Chinese online lender LexinFintech surges in US market debut (updated)
21/12/2017 18:17
(Updates with CFO quote, industry background, updates shares)
By Diptendu Lahiri
Dec 21 (Reuters) - Chinese online lender LexinFintech
Holdings Ltd's LX.O shares surged in their U.S. market debut
on Thursday, brushing aside worries related to Beijing's recent
crackdown on the booming micro-credit industry.
LexinFintech's shares touched a session high of $14.88, a 53
percent jump from its IPO price that valued the Shenzhen-based
company at $4.51 billion.
The company, which was looking to take advantage of the
industry boom, slashed its IPO by two-thirds last week from its
initial estimate of raising $500 million following the
clampdown.
China is trying to put the brakes on the blistering yet
haphazard growth of the country's online micro-lenders,
unveiling tougher rules in recent weeks, including a ban on
loans to borrowers who have no source of income.
The industry is booming amid rising Chinese incomes and
limited access to credit cards.
LexinFintech sees tougher regulation of the industry as a
positive as it would help raise the barrier to entry of newer
players.
"People might over-react to the news, but these are
regulations that will make this sector more robust," Chief
Financial Officer Craig Yan Zeng told Reuters.
Shares of micro-lenders such as Qudian QD.N , PPDAI Group
PPDF.N and Jianpu Technology JT.N , which have recently
listed their stocks on U.S. exchanges, have been hit hard due to
the crackdown.
Shares of Qudian QD.N are down about 57 percent and PPDAI
about 46 percent since going public in October. Jianpu, which
listed its stock in November, is down 19 percent.
LexinFintech initial public offering was priced at the low
end of the $9 to $11 per American depositary share range,
raising $108 million.
The company provides loans to young educated adults aged
between 18 and 36, including loans for online shopping.
The CFO said the company's loans are offered at a
competitive interest rate of 25 percent, compared with the
industry threshold of 36 percent.
Existing LexinFintech shareholders including K2 Partners and
Chinese e-commerce firm JD.com Inc JD.O have expressed
interest in buying $28 million of its shares at the IPO price,
according to the company filing.
LexinFintech shares pared some of their early gains to trade
up 19.44 percent at $10.73.
Bank of America Merrill Lynch, China Renaissance, Deutsche
Bank and Goldman Sachs were joint bookrunners on the IPO.
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Shares of Chinese online microlenders fall after govt. crackdown
http://reut.rs/2zb9cr0
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(Reporting by Diptendu Lahiri in Bengaluru; editing by Sai
Sachin Ravikumar and Anil D'Silva)
((Diptendu.Lahiri@thomsonreuters.com; within U.S. +1 646 223
8780; outside U.S. +91 80 6749 6328;; Reuters Messaging:
diptendu.lahiri.reuters.com@reuters.net))
Keywords: LEXINFINTECH HOL IPO/