What happened
China-based LexinFintech Holdings (LX 1.18%) saw its share price drop at double-digit rates on Wednesday following the release of its latest quarterly results. In mid-afternoon trading, the previously popular stock was down by nearly 13%.
So what
For its second quarter, LexinFintech earned revenue of just under 3.27 billion yuan ($505 million), which bettered the almost 2.96 billion yuan ($457 million) it made in the same quarter last year. That derived from total loan originations of 60.6 billion yuan ($9.4 billion) in the quarter, against the 41.1 billion ($6.3 billion) of Q2 2020.
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Net income rose to slightly under 787 million yuan ($121 million), or the equivalent of $0.30 per diluted share, from the year-ago result of 419 million yuan ($65 million).
Average analyst estimates for revenue and profitability weren't immediately available.
Despite those encouraging growth rates, LexinFintech quoted its CEO Jay Wenjie Xiao as saying: " ... it's no time to stay content and complacent. Recent regulatory changes have sought to reshape the operating environment of financial institutions and their technology partners."
Now what
Nearly every Chinese finance sector operator of significant size is being cautious, given their government's recent crackdowns on their industry in particular, and on publicly traded companies more generally.
So LexinFintech has trimmed its guidance. It now believes total loan originations for this year will be roughly 230 billion yuan ($35 billion); formerly it estimated 240 billion yuan ($37 billion) to 250 billion yuan ($39 billion). No revenue or profitability forecasts were provided.
Regardless, that 230 billion yuan would represent an improvement of nearly 30% from the 2020 tally.
