X Financial (NYSE: XYF) (the "Company") is a leading online personal finance company in China. The Company is committed to connecting borrowers on its platform with its institutional funding partners. With its proprietary big data-driven technology, the Company has established strategic partnerships with financial institutions across multiple areas of its business operations, enabling it to facilitate loans to prime borrowers under a robust risk assessment and control system.
X Financial offers differentiated products specifically catered to the financing needs of individuals in China. The Company’s flagship loan product is Xiaoying Card Loan, which offers borrowers a combination of small credit line and attractive interest rates in China.
The strong credit performance and underlying insurance/guarantee protection of the loans that the Company facilitates and its proven risk management and credit assessment capabilities enable it to attract a diversified and low-cost funding base to support its growth. We have established a long-term collaboration relationship with institutional funding partners, including banking financial institution partners.
X Financial’s business model is light in capital and labor commitment, and the Company believes it can manage transaction and operating costs in an effective way. Benefitting from its superior loan product offerings, strong credit performance and underlying insurance/guarantee protection of its investment products, X Financial continues to expand its user base of both borrowers and institutional funding partners, primarily through referrals without incurring significant sales and marketing expenses, resulting in relatively low user acquisition costs. Furthermore, the Company’s highly automated risk management system and technology infrastructure enable it to automatically facilitate a large number of transactions simultaneously.
The Company utilizes data-driven and technology-empowered credit analysis. It’s proprietary risk control system, WinSAFE, builds risk profiles of prospective borrowers upon data from reputable credit information providers employed by traditional financial institutions, augmented by a variety of social and behavioral data from internet and mobile platforms that are typically not utilized by traditional financial institutions. Leveraging data analysis and machine learning in analyzing a borrower’s value, repayment capability and propensity, the Company has the capabilities to offer differentiated credit limits to borrowers based on individual credit assessment result. X Financial’s rigorous data-driven credit assessment methodology has helped it to achieve a strategic balance between borrower expansion and asset quality control.
X Financial benefits from its strategic partnership with various financial institutional cooperators. The protection offered by those financial institutional cooperators' credit insurance/ guarantee services on the Company’s investment products significantly enhances the institutional funding partners’ confidence.