FinVolution Tests Regulatory Tolerance With First Asset-Backed Securities Issue

Online loan facilitator issues 200 million yuan worth of ABS months after Ant Group scrapped plan for much larger similar offering Key Takeaways: •      Online loan facilitator FinVolution has issued its first batch of 200 million yuan worth of asset-backed securities as a new form of fundraising tool •      Move comes four months after the larger Ant Group canceled a much larger ABS sale totaling 18 billion yuan By Warren Yang Online loan facilitator FinVolution Group (FINV.US) is undergoing its own low-key revolution in China’s fintech realm, quietly adding asset…

Read MORE »

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…

Read MORE »

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…

Read MORE »

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…

Read MORE »

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…

Read MORE »

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…

Read MORE »

Loan Facilitator 360 DigiTech’s Profit Soars, as Investor Focus Elsewhere

Fintech’s first-quarter profit rose by factor of seven on its automation drive, even as company acknowledged recent meeting with top financial regulators    Key points: 360 DigiTech is executing well on its strategy to lower costs through growing automation of its loan facilitating services The company’s shares could remain under pressure until China’s financial regulators announce expected new round of regulations for high-tech loan facilitators By Doug Young It’s hard to focus on your business when there’s a wild tiger in the room and no one knows exactly if and…

Read MORE »

Noah Holdings Finds Resurgent Riches in China’s Wealthy

One of the nation’s oldest private wealth managers posts record business in first quarter, but forecasts more modest profit gains for all 2021  Key points: Asset manager Noah Holdings is focusing on higher-margin, affluent customers over more mainstream ones The strategy could position it for stronger growth in the next few years as it emerges as one of the survivors from China’s recent P2P cleanup   By Doug Young Forget the Average Joe and focus on the rich. That’s the message coming in the latest earnings report from Noah Holdings Ltd.…

Read MORE »

LexinFintech Finds Weaker Growth, Better Profits in Business Shift

Key takeaways: LexinFintech is transforming from a direct lender to a middleman that facilitates micro loans between banks and customers The transformation is hurting the company’s revenues due to the new model’s lower fees. But profitability is improving with lower risk levels By Doug Young We’ll start off the new week with a story that could be called, “A Tale of Two Fintechs.” A couple of weeks ago we looked at the story of FinVolution Group (NYSE: FINV), whose stock nearly doubled in a single day after it reported financial…

Read MORE »

Online Lender FinVolution Signals Emergence From Fintech Storm

Company’s shares nearly double on latest quarterly report that shows return to strong growth after a regulatory cleanup over the last two years Two key takeaways: 1) FinVolution’s latest results – and massive rally in its shares – show China’s fintech sector could be poised for a new era of growth after a difficult two-year cleanup. 2) The company’s confidence about the future is reflected in its forecast for 70% loan origination growth this year, and the raising of its dividend by 42%. By Doug Young It’s not often you…

Read MORE »