Qudian’s third quarter net profit more than quadrupled as microcredit increases

Qudian Inc., a leading Chinese microlender, on Monday said its third quarter net profit more than quadrupled on strong growth in borrowers seeking short-term loans to purchase items as diverse as sneakers. brand and concert tickets.

For the three months ended September 30, the company posted net income of $ 97.8 million, up 322% from the third quarter of last year. It reported revenue of $ 218.1 million in the same period, up 308% from the previous year.

In the third quarter, the company had 7.5 million active borrowers, up 175% from the same period last year. The total value of transactions reached $ 3.8 billion, up 219% from the previous year quarter.

Qudian, whose name translates to “Fun Shop,” raised $ 900 million during its initial public offering (IPO) on the New York Stock Exchange last month, making it the fourth-largest IPO in the world. United States this year. Qudian’s U.S. depository shares fell 1% to $ 27.23 on Monday, still up about 13% from its IPO price of $ 24.

The company lends money and advances credits to young Chinese mobile-savvy consumers, poorly served by traditional banks due to borrowers’ lack of credit history.

Qudian started in 2014 offering small online loans to students. Now, the company has turned to loans primarily to white-collar workers after China banned online student loans following several financial scams.

Users borrowed an average of $ 139 per transaction for cash credit and $ 209 for merchandise credit, according to the company’s earnings release.

Qudian uses data provided by Ant Financial Services Group, a subsidiary of Alibaba, a minority investor, to analyze a borrower’s creditworthiness based on their online shopping history and borrowing behavior. Qudian said its rate of defaults, or those overdue for more than 30 days, remained below 0.5% until September 30.

Qudian said in its IPO prospectus that the annual interest rate charged in 2016 was 59.5%, above the legal cap of 36%.

Qudian CFO Carl Yeung said in the earnings release that the company has adjusted interest rates on all of its products since April and now capped them at 36%.

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