Stock in CNFinance Holds Steady on High Loan Origination Volume

author: Anthony Russo   

Shares of CNFinance Holdings Ltd. (NYSE: CNF) were not largely affected by midday Monday after the company announced low-interest fees income and soaring loan origination volume in its fourth-quarter financials.
The Guangzhou-based home equity loan provider said in the three months through December that its interest fees income was $85.5 million, down 43% year-over-year. Net income dropped by more than three times to $8.7 million compared with $26.9 million in the same period in the preceding year.
However, its loan origination volume in the quarter reached $286 million, up 82% year-over-year.
By intraday, CNF was trading up nearly 1% higher at $4.29 per American depositary share. Despite the disaster on Wall Street last week, shares of CNF did not take too much of a hit. While its stock fell nearly 6% to $4.11 per share last Monday, it recovered later in the week. However, after raising $48.75 million in its IPO in November 2018, CNF has traded mostly below its issue price of $7.50 per share.
Operating for more than 20 years, CNF organizes loans by connecting micro-and small-enterprise (“MSE”) owners with its funding partners. The company mainly targets MSE owners that own properties in Tier 1 and Tier 2 cities in China. As of December, CNF had signed cooperation agreements with approximately 1,300 sales partners.
Looking ahead, the company noted that the coronavirus could affect its business in the first quarter and perhaps beyond. 
“We expect 2020 to be a challenging year for CNFinance, but we also believe it would bring along many opportunities at the same time. As a leading home equity loan service provider in China, we will leverage our resources and knowledge gained from years of experience in the home equity loan business to provide better products and services to our customers,” Zhai Bin, the chairman and chief executive officer of CNF, said in a statement today.
He added, “We will strive to continuously provide accessible, affordable and efficient financing solutions to micro-and small- enterprise (“MSE”) owners in China.”
In the first quarter, the company said it expects to breakeven. 

It also noted that the Chinese New Year is usually the slowest period of the year for loan originations

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