Qudian Inc. Faces Challenges in Last-Mile Delivery Transition

Qudian Inc. (NYSE: QD), a consumer-oriented technology company based in China, recently reported its unaudited financial results for the fourth quarter and full year of 2024. The company, which has historically focused on providing small consumer credit products, has been transitioning into last-mile delivery services. This strategic shift has had a significant impact on its overall revenue and profitability, but it also comes with its own set of challenges and risks.

The financial results for the full year 2024 show that Qudian's total revenues increased by 71.3% to RMB216.4 million (US$29.7 million), primarily due to the increase in sales income generated from the last-mile delivery business. This indicates that the transition has been successful in boosting revenue. However, the fourth quarter of 2024 saw a decline in revenue to approximately RMB50.3 million, compared to RMB62.1 million for the same period of the previous year, due to intense competition in the industry. This suggests that while the last-mile delivery business has contributed to overall revenue growth, it also faces challenges that could impact future profitability.

The potential long-term benefits of this strategic shift include the diversification of revenue streams and the ability to leverage technology capabilities to satisfy Chinese consumers' fundamental and daily needs. Qudian's exploration of innovative consumer products and services aligns with this strategy. Additionally, the company's commitment to executing its business transition and maintaining prudent cash management could help safeguard its balance sheet in the long run.

However, there are also potential risks associated with this shift. The intense competition in the last-mile delivery industry, as evidenced by the decline in revenue in the fourth quarter of 2024, could lead to additional operational losses in the future. Furthermore, the company's net loss attributable to shareholders was RMB66.4 million (US$9.1 million) for the fourth quarter of 2024, compared to a net loss of RMB117.1 million for the same period of the previous year. This indicates that while the company has made progress in reducing its net loss, it is still operating at a loss, which could pose a risk to its long-term financial stability.



The decline in revenue from last-mile delivery services in the fourth quarter of 2024 was primarily due to increased competition in the industry. According to the financial report, "The Company's last-mile delivery business encountered intense competition in the fourth quarter of 2024, which led to a decline in revenue to approximately RMB50.3 million in the fourth quarter of 2024, compared to RMB62.1 million for the same period of last year." This intense competition resulted in a decrease in delivery order volume, which in turn led to a reduction in sales income generated from last-mile delivery business.

To address the intense competition, Qudian Inc. plans to remain steadfast in its commitment to executing its business transition. The company aims to maintain prudent cash management to safeguard its balance sheet. This strategy is outlined in the report, which states, "Moving forward, the Company expects to remain steadfast in its commitment to executing its business transition and simultaneously maintaining prudent cash management to safeguard its balance sheet." By focusing on these areas, Qudian Inc. hopes to navigate the competitive landscape and continue to grow its last-mile delivery business.

In conclusion, Qudian Inc.'s financial performance in 2024 shows a positive trend in total revenues and net income, driven by the success of its last-mile delivery business. However, the company also faces challenges in managing its operating costs and maintaining its market share in a competitive environment. The company's ability to navigate these challenges will be crucial in determining its future financial performance.