X Financial Announces Results of Tender Offer

Rhea-AI Summary

X Financial (NYSE: XYF) has completed its tender offer to purchase up to 2 million American Depositary Shares (ADSs) at $4.52 per ADS. The offer, which expired on July 12, 2024, resulted in 2,026,640 ADSs being validly tendered. The company increased its purchase amount to accept all tendered ADSs. CFO Frank Fuya Zheng stated that this buyback provides liquidity to exiting shareholders at a premium while allowing remaining shareholders to increase their ownership stake. Following the tender offer, X Financial expects to have 186,872,295 Class A ordinary shares outstanding. The company plans to continue exploring methods like dividends and share buybacks to return value to shareholders when profitability allows.

Positive

• Successful completion of tender offer, purchasing 2,026,640 ADSs
• Increased purchase amount to accept all validly tendered ADSs
• Provided liquidity to exiting shareholders at a premium to market price
• Remaining shareholders can increase their ownership stake at no additional cost
• Company plans to explore future dividends and share buybacks when profitability allows

Negative

• Reduction in cash reserves due to ADS repurchase
• Potential dilution of earnings per share due to reduced number of outstanding shares

Insights

Financial Analyst

The completion of X Financial's tender offer to repurchase 2,026,640 American Depositary Shares (ADSs) at a price of $4.52 per ADS is noteworthy. This move demonstrates the company’s strategy to return value to shareholders and manage the share count.

Firstly, the share buyback was executed at a premium to the prevailing market price. This indicates the management's confidence in the company's intrinsic value, suggesting they believe the shares are undervalued. For remaining shareholders, this buyback increases their relative ownership percentage, potentially leading to higher earnings per share (EPS) in the future, assuming a constant net income.

Moreover, reducing the number of outstanding shares can have a positive impact on the company's financial ratios, such as EPS and return on equity (ROE). These improvements could make the company more attractive to investors in the longer term. However, it’s essential to monitor the company’s financials to ensure that funds used for the buyback do not strain its liquidity.

Market Research Analyst

X Financial’s decision to increase the tender offer from 2,000,000 ADSs to 2,026,640 ADSs reflects an effort to accommodate all shareholders who wanted to participate. Such an approach can strengthen investor relations, signaling the company's commitment to its shareholders. It’s a move that can build goodwill and potentially attract more investors.

However, investors should be aware of the broader market and economic conditions that might affect the company's performance. The online personal finance sector in China is highly competitive and regulatory changes can have significant implications. While the buyback is a positive sign, it’s important to consider these external factors when evaluating the long-term potential of the investment.

SHENZHEN, China, July 15, 2024 /PRNewswire/ -- X Financial (NYSE: XYF) (the "Company" or "we"), a leading online personal finance company in China, announced today the results of its previously announced tender offer (the "Tender Offer") to purchase up to 2 million American Depositary Shares (the "ADSs") of the Company, each representing six Class A ordinary shares, par value $0.0001 per share, at a price of $4.52 per ADS, less any applicable withholding taxes, less a cancellation fee of $0.05 per ADS accepted for purchase in the Tender Offer that will be paid to The Bank of New York Mellon, the Company's ADS depositary (the "ADSs Depositary"), and without interest. The Tender Offer expired at 5:00 P.M., New York City time, on July 12, 2024.

Based on the results, a total of 2,026,640 ADSs were validly tendered and not withdrawn. The Company announced that the aggregate amount of ADSs that the Company intends to purchase is increased from the previously announced 2,000,000 to 2,026,640 to accept for purchase all ADSs validly tendered and not validly withdrawn. Except as described in this press release, the terms and conditions of the Tender Offers set forth in the Offer to Purchase remain unchanged.

"We are happy to execute this ADS buyback and provide liquidity to securityholders who were seeking an exit, at a premium to the prevailing market price, and at the same time provide remaining securityholders who did not want to participate an opportunity to increase their relative percentage ownership in X Financial at no additional cost to them," commented Mr. Frank Fuya Zheng, CFO of X Financial. "We are dedicated to navigating the evolving economic landscape while ensuring the sustainable success of our business and returning value to our shareholders, and we plan to employ different methods, such dividends and shares buyback, as and when profitability and smooth operations allow. We are confident in our position as a public company and will drive long-term returns for our shareholders," concluded Mr. Zheng.

Following completion of the Tender Offer, the Company expects to have 186,872,295 Class A ordinary shares (including Class A ordinary shares represented by ADSs) outstanding.

The information agent and depositary for the Tender Offer is Broadridge Corporate Issuer Solutions, LLC ("Broadridge"). Broadridge will promptly pay for all of the ADSs accepted for purchase in accordance with the terms and conditions of the Tender Offer. For all questions relating to the Tender Offer, please contact: Broadridge Corporate Issuer Solutions, LLC, Telephone (855) 793-5068 (toll-free), email shareholder@Broadridge.com.

About X Financial

X Financial (NYSE: XYF) 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 and originate loans to prime borrowers under a risk assessment and control system.

For more information, please visit: http://ir.xiaoyinggroup.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of applicable U.S. securities laws, including statements about the Tender Offer, including the value of the ADSs to be offered to purchase in the tender offer and whether the Tender Offer is actually consummated. Forward-looking statements may be identified by words such as "seek", "believe", "plan", "estimate", "anticipate", "expect", "intend", "continue", "outlook", "may", "will", "should", look forward" "could", or "might", and other similar expressions. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could materially affect our business and financial results include, but are not limited to, the factors described in the forward-looking statement disclosure and "Risk Factors" section of our most recent Annual Report on Form 20-K. We do not have any intent, and disclaim any obligation, to update the forward-looking information to reflect events that occur, circumstances that exist or changes in our expectations after the date of this press release, except as required by law.

For more information, please contact:

X Financial
Mr. Frank Fuya Zheng
E-mail: ir@xiaoying.com 

Christensen IR

In China
Mr. Rene Vanguestaine
Phone: +86-178-1749 0483
E-mail: rene.vanguestaine@christensencomms.com 

In US
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: linda.bergkamp@christensencomms.com

View original content:https://www.prnewswire.com/news-releases/x-financial-announces-results-of-tender-offer-302196757.html

SOURCE X Financial

FAQ

What was the price per ADS in X Financial's (XYF) tender offer?

X Financial (XYF) offered to purchase ADSs at a price of $4.52 per ADS in its tender offer that expired on July 12, 2024.

How many ADSs did X Financial (XYF) purchase in its tender offer?

X Financial (XYF) purchased 2,026,640 ADSs in its tender offer, increasing from the initially announced 2 million to accept all validly tendered ADSs.

What is X Financial's (XYF) expected number of Class A ordinary shares outstanding after the tender offer?

Following the completion of the tender offer, X Financial (XYF) expects to have 186,872,295 Class A ordinary shares outstanding, including those represented by ADSs.

When did X Financial's (XYF) tender offer expire?

X Financial's (XYF) tender offer expired at 5:00 P.M., New York City time, on July 12, 2024.