High Templar Tech Limited · NYSE:HTT
High Templar Tech — Qudian — Q2 2019 Earnings Presentation
31 slides from High Templar Tech's earnings presentation, August 2019
Slide 1: Management Presentation
Management Presentation August 2019
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such a
Slide 3: Focused on Serving Large Population of Underbanked
Focused on Serving Large Population of Underbanked Large credit transactions Mainly served by PBOC credit record Banks Traditional mortgage and auto loans ~150mn Leading technology conglomerates APR 3.5-18% people Mid credit transactions Key contributors of banks’ credit card ~230mn Ba
Slide 4: Our Tech-driven Business Model
Our Tech-driven Business Model Leading Innovations in Fintech Monetization of Technology Open Platform Distributed Clearing Technology Credit Solution- Full suite tech Zero credit risk as-a-Service infrastructure & low support operational cost Big-data Small Credit Facilitation Credit-tech Credit Tr
Slide 5: Massive, Under-penetrated User Base Unlocks Huge Opportunities
Massive, Under-penetrated User Base Unlocks Huge Opportunities User base (mn) User base (mn) Aug 2017: Aug 2018: Industry credit down cycle: Industry credit cycle Payment ecosystem Payment ecosystem stabilized: Conservative risk-taking on new users More aggressive new front-page icon front-page icon
Slide 6: Our Traffic Acquisition Strategy
Our Traffic Acquisition Strategy 3.0 Distributed Ecosystem Traffic Independent Traffic- 2.0 Generation App E-sports Competition Transportation Laifenqi App 1.0 Plug-in to one Payment Ecosystem Gaming Delivery Leisure Social Entertainment Travel Live- streaming News Music Offline Stores E-commerce •
Slide 7: Unique Business Model Based Upon Proprietary Technology
Unique Business Model Based Upon Proprietary Technology Massive Amount of Data 10 TB New data /day Technology Infrastructure 315 37K Databases Credit & Anti-fraud Assessment Model Transactions per hour 1,591 800+ decision rules 6,000+ data variables Cloud-based servers QD score Centralized Fund Matc
Slide 8: Tech-enabled Credit Analysis and Serving Process
Tech-enabled Credit Analysis and Serving Process Artificial intelligence QD Score User Credit Assessment Deposit Cash Information Data Analysis & Collection • Complex network • Behavior patterns • Address clustering • LBS(1) information Machine learning • Biometric recognition… algorithms for collec
Slide 9: Credit Solution-as-a-Service for App Partners
Credit Solution-as-a-Service for App Partners Real-time customer intelligence and Fully in-app user experiences analytics Better monetization of user traffic New partner applications, accounting, etc. supporting functions Increase user engagement and ARPU Dedicated App Developed for App Partners Enh
Slide 10: 1. Overview of Small Credit Facilitation
1. Overview of Small Credit Facilitation
Slide 11: 2Q19 Segment Highlights
2Q19 Segment Highlights 76.0mn registered users RMB19.7bn total amount of transactions 33.0mn users with approved credit RMB1,158.6mn Non-GAAP net income As of June 30, 2019 During 2Q19 6.0mn outstanding borrowers (1) RMB28.7bn outstanding loans (2) As of June 30, 2019 As of June 30, 2019 <4.3% M1+
Slide 12: Optimized Risk Model to Quickly React to Credit Cycle and De-risk Our Balance
Optimized Risk Model to Quickly React to Credit Cycle and De-risk Our Balance New regulation issued caused an Monetization via increase in loan balance industry wide credit crunch and downcycle + User activation via credit trial programs 40 12 35 10 Daily Outstanding Loan Balance (RMB bn) 30 Overall
Slide 13: Credit Performance Managed within Targets
Credit Performance Managed within Targets M1+ Delinquency Rate by Vintage (1) 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2 3 4 5 6 7 8 9 10 11 12 Month since credit draw down 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018 1Q2019 M6+ Charge-off Rate by Vintage (2) 3.0% 2.5% 2.0% 1.5% 1.0% 0
Slide 14: Continued Funding Increase & Partnership Expansion
Continued Funding Increase & Partnership Expansion Continue to increase off BS funding and expand partnerships(1) Total: RMB15.0 bn(2) Total: RMB28.7 bn(2) Off BS 20.4% On BS 29.1% 36.3% 2Q2018 2Q2019 9.0% ~87 partners(3) ~107 partners(3) 2.0% 0.8% 65.7% 4.9% On BS Off BS 31.7% Own Equity Trusts (ex
Slide 15: Expanding Loan Book at Stable and Healthy Leverage
Expanding Loan Book at Stable and Healthy Leverage Listed Company A Listed Company B Loan balance RMB 52.6bn Loan balance Loan RMB balance 35.0bn RMB 28.7bn(1) Net asset Adj. Net Adj. Net Adj. Net Net asset Net asset RMB Profit(2) Profit(2) Profit(2) RMB RMB 12.3bn RMB RMB RMB 5.2bn 4.7bn 0.8bn 0.6b
Slide 16: 2. Overview of Open Platform
ES Qudian 2. Overview of Open Platform
Slide 17: 2Q19 Segment Highlights
2Q19 Segment Highlights 3.4mn cumulative number of users for 417k+ cumulative number of traffic referral service borrowers referred to funding As of June 30, 2019 partners/financial service providers As of June 30, 2019 RMB398mn revenue generated (1) RMB5.9bn cumulative amount of During 2Q19 transac
Slide 18: Our Open Platform Creates a New Risk-free Growth Avenue
Our Open Platform Creates a New Risk-free Growth Avenue Online Traffic Aggregation and Real Time Transaction Big-data Driven Credit Analysis Distribution Referral & Settlement • Access large potential borrower pool • Behavioral based • Automated funding matching and clearing • High quality borrowing
Slide 19: 3. Financials
Enis Qudian 3. Financials
Slide 20: Financial Highlights
Financial Highlights 2Q19 Non-GAAP Net Income RMB1,159 million M1+ Delinquency Coverage Ratio(2)(3) increased by 57% vs. 2Q18(1) (RMB mn, except for EPS numbers) (RMB mn) Diluted RMB RMB RMB RMB EPS 7.30 7.92 2.23 4.05 1.1x 1.2x 1.1x 1.2x 1.3x +14% 888 YoY 2,549 681 668 2,229 +57% 581 585 572 YoY 53
Slide 21: Financial Highlights (Cont'd)
Financial Highlights (Cont’d) 2Q19 Open Platform Revenue Increased by 150% 2Q19 Loan Balance Increased by 92% vs. 2Q18 vs. 1Q19 (RMB bn) (RMB mn) Referral service fee and other related income Loan balance / Loan facilitation income net asset 1.5x 2.3x and other related income Sales income 7,692 +61%
Slide 22: Financial Highlights (Cont'd)
Financial Highlights (Cont’d) Cost of Revenue Operating Expenses (RMB mn) (RMB mn) As % of As % of Revenue 18%(1) 12%(1) 8%(1) 8%(1) Revenue 32% 30% 23% 35% 30% 2,735 Changes in risk assurance liabilities Dabai Auto 2,293 Changes in guarantee 117 liabilities Cash & Merchandise Provisions R&D 2,061 1
Slide 23: Competitive Operating Efficiency
Competitive Operating Efficiency Cost of Revenue(Core consumption finance business)(1)(2) as SG&A and R&D Expenses(1)(2) as % of Total Revenue(1) % of Total Revenue (Core consumption finance business)(1) (%) (%) 18% 16% 12% 12% 9% 8% FY17 FY18 2Q19 FY17 FY18 2Q19 Notes: 23 (1) Excludes Dabai Auto-re
Slide 24: Appendix
Appendix
Slide 25: Unaudited Income Statement
Unaudited Income Statement For the Year Ended For the Three Months Ended 31-Dec-17 31-Dec-18 30-Jun-18 30-Jun-19 (in millions) RMB RMB RMB RMB Financing income 3,642 3,535 895 984 Sales commission fee 797 307 106 96 Sales income 26 2,175 785 124 Penalty fees 8 28 6 9 Loan facilitation income and oth
Slide 26: Unaudited Balance Sheet
Unaudited Balance Sheet As of 31-Dec-17 31-Dec-18 31-Mar-19 30-Jun-19 (in millions) RMB RMB RMB RMB Cash and cash equivalents 6,832 2,501 1,931 2,587 Restricted cash(1) 2,253 340 1,138 859 Short-term amounts due from related parties 551 - - - Short-term loan principal and financing service fee recei
Slide 27: Shareholding Structure
Shareholding Structure Min Luo 100% Zhu Entities Ark Trust Qufenqi Holding (Mgmt. and Public (Blue Run) Phoenix Entities Shareholders Limited employees) (VC) 22.7% 6.6% 4.7% 3.0% 63.0% Qudian Inc. (Cayman) (Listed in NYSE) Notes: 27 (1) API and Zhu Entities’ Shareholding information is based on late
Slide 28: Streamlined Credit Analysis and Serving Process
Streamlined Credit Analysis and Serving Process Loan Amount 1,000 3月 Loan Tenure Application Assessment Approval, Settlement and collection Data Analytics at Engagement Dynamic Risk Management Empowered by Established infrastructure for loan High Velocity Transaction Data management • Register with
Slide 29: Regulatory Compliant is Embedded in Our DNA
Regulatory Compliant is Embedded in Our DNA Protect investors Protect borrowers M2 money supply Governing Unit of China Regulated licensed APR within Lending through Internet Finance institutional funding regulatory cap regulated licensed Association Legal collection institutions practices
Slide 30: Visionary Management Team and Talented Employees
Visionary Management Team and Talented Employees Min Luo Carl Yeung Founder, Chief Executive Officer Chief Financial Officer Over 10 years of entrepreneurial experience in e-commerce and Over 10 years of experience in the tech and finance industry online social platform Previously served as CF
Slide 31: Established Clear Leadership Position within 4 Years
Established Clear Leadership Position within 4 Years 2019Q2 Registered users >76 2018 mn Registered users Cumulative number of >72 mn transactions >195 mn 2017 Cumulative number of Open-platform Registered users transactions: >176mn referred transaction 2016 >62mn Launched open- amount