(Yicai Global) March 15 -- PPDai, the pioneer of China's peer-to-peer lending sector, doubled its profit last year thanks to spending cuts against a backdrop of widespread P2P company failures stemming from stricter government regulation.

Net profit was CNY2.5 billion (USD359 million) in the 12 months ended December, the Shanghai-based microlender said in an earnings report yesterday. Revenue jumped just over 10 percent to CNY4.3 billion from a year earlier.

China's once-booming P2P sector became the subject of a widespread government crackdown in 2018 following reports of Ponzi schemes and huge losses for individual borrowers. Some 1,282 players in the market had trouble complying with regulations last year, states a government report issued last month, adding that close to half of these firms had ceased operations.

"We did a good job in the fourth quarter and the full year, despite tightening regulation and an unstable market," said founder and Chief Executive Zhang Jun. "The rising net profit indicates we have steady operations, excellent compliant culture and consistently prudent risk management."

Earnings climbed despite the number of PPDai's unique borrowers falling by more than one-fifth to 6.8 million. New loans also fell 6.2 percent to CNY61.5 billion, with an average term of 9.4 months. 
The firm's shares [NYSE:PPDF] closed 0.5 percent higher at USD4.98 in trading overnight.

"We will continue to closely cooperate with regulators and believe we will meet all future industrial requirements and seize opportunities stemming from long-term growth in China's online consumer finance market," Jun added.

Founded in 2017, the firm was China's first pureplay online microlending platform and listed in New York in November the same year.

Editor: William Clegg