Stuck in Covid-Induced Hardship, Lufax Loan Portfolio Shrinks for First Time

The online loan facilitator is bearing more credit risk as its use of third parties to insure and guarantee the loans it brokers becomes costlier Key Takeaways: Lufax’s revenue and profit fell 17% and 67% in the third quarter, respectively, as it became more selective with borrowers to minimize potential loan losses The company’s total outstanding loan volume shrunk for the first time since its 2020 IPO, as its credit impairments surged 138% By Warren Yang Lufax Holding Ltd. (LU.US), the largest of China’s online loan facilitators, appears caught between…

Read More »

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…

Read More »

Linklogis Benefits from Beijing Campaign to Improve Supply Chain Financing

The company increased the number of its anchor customers — buyers in supply chains — using its financing services by 50% in the nine months to September Key Takeaways: Linklogis grew the number of anchor enterprise customers using its supply chain financing services by 50% to 327 in the nine months to September The strong gains came after Beijing began requiring state-owned companies to build systems to help finance the operations of their suppliers By Warren Yang Beijing has come up with a clever solution to aid small businesses that…

Read More »

Qudian in Search of a Business as Stock Returns to Penny Territory

The former fintech highflyer was warned a third time about possible delisting this year after its stock fell below $1 on the failure of its latest new foray into the food industry Key Takeways: Qudian was notified by the New York Stock Exchange that it was in violation of listing rules that require its stock price to stay above $1 The warning was its third one this year, and came after the company said it was scaling down a food business it started just six months ago and ceased its…

Read More »

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…

Read More »

All in the Family: Cash-strapped ZhongAn Taps Chairman’s Ties to Fund a Money-losing Unit

Sinolink, majority-owned by ZhongAn’s chairman Ou Yaping, will provide about $103 million in fresh capital for a ZhongAn unit that develops businesses overseas Key Takeaways: Sinolink will buy about 156 million new shares in ZhongAn’s overseas business development unit, ZhongAn International, for about $103 million The deal comes in a difficult year for ZhongAn, whose own cash holdings are dwindling By Warren Yang Created in 2013 by Alibaba-affiliated (BABA.US; 9988.HK) Ant Group, Tencent (0700.HK) and Ping An Insurance (2318.HK; 601318.SS), ZhongAn Online P&C Insurance Co. Ltd. (6060.HK) has been working…

Read More »

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…

Read More »

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…

Read More »

Qudian Finds New Business Model in Buying Back Shares

Online lender announces plan to buy back up to $200 million worth of its shares, sending its stock up by as much as 60% Key Takeaways: Qudian has announced a $200 million share buyback plan, extending a recent series of buying of its own stock Aggressive share purchasing comes as Qudian dramatically scales back its original consumer lending business and searches for a new business model By Doug Young It seems that Qudian Inc. (QD.US), the former fintech pioneer that is now considering dumping its original consumer lending business, has…

Read More »

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…

Read More »