X Financial (XYF) is a leading online personal finance company based in China, dedicated to revolutionizing the way borrowers and institutional funding partners connect. Utilizing a proprietary big data-driven platform, the company facilitates and originates loans, offering tailored financial solutions to prime borrowers. With a strong focus on innovation and risk management, X Financial has established strategic partnerships with financial institutions, enabling seamless operations across its diverse product offerings. Renowned for its flagship products like Xiaoying Card Loan and Xiaoying Housing Loans, the company delivers exceptional value by blending technology and customer-centric solutions. As a trusted leader in China’s fintech sector, X Financial continues to drive growth and innovation in the rapidly evolving personal finance market.
Strong Financial Performance in Q3 2024
In the third quarter of 2024, X Financial reported a total net revenue of RMB 1.58 billion (US$225.5 million), reflecting a year-over-year growth of 13.3%. The company’s income from operations increased by 17% to RMB 509 million (US$72.5 million), while non-GAAP adjusted net income reached a record high of RMB 434 million (US$61.8 million), up 16% from the previous year. These results were supported by an improvement in asset quality and operational efficiencies, further enhancing the company’s profitability.
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Resilient Loan Facilitation and Improved Asset Quality
The company facilitated and originated loans totaling RMB 28.3 billion in Q3 2024, a 24.6% sequential increase, demonstrating X Financial’s ability to adapt to market demand effectively. Despite a slight year-over-year decline of 3.8%, the total number of active borrowers increased to 1.97 million, up 8.6% from the same quarter in 2023. The delinquency rates for loans past due for 31-60 days improved significantly to 1.02%, down from 1.29% in the previous quarter, highlighting the company’s robust risk management capabilities.
Strategic Share Repurchase and Dividend Initiatives
X Financial has demonstrated confidence in its long-term growth through strategic capital allocation. In Q3 2024, the company extended its US$30 million share repurchase program, repurchasing shares worth US$1.3 million. Additionally, a new US$20 million repurchase program was initiated, with US$9.2 million already utilized. These actions, combined with the semi-annual dividend policy, underline X Financial’s commitment to delivering value to shareholders.
Diverse Revenue Streams and Product Innovation
The company’s revenue is well-diversified, with growth across all core segments. Loan facilitation service fees increased by 5.9% year-over-year to RMB 878 million (US$125.2 million), while financing income rose by 11.6% to RMB 336 million (US$47.8 million). Guarantee income saw an exceptional 576% growth year-over-year, reaching RMB 54 million (US$7.6 million). The introduction of new features, such as Xiaoying Housing Loans and Xiaoying Card Loan products, has further strengthened X Financial’s market presence and customer acquisition efforts.
Positive Macroeconomic Tailwinds
China’s economic stimulus measures, aimed at stabilizing financial markets and boosting consumption, are expected to benefit X Financial significantly. The personal finance market, integral to the broader economy, stands to gain from these initiatives. X Financial has already observed positive signs in the market and anticipates monthly loan volumes to exceed RMB 10 billion in Q4 2024, setting a new record.
Guidance and Outlook for 2024
X Financial expects to facilitate loans totaling RMB 30 billion to RMB 31 billion in Q4 2024, with the total for the year projected between RMB 102.6 billion and RMB 103.6 billion. This guidance reflects the company’s confidence in maintaining growth momentum amid improving market conditions and continued operational excellence.
Would You Dare Invest in X Financial?
X Financial’s strong financial results, focus on asset quality, strategic capital initiatives, and ability to leverage macroeconomic trends make it a compelling investment opportunity. The company’s innovative approach to online personal finance, supported by a robust risk management system and diverse revenue streams, positions it well for sustained growth and profitability. Investors seeking exposure to China’s expanding fintech sector should consider X Financial as a key player driving digital transformation in personal finance.
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