Kunlun Group to Offload Shares of Microcredit Firm Qudian to Avoid Financial Risks
Tang Shihua
DATE:  May 24 2018
/ SOURCE:  Yicai
Kunlun Group to Offload Shares of Microcredit Firm Qudian to Avoid Financial Risks Kunlun Group to Offload Shares of Microcredit Firm Qudian to Avoid Financial Risks

(Yicai Global) May 24 -- Kunlun Group Ltd. plans to sell shares of Qudian Inc., a Chinese online microlending firm, to improve asset liquidity and avoid financial risks, the company said.

The Hong Kong-based company's board of directors plans to authorize its management to sell the shares of Qudian it holds within the next 12 months, said its parent company Beijing Kunlun Tech Co. in a statement yesterday.

As of the statement date, Kunlun Group holds 55,603,706 shares of Qudian, or 16.7 percent stake, as its third largest shareholder. Ant Financial Services Group, affiliate of Alibaba Group Holding Ltd., also owns a 12.8 percent stake in Qudian, which it bought through a Hong Kong-based subsidiary, shows publicly available information.

Qudian was listed on the New York Stock Exchange [NYSE: QD] lst October, with offering price of USD24 per share. Its stock price hit a maximum of USD35.45 and market value reached about USD10 billion at its initial public offering. Kunlun sold part of its shares at the offering price and got USD56 million. As Kunlun was an investor in Qudian well before its IPO, it got a hefty return by selling parts of its shares.

However, Qudian's stock price has kept declining since then. It closed at USD9.01 per share yesterday, down about 2 percent, after hitting a session low of USD8.59 -- a sharp decline compared with the initial public offering price, following Kunlun's statement about its plans to offload more shares.

Qudian originally provided campus loan to college students. However, since the central government cracked down on scam and financial fraud of companies operating in this field, the firm's focus shifted to less lucrative areas.

Per its first quarter financial report released on May 21, the company's revenue more than doubled year-on-year, with net profit totaling CNY316 million (USD50 million). However, its stock price slumped by 16.46 percent, with the quarterly financial results failing to stop it.

Although the company's operating income has jumped, its year-on-year growth rate of single quarter revenue has witnessed a continuous downtrend since the third quarter of last year, showed the financial report.

Editor: Mevlut Katik

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Keywords:   Assets Sale,NYSE,Qudian,Fintech,Alibaba,Kunlun Group,SHAREHOLDING