Qudian, a leading micro-lender to Chinese consumers

Qudian Inc. (Qudian) is a financial technology and stock company located in Xiamen, China, that primarily offers credit services to consumers. A micro-lending enterprise by nature, the company provides short-term micro loans through its mobile app to China’s young workers and college students. It has also broadened its focus, looking to deliver innovative products and services that cater to the essential, everyday needs of Chinese consumers through technology.

Qudian was founded in 2014 by Mr Min Luo who today serves as the company Chief Executive Officer and Chairman of the Board of Directors.

Prior to establishing Qudian, Mr Luo served as Vice President of Marketing at OkBuy.com, an online marketplace for shoe products and apparel in China.

He has also held several other executive roles in companies like Jiyiri.com, an online birthday related service provider, and dipian.com, an online social platform directed at college students.

Qudian’s $900M U.S. IPO

In October 2017, Qudian reportedly raised US$900 million in an IPO, marking the largest U.S. listing by a Chinese tech firm at the time.

According to a Reuters article, “Its American depositary shares were priced at $24 each, above the marketed range of $19-$22.”

Additionally, “Qudian sold 35.63 million new shares, while shareholders including Kunlun Group <300418.SZ> and board directors Li Du and Yi Cao sold 1.88 million existing Qudian stocks.”

Up to US$100 million strategic investment in SECOO

On 3 June 2020, Qudian and Secoo Holding Limited, Asia’s largest online platform for upscale products and services, announced that they had entered into a definitive agreement in which Qudian agreed to purchase up to 10,204,082 new issued Class A ordinary shares of Secoo for a total purchase price of US$100,000,003.60, at a price of US$9.80 per share.

This completion of this transaction saw Qudian holding approximately 28.9% of Secoo’s issued and outstanding shares, becoming its largest shareholder.

In addition, the companies also entered into a business cooperation agreement that focused on collaboration in the online luxury e-commerce business space.

Market capitalisation and shareholding

Qudian is listed and trades on the New York Stock Exchange under the ticker symbol #QD. The company’s market capitalisation as of 27 September is valued at US$382.6 million, with revenue of US$202.57 million, but a net income of -US$272.12 million.

According to its website, “each ADS of Qudian Inc. represents one Class A ordinary share.” More specifically:

• Its ordinary shares are divided into Class A ordinary shares and Class B ordinary shares.
• For matters requiring a shareholder’s vote, each Class A ordinary share carries one vote, while each Class B ordinary share carries ten votes, with both classes voting together as a single group.
• Each Class B ordinary share can be converted into one Class A ordinary share at any time by its holder.
• Class A ordinary shares cannot be converted into Class B ordinary shares at any time.
• If a holder transfers Class B ordinary shares to any person or entity that is not an affiliate, those shares will automatically and immediately be converted into the equivalent number of Class A ordinary shares.

Qudian reports second quarter 2024 unaudited financial results

On 6 September, Qudian released its Q2 2024 unaudited financial results. In the 2nd quarter of this year, Qudian achieved strong financial results, with total revenues reaching RMB53.3 million (US$7.3 million), up from RMB11.1 million in the same period in 2023.

The company’s last-mile delivery business contributed RMB46.2 million in revenue, a significant rise from RMB4.3 million for the 2^nd quarter of last year. The company also turned its non-GAAP net income around, reporting RMB99.8 million (US$13.7 million) in profit (attributed to its shareholders), compared to a net loss of RMB76.9 million in Q2 2023, with a non-GAAP net income per diluted ADS of RMB0.53 (US$0.07).

Operating costs and expenses rose slightly to RMB110.8 million (US$15.2 million) from RMB106.7 million the previous year, while the cost of revenues increased to RMB46.2 million (US$6.4 million), reflecting higher service costs linked to the expansion of the delivery business.

Research and development expenses increased by 53.4%, rising to RMB15.2 million (US$2.1 million), driven by higher staffing as Qudian explored new business opportunities.

Investment-related income surged, with interest and investment income increasing to RMB89.5 million (US$12.3 million) from RMB6.8 million in Q2 2023. Gains from derivative instruments rose to RMB58.4 million (US$8.0 million from RMB10.4 million for the 2^nd quarter in 2023.

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