Macquarie downgrades to "underperform", cuts PT to Street low
05/09/2019 11:51
** Macquarie says the Chinese fintech co's Q2 profit was a
big miss; also disappointed the co paid more cash for deal to
buy CreditEase, overlooking its own need for more capital while
it changes its funding model
** Brokerage downgrades co's U.S.-listed shares YRD.N to
"underperform" from "neutral"; slashes PT by half to $6, the
lowest on Wall Street; also lowers EPS estimates for 2019, 2020
** YRD plans to increase contribution from institutional
funding to 80-90% next year from less than 5% now, thus loan
growth could be muted in transition period - Macquarie
** Before YRD's loan facilitation model becomes 100%
risk-free, brokerage says regulators will need to put in more
capital
** Stock had fallen 3% on Sept. 3, after co reported
quarterly profit that missed estimates hurt in part by higher
sales and marketing expenses
** Stock has slipped ~11% this year
(Reporting by Siju Varghese in Bengaluru)
((siju.varghese@thomsonreuters.com))