(Yicai Global) Aug. 27 -- Shares in Qudian slid to their lowest price since China's largest online provider of short-term consumer loans listed last October amid investors' concerns over a partnership with fintech giant Ant Financial Services Group which will end this week.
Stocks in the Beijing-based firm [NYSE: QD] fell 12.3 percent to USD6.02 in trading on Friday. The company had attempted to play down the impact of the soon-to-end partnership with the Hangzhou-based Alipay operator in its interim report but investors seemed unconvinced.
Cooperation with Ant Financial, which will finish at the end of August, is not expected to hurt Qudian's business, Securities Times reported Chief Financial Officer Yang Jiakang as saying in the earnings call. Around 96 percent of Qudian's loan transactions in the first half of this year were completed through its own app, he said, adding that the cooperation related to credit ratings between the pair would continue.
The withdrawal of Qudian loan services from the Alipay will no doubt affect traffic for the lender. So herein the question lies - Has Qudian become mature enough to no longer rely on Alipay for customers?
Yicai Global has selected three key points from Yang's answers in the conference call as the core customer base, the degree of external channel dependence, and the contribution of the customer base.
How many customers has Qudian accrued through its own app?
Qudian disclosed in its listing prospectus last year that it signed a new contract with Alipay last August, with a lower entry level free from the platform. The Ant Financial unit would also charge Qudian a higher channel fee according to the deal.
The online lender started to push its own app from last November with 96 percent of borrowing completed through its own app for the first half.
Company revenue more than doubled to CNY2.2 billion (USD339 million) in the first half, while adjusted net profit rose 42 percent to CNY738 million.
How many of Qudian's new registered users are from Ant Financial?
Over 30 percent of Qudian's new borrowers in the past eight months registered through a specific contract related to Ant Financial cooperation, and this part of the customer make-up may change in the future, Yang said. The remainder of more than 60 percent of new registered users will remain on the platform, he emphasized.
Another key point is that 30 percent of newly registered users through Ant Financial contributed a mere 2% of Qudian's total transaction volume. Therefore, Yang believes that this channel will not affect the income and profit.
Qudian is expected to gain some 1 million to 2 million new registered users through traffic to its app, he added.
How much room for development does Qudian have for its registered users?
Yang analyzed the firm's user structure, stating that there are some 5 million borrowers among more than 67 million registered users, which means there is space to develop business from 92.5 percent of registered users.
The management has full confidence in the future business and financial situation, and the company is steadily moving toward the goal of CNY2.5 billion of adjusted net profit for the whole year, Yang stated.
The firm also aims to make new car retail platform Dabai Automobile a new pillar of growth for the company.
Dabai Automobile realized sales of CNY785 million in the second quarter, accounting for 35 percent of total income, though the unit is yet to break even. Income costs at Qudian also increased from CNY194.3 million in the same period in 2017 to CNY947.8 million, mainly because of the costs related to Dabai Automobile.
Qudian expects that Dabai Automobile will become cash-positive and profitable next month from the perspective of gross profit, Yang told analysts.
Editor: William Clegg