Chinese Lender Qudian Jumps After Year's Fourth-Biggest U.S. IPOBy
Shares leap as much as 48 percent after $900 million offering
Qudian to be joined by other Asian companies on U.S. exchanges
Qudian Inc., a Chinese online loan provider, jumped in its trading debut after pricing the fourth-biggest U.S. initial public offering this year.
Qudian rose as much as 48 percent and was up 32 percent to $31.60 at 11:50 a.m. 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 about $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 Holding Ltd.’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 U.S. exchanges. Sea Ltd., the Singapore-based parent company of gaming platform Garena, is scheduled to price its IPO this week. It’ll be joined by Bain Capital-backed Rise Education Cayman Ltd., which offers immersive American English lessons at its network of after-school learning centers in China.
Those listings have helped put October on track to be the biggest month of the year for new share sales in the U.S.