Steve Chan's questions to Qudian (QD) leadership • Q1 2021
Question
Steve Chan of Haitong International asked if the conservative approach to the credit business implies a medium-term transformation into an early education company. He also requested clarification on how Wanlimu Kids' revenue and expenses are reported on the P&L and what the target revenue or return is for the next three years.
Answer
Sissi Zhu, VP of Investor Relations, clarified that the credit business remains highly profitable and will be maintained as long as it generates profit. However, resources will be allocated to Wanlimu Kids if it demonstrates a better return, especially given its safer regulatory profile. For Q1, she noted that Wanlimu's financial impact was minimal and included within other income and cost lines. Looking ahead two to three years, she anticipates the unit economics for the kids' business will be very attractive and superior to the 10-20% net profit margins seen in comparable offline education and catering businesses.