Chinese online lender LexinFintech Holdings Ltd’s shares surged in their US market debut on Thursday, as investors brushed aside worries about Beijing’s recent crackdown on China’s booming microlending industry.
LexinFintech’s shares jumped 53% from its IPO price, which valued the Shenzhen-based company at $4.5 billion, to reach a high of $14.88. Though the company had previously slashed its IPO by two-thirds in the wake of the clampdown last week.
China is trying to pump the brakes on the blistering yet haphazard growth of the country’s internet microlenders, unveiling tougher rules in recent weeks, including a ban on loans to borrowers who have no source of income.
LexinFintech sees tougher regulation of the industry as positive, since it would help raise the barrier to entry for newer players. “People might overreact to the news, but these are regulations that will make this sector more robust,” Chief Financial Officer Craig Yan Zeng told Reuters.