The core shareholders of Xiaoying Technology have lost all patience.

Questioning AI · Does Shareholder Exit Hint at Deterioration in Xiaoying Technology’s Asset Quality?

Text | Little Lu Yu

Editor | Yang Xuran

The meaning behind “Cigarette Butt Stocks” usually refers to a company with low market value and valuation, but still with enough investment value—meaning even if it’s about to fail, some corporate value can still be extracted.

But the reality is, many companies look very much like cigarette butt stocks, yet it’s hard to assess whether they still retain much corporate value; “minefields” are more pervasive than analysts imagine.

Recently released 2025 financial reports show Xiaoying Technology, seemingly such a cigarette butt company. Its net income last year reached 7.6394 billion yuan, with a net profit of 1.4646 billion yuan. However, its stock price has fallen over 65% from the high point in July 2025, showing a divergence between rising performance and falling stock price.

Xiaoying Technology stock performance (since listing)

Currently, Xiaoying Technology’s EPS is as high as 6, but its PE is only 1.1, which is extremely low valuation in any market, plus ample cash on hand, making it still seem to possess sufficient corporate value.

But the core shareholders of the IPO seem to think differently. Since the new lending regulations, they have gradually disappeared from the financial reports.

Perhaps these savvy investors are more aware than analysts that Xiaoying Technology and its founder Tang Yue ultimately may or may not survive regulatory storms and industry upheavals.

This article is a deep value analysis from the “JuChao WAVE” content team. Follow us on multiple platforms.

01 Shareholder Exit

Everything about Xiaoying Technology bears the strong personal influence of founder Tang Yue.

He previously worked in securities research and sales at Merrill Lynch, and after seven years on Wall Street, he co-founded Elong.com with his team. Later, this company went public on NASDAQ; after making a name for himself, he stepped back.

In 2014, the wave of internet finance swept in again, and Tang Yue founded Xiaoying Technology once more.

Coming from Wall Street, Tang Yue has a natural sensitivity and precision in capital games. He carefully designed a “low equity, high voting rights” dual-class share structure, locking in absolute control of the company with less than half of the economic rights.

By the end of 2025, Tang Yue’s family trust held about 42.91% of Xiaoying Technology’s shares, but his voting rights soared to an astonishing 91.5%. Moreover, he had long served as chairman and CEO—his emphasis on control is evident.

This control confidence is not only from the shareholding structure but also from his luxurious network of influential friends.

Tang Yue once admitted that founding Xiaoying Technology was inspired by the “Three Horses” (Pony Ma, Ping An’s Ma Mingzhe, Jack Ma) who established ZhongAn Insurance. ZhongAn Insurance also provided key insurance services for Xiaoying Technology’s early financial management and loans. It was this partnership with ZhongAn Insurance’s quasi-implicit guarantee model that allowed Xiaoying Technology to expand rapidly during the early P2P chaos.

By the time Xiaoying Technology went public, support from industry giants was even more direct.

At that time, Chow Tai Fook was the second-largest shareholder with 13.6%, Hong Kong billionaire Zhang Songqiao was the fourth-largest with 9.68%, founder of Jianyan Pharmaceutical Zhu Baoguo held 10.07%, and Yin Tai Investment’s Shen Guojun attended the bell-ringing as a representative investor.

In the two years since the implementation of new lending regulations and the continued slump in Xiaoying Technology’s stock price, Tang Yue’s influential friends have gradually divested. Zhu Baoguo, Zhang Songqiao, Chow Tai Fook—these early core shareholders—have now disappeared from Xiaoying Technology’s latest major shareholder list.

Considering that these major financial investors entered early, their holdings should still be in a profit position at the time of reduction, but compared to the peak at IPO, most of their gains have already vanished.

At low stock prices, with founders not reducing holdings, a collective and substantial exit by major shareholders usually signals pessimism about the company’s future operations.

Meanwhile, Xiaoying Technology has repeatedly bought back shares and paid dividends, with total investments approaching $200 million. Last year alone, Xiaoying Technology repurchased 4.26 million ADS (including 3.8 million ADS and 2.76 million Class A shares), costing $67.9 million. By November 30 this year, another $48 million buyback quota remains.

Buybacks have temporarily boosted Xiaoying Technology’s stock price; for example, on December 19, 2024, when the large shareholder announced a buyback, the stock surged over 7%. After the Q1 2025 financial report and buyback progress, the stock’s year-to-date increase once exceeded 57%—but ultimately, the stock performance still showed no fundamental improvement.

02 Declining Quality

Can the exit of core shareholders be seen as a warning sign for Xiaoying Technology’s future? Following this line of thought, examining Xiaoying Technology’s 2025 financial report reveals a highly contradictory picture.

Looking at revenue data, Xiaoying Technology achieved 7.64B yuan in operating income last year, a 30.09% increase, with total loan facilitation reaching 130.55B yuan. The year-end loan balance remained above 50B yuan, with a quarterly high over 30B yuan, indicating a company still in rapid growth.

But profit data paints a very different picture. In 2025, net profit was only 1.47B yuan, down 4.89% year-on-year, marking the first annual net profit decline since its P2P transformation.

Growing revenue but declining profit is a dangerous signal in any industry, often indicating cost overruns or underlying asset quality issues—Xiaoying Technology may be suffering from both.

In the worst quarter for profit decline, Q4 2025, Xiaoying’s total revenue was 1.47B yuan, down 14.1% year-on-year, while net profit was only 57.2 million yuan, plunging 85.2% year-on-year. Compared to Q3’s 421 million yuan net profit, it decreased by 25.1% quarter-on-quarter.

The company explained this as “an increase in credit-related provisions and a decrease in loan-related income.” In other words, more borrowers are defaulting on loans, forcing the company to set aside a large amount of money for bad debt risk.

Delinquency rates also serve as a reference. As of the end of 2025, Xiaoying’s “30-60 days overdue” default rate was about 2.9%, up 173 basis points from the end of 2024; the “91-180 days overdue” default rate soared from 2.48% to 6.31%, an increase of 383 basis points.

To cover the expanding risk exposure, Xiaoying Technology set aside 398.1 million yuan in contingent liability reserves in Q4, more than three times the amount from the same period last year. With rising risk control costs and deteriorating asset quality, Xiaoying Technology has had to scale back its lending facilitation business.

Similarly, in Q4 2025, Xiaoying facilitated and disbursed loans totaling 22.8 billion yuan, down 29.5% year-on-year and 32.3% quarter-on-quarter, with about 1.69 million active borrowers, down 20.2% year-on-year.

For Q1 2026, Xiaoying’s loan volume is projected to be only 14.5 to 15.5 billion yuan, shrinking at least 32% from the previous quarter—more a passive contraction under risk pressure than strategic adjustment.

The next 1-2 quarters will be critical for observing Xiaoying’s asset quality. After massive provisions, whether overdue rates stabilize or improve will determine if the company can “stop the bleeding” or continue “bleeding out.”

If provisioning continues to rise and overdue rates worsen, even with abundant cash, Xiaoying’s true enterprise value will be hard to assess.

And the high-cost, technologically driven risk control systems like WinSAFE, WinPROT, and AI interaction must ultimately prove their worth through financial metrics.

For example, can they achieve lower ultimate bad debt rates under the same or more lenient approval rates? Can AI applications in customer service and post-loan management bring quantifiable reductions in operating costs or improvements in recovery efficiency?

The exiting IPO core shareholders clearly lack patience to wait for Xiaoying Technology to verify the effectiveness of these new technologies.

03 Inherent Nature Difficult to Change

Since the gradual implementation of new lending regulations in 2024, Xiaoying Technology has been attempting a narrative shift in capital markets, explicitly establishing “Finance + Technology” as its strategic core, claiming to push the industry from “data-driven” to “intelligent-driven” new phase.

This is also a hallmark of Xiaoying Technology under Tang Yue’s leadership—keen intuition, swift action, almost every step aligned with industry transformation.

In 2014, during the boom of internet finance, Xiaoying Technology entered the market with a differentiated P2P + insurance model, rapidly rising to industry front-runner, and completed an IPO decisively in 2018.

By late 2020, as the P2P industry entered a countdown to zero, Xiaoying Technology also decisively cleared its P2P platform Xiaoying Wangjin, settling all principal and interest for lenders, completing a “withdrawal” that most industry players failed to achieve, and transitioned to a loan facilitation business.

In May 2021, just half a year after the transition, Xiaoying Technology obtained a nationwide internet microloan license, becoming one of the first companies to complete the transformation and gain nationwide operation qualification. Many peers that moved more slowly eventually faded from China’s fintech development history.

Thus, when the 2024 new lending regulation storm hit, Xiaoying Technology again demonstrated rapid turnaround ability, shifting revenue sources from reliance on transaction-based matching fees to full-process loan services empowered by technology—pre-loan, during, and post-loan.

Xiaoying Technology also rolled out a substantial “Win” tech matrix for this narrative shift.

Among them, WinSAFE integrates marketing, risk control, and service modules, covering five major systems: growth, risk control, asset management, customer service, and post-loan management, claiming to realize “full automation of credit decision-making and real-time risk control.”

WinPROT claims to achieve pre-loan fraud detection, real-time monitoring of abnormal transactions during the loan, and intelligent collection optimization after the loan, thereby improving risk handling efficiency.

The problem is, if these are truly effective, why haven’t overdue rates remained low as before?

Interestingly, collection, which should be the last line of defense in risk control, seems to be Xiaoying’s most resilient profit margin.

On the Black Cat Complaint platform, Xiaoying Card Loan ranks high in popularity, with “high interest,” “violent collection,” and “bombing contact lists” as the most frequent complaints. Many users report that just days after overdue, third-party collectors harass family, colleagues, or even employers, and personal information is obtained and spread without authorization.

Looking again at the company’s official statements praising “tech for good” and “digital inclusion,” it’s somewhat ironic.

After full collection of personal information, invasion into personal lives follows—born from China’s vast population base, internet, and AI tech seem to have a certain counterproductive impulse.

The original gene of internet finance companies is hard to change; Xiaoying Technology and others’ claims of “tech-enabled loan services” seem more like a “packaging” to move away from a heavy-asset, interest-margin-driven model.

As for what a truly lightweight, tech-driven, asset-light model looks like, no company in the entire loan facilitation industry has truly achieved it—figures like Tang Yue, a “fintech tycoon,” can only face an approaching storm of turbulence.

Author’s note: Personal opinions, for reference only.