company’s financial assets and liabilities measured and recorded at fair value on recurring basis as of December 31, 2016 and 2017: - continued

As of December 31, 2017

Active market
(Level 1)

Observable input
(Level 2)

Non-observable input
(Level 3)

Total

RMB

Assets:

Short-term investments

Monetary wealth management products

—

300,000,000

—

300,000,000

Liabilities:

Guarantee liabilities

—

46,981,325

As of December 31, 2017

Active market
(Level 1)

Observable input
(Level 2)

Non-observable input
(Level 3)

Total

US$

Assets:

Short-term investments

Monetary wealth management products

—

46,109,156

—

46,109,156

Liabilities:

Guarantee liabilities

—

7,220,897

Summary of Significant Unobservable Inputs

Significant Unobservable Inputs


		Range of Inputs Weighted - Average As of December 31,
Financial Liabilities	Unobservable Input	2016		2017
Guarantee liabilities	Discount rates		5.20%		5.87%
	Expected delinquency rates		0.25%-0.51%		0.70%-6.24%

Related Party Balances and Transactions (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Related Parties


Name of related parties		Relationship with the Company
Luo Min		Founder, chief executive officer and controlling shareholder of the Company
Qufenqi Inc.		Ultimate legal holding company of Beijing Happy Time prior to December 31, 2015
Qufenqi (HK) Limited		Holding company of Beijing Happy Time prior to December 17, 2015, and a subsidiary of the Company since April 27, 2017
Alipay.com Co., Ltd.		Subsidiary of shareholder of the Company
Ganzhou Qu Campus		The Company’s equity method investee
Ganzhou Happy Share Capital Management LLP		Company controlled by Founder
Zhima Credit Management Co., Ltd.		Subsidiary of shareholder of the Company
Chongqing Alibaba Small Loan Co., Ltd.		Subsidiary of shareholder of the Company
Guosheng Financial Holding Inc.		Company controlled by Director
Guosheng Securities Asset Management Co., Ltd.		Company controlled by Director
Alibaba Cloud Computing Co. Ltd.		Company controlled by the ultimate controlling individual of shareholder
Key management and their immediate families		The Company’s key management and their immediate families

Schedule of Amounts Due to Related Parties

Amounts due to related parties


		As of December 31,
	Note	2016		2017
		RMB		RMB		US$
Qufenqi Inc.	(i)		867,874		813,326		125,006
Guosheng Financial Holding Inc.	(ii)		—		631,746,787		97,097,703
Guosheng Securities Asset Management Co., Ltd.	(ii)		—		83,475,455		12,829,943
Alipay.com Co., Ltd.			—		418,597		64,337
Zhima Credit Management Co., Ltd.	(iii)		19,605,313		3,108,873		477,825

Total			20,473,187		719,563,038		110,594,814

(i)	The balance represents the transactions from daily operations, which is interest free and payable on demand.

(ii)	The balance represents the borrowings and interests payable arising from consolidated trusts.

(iii)

The balance represents the credit assessment and advertising platform service fee payables.

Schedule of Amounts Due from Related Parties

Amounts due from related parties


				As of December 31,
	Note			2016		2017
				RMB		RMB		US$
Short-term amounts due from related parties
Qufenqi Inc.					180,000,000		27,475		4,223
Qufenqi (HK) Limited					4,860		—		—
Ganzhou Qu Campus					157,673		23,714		3,645
Ganzhou Happy Share Capital Management LLP					770		770		118
Alipay.com Co., Ltd.		(i	)		404,631,249		549,842,011		84,509,170
Zhima Credit Management Co., Ltd.					778,837		—		—
Alibaba Cloud Computing Co. Ltd.					—		320,853		49,314
Key management and their immediate families
Employee advances					60,000		—		—
Loan principal and financing service fee receivables		(ii	)		272,318		1,000,000		153,697

Total short-term amounts due from related parties					585,905,707		551,214,823		84,720,167

Long-term amounts due from related parties
Key management and their immediate families
Loan principal and financing service fee receivables		(ii	)		1,000,000		—		—

Total long-term amounts due from related parties					1,000,000		—		—

Total amounts due from related parties					586,905,707		551,214,823		84,720,167

(i)	The balance represents the amount deposited in the Company’s Alipay account. Such amount is unrestricted as to withdrawal and use and readily available to the Company on demand.

(ii)	Key management and their immediate families borrowed funds through the Company’s financing platform.

Schedule of Movement of Loan Principal and Financing Service Fee Receivables Due from Related Parties

The movement of the loan principal and financing service fee receivables due from key management and their immediate families is as follows:


	As of December 31,
	2016			2017
	RMB			RMB			US$
Balance at beginning of the year		2,705,053			1,272,318			195,552
Loan principal and financing service fee receivables		2,700,000			—			—
Payments		(4,132,735	)		(272,318	)		(41,855	)

Balance at end of the year		1,272,318			1,000,000			153,697

Schedule of Transactions with Related Parties

Transactions with related parties


	For the years ended December 31,
	2015		2016		2017
	RMB		RMB		RMB		US$
Service income
Key management and their immediate families		133,380		90,539		4,551		699

Cost of revenue
Alipay.com Co., Ltd.		8,185,069		41,186,645		114,175,547		17,548,460
Zhima Credit Management Co., Ltd.		—		6,150,041		21,435,176		3,294,526
Alibaba Cloud Computing Co. Ltd.		—		—		23,173,116		3,561,643
Chongqing Alibaba Small Loan Co., Ltd.		—		—		3,151,324		484,350
Guosheng Financial Holding Inc.		—		—		56,746,787		8,721,821
Guosheng Securities Asset Management Co., Ltd.		—		—		2,327,277		357,696

		8,185,069		47,336,686		221,009,227		33,968,496

Sales and marketing
Zhima Credit Management Co., Ltd.		—		36,149,807		16,033,107		2,464,243
Alipay.com Co., Ltd.		—		—		222,081,862		34,133,357

		—		36,149,807		238,114,969		36,597,600

Share-based Compensation (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of Assumptions used to Determine Fair Value of Share Options Granted

For the years ended December 31,

2015

2016

2017

Risk-free interest rate (%)

2.00 to 2.43

2.47

1.56 to 2.33

Volatility (%)

46.6 to 50.3

49.8 to 49.9

50.9 to 52.4

Expected exercise multiple

2.2 to 2.8

Dividend yield

Nil

Expected life (in years)

Exercise price

Nil

Fair value of ordinary shares (RMB)

3.82 to 12.63

25.89 to 26.04

81.94 to 94.22

Summary of Share Option Activity

A summary of share option activity under the 2014 Plan is as follows:


	Number of shares			Weighted average exercise price		Weighted average grant date fair value
				RMB		RMB
Balance, April 9, 2014 (date of inception)		—			—		—

Granted		18,373,219			—		1.30
Exercised		—			—		—
Forfeited		—			—		—

Balance, December 31, 2014		18,373,219			—		1.30

Granted		2,449,800			—		3.63
Exercised		—			—		—
Canceled		(13,373,019	)		—		2.08
Forfeited		(7,450,000	)		—		0.68

Balance, December 31, 2015		—			—		—

Exercisable, December 31, 2015		—			—		—

Expected to vest, December 31, 2015		—			—		—

A summary of share option activity under the 2015 Plan is as follows:


	Number of shares			Weighted average exercise price		Weighted average grant date fair value
				RMB		RMB
Balance, December 31, 2014		—			—		—

Granted		15,814,019			—		12.62
Exercised		—			—		—
Surrendered		(3,000	)		—		12.62

Balance, December 31, 2015		15,811,019			—		12.62

Exercised and forfeited		(3,446,700	)		—		12.62
Exercised and replaced		(12,364,319	)		—		12.62

Balance, December 31, 2016		—			—		—

Exercisable, December 31, 2016		—			—		—

Expected to vest, December 31, 2016		—			—		—

A summary of share option activity under the 2016 Plan is as follows:


	Number of shares			Weighted average exercise price		Weighted average grant date fair value
				RMB		RMB
Balance, December 31, 2015		—			—		—
Granted		15,299,019			—		25.89
Exercised		—			—		—
Forfeited		—			—		—

Balance, December 31, 2016		15,299,019			—		25.89

Granted		694,904			—		88.33
Exercised		—			—		—
Forfeited		(241,650	)		—		34.38

Balance, December 31, 2017		15,752,273			—		28.51

Exercisable, December 31, 2017		9,551,437			—		24.52

Expected to vest, December 31, 2017		6,200,836			—		34.66

Summary of Allocated Share-based Compensation Expense

For the years ended December 31, 2015, 2016 and 2017, the Company allocated share-based compensation expense as follows:


	For the years ended December 31,
	2015		2016		2017
	RMB		RMB		RMB		US$
Sales and marketing		23,690,916		690,486		1,890,690		290,594
General and administrative		11,424,573		18,986,103		42,848,932		6,585,760
Research and development		20,491,681		2,457,031		19,316,229		2,968,850

		55,607,170		22,133,620		64,055,851		9,845,204

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Summary of Future Minimum Lease Payments Under Non-cancelable Operating Leases Agreements

Future minimum lease payments under non-cancelable operating leases agreements consist of the following as of December 31, 2017:


	RMB		US$
Year ending December 31:
2018		43,905,311		6,748,123
2019		40,490,584		6,223,289
2020 and after		8,789,893		1,350,982

Total		93,185,788		14,322,394

Convertible Preferred Shares (Tables)

12 Months Ended

Dec. 31, 2017