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Qudian Stock Rises 3% on Strong Income, Guidance

The chairman and CEO of the P2P lending company issued an optimistic statement to shareholders in the financial report for the fourth quarter and full year.

Anna Vodopyanova
    Mar 18, 2019 10:31 AM  PT
Qudian Stock Rises 3% on Strong Income, Guidance

Shares in Qudian Inc. (NYSE: QD) were trading up nearly 3 percent by Monday afternoon, at $5.49 per American depositary share, after the company reported earnings for the fourth quarter that beat analysts' estimates, though its revenue was less than expected.

The Xiamen-based online company, which provides small consumer credit products, reported in a statement today that its revenue during the three months through December increased 21 percent year-over-year to $262.3 million. Its net income, Qudian said, was $111.6 million, at a 42 percent rise. Earnings per share were 37 cents.

For the full year, the company reported revenue of $1.1 billion, a 61 percent increase from 2017. Net income in 2018 reached $362.3 million, up 15 percent year-over-year.

"Throughout 2018, as a result of our commitment to delivering risk adjusted returns and an overall conservative risk management approach, our asset quality was maintained within our target levels," Qudian's founder, chairman, and chief executive, Min Luo, said in the statement.

He continued, "On regulatory risk, there were various new regulations and guidelines issued in 2018 for the sector. Yet, Qudian is a leader and pioneer to operate a purely institutional funding base of licensed lenders strictly under regulatory compliant annual interest rate and regulated lending activities happen between borrowers and institutions, meaning there are no material regulatory uncertainties for us."

Luo also commented on the termination of Qudian's collaboration with Alipay, the mobile wallet app of Ant Financial, an affiliate of Chinese giant Alibaba Group Holding Ltd. (NYSE: BABA). The news, announced in August, plunged the company's stock 8 percent at the time to near $7 per share. Since then, the stock of the peer-to-peer lender has not recovered, further dampened by China's regulatory tightening of the industry last year.

"The fourth quarter of 2018 was the first full quarter following the termination of user engagement through Alipay's dedicated channel for online third-party service providers," Luo said. "Despite the termination, our registered users continued to grow to 71.8 million and outstanding borrowers grew to 5.3 million in this quarter, demonstrating that an innately affordable and attractive service does not require costly marketing or special channels to successfully grow."

Looking ahead, Qudian said it expects to generate non-GAAP net income for the full year 2019 in an amount exceeding 3.5 billion yuan, representing a 37 percent rise from 2018. 

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