Finance

Lexin Slows Down Lending as Latest Regulatory Wave Rocks Fintechs

Company scales back 2021 loan facilitation goals amid latest talk that Beijing could sharply lower interest rate cap for personal loans Key Takeaways: •      LexinFintech is voluntarily slowing down its lending activity while it awaits the next major move in China’s rapidly evolving regulatory environment •      Company’s shares tumbled after its latest quarterly results announcement, despite reporting 10% revenue growth and 88% profit growth By Thomas Zhang Solid growth is the gold standard for investors, even though such growth may not guarantee a stock will rise. That lesson is on…

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Investors Cheer ZhongAn’s Insurance Milestone. But Only Briefly

Online insurer backed by Alibaba, Tencent and Ping An posts first-ever profit for its underwriting business in first half of 2021 Key takeaways: •   Online-only insurer ZhongAn made a profit from underwriting insurance for the first time in the first half of 2021, helping its net profit jump 54% •   Company’s shares still trade far below their IPO price, underscoring soured investor sentiment after years of losses By Warren Yang It’s been a long time coming for ZhongAn Online P&C Insurance Co. Ltd. (6060.HK), the online insurer that made a splash in…

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Noah Holdings Stung by High Costs Amid Pivot to China’s Rich

Investors dump asset manager’s shares after its latest quarterly report shows heavy spending eroded profit margins Key points: Asset manager Noah Holdings’ second quarter revenue grew 20%, but margins got squeezed by faster-growing operating expenses High expenses came from recruitment of new wealth management staff as company shifts focus to affluent Chinese customers By Warren Yang For a refocused Noah Holdings Ltd. (NOAH.US) banking on Chinese millionaires as its main customers, growth is proving costly. The company, one of the oldest private asset managers in China, reported 899.4 million yuan…

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360 DigiTech’s Lending App Returns to China Stores, But Investors Unimpressed

Fintech company’s shares jump after announcement of return of its Jietiao app to Chinese app stores, but later give back all those gains and more Key Takeaways: Fintech loan facilitator 360 DigiTech says its main app was restored to Chinese app stores after its earlier removal for data collection violations Company’s stock initially rallied after news, but failed to recover to pre-crisis levels and later gave back all the gains amid a flood of shareholder lawsuits By Thomas Zhang Investors in Chinese fintech companies have had a few rollercoaster months…

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Bitcoin Mining Machine Maker Canaan Plays Up Offshore Sales

Company announces two major new international orders over last two weeks as ongoing crackdown pressures sales in its home China market Key points: Canaan Inc.’s recent series of deals from two major international customers could be worth around $200 million in 2021 and 2022 Company is trying to highlight its growing global customer base as China shutters most domestic crypto mining in recent crackdown By Doug Young Despite being based in China, we’re really quite international. That’s the message bitcoin mining machine maker Canaan Inc. (CAN.US) is trying to tell…

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Software Spinoff OneConnect Unable to Cut the Cord from Powerful Parent

Company’s shares have lost a third of their value over the past week since it revealed it still gets two-thirds of its revenue from Ping An-related sources Key Takeaways: More than two-thirds of OneConnect’s revenue comes from its parent Ping An Group and affiliated companies OneConnect may be especially vulnerable in Beijing’s recent crackdown on U.S.-listed Chinese companies due to its access to huge amounts of sensitive financial data By Thomas Zhang In the investment world, 25% revenue growth is generally a positive thing. It’s rarely something to worry about…

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Tiger Brokers-Backed SPAC Makes Stealthy Trading Debut

TradeUP Acquisition Corp. raised $40 million as the second ‘blank check company’ sponsored by China’s No. 2 broker for Chinese investing in U.S. and Hong Kong stocks Key points: The ‘blank check company’ sponsored by Tiger Brokers made a quiet trading debut last week after raising $40 million The SPAC is part of the company’s fast-growing investment banking services for Chinese companies listing overseas By Doug Young Following a strong start to the year, Chinese IPOs in New York have ground to a sudden halt as companies figure out their…

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Fintech Qudian’s Profits Boom, Loans Shrink as It Bets on Direct Lending Model

Company posts fourth consecutive quarterly profit, but its shares remain significantly undervalued compared with peers Key points: Former fintech star Qudian has given investors cause for cheer with its fourth consecutive quarterly profit Microlender must demonstrate it can resume expansion of its core lending business following years-long regulatory crackdown By Ben Livesey Qudian Inc. (NYSE: QD), once the darling of the Chinese fintech industry, has provided some respite for long-suffering investors in its first-quarter results, with confident comments on its loan quality and optimism that implies it may be seeing…

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Investment Bank China Renaissance Is Reborn on First-Quarter IPO Boom

Company’s deal volume rose six-fold in first three months of 2021, as it helped to underwrite Kuaishou’s blockbuster Hong Kong listing （Photo above of Renaissance founder Bao Fan） Key points: China Renaissance has reported a banner first-quarter on an explosion of IPOs by Chinese tech companies The investment bank faces several headwinds, including growing movement by big Wall Street banks into its backyard By Ben Livesey Boutique dealmaker and private equity investor China Renaissance Holdings Ltd. (1911.HK) has been going gangbusters this year. The self-proclaimed one-stop shop for Chinese “new…

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Daqo’s Secondary China IPO: Good for Daqo, But Less Clear for U.S. Shareholders

Company’s plan for dual listing on Shanghai’s STAR Market moves ahead with submission to Chinese securities regulator Key points: Daqo is at the forefront of a group of New York-listed private Chinese firms seeking secondary listings on China’s 2-year-old STAR Market The dual listing should benefit the company, but could have relatively little upside for its New York-listed shares By Doug Young Today we break from our usual discussion of corporate strategy and instead examine a growing financial strategy of Chinese companies: listing in multiple markets at once, usually combinations…

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