(Yicai Global) June 7 -- Gaming firm Beijing Kunlun Tech has sold another 2.5 million shares in Qudian for just under USD8.9 apiece as it plans to shed all of its holdings in the micro-lender within a year.

The passive investor pocketed CNY123 million (USD19 million) from the deal, equivalent to nearly 12.4 percent of its 2017 profit, it said in a statement yesterday. The sale leaves Kunlun with 53 million Qudian shares, or a roughly 16-percent stake.

Kunlun, Qudian's third-largest shareholder, announced on May 23 that it would sell off its entire stake in the firm within 12 months as it looks to improve liquidity and avoid financial risk. Shares [NYSE:QD] had slumped nearly 24 percent to USD9.2 in the five trading days before the statement, but have since rallied to USD9.64.

Qudian is one of a multitude of Chinese fintech firms, including Hexindai, Ppdai Group and Jianpu Technology, which listed in the United States late last year but struggled to find success. Qudian's Chief Executive Luo Min plunged his firm into even more trouble by saying in an interview that the company would write off overdue payments as bad debt, rather than chase them up, which few believed.

The firm began life in 2014 offering loans to college students, but was forced to move into less lucrative fields after the Chinese government outlawed lending to learners in June last year. One of the main reasons was students committing suicide after finding themselves under excessive pressure from debt collectors, with some being forced to take nude photos as collateral. Even after it listed on Oct. 18, reports still suggested Qudian lent to college-goers.

Kunlun sold off a portion of its shares the same day the investee went public with an offering price of USD24, and closed at nearly USD29.2. The company was Qudian's second-largest shareholder before the deal, from which it profited CNY86 million and reduced its shareholding to 17.4 percent.

It also dumped close to 1.8 million shares to cover the over allotment for the listing, shedding them at USD24 a share in a deal worth USD42 million.

Editor: James Boynton