Qudian Reports Q4 Financial Results Shares rise on Guidance

Chinese online credit provider Qudian Inc. (NYSE: QD) reported its first financial results since going public back in October last year. The company reported its fourth quarter and full year results for fiscal year 2017, but missed estimates in both earnings and revenue.

For the fourth quarter, Qudian reported revenue of $229.2 million, increasing 108.4 percent year over year, but missing estimates of $230.03 million. The company reported an EPS of $0.26, missing analysts’ estimates of $0.27.

Qudian shares were trading 7.6 percent higher midday on Monday.

For the fourth quarter, Qudian reached a total of $3.9 billion in transactions, increasing 69.7 percent year over year, as active borrowers grew to 6.9 million on a total of 62.4 million registered users.

Transactions saw strong growth as transactions processed per hour on average grew to 40,935. The average size of transactions were $148 for cash credit and $215 for merchandise credit.

For the full year, net income increased by 272 percent to $342.5 million on revenue of $734 million, which increased by 231 percent.

"Our success in 2017 was driven by the technology and cost efficiency we put together that made small consumption credit accessible and affordable to hundreds of millions of creditworthy but underserved consumers in China. We also embraced the new regulations issued in the fourth quarter and believe they will promote the longer term healthy growth of the industry.” said Min Luo, Founder, Chairman and Chief Executive Officer of Qudian. “As the industry leader, we have been practicing substantially all the key requirements and working closely with our partners to operate in accordance with the regulatory framework.”

Luo also said in the earnings transcript that he signed an agreement to terminate his salary and bonus until the company reaches a market capitalization of $100 billion, focusing on the growth for the company and driving shareholder value.

The company also launched its new business initiative, Dabai Auto, a budget auto financing segment. The segment launched back in November, but has expanded rapidly, says Luo.

Luo said that many of the registered users seeked larger credit size than what the company’s credit and merchandise credit products were offering, which opened an opportunity to launch Dabai Auto. Qudian leased 284 cars in 2017, and so far has cumulatively leased 4,800 cars as of March 10, 2018.

Qudian forecasts adjusted net income of approximately $400 million and lease more than 100 vehicles.

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