Yirendai Shares Jump 15% Despite 38% Drop in Loan Amount
Yirendai Ltd. (NYSE: YRD), a large peer-to-peer lender in China, posted its fourth quarter earnings Monday showing both revenue and net income dropped more than 25 percent.
The stock of Yirendai, however, jumped more than 15 percent today in New York to close at $13.25 per share.
In the fourth quarter of 2018, the Beijing-based fintech company saw its revenue decrease 30 percent to $185 million amid an uncertain industry environment. Net income was $48.2 million, a decrease of 26 percent from the prior year, primarily because of a 38 percent drop in the amount of loans facilitated in the past quarter.
Yirendai facilitated $1.2 billion of loans to 111,274 borrowers through its online marketplace over the past quarter, with more than 30 percent of loan volume generated by repeat borrowers who borrowed on Yirendai's platform before. However, during the same quarter a year earlier, Yirendai facilitated nearly $2 billion of loans to more than 200,000 borrowers.
Yihan Fang, chief executive officer of Yirendai, conceded that 2018 was a challenging year for Yirendai with the Chinese online lending industry in turmoil after several well-known platforms declared bankruptcy.
"Demand for our wealth management product continues to be strong, close to half a million retail investors chose to invest in our platform this year despite volatilities in the industry and we continue to see average [assets under management] per investor increasing," said Fang. "2019 will be an important year for our online wealth management business as we strategically focus to provide more diversified products to better serve our investors."
For the long term, however, Yirendai's management said it remained optimistic. "We are progressing smoothly with the current industry regulation evaluation process," commented Dennis Cong, chief financial officer of Yirendai. "This quarter, we continue to make progress in expanding our institutional partnerships which will help drive our business growth in 2019."
"Going into 2019, we will maintain focused on continual diversification in funding sources, expanding our loan product mix as well as enhancing our risk management strategies to support our credit and wealth management business growth," said Cong.
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