Photographer: Michael Nagle/Bloomberg

Chinese Lender Qudian Jumps After Year's Fourth-Biggest U.S. IPO

Updated on
  • 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.

MORE: How Qudian’s IPO could make its 34-year-old founder a billionaire

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.

Qudian’s offering was led by Morgan Stanley, Credit Suisse Group AG, Citigroup Inc., China International Capital Corp. and UBS Group AG.

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