X Financial Posts Q4 Recovery, Positive Outlook

XYF stock surged nearly 40% Monday on fourth-quarter recovery.
Benjamin WangApr 26,2021,21:37

X Financial (NYSE: XYF) reported increased revenue for the fourth quarter and a strong outlook for the first half of 2021, sending its shares to soar 40% Monday, to $4.02 apiece.

The Shenzhen-based fintech company said in a statement today that in the three months through December its revenue was $109.8 million, up 8% year-over-year.

That offset the overall revenue decline in 2020, which was 29% down from 2019.

Net loss, it reported, hit $100.5 million, or $1.88 per American depositary share, in the fourth quarter.

X Financial said its total loan facilitation amount was $1.3 billion, down 2% year-over-year. The company’s core product, Xiaoying Credit Loan, which accounted for 92.2% of the company's total loan facilitation amount, saw a 29% improvement.

“We are very pleased to close out 2020 with a substantial business recovery in the fourth quarter. Our top line saw a year-over-year growth, mainly driven by the recovery in the loan facilitation amount which was almost back to the levels of the same period of 2019,” Justin Tang, the founder, chief executive officer, and chairman of X Financial, said in the statement.

The company noted that the China Banking and Insurance Regulatory Commission finalized guidelines on internet loan businesses that will be favorable for the industry in the long run.

“Looking ahead, our business recovery has continued to be driven by growing market demand so far this year. Leveraging our quality borrower base, cutting-edge risk management system, trustworthy brand and strengthened partnerships with financial institutions, we will continue to improve our top line and bottom line in the short-term, and we believe we are on track to deliver long-term sustainable growth,” Tang added.

The number of active borrowers in the fourth quarter was 6.6 million. The total cumulative registered users on the platform reached 54.6 million as of December, the report said.

For the first quarter of 2021, the company expects total loan facilitations to be 10.9 billion yuan and net income attributable to X Financial's shareholders to be no less than 110 million yuan.

Topics:X Financial; China; U.S.