PPDAI Stock Soars 7% on Increase in Institutionally-Funded Loans
The stock in PPDAI Group Inc (NYSE: PPDF) closed 7% higher on Wednesday, at $2.83 per American depositary share, after it announced a positive trend in funding of loans by its institutional partners and increased loan origination volume.
For the third quarter, the Shanghai-based company, which operates an online consumer finance marketplace, said in a statement on Wednesday that the volume of loans facilitated by its institutional funding partners jumped to $2.64 billion, up 91% from the second quarter. Total loan origination volume was above PPDAI's guidance, it said, as it reached $3.51 billion, up 14% from the previous quarter.
"We are pleased with the rapid and successful expansion of our funding sources towards institutional funding partners," Jun Zhang, the chairman and co-chief executive officer or PPDAI, said in a statement on Wednesday.
He added that the company plans to continue to expand the funding of loans by institutional partners.
Through June, it reported serving more than 99 million cumulative registered users.
Founded in 2007, PPDAI previously focused on peer-to-peer lending before regulators in Beijing tightened China's lending industry, putting many smaller lenders out of business. Some financing marketplaces, like PPDAI, turned to institutionally-funded loans for increased credibility and better risk assessment.
In August, 708 peer-to-peer lenders operated in China, down from 6,000 in 2015, as reported by Waidaizhijia, the P2P-tracking portal. The decline in the industry is expected to persist as China has launched the registration process.
PPDAI, the stock in which was trading near $9.60 per ADS in 2017, the year it went public, has seen its shares fall to a low of $2.65 per ADS this month.
The company announced last month that it will hold its annual shareholders meeting on Nov. 5 to discuss changing its name to FinVolution Group.