What happened

The American Depositary Receipts (ADRs) of China's Lufax Holding (NYSE:LU) closed more than 10% down on Wednesday. This followed the release of its first set of quarterly results as a publicly traded company, which were published after market hours on Tuesday.

So what

For its Q3 of fiscal 2020, Lufax's "total income" (i.e., revenue) rose by nearly 11% on a year-over-year basis to slightly more than 13 billion yuan ($2 billion), on outstanding loan balances that grew by 21%. Non-IFRS adjusted net profit increased 2% to 3.4 billion yuan ($517 million, equating to $0.24 per share).

A collection of Chinese 100 yuan notes.

Image source: Getty Images.

That bottom-line result came in well above the average analyst expectation of $0.14 per share for the fintech company. Revenue projections weren't immediately available.

Lufax proffered guidance for the entirety of 2020. The company believes its adjusted net profit will come in at 13.2 billion yuan to 13.4 billion yuan ($2.01 billion to $2.04 billion).

Now what

Despite those encouraging results, Lufax, already an important lender to individuals and businesses in China despite its relative youth, faces a cloudy future.

Last month, the Chinese government scotched the planned IPO of peer Ant Financial on rather vague grounds. Officialdom in the country appears to be uncomfortable with hungry, modern operators like Ant and Lufax moving in on turf that had been the province of state-controlled banks. The specter of tighter state control looms over both companies, and that uncertainty seems to be driving investors away from Lufax just now.

 
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