SCHEDULE: Legend Architecture Consultant Limited Discloses 10% Stake in X Financial Class A Shares

Legend Architecture Consultant Limited has reported a beneficial ownership of 10.00% of X Financial's Class A ordinary shares, representing a 0.74% stake in total voting power.

Summary

• Legend Architecture Consultant Limited holds 15,576,134 Class A Ordinary Shares of X Financial.
• This represents 10.00% of the total outstanding Class A Ordinary Shares.
• The holding translates to 0.74% of the total outstanding voting power, considering both Class A and Class B shares.
• Each American Depositary Share (ADS) represents six Class A ordinary shares.
• As of March 31, 2025, X Financial had 155,656,363 Class A ordinary shares and 97,600,000 Class B ordinary shares issued and outstanding.
• Class A ordinary shares carry one vote per share, while Class B ordinary shares carry 20 votes per share.

Sentiment

Score: 6

Explanation: The filing is a standard disclosure of a significant passive stake. While a large stake can be seen as positive, the limited voting power for Class A shareholders due to the dual-class structure introduces a governance consideration. The sentiment is neutral to slightly positive due to the investment itself, but not overwhelmingly so given the nature of the filing.

Positives

• A significant institutional investor has taken a substantial 10.00% stake in the Class A ordinary shares, indicating confidence in X Financial.

Negatives

• The 10.00% stake in Class A shares only represents 0.74% of the total voting power due to the dual-class share structure with high-vote Class B shares, limiting the influence of Class A shareholders.

Risks

• The dual-class share structure concentrates voting power with Class B shareholders, potentially limiting the influence of Class A shareholders despite significant ownership.

Future Outlook

The Schedule 13G filing is a disclosure of beneficial ownership and does not contain forward-looking statements or guidance regarding the issuer's future performance or strategic outlook.

Management Comments

• Legend Architecture Consultant Limited certified that the securities were not acquired or held for the purpose of changing or influencing the control of the issuer, nor in connection with any transaction having that purpose or effect, other than activities solely related to a nomination under Rule 14a-11.

Industry Context

This filing indicates a significant passive investment by Legend Architecture Consultant Limited in X Financial, a company operating with a dual-class share structure. Such structures are common in technology and growth-oriented companies, particularly those based in China, allowing founders or early investors to retain control despite dilution of economic ownership. The low voting power percentage relative to the Class A share ownership highlights the impact of such structures on investor influence.

Comparison to Industry Standards

• The dual-class share structure employed by X Financial, where Class B shares carry significantly more voting power (20 votes per share) than Class A shares (1 vote per share), is a common governance model among Chinese technology and fintech companies listed in the U.S., such as Alibaba Group Holding Limited (BABA) and JD.com, Inc. (JD), which also utilize similar structures to maintain founder control.
• While a 10.00% stake in a specific share class is substantial, its diluted voting power of 0.74% is typical for Class A shareholders in companies with such structures, contrasting sharply with single-class share companies where a 10% stake would typically confer 10% voting power, aligning with global benchmarks for corporate governance where 'one share, one vote' is often preferred by institutional investors.

Stakeholder Impact

• Shareholders: The disclosure of a significant 10.00% stake by Legend Architecture Consultant Limited may be viewed positively by other Class A shareholders as it indicates institutional confidence, although the limited voting power of these shares remains a factor.

Next Steps

• The document does not specify any future actions, events, or milestones for the issuer or the reporting person beyond the filing itself.

Key Dates

Keywords

X Financial, Legend Architecture Consultant Limited, Schedule 13G, Beneficial Ownership, Class A Shares, Voting Power, SEC Filing, Institutional Investment, Shareholding, Dual-Class Structure