Hexindai to Begin Partnering with Phoenix Finance's P2P Platform; Shares Jump
Hexindai said the partnership was expected to facilitate about 10 billion yuan ($1.5 billion) in consumer credit loans over the next three years.
Shares of Hexindai Inc. (Nasdaq: HX), a Chinese consumer lending marketplace, jumped nearly 17 percent in morning trading today after the company announced a billion-dollar collaboration deal with Phoenix Intelligent Credit.
Under the agreements, Hexindai has agreed to acquire a 5.88 percent equity stake in Phoenix Intelligent Credit Group Ltd., a wholly owned subsidiary of Phoenix Financial Group Ltd., for about $29 million. Hexindai said the partnership was expected to facilitate about 10 billion yuan ($1.5 billion) in consumer credit loans over the next three years.
"Together, we will work closely on expanding our consumer credit loan business and enhancing our big data-driven risk management systems to create enormous synergies," said Xinming Zhou, chief executive officer of Hexindai. "Going forward, we will continue to develop strategic relationships with respected institutions to seek operating synergies, diversify our user acquisition channels and funding sources, reduce funding cost, and further strengthen our risk management as we work to increase confidence in our platform and better serve customers."
Last month, shares in Hexindai tanked more than 30 percent after the Chinese lending company reported revenue decreased 83 percent for the three months through September. Since then, the company has bounced back a bit after the company said it would repurchase up to $25 million of its shares over the next 12 months.
Hexindai was trading at $2.98 per American depositary shares in New York, up 28 cents, by early afternoon in New York.