X Financial's Fourth Quarter Results Take Stock 5% Higher
The stock of X Financial (NYSE: XYF) jumped more than 5 percent Tuesday morning, to $6.55 per American depositary share, after the peer-to-peer lending marketplace announced improved revenue and profit for the fourth quarter, as well as a dividend for 2018.
The Shenzhen-based company, which connects borrowers and investors on its platform, reported in a statement Monday evening that its revenue grew 18 percent year-over-year to $125.5 million during the three months through December.
Its net income, X Financial said, was $35.2 million, or 22 cents per share, at a 53 percent increase from the same period of 2017.
The founder, chairman, and chief executive officer of X Financial, Justin Tang, said the improved results came despite market volatility last year.
"Since the second half of 2018, the industry has been under strict government oversight with many small and illegal lending platforms gradually being weeded out of the market," Tang said.
"Over the past year, we have been diversifying our funding sources and strengthening our cooperation with financial institutions. For example, we partnered with CITIC Trust, Kunlun Bank and China Foreign Economy and Trade Trust Co., Ltd. and are also in discussions with other nationally renowned financial institutions and trusts. Given that the majority of our products are covered by ZhongAn Insurance, financial institutions have been eager to cooperate with us."
Tang added that the company has taken measures to strengthen its credit risk assessment by sharing credit information with Baihang Credit. It has also partnered with Citic AIBank Corp. that would independently manage all borrowers' and investors' funds. And lastly, he said X Financial has launched Xiaoying Wallet, after significant investment in research and development.
"Overall, we are pleased with the significant progress we have made and strongly believe that we are ideally positioned to continue benefiting from the enormous growth opportunities in China's personal finance industry," Tang said.
Tang also mentioned paying out a dividend of 10 cents per share to the company's stockholders. The date of the payout has not yet been declared.
The company has facilitated 1.3 million loans during the fourth quarter, representing a year-over-year increase of 13 percent and a quarter-over-quarter increase of 61 percent. The loan facilitation amount was 9.5 billion yuan, according to the report.
During the full year, X Financial said its revenue has nearly doubled from 2017 to $515 million. Net income grew 154 percent year-over-year to $128.4 million, or 84 cents per ADS.
The company forecast the total loan facilitation in the first quarter to reach 9 billion yuan.
X Financial completed its initial public offering in New York in September 2018, raising $104.5 million. The stock skyrocketed to $19 per share in its first hour of trading from its offering price of $9.50 per share.
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