FAST NEWS: Yixin Returns to Profits as Loan Intermediary Revenue Surges

The latest: Internet-based auto financier Yixin Group Ltd. (2858.HK) announced Monday that its revenue jumped 73.2% year-on-year to 2.45 billion yuan ($358 million) in the first half of the year, as it returned to the black with a net profit of 124 million yuan.

Looking up: The company logged 266,000 auto financing transactions in the first half of the year, up 17% year-on-year. The value of those transactions jumped by an even larger 37% to 25 billion yuan, even as demand for vehicles shrank due to weak spending tied to China’s strict pandemic control measures.

Take Note: The group’s new vehicle financing transactions fell 24% in the first half, while the amount financed from those transactions fell 16%, mainly due to the pandemic-related supply chain disruptions and a pivot to stronger focus on the used vehicle financing business.

Digging Deeper: Yixin is a leading online auto finance trading platform in China, with internet giant Tencent (0700.HK) holding a majority 53.97% stake. The company was originally a direct provider of loans for auto buying and leasing. But it turned to intermediary services facilitating similar loans between banks and consumers after a regulatory clampdown on online finance and P2P lending. The new business has been a quick success, with revenue from that part of its mix jumping 126% year-on-year to 1.52 billion yuan in the first half of 2022. To diversify its revenue, the group launched an “after-market business” in 2020, which has also been growing steadily. That business brought in 88.8 million yuan in revenue in the first half of the year, up 68% year-on-year.

Market Reaction: Shares of Yixin surged 12.2% in early trade on Tuesday, before giving back some of that to close up 5.1% at HK$1.03 at the midday break. They now trade at the lower end of their 52-week range.

Translation by Jony Ho

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