A growing young middle-class in China has brought new attitudes towards credit. Young and affluent Chinese consumers do not share their elder’s pessimism when it comes to borrowing and this trend has helped LexinFintech to capitalize on the niche.
The companys online shopping mall, Fenqile, targets young Chinese adults who are willing to borrow money to pay for smartphones and other high-range products and goods.
Chinese online sales giant JD.com (JD) is a significant investor in LexinFintech. Many of the online lenders management team worked earlier for Tencent Hoor its online payment unit Tenpay. Tencent is JD.coms top shareholder as the duo boast a strategic alliance.
LexinFintech surprised investors as it reached profitability. Total operating revenue from Jan. 1-Sept. 30 of 2017 rose 35%, equivalent of roughly USD 599 million. It earned a net USD21 million for the period, reversing from a net loss in 2016.
Analysts expect LexinFintech to earn 91 cents per share in fiscal 2018, vaulting to USD 8.69 a share in 2019, according to Zacks Investment Research.
The company had 3.3 million active customers in the first nine months of 2017, up 34% from the year-earlier period. More than 90% of its customers were young, educated adults aged 18 to 36, a group it calls underserved by traditional financial institutions in China.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now