360 DigiTech Inc. (Nasdaq: QFIN) was the top gainer among Chinese stocks Friday, surging 15% following strong second-quarter results and in spite of the class-action lawsuits.
Just a few weeks back, 360 DigiTech suffered a big hit when its app was removed from mobile app stores after the fintech company failed to fix certain issues flagged by China's Cyberspace Administration. While the app is back in stores, 360 DigiTech is facing court battles as some investor rights litigators are pursuing the firm for allegedly "false and materially misleading statements" related to the "risk of government regulation."
And still, the company's business performance demonstrates its solid standing the market. For the second quarter, 360 DigiTech reported 20% year-over-year revenue growth to $619.8 million and a net income of $239.7 million, a 77% increase.
The firm counted 108 financial institutional partners, 34.7 million users with approved credit lines, and 22.3 million borrowers with successful drawdown as of June 30. During the three-month period, 88.5 billion yuan in loans were facilitated through its platform, according to the report.
360 DigiTech's CEO Haisheng Wu noted its increased market share in the first half-year and "a relatively stable macro environment." He also said the strong demand is expected to continue.
In the statement, Wu commented on the regulatory changes, which have weighed significantly on many a Chinese company's market value over the past few weeks. "We strongly believe recent regulatory actions will ultimately provide additional policy clarity for a more healthy and consolidated industry and benefit leading platforms like us," he said.
In the call with analysts on Friday, Wu also commented on the app removal: "We have already fixed the issue, and our app has been restored to all major app store to-date. We have conducted a thorough internal review, and improved our operating protocol, to ensure such incident never happen again. Thanks to our diversified customer acquisition channel and balanced product mix, the impact from app removal to our operation has been minimal."
Separately, on Friday, China passed its Personal Information Protection Law (PIPL), laying out tougher rules on user privacy protection. The new rules are expected to affect the operations of Chinese tech giants and sent some stocks lower again across the board. Specifically, Alibaba Group (NYSE: BABA; HKEX: 9988) hit another 52-week low today of $155.50 per share.
Shares in QFIN, meanwhile, closed at $19.45 per share today; in fact, 360 DigiTech is now among the few Chinese companies that have gained in trading this year. Year-to-date, QFIN shares are up 62%, though still significantly lower than the recent peak of $45 a share it hit June.