REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
, each representing one Class A ordinary share |
||||
, par value US$0.0001 per share* |
* | , but only in connection with the listing on the New York Stock Exchange of American depositary shares. |
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report. | | |||
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. | ☐ Yes ☒ |
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If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. |
☐ Yes ☒ |
|||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. |
☒ |
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Indicate by check mark whether the registrant has submitted every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). |
☒ |
|||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. |
|
Large accelerated filer ☐ | |
Non-accelerated filer ☐ |
Emerging growth company |
† | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ | Other ☐ |
If “Other” has been checked in response to the previous question, indicate by check mark which consolidated financial statement item the registrant has elected to follow. | ☐ Item 17 ☐ Item 18 | |
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). |
☐ Yes | |
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS) | ||
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. | ☐ Yes ☐ No |
ii |
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iv |
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1 |
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ITEM 1. |
1 |
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ITEM 2. |
1 |
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ITEM 3. |
1 |
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ITEM 4. |
69 |
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ITEM 4A. |
123 |
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ITEM 5. |
123 |
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ITEM 6. |
151 |
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ITEM 7. |
163 |
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ITEM 8. |
164 |
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ITEM 9. |
167 |
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ITEM 10. |
167 |
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ITEM 11. |
175 |
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ITEM 12. |
176 |
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179 |
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ITEM 13. |
179 |
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ITEM 14. |
179 |
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ITEM 15. |
179 |
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ITEM 16A. |
180 |
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ITEM 16B. |
180 |
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ITEM 16C. |
180 |
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ITEM 16D. |
181 |
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ITEM 16E. |
181 |
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ITEM 16F. |
182 |
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ITEM 16G. |
182 |
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ITEM 16H. |
182 |
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183 |
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ITEM 17. |
183 |
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ITEM 18. |
183 |
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ITEM 19. |
183 |
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189 |
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F-1 |
• |
“active borrowers” are to borrowers who have drawn down credit in the specified period; |
• |
“ADSs” are to our American depositary shares, each of which represents one Class A ordinary share, and “ADRs” are to the American depositary receipts that evidence our ADSs; |
• |
“amount of transactions” are to the aggregate principal amount of credit drawdowns that are provided to borrowers in the specified period, which are comprised of (i) credit drawdowns that are facilitated under our loan book business and (ii) credit drawdowns that are facilitated under our transaction services business; |
• |
“Ant Financial” are to Ant Small and Micro Financial Services Group Co., Ltd., a company organized under the laws of the PRC, and its affiliates; |
• |
“China” and the “PRC” are to the People’s Republic of China, excluding, for the purposes of this annual report only, Taiwan, the Hong Kong Special Administrative Region and the Macao Special Administrative Region; |
• |
“D1 delinquency rate” are to the balance of the total amount of principal and financing service fees that became overdue as of a specified date, divided by the total amount of principal and financing services fees that was due for repayment as of such date, in each case with respect to our loan book business and transaction services business; |
• |
“loan book business” are to our business of offering small credit products to consumers; the relevant transactions may be funded by our institutional funding partners or our own capital, and we undertake credit risk for such transactions; |
• |
“M1+ delinquency coverage ratio” are to the balance of allowance for principal and financing service fee receivables at the end of a period, divided by the total balance of outstanding principal for on-balance sheet transactions for which any installment payment was more than 30 calendar days past due as of the end of such period; |
• |
“M1+ delinquency rate by vintage” are to the total outstanding principal balance of the transactions of a vintage for which any repayment is overdue for more than 30 days, divided by the total initial principal of the transactions facilitated in such vintage; |
• |
“new borrowers” are to borrowers who drew down credit for the first time from our platform; new borrowers who have made at least two drawdowns in the relevant period are also counted as repeat borrowers; |
• |
“number of transactions” are to the number of credit drawdowns facilitated by us to borrowers, which are comprised of (i) credit drawdowns that are facilitated under our loan book business and (ii) credit drawdowns that are facilitated under our transaction services business; |
• |
“off-balance sheet transactions” are to credit drawdowns under our loan book business that are not recorded on our balance sheets; we bear credit risk for such transactions; |
• |
“on-balance sheet transactions” are to credit drawdowns under our loan book business that are recorded on our balance sheets; |
• |
“outstanding borrowers” are to borrowers who have outstanding loans under either the loan book business or the transaction services business as of a specified date; |
• |
“provision ratio” are to the amount of provision for loan principal and financing service fee receivables incurred during a period as a percentage of the total amount of on-balance sheet transactions facilitated during such period; |
• |
“P2P platforms” are to financial information intermediaries that are engaged in lending information business and directly provide peers, which can be natural persons, legal persons or other organizations, with lending information services; |
• |
“Qudian marketplace” are to our online marketplace where consumers purchase merchandise offered by third-party merchandise suppliers with our merchandise credit products; |
• |
“registered users” are to individuals who have registered with us; |
• |
“repeat borrowers” are to active borrowers in the specified period who have made at least two drawdowns since such borrowers’ registration with us until the end of the specified period; |
• |
“RMB” or “Renminbi” are to the legal currency of China; |
• |
“small credit products” are to cash or merchandise credit products that are less than RMB5,000 in amount; |
• |
“transaction services business” are to our business of offering loan recommendation and referral services to third-party financial service providers; we assume no credit risk for the transactions facilitated under the transaction services business; |
• |
“transactions” are to borrowers’ credit drawdowns from our platform; |
• |
“US$,” “U.S. dollars,” or “dollars” are to the legal currency of the United States; |
• |
“vintage” are to the on-balance sheet transactions and off-balance sheet transactions facilitated under the loan book business during a specified time period; and |
• |
“we,” “us,” “our company” and “our” are to Qudian Inc., its subsidiaries, its consolidated VIEs and/or their respective subsidiaries, as the context requires. |
• |
our goal and strategies; |
• |
our expansion plans; |
• |
our future business development, financial condition and results of operations; |
• |
our expectations regarding demand for, and market acceptance of, our credit products and services; |
• |
our expectations regarding keeping and strengthening our relationships with borrowers, institutional funding partners, merchandise suppliers and other parties we collaborate with; and |
• |
general economic and business conditions. |
ITEM 1. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. |
KEY INFORMATION |
A. |
Selected Financial Data |
Year Ended December 31, |
||||||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands, except for share and per share data) |
||||||||||||||||||||||||
Condensed Consolidated Statement of Operations Data: |
||||||||||||||||||||||||
Revenues |
||||||||||||||||||||||||
Financing income |
1,271,456 | 3,642,184 | 3,535,276 | 3,510,055 | 2,102,665 | 322,248 | ||||||||||||||||||
Sales commission fee |
126,693 | 797,167 | 307,492 | 356,812 | 80,992 | 12,413 | ||||||||||||||||||
Sales income |
— | 26,083 | 2,174,789 | 431,946 | 610,793 | 93,608 | ||||||||||||||||||
Penalty fees |
22,943 | 7,922 | 28,013 | 44,354 | 72,235 | 11,070 | ||||||||||||||||||
Guarantee income |
— | — | — | — | 826,198 | 126,620 | ||||||||||||||||||
Loan facilitation income and other related income |
21,754 | 302,010 | 1,646,773 | 2,297,413 | 131,633 | 20,174 | ||||||||||||||||||
Transaction services fee and other related income |
— | — | — | 2,199,464 | (136,542 | ) | (20,926 | ) | ||||||||||||||||
Total revenues |
1,442,846 |
4,775,366 |
7,692,343 |
8,840,044 |
3,687,974 |
565,207 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cost of revenues |
||||||||||||||||||||||||
Cost of goods sold |
— | (23,895 | ) | (2,003,642 | ) | (366,015 | ) | (645,083 | ) | (98,864 | ) | |||||||||||||
Cost of other revenues |
(267,862 | ) | (856,951 | ) | (731,786 | ) | (535,773 | ) | (217,271 | ) | (33,298 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total cost of revenues |
(267,862 |
) |
(880,846 |
) |
(2,735,428 |
) |
(901,788 |
) |
(862,354 |
) |
(132,162 |
) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands, except for share and per share data) |
||||||||||||||||||||||||
Operating expenses(1) |
||||||||||||||||||||||||
Sales and marketing |
(182,458 | ) | (431,749 | ) | (540,551 | ) | (280,616 | ) | (293,282 | ) | (44,947 | ) | ||||||||||||
General and administrative |
(108,786 | ) | (183,674 | ) | (255,867 | ) | (286,059 | ) | (285,905 | ) | (43,817 | ) | ||||||||||||
Research and development |
(52,275 | ) | (153,258 | ) | (199,560 | ) | (204,781 | ) | (170,691 | ) | (26,160 | ) | ||||||||||||
Changes in guarantee liabilities and risk assurance liabilities |
(861 | ) | (150,152 | ) | (116,593 | ) | (1,143,427 | ) | 87,894 | 13,470 | ||||||||||||||
Provision for receivables and other assets |
(132,176 | ) | (605,164 | ) | (1,178,723 | ) | (2,283,126 | ) | (1,641,362 | ) | (251,550 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total operating expenses |
(476,556 |
) |
(1,523,997 |
) |
(2,291,294 |
) |
(4,198,009 |
) |
(2,303,346 |
) |
(353,004 |
) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other operating income |
14,646 |
50,703 |
23,748 |
108,508 |
343,324 |
52,617 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income from operations |
713,074 |
2,421,226 |
2,689,369 |
3,848,755 |
865,598 |
132,659 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest and investment income, net |
6,663 | 24,887 | 47,060 | 24,292 | 708,251 | 108,544 | ||||||||||||||||||
Loss from equity method investments |
(4,805 | ) | (20,676 | ) | (11,319 | ) | (3,420 | ) | (370,039 | ) | (56,711 | ) | ||||||||||||
Foreign exchange gain/(loss), net |
(9,651 | ) | (7,177 | ) | (90,771 | ) | 6,635 | (107 | ) | (16 | ) | |||||||||||||
Other income |
47 | 2,108 | 15,231 | 24,583 | 26,358 | 4,040 | ||||||||||||||||||
Other expenses |
(1,834 | ) | (363 | ) | (522 | ) | (10,323 | ) | (9,263 | ) | (1,420 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income before income taxes |
703,493 |
2,420,005 |
2,649,047 |
3,890,522 |
1,220,798 |
187,095 |
||||||||||||||||||
Income tax expenses |
(126,840 | ) | (255,546 | ) | (157,731 | ) | (626,234 | ) | (261,979 | ) | (40,150 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income |
576,653 |
2,164,459 |
2,491,316 |
3,264,288 |
958,819 |
146,945 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net Income attributable to Qudian Inc.’s shareholders |
576,653 |
2,164,459 |
2,491,316 |
3,264,288 |
958,819 |
146,945 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earnings per share for Class A and Cass B ordinary shares |
||||||||||||||||||||||||
— Basic |
7.27 | 17.13 | 7.82 | 11.72 | 3.78 | 0.58 | ||||||||||||||||||
Earnings per share for Class A and Class B ordinary shares |
||||||||||||||||||||||||
— Diluted |
1.90 | 7.09 | 7.74 | 10.94 | 3.59 | 0.55 | ||||||||||||||||||
Earnings per ADS (1 Class A ordinary shares equals 1 ADSs) |
||||||||||||||||||||||||
— Basic |
17.13 | 7.82 | 11.72 | 3.78 | 0.58 | |||||||||||||||||||
Earnings per ADS (1 Class A ordinary shares equals 1 ADSs) |
||||||||||||||||||||||||
— Diluted |
7.09 | 7.74 | 10.94 | 3.59 | 0.55 | |||||||||||||||||||
Weighted average number of Class A and Class B ordinary shares outstanding |
||||||||||||||||||||||||
— Basic |
79,305,191 | 126,390,196 | 318,685,836 | 278,531,382 | 253,658,448 | 253,658,448 |
Year Ended December 31, |
||||||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands, except for share and per share data) |
||||||||||||||||||||||||
Weighted average number of Class A and Class B ordinary shares outstanding |
||||||||||||||||||||||||
— Diluted |
303,778,745 | 305,221,444 | 321,955,142 | 300,457,711 | 274,333,161 | 274,333,161 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive (loss)/income: |
||||||||||||||||||||||||
Foreign currency translation adjustment |
— | (77,947 | ) | 33,089 | 31,893 | (38,455 | ) | (5,893 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive income |
576,653 |
2,086,512 |
2,524,405 |
3,296,181 |
920,364 |
141,052 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive income attributable to Qudian Inc.’s shareholders |
576,653 |
2,086,512 |
2,524,405 |
3,296,181 |
920,364 |
141,052 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Share-based compensation expenses are allocated in operating expenses as follows: |
Year Ended December 31, |
||||||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Sales and marketing |
690 | 1,891 | 5,641 | 4,482 | 1,912 | 293 | ||||||||||||||||||
General and administrative |
18,986 | 42,849 | 38,587 | 74,312 | 40,895 | 6,267 | ||||||||||||||||||
Research and development |
2,457 | 19,316 | 13,753 | 8,505 | 2,827 | 433 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total share-based compensation expenses |
22,134 |
64,056 |
57,981 |
87,299 |
45,634 |
6,994 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
||||||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Summary Consolidated Balance Sheets: |
||||||||||||||||||||||||
Cash and cash equivalents |
785,770 | 6,832,306 | 2,501,188 | 2,860,938 | 1,537,558 | 235,641 | ||||||||||||||||||
Restricted cash and cash equivalent |
— | 2,252,646 | 339,827 | 1,257,649 | 135,404 | 20,752 | ||||||||||||||||||
Time deposits |
— | — | — | 231,132 | — | — | ||||||||||||||||||
Short-term amounts due from related parties(1) |
585,906 | 551,215 | 2 | — | — | — | ||||||||||||||||||
Short-term investments |
— | — | — | — | 5,042,314 | 772,768 | ||||||||||||||||||
Short-term loan principal and financing service fee receivables, net |
4,826,791 | 8,758,545 | 8,417,821 | 7,894,697 | 3,940,461 | 603,902 | ||||||||||||||||||
Short-term finance lease receivables, net |
— | 8,508 | 508,647 | 398,256 | 179,613 | 27,527 | ||||||||||||||||||
Short-term contract assets |
— | — | 903,436 | 2,741,914 | 92,813 | 14,224 | ||||||||||||||||||
Long-term loan principal and financing service fee receivables |
87,822 | — | 665,653 | 424 | — | — | ||||||||||||||||||
Long-term finance lease receivables, net |
— | 17,900 | 649,243 | 239,697 | 28,771 | 4,409 | ||||||||||||||||||
Long-term contract assets |
— | — | 15,597 | 273,597 | 23,094 | 3,539 | ||||||||||||||||||
Total assets |
7,117,599 |
19,380,416 |
16,253,375 |
18,361,604 |
13,398,032 |
2,053,338 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Short-term borrowings and interest payables |
4,183,231 | 7,979,415 | 3,860,441 | 1,049,570 | — | — | ||||||||||||||||||
Long-term borrowings and interest payables |
76,052 | 510,024 | 413,400 | — | 102,415 | 15,696 | ||||||||||||||||||
Convertible senior notes |
— | — | — | 2,339,552 | 822,005 | 125,978 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities |
4,604,010 |
9,840,049 |
5,432,762 |
6,437,552 |
1,488,188 |
228,075 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total mezzanine equity |
5,943,978 |
— |
— |
— |
— |
— |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Non-controlling interest |
— |
— |
— |
— |
10,000 |
1,533 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Qudian Inc. shareholders’ equity / (deficit) |
(3,430,389 |
) |
9,540,367 |
10,820,613 |
11,924,052 |
11,899,844 |
1,823,730 |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total shareholders’ equity / (deficit) |
(3,430,389 |
) |
9,540,367 |
10,820,613 |
11,924,052 |
11,909,844 |
1,825,263 |
|||||||||||||||||
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|
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|
|
|
(1) | Includes RMB404.6 million and RMB549.8 million deposited in our Alipay accounts as of December 31, 2016 and 2017. Such amount is unrestricted as to withdrawal and use and readily available to us on demand. |
For the year ended December 31, |
||||||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Adjusted net income(1) |
598,787 | 2,228,515 | 2,549,297 | 3,351,587 | 382,344 | 58,597 |
(1) | Adjusted net income is defined as net income excluding share-based compensation expenses and convertible senior notes buyback income. |
For the year ended December 31, |
||||||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Net income |
576,653 | 2,164,459 | 2,491,316 | 3,264,288 | 958,819 | 146,945 | ||||||||||||||||||
Add: share-based compensation expenses |
22,134 | 64,056 | 57,981 | 87,299 | 45,634 | 6,994 | ||||||||||||||||||
Less: Convertible senior notes buyback income |
— | — | — | — | 622,109 | 95,342 | ||||||||||||||||||
Adjusted net income |
598,787 | 2,228,515 | 2,549,297 | 3,351,587 | 382,344 | 58,597 |
A. |
Capitalization and Indebtedness |
B. |
Reasons for the Offer and Use of Proceeds |
C. |
Risk Factors Risks Related to Our Business and Industry |
• | offer personalized and competitive credit products; |
• | increase the utilization of our credit products by existing borrowers as well as new borrowers; |
• | offer attractive financing service fees while driving the growth and profitability of our business; |
• | maintain low delinquency rates of transactions facilitated by us; |
• | develop sufficient, diversified, cost-efficient and reputable institutional funding sources; |
• | maintain and enhance our relationships with our other business partners, including merchandise suppliers and financial service providers that participate on our open platform; |
• | continue to broaden our prospective borrower base; |
• | navigate a complex and evolving regulatory environment; |
• | improve our operational efficiency; |
• | attract, retain and motivate talented employees to support our business growth; |
• | enhance our technology infrastructure to support the growth of our business and maintain the security of our system and the confidentiality of the information provided and utilized across our system; |
• | navigate economic condition and fluctuation; and |
• | defend ourselves against legal and regulatory actions, such as actions involving intellectual property or privacy claims. |
• | enhance the reputation and recognition of the “Wanlimu Kids Clubs” brand; |
• | increase student enrollment; |
• | obtain all necessary approvals, licenses and permits or to make all necessary registrations and filings for our educational services in China; |
• | offer educational programs that are appealing to children and their parents; |
• | properly price our educational programs; and |
• | operate our education centers in a safe and cost-efficient manner. |
• | maintain the effectiveness, quality and reliability of our systems; |
• | provide borrowers with a superior experience; |
• | engage a large number of quality borrowers with low delinquency rate; |
• | enhance and improve our credit assessment model and risk management system; |
• | enhance the quality of our funding sources; |
• | effectively manage and resolve borrower complaints; and |
• | effectively protect personal information and privacy of borrowers. |
• | our failure to predict market demand accurately and supply attractive and increasingly personalized credit products at appropriate pricing and amount that meet this demand in a timely fashion; |
• | borrowers may not like, find useful or agree with any changes made to our platform; |
• | our existing credit products may cease to be popular among current borrowers or prove to be less attractive to prospective borrowers; |
• | our failure to offer attractive merchandise on the Qudian marketplace that can be purchased by borrowers through merchandise credit products at competitive amount of financing service fees to meet consumer needs and preferences; |
• | our failure to assess risk associated with new products and to properly price new and existing products; |
• | negative publicity about our credit products, our platform or our mobile apps’ performance or effectiveness; |
• | views taken by regulatory authorities that the launch of new credit products and changes to our existing credit products do not comply with PRC laws, rules or regulations applicable to us; and |
• | the introduction or anticipated introduction of competing offerings by competitors. |
• | become delinquent in the payment of an outstanding obligation; |
• | defaulted on a pre-existing debt obligation; |
• | taken on additional debt; or |
• | sustained other adverse financial events. |
• | our ability to attract new borrowers and maintain relationships with existing borrowers; |
• | the amount of transactions; |
• | the mix of products we offer; |
• | delinquency rates of transactions we facilitate; |
• | the amount and timing of cost of revenues and operating expenses related to acquiring borrowers and the maintenance and expansion of our business, operations and infrastructure; |
• | our ability to establish relationship with additional institutional funding partners and maintain relationships with existing institutional funding partners; |
• | our ability to secure funding for credit we facilitate on reasonable terms; |
• | our emphasis on borrower experience instead of near-term growth; |
• | the timing of expenses related to the development or acquisition of technologies or businesses; |
• | network outages or security breaches; |
• | general economic, industry and market conditions; and |
• | changes in applicable laws and regulations. |
• | the growth of Internet, broadband, personal computer and mobile penetration and usage in China, and the rate of any such growth; |
• | the trust and confidence level of online retail and mobile commerce consumers, including our users, in China, as well as changes in borrower demographics and consumer tastes and preferences; |
• | the selection, price and popularity of merchandise that we and our competitors offer online; |
• | whether alternative retail channels or business models that better address the needs of consumers emerge in China; and |
• | the development of fulfillment, payment and other ancillary services associated with retail and mobile commerce purchases. |
• | difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business; |
• | inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits including the failure to successfully further develop the acquired technology; |
• | difficulties in retaining, training, motivating and integrating key personnel; |
• | diversion of management’s time and resources from our normal daily operations and potential disruptions to our ongoing businesses; |
• | difficulties in maintaining uniform standards, controls, procedures and policies within the combined organizations; |
• | difficulties in retaining relationships with borrowers, institutional funding partners, merchandise suppliers, employees and other partners of the acquired business; |
• | risks of entering markets in which we have limited or no prior experience; |
• | regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals, as well as being subject to new regulators with oversight over an acquired business; |
• | assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability; |
• | liability for activities of the acquired business before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; and |
• | unexpected costs and unknown risks and liabilities associated with strategic investments or acquisitions. |
• | revoking our business and operating licenses; |
• | levying fines on us; |
• | confiscating any of our income that they deem to be obtained through illegal operations; |
• | shutting down our services; |
• | discontinuing or restricting our operations in China; |
• | imposing conditions or requirements with which we may not be able to comply; |
• | requiring us to change our corporate structure and contractual arrangements; |
• | restricting or prohibiting our use of the proceeds from overseas offering to finance our PRC consolidated VIEs’ business and operations; and |
• | taking other regulatory or enforcement actions that could be harmful to our business. |
• | the composition of our board of directors and, through it, any determinations with respect to our operations, business direction and policies, including the appointment and removal of officers; |
• | any determinations with respect to mergers or other business combinations; |
• | our disposition of substantially all of our assets; and |
• | any change in control. |
• | regulatory developments affecting us or our industry; |
• | announcements of studies and reports relating to the quality of our credit offerings or those of our competitors; |
• | changes in the economic performance or market valuations of other consumer finance service providers; |
• | actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; |
• | changes in financial estimates by securities research analysts; |
• | conditions in the market for consumer finance services; |
• | announcements by us or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; |
• | additions to or departures of our senior management; |
• | fluctuations of exchange rates between the Renminbi and the U.S. dollar; |
• | release or expiry of lock-up or other transfer restrictions on our outstanding shares or ADSs; and |
• | sales or perceived potential sales of additional Class A ordinary shares or ADSs. |
• | the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; |
• | the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; |
• | the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and |
• | the selective disclosure rules by issuers of material nonpublic information under Regulation FD. |
• | have a majority of the board be independent (although all of the members of the audit committee must be independent under the Exchange Act); |
• | have a compensation committee or a nominating and corporate governance committee consisting entirely of independent directors; or |
• | have regularly scheduled executive sessions with only independent directors each year. |
ITEM 4. |
INFORMATION ON THE COMPANY |
A. |
History and Development of the Company |
B. |
Business Overview |
• | Installments. |
• | Durations. |
• | Prepayments. |
• | Penalty fee. |
• | Repayment method. |
• | Information Authentication . |
• | Restricted List Search . |
• | Admission Module . |
• | Redline Module . |
• | Enhanced Rule Module . |
Year Ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
On-balance sheet transactions: |
||||||||||||||||
Credit drawdowns that were funded by institutional funding partners |
17,786,502 | 6,827,311 | 611,751 | 93,755 | ||||||||||||
Credit drawdowns transferred to institutional funding partners |
1,664,062 | 477,200 | — | — | ||||||||||||
Credit drawdowns funded through trusts(1) |
16,122,440 | 6,350,111 | 611,751 | 93,755 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Credit drawdowns that were funded by our own capital |
19,249,864 | 15,933,116 | 17,683,191 | 2,710,068 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total on-balance sheet transactions |
37,036,366 | 22,760,427 | 18,294,942 | 2,803,823 | ||||||||||||
Off-balance sheet transactions |
20,904,603 | 38,080,279 | 97,879 | 15,001 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Transactions under the loan book business |
57,940,969 |
60,840,706 |
18,392,821 |
2,818,823 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Transactions under the transaction services business |
— |
23,683,642 |
4,020,778 |
616,211 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
57,940,969 |
84,524,348 |
22,413,599 |
3,435,034 |
||||||||||||
|
|
|
|
|
|
|
|
(1) | Excludes credit drawdowns funded by our own capital through trusts. |
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
% |
||||||||||||
On-balance sheet transactions: |
||||||||||||
Credit drawdowns that were funded by institutional funding partners |
30.7 | 8.1 | 2.7 | |||||||||
Credit drawdowns transferred to institutional funding partners |
2.9 | 0.6 | — | |||||||||
Credit drawdowns funded through trusts(1) |
27.8 | 7.5 | 2.7 | |||||||||
|
|
|
|
|
|
|||||||
Credit drawdowns that were funded by our own capital |
33.2 | 18.9 | 78.9 | |||||||||
|
|
|
|
|
|
|||||||
Total on-balance sheet transactions |
63.9 |
26.9 |
81.6 |
|||||||||
|
|
|
|
|
|
|||||||
Off-balance sheet transactions |
36.1 | 45.1 | 0.5 | |||||||||
|
|
|
|
|
|
|||||||
Transactions under the loan book business |
100.0 |
72.0 |
82.1 |
|||||||||
|
|
|
|
|
|
|||||||
Transactions under the transaction services business |
— |
28.0 |
17.9 |
|||||||||
|
|
|
|
|
|
|||||||
Total |
100.0 |
100.0 |
100.0 |
|||||||||
|
|
|
|
|
|
(1) | Excludes credit drawdowns funded by our own capital through trusts. |
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Percentage of delinquent principal and services fees for on-balance sheet transactions recovered |
79.4 | % | 37.6 | % | 155.3 | % |
• | maintaining and strengthening our proprietary data and analytics systems, including our decisioning engine, proprietary risk management system and fraud prevention system; and |
• | ensuring our technology system, including front-end and back-end management systems, collection systems, financial systems, security protocols and business continuity plans are well established, reviewed, tested and continuously strengthened. |
• | Financial systems. |
• | Transaction syndication and clearing system. |
banks. For a small credit application that can be funded by a single funding source, it automatically selects the proper funding source for each credit drawdown based on the large number of funding criteria specified by our institutional funding partners. For a large credit application, it can syndicate the credit commitment among us and our institutional funding partners based on their funding criteria. The system also separates payments from borrowers into the relevant categories, namely, principals, financing service fees, fees payable to institutional funding partners and penalty fees on a real-time basis and settles with the relevant funding partners on a same-day basis. The system adapts to new funding arrangements quickly. For example, it typically takes two days to complete the configuration for a new trust and two weeks to do so for a new off-balance sheet funding arrangement with a bank. The advanced and efficient system allows us to quickly match demand with institutional funding with appropriate risk appetite, thereby providing credit to consumer instantaneously. |
• | Liquidity forecast system. |
• | Security. |
• | Front-end systems. |
• | Back-end management systems.back-end systems include, among other things, our user credit and repayment management system, merchandise procurement system, merchandise management system and user information management system. |
• | Collection systems. |
• | The overall capital cost charged on a borrower, comprised of interests and fees, should be in compliance with the judicial interpretations by the Supreme People’s Court of the PRC regarding interest rates in private lending; according to the Private Lending Judicial Interpretations, if the annual interest rate of a private loan is higher than 36%, the excess will be void and will not be enforced by the courts; |
• | A provider of cash loan shall not deduct interests, service fees, management fees or deposits from the loan principal or set excessive overdue interest, late fee or penalty interest; |
• | A bank may not outsource its core business functions, such as credit assessment and risk management, to third parties; |
• | A bank participating in loan facilitation transactions may not accept credit enhancement services from a third party which has not obtained any license or approval to provide guarantees, including credit enhancement service in the form of a commitment to assume default risks; and |
• | A bank may not permit its service provider in cash loan business to collect interest or fees from borrowers. |
C. |
Organizational Structure |
(1) | Includes subsidiaries of Xiamen Financial Lease located in various cities across China. Xiamen Financial Lease and its subsidiaries were primarily involved in operating Dabai Auto, our budget auto financing business. We ceased offering auto financing products in the second quarter 2019, and we are on the process of winding down certain subsidiaries of Xiamen Financial Lease. |
(2) | Mr. Min Luo, our founder, chairman and chief executive officer, and Mr. Lianzhu Lv, our head of user experience department, respectively hold 99.0% and 1.0% of equity interests in Ganzhou Qudian. |
(3) | Mr. Min Luo and Mr. Hongjia He, our vice president, respectively hold 99.0% and 1.0% of equity interests in Hunan Qudian. |
(4) | The following table sets forth the shareholders of Beijing Happy Time, their respective equity interests in Beijing Happy Time and their respective relationships with shareholders of Qudian Inc. as of the date of this annual report. For further information as to the principal shareholders of Qudian Inc., see “Item 6. Directors, Senior Management and Employees — E. Share Ownership.” |
Shareholders |
Relationship with shareholders of Qudian Inc. |
Amount of Registered Capital |
Percentage of Equity Interests |
|||||||
RMB |
||||||||||
Mr. Min Luo |
Holds 100% equity interests in Qufenqi Holding Limited | 5,025,579 | 21.0 | |||||||
Phoenix Auspicious Internet Investment L.P. and Shenzhen Guosheng Qianhai Investment Co., Ltd. |
Affiliates of Phoenix Auspicious FinTech Investment L.P. and Guosheng (Hong Kong) Investment Limited (formerly known as Wa Sung Investment Limited), or Guosheng HK, collectively referred to as Phoenix Entities |
4,596,670 | 19.2 | |||||||
Beijing Kunlun Tech Co., Ltd. |
Affiliate of Kunlun Group Limited | 4,587,496 | 19.2 | |||||||
Ningbo Yuanfeng Venture Capital L.P.(a) |
Affiliate of Source Code Accelerate L.P. | 3,757,355 | 15.7 | |||||||
Shanghai Yunxin Venture Capital Co., Ltd.(a) |
Affiliate of API (Hong Kong) Investment Limited | 2,985,744 | 12.5 | |||||||
Jiaxing Blue Run Quchuan Investment L.P. and Tianjin Blue Run Xinhe Investment Center L.P.(a) |
Affiliates of Ever Bliss Fund, L.P. and Joyful Bliss Limited, collectively referred to as Zhu Entities | 1,681,366 | 7.0 | |||||||
Tianjin Happy Share Asset Management L.P., referred to as Tianjin Happy Share(b) |
Not applicable | 1,251,742 | 5.2 |
(a) | Ningbo Yuanfeng Venture Capital L.P., Shanghai Yunxin Venture Capital Co., Ltd., Jiaxing Blue Run Quchuan Investment L.P. and Tianjin Blue Run Xinhe Investment Center L.P. entered into a series of agreements to transfer their respective equity interest in Beijing Happy Time to Mr. Min Luo in October 2020. We are still in the process of completing the registration of such share transfer with the relevant regulatory authorities. |
(b) | Tianjin Happy Share was established in connection with the share incentive plan of Beijing Happy Time. For more information, see “Item 6. Directors, Senior Management and Employees — B. Compensation — 2015 Share Incentive Plan.” |
(5) | Mr. Min Luo, our founder, chairman and chief executive officer, and Mr. Long Xu, our director, respectively hold 99.9% and 0.1% of equity interests in Xiamen Qu Plus Plus Technology Development Co., Ltd. |
(6) | Material subsidiaries of Ganzhou Qudian include Xiamen Qudian Commercial Factoring Co., Ltd., Jiangxi Chunmian Technology Development Co., Ltd., Ganzhou Qudian Commerce Development Co., Ltd., Xiamen Junda Network Technology Co., Ltd., Xinjiang Qudian Technology Co., Ltd. and Xiamen Wanlimu Growth, which we expect to utilize to explore new business opportunities. |
(7) | Material subsidiaries of Xiamen Qudian include Xiamen Wanlumu Technology Co., Ltd., Xiamen Qudian Culture and Technology Co., Ltd., Global Select (HK) Limited, Qu Plus Plus (HK) Limited and Xiamen Wanlimu Luxuries Co., Ltd. |
(8) | Material subsidiaries of Beijing Happy Time include Fuzhou Happy Time Technology Development Co., Ltd., Tianjin Happy Time Technology Development Co., Ltd., Tianjin Qufenqi Technology Co., Ltd, Ganzhou Happy Fenqi Network Service Co., Ltd., Ganzhou and Fuzhou High-tech Zone Microcredit Co., Ltd. Bejing Happy Time currently operates our websites and mobile apps under the Laifenqi brand and Qudian brand. |
• | exercise effective control over each of our consolidated VIEs and its subsidiaries; |
• | receive substantially all the economic benefits of each of our consolidated VIEs; and |
• | have an exclusive option to purchase all or part of the equity interests in the equity interest in or all or part of the assets of each of our consolidated VIEs when and to the extent permitted by PRC law. |
• | the ownership structures of Ganzhou Qufenqi, Xiamen Youxiang and our consolidated VIEs in China do not violate any applicable PRC law, regulation, or rule currently in effect; and |
• | the contractual arrangements among Ganzhou Qufenqi or Xiamen Youxiang, as applicable, each of our consolidated VIEs and its shareholders governed by PRC laws are valid, binding and enforceable in accordance with their terms and applicable PRC laws, rules, and regulations currently in effect, and will not violate any applicable PRC law, regulation, or rule currently in effect. |
D. | Facilities |
ITEM 4A. |
UNRESOLVED STAFF COMMENTS |
ITEM 5. |
OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
A. |
Operating Results |
As of December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
(in thousands) |
||||||||||||
Registered users |
71,766 | 79,463 | 81,937 | |||||||||
Outstanding borrowers |
5,260 | 6,116 | 3,472 | |||||||||
Cumulative number of borrowers |
16,716 | 19,037 | 19,067 |
Year Ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
On-balance sheet transactions |
37,036,366 | 22,760,427 | 18,294,942 | 2,803,823 | ||||||||||||
Off-balance sheet transactions |
20,904,603 | 38,080,279 | 97,879 | 15,001 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Transactions under the loan book business |
57,940,969 | 60,840,706 | 18,392,821 | 2,818,823 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Transactions under the transaction services business |
— | 23,683,642 | 4,020,778 | 616,211 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
57,940,969 | 84,524,348 | 22,413,599 | 3,435,034 | ||||||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
On-balance sheet transactions |
9,652,127 | 9,286,416 | 4,718,031 | 723,070 | ||||||||||||
Off-balance sheet transactions |
9,353,242 | 13,254,755 | 83,723 | 12,831 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Transactions under the loan book business |
19,005,369 | 22,541,171 | 4,801,755 | 735,901 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Transactions under the transaction services business |
— | 15,594,775 | 5,135,404 | 787,035 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
19,005,369 | 38,135,946 | 9,937,159 | 1,522,936 | ||||||||||||
|
|
|
|
|
|
|
|
Delinquent for |
||||||||||||||||||||||||
1-30 calendar days |
31-60 calendar days |
61-90 calendar days |
More than 90 calendar days |
Total |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
As of |
||||||||||||||||||||||||
December 31, 2018 |
153,188 | 108,535 | 104,483 | 298,091 | 664,297 | 96,618 | ||||||||||||||||||
December 31, 2019 |
314,330 | 212,627 | 185,994 | 629,975 | 1,342,926 | 192,899 | ||||||||||||||||||
December 31, 2020 |
51,673 | 45,871 | 53,291 | 254,885 | 405,720 | 62,179 |
Delinquent for |
||||||||||||||||||||
1-30 calendar days |
31-60 calendar days |
61-90 calendar days |
Total |
|||||||||||||||||
RMB |
RMB |
RMB |
RMB |
US$ |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
As of |
||||||||||||||||||||
December 31, 2018 |
4,328 | 5,545 | 7,108 | 16,981 | 2,470 | |||||||||||||||
December 31, 2019 |
6,233 | 8,118 | 10,669 | 25,019 | 3,594 | |||||||||||||||
December 31, 2020 |
1,109 | 1,551 | 2,557 | 5,217 | 800 |
(1) | Financing service fees are reversed post 90 calendar days. |
Year Ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Amount recovered past due payments for principal |
500,936 | 461,822 | 580,048 | 88,896 | ||||||||||||
Amount recovered past due payments for financing service fees |
39,878 | 52,730 | 58,223 | 8,923 |
Year Ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Amount charged off |
1,077,333 | 1,215,718 | 2,127,088 | 325,991 |
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Provision ratio |
3.09 | % | 9.49 | % | 7.84 | % |
As of December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
M1+ delinquency coverage ratio |
1.1x | 1.5x | 2.4x |
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
% |
||||||||||||
Charge-off ratio |
2.91 | % | 5.34 | % | 11.63 | % |
Year Ended December 31, |
||||||||||||||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||||||||||||||
RMB |
% of total revenues |
RMB |
% of total revenues |
RMB |
US$ |
% of total revenues |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Revenues |
||||||||||||||||||||||||||||
Financing income |
3,535,276 | 46.0 | 3,510,055 | 39.7 | 2,102,665 | 322,248 | 57.0 | |||||||||||||||||||||
Sales commission fee |
307,492 | 4.0 | 356,812 | 4.0 | 80,992 | 12,413 | 2.2 | |||||||||||||||||||||
Sales income |
2,174,789 | 28.3 | 431,946 | 4.9 | 610,793 | 93,608 | 16.5 | |||||||||||||||||||||
Penalty fees |
28,013 | 0.4 | 44,354 | 0.5 | 72,235 | 11,070 | 2.0 | |||||||||||||||||||||
Guarantee income |
— | — | — | — | 826,198 | 126,620 | 22.4 | |||||||||||||||||||||
Loan facilitation income and other related income |
1,646,773 | 21.3 | 2,297,413 | 26.0 | 131,633 | 20,174 | 3.6 | |||||||||||||||||||||
Transaction services fee and other related income |
— | — | 2,199,464 | 24.9 | (136,542 | ) | (20,926 | ) | (3.7 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total revenues |
7,692,343 |
100.0 |
8,840,044 |
100.0 |
3,687,974 |
565,207 |
100.0 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Cost of revenues and operating expenses: |
||||||||||||||||||||||||||||
Cost of revenues |
2,735,428 | 35.6 | 901,788 | 10.2 | 862,354 | 132,162 | 23.4 | |||||||||||||||||||||
Sales and marketing |
540,551 | 7.0 | 280,616 | 3.2 | 293,282 | 44,947 | 8.0 | |||||||||||||||||||||
General and administrative |
255,867 | 3.3 | 286,059 | 3.2 | 285,905 | 43,817 | 7.7 | |||||||||||||||||||||
Research and development |
199,560 | 2.6 | 204,781 | 2.3 | 170,691 | 26,160 | 4.6 | |||||||||||||||||||||
Changes in guarantee liabilities and risk assurance liabilities |
116,593 | 1.5 | 1,143,427 | 12.9 | (87,894 | ) | (13,470 | ) | (2.4 | ) | ||||||||||||||||||
Provision for receivables and other assets |
1,178,723 | 15.3 | 2,283,126 | 25.8 | 1,641,362 | 251,550 | 44.5 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
5,026,722 |
65.3 |
5,099,797 |
57.6 |
3,165,700 |
485,166 |
85.8 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Cost of revenues and operating expenses paid to related parties: |
||||||||||||||||
Cost of revenues (1) |
147,611 | — | — | — | ||||||||||||
Sales and marketing (2) |
32,542 | — | — | — | ||||||||||||
Total |
180,153 | — | — | — |
(1) | Primarily includes (i) payment processing and settlement fees to Alipay, (ii) fees related to credit analysis information provided by Zhima Credit, (iii) fees related to cloud computing services provided by Alibaba |
Cloud Computing and (iv) interest expenses of borrowings from Guosheng Financial Holding Inc. and Guosheng Securities Asset Management Co., Ltd. in connection with their investments in several trusts. |
(2) | Includes borrower engagement fees to Alipay. |
Year Ended December 31, |
||||||||||||||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Cost of revenues: |
||||||||||||||||||||||||||||
Cost of goods sold |
2,003,642 | 26.1 | 366,015 | 4.1 | 645,083 | 98,864 | 17.5 | |||||||||||||||||||||
Cost of other revenues |
731,786 | 9.5 | 535,773 | 6.1 | 217,271 | 33,298 | 5.9 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
2,735,428 |
35.6 |
901,788 |
10.2 |
862,354 |
132,162 |
23.4 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Provision for receivables and other assets |
1,178,723 | 15.3 | 2,283,126 | 25.8 | 1,641,362 | 251,550 | 44.5 |
Year Ended December 31, |
||||||||||||||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentages) |
||||||||||||||||||||||||||||
Sales and marketing |
5,641 | 0.1 | 4,482 | 0.1 | 1,912 | 293 | 0.1 | |||||||||||||||||||||
General and administrative |
38,587 | 0.5 | 74,312 | 0.8 | 40,895 | 6,267 | 1.1 | |||||||||||||||||||||
Research and development |
13,753 | 0.2 | 8,505 | 0.1 | 2,827 | 433 | 0.1 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
57,981 | 0.8 | 87,299 | 1.0 | 45,634 | 6,994 | 1.3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• | Identify the contract(s) with a customer; |
• | Identify the performance obligations in the contract; |
• | Determine the transaction price; |
• | Allocate the transaction price to the performance obligations in the contract; and |
• | Recognize revenue when (or as) the entity satisfies a performance obligation. |
Year Ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands, except for share and per share data) |
||||||||||||||||
Revenues: |
||||||||||||||||
Financing income |
3,535,276 | 3,510,055 | 2,102,665 | 322,248 | ||||||||||||
Sales commission fee |
307,492 | 356,812 | 80,992 | 12,413 | ||||||||||||
Sales income |
2,174,789 | 431,946 | 610,793 | 93,608 | ||||||||||||
Penalty fees |
28,013 | 44,354 | 72,235 | 11,070 | ||||||||||||
Guarantee income |
— | — | 826,198 | 126,620 | ||||||||||||
Loan facilitation income and other related income |
1,646,773 | 2,297,413 | 131,633 | 20,174 | ||||||||||||
Transaction services fee and other related income |
— | 2,199,464 | (136,542 | ) | (20,926 | ) | ||||||||||
Total revenues |
7,692,343 |
8,840,044 |
3,687,974 |
565,207 |
||||||||||||
Cost of revenues and operating expenses: |
||||||||||||||||
Cost of goods sold |
(2,003,642 | ) | (366,015 | ) | (645,083 | ) | (98,864 | ) | ||||||||
Cost of other revenues |
(731,786 | ) | (535,773 | ) | (217,271 | ) | (33,298 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenues |
(2,735,428 |
) |
(901,788 |
) |
(862,354 |
) |
(132,162 |
) | ||||||||
Operating expenses: |
||||||||||||||||
Sales and marketing |
(540,551 | ) | (280,616 | ) | (293,282 | ) | (44,947 | ) | ||||||||
General and administrative |
(255,867 | ) | (286,059 | ) | (285,905 | ) | (43,817 | ) | ||||||||
Research and development |
(199,560 | ) | (204,781 | ) | (170,691 | ) | (26,160 | ) | ||||||||
Changes in guarantee liabilities and risk assurance liabilities |
(116,593 | ) | (1,143,427 | ) | 87,894 | 13,470 | ||||||||||
Provision for receivables and other assets |
(1,178,723 | ) | (2,283,126 | ) | (1,641,362 | ) | (251,550 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
(2,291,294 |
) |
(4,198,009 |
) |
(2,303,346 |
) |
(353,003 |
) | ||||||||
Other operating income |
23,748 |
108,508 |
343,324 |
52,617 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income from operations |
2,689,369 |
3,848,755 |
865,598 |
132,659 |
||||||||||||
Interest and investment income, net |
47,060 | 24,292 | 708,251 | 108,544 | ||||||||||||
Loss from equity method investments |
(11,319 | ) | (3,420 | ) | (370,039 | ) | (56,711 | ) | ||||||||
Foreign exchange gain/(loss), net |
(90,771 | ) | 6,635 | (107 | ) | (16 | ) | |||||||||
Other income |
15,231 | 24,583 | 26,358 | 4,040 | ||||||||||||
Other expenses |
(522 | ) | (10,323 | ) | (9,263 | ) | (1,420 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income before income taxes |
2,649,047 |
3,890,522 |
1,220,798 |
187,095 |
||||||||||||
Income tax expenses |
(157,731 | ) | (626,234 | ) | (261,979 | ) | (40,150 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income |
2,491,316 |
3,264,288 |
958,819 |
146,945 |
||||||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
% |
||||||||||||
Revenues: |
||||||||||||
Financing income |
46.0 | 39.7 | 57.0 | |||||||||
Sales commission fee |
4.0 | 4.0 | 2.2 | |||||||||
Sales income |
28.3 | 4.9 | 16.5 | |||||||||
Penalty fees |
0.4 | 0.5 | 2.0 | |||||||||
Guarantee income |
— | — | 22.4 | |||||||||
Loan facilitation income and other related income |
21.3 | 26.0 | 3.6 | |||||||||
Transaction services fee and other related income |
— | 24.9 | (3.7 | ) | ||||||||
|
|
|
|
|
|
|||||||
Total revenues |
100.0 |
100.0 |
100.0 |
|||||||||
Cost of revenues and operating expenses: |
||||||||||||
Cost of goods sold |
(26.1 | ) | (4.1 | ) | (17.5 | ) | ||||||
Cost of other revenues |
(9.5 | ) | (6.1 | ) | (5.9 | ) | ||||||
|
|
|
|
|
|
|||||||
Total cost of revenues |
(35.6 |
) |
(10.2 |
) |
(23.4 |
) | ||||||
Operating expenses: |
||||||||||||
Sales and marketing |
(7.0 | ) | (3.2 | ) | (8.0 | ) | ||||||
General and administrative |
(3.3 | ) | (3.2 | ) | (7.7 | ) | ||||||
Research and development |
(2.6 | ) | (2.3 | ) | (4.6 | ) | ||||||
Changes in guarantee liabilities and risk assurance liabilities |
(1.5 | ) | (12.9 | ) | 2.4 | |||||||
Provision for receivables and other assets |
(15.3 | ) | (25.8 | ) | (44.5 | ) | ||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
(29.8 |
) |
(47.5 |
) |
(62.4 |
) | ||||||
Other operating income |
0.3 |
1.2 |
9.3 |
|||||||||
|
|
|
|
|
|
|||||||
Income from operations |
35.0 |
43.5 |
23.5 |
|||||||||
Interest and investment income, net |
0.6 | 0.3 | 19.2 | |||||||||
Loss from equity method investments |
(0.1 | ) | (0.1 | ) | (10.0 | ) | ||||||
Foreign exchange gain/(loss), net |
(1.2 | ) | 0.1 | (0.0 | ) | |||||||
Other income |
0.2 | 0.3 | 0.7 | |||||||||
Other expenses |
(0.0 | ) | (0.1 | ) | (0.3 | ) | ||||||
|
|
|
|
|
|
|||||||
Net income before income taxes |
34.5 |
44.0 |
33.1 |
|||||||||
Income tax expenses |
(2.1 | ) | (7.1 | ) | (7.1 | ) | ||||||
|
|
|
|
|
|
|||||||
Net income |
32.4 |
36.9 |
26.0 |
|||||||||
|
|
|
|
|
|
• | Cost of revenues. on-balance sheet loan book business and the decrease in costs of Dabai Auto business, partially offset by the increase in cost of goods sold related to the Wanlimu e-commerce platform. |
• | Sales and marketing expenses. e-commerce platform. |
• | General and administrative expenses. |
• | Research and development expenses. |
• | Changes in guarantee liabilities and risk assurance liabilities. off-balance sheet transactions. |
• | Provision for receivables and other assets. past-due on-balance sheet outstanding principal receivables as compared to that of 2019. |
B. |
Liquidity and Capital Resources |
As of December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Total assets |
16,253,375 | 18,361,604 | 13,398,032 | 2,053,338 | ||||||||||||
Total liabilities |
5,432,762 | 6,437,552 | 1,488,188 | 228,075 | ||||||||||||
Total net assets |
10,820,613 | 11,924,052 | 11,909,844 | 1,825,263 |
(1) | Defined as total assets minus total liabilities. |
As of December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Short-term loan principal and financing service fee receivables |
8,417,821 | 7,894,697 | 3,940,461 | 603,902 | ||||||||||||
Long-term loan principal and financing service fee receivables |
665,653 | 424 | — | — | ||||||||||||
Short-term borrowings and interest payables |
3,860,441 | 1,049,570 | — | — | ||||||||||||
Long-term borrowings and interest payables |
413,400 | — | 102,415 (1) |
15,696 (1) |
(1) | Long-term borrowings and interest payable as of December 31, 2020 represent borrowings in connection with the construction in progress and do not relate to cash and merchandise credit products. |
Year Ended December 31, |
||||||||||||||||
2018 |
2019 |
2020 |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Summary Consolidated Cash Flow Data: |
||||||||||||||||
Net cash provided by operating activities |
3,332,319 | 5,503,389 | 2,471,712 | 378,806 | ||||||||||||
Net cash used in investing activities |
(2,790,734 | ) | (929,559 | ) | (3,269,876 | ) | (501,130 | ) | ||||||||
Net cash used in financing activities |
(6,727,839 | ) | (3,372,335 | ) | (1,591,272 | ) | (243,873 | ) | ||||||||
Cash and cash equivalents, and restricted cash and cash equivalent at beginning of period |
9,084,952 | 2,841,015 | 4,118,587 | 631,201 | ||||||||||||
Cash and cash equivalents, and restricted cash and cash equivalent at beginning of period |
2,841,015 | 4,118,587 | 1,672,962 | 256,393 |
C. |
Research and Development |
D. |
Trend Information |
E. |
Off-Balance Sheet Arrangements |
F. |
Tabular Disclosure of Contractual Obligations |
Payment due by period |
||||||||||||||||||||||||
Total |
Less than 1 Year |
1-3 Years |
3-5 Years |
More than 5 Years |
||||||||||||||||||||
RMB |
US$ |
RMB |
||||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Operating lease commitments |
130,252 | 19,962 | 35,896 | 32,277 | 25,104 | 36,975 | ||||||||||||||||||
Long-term borrowings and interest payable |
125,480 | 19,231 | 5,064 | 30,147 | 47,166 | 43,103 |
ITEM 6. |
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
A. |
Directors and Senior Management |
Name |
Age |
Position/Title | ||||
Min Luo |
38 | Chairman and Chief Executive Officer | ||||
Long Xu |
38 | Director and Senior Vice President | ||||
Yingming Li |
43 | Director | ||||
Shengwen Rong |
53 | Independent Director | ||||
Yifan Li |
54 | Independent Director | ||||
Yan Gao |
40 | Vice President of Finance |
B. |
Compensation |
Name |
Position |
Ordinary Shares Underlying Options Awarded |
Option Exercise Price |
Grant Date |
Option Expiration Date | |||||||
Long Xu |
Director | * | US$0.0 | February 23, 2016 | February 23, 2026 | |||||||
* | US$0.0 | December 20, 2018 | December 20, 2028 | |||||||||
* | US$0.0 | September 22, 2019 | September 22, 2029 | |||||||||
* | US$0.0 | December 25, 2019 | December 25, 2029 | |||||||||
* | US$0.0 | March 26, 2020 | March 26, 2030 | |||||||||
Yifan Li |
Independent director | * | US$0.0 | October 17, 2017 | December 8, 2026 | |||||||
* | US$0.0 | June 14, 2019 | June 14, 2029 | |||||||||
Rocky Ta-Chen Lee(1) |
Independent director | * | US$0.0 | October 17, 2017 | December 8, 2026 | |||||||
* | US$0.0 | June 14, 2019 | June 14, 2029 | |||||||||
Shengwen Rong |
Independent director | * | US$0.0 | November 30, 2018 | November 30, 2028 | |||||||
* | US$0.0 | June 14, 2019 | June 14, 2029 | |||||||||
Yan Gao |
Vice President of Finance |
* | US$0.0 | May 3, 2017 | May 3, 2027 | |||||||
* | US$0.0 | March 12, 2018 | March 12, 2028 | |||||||||
* | US$0.0 | December 20, 2018 | December 20, 2028 | |||||||||
* | US$0.0 | September 22, 2019 | September 22, 2029 | |||||||||
* | US$0.0 | December 25, 2019 | December 25, 2029 | |||||||||
* | US$0.0 | March 26, 2020 | March 26,2030 |
* | Less than 1% of our outstanding shares, assuming conversion of our preferred shares into ordinary shares. |
(1) | Mr. Rocky Ta-Chen Lee ceased to be a director of our company in September 2020. |
C. |
Board Practices |
• | selecting the independent auditor; |
• | pre-approving auditing and non-auditing services permitted to be performed by the independent auditor; |
• | annually reviewing the independent auditor’s report describing the auditing firm’s internal quality control procedures, any material issues raised by the most recent internal quality control review, or peer review, of the independent auditors and all relationships between the independent auditor and our company; |
• | setting clear hiring policies for employees and former employees of the independent auditors; |
• | reviewing with the independent auditor any audit problems or difficulties and management’s response; |
• | reviewing and, if material, approving all related party transactions on an ongoing basis; |
• | reviewing and discussing the annual audited financial statements with management and the independent auditor; |
• | reviewing and discussing with management and the independent auditors major issues regarding accounting principles and financial statement presentations; |
• | reviewing reports prepared by management or the independent auditors relating to significant financial reporting issues and judgments; |
• | discussing earnings press releases with management, as well as financial information and earnings guidance provided to analysts and rating agencies; |
• | reviewing with management and the independent auditors the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on our financial statements; |
• | discussing policies with respect to risk assessment and risk management with management, internal auditors and the independent auditor; |
• | timely reviewing reports from the independent auditor regarding all critical accounting policies and practices to be used by our company, all alternative treatments of financial information within U.S. GAAP that have been discussed with management and all other material written communications between the independent auditor and management; |
• | establishing procedures for the receipt, retention and treatment of complaints received from our employees regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; |
• | annually reviewing and reassessing the adequacy of our audit committee charter; |
• | such other matters that are specifically delegated to our audit committee by our board of directors from time to time; |
• | meeting separately, periodically, with management, internal auditors and the independent auditor; and |
• | reporting regularly to the full board of directors. |
• | reviewing, evaluating and, if necessary, revising our overall compensation policies; |
• | reviewing and evaluating the performance of our directors and senior officers and determining the compensation of our senior officers; |
• | reviewing and approving our senior officers’ employment agreements with us; |
• | setting performance targets for our senior officers with respect to our incentive compensation plan and equity-based compensation plans; |
• | administering our equity-based compensation plans in accordance with the terms thereof; and such other matters that are specifically delegated to the remuneration committee by our board of directors from time to time. |
• | selecting and recommending to the board nominees for election by the shareholders or appointment by the board; |
• | reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; |
• | making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and |
• | advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken. |
• | conducting and managing the business of our company; |
• | representing our company in contracts and deals; |
• | appointing attorneys for our company; |
• | selecting senior management such as managing directors and executive directors; |
• | providing employee benefits and pension; |
• | managing our company’s finance and bank accounts; |
• | exercising the borrowing powers of our company and mortgaging the property of our company; and |
• | exercising any other powers conferred by the shareholders meetings or under our second amended and restated memorandum and articles of association. |
D. |
Employees |
Number of Function |
Employees |
% of Total |
||||||
Risk management |
131 | 12.5 | ||||||
Technology and product development |
285 | 27.2 | ||||||
Finance |
85 | 8.1 | ||||||
Operation management |
106 | 10.1 | ||||||
General administrative and others |
189 | 18.1 | ||||||
New businesses |
4 | 0.4 | ||||||
Sales and marketing |
24 | 2.3 | ||||||
Dabai Auto |
50 | 4.8 | ||||||
Wanlimu Kids project |
173 | 16.5 | ||||||
|
|
|
|
|||||
Total |
1,047 | 100.0 | ||||||
|
|
|
|
E. |
Share Ownership |
• | each of our directors and executive officers; and |
• | each person known to us to own beneficially 5.0% or more of our ordinary shares. |
Ordinary Shares Beneficially Owned |
||||||||||||||||
Class A ordinary shares |
Class B ordinary shares |
Percentage of total ordinary shares |
Percentage of aggregate voting power ** |
|||||||||||||
Directors and Executive Officers: |
||||||||||||||||
Min Luo (1) |
63,491,172 | 25.1 | 77.0 | |||||||||||||
Long Xu |
* | — | * | |||||||||||||
Yingming Li |
— | — | — | — | ||||||||||||
Shengwen Rong |
* | — | * | * | ||||||||||||
Yifan Li |
* | — | * | * | ||||||||||||
Rocky Ta-Chen Lee(2) |
* | — | * | * | ||||||||||||
Yan Gao |
* | — | * | * | ||||||||||||
Directors and Executive Officers as a Group |
1,007,750 | 63,491,172 | 25.5 | 77.1 | ||||||||||||
Principal Shareholders |
||||||||||||||||
Qufenqi Holding Limited |
— | 63,491,172 | 25.1 | 77.0 | ||||||||||||
Guosheng HK (3) |
12,670,000 | 4,125,698 | 6.6 | 6.5 |
* | Beneficially owns less than 1% of our outstanding shares. |
** | For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class. In respect of all matters subject to a shareholders’ vote, each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to ten votes, voting together as one class. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. |
(1) | Represents 63,491,172 Class B ordinary shares held by Qufenqi Holding Limited, a limited liability company established in the British Virgin Islands. Qufenqi Holding Limited is indirectly wholly owned by a trust of which Mr. Min Luo and his wife are the beneficiaries. Mr. Min Luo is our founder, chairman of the board and chief executive officer. The registered address of Qufenqi Holding Limited is Geneva Place, Waterfront Drive, P.O. Box 3469, Road Town, Tortola, British Virgin Islands. Pursuant to a proxy and power of attorney dated April 25, 2020, or the Guosheng proxy, Qufenqi Holding Limited appointed Guosheng HK as its proxy and attorney-in-fact |
(2) | Mr. Rocky Ta-Chen Lee ceased to be a director of our company in September 2020. |
(3) | Represents (i) 12,670,000 Class A ordinary shares held by Guosheng HK and (ii) 4,125,698 Class B ordinary shares subject to the Guosheng proxy. The Guosheng proxy is further described in footnote 1 above. Information regarding beneficial ownership in Class A ordinary shares is reported as of December 31, 2019, based on the information contained in the Schedule 13G/A filed by Guosheng HK and its affiliates on February 11, 2020, or the Guosheng 13G/A. Guosheng HK is a limited liability company incorporated under the laws of Hong Kong and a subsidiary of Guosheng Financial Holding Inc., or Guosheng, a public company listed on the Shenzhen Stock Exchange. Based on Guosheng’s public filings, Mr. Li Du has control over Guosheng as of the date of this annual report. The registered address of Guosheng HK is Unit 606, 6th Floor, Alliance Building, 133 Connaught Road Central, Hong Kong. According to the Guosheng 13G/A, Phoenix Auspicious Fintech Investment L.P. held 22,367,426 Class A ordinary shares as of December 31, 2018 and held no equity interest in our company as of December 31, 2019. |
ITEM 7. |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
A. |
Major Shareholders |
B. |
Related Party Transactions |
C. |
Interests of Experts and Counsel |
ITEM 8. |
FINANCIAL INFORMATION |
A. |
Consolidated Statements and Other Financial Information |
B. |
Significant Changes |
ITEM 9. |
THE OFFER AND LISTING |
A. |
Offering and Listing Details |
B. |
Plan of Distribution |
C. |
Markets |
D. |
Selling Shareholders |
E. |
Dilution |
F. |
Expenses of the Issue |
ITEM 10. |
ADDITIONAL INFORMATION |
A. |
Share Capital |
B. |
Memorandum and Articles of Association |
C. |
Material Contracts |
D. |
Exchange Controls |
E. |
Taxation |
(1) | that no law which is enacted in the Cayman Islands imposing any tax to be levied on profits or income or gains or appreciations shall apply to us or our operations; and |
(2) | that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not be payable on our shares, debentures or other obligations or by way of the withholding in whole or in part of any relevant payment as defined in Section 6(3) of the Tax Concessions Law (2011 Revision). |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate the income of which is subject to United States federal income taxation regardless of its source; or |
• | a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person. |
• | a dealer or broker in securities or currencies; |
• | a financial institution; |
• | a regulated investment company; |
• | a real estate investment trust; |
• | an insurance company; |
• | a tax-exempt organization; |
• | a person holding our ADSs or Class A ordinary shares as part of a hedging, integrated or conversion transaction, a constructive sale or a straddle; |
• | a trader in securities that has elected the mark-to-market |
• | a person liable for alternative minimum tax; |
• | a person who owns or is deemed to own 10% or more of our stock (by vote or value); |
• | a person required to accelerate the recognition of any item of gross income with respect to our ADSs or Class A ordinary shares as a result of such income being recognized on an applicable financial statement; |
• | a partnership or other pass-through entity for United States federal income tax purposes; or |
• | a person whose “functional currency” is not the United States dollar. |
• | at least 75% of our gross income is passive income, or |
• | at least 50% of the value (determined based on a quarterly average) of our assets is attributable to assets that produce or are held for the production of passive income. |
• | the excess distribution or gain will be allocated ratably over your holding period for the ADSs or Class A ordinary shares, |
• | the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and |
• | the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year for individuals or corporations, as applicable, and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. |
F. |
Dividends and Paying Agents |
G. |
Statement by Experts |
H. |
Documents on Display |
I. |
Subsidiary Information |
ITEM 11. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 12. |
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
A. |
Debt Securities |
B. |
Warrants and Rights |
C. |
Other Securities |
D. |
American Depositary Shares |
Service |
Fees | |
• To any person to which ADSs are issued or to any person to which a distribution is made in respect of ADS distributions pursuant to stock dividends or other free distributions of stock, bonus distributions, stock splits or other distributions (except where converted to cash) |
• Up to US$0.05 per ADS issued | |
• Cancelation of ADSs, including the case of termination of the deposit agreement |
• Up to US$0.05 per ADS canceled | |
• Distribution of cash dividends |
• Up to US$0.05 per ADS held | |
• Distribution of cash entitlements (other than cash dividends) and/or cash proceeds from the sale of rights, securities and other entitlements |
• Up to US$0.05 per ADS held | |
• Distribution of ADSs pursuant to exercise of rights. |
• Up to US$0.05 per ADS held | |
• Distribution of securities other than ADSs or rights to purchase additional ADSs |
• Up to US$0.05 per ADS held | |
• Depositary services |
• Up to US$0.05 per ADS held on the applicable record date(s) established by the depositary |
• | Fees for the transfer and registration of ordinary shares charged by the registrar and transfer agent for the ordinary shares in the Cayman Islands (i.e., upon deposit and withdrawal of ordinary shares). |
• | Expenses incurred for converting foreign currency into U.S. dollars. |
• | Expenses for cable, telex and fax transmissions and for delivery of securities. |
• | Taxes and duties upon the transfer of securities, including any applicable stamp duties, any stock transfer charges or withholding taxes (i.e., when ordinary shares are deposited or withdrawn from deposit). |
• | Fees and expenses incurred in connection with the delivery or servicing of ordinary shares on deposit. |
• | Fees and expenses incurred in connection with complying with exchange control regulations and other regulatory requirements applicable to ordinary shares, deposited securities, ADSs and ADRs. |
• | Any applicable fees and penalties thereon. |
ITEM 13. |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
ITEM 14. |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
ITEM 15. |
CONTROLS AND PROCEDURES |
ITEM 16A. |
AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16B. |
CODE OF ETHICS |
ITEM 16C. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
For the Year Ended December 31, |
||||||||
2019 |
2020 |
|||||||
(in thousands of RMB) |
||||||||
Audit Fees (1) |
17,630 | 13,350 | ||||||
Tax Fees (2) |
555 | 100 | ||||||
|
|
|
|
|||||
Total |
18,185 | 13,450 | ||||||
|
|
|
|
(1) | Audit fees in 2019 include the aggregate fees billed in each of the fiscal period listed for professional services rendered by our independent public accountant for the audit and review of our financial statements and services related to our issuance of the convertible senior notes. Audit fees in 2020 include the aggregate fees billed in each of the fiscal period listed for professional services rendered by our independent public accountant for the audit and the agreed upon procedures of our financial statements. |
(2) | Tax fees include the aggregated fees billed in each of the fiscal periods listed for professional services rendered by our independent public accountant for tax compliance, tax advice and tax planning. |
ITEM 16D. |
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16E. |
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
Period |
Total Number of ADSs Purchased |
Average Price Paid per ADS (1) |
Total Number of ADSs Purchased as Part of Publicly Announced Plans or Programs (2) |
Approximate Dollar Value of ADSs that May Yet Be Purchased Under the Program (2) |
||||||||||||
November 21, 2017 through November 30, 2017 |
2,474,836 | US$ | 14.06 | 2,474,836 | US$ | 265.2 million | ||||||||||
December 2017 |
2,062,279 | US$ | 13.92 | 2,062,279 | US$ | 236.5 million | ||||||||||
June 2018 |
8,958,483 | US$ | 9.58 | 8,958,483 | US$ | 150.7 million | ||||||||||
August 2018 |
85,000 | US$ | 6.00 | 85,000 | US$ | 150.2 million | ||||||||||
September 2018 |
9,781,767 | US$ | 5.27 | 9,781,767 | US$ | 98.6 million | ||||||||||
October 2018 |
8,358,409 | US$ | 4.68 | 8,358,409 | US$ | 59.5 million | ||||||||||
November 2018 |
1,702,700 | US$ | 5.12 | 1,702,700 | US$ | 50.8 million | ||||||||||
December 2018 |
4,351,400 | US$ | 5.34 | 4,351,400 | US$ | 327.6 million | ||||||||||
April 2019 |
18,173,885 | US$ | 5.68 | 18,173,885 | US$ | 224.4 million | ||||||||||
August 2019 |
26,169,241 | US$ | 7.45 | 26,169,241 | US$ | 29.4 million | ||||||||||
March 2020 |
513,990 | US$ | 1.95 | 513,990 | US$ | 499.0 million | ||||||||||
May 2020 |
259,986 | US$ | 1.50 | 773,976 | US$ | 498.6 million | ||||||||||
December 2020 |
721,315 | US$ | 1.20 | 1,495,291 | US$ | 497.7 million | ||||||||||
Total |
83,613,291 | US$ | 6.87 | 83,613,291 | US$ | 497.7 million | ||||||||||
|
|
|
|
|
|
|
|
(1) | Each of our ADSs represents one Class A ordinary share. The average price per ADS is calculated using the execution price for each repurchase excluding commissions paid to brokers. |
(2) | We announced a share repurchase program approved by our board of directors in November 2017, under which we may repurchase up to US$300 million worth of our outstanding ADSs over a period of twelve months. We further announced a share repurchase program in December 2018, under which we may repurchase up to US$300 million worth of our outstanding ADSs over a period of twelve months, in addition to any further repurchases that may be made under the program announced in November 2017. We further announced a share repurchase program in January 2020, under which we may repurchase up to US$500 million worth of our outstanding ADSs over a period of 30 months. The repurchases have been, and will be, through various means, including open market transactions, privately negotiated transactions, tender offers or any combination thereof. The repurchases have been, and will be, effected in compliance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, and our insider trading policy. The number of ADSs repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, price, trading volume and general market conditions. |
(3) | On April 29, 2019, we purchased all 18,173,885 of our Class A ordinary shares then held by Kunlun at a price of US$5.678 per share, or an aggregate consideration of US$103.2 million. |
ITEM 16F. |
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
ITEM 16G. |
CORPORATE GOVERNANCE |
ITEM 16H. |
MINE SAFETY DISCLOSURE |
ITEM 17. |
FINANCIAL STATEMENTS |
ITEM 18. |
FINANCIAL STATEMENTS |
ITEM 19. |
EXHIBITS |
13.1** | Certification by Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
13.2** | Certification by Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
15.1* | Consent of Tian Yuan Law Firm | |
15.2* | Consent of Independent Registered Public Accounting Firm | |
99.1*** | Consolidated Financial Statements of Secoo Holding Limited as of December 31, 2019 and 2020 and for the years ended December 31, 2018, 2019 and 2020 | |
101.INS* | Inline XBRL Instance Document | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* | Filed herewith |
** | Furnished herewith |
*** | To be filed by amendment within six months of December 31, 2020 |
QUDIAN INC. | ||
By: | /s/ Min Luo | |
Name: | Min Luo | |
Title: | Chairman and Chief Executive Officer |
PAGE(S) | ||||
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F-7 |
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F-11 |
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F-13 |
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F-14 |
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F-16 |
Allowance for loan principal and financing service fee receivables | ||
Description of the Matter |
At December 31, 2020, the Company’s loan principal and financing service fee receivables and related allowance was RMB 4,790 million and RMB 849 million, respectively. As explained in Note 2 to the consolidated financial statements, the Company considers the loans to be homogeneous unsecured consumer loans of similar principal amounts. The allowance is calculated based on the Company’s historical loss experience with the entire loan portfolio, using a roll rate-based model and adjusted for various qualitative factors that reflect current conditions and reasonable and supportable forecasts of future economic conditions. These factors may include gross-domestic product rates, consumer price indexes, per capita consumption expenditure and other considerations. Auditing management’s allowance for loan principal and financing service fee receivables was complex and subjective due to the highly judgmental nature of the qualitative factors used to adjust the allowance calculated using the roll-rate based model. Quantifying the impact of the selected qualitative factors on the allowance was also complex and highly judgmental. These qualitative factors require management to make significant judgments which could significantly affect the amount of the allowance for loan principal and financing service fee receivables. | |
How We Addressed the Matter in Our Audit |
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s allowance for loan principal and financing service fee receivables. For example, we tested controls over management’s review of the allowance calculations, the significant assumptions and data inputs. To test the Company’s allowance, we performed audit procedures that included, among others, evaluating the methodology used, management’s selection of qualitative factors and their impact on the allowance, and the underlying data used in the calculation. We compared the selected qualitative factors to publicly available market information. We evaluated the appropriateness of the Company’s methodology and model to measure expected credit loss and evaluated management’s development, selection and weighting of the qualitative factors used in the expected credit loss model. In addition, we also involved valuation specialists to assist with these procedures. We evaluated the loss rate used to calculate the Company’s allowance at December 31, 2020 by comparing management’s estimate to subsequent results. We also tested the completeness and accuracy of the underlying data used by the Company in the roll-rate based model and recalculated the Company’s calculation of the allowance for loan principal financing service fee receivables. |
Estimation of variable consideration for loan facilitation income, transaction services fees and other related income | ||
Description of the Matter |
For the year ended December 31, 2020, the Company recognized negative RMB 5 million revenue related to loan facilitation income, transaction services fees and other related income. As explained in Note 2 to the consolidated financial statements, the transaction price of loan facilitation income, transaction services fees and other related income includes variable consideration which is contingent on the borrower making timely repayments. The amount of variable consideration is limited to the amount that is probable not to be reversed in future periods. Management estimated the variable consideration using the expected value method, based on historical defaults, and current and forecasted borrower repayment trends and assessed whether variable consideration should be constrained. Auditing management’s estimation of variable consideration for loan facilitation income, transaction services fees and other related income was complex due to the highly judgmental nature of the qualitative factors used in the expected value method and quantifying the impact of the selected qualitative factors on the variable consideration. The estimation of variable consideration is also affected by future market and economic conditions. These factors combined have a significant effect on the amount of the estimated variable consideration for loan facilitation income, transaction services fees and other related income. | |
How We Addressed the Matter in Our Audit |
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s estimation of variable consideration of loan facilitation income, transaction services fees and other related income. For example, we tested controls over management’s review of the variable consideration calculations, the significant assumptions and data inputs. To test the Company’s estimation of variable consideration for loan facilitation income, transaction services fees and other related income, we performed audit procedures that included, among others, evaluating the methodology used and management’s selection of the qualitative factors and their impact on the amount of variable consideration included in the transaction price. We compared the selected qualitative factors to publicly available market information. We assessed the historical accuracy of management’s estimate by comparing the results of management’s prior estimate to reversals to cumulative revenue that were recognized during the reporting period. We also tested the completeness and accuracy of the underlying data used by the Company to estimate the variable consideration and recalculated the Company’s calculation of the amount required to be constrained. |
Estimation of risk assurance liabilities | ||
Description of the Matter |
At December 31, 2020, the Company’s risk assurance liabilities totaled RMB 20 million. As explained in Note 2 to the consolidated financial statements, the Company provides risk assurance liabilities on the principal and accrued interest repayment of loans facilitated through the Company’s platform. The contingent loss arising from the obligation to make future payments is recognized when borrower default is probable and the amount of loss is estimable. The contingent loss is calculated based on the expected future payouts, adjusted for various qualitative factors that reflect, current conditions and reasonable and supportable forecasts of future economic conditions. These factors may include gross-domestic product rates, consumer price indexes, per capita consumption expenditure and other considerations. Auditing management’s estimation of risk assurance liabilities was complex and subjective due to the highly judgmental nature of the qualitative factors used in the measurement process and quantifying the impact of the selected qualitative factors on the risk assurance liabilities. These qualitative factors require management to make significant judgments which could significantly affect the amount of the estimation of risk assurance liabilities. | |
How We Addressed the Matter in Our Audit |
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s estimation of risk assurance liabilities. For example, we tested controls over management’s review of the risk assurance liabilities calculations, the significant assumptions and data inputs. To test the Company’s estimation of risk assurance liabilities, we performed audit procedures that included, among others, evaluating the methodology used and management’s selection of the qualitative factors and their impact on the estimate. We compared the selected qualitative factors to publicly available market information. We evaluated the appropriateness of the Company’s methodology and model to measure expected credit loss and evaluated management’s development, selection and weighting of the qualitative factors used in the expected credit loss model. In addition, we also involved valuation specialists to assist with these procedures. We assessed the historical accuracy of management’s estimate by comparing the results of management’s prior estimate of the estimated contingent loss amount of risk assurance liabilities to the historical payouts. We also tested the completeness and accuracy of the underlying data used by the Company to develop its estimate and recalculated the recorded amount. |
As of December 31, | ||||||||||||||||
Notes | 2019 | 2020 | ||||||||||||||
RMB | RMB | US$ | ||||||||||||||
ASSETS: |
||||||||||||||||
Current assets: |
||||||||||||||||
Cash and cash equivalents |
||||||||||||||||
Restricted cash and cash equivalents |
||||||||||||||||
Time deposits |
— | — | ||||||||||||||
Short-term investments |
— | |||||||||||||||
Short-term loan principal and financing service fee receivables (net of allowance of RMB |
3 | |||||||||||||||
Short-term finance lease receivables (net of allowance of RMB |
4 | |||||||||||||||
Short-term contract assets (net of allowance of RMB |
||||||||||||||||
Other current assets (net of allowance of RMB |
5 | |||||||||||||||
|
|
|
|
|
|
|||||||||||
Total current assets |
||||||||||||||||
|
|
|
|
|
|
As of December 31, | ||||||||||||||||
Notes | 2019 | 2020 | ||||||||||||||
RMB | RMB | US$ | ||||||||||||||
Non-current assets: |
||||||||||||||||
Long-term loan principal and financing service fee receivables (net of allowance of RMB |
3 | — | — | |||||||||||||
Long-term finance lease receivables (net of allowance of RMB |
4 | |||||||||||||||
Operating lease right-of-use |
||||||||||||||||
Investment in equity method investee (including amounts measured at fair value of RMB |
7 | |||||||||||||||
Long-term investments |
8 | |||||||||||||||
Property and equipment, net |
||||||||||||||||
Intangible assets |
||||||||||||||||
Long-term contract assets (net of allowance of RMB |
||||||||||||||||
Deferred tax assets |
16 | |||||||||||||||
Other non-current assets |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Total non-current assets |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
TOTAL ASSETS |
||||||||||||||||
|
|
|
|
|
|
As of December 31, | ||||||||||||||||
Notes | 2019 | 2020 | ||||||||||||||
RMB | RMB | US$ | ||||||||||||||
LIABILITIES AND EQUITY |
||||||||||||||||
Current liabilities: |
||||||||||||||||
Short-term borrowings and interest payables |
9 | — | — | |||||||||||||
Short-term lease liabilities |
6 | |||||||||||||||
Accrued expenses and other current liabilities |
10 | |||||||||||||||
Guarantee liabilities and risk assurance liabilities (including amounts of guarantee liabilities of RMB |
11 | |||||||||||||||
Income tax payable |
||||||||||||||||
Total current liabilities |
||||||||||||||||
Non-current liabilities: |
||||||||||||||||
Long-term borrowings and interest payables |
9 | — | ||||||||||||||
Convertible senior notes |
12 | |||||||||||||||
Deferred tax liabilities |
16 | |||||||||||||||
Long-term lease liabilities |
6 | |||||||||||||||
Total non-current liabilities |
||||||||||||||||
Total liabilities |
||||||||||||||||
As of December 31, | ||||||||||||||||
Notes | 2019 | 2020 | ||||||||||||||
RMB | RMB | US$ | ||||||||||||||
Commitments and contingencies |
21 | |||||||||||||||
Equity: |
||||||||||||||||
Class A Ordinary shares (US$ |
22 | |||||||||||||||
Class B Ordinary shares (US$ |
22 | |||||||||||||||
Treasury shares |
23 | ( |
) | ( |
) | ( |
) | |||||||||
Additional paid-in capital |
||||||||||||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ( |
) | ||||||||||
Retained earnings |
||||||||||||||||
Total Qudian Inc. shareholders’ equity |
||||||||||||||||
Non-controlling Interests |
— | |||||||||||||||
Total equity |
||||||||||||||||
TOTAL LIABILITIES AND EQUITY |
||||||||||||||||
For the years ended December 31, | ||||||||||||||||||||
Notes | 2018 | 2019 | 2020 | |||||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||||||
Revenues: |
||||||||||||||||||||
Financing income |
||||||||||||||||||||
Sales commission fee |
||||||||||||||||||||
Sales income |
||||||||||||||||||||
Penalty fee |
||||||||||||||||||||
Guarantee income |
— | — | ||||||||||||||||||
Loan facilitation income and other related income |
||||||||||||||||||||
Transaction services fee and other related income |
— | ( |
) | ( |
) | |||||||||||||||
Total revenues |
||||||||||||||||||||
Cost of revenues: |
||||||||||||||||||||
Cost of goods sold |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Cost of other revenues (including related party amounts of RMB |
13 | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
Total cost of revenues |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Operating expenses: |
||||||||||||||||||||
Sales and marketing (including related party amounts of RMB |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
General and administrative |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Research and development |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Changes in guarantee liabilities and risk assurance liabilities (including changes in guarantee liabilities amounts of RMB RMB - (US$ - for the year ended December 31, 2018, 2019 and 2020, respectively). |
( |
) | ( |
) | ||||||||||||||||
Provision for receivables and other assets |
14 | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
Total operating expenses |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||
Other operating income |
||||||||||||||||||||
Income from operations |
||||||||||||||||||||
Interest and investment income, net |
15 | |||||||||||||||||||
Loss from equity method investments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Foreign exchange gain/(loss), net |
( |
) | ( |
) | ( |
) | ||||||||||||||
Other income |
||||||||||||||||||||
Other expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Net income before income taxes |
||||||||||||||||||||
Income tax expenses |
16 | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
Net income |
||||||||||||||||||||
For the years ended December 31, | ||||||||||||||||||||
Notes | 2018 | 2019 | 2020 | |||||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||||||
Net income attributable to Qudian Inc.’s shareholders |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Earnings per share for Class A and Class B ordinary shares: |
||||||||||||||||||||
Basic |
17 | |||||||||||||||||||
Diluted |
17 | |||||||||||||||||||
Earnings per ADS (1 Class A ordinary share equals 1 ADSs): |
||||||||||||||||||||
Basic |
17 | |||||||||||||||||||
Diluted |
17 | |||||||||||||||||||
Weighted average number of Class A and Class B ordinary shares outstanding: |
||||||||||||||||||||
Basic |
17 | |||||||||||||||||||
Diluted |
17 | |||||||||||||||||||
Other comprehensive income/(loss) |
||||||||||||||||||||
Foreign currency translation adjustment |
( |
) | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive income |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive income attributable to Qudian Inc.’s shareholders |
||||||||||||||||||||
|
|
|
|
|
|
|
|
Class A and B Ordinary shares |
Treasury shares |
Additional paid-in capital |
Accumulated other comprehensive loss/foreign currency translation adjustment |
Retained earnings |
Total Qudian Inc. shareholders’ equity |
Non-controlling interests |
Total equity |
|||||||||||||||||||||||||||||
Number of Shares Outstanding |
Amount | |||||||||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | |||||||||||||||||||||||||||||
Balance at December 31, 2017 |
( |
) | ( |
) | — | |||||||||||||||||||||||||||||||
Adjustments due to the adoption of Topic 606 |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Repurchase of ordinary shares |
( |
) | — | ( |
) | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||
Canceled share s |
— | ( |
) | ( |
) | — | — | — | — | — | ||||||||||||||||||||||||||
Vesting of share options held by |
||||||||||||||||||||||||||||||||||||
Share Based Payment Trust |
— | ( |
) | — | — | — | — | — | ||||||||||||||||||||||||||||
Exercise of share options |
— | — | — | — | ||||||||||||||||||||||||||||||||
Share-based compensation (Note 20) |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Other comprehensive income |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2018 |
( |
) | ( |
) | — | |||||||||||||||||||||||||||||||
Repurchase of ordinary shares |
( |
) | — | ( |
) | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||
Canceled shares |
— | ( |
) | ( |
) | — | — | — | — | — | ||||||||||||||||||||||||||
Vesting of share options held by |
||||||||||||||||||||||||||||||||||||
Share Based Payment Trust |
— | ( |
) | — | — | — | — | — | ||||||||||||||||||||||||||||
Exercise of share options |
— | — | — | — | ||||||||||||||||||||||||||||||||
Share-based compensation (Note 20) |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Purchase of capped call option |
— | — | — | ( |
) | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2019 |
( |
) | ( |
) | — | |||||||||||||||||||||||||||||||
Adjustments due to the adoption of ASC 326 |
— | — | — | — | — | ( |
) | ( |
) | — | ( |
) | ||||||||||||||||||||||||
Repurchase of ordinary shares |
( |
) | — | ( |
) | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||
Issuance of shares by the Company’s subsidiary |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Vesting of share options held by |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Share Based Payment Trust |
— | ( |
) | — | — | — | — | — | ||||||||||||||||||||||||||||
Exercise of share options |
( |
) | — | — | — | |||||||||||||||||||||||||||||||
Share-based compensation (Note 20) |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | ( |
) | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2020 |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Cash flows from operating activities: |
||||||||||||||||
Net income |
||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||||
Provision for receivables and other assets |
||||||||||||||||
Depreciation and amortization |
||||||||||||||||
Amortization of lease right-of-use |
— | |||||||||||||||
Loss on disposal of property and equipment |
— | — | ||||||||||||||
Accrued interest of convertible senior notes |
— | |||||||||||||||
Income from the repurchase of convertible senior notes |
— | — | ( |
) | ( |
) | ||||||||||
Share-based compensation expense |
||||||||||||||||
Share of loss from equity method investment |
||||||||||||||||
Unrealized investment income of short-term investment |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Foreign exchange (gain)/ loss, net |
( |
) | ||||||||||||||
Changes in operating assets and liabilities: |
||||||||||||||||
Financing service fee receivables |
||||||||||||||||
Finance lease receivables |
— | — | — | |||||||||||||
Contract assets |
( |
) | ( |
) | ||||||||||||
Receivables from related parties |
— | — | ||||||||||||||
Deferred tax assets and liabilities |
( |
) | ||||||||||||||
Other current and non-current assets |
( |
) | ( |
) | ||||||||||||
Interest payables |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Payables to related parties |
( |
) | — | — | — | |||||||||||
Guarantee liabilities |
( |
) | ( |
) | ( |
) | ||||||||||
Risk assurance liabilities |
— | ( |
) | ( |
) | |||||||||||
Operating lease liabilities |
— | ( |
) | ( |
) | ( |
) | |||||||||
Other current and non-current liabilities |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by operating activities |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash flows from investing activities: |
||||||||||||||||
Proceeds from redemption of short-term investments |
||||||||||||||||
Proceeds from redemption of long-term investments |
— | — | ||||||||||||||
Proceeds from collection of loan principal |
||||||||||||||||
Principal collection of finance lease receivables |
— | |||||||||||||||
Proceeds from collection of loan principal due from related parties |
— | |||||||||||||||
Proceeds from disposal of long-term assets |
— | |||||||||||||||
Purchases of short-term investments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Purchases of property and equipment, intangible assets and land lease right of use asset |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Purchases of long-term investments |
— | ( |
) | ( |
) | ( |
) | |||||||||
Purchases of equity method investment |
— | ( |
) | ( |
) | ( |
) | |||||||||
Payments to originate loan principal |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Purchase of current assets held for lease |
( |
) | — | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash used in investing activities |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Cash flows from financing activities: |
||||||||||||||||
Proceeds from deposits to funding |
— | — | ||||||||||||||
Proceeds from borrowings |
||||||||||||||||
Proceeds from convertible senior notes, net of issuance cost |
— | — | — | |||||||||||||
Proceeds from related parties |
— | — | — | |||||||||||||
Proceeds from issuance of shares of subsidiary |
— | — | ||||||||||||||
Refund of guarantee deposits from Funding Partners |
— | — | — | |||||||||||||
Proceeds from exercise of share options |
||||||||||||||||
Payments to related parties |
( |
) | — | — | — | |||||||||||
Repayment of borrowings |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Repurchase of ordinary shares |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Repurchase of convertible senior notes |
— | — | ( |
) | ( |
) | ||||||||||
Payments for interest of convertible senior notes |
— | — | ( |
) | ( |
) | ||||||||||
Payments for IPO expenditure |
( |
) | — | — | — | |||||||||||
Purchase of capped call option |
— | ( |
) | — | — | |||||||||||
Payments of deposits to funding |
— | ( |
) | — | — | |||||||||||
Payments of guarantee deposits to Funding Partners |
( |
) | — | — | — | |||||||||||
Net cash used in financing activities |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Effect of exchange rate changes |
( |
) | ( |
) | ( |
) | ||||||||||
Net increase/(decrease) in cash and cash equivalents, and restricted cash and cash equivalents |
( |
) | ( |
) | ( |
) | ||||||||||
Cash and cash equivalents, and restricted cash and cash equivalents at beginning of the year |
||||||||||||||||
Cash and cash equivalents, and restricted cash and cash equivalents at end of the year |
||||||||||||||||
Reconciliation of cash and cash equivalents, and restricted cash and cash equivalents to the consolidated balance sheet |
||||||||||||||||
Cash and cash equivalents |
||||||||||||||||
Restricted cash and cash equivalents |
||||||||||||||||
Total cash and cash equivalents, and restricted cash and cash equivalents |
||||||||||||||||
Supplemental disclosures of cash flow information: |
||||||||||||||||
Income taxes paid, net of refunds |
||||||||||||||||
Interest expense paid |
Entity |
Date of incorporation |
Place of incorporation |
Percentage of legal ownership by the Company |
Principal activities | ||||||
Subsidiaries |
||||||||||
QD Data Limited (“Qudian HK”) |
||||||||||
QD Technologies Limited (“Qudian BVI”) |
||||||||||
Qufenqi (Ganzhou) Information Technology Co., Ltd. (“Qufenqi Ganzhou”) |
||||||||||
Qudian Inc. Equity Incentive Trust (“Share Based Payment Trust”) |
||||||||||
Qufenqi (HK) Limited (“Qufenqi HK”) |
||||||||||
Xiamen Qudian Financial Lease Co., Ltd. (“Xiamen Financial Lease”) |
||||||||||
Xiamen Happy Time Technology Co., Ltd. (“Xiamen Happy Time”) |
||||||||||
Qu Plus Plus Inc. (“Qu Plus Plus”) |
||||||||||
Qu Plus Plus Limited (“Qu Plus Plus BVI”) |
||||||||||
Qu Plus HK (Limited) (“Qu Plus HK”) |
||||||||||
Xiamen Youxiang Time Technology Service Co., Ltd. (“Xiamen Youxiang Time”) |
||||||||||
Xiamen Xincheng Youda Financing Guarantee Co., Ltd. (“Xiamen Xincheng Youda”) |
Entity |
Date of incorporation |
Place of incorporation |
Percentage of legal ownership by the Company |
Principal activities | ||||
VIEs |
||||||||
Beijing Happy Time Technology Development Co., Ltd. (“Beijing Happy Time”) |
||||||||
Ganzhou Qudian Technology Co., Ltd. (“Ganzhou Qudian”) |
||||||||
Hunan Qudian Technology Development Co., Ltd. (“Hunan Qudian”) |
||||||||
Xiamen Qudian Technology Co., Ltd. (“Xiamen Qudian”) |
||||||||
Xiamen Weipujia Technology Co., Ltd. (“Xiamen Weipujia”) |
||||||||
Xiamen Qu Plus Plus Technology Development Co., Ltd. (“Xiamen Qu Plus Plus”) |
As of December 31, | ||||||||||||
2019 | 2020 | |||||||||||
RMB | RMB | US$ | ||||||||||
Short-term loan principal and financing service fee receivables |
||||||||||||
Other current assets |
||||||||||||
|
|
|
|
|
|
|||||||
Total current assets |
||||||||||||
|
|
|
|
|
|
|||||||
Total non-current assets |
||||||||||||
|
|
|
|
|
|
|||||||
Total assets |
||||||||||||
|
|
|
|
|
|
|||||||
Total current liabilities |
||||||||||||
Total non-current liabilities |
||||||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
||||||||||||
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Revenues |
||||||||||||||||
Net income |
For the years ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Net cash provided by operating activities |
||||||||||||||||
Net cash used in investing activities |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net cash used in financing activities |
( |
) | ( |
) | ( |
) | ( |
) |
• |
Identify the contract(s) with a customer; |
• |
Identify the performance obligations in the contract; |
• |
Determine the transaction price; |
• |
Allocate the transaction price to the performance obligations in the contract; and |
• |
Recognize revenue when (or as) the entity satisfies a performance obligation. |
Category | Estimated Useful Life |
Estimated Residual |
||||
Office and electronic equipment |
||||||
Motor vehicles |
||||||
Leasehold improvements |
• |
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 |
As of December 31, | ||||||||||||
2019 | 2020 | |||||||||||
RMB | RMB | US$ | ||||||||||
Short-term loan principal and financing service fee receivables: |
||||||||||||
Loan principal and financing service fee receivables |
||||||||||||
Less: allowance for loan principal and financing service fee receivables |
( |
) | ( |
) | ( |
) | ||||||
Short-term loan principal and financing service fee receivables, net |
||||||||||||
Long-term loan principal and financing service fee receivables: |
||||||||||||
Loan principal and financing service fee receivables |
— | — | ||||||||||
Less: allowance for loan principal and financing service fee receivables |
( |
) | — | — | ||||||||
Long-term loan principal and financing service fee receivables, net |
— | — | ||||||||||
As of December 31, | ||||||||||||
2019 | 2020 | |||||||||||
RMB | RMB | US$ | ||||||||||
Nonaccrual loan principal |
||||||||||||
Less: allowance for nonaccrual loan principal |
( |
) | ( |
) | ( |
) | ||||||
Nonaccrual loan principal, net |
||||||||||||
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 |
||||||||||||||||||||||||||||||||||||
-Financing service fee receivables |
— | — | — | |||||||||||||||||||||||||||||||||
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 |
||||||||||||||||||||||||||||||||||||||||
-Financing service fee receivables |
— | — | — | |||||||||||||||||||||||||||||||||||||
As of December 31, | ||||||||||||||||||||||||||||
2019 | 2020 | |||||||||||||||||||||||||||
Loan principal | Financing service fee receivables |
Total | Loan principal | Financing service fee receivables |
Total | |||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | US$ | ||||||||||||||||||||||
Balance at the beginning of the year |
||||||||||||||||||||||||||||
Adjustment due to the adoption of ASC 326 |
— | — | — | — | ||||||||||||||||||||||||
Additions/ (reverse) |
( |
) | ||||||||||||||||||||||||||
Charge-offs |
( |
) | — | ( |
) | ( |
) | — | ( |
) | ( |
) | ||||||||||||||||
Balance at the end of the year |
||||||||||||||||||||||||||||
Evaluated for impairment on a portfolio basis |
||||||||||||||||||||||||||||
As of December 31, | ||||||||||||
2019 | 2020 | |||||||||||
RMB | RMB | US$ | ||||||||||
Gross investment in finance lease receivables |
||||||||||||
Less: unearned income |
( |
) | ( |
) | ( |
) | ||||||
Net investment in finance lease receivables |
||||||||||||
Less: allowance for finance lease receivables |
( |
) | ( |
) | ( |
) | ||||||
Finance lease receivables, net |
||||||||||||
As of December 31, | ||||||||||||
2019 | 2020 | |||||||||||
RMB | RMB | US$ | ||||||||||
Nonaccrual finance lease receivables |
||||||||||||
Less: allowance for nonaccrual financial lease receivables |
( |
) | ( |
) | ( |
) | ||||||
Nonaccrual finance lease receivables, net |
||||||||||||
1-30 days |
31-60 days |
61-90 days |
90-120 days |
120-150 days |
150-180 days |
Total past due | Current | Total | ||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | ||||||||||||||||||||||||||||
Finance lease receivables |
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-30 days |
31-60 days |
61-90 days |
90-120 days |
120-150 days |
150-180 days |
Total past due | Current | Total | Total | |||||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | US$ | |||||||||||||||||||||||||||||||
Finance lease receivables |
||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 1 year |
1 – 2 years | 2 – 3 years | 3 – 4 years | Total | ||||||||||||||||
RMB | RMB | RMB | RMB | RMB | ||||||||||||||||
As of December 31, 2019 |
||||||||||||||||||||
Finance lease receivables |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Less than 1 year |
1 – 2 years | 2 – 3 years | 3 – 4 years | Total | ||||||||||||||||
RMB | RMB | RMB | RMB | RMB | ||||||||||||||||
As of December 31, 2020 |
||||||||||||||||||||
Finance lease receivables |
— | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Less than 1 year |
1 – 2 years | 2 – 3 years | 3 – 4 years | Total | ||||||||||||||||
US$ | US$ | US$ | US$ | US$ | ||||||||||||||||
As of December 31, 2020 |
||||||||||||||||||||
Finance lease receivables |
— | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
As of December 31, | ||||||||||||
2019 | 2020 | |||||||||||
RMB | RMB | US$ | ||||||||||
Balance at the beginning of the year |
||||||||||||
Adjustment due to the adoption of ASC 326 |
— | |||||||||||
Additions/(reverse) |
( |
) | ( |
) | ||||||||
Charge-offs |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Balance at the end of the year |
||||||||||||
|
|
|
|
|
|
|||||||
Evaluated for impairment on a portfolio basis |
||||||||||||
|
|
|
|
|
|
As of December 31, | ||||||||||||||||
2019 | 2020 | |||||||||||||||
RMB | RMB | US$ | ||||||||||||||
Prepaid expenses |
||||||||||||||||
Inventory |
||||||||||||||||
Deposits in trust protection fund |
5 .1 |
|||||||||||||||
Guarantee deposits held by Funding Partners |
||||||||||||||||
Receivables from third party payment service providers |
5 .2 |
|||||||||||||||
Receivables from Funding Partners and service providers |
||||||||||||||||
Other account receivables |
||||||||||||||||
Others |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Total |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
Less: Allowance for other current assets |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Financing income |
||||||||||||||||
Sales income |
As of December 31, | ||||||||||||
2019 | 2020 | |||||||||||
RMB | RMB | US$ | ||||||||||
Year ending December 31, |
||||||||||||
1 year (Including 1 year) |
||||||||||||
1 year to 2 years (Including 2 years) |
||||||||||||
2 years to 3 years (Including 3 years) |
||||||||||||
Over 3 years |
— | |||||||||||
|
|
|
|
|
|
|||||||
Total lease payment |
||||||||||||
|
|
|
|
|
|
|||||||
Less: imputed interest |
||||||||||||
|
|
|
|
|
|
|||||||
Present value of lease liabilities |
||||||||||||
|
|
|
|
|
|
For the years ended December 31, |
||||||||||||
2019 | 2020 | |||||||||||
RMB | RMB | US$ | ||||||||||
Operating cash flows used in operating leases |
||||||||||||
ROU assets obtained in exchange for new operating lease liabilities |
As of December 31, | ||||||||||||||||
Funding Partners |
Fixed annual rate (%) |
Term |
2019 | 2020 | ||||||||||||
RMB | RMB | US$ | ||||||||||||||
Trust beneficiaries |
||||||||||||||||
Banks |
||||||||||||||||
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
As of December 31, | ||||||||||||||||
Floating annual rate (%) |
Term |
2019 | 2020 | |||||||||||||
RMB | RMB | US$ | ||||||||||||||
Banks |
LPR + |
— | ||||||||||||||
|
|
|
|
|
|
Less than 1 year |
1 – 2 years | 2 – 3 years | 3 – 4 years | 4 – 5 years | Greater than 5 years |
Total | ||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | RMB | RMB | ||||||||||||||||||||||
Long-term borrowings and interest payables (RMB) |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Long-term borrowings and interest payables (US$) |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, | ||||||||||||
2019 | 2020 | |||||||||||
RMB | RMB | US$ | ||||||||||
Accrued payroll |
||||||||||||
Tax payables |
||||||||||||
Payable to suppliers |
||||||||||||
Payable to external service providers |
||||||||||||
Payable to funding partner |
||||||||||||
Others |
||||||||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
As of December 31, | ||||||||||||
2019 | 2020 | |||||||||||
RMB | RMB | US$ | ||||||||||
Balance at beginning of the year |
||||||||||||
Fair value of guarantee liabilities upon the inception of new loans |
||||||||||||
Performed guarantee |
( |
) | ( |
) | ( |
) | ||||||
Change in fair value of guarantee liabilities |
||||||||||||
|
|
|
|
|
|
|||||||
Balance at end of the year |
||||||||||||
|
|
|
|
|
|
|
|
As of December 31, | | |
2019 | ||||
RMB | ||||
Balance at beginning of the year |
— | |||
Fair value of risk assurance liabilities upon the inception of new loans |
||||
Payouts |
( |
) | ||
Change in fair value of risk assurance liabilities |
||||
|
|
|||
Balance at end of the year |
||||
|
|
As of December 31, 2020 |
||||||||||||||||
Contingent |
Non-contingent |
Total |
||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Balance at the beginning of the period |
||||||||||||||||
Adjustment due to the adoption of ASC 326 |
— |
|||||||||||||||
Fair value of risk assurance liabilities upon the inception of new loans |
— |
|||||||||||||||
Expected credit loss upon the inception of new loans |
— |
|||||||||||||||
Recognized as guarantee income |
— |
( |
) |
( |
) |
( |
) | |||||||||
Payouts |
( |
) |
— |
( |
) |
( |
) | |||||||||
Change in fair value of risk assurance liabilities |
( |
) |
— |
( |
) |
( |
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at end of the year |
||||||||||||||||
|
|
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Interest expenses of borrowings |
||||||||||||||||
Other costs |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Provision for loan principal and financing service fee receivables |
||||||||||||||||
Provision for finance lease receivables |
( |
) | ( |
) | ||||||||||||
Provision for contract assets |
— | — | ( |
) | ( |
) | ||||||||||
Provision for other current and non-current assets |
||||||||||||||||
Provision for investment in equity method investee |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Unrealized investment income of short-term investments |
— | — | ||||||||||||||
Realized investment income of short-term investments |
||||||||||||||||
Investment income of long-term investments |
— | — | ||||||||||||||
Interest income |
||||||||||||||||
Income from the repurchase of convertible senior notes |
— | — | ||||||||||||||
Interest expense of convertible senior notes |
— | ( |
) | ( |
) | ( |
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Current income tax expenses |
||||||||||||||||
Deferred income tax expenses |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total income tax expenses |
||||||||||||||||
|
|
|
|
|
|
|
|
As of December 31, | ||||||||||||
2019 | 2020 | |||||||||||
RMB | RMB | US$ | ||||||||||
Non-current deferred tax assets |
||||||||||||
Allowance for loan principal and financing service fee receivables |
||||||||||||
Allowance for finance lease receivable |
||||||||||||
Allowance for other current assets |
||||||||||||
Guarantee liabilities |
||||||||||||
Risk assurance liabilities |
||||||||||||
Share-based compensation |
||||||||||||
Investment loss under equity method |
— | — | ||||||||||
Lease liabilities |
— | |||||||||||
Net operating loss carry forwards |
||||||||||||
Less: valuation allowance |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total non-current deferred tax assets net of valuation allowance |
||||||||||||
|
|
|
|
|
|
|||||||
Net non-current deferred tax assets |
||||||||||||
|
|
|
|
|
|
|||||||
Non-current deferred tax liabilities |
||||||||||||
Contract assets |
( |
) | ( |
) | ( |
) | ||||||
Right-of-use assets |
— | ( |
) | ( |
) | |||||||
Fair value change of short-term investment |
— | ( |
) | ( |
) | |||||||
Unallocated revenue |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total non-current deferred tax liabilities |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net non-current deferred tax liabilities |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Profit before income tax |
||||||||||||||||
PRC statutory income tax rate |
% | % | % | % | ||||||||||||
Income tax at statutory tax rate |
||||||||||||||||
Effect of different tax rates |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Exempt income |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Expenses not deductible for tax purposes |
||||||||||||||||
Adjustment on current income tax of the previous periods |
( |
) | ||||||||||||||
Financial subsidy |
( |
) | — | — | — | |||||||||||
Deferred only adjustment |
— | |||||||||||||||
Research and development super-deduction |
— | ( |
) | ( |
) | ( |
) | |||||||||
Tax rate change |
( |
) | ( |
) | ( |
) | ||||||||||
Changes in valuation allowance |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income tax expenses |
||||||||||||||||
|
|
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||
2019 | 2020 | |||||||||||
RMB |
RMB |
US$ |
||||||||||
Balance at beginning of the year |
— | |||||||||||
Additions |
||||||||||||
Decreases |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Balance at end of the year |
— | |||||||||||
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||||||||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | US$ | RMB | US$ | |||||||||||||||||||||||||
Class A | Class B | Class A | Class B | Class A | Class A | Class B | Class B | |||||||||||||||||||||||||
Earnings per share –basic: |
||||||||||||||||||||||||||||||||
Numerator: |
||||||||||||||||||||||||||||||||
Allocation of net income attributable to Qudian Inc. for basic computation |
||||||||||||||||||||||||||||||||
Millions of Shares (denominator): |
||||||||||||||||||||||||||||||||
Weighted average number of ordinary share outstanding – basic |
||||||||||||||||||||||||||||||||
Denominator used for basic earnings per share |
||||||||||||||||||||||||||||||||
Earnings per share – basic |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||||||||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||||||||||||||||||
RMB | RMB | RMB | RMB | RMB | US$ | RMB | US$ | |||||||||||||||||||||||||
Class A | Class B | Class A | Class B | Class A | Class A | Class B | Class B | |||||||||||||||||||||||||
Earnings per share – diluted: |
||||||||||||||||||||||||||||||||
Numerator: |
||||||||||||||||||||||||||||||||
Allocation of Interest charges applicable to the convertible senior notes |
— | — | ||||||||||||||||||||||||||||||
Allocation of net income attributable to Qudian Inc. for diluted computation |
||||||||||||||||||||||||||||||||
Reallocation of interest charges applicable to the convertible senior notes and net income attributable to Qudian Inc. as a result of conversion of Class B to Class A shares |
— | — | — | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Allocation of net income attributable to Qudian Inc |
||||||||||||||||||||||||||||||||
Millions of Shares (denominator): |
||||||||||||||||||||||||||||||||
Weighted average number of ordinary share outstanding– basic |
||||||||||||||||||||||||||||||||
Conversion of Class B to Class A ordinary shares |
— | — | — | — | ||||||||||||||||||||||||||||
Adjustments for dilutive share options |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Conversion of the Convertible Senior Notes to Class A ordinary share |
— | — | — | — | — | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Denominator used for diluted earnings per share |
||||||||||||||||||||||||||||||||
Earnings per share – diluted |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Class A | Class A | Class A | Class A | |||||||||||||
Earnings per share – ADS: |
||||||||||||||||
Denominator used for earnings per ADS – basic |
||||||||||||||||
Denominator used for earnings per ADS – diluted |
||||||||||||||||
Earnings per ADS – basic |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings per ADS – diluted |
||||||||||||||||
|
|
|
|
|
|
|
|
As of December 31, 2019 | ||||||||||||||||
Active market (Level 1) |
Observable input (Level 2) |
Non-observable input (Level 3) |
Total | |||||||||||||
RMB | RMB | RMB | RMB | |||||||||||||
Liabilities: |
||||||||||||||||
Guarantee liabilities |
— | — | ||||||||||||||
As of December 31, 2020 | ||||||||||||||||
Active market (Level 1) |
Observable input (Level 2) |
Non-observable input (Level 3) |
Total | |||||||||||||
RMB | RMB | RMB | RMB | |||||||||||||
Assets: |
||||||||||||||||
Short-term investments |
— | — | ||||||||||||||
Investment in equity method investee under fair value option |
— | — | ||||||||||||||
Liabilities: |
||||||||||||||||
Guarantee liabilities |
— | — | ||||||||||||||
As of December 31, 2020 | ||||||||||||||||
Active market (Level 1) |
Observable input (Level 2) |
Non-observable input (Level 3) |
Total | |||||||||||||
US$ | US$ | US$ | US$ | |||||||||||||
Assets: |
||||||||||||||||
Short-term investments |
— | — | ||||||||||||||
Investment in equity method investee under fair value option |
— | — | ||||||||||||||
Liabilities: |
||||||||||||||||
Guarantee liabilities |
— | — | ||||||||||||||
Range of Inputs Weighted - Average As of December 31, | ||||||
Financial Liabilities |
Unobservable Input |
2019 | 2020 | |||
Guarantee liabilities |
Discount rates | |||||
Expected delinquency rates |
Name of related parties |
Relationship with the Company | |
Luo Min |
||
Alipay.com Co., Ltd. |
||
Zhima Credit Management Co., Ltd. |
||
Ant Zhixin (Hangzhou) Information Technology Co., Ltd. |
||
Guosheng Financial Holding Inc. |
||
Guosheng Securities Asset Management Co., Ltd. |
||
Alibaba Cloud Computing Co., Ltd. |
||
Key management and their immediate families |
For the years ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Cost of revenues |
||||||||||||||||
Alipay.com Co., Ltd. |
— | — | — | |||||||||||||
Zhima Credit Management Co., Ltd. |
— | — | — | |||||||||||||
Alibaba Cloud Computing Co., Ltd. |
— | — | — | |||||||||||||
Ant Zhixin (Hangzhou) Information Technology Co., Ltd. |
— | — | — | |||||||||||||
Guosheng Financial Holding Inc. |
— | — | — | |||||||||||||
Guosheng Securities Asset Management Co., Ltd. |
— | — | — | |||||||||||||
— | — | — | ||||||||||||||
Sales and marketing Alipay.com Co., Ltd. |
— | — | — | |||||||||||||
Number of shares | Weighted average exercise price |
Weighted average grant date fair value |
Weighted average remaining contractual term |
Aggregated intrinsic value |
||||||||||||||||
RMB | RMB | Years | RMB | |||||||||||||||||
Balance, December 31, 2018 |
— | |||||||||||||||||||
Granted |
— | |||||||||||||||||||
Exercised |
( |
) | — | |||||||||||||||||
Forfeited |
( |
) | — | |||||||||||||||||
Balance, December 31, 2019 |
— | |||||||||||||||||||
Granted |
— | |||||||||||||||||||
Exercised |
( |
) | — | |||||||||||||||||
Forfeited |
( |
) | — | |||||||||||||||||
Balance, December 31, 2020 |
— | |||||||||||||||||||
Vested and expected to vest as of December 31, 2020 |
— | |||||||||||||||||||
Exercisable, December 31, 2020 |
— | |||||||||||||||||||
For the years ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Sales and marketing |
||||||||||||||||
General and administrative |
||||||||||||||||
Research and development |
||||||||||||||||
For the years ended December 31, | ||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||
RMB | RMB | RMB | US$ | |||||||||||||
Revenues: |
||||||||||||||||
Installment credit services |
||||||||||||||||
– Financing income |
||||||||||||||||
– Sales commission fee |
||||||||||||||||
– Penalty fee |
||||||||||||||||
– Sales income |
||||||||||||||||
– Guarantee income |
— |
— |
||||||||||||||
– Loan facilitation income |
( |
( |
||||||||||||||
– Post-origination services fee |
||||||||||||||||
– Transaction services fee |
— |
( |
( |
|||||||||||||
E-commerce sales services |
— | — | ||||||||||||||
– Sales income |
— |
— |
||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total consolidated revenues |
||||||||||||||||
Income from operations: |
||||||||||||||||
Installment credit services |
||||||||||||||||
E-commerce sales services |
— | — | ( |
( |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total segment income from operations |
||||||||||||||||
Unallocated expenses |
( |
) | ( |
) | ( |
) | ( |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Total consolidated income from operations |
||||||||||||||||
Total other Income/(expense), net |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income before income taxes |
||||||||||||||||
|
|
|
|
|
|
|
|
As of December 31, | ||||||||||||
2019 | 2020 | |||||||||||
RMB | RMB | US$ | ||||||||||
ASSETS: |
||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
||||||||||||
Short-term amounts due from related parties |
||||||||||||
Other current assets |
— | — | ||||||||||
|
|
|
|
|
|
|||||||
Total current assets |
||||||||||||
|
|
|
|
|
|
|||||||
Non-current assets: |
||||||||||||
Investments in subsidiaries, VIEs and VIEs’ subsidiaries |
||||||||||||
|
|
|
|
|
|
|||||||
Total non-current assets |
||||||||||||
|
|
|
|
|
|
|||||||
TOTAL ASSETS |
||||||||||||
|
|
|
|
|
|
As of December 31, | ||||||||||||
2019 | 2020 | |||||||||||
RMB | RMB | US$ | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY: |
||||||||||||
Current liabilities: |
||||||||||||
Accrued expenses and other current liabilities |
||||||||||||
Short-term amounts due to related parties |
||||||||||||
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Commitments and contingencies |
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Shareholders’ equity |
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Share-based compensation expense |
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General and administrative |
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Interest and investment income, net |
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Other non-interest income |
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Foreign exchange loss, net |
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Income from the repurchase of convertible senior notes |
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Payable to employees |
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Exhibit 4.44
WLM KIDS INC.
2021 SHARE INCENTIVE PLAN
2021
1. Purposes of the Plan. The purposes of this Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentives to the CEO, other selected Employees, Directors, and Consultants and to promote the success of the Companys business by offering these individuals an opportunity to acquire a proprietary interest in the success of the Company, or to increase this interest by permitting them to acquire Shares of the Company. The Plan provides both for the direct award or sale of Shares and for the grant of Awards to purchase Shares. Awards granted under the Plan may be a Share Purchase Right, a Restricted Share, an Option (Incentive Stock Options or Nonqualified Stock Options), a restricted share unit or a Share Award, as determined by the Administrator at the time of grant. Except otherwise provided in this Plan or the Share Award Agreement, Awards and Ordinary Shares acquired by the Awardees based on the Awards, directly or indirectly, in accordance with this Plan shall have no voting rights. All outstanding Awards granted prior to the date on which this Plan is adopted by the Companys Board shall be governed by this Plan.
2. Definitions. For the purposes of this Plan, the following terms shall have the following meanings:
(a) Acquisition Date means, with respect to Shares, the date on which the Shares are sold under the Plan, the Shares are delivered upon exercise of an Award or the Shares are delivered in connection with a Share Award as the case may require.
(b) Administrator means the Chief Executive Officer of the Company or such delegates as shall be administering the Plan in accordance with Section 4 hereof.
(c) Affiliate means, with respect to any Person, any Person which, directly or indirectly, controls, is controlled by or is under common control with such Person.
1
(d) Applicable Law means any applicable legal requirements relating to the administration of and the issuance of securities under equity securities-based compensation plans, including, without limitation, the requirements of laws of the PRC or the Cayman Islands, and the requirements of any stock exchange or quotation system upon which the Shares may then be listed or quoted and the applicable laws of any other country or jurisdiction where Awards are granted under the Plan or where the Awardees are domiciled or resident for tax purposes. For all purposes of this Plan, references to statutes and regulations shall be deemed to include any successor statutes or regulations, to the extent reasonably appropriate as determined by the Administrator.
(e) Articles means the Companys Amended and Restated Memorandum and Articles of Association, as amended from time to time.
(f) Award means a Share Purchase Right, a Restricted Share, an Option, a restricted share unit or a Share Award as the case may require.
(g) Award Agreement means a written or electronic agreement between the Company and an Awardee, the form(s) of which shall be approved from time to time by the Administrator, evidencing the terms and conditions of an individual Award granted under the Plan, and includes any documents attached to or incorporated into the Award Agreement, including, but not limited to, a notice of Award grant and a form of exercise notice. The Award Agreement shall be subject to the terms and conditions of the Plan.
(h) Awarded Shares means the Shares subject to an Award.
(i) Awardee means the holder of an outstanding Award granted under the Plan.
(j) Board means the Board of Directors of the Company.
2
(k) Cause means (i) a Service Provider has been negligent in the discharge of his or her duties to the Company or any Affiliate, has refused to perform stated or assigned duties or is incompetent in or (other than by reason of a disability or analogous condition) incapable of performing those duties; (ii) a Service Provider has been dishonest or committed or engaged in an act of theft, embezzlement or fraud, a breach of confidentiality, an unauthorized disclosure or use of inside information, customer lists, trade secrets or other confidential information; (iii) a Service Provider has breached a fiduciary duty, or willfully and materially violated any other duty, law, rule, regulation or policy of the Company or any of its Affiliates; or has been convicted of, or pled guilty or nolo contendere to, a felony or misdemeanor or equivalent in any jurisdiction (other than minor traffic violations or similar offenses); (iv) a Service Provider has materially breached any of the provisions of any agreement (including but not limited to the employment agreement, invention assignment agreement, non-compete agreement and confidentiality agreement) or any understanding with the Company or any of its Affiliates; (v) a Service Provider has engaged in unfair competition with, or otherwise acted intentionally in a manner injurious to the reputation, business or assets of, the Company or any of its Affiliates; (vi) a Service Provider has improperly induced a vendor or customer to break or terminate any contract with the Company or any of its Affiliates or induced a principal for whom the Company or any Affiliate acts as agent to terminate such agency relationship; or (vii) any of the circumstances set forth under Article 39 of the Labor Contract Law of the PRC, in each case as determined in good faith by the Administrator.
(l) Change in Control means the occurrence of any of the following events:
any person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Companys then outstanding voting securities; or
3
the consummation of the sale, lease, or disposition by the Company of all or substantially all of the Companys assets; or
the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.
Anything in the foregoing to the contrary notwithstanding, a transaction shall not constitute a Change in Control if its sole purpose is to change the legal jurisdiction of the Companys incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Companys securities immediately before such transaction. In addition, a sale by the Company of its securities in a transaction, the primary purpose of which is to raise capital for the Companys operations and business activities including, without limitation, an initial public offering of Shares under the Securities Act or other Applicable Law, shall not constitute a Change in Control.
(m) Code means the U.S. Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder. References to IRC Section shall mean a section number of the Internal Revenue Code of 1986.
(n) Company means WLM Kids Inc., a company currently organized under the laws of the Cayman Islands, or any successor corporation thereto.
4
(o) Consultant means any natural person, including an advisor, who is engaged by the Company, or any Parent, Subsidiary, Affiliate or variable interest entity whose financial statements are intended to be consolidated with the Company, any Parent, Subsidiary or Affiliate to render bona fide consulting or advisory services to such entity and who is compensated for the services, and any other persons including former employees who, in the sole opinion of the Administrator, have contributed or will contribute to the Company, Parent, Subsidiaries or Affiliate, provided that the term Consultant, does not include (i) Employees or (ii) securities promoters.
(p) Date of Grant means the date an Award is granted to an Awardee in accordance with Section 14 hereof.
(q) Director means a member of the Board.
(r) Disability means total and permanent disability as defined in Section 22(e)(3) of the Code.
(s) Employee means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary. A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or any Parent or Subsidiary, including sick leave, military leave, or any other personal leave, or (ii) transfers between locations of the Company or between the Company or any Parent or Subsidiary, or any successor. For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three (3) months following the 91st day of such leave, any Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonqualified Stock Option. For the avoidance of doubt, neither service as a Director nor payment of a directors fee by the Company or any Parent or Subsidiary shall be sufficient to constitute employment by the Company or any Parent or Subsidiary.
5
(t) Exercise Price means the amount for which one Share may be purchased upon exercise of an Award, as specified by the Administrator in the applicable Award Agreement in accordance with Sections 6(d) and 8(b) hereof.
(u) Exchange Act means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(v) Fair Market Value means, as of any date, the value of the Shares determined as follows:
if the Shares are listed on any established stock exchange or a national market system, including, without limitation, The New York Stock Exchange, The Nasdaq Global Market or The Nasdaq Capital Market of The Nasdaq Stock Market, the Hong Kong Stock Exchange and the London Stock Exchange (Main Listing or Alternative Investment Market), the Fair Market Value shall be the closing sales price for the Shares (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
if the Shares are regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value shall be the mean of the high bid and low asked prices for the Shares on the day of determination, as reported in The Wall Street Journal or any other source as the Administrator deems reliable; or
in the absence of an established market for the Shares, the Fair Market Value thereof shall be determined in good faith by the Administrator in accordance with the acceptable valuation methodology in accordance with U.S. Treasury Regulations issued under IRC Section 409A, and as amended from time to time.
6
(w) Hong Kong means the Hong Kong Special Administrative Region of the Peoples Republic of China.
(x) Hong Kong Stock Exchange means The Stock Exchange of Hong Kong Limited.
(y) Incentive Stock Option means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code, as designated in the applicable Award Agreement.
(z) HKSE Listing Rules mean Rules Governing the Listing of Securities on the Hong Kong Stock Exchange (as amended from time to time).
(aa) Non-Compete Obligation means during the Employees employment with the Company or any Parent or Subsidiary and within two (2) years after his/her employment with the Company or any Parent or Subsidiary ends, to the furthest extent permitted by the Applicable Law, the Employee shall not, directly or indirectly, (i) establish, carry on, participate in, work for, provide financial support or security for, or advise, any entity or individual that directly or indirectly competes with the Company or any Affiliate of the Company; (ii) participate in or work for any entity or individual that is a supplier or vendor of the Company or any Affiliate of the Company; or (iii) carry on any activity similar to the business carried on by the Company or any Affiliate of the Company.
(bb) Non-Disclosure Obligation means during or after the Employees employment with the Company or any Parent or Subsidiary ends, the Employee will not disclose any information, whether or not in writing, of a private, secret, or confidential nature concerning the Companys business, business relationships or financial affairs to any entity or individual or use the same for any purposes (other than in the performance of his/her duties as an Employee) without written approval by an officer of the Company, unless and until such information has become public knowledge through no fault of the Employee. Such obligations may be further specified in the applicable employment agreement, non-competition, non-disclosure, and non-solicitation agreement and any other agreements of the same kind, if any, made between the Employee and the Company or any Parent or Subsidiary.
7
(cc) Non-Solicitation Obligation means for a period of two years following the termination of employment for any reason whatsoever, the Employee will not, directly or indirectly, either for the Employee or for any other entity or individual, in any capacity, induce or attempt to induce or call upon or solicit any of the Companys Employees, consultants, vendors, prospective vendors, suppliers, landlords or other business relations of the Company to leave or cease doing business with the Company or in any way interfere with the relationship between the Company and any of the Companys Employees, vendors, prospective vendors, suppliers, landlords or other business relations, or hire or solicit for employment any Employee. Such obligations may be further specified in the applicable employment agreement, non-competition, non-disclosure, and non-solicitation agreement and any other agreements of the same kind, if any, made between the Employee and the Company or any Parent or Subsidiary.
(dd) Nonqualified Stock Option means an Option not intended to qualify as an Incentive Stock Option, as designated in the applicable Award Agreement, or an Incentive Stock Option that does not so qualify.
(ee) Option means an option to purchase Shares that is granted pursuant to the Plan in accordance with Section 8 hereof.
(ff) Parent means a parent corporation with respect to the Company, whether now or hereafter existing, as defined in Section 424(e) of the Code.
(gg) Person means an individual, corporation, partnership, association, trust, or any other entity.
8
(hh) Plan means this Share Incentive Plan, as amended from time to time.
(ii) PRC means the Peoples Republic of China, but for the purpose of this Plan and for jurisdiction reference only, excluding Taiwan, Hong Kong, Macau.
(jj) Purchase Price means the amount of consideration for which one Share may be acquired pursuant to a Share Purchase Right or Share Award, as specified by the Administrator in the applicable Restricted Share Purchase Agreement or Share Award in accordance with Section 7(c) hereof
(kk) Purchaser means the holder of Shares purchased pursuant to the exercise of a Share Purchase Right.
(ll) Restricted Share Purchase Agreement means a written or electronic agreement between the Company and a Purchaser, the form(s) of which shall be approved from time to time by the Administrator, evidencing the terms and conditions of an individual Share Purchase Right, and includes any documents attached to or incorporated into the Restricted Share Purchase Agreement. The Restricted Share Purchase Agreement shall be subject to the terms and conditions of the Plan.
(mm) Restricted Shares means Shares acquired pursuant to a Share Purchase Right or Share Award Agreement (if subjected to rights of redemption, repurchase or forfeiture).
(nn) SAFE means the PRC State Administration of Foreign Exchange and its local branches.
(oo) Securities Act means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
9
(pp) Service Provider means an Employee, Director, or Consultant.
(qq) Share or Ordinary Share means a common stock or ordinary share of the Company, as adjusted in accordance with Section 13 hereof.
(rr) Share Award means an award or issuance of Shares or other similar awards made under Section 7 of the Plan, the grant, issuance, retention, vesting, settlement and/or transferability of which is subject during specified periods of time to such conditions (including continued employment or performance conditions (if any)) and terms as are expressed in the agreement or other documents evidencing the Award (the Share Award Agreement).
(ss) Shareholders Agreement means any agreement between an Awardee as a member of the Company and the Company or other members of the Company or both.
(tt) Share Purchase Right means a right to purchase Restricted Shares pursuant to Section 7 hereof.
(uu) Subsidiary means a subsidiary corporation with respect to the Company, whether now or hereafter existing, as defined in Section 424(f) of the Code.
(vv) United States means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia.
(xx)U.S. Treasury Regulations means the Regulations as issued by the United States Treasury Department, as carried out by the Internal Revenue Service (IRS), under the Internal Revenue Code of 1986 (that is, as Code is defined under (k) above.)
3. Shares Subject to the Plan.
10
(a) Basic Limitation. Subject to the provisions of Section 13 hereof, the maximum aggregate number of Shares that may be delivered under the Plan, and any similar plan in other jurisdictions, shall not exceed 400,000,000 Shares (as appropriately adjusted for subsequent stock splits, stock dividends and the like). The Shares that may be delivered under this Plan will be the Companys Ordinary Shares which are to be issued to and held by the Awardees, or one or more entities (ESOP Vehicles) owned or designated by the Awardees prior to or after the Companys listing. The number of Shares that are subject to Awards outstanding under the Plan at any time shall not exceed the aggregate number of Shares that then remain available reserved under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of outstanding Awards granted under the Plan.
(b) Additional Shares. If an Award expires, becomes unexercisable, or is cancelled, forfeited, or otherwise terminated without having been exercised or settled in full, as the case may be, the Shares allocable to the unexercised portion of the Award shall again become available for future grant or sale under the Plan (unless the Plan has terminated). Shares that actually have been delivered under the Plan, upon exercise of an Award or delivery under a Share Purchase Right or Share Award, shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that in the event that Shares delivered under the Plan are reacquired by the Company pursuant to any forfeiture provision, right of repurchase or redemption, or are retained by the Company upon the exercise of or purchase of Shares under an Award in order to satisfy the Exercise Price or Purchase Price for the Award or any withholding taxes due with respect to the exercise or purchase, such Shares shall again become available for future grant under the Plan.
4. Administration of the Plan.
(a) Administrator. The Plan shall be administered by the Chief Executive Officer of the Company. The Chief Executive Officer of Company may authorize one or more officers in writing to administrate the grants of any Awards and may limit such authority as the Chief Executive Officer determines from time to time.
11
(b) Powers of the Administrator. Subject to the provisions of the Plan, and subject to the approval of the Board, the Administrator shall have the authority in its discretion:
to determine the Fair Market Value, in accordance with Section 2(v) hereof;
to select the Awardees to whom Awards may from time to time be granted hereunder;
to determine the number of Shares to be covered by each Award granted hereunder;
to approve the form(s) of agreement for use under the Plan;
to determine the terms and conditions of any Award granted hereunder including, but not limited to, the Exercise Price, the Purchase Price, the time or times when Awards may be exercised (which may be based on performance criteria), the time or times when repurchase or redemption rights shall lapse, any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine;
to implement a program where (A) outstanding Awards are surrendered or cancelled in exchange for Awards of the same type (which may have lower Exercise/Purchase Prices and different terms), Awards of a different type, or cash, or (B) the Exercise/Purchase Price of an outstanding Award is reduced, based in each case on terms and conditions determined by the Administrator in its sole discretion;
to approve earlier Exercise of the Awards granted under the Plan.
to implement any ESOP platform system necessary to facilitate the administration of this Plan.
12
to prescribe, amend, and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable laws of jurisdictions other than the United States;
to allow Awardees to satisfy withholding tax obligations by the Administrator electing to have the Company withhold from the Shares to be delivered under an Award that number of Shares having a Fair Market Value equal to the minimum amount required to be withheld in accordance with the Applicable Laws. The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by Awardees to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable. For the avoidance of doubt, the Company and the Administrator shall not be responsible for any failure by the Awardee to discharge all taxes and liabilities to which he or she may become subject as a result of his or her participation in this Plan or the delivery of any Shares;
to modify or amend each Award, including, without limitation, the discretionary authority to extend the post-termination exercisability of an Award longer than is otherwise provided for in an Award Agreement or accelerate the vesting or exercisability of an Award or lapsing of a repurchase or redemption right to which Restricted Shares may be subject;
to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan; and
to make any other determination and take any other action that the Administrator deems necessary or desirable for the administration of the Plan.
(c) Delegation of Authority to Officers. Subject to Applicable Law, the Administrator may delegate limited authority to specified officers of the Company to execute on behalf of the Company any instrument required to effect an Award previously granted by the Administrator.
(d) Effect of Administrators Decision. All decisions, determinations, and interpretations of the Administrator shall be final and binding on all Awardees.
13
5. Eligibility.
(a) General Rule. With the exception of any holding company managed by the Administrator or its delegates for the purpose of administrating the Plan, only Service Providers, or trusts or companies established in connection with any employee benefit plan of the Company (including the Plan) for the benefit of a Service Provider, shall be eligible for the grant of Awards. Incentive Stock Options may be granted to Employees only.
6. Terms and Conditions of Award (including Restricted Shares and restricted share units).
(a) Award Agreement. Each grant of an Award under the Plan shall be evidenced by an Award Agreement between the Awardee and the Company. Each Award shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions that are not inconsistent with the Plan and that the Administrator deems appropriate for inclusion in an Award Agreement. The provisions of the various Award Agreements entered into under the Plan need not be identical.
(b) Type of Award. Each Award shall be designated in the Award Agreement as either an Option, a Share Purchase Right, a Restricted Share, a restricted share unit or a Share Award.
(c) Number of Shares. Each Award Agreement shall specify the number of Shares that are subject to the Award and shall provide for the adjustment of such number in accordance with Section 13 hereof.
14
(d) Exercise Price. Subject to the provision of Section 8(b), each Award Agreement shall specify the Exercise Price. The Exercise Price shall be payable in accordance with Section 10 hereof and the applicable Award Agreement.
(e) Term of Award. The Award Agreement shall specify the term of the Award; provided, however, that the term shall not exceed ten (10) years from the Date of Grant. Subject to the preceding sentence, the Administrator in its sole discretion shall determine when an Award is to expire.
(f) Exercisability. Each Award Agreement shall specify the date when all or any installment of the Award is to become exercisable. The exercisability provisions of any Award Agreement shall be determined by the Administrator in its sole discretion.
(g) Exercise Procedure. Any Award granted hereunder shall be exercisable according to the terms hereof at such times and under such conditions as may be determined by the Administrator and/or as set forth in the Award Agreement; provided, however, that an Award shall not be exercised for a fraction of a Share.
An Award shall be deemed exercised when the Company receives (A) written or electronic notice of exercise (in accordance with the Award Agreement) from the person entitled to exercise the Award, (B) full payment for the Shares with respect to which the Award is exercised, and (C) all representations, indemnifications, and documents reasonably requested by the Administrator including, without limitation, any Shareholders Agreement has been entered into to the satisfaction of the Administrator. Full payment may consist of any consideration and method of payment authorized by the Administrator in accordance with Section 10 hereof and permitted by the Award Agreement. Upon the Award being exercised and when the exercise procedure as stipulated in this clause has been fully complied with, the Company shall cause or procure the underlying Ordinary Shares or the relevant economic interests (i) be issued to the Awardees designated by the Company or certain ESOP Vehicles owned or designated by such Awardees, or (ii) be assigned to the Awardees by other measures or methods deemed necessary or appropriate by the Administrator.
15
Shares delivered upon exercise of an Award shall be delivered in the name of the Awardee or, if requested by the Awardee, in the name of the Awardee and his or her spouse. Subject to the provisions of Sections 9, 10, 15, and 16, the Company shall issue (or cause to be issued) certificates evidencing the delivered Shares promptly after the Award is exercised. Notwithstanding the foregoing, the Administrator in its discretion may require the Company to retain possession of any certificate evidencing Shares acquired upon the exercise of an Award, if those Shares remain subject to repurchase or redemption under the provisions of the Award Agreement, any Shareholders Agreement, or any other agreement between the Company and the Awardee, or if those Shares are collateral for a loan or obligation due to the Company.
Exercise of an Award in any manner shall result in a decrease in the number of Shares thereafter available, both for purposes of the Plan (in accordance with Section 3(b)) and for sale under the Award, by the number of Shares as to which the Award is exercised.
(h) Vesting Schedule. Subject to the Awardees continued status as a Service Provider through each of the applicable vesting dates and to the extent permitted by applicable law, the Award shall become exercisable, in whole or in part, in accordance with the terms thereof at such times and under such conditions as maybe determined by the Administrator and/or set forth in the Award Agreement. Unless the Administrator determines otherwise, all Awards shall become exercisable as set forth in the following schedule:
33%, 33% and 34% of the Awarded Shares shall vest on each of the second, forth, and sixth anniversary of the Vesting Commencement Date, subject to the Awardees continuing to be a Service Provider through these dates. Before or after execution of the Award Agreement, the vesting schedule for certain Awardees may be modified or changed by the Administrator in its sole discretion as it deems necessary or appropriate where if the Administration so determined the new agreement between the Company and the Awardee shall be deemed established and effective immediately regarding the said modification or change.
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(i) Alteration of Granted Awards. As long as the Administrator determines necessary or appropriate but in no event later than one (1) working day before each vesting date of the Awards, the Administrator, hereby authorized by the Board of Directors of the Company, may review the capabilities of the Awardees in accordance with certain performance target or evaluation criteria of the relevant position or rank and, if the Administrator determines that the Awardees fail to meet the performance target or fulfill the evaluation criteria, reduce the amount of unvested Awards granted to the Awardees to the extent that the Administrator deemed applicable, provided that such performance target or evaluation criteria have been determined by the Administrator and informed such Awardee in advance, and provided further that the unvested Awards so reduced should not exceed 20% the unvested Awards of such Awardee then outstanding. Subject to the preceding sentence, if the Administrator so determines, the new agreement between the Company and the Awardee shall be deemed established and effective immediately regarding the said alteration of Awards. The Awards as so reduced shall be deemed forfeited immediately and can be retained by the Company for future grant under the Plan.
(j) Termination of Service (other than by death).
If an Awardee ceases to be a Service Provider for Cause, the Award or any other share-based award received by the Awardee will terminate and be cancelled on the Awardees severance date, whether or not the Award or other share-based awards is then vested and/or exercisable. If an Awardee ceases to be a Service Provider for any reason other than because of death and without Cause, then the Awardees Awards shall expire on the earliest of the following occasions:
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The expiration date determined by Section 6(e) hereof;
The last day of the three-month period following the cessation of the Awardee as a Service Provider for any reason other than Disability, or such later date as the Administrator may determine and specify in the Award Agreement, provided that no Award that is exercised after the expiration of the three-month period immediately following the termination of the Awardees relationship as an Employee shall be treated as an Incentive Stock Option; or
The last day of the twelve-month period following the cessation of the Awardee as a Service Provider by reason of Disability, or such later date as the Administrator may determine and specify in the Award Agreement; provided that no Award that is exercised after the expiration of the twelve-month period immediately following the cessation of the Awardee as an Employee shall be treated as an Incentive Stock Option.
Following the cessation of the Awardee as a Service Provider, the Awardee may exercise all or part of the Awardees Award at any time before the expiration of the Award as set forth in Section 6(j)(i) hereof, but only to the extent that the Award was vested and exercisable as of the date of cessation of the Awardee as a Service Provider (or became vested and exercisable as a result of the cessation). The balance of the Shares subject to the Award shall be forfeited on the date of cessation of the Awardee as a Service Provider. In the event that the Awardee dies after the cessation of the Awardee as a Service Provider but before the expiration of the Awardees Award as set forth in Section 6(j)(i) hereof, all or part of the Award may be exercised (prior to expiration) by the executors or administrators of the Awardees estate or by any person who has acquired the Award directly from the Awardee by beneficiary designation, bequest, or inheritance, but only to the extent that the Award was vested and exercisable as of the cessation date of the Awardee as a Service Provider (or became vested and exercisable as a result of the cessation). Any Awarded Shares subject to the portion of the Award that are vested as of the cessation date of the Awardee as a Service Provider but that are not purchased prior to the expiration of the Award pursuant to this Section 6(j) shall be forfeited immediately following the Awards expiration.
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(k) Leaves of Absence. Unless otherwise determined by the Administrator, for purposes of this Section 6, the service of an Awardee as a Service Provider shall be deemed to continue while the Awardee is on a bona fide leave of absence, if such leave was approved by the Company and/or the Affiliate in writing. Unless otherwise determined by the Administrator and subject to Applicable Law, vesting of an Award shall be suspended during any unpaid leave of absence.
(l) Death of Awardee.
If an Awardee dies while a Service Provider, then the Awardees Award shall expire on the earlier of the following dates:
The expiration date determined by Section 6(e) hereof;
The last day of the six-month period immediately following the Awardees death, or such later date as the Administrator may determine and specify in the Award Agreement.
All or part of the Awardees Award may be exercised at any time before the expiration of the Award as set forth in Section 6(l)(i) hereof by the executors or administrators of the Awardees estate or by any person who has acquired the Award directly from the Awardee by beneficiary designation, bequest, or inheritance, but only to the extent that the Award was vested and exercisable as of the date of the Awardees death or had become vested and exercisable as a result of the death. The balance of the Shares subject to the Award shall be forfeited upon the Awardees death. Any Awarded Shares subject to the portion of the Award that are vested as of the Awardees death but that are not purchased prior to the expiration of the Award pursuant to this Section 6(l) shall be forfeited immediately following the Awards expiration.
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(m) Restriction on Exercise of Award. Notwithstanding any provision to the contrary in this Plan, in the event that an Awardee who is an Employee ceases to be a Service Provider for any reason whatsoever, the Award granted to him/her may not be exercised as of such termination, unless otherwise provided in the applicable Award Agreement. Any exercise of the Award is subject to (i) such Awardees full compliance with the Non-Compete Obligation, the Non-Disclosure Obligation and the Non-Solicitation Obligation, (ii) any other obligations to which the Awardee is subject under any applicable employment agreement, non-competition, non-disclosure and non-solicitation agreement and any other agreements of similar kind, if any, made between the Employee and the Company or any Parent or Subsidiary, and their ancillary documents, and (iii) a requirement that the cessation of the Awardee as a Service Provider is not for Cause. In the event that an Awardee is in breach of any of the aforementioned obligations for any reason whatsoever, the Company may, at its sole discretion, withdraw any Award which the Awardee is entitled to exercise but has not yet exercised and reacquire from such Awardee any Shares delivered to such Awardee pursuant to the applicable Award Agreement and the Awardee shall be obliged to return any share certificate(s) evidencing such Shares upon request of the Company or the Administrator, provided that the Company shall refund the Exercise Price paid by the Awardee without any interest or fees whatsoever, subject to any compensation or indemnification to which the Company is entitled and/or any costs incurred by the Company due to such breach of any aforementioned obligations of the Awardee.
(n) Restrictions on Transfer of Shares. Shares delivered upon exercise of an Award shall be subject to such special forfeiture conditions, rights of repurchase or redemption, rights of first refusal, and other transfer restrictions as the Administrator may determine. The restrictions described in the preceding sentence shall be set forth in the applicable Award Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally.
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7. Terms and Conditions of Share Purchase Rights and Share Awards.
(a) Restricted Share Purchase Agreement or Share Award Agreements. Each Share Purchase Right or Share Award under the Plan shall be evidenced by a Restricted Share Purchase Agreement or Share Award Agreement, respectively, between the Purchaser and the Company. Each Share Purchase Right and each Share Award shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions that are not inconsistent with the Plan and that the Administrator deems appropriate for inclusion in a Restricted Share Purchase Agreement or Share Award Agreement, including without limitation, (i) the number of Shares subject to such Restricted Share Purchase Agreement or Share Award, as applicable, or a formula for determining such number, (ii) the Purchase Price of the Shares, if any, and the means of payment for the Shares, (iii) the performance criteria, if any, and level of achievement versus these criteria that shall determine the number of Shares granted, issued, retainable and/or vested, (iv) such terms and conditions on the grant, issuance, vesting, settlement and/or forfeiture of the Shares as may be determined from time to time by the Administrator and (v) restrictions on the transferability of the Award. The provisions of the various Restricted Share Purchase Agreements and Share Award Agreements entered into under the Plan need not be identical.
(b) Duration of Offers of Share Purchase Rights. Any Share Purchase Rights granted under the Plan shall automatically expire if not exercised by the Purchaser within 30 days (or such longer time as is specified in the Restricted Share Purchase Agreement) after the Date of Grant.
(c) Purchase Price. The Purchase Price, if any, shall be determined by the Administrator in its sole discretion. The Purchase Price, if any, shall be payable in a form described in Section 10 hereof.
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(d) Restrictions on Transfer of Shares. Any Shares awarded or sold pursuant to Share Purchase Rights or Share Awards shall be subject to such special forfeiture conditions, rights of repurchase or redemption, rights of first refusal, market stand-offs, and other transfer restrictions as the Administrator may determine. The restrictions described in the preceding sentence shall be set forth in the applicable Restricted Share Purchase Agreement or Share Award Agreement, as applicable, and shall apply in addition to any restrictions that may apply to holders of Shares generally. Unless otherwise determined by the Administrator and subject to Applicable Law, vesting of Shares acquired pursuant to a Restricted Share Purchase Agreement or Share Awards shall be suspended during any unpaid leave of absence.
8. Terms and Conditions of Option.
(a) Type of Option. Each Option shall be designated in the Award Agreement as either an Incentive Stock Option or a Nonqualified Stock Option. However, notwithstanding a designation of an Option as an Incentive Stock Option, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by an Optionee during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds US$100,000, such Options shall be treated as Nonqualified Stock Options. For purposes of this Section 8(a), Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the Date of Grant.
(b) Exercise Price. The Exercise Price of an Incentive Stock Option to any U.S. Awardees shall not be less than 100% of the Fair Market Value on the Date of Grant; the Exercise Price of any Option granted to non-U.S. Awardees shall be determined by the Administrator. Notwithstanding anything to the contrary in the foregoing, in the event of a transaction described in Section 424(a) of the Code, then, consistent with Section 424(a) of the Code, Incentive Stock Options may be delivered at an Exercise Price other than as required by the foregoing.
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9. Withholding Taxes. As a condition to the exercise of an Award, purchase of Restricted Shares or receipt of a Share Award, the Awardee (or in the case of the Awardees death or in the event of a permissible transfer of Awards hereunder, the person exercising the Award, purchasing Restricted Shares or receiving the Share Award) shall make such arrangements as the Administrator may require for the satisfaction of any applicable withholding taxes arising in connection with the exercise of an Award or purchase of Restricted Shares under the laws of any applicable jurisdiction including Hong Kong, the PRC, the U.S. and any other jurisdiction. The Awardee (or in the case of the Awardees death or in the event of a permissible transfer of Awards hereunder, the person exercising the Award, purchasing Restricted Shares or receiving Share Awards) also shall make such arrangements as the Administrator may require for the satisfaction of any applicable Hong Kong, PRC, U.S. federal, state, local, or non-PRC and non-U.S. withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Award, purchasing Restricted Shares or receiving Share Awards. The Company shall not be required to deliver any Shares under the Plan until the foregoing obligations are satisfied. Without limiting the generality of the foregoing, upon the exercise of the Award or delivery of Restricted Shares or Share or Award, the Company shall have the right to withhold taxes from any compensation or other amounts that the Company may owe to the Awardee, or to require the Awardee to pay to the Company the amount of any taxes that the Company may be required to withhold with respect to the Shares delivered to the Awardee. Without limiting the generality of the foregoing, the Administrator in its discretion may authorize the Awardee to satisfy all or part of any withholding tax liability by (i) having the Company withhold from the Shares that would otherwise be delivered upon the exercise of an Award, purchase of Restricted Shares that number of Shares or received in a Share Award having a Fair Market Value, as of the date the withholding tax liability arises, equal to the portion of the Companys withholding tax liability to be so satisfied or (ii) by delivering to the Company previously owned and unencumbered Shares having a Fair Market Value, as of the date the withholding tax liability arises, equal to the amount of the Companys withholding tax liability to be so satisfied.
10. Payment for Shares. The consideration to be paid for the Shares to be delivered under the Plan, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined on the Date of Grant), subject to the provisions in this Section 10.
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(a) General Rule. The entire Purchase Price or Exercise Price (as the case may be) for Shares delivered under the Plan shall be payable in cash or cash equivalents at the time when the Shares are purchased, except as otherwise provided in this Section 10.
(b) Surrender of Shares. To the extent that an Award Agreement, Restricted Share Purchase Agreement or Share Award Agreement so provides, all or any part of the Exercise Price or Purchase Price (as the case may be) may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Awardee. These Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value on the date the Award is exercised or Restricted Shares are purchased. The Awardee shall not surrender, or attest to the ownership of, Shares in payment of the Exercise Price or Purchase Price (as the case may be) if this action would subject the Company to adverse accounting consequences, as determined by the Administrator.
(c) Services Rendered. At the discretion of the Administrator and to the extent so provided in the agreements evidencing Awards of Shares under the Plan, Shares may be awarded under the Plan in consideration of services rendered to the Company or any Parent or Subsidiary prior to the Award.
(d) Exercise/Sale. At the discretion of the Administrator and to the extent an Award Agreement so provides, and if the Shares are publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes.
(e) Exercise/Pledge. At the discretion of the Administrator and to the extent an Award Agreement so provides, and if the Shares are publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction to pledge Shares to a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes.
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(f) Other Forms of Consideration. At the discretion of the Administrator and to the extent an Award Agreement, a Restricted Share Purchase Agreement or Share Award so provides, all or a portion of the Exercise Price or Purchase Price may be paid by any other form of consideration and method of payment to the extent permitted by Applicable Law.
11. Non-transferability of Awards. Unless otherwise determined by the Administrator and so provided in the applicable Award Agreement, Restricted Share Purchase Agreement or Share Award Agreement (or be amended to provide), no Award shall be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner (whether by operation of law or otherwise) other than (i) by will or applicable laws of descent and distribution or (except in the case of an Incentive Stock Option) pursuant to a qualified domestic relations order or (ii) by trusts or companies established in connection with any employee benefit plan of the Company (including the Plan) for the benefit of a Service Provider or Service Providers, in each case subject to Applicable Law, and shall not be subject to execution, attachment, or similar process. In the event the Administrator in its sole discretion makes an Award transferable, only a Nonqualified Stock Option, Share Purchase Right or Share Award may be transferred provided such Award is transferred without payment of consideration to members of the Awardees immediate family (as such term is defined in Rule 16a-1(e) of the Exchange Act) or to trusts or partnerships established exclusively for the benefit of the Awardee and the members of the Awardees immediate family, all as permitted by Applicable Law. Upon any attempt to pledge, assign, hypothecate, transfer, or otherwise dispose of any Award or of any right or privilege conferred by this Plan contrary to the provisions hereof, or upon the sale, levy or attachment or similar process upon the rights and privileges conferred by this Plan, such Award shall thereupon terminate and become null and void. Incentive Stock Options may be exercised during the lifetime of the Awardee only by the Awardee.
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12. Rights as a Member. Other than the Ordinary Shares acquired by the CEO of the Company (Mr. LUO Min) based on the Awards granted to him by this Plan and the applicable Award Agreement, all Awards and Ordinary Shares acquired by the Awardees, directly or indirectly, in accordance with this Plan shall have no voting rights. Besides, until the Shares actually are delivered (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to receive dividends or any other rights as a member shall exist with respect to the Shares, notwithstanding the exercise of the Award. No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Shares are delivered, except as provided in Section 13 of the Plan.
13. Adjustment of Shares.
(a) Changes in Capitalization. Subject to any required action by the members of the Company in accordance with Applicable Law, the class(es) and number and type of Shares that have been authorized for issuance under the Plan but as to which no Awards have yet been granted or that have been returned to the Plan upon cancellation or expiration of an Award, and the class(es), number, and type of Shares covered by each outstanding Award, as well as the price per Share covered by each outstanding Award, shall be proportionately adjusted for any increase, decrease, or change in the number or type of outstanding Shares or other securities of the Company or exchange of outstanding Shares or other securities of the Company into or for a different number or type of shares or other securities of the Company or successor entity, or for other property (including, without limitation, cash) or other change to the Shares resulting from a share split, reverse share split, share dividend, dividend in property other than cash, combination of shares, exchange of shares, combination, consolidation, recapitalization, reincorporation, reorganization, change in corporate structure, reclassification, or other distribution of the Shares effected without receipt of consideration by the Company; provided, however, that the conversion of any convertible securities of the Company shall not be deemed to have been effected without receipt of consideration. The adjustment contemplated in this Section 13(a) shall be made by the Board, whose determination shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of equity securities of the Company of any class, or securities convertible into equity securities of the Company of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number, type, or price of Shares subject to an Award. Where an adjustment under this Section 13(a) is made to an Incentive Stock Option, the adjustment shall be made in a manner that will not be considered a modification under the provisions of Section 424(h)(3) of the Code.
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(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Awardee as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for an Awardee to have the right to exercise his or her Award until fifteen (15) days prior to the proposed dissolution or liquidation as to all of the Awarded Shares covered thereby, including Shares as to which the Award would not otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase or redemption award applicable to any Shares purchased upon exercise of an Award or Restricted Shares purchased under a Share Purchase Right shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent an Award has not been previously exercised and all Restricted Shares covered by a Share Purchase Right have not been purchased, the Award will terminate immediately prior to the consummation of such proposed action.
(c) Change in Control. In the event of a Change in Control, unless the Award Agreement, Restricted Share Purchase Agreement or Share Award Agreement provides otherwise, each outstanding Award shall be assumed or an equivalent award shall be substituted by, and each right of the Company to repurchase, redeem or reacquire Shares upon termination of a Purchasers relationship as a Service Provider shall be assigned to, the successor corporation or a Parent or Subsidiary of the successor corporation. If, in the event of a Change in Control, the Award is not assumed or substituted, or the repurchase, redemption or reacquisition or similar right is not assigned, in the case of an outstanding Award, the Award shall fully vest immediately and the Awardee shall have the right to exercise the Award as to all of the Awarded Shares, including Shares as to which it would not otherwise be vested or exercisable, and, in the case of Restricted Shares, the Companys repurchase, redemption or reacquisition or similar right shall lapse immediately and all of the Restricted Shares subject to the repurchase, redemption or reacquisition or similar right shall become vested. If an Award becomes fully vested and exercisable, in lieu of assumption or substitution in the event of a Change in Control, the Administrator shall notify the Awardee in writing or electronically that the Award shall be fully exercisable for a period of fifteen
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(15) days from the date of such notice, and the Award shall terminate upon the expiration of such period. For purposes of this Section 13(c), an Award shall be considered assumed, and Restricted Shares will be considered assigned if, following the Change in Control, the Award confers the right to purchase or receive, for each covered Share immediately prior to the Change in Control, the consideration (whether shares, cash, or other securities or property) received in connection with the Change in Control by holders of Shares for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if the consideration received in the Change in Control is not solely common stock or ordinary shares of the successor corporation or its Parent or Subsidiary, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Award or vesting of the Restricted Shares, for each covered Share, to be solely common stock or ordinary shares of the successor corporation or its Parent or Subsidiary equal in Fair Market Value to the per Share consideration received by holders of Shares in the Change in Control.
(d) Reservation of Rights. Except as provided in this Section 13 and in the applicable Award Agreement, Restricted Share Purchase Agreement or Share Award Agreement, an Awardee shall have no rights by reason of (i) any subdivision or consolidation of Shares or other securities of any class, (ii) the payment of any dividend, or (iii) any other increase or decrease in the number of Shares or other securities of any class. Any issuance by the Company of equity securities of any class, or securities convertible into equity securities of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Awarded Shares. The grant of an Award, Share Purchase Right or Share Award shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell, or transfer all or any part of its business or assets.
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14. Date of Grant. The Date of Grant of an Award shall, for all purposes, be the date on which the Administrator makes the determination to grant the Award, or such other later date as is determined by the Administrator. In any event, the Date of Grant shall be no earlier than the effective date of a legally binding Award Agreement which has been entered by the Awardee or Awardee and the Company.
15. Securities Law Requirements.
(a) Legal Compliance. Notwithstanding any other provision of the Plan or any agreement entered into by the Company pursuant to the Plan, the Company shall not be obligated, and nor shall it have any liability for failure to deliver any Shares under the Plan unless the issuance and delivery of Shares comply with (or are exempt from) all Applicable Law, including, without limitation, the applicable securities laws in the Cayman Islands, Hong Kong, PRC, Securities Act, U.S. state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Companys securities may then be traded, and shall be further subject to the approval of counsel for the Company with respect to such compliance.
(b) Investment Representations. Shares delivered under the Plan shall be subject to transfer restrictions, and the person acquiring the Shares shall, as a condition to the exercise of an Award or the purchase or acquisition of Restricted Shares if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with Applicable Law, including, without limitation, the representation and warranty at the time of acquisition of Shares that the Shares are being acquired only for investment purposes and without any present intention to sell, transfer, or distribute the Shares.
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16. Condition to Exercise. Any exercise of Award or the rights to purchase the Shares, or any issuance of Shares under the applicable Award Agreement, Share Purchase Rights and Share Awards shall be subject to the Awardee or the holder of Share Purchase Rights and Share Awards being in compliance with all applicable PRC laws and regulations, including but not limited to the requirement of registration with SAFE.
17. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Companys counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to deliver or sell such Shares as to which such requisite authority shall not have been obtained.
18. Clawback. Notwithstanding any other provisions in this Plan, any Award which is subject to recovery under any law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement).
19. Approval by Members and Validity. The Plan shall be approved and adopted by the Board. Such approval by members of the Company shall be obtained in the degree and manner required under Applicable Law and the Articles. Awards may be granted but Awards may not be exercised and Restricted Shares may not be purchased or acquired prior to approval of the Plan by members of the Company. Awards may be granted but not be exercised prior to the last day of the six-month period following the listing date of the Company.
In the event that the Shares are to be listed on the Hong Kong Stock Exchange, any grant of an Award to any director, chief executive officer or substantial shareholder of any member of the Group, or any of their respective associates (as defined in the HKSE Listing Rules) upon the Companys listing, shall be subject to the prior approval of the independent non-executive Directors (excluding any independent non-executive Director who is the proposed Grantee of the Awards in question) and shall otherwise be subject to compliance with the requirements of the HKSE Listing Rules. Notwithstanding the foregoing, any grant of an Award to a director pursuant to Rule 14A.73(6) of the HKSE Listing Rules will be exempted from reporting, announcement and independent Shareholders approval requirements if the Award forms part of the relevant directors remuneration under his/her service contract.
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20. Duration and Amendment.
(a) Term of Plan. Subject to approval by members of the Company in accordance with Section 18 hereof, the Plan shall become effective upon the later to occur of its adoption by the Board or its approval by the members of the Company as described in Section 18 hereof. In the event that the members of the Company fail to approve the Plan within 12 months prior to or after its adoption by the Board, any Awards that have been granted and any Shares that have been awarded or purchased under the Plan shall be rescinded, and no additional Awards shall be granted thereafter. Unless sooner terminated under Section 19(b) hereof, the Plan shall continue in effect for a term of ten (10) years.
(b) Amendment and Termination. The Board may at any time amend, alter, suspend, or terminate the Plan, subject to Applicable Law and the Articles.
(c) Effect of Amendment or Termination. Termination of the Plan shall not affect the Administrators ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination. No Shares shall be delivered or sold under the Plan after the termination thereof, except upon exercise of an Award granted prior to the termination of the Plan.
21. Legending Share Certificates. In order to enforce any restrictions imposed upon Shares delivered upon the exercise of Awards or the acquisition of Restricted Shares, including, without limitations, the restrictions described in Sections 6(m), 7(d), and 15(b) hereof, the Administrator may cause a legend or legends to be placed on any share certificates representing the Shares, which legend or legends shall make appropriate reference to the restrictions, including, without limitation, a restriction against sale of the Shares for any period as may be required by Applicable Law.
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22. No Retention Rights. Neither the Plan nor any Award shall confer upon any Awardee any right to continue his or her relationship as a Service Provider with the Company for any period of specific duration or interfere in any way with his or her right or the right of the Company (or any Parent or Subsidiary employing or retaining the Awardee), which rights are hereby expressly reserved by each, to terminate this relationship at any time, with or without cause, and with or without notice.
23. No Registration Rights. The Company may, but shall not be obligated to, register or qualify the sale of Shares under the Securities Act or any other Applicable Law. The Company shall not be obligated to take any affirmative action in order to cause the sale of Shares under this Plan to comply with any law.
24. No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Parent or Subsidiary and an Awardee or any other person. To the extent that any Awardee acquires a right to receive payments from the Company or any Parent or Subsidiary pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company, a Parent, or any Subsidiary.
25. No Rights to Awards. No Awardee, eligible Service Provider, or other person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of a Service Provider, Awardee, or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to any Awardee or with respect to different Awardees.
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26. Exemption from Section 409A of the Code. This Plan is intended to qualify for exemption from the application of Section 409A of the Code, such that due to the exemption(s) available under the Code, the IRC Section 409A will not apply to the Plan. Accordingly, the Plan will not provide any deferred compensation arrangement to any of the Plan Awardee(s). For purposes of this Plan, the term deferred compensation arrangement shall mean an arrangement, which has the possibility of an Awardee, deferring the timing of taxation (in the U.S.) of any award received under the Plan to a tax year later than then year during which the Awardee was given legal or economic right(s) with respect to the Award. None of the Award under this Plan shall include any phantom stock(s) or phantom share(s) arrangement. Notwithstanding any other provision to the contrary, in the event that any term(s) or condition(s) under this plan or any of the related document(s), such as the Award Agreement (as referred to in 2 (cc), Restricted Share Purchase Agreement (as referred to in 2 (ll)), Share Purchase Agreement (as referred to in 2(mm)), and the Share Award Agreement (as referred to in 2(mm)), may cause this Plan to be subject to the application of IRC Section 409A, such term(s) or condition(s) shall be void and ineffective. While the objective is for this Plan to be exempt from the application of IRC Section 409A, and the Company has made its best efforts to achieve the objective, the Company shall not have any liability or obligation (including but not limited to any obligation to indemnify an Awardee for penalties, taxes or any other losses) to an Awardee in the event that the Plan does not qualify for the exemption from IRC Section 409A.
27. Language. This Plan has been written in English.
[Remainder of Page Intentionally Left Blank]
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Exhibit 8.1
LIST OF SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIES OF
QUDIAN INC.
(as of December 31, 2020)
Subsidiaries |
Jurisdiction of Incorporation | |
Qufenqi (Ganzhou) Information Technology Co., Ltd.* 趣分期(赣州)信息技术有限公司 |
PRC | |
Xiamen Happy Time Technology Co., Ltd.* 厦门快乐时代科技有限公司 |
PRC | |
Qufenqi (HK) Limited |
Hong Kong | |
QD Technologies Limited |
British Virgin Islands | |
Qu Plus Plus Inc. |
Caymna Islands | |
Qu Plus Plus Limited |
British Virgin Islands | |
Qu Plus (HK) Limited |
Hong Kong | |
QD Data Limited |
Hong Kong | |
Xiamen Qudian Financial Lease Co., Ltd.* 厦门趣店融资租赁有限公司 |
PRC | |
Jinan Qudian Car Leasing Co., Ltd.* 济南趣店汽车租赁有限公司 |
PRC | |
Wenzhou Qudian Car Leasing Co., Ltd.* 温州趣店汽车租赁有限公司 |
PRC | |
Nanchang Qudian Car Leasing Co., Ltd.* 南昌趣店汽车租赁有限公司 |
PRC | |
Ningxia Qudian Car Leasing Co., Ltd.* 宁夏趣店汽车租赁有限公司 |
PRC | |
Shijiazhuang Qudian Car Leasing Co., Ltd.* 石家庄趣店汽车租赁有限公司 |
PRC | |
Gansu Qudian Car Sale & Service Co., Ltd.* 甘肃趣店汽车销售有限公司 |
PRC | |
Shenyang Qudian Car Leasing Co., Ltd.* 沈阳趣店汽车租赁有限公司 |
PRC | |
Chongqing Qudian Car Leasing Co., Ltd.* 重庆趣店汽车租赁有限公司 |
PRC | |
Suzhou Qudian Car Leasing Co., Ltd.* 苏州趣店汽车租赁有限公司 |
PRC | |
Taiyuan Qudian Car Leasing Co., Ltd.* 太原趣店汽车租赁有限公司 |
PRC | |
Xiamen Qudian Car Sale & Service Co., Ltd.* 厦门趣店汽车销售服务有限公司 |
PRC | |
Zhengzhou Qudian Car Leasing Co., Ltd.* 郑州趣店汽车租赁有限公司 |
PRC | |
Guiyang Qudian Car Leasing Co., Ltd.* 贵阳趣店汽车租赁有限公司 |
PRC | |
Chengdu Qudian Car Leasing Co., Ltd.* 成都趣店汽车租赁有限公司 |
PRC | |
Nanjing Qudian Car Leasing Co., Ltd.* 南京趣店汽车租赁有限公司 |
PRC | |
Xiamen Xincheng Youda Financing Guarantee Co., Ltd.* 厦门信诚友达融资担保有限公司 |
PRC | |
Xiamen Youqi Technology Co., Ltd.* 厦门友契科技有限公司 |
PRC | |
Xiamen Youdun Technology Co., Ltd.* 厦门友盾科技有限公司 |
PRC | |
Xiamen Youxiang Times Technology Service Co., Ltd.* 厦门优享时代科技服务有限公司 |
PRC | |
Consolidated Variable Interest Entities (VIEs) |
Jurisdiction of Incorporation | |
Beijing Happy Time Technology Development Co., Ltd.* 北京快乐时代科技发展有限公司 |
PRC |
Xiamen Qudian Technology Co., Ltd.* 厦门趣店科技有限公司 |
PRC | |
Hunan Qudian Technology Development Co., Ltd.* 湖南趣店科技发展有限公司 |
PRC | |
Ganzhou Qudian Technology Co., Ltd.* 赣州趣店科技有限公司 |
PRC | |
Xiamen Weipujia Technology Co., Ltd.* 厦门唯谱家科技有限公司 |
PRC | |
Xiamen Qu Plus Plus Technology Development Co., Ltd* 厦门趣加加科技发展有限公司 |
PRC | |
Subsidiaries of Consolidated VIEs |
Jurisdiction of Incorporation | |
Ganzhou Happy Fenqi Network Service Co., Ltd.* 赣州快乐分期网络服务有限公司 |
PRC | |
Xinjiang Qudian Technology Co., Ltd. * 新疆趣店科技有限公司 |
PRC | |
Fuzhou High-tech Zone Microcredit Co., Ltd.* 抚州高新区趣分期小额贷款有限公司 |
PRC | |
Ganzhou Happy Life Network Microcredit Co., Ltd.* 赣州快乐生活网络小额贷款有限公司 |
PRC | |
Qufenqi (Beijing) Information Technology Co., Ltd.* 趣分期(北京)信息技术有限公司 |
PRC | |
Fuzhou Happy Time Technology Development Co., Ltd.* 抚州快乐时代科技发展有限公司 |
PRC | |
Xiamen Qudian Commercial Factoring Co., Ltd.* 厦门趣店商业保理有限公司 |
PRC | |
Ganzhou Happy Fenqi Technology Development Co., Ltd.* 赣州快乐分期科技发展有限公司 |
PRC | |
Ganzhou Happy Time E-Commerce Co., Ltd.* 赣州快乐时代电子商务有限公司 |
PRC | |
Xiamen Junda Network Technology Co., Ltd.* 厦门均达网络科技有限公司 |
PRC | |
Tianjin Qufenqi Technology Co., Ltd.* 天津趣分期科技有限公司 |
PRC | |
Yihuang Qudian Technology Development Co., Ltd.* 宜黄县趣店科技发展有限公司 |
PRC | |
Jiangxi Chunmian Technology Development Co., Ltd.* 江西春眠科技发展有限公司 |
PRC | |
Ganzhou Qudian Commerce Development Co., Ltd.* 赣州趣店商贸发展有限公司 |
PRC | |
Tianjin Happy Time Technology Development Co., Ltd.* 天津快乐时代科技发展有限公司 |
PRC | |
Xiamen Wanlimu Technology Co., Ltd.* 厦门万里目科技有限公司 |
PRC | |
Xiamen Wanlimu Growth Technology Co., Ltd.* 厦门万里目成长科技有限公司 |
PRC |
* | The English name of this subsidiary, consolidated VIE or subsidiary of consolidated VIE, as applicable, has been translated from its Chinese name. |
Exhibit 12.1
Certification by the Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Min Luo, certify that:
1. | I have reviewed this annual report on Form 20-F of Qudian Inc. (the Company); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. | The Companys other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the Companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the Companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
5. | The Companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Companys auditors and the audit committee of the Companys board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal control over financial reporting. |
Date: | April 29, 2021 | |
By: | /s/ Min Luo | |
Name: | Min Luo | |
Title: | Chairman and Chief Executive Officer |
Exhibit 12.2
Certification by the Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Yan Gao, certify that:
1. | I have reviewed this annual report on Form 20-F of Qudian Inc. (the Company); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. | The Companys other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the Companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the Companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
5. | The Companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Companys auditors and the audit committee of the Companys board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal control over financial reporting. |
Date: | April 29, 2021 | |
By: | /s/ Yan Gao | |
Name: | Yan Gao | |
Title: | Vice President of Finance |
Exhibit 13.1
Certification by the Chief Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the annual report of Qudian Inc. (the Company) on Form 20-F for the year ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Min Luo, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | April 29, 2021 | |
By: | /s/ Min Luo | |
Name: | Min Luo | |
Title: | Chairman and Chief Executive Officer |
Exhibit 13.2
Certification by the Principal Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the annual report of Qudian Inc. (the Company) on Form 20-F for the year ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Yan Gao, Vice President of Finance of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | April 29, 2021 | |
By: | /s/ Yan Gao | |
Name: | Yan Gao | |
Title: | Vice President of Finance |
Exhibit 15.1
10/F, Tower B, CPIC Plaza, No. 28 Fengsheng Lane, Xicheng District, Beijing 100032, China
Tel: 86 10 5776 3888 Fax: 86 10 5776 3777
April 29, 2021
Qudian Inc.
Tower A, AVIC Zijin Plaza
Siming District, Xiamen
Fujian Province 361000
Peoples Republic of China
as the Company
Dear Sirs,
We consent to the references to our firm under the heading Item 3. Key InformationD. Risk FactorsRisks Related to Our Corporate Structure If the PRC government deems that the contractual arrangements in relation to our consolidated VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. and Item 4. Information on the CompanyC. Organizational StructureOur Contractual Arrangements with Consolidated VIEs and Their Shareholders in Qudian Inc.s Annual Report on Form 20-F for the year ended December 31, 2020 (the Annual Report), which is to be filed with the Securities and Exchange Commission (the SEC) on April 29, 2021. We also consent to the filing with the SEC of this consent letter as an exhibit to the Annual Report.
In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.
Yours faithfully,
/s/ Tian Yuan Law Firm
Tian Yuan Law Firm
Exhibit 15.2
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
(1) | Registration Statement (Form S-8 No. 333-224249) pertaining to the 2016 Equity Incentive Plan of Qudian Inc., and |
(2) | Registration Statement (Form S-8 No. 333-249085) pertaining to the 2016 Equity Incentive Plan of Qudian Inc.; |
of our reports dated April 29, 2021, with respect to the consolidated financial statements of Qudian Inc., and the effectiveness of internal control over financial reporting of Qudian Inc., included in this Annual Report (Form 20-F) of Qudian Inc. for the year ended December 31, 2020.
/s/ Ernst & Young Hua Ming LLP
Shanghai, The Peoples Republic of China
April 29, 2021