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Actionable news in YRD: Yirendai Ltd,

A Quick Buy For China Rapid Finance At Upcoming Quiet Period Expiration

Event Summary

The 25-day quiet period on China Rapid Finance Ltd (NYSE: XRF) will end on May 23, allowing the firm's IPO underwriters to publish reports and recommendations after this time.

We believe XRF's IPO underwriters could affect an additional price increase with the likely release of many positive research reports. Several years of our firm's research have shown abnormal price increases of 2%-3% in a week-long window surrounding the expiration date.

The influential team of underwriters includes: BofA, Citi, Deutsche Bank, Wells Fargo; BMO, JMP Securities, Robert W. Baird, William Blair.

While not all quiet period expirations present buying opportunities, we are excited by the combination of XRF's strong syndicate, market debut, and strong market position -- as well as the well tested event.

Steady Early Gains Following Market Debut

XRF was priced at $6, significantly lower than its expected price range. The stock closed at $6.45 on its first day of trading. It reached a high of $8.33 on May 1, and the stock closed at $7.24 on Friday).

Business Overview: Specialty Retailer of Hard Surface Flooring

China Rapid Finance operates one of China's largest consumer lending marketplaces by total number of loans. To date, the company has facilitated approximately 15 million loans to approximately 2 million people. China Rapid Finance focuses on the "Emerging Middle-class, Mobile Active consumers (EMMAs)" (S-1/A). These consumers regularly use mobile devices, and XRF believes this segment represents a significant opportunity in the consumer credit landscape. The company notes in its SEC filing that the People's Bank of China estimates that nearly 500 million citizens had good employment...