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Qudian Shares Plunge After Disappointing Earnings

Peter H. Frank 2018-11-19 14:52 PM
Qudian Shares Plunge After Disappointing Earnings

(Updated with closing stock price)

Qudian Inc., an online consumer lender of small loans, announced disappointing earnings this morning, sending shares in the Beijing-based company sharply lower on Wall Street. 

By the close in New York, Qudian (NYSE: QD) was off more than 16 percent, or $1.89 per share to $9.59, making it the second-largest loser among the 150 Chinese ADSs tracked by CapitalWatch. 

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After ending last week relatively flat, shares in Qudian plummeted today 

after the company reported disappointing earnings. (Source: Thomson Reuters Eikon)

For the three months ended March 31, Qudian said its earnings fell 32 percent compared with a year earlier to $50.3 million, or 15 cents per fully diluted share. The company earned $74.1 million, or 24 cents in the same year-ago quarter. 

Revenue over the same period more than doubled to $273.7 million from $133.1 million, driven primarily by the introduction of Dabai Auto business, which provides auto leasing financing. That segment generated $87 million in revenue in this year's first quarter. 

"Our results in the first quarter reflect both the temporary credit downturn in Chinese consumer credit markets following implementation of new regulations late last year as well as our proactive decision to temporarily tighten credit standards and de-risk our book," said Min Luo, Qudian's founder, chairman and chief executive officer. "Despite these short-term impacts, we are pleased to report solid results for the quarter. We remain confident in our core business, and we continue to believe current regulations will support a healthier industry longer term." 

The company said for the full year, it expected adjusted net income to exceed RMB2.5 billion ($398.5 million), and the number of vehicles leased to be more than 100,000. As of March 31, the company had leased 6,608 cars, it reported. 

While the amount of outstanding loans nearly doubled over the past year to $2.1 billion and the number of registered users climbed 66 percent to 65 million, lending figures were otherwise down across the board. The company said the number of credit drawdowns was 10.9 million, down 45 percent compared with the year before, the number of active borrowers was down 14 percent to 4.1 million, and the total amount of transactions was off 8 percent to $2.4 billion. 

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(Source: Qudian Inc.)

At the same time, the company reported that its provision for possible loan losses increased to $70.7 million from just $8.1 million a year ago. 

Qudian, which went public in October at $24 per share, has had a rocky time since. With the Chinese government cracking down on internet-based micro-lenders, the company has seen its stock price take significant hits.

The company, which has been targeted by lawfirms seeking a class-action suit by shareholders against the company, announced at the end of last year that it planned to buy back up to $300 million in its stock to help bolster its price.


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