Qudian: 60% Discount To Liquidation Value And Massive Value Creation From Buybacks

Core Viewpoint - Qudian Inc. is considered a severely undervalued asset, trading at a significant discount to its liquidation value, with a strong cash position that allows for various opportunities [2][10] Group 1: Company Overview - Qudian operates as a consumer-oriented technology company providing credit solutions and has ventured into the ready-to-cook meal business through QD Food, with a presence in over 200 cities in China [3] - The company has also introduced last-mile delivery services under the brand "Fast Horse" to enhance logistics and meet consumer expectations [3] Group 2: Valuation Metrics - Qudian's diluted market capitalization is approximately $500 million, with a liquidation value estimated at around$1.319 billion, indicating a 60% discount on liquidation value [5][10] - The company has over $1.4 billion in current assets and only$111 million in total liabilities, showcasing a solid balance sheet [7][9] Group 3: Financial Performance - In 2023, Qudian reported a profit of $57 million in Q1 but faced losses in subsequent quarters, totaling$51 million across Q2, Q3, and Q4 [11] - Despite these losses, the company is unlocking value through share repurchase programs, which have been effective in enhancing shareholder value [15][16] Group 4: Share Repurchase Programs - Qudian initiated a share repurchase program in June 2022, with plans to buy back up to $200 million worth of shares, and has since spent around$94 million on this initiative [14][15] - A new program was approved in March 2024 to repurchase an additional $300 million worth of shares over the next 36 months, indicating confidence in the company's undervaluation [14] Group 5: Market Sentiment and Strategy - The current market sentiment towards Qudian is negative, but this presents a buying opportunity as shares are available at a significant discount [16] - The company is advised to continue its share repurchase strategy to maximize shareholder value, as each dollar spent on buybacks is generating substantial returns [15][16]