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Chinese Lender X Financial Files for a $250 Million IPO on NYSE

The FinTech firm seeks to open its doors to shareholders on the New York Stock Exchange under the ticker "XYF."

CapitalWatch Staff
    Aug 29, 2018 11:07 AM  PT
Chinese Lender X Financial Files for a $250 Million IPO on NYSE

X Financial seeks to raise up to $250 million in its initial public offering on the New York Stock Exchange under the symbol "XYF."

The Shenzhen-based company, which filed its prospectus with the Securities and Exchange Commission Tuesday, provides financial services to borrowers including credit transfers and high-credit-limit unsecured loans. Investors of X Financial use the Xiaoying Wealth Management platform, which offers diversified investment opportunities supplied with insurance, a rare factor seen in less than 3 percent of online consumer finance marketplaces in China, according to research by consultancy Oliver Wyman.

X Finance was the largest player offering credit card balance transfer loan products in China in terms of outstanding loan balance, and the third largest player among non-traditional financial institutions offering high-credit-limit unsecured loans as of June 30, the company said citing Oliver Wyman Report in its prospectus.

The company uses "data-driven and technology-empowered" credit analysis, building risk profiles of prospective borrowers supported by data from credit information providers, as well as internet and mobile behavior.

The company said it had nearly 1.3 million active borrowers and 199,000 individual investors as of June 30. For the full year 2017, it had 2.2 million borrowers and 198,000 investors compared with 209,000 borrowers and 95,000 investors in 2016.

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(Source: X Financial's prospectus filed Aug. 28)

As of June 30, X Financial said 84 percent of the funding for loans came from individual investors, while 16 percent were funds from corporate investors and institutional funding partners.

In 2017, and for the six months ended June 30, the total loans X Finance facilitated reached $5.1 billion and $2.97 billion, respectively.

Based in Shenzhen, X Finance has experienced rapid growth over the past three years. The company's revenue was $270 million in 2017. For the six months ended June 30, the company posted revenue of $279.3 million. Net income for the full year 2017 was $51.3 million in contrast to a net loss of $17.9 million for 2016. For the first half-year of 2018, X Finance posted $67 million in profit.

Deutsche Bank Securities, Morgan Stanley, and China Merchants Securities (Hong Kong) are acting as the underwriters on the deal.  

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