LexinFintech (LX) reported a solid set of Q3 results with loan origination growing 170% y/y that resulted in a beat on both revenue and EPS. More importantly, loan origination guidance was increased to RMB115-125b vs. the prior forecast of RMB115b.
The bottom line
China's online lending sector is in a bad shape due to the heavy-handed, and we would also argue necessary, regulation to clean up the scandal-riddled sector to prevent systemic risk and social unrest. However, that does not mean investors cannot find value or quality, and we believe that LX is