Chinese fintech firm Qudian (NYSE: QD) on Friday reported second-quarter results that were better than the street projection, sending its shares up 4.7% immediately following the announcement. On an adjusted basis, earnings came in at 59 cents per share, 8 cents higher than expected.
Despite the slowdown in the Chinese economy, Qudian reported flat year-over-year revenues at around $323.5 million. The topline was boosted by a 12% increase in the number of registered users and partly offset by the discontinuation of Dabai Auto.
CEO Min Luo said, “Since we have an overwhelming demand situation, instead of increasing marketing spend we have stepped up efforts to activate more new users in our loan book business. Through our increased efforts in credit trials and our evolving credit assessment system, new active borrowers increased by 107.9% from last quarter.”
Total outstanding loan balance at the end of the second quarter rose 91.8% to RMB28.7 billion.
Qudian also maintained its adjusted net income guidance for FY19 at above RMB 4.5 billion, which will represent a 76.5% increase from 2018.
Notably, Qudian is one of the few US-listed Chinese firms that have performed relatively well in the backdrop of US-China trade spat as well as a slowing economy back home. The stock has doubled since the beginning of this year, but is still considered underpriced by a margin of 10%.
The Xiamen-based firm owes its initial success to the opening up of the online credit market in China, allowing companies to set up digital platforms for small consumer credit products. However, last year the sector came under stringent regulatory scrutiny, resulting in curbs on such companies.