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QD - Qudian Inc. (NYSE)

Discussion in 'International Markets' started by SensibleInvesting, May 25, 2019.

  1. SensibleInvesting

    SensibleInvesting

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    Hey everyone,

    Given the most recent volatility in the Chinese markets, I decided to not squander a wonderful crash and went bargain hunting, and will continue to do so for some time.

    Recently, I initiated a long position on QD:NYSE (Qudian). In the past year, QD have repurchased >25% of their entire market cap in shares. They're also growing at around a 20 - 25% clip, but have been priced for failure - despite all evidence to the contrary, sentiment is unbelievably bearish. Should the stock price drop (which it most likely will given the negative China sentiment), I have 2 more bullets ready to fire.

    This is a full 15 minute video analysis I made on QD - would love your thoughts and feedback:


    Based on QD's fundamentals, I'm targeting an 80% upside - based on their current out-performance, we're looking at a forward PE of around 4! Crazy!

    Cheers!
     
  2. SensibleInvesting

    SensibleInvesting

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    Just thought I'd post a little update about Qudian - it looks like due to the economic conditions they've wound down their DaBai Autos lending sector. Having said this, they've now dedicated 100% of their focus to growing their pure lending business - in Q1 of 2019, the majority of their revenue growth came from off-balance sheet transactions, reflecting them shifting their business model from direct lending to lending intermediary (which addresses the regulatory crackdown concerns). They've forecasted revenue for FY 2019 to be at least RMB 3.5B; if we have some favourable exchange rates this should see their PE per ADS down to ~3.
     
  3. SensibleInvesting

    SensibleInvesting

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    Update 21/06/2019 - great news - this company is posting some ridiculous numbers! Increased guidance by ~25% for net income - that's nuts:
    upload_2019-6-24_6-44-32.png
     
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  4. peter2

    peter2

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    Good post to highlight the better guidance. I know you're not a day trader but it was a good day for those who read your post and watched tonight's price action on the US markets.
    QD2306.PNG
    A swing trade was possible with the BO > 7.75 a few days ago. I wasn't watching it then. Opportunities are everywhere if we look.
     
  5. SensibleInvesting

    SensibleInvesting

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    Yes well said Peter; I'm looking to increase my holdings in QD - not a trader but always good to pay attention to technicals for better entry points!

    Based on my limited understanding of technicals, it seems to get pumped up to ~70 - 75 RSI before getting dumped back down to ~45 - 50 RSI, on the bigger runs - perhaps it'll have one or two more up days before coming down. Who knows... G20 could turn out to be a disaster and it might crash big!
     
  6. SensibleInvesting

    SensibleInvesting

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    Morning Peter,

    Looks like the pump to ~70RSI has been dumped back down to ~45 - 50RSI - I'm firing another bullet at these prices. Seems like the pump and dump is still happening, and more traders than fundamental investors are interested in QD (for now):
    upload_2019-6-27_6-49-5.png
    I've got another bullet ready should it go back down to the ~$6 levels - perhaps another small dip before getting ready to repeat the pump and dump process, inching incrementally higher each time.

    Cheers,
    SI
     
  7. SensibleInvesting

    SensibleInvesting

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    Hey guys, I've made an amended analysis video to supplement my previous one. Based on my latest research, 80% upside seems far too conservative, and I've put together why I believe 3 - 4x is a more appropriate valuation for Qudian, based on today's prices:

     
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  8. peter2

    peter2

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    I liked your chart showing the relative strength of QD against its peer companies.
    All the best with your investment.
     
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  9. SensibleInvesting

    SensibleInvesting

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    Thanks Peter. Fingers crossed my analysis is correct and we make mega bucks off QD!
     
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