X Financial (NYSE:XYF) Issues Earnings Results

X Financial (NYSE:XYF) issued its quarterly earnings results on Monday. The company reported $0.65 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.29 by $0.36, Zacks reports. X Financial had a return on equity of 9.19% and a net margin of 9.94%.The firm had revenue of $146.24 million during the quarter, compared to analyst estimates of $190.63 million.

Here are the key takeaways from X Financial’s conference call:

• Origination and revenue declined sharply: Loan facilitation volume fell 70.2% year over year to RMB 11.63 billion, while net revenue dropped 56.3% to RMB 993.6 million. The company is prioritizing credit quality and capital preservation over near-term growth.
• Credit metrics improved sequentially but remain elevated: The 31–60-day delinquency rate declined to 1.73% and the 91–180-day rate to 9.09%, although both remained above year-ago levels. Management attributed the improvement to tighter underwriting and stronger collections, while cautioning that older vintages continue to pressure results.
• Profitability improved from the prior quarter: Net income rose 23.8% sequentially to RMB 47 million, adjusted net income increased 104.3% to RMB 166 million, and operating margin expanded to 19.6% from 12% in Q1. However, earnings remained substantially below the prior-year period.
• Balance-sheet credit risk increased: The company recorded RMB 95.3 million of provisions for credit losses related to deposits and other financial assets, largely tied to one funding institution that has delayed returning guarantee funds. Management said the amount was conservatively written down but may ultimately be recovered.
• Capital returns and liquidity remain important priorities: X Financial repurchased approximately 2.63 million ADS for $12.49 million and declared a $0.28-per-ADS cash dividend. The company reported approximately RMB 2 billion in cash and restricted cash, but provided no third-quarter guidance because of ongoing uncertainty.

X Financial Price Performance

X Financial stock traded down $0.38 during mid-day trading on Wednesday, hitting $5.04. The company’s stock had a trading volume of 37,591 shares, compared to its average volume of 132,556. The business has a 50 day moving average price of $5.00 and a 200-day moving average price of $4.86. X Financial has a 12 month low of $3.30 and a 12 month high of $15.96. The stock has a market cap of $196.86 million, a price-to-earnings ratio of 2.59 and a beta of 0.46.

X Financial Cuts Dividend

The firm also recently declared a dividend, which will be paid on Monday, September 28th. Shareholders of record on Thursday, September 10th will be paid a $0.28 dividend. The ex-dividend date of this dividend is Thursday, September 10th. This represents a yield of 1,027.0%. X Financial’s payout ratio is currently 15.65%.

Institutional Investors Weigh In On X Financial

A number of hedge funds and other institutional investors have recently modified their holdings of XYF. Police & Firemen s Retirement System of New Jersey bought a new position in X Financial during the 4th quarter worth approximately $43,000. BNP Paribas Financial Markets bought a new stake in X Financial in the third quarter valued at approximately $105,000. Russell Investments Group Ltd. boosted its stake in shares of X Financial by 468.4% during the third quarter. Russell Investments Group Ltd. now owns 33,780 shares of the company’s stock valued at $457,000 after purchasing an additional 27,837 shares during the period. Finally, Jump Financial LLC purchased a new stake in shares of X Financial during the second quarter valued at approximately $697,000. Institutional investors own 1.15% of the company’s stock.

Analysts Set New Price Targets

Separately, Weiss Ratings cut X Financial from a “hold (c+)” rating to a “hold (c)” rating in a report on Friday, August 14th. One investment analyst has rated the stock with a Hold rating, Based on data from MarketBeat.com, the stock currently has a consensus rating of “Hold”.

About X Financial

X Financial (NYSE:XYF) is a Beijing-based online credit marketplace focused on providing diversified financing solutions to individuals and small- and medium-sized enterprises (SMEs) in China. The company was established in 2014 and completed its initial public offering on the New York Stock Exchange in 2016. Since inception, X Financial has built a technology-driven platform that connects borrowers with a network of institutional investors, banks and other funding sources, aiming to streamline access to credit and improve lending efficiency.

The company’s core offerings include consumer loans, SME loans, real estate-secured financing and wealth management products.