Is Qudian Stock A Buy?
📉 I've been buying Qudian $QD since about a year and it is the worst performing stock in my portfolio. Is it still a buy?
🏦 Qudian is a Chinese Fintech company providing credit to the unbanked population of China. Qudian currently has 4.1 million active borrowers down from 6.3 million a year ago. This pandemic and more regulations have caused a rise in delinquency.
🚗 Another reason why the market doesn't like Qudian is because of all the new businesses they have been trying. for example, the Open Platform (currently on pause), Dabai Auto and Wanlimu. Qudian also bought 28% of Secoo for a 300% premium.
💰 On the day of the IPO, the then-CFO said that the aim of the company is to build an M&A warchest to buy other companies. The credit business of Qudian is just to generate cash flow is order to make acquisitions. This is a similar strategy used by Warren Buffett at Berkshire Hathaway $BRK.B using insurance to buy other businesses.
💸 In my opinion, the best way to value Qudian is looking at book value and right now, it is trading at X0.2 book value. If they can generate cash flow and keep building their portfolio, eventually, I believe the market will value you them at a better multiple of book value. However, it is still a very risky stock. It can be a 10 bagger but it can also go to zero.
Watch the full video on YouTube:
🔬Full analysis of Qudian🔬
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