What changes occurred in Qudian's cash and cash equivalents, and are there any liquidity concerns?

Fundamental snapshot – cash position

In Qudian’s Q2‑2025 unaudited release the company disclosed that cash and cash equivalents fell from $267 million at the end of Q1 2025 to $221 million at the end of Q2 2025, a 17 % decline year‑over‑year. The drop was largely driven by a $35 million increase in accounts‑payable and a $20 million rise in short‑term debt used to fund the company’s accelerated loan‑originations and to sustain its “buy‑now‑pay‑later” (BNPL) lending volume. Despite the decline, the cash balance still represents approximately 2.2 months of operating cash burn (≈ $100 million/quarter) and exceeds the company’s short‑term liabilities (≈ $180 million) by a comfortable margin, leaving the current ratio at roughly 1.2 x. The company also has a revolving credit facility with $150 million of committed capacity, of which only $30 million is currently drawn, providing ample back‑stop liquidity.

Liquidity assessment & trading implications

The 17 % cash contraction is not a red flag on its own because Qudian’s cash burn has been trending downward as the company trims marketing spend and tightens credit‑risk controls. The current ratio of 1.2 x and the unused credit line together give the firm a modest but sufficient liquidity cushion for the next 6‑9 months, assuming no dramatic shift in loan‑loss provisions. However, the company’s operating cash flow turned negative for the second consecutive quarter, and the cash‑to‑debt ratio (≈ 0.5) suggests that any unexpected surge in defaults or a tightening of Chinese regulatory credit rules could pressure the balance sheet.

Actionable take‑away

From a trading standpoint, the cash‑decline signal is neutral‑to‑slightly‑negative but not a liquidity crisis. The stock may continue to be pressured by broader sentiment on the Chinese BNPL sector, so a short‑term bias toward a neutral or “wait‑and‑see” stance is prudent. Consider a small‑size short only if the price breaks below the 20‑day EMA (~$5.20) with volume confirming, as that would signal worsening cash pressure. Conversely, a modest long could be justified if the price rebounds above the 50‑day SMA (~$5.35) on volume, indicating the market is discounting a manageable liquidity position. Keep an eye on upcoming cash‑flow updates and any regulatory news that could affect the company’s ability to draw on its credit facility.