Qudian Makes a Splash as the Biggest Chinese IPO of the Year

By Chris Lange Updated Jan 12, 7:04AM EST · Published Oct 18, 12:00PM EDT

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Qudian Makes a Splash as the Biggest Chinese IPO of the Year — © Thinkstock

Qudian Inc. (NYSE: QD) entered the market with a bang on Wednesday, with shares jumping nearly 50% from the original pricing. This is yet another Chinese company breaking into U.S. markets and, like its predecessors, Qudian received an incredible valuation and pop for its initial public offering. This is the biggest Chinese company to IPO in 2017.

This Chinese giant priced its 37.5 million American depositary shares (ADSs) at $24 apiece, with an overallotment option for an additional 5.625 million. Each ADS represents one ordinary share. At this price the entire offering is valued up to $1.035 billion.

The underwriters for the offering are Morgan Stanley, Credit Suisse, Citigroup, CICC, UBS Investment Bank, Stifel, Needham and Nomura.

As a provider of online credit products, Qudian uses big data-enabled technologies, such as artificial intelligence and machine learning, to transform the consumer finance experience in China. The company targets hundreds of millions of quality, unserved or underserved consumers in China.

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This is the largest online provider of small cash credit products in China in terms of the number of active borrowers and the amount of transactions in the six months ended in June, 2017, according to the Oliver Wyman Report. In the six months to that date, the firm facilitated approximately RMB38.2 billion ($5.6 billion) in transactions to 7.0 million active borrowers.

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Qudian described its finances as follows:

Our total revenues increased from RMB24.1 million in the period from April 9 to December 31, 2014 to RMB235.0 million in 2015. Our total revenues further reached RMB1,442.8 million (US$212.8 million) in 2016, which was 514.0% higher than our total revenues in 2015. Our total revenues increased by 393.3% from RMB371.6 million in the six months ended June 30, 2016 to RMB1,833.1 million (US$270.4 million) in the same period in 2017. Our net losses were RMB40.8 million in the period from April 9 to December 31, 2014 and RMB233.2 million in 2015. In 2016, we recorded net income of RMB576.7 million (US$85.1 million). Our net income increased by 695.2% from RMB122.4 million in the six months ended June 30, 2016 to RMB973.7 million (US$143.6 million) in the same period in 2017.

The company intends to use the net proceeds from this offering for marketing and borrower engagement activities, strategic acquisitions and general corporate purposes.

Shares of Qudian were last seen up about 30% at $31.17, with a range of $30.38 to $35.45 on the day so far. Over 21 million shares have moved as of noon Eastern.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.