X Financial (NYSE:XYF) Issues Quarterly Earnings Results, Beats Estimates By $0.36 EPS

X Financial (NYSE:XYF) released its earnings results on Monday, August 24th. The company reported $0.65 EPS for the quarter, topping analysts’ consensus estimates of $0.29 by $0.36, Zacks reports. The firm had revenue of $146.24 million during the quarter, compared to analyst estimates of $145.96 million. X Financial had a net margin of 9.94% and a return on equity of 9.14%.

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 Trading Up 0.3%

NYSE XYF traded up $0.01 during trading on Wednesday, reaching $5.55. The company’s stock had a trading volume of 14,013 shares, compared to its average volume of 130,791. The firm has a market capitalization of $217.12 million, a price-to-earnings ratio of 2.83 and a beta of 0.46. X Financial has a 12 month low of $3.30 and a 12 month high of $15.96. The firm has a 50 day moving average price of $5.07 and a 200 day moving average price of $4.86.

X Financial Cuts Dividend

The firm also recently announced a dividend, which will be paid on Monday, September 28th. Stockholders of record on Thursday, September 10th will be given a $0.28 dividend. This represents a dividend yield of 1,027.0%. The ex-dividend date of this dividend is Thursday, September 10th. X Financial’s payout ratio is presently 27.55%.

Institutional Investors Weigh In On X Financial

Hedge funds have recently made changes to their positions in the stock. Jump Financial LLC bought a new position in shares of X Financial during the 2nd quarter worth about $697,000. Russell Investments Group Ltd. raised its stake in X Financial by 468.4% during the 3rd quarter. Russell Investments Group Ltd. now owns 33,780 shares of the company’s stock worth $457,000 after buying an additional 27,837 shares during the period. Police & Firemen s Retirement System of New Jersey bought a new position in X Financial in the fourth quarter worth approximately $43,000. Finally, BNP Paribas Financial Markets acquired a new stake in X Financial in the third quarter valued at approximately $105,000. 1.15% of the stock is currently owned by institutional investors and hedge funds.

Wall Street Analysts Forecast Growth

Separately, Weiss Ratings downgraded shares of X Financial from a “hold (c+)” rating to a “hold (c)” rating in a research report on Friday, August 14th. One analyst has rated the stock with a Hold rating, According to MarketBeat, X Financial presently has an average rating of “Hold”.

X Financial Company Profile

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.