Hexindai Revenue Plummets 91%; Stock Jumps 6%
Shares in Hexindai Inc. (Nasdaq: HX) soared 6 percent, to $1.68 apiece, on Wednesday though the company reported a dramatic decline in revenue for the first fiscal quarter.
The Beijing-based consumer lending platform said its revenue dropped to $4.9 million in the three months through June, down 91 percent year-over-year. Its net loss hit $7.2 million, or 15 cents per American depositary share, in contrast to net income of $29.7 million in the corresponding period a year ago.
Xiaobo An, the founder and chief executive officer of Hexindai, attributed the loss to the continuing uncertainty related to the regulatory environment in the peer-to-peer industry in China.
"Facing a challenging market, we began strategically repositioning our business during the quarter by developing a loan assistance business alongside our P2P business," An said in a statement today.
The loan volume facilitated by Hexindai decreased 94 percent to $28.2 million in the first quarter, while the number of borrowers declined 36 percent to 18,546 from one year ago, according to the report.
In July, Hexindai announced it will further diversify its business by launching a new e-commerce installment financing service "Hexin Installments."
Apart from its new loan assistance business, Hexindai sought to increase its partnerships with institutional funding partners to provide installment financing for consumers. Loan volume funded by institutional partners during the first quarter accounted for approximately 20 percent of the total loans, according to its statement.
An expressed his determination to rebuild customer confidence in the preceding quarter when the company reported 85 percent decline in its net revenue. "We are awaiting further notice to begin the registration process which we believe has already begun to rebuild confidence in our platform," he said in June.
The stock of Hexindai has slid 79 percent over the past year from $7.88 per ADS to today's close of $1.68 per share.
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