Chinese lender Qudian jumps after year’s 4th biggest US IPO

Bloomberg

Qudian Inc., a Chinese online loan provider, jumped in its trading debut after pricing the fourth-biggest US initial public offering this year. Qudian rose as much as 48 percent and was up 32 percent to $31.60 at 11:50 am on Wednesday in New York. The company raised $900 million, selling 37.5 million American depositary shares for $24 apiece, according to data compiled by Bloomberg. The shares had been marketed for $19 to $22 each.
Founded by Min Luo in 2014, Qudian lends to consumers in China who can’t get credit from traditional financial institutions. The amounts borrowed are relatively small: Cash loans averaged the equivalent of $136 in the six months through June, while merchandise credit averaged $184. The loans had a weighted average term of about two months and eight months, respectively. Over the same period, Qudian facilitated $5.6 billion in transactions to 7 million active borrowers, with the average customer drawing on their credit line six times. Qudian has a partnership with Alipay, an online payment platform operated by Alibaba Group’s financial affiliate Ant Financial, to distribute cash to consumers and collect repayments.
Qudian became profitable on an annual basis in 2016, posting net income of $85 million on total revenue of $213 million. In the first six months of this year, its net income was $144 million on revenue of $270 million. The micro-lender is joined by a cluster of Asian companies coming to US exchanges.