FAST NEWS: OneConnect Cashes Out of Non-core Business

The latest: Financial technology service provider OneConnect Financial Technology Co. Ltd. (OCFT.US; 6638.HK) on Thursday said it sold its 40% stake in Puhui Lixin to Puhui Management, a company principally engaged in the investment and disposal of non-performing assets. Looking up: At the end of September, OneConnect had cash and cash equivalents of 1.46 billion yuan ($204 million). Through this transaction the company will obtain an additional 199 million yuan, further increasing its cash reserves. Take Note: Upon completion of the sale, OneConnect will no longer be able to incorporate…

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Online Loan Facilitators Enter ‘Risk Management Mode’ as Times Get Tough

Lexin, 360 DigiTech and FinVolution are turning their focus to high-quality borrowers at the expense of revenue growth to shield themselves from growing default risks Key Takeaways: Lexin and 360 DigiTech reported third-quarter revenue and profit declines as they refrained from lending to riskier borrowers and boosted default provisions The results show that fintech loan facilitators are turning cautious to avoid default-related loan losses as China’s economy slows By Warren Yang “Risk management trumps all” appears to be the mantra for Chinese online loan companies these days as China’s economy…

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If JD Tech Is Getting Back on IPO Track, Could Ant Group Be Next?

China’s securities regulator is reported to be taking another look at JD Technology’s IPO application and might approve the listing at the end of the year. The market thinks Alibaba’s Ant Group may also be getting close to reviving its IPO Key Takeaways: Reports are circulating that Chinese securities regulators are reviewing JD Technology’s IPO application, and that the firm’s investment bankers have resumed work on the listing Meanwhile, Ant Group has taken a potential step towards a revived IPO after boosting the registered capital of its consumer finance arm…

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FinVolution Picks Up the Pace in Its Global Expansion

The fintech lender announced a major boost in the size of the borrowing facility from its Indonesia partner, though the expanded amount is still small at around $30 million Key Takeaways: FinVolution has announced a major expansion in the size of its borrowing facility from Indonesian partner PT Bank Jago The fintech lender still gets a miniscule part of its business from outside China, with international loans accounting for just 2% of its lending transaction volume By Doug Young Every journey begins with a single step, especially when that first…

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Credit, Anyone? China’s Online Loan Platforms Get Stuck as Quality Borrowers Dwindle

Three online loan facilitators reported second-quarter profit declines of varying degrees, as China’s slowing economy forced them to prioritize risk management over revenue growth Key Takeaways: FinVolution’s revenue growth slowed to about 12% in the second quarter from 16% and 32% in the previous two quarters, while its latest quarterly net profit fell about 6% 360 DigiTech and Lexin posted little or no revenue growth for the quarter, as their profits plunged 37% and 80%, respectively, during the period By Warren Yang It’s difficult for any lender to grow its…

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After Ho-Hum Pricing, AMTD Digital Storms Out of the Gate in U.S. Trading Debut

Shares of fintech accelerator backed by Hong Kong billionaire Li Ka-shing more than tripled from their IPO price in their first two trading days Key Takeaways: Hong Kong-based AMTD Digital Raised About $125 million in a New York IPO, becoming the largest New York listing by a Chinese company this year The company, which is backed by Hong Kong billionaire Li Ka-shing, is suffering from slowing revenue growth, but boasts higher margins than other fintech stocks By Warren Yang There are plenty of China fintech stocks out there, though many…

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China’s Economic Slump Leaves Internet Lenders Battling Bad Loans

360 DigiTech, FinVolution and Lexin all reported first-quarter net profit declines and growing delinquent loans, amid a grim outlook for China’s economy Key takeaways: •      360 DigiTech and FinVolution posted 12% and 9% profit declines in the first quarter, respectively, while Lexin’s profit plunged by 89% •      Delinquent loans rose for all three lending platforms, forcing them to increase loan-loss provisions By Warren Yang The fortunes of consumer lenders are a good proxy for the state of an economy. When times get rough, individuals with shaky income are often among…

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Qudian Sees Food for Growth in Prepared Meals, Weighs Exit of Core Lending Business

The former fintech pioneer’s stock fell more than 10% after it announced a potential wind down of its original credit business as well as a new foray into ready-made meal kits Key Takeaways •      Qudian said it has started trial operations for QD Food, which sells ready-to-cook meal kits through a WeChat mini app •      The move comes as company says it may wind down its original credit business due to challenging regulatory environment By Warren Yang Some China fintech companies seem to know no bounds when it comes to…

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FinVolution Emerging as Fintech Lending Leader After Industry Makeover

Direct lender-turned-loan facilitator reported better results for 2021 than two of its peers that also released earnings last week, sparking a 30% jump in its shares Key Takeaways: •      FinVolution, which has transformed into a loan facilitator from a direct lender, reported a 32% rise in fourth quarter revenue despite regulatory headwinds for fintech lenders •      Lexin, which is also switching to a facilitator model but still continues to lend directly, posted a 27% decline in quarterly revenue, as it sacrificed growth for better risk management •      Fourth-quarter revenue at…

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Qudian Headed for Wall Street Exit Door? Not So Fast, Perhaps

Former fintech highflyer’s average share price falls below $1 for 30 days, even as analyst sentiment shows sudden positive shift Key takeaways: Qudian’s stock has closed at an average price of less than $1 over the last 30 trading days, putting it out of compliance with New York Stock Exchange listing rules Analysts have suddenly become more positive on the company, with six rating it a ‘buy’ or ‘strong buy’ in February after it received mostly ‘hold’ ratings in previous two months By Doug Young We’ll end this first trading…

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