Yirendai's Stock Jumps 4% on Better-than-expected Revenue

Yirendai’s revenue fell 114 percent year-over-year in the second quarter, but still beat analysts' estimates.

Author: Anthony Russo   

The stock in Yirendai Ltd. (NYSE: YRD) closed up 4 percent, at $9.59 per share Wednesday, after the company reported better-than-expected revenue.

Yirendai provides services both online and offline, connecting borrowers and investors in its peer-to-peer lending marketplace. It also provides wealth management services.

The Beijing-based company said in a statement Tuesday after markets closed that its revenue in three months through June was $322.9 million, down 114 percent year-over-year but still above analysts' expectations. Net income was $22.5 million, or 24 cents per American depositary share, compared with $30.9 million, or 50 cents per ADS, a year ago.

Yirendai attributed the decline to the revenue drop in Yiren Credit, which was $236.6 million in three months through June, down 34 percent from a year ago. The number of borrowers fell 10 percent year-over-year to 135,246, while loan originations decreased 12 percent to $1.4 billion.

Huan Chen, Yirendai's director and chief risk officer, commented on the market conditions.

"On credit performance and risk management, we saw slight volatilities in early delinquencies this quarter as a result of industry conditions and a declining loan balance," Chen said in the statement. "To improve our overall risk levels, we have been actively optimizing our product portfolio to reduce risk exposure and enhancing our risk data set to lower borrowers' over-indebteness risk."

Chen also said Yirendai's integration with institutional bank funding could show further risk performance improvement.

Meanwhile, the company's revenue from its Yiren Wealth line grew 11 percent from a year ago to $86.3 million in the second quarter.

Going forward, Yirendai said it plans to make a number of staff changes. Dennis Cong, the co-chief financial officer of Yirendai, will assume the role of senior vice president of corporate business development, while Jia Liu will become the sole CFO, the company said.