Shares of Qudian Inc. sank 5.5% in active premarket trading Thursday, after the China-based consumer finance company said it was withdrawing its fiscal 2019 guidance, and will not issue an outlook in the near term, given uncertainty regarding the regulatory and operating environment. Separately, the company said it approved a new $500 million stock repurchase program. Qudian said recent regulatory developments include further restrictions on loan collection practices, more stringent user data privacy rules and the requirement for peer-to-peer (P2P) lending platforms to exit their P2P businesses. “These regulatory developments have reduced the availability of funding for consumer credit and driven up delinquency rates across the industry, including the company’s loan portfolio,” the company said. As a result, Qudian said transaction volumes have “substantially” decreased as it implemented “significantly stricter” loan approval standards. In November, the company said it expected 2019 adjusted net income of RMB4.0 billion ($581.4 million). Qudian’s stock has plunged 33.5% over the past three months through Wednesday, while the S&P 500 has gained 10.0%.
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