SecProbe.io

Mail Stop 4720

May 24, 2018

Yue (Justin) Tang
Chief Executive Officer and Chairman
X Financial
7-8F, Block A, Aerospace Science and Technology Plaza
No. 168, Haide Third Avenue, Nanshan District
Shenzhen, 518067, the People's Republic of China

Re: X Financial
Amendment No. 2 to
Draft Registration Statement on Form F -1
Submitted May  4, 2018
  CIK No. 0001725033

Dear Mr. Tang :

We have reviewed your amended draft registration statement  and have the following
comments.  In some of our comments, we may ask you to provide us with information so we
may better understand your disclosure.

Please respond to this letter by providing the requested information and either submitting
an amended draft registration statement or  publicly  filing your registration statement on
EDGAR.  If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing the information you provide in response to these  comments  and your
amended draft registration statement or filed registration statement, we may have additional
comments.

General

1. Considering that you will enhance disclosures in future amendments and provide
responses to comments below, we will reevaluate your response to several comments,
including comments 6 and 19 and  comment  58 in our letter dated February 5, 2018, once
those disclosures and responses are provided.

Yue (Justin) Tang
X Financial
May 24, 2018
Page  2

Manage ment's Discussion and Analysis of Financial Condition and Results of Operations

Loan Performance, page 95

2. We note you discuss throughout your filing, including in your risk factor on page 30, that
if you are unable to maintain low delinquency rates for transactions facilitated by you,
your business and results of operations may be materially and adversely affected and that
historical rates may not be indicative of future results.  We also note delinquencies drive
defaults of principal and interest and th e guarantee provision which increased from RMB
110.2 million in 2016 to RMB 857.8 million in 2017.  Please address the following:

 Enhance your disclosure to discuss how delinquency rates impact defaults of
principal and interest and or the guarantee provi sion;

 Disclose defaults of principal and interest and or the guarantee provision as a
percentage of respective loans facilitated for the periods presented and explain related
trends; and

 Enhance your risk factor discussion to also discuss the impact of a ctual defaults of
principal and interest to your business.

3. We note from your disclosure on page 156, that the credit risk level for loans rated A &
B, your lower risk ratings, increased from a total of 57% in 2016 to 74.2% in 2017 and
the credit risk le vel for loans rated C & D, your higher risk ratings, decreased from 43%
in 2016 to 25.8% in 2017.  Tell us and disclose the relationship between your credit risk
levels and delinquency, including why the percentage of higher risk loans decreased from
2016 to 2017 but your delinquency rates increased from 2016 to 2017.

Discussion of Key Balance Sheet Items, page 106

4. You state that guarantee liabilities increased from RMB 100.7 million in 2016 to RMB
545.2 million, primarily due to the increase in your tr ansaction volume.  Please disclose
how the increase in delinquency rates, change in product mix, credit profile of the
underlying borrower and the year -over-year change in the loss emergence period
contributed to the increase.

Liquidity and Capital Resour ces, page 107

5. Please enhance your disclos ure to address the impact on your liquidity and working
capital for all related party transactions in both 2016 and 2017 as disclosed on page F -44.

Yue (Justin) Tang
X Financial
May 24, 2018
Page  3

Critical Accounting Policies, Judgments and Estimates

Guarantee liabilities, page 118

6. Please update your discussion to reflect the terms of your agreement with ZhongAn
subsequent to September 2017, including the impact to each loan product and your non -
obligatory intentions for future compensation.

Busine ss

Our Partnership with ZhongAn, page 153

7. We note your disclosure that 95.1% of the loan products you facilitated as of December
31, 2017 were covered by the credit insurance products provided by ZhongAn .  We
further note your disclosure that the protection offered by ZhongAn’s insurance policy
significantly enhances the confidence of your investors and business partners, and if the
provision of services by ZhongAn become limited, restricted, or are rendered less
effective or more expensiv e, your business may be materially and adversely affected.
Please tell us and disclose the following:

 How you monitor the financial condition and credit quality of ZhongAn;

 ZhongAn’s credit rating; and

 Zhon gAn’s financial strength, including its ability to pay insured claims, considering
the recent changes to your arrangement whereby ZhongAn is now fully liable for
credit risk for Xiaoying Preferred loans.

Credit Insurance, page 153

8. You state that, in add ition to ZhongAn’s insurance protection, Shenzhen Tangren, your
consolidated VIE with the financing guarantee license, also provides a guarantee for
certain loans you facilitate to protect investors against defaults for both the principal and
interest.  Pl ease tell us and disclose the specific loan population that Shenzhen Tangren
provides a guarantee  and the terms of their guarantee .

Risk Management

Credit Scoring and Pricing, page 156

9. Tell us and disclose how your credit risk levels for Xiaoying Card  loans correlate to the
likelihood of default.

Yue (Justin) Tang
X Financial
May 24, 2018
Page  4

Management, page 179

10. We note that you have identified three independent directors who will become directors
upon effectiveness of this registration statement.  Please file consents for Messrs. Rong,
Xue and Zhang or advise.  Refer to Rule 438 of Regulation C for further guidan ce.

Notes to the consolidated financial statements for the years ended December 31, 2016 and 2017

Note 2.  Summary of Significant Accounting Policies

Consolidated Trusts, page F -12

11. Please disaggregate Loans at fair value by product consistent with your  guarantee
liabilities rollfoward.

Revenue Recognition, page F -16

12. We note your respo nse to comment 18.  Please tell us and disclose the following:

 On page F -16, you state that you charge a portion of service fees upfront for certain
products  which are deducted from the loan proceeds at loan origination, and the
remaining fees are collected on a monthly basis.  In your Direct and Intermediary
Model discussions you state service fees are collected on a monthly basis in equal
payments for most p roducts and for certain selected products, the upfront fee is
deducted from loan proceeds at origination and the remaining consideration is
collected in equal payments on a monthly basis.  Please reconcile these statements,
clarifying for each product, whe n each service fee is due and collected;

 Enhance your disclosure to disaggregate upfront fees collected by product.  Consider
disclosing in a table format; and

 Update your disclosure, including the Direct Model and Intermediary Model, to
discuss the impact of the amended agreement with ZhongAn in September 2017 on
your guarantee fees, by product, as applicable.

13. Please  provide us with copies, in English, of all  agreements between you and the
borrower, you and the investor and the borrower and investor.

14. Please disclose the impact to your Xiaoying Preferred Loan guarantee fees as a result of
your revised arrangement with ZhongAn subsequent to September 2017.

15. You state in September 2017 you revised your arrangement with ZhongAn related to
Xiaoying Card Loans and your obligation at any time is capped at a certain percentage of

Yue (Justin) Tang
X Financial
May 24, 2018
Page  5

 the original principal as pre -agreed with ZhongAn, no more than the contractual
guara ntee fee charged to borrowers across the entire portfolio.   Please address the
following:

 Tell us and disclose the contractual terms of your revised arrangement, including for
example, the amount of the cap and if it will be renegotiated annually;

 Tell us and disclose how ZhongAn ultimately bears substantially all credit risk if you
are exposed to a certain percentage of the guarantee obligation and retain the default
risk in rel ation to the guarantee fee; and

 Tell us and disclose how the time lag bet ween the collection of guarantee fee and
compensation to ZhongAn results in exposure to you, how this is considered in the
contractual guarantee obligation determination at inception, and how this is different
from your prior agreement.

Guarantee liabil ities, page F -24

16. We note you revised your guarantee liabilities policy to state that prior to September
2017, under the arrangement with ZhongAn, in order to maintain a stable business
relationship, you compensated ZhongAn for actual losses incurred based  on defaulted
principal and interest, although not contractually obligated.  Please address the following:

 Tell us why if the compensation to ZhongAn was not contractually obligated prior to
September 2017 this was not reflected in the guarantee liabili ty policy in the original
registration statement; and

 Tell us how a non -contractual guarantee obligation is within the scope of ASC 460.

17. You state that at inception of each loan, you recognize the guarantee liability at fair value
in accordance with ASC 460 and that the guarantee liability at loan inception is based on
your expected payouts based on delinquency and collection rates, conside ring historical
losses and incorporating a markup margin.  Subsequent to the loan’s inception, the
guarantee liability is measured using a combination of ASC 460 and ASC 450.  Please
address the following:

 Tell us and disclose how your guarantee liabili ty at inception considers the guidance
in ASC 460 -10-25-2 and ASC 460 -10-30-3 that requires both the contingent and non -
contingent aspect be considered in the guarantee liability at inception; and

 Tell us how your guarantee liability at inception factors in your significantly
increasing payouts, delinquency and collection rates and historical losses from 2016
to 2017.

Yue (Justin) Tang
X Financial
May 24, 2018
Page  6

 18. We note your response to  comment 26 and that up to December 31, 2017, actual payout
and collection rates have never exceeded orig inal estimates, as such, increased premiums
charged to borrowers were not impacted.  Please explain how the additional contingent
liability of RMB 182,578,676 recognized in 2017 was considered in the original estimate.
Also, please make sure to discuss th e increase in the provision for contingent guarantee
liabilities in MD&A where applicable.

Financial Guarantee Derivative, page F -25

19. We note that starting in September 2017, for newly facilitated Xiaoying Card Loans, your
exposure to borrowers' credit ri sk is capped at a certain percentage of the loan principal at
origination agreed to with ZhongAn and that your exposure will not be more than the
contractual guarantee fee charged to the borrower across the entire portfolio.  We also
note that as a result of this change, you now account for the financial guarantee as a credit
derivative under ASC  815 because the scope exemption in ASC  815-10-15-58 is not met.
Please tell us and disclose the following:

 How the terms of the financial guarantee contract bet ween you and Xiaoying Card
Loan borrowers changed from your previous agreement, including how the capped
percentage as pre -agreed with ZhongAn is reflected in the new guarantee agreement;

 How the new guarantee agreement did not meet the scope exception i n ASC 815 -10-
15-58;

 How the introduction of capped guarantee exposure of expected payouts resulted in
the determination that the exposure should be accounted for as a credit derivative;

 The contractual terms that impact the valuation, including the amount of the cap and
if it will be renegotiated annually; and

 The related outstanding loan balance, remaining weighted average contractual loan
term and delinquency rate for the period presented.  Refer to ASC 815 -10-50.

Accounts receivable and contact assets and allowance for uncollectible accounts receivable and
contract assets, page F -26

20. Please disaggregate accounts receivable from facilitation services and guarantee services
and contracts from facilitation services by product.

21. You state contract assets represent your right to consideration in exchange for facilitation
services that the Company has transferred to the customer before payment is due.
Clarify, for each product, the change in time frame for a right to consideration to become
unconditional (that is, for a contract asset to be reclassified to a receivable).  Refer to
ASC 606 -10-50-10(d).

Yue (Justin) Tang
X Financial
May 24, 2018
Page  7

Loan Receivable from Xiaoying Housing Loans, page F -28

22. We note that the Xiaoying Housing loans outstanding balance - including  the principal,
interest, fees, and penalties - increased from RMB 23.4 million at December 31, 2016 to
RMB 219.5 million at December 31, 2107.  Please enhance your disclosure to discuss
how these loans were previously recognized in your financial statemen ts and how the
related defaults are reflected in your guarantee liabilities rollforward.

Note 8.  Guarantee Liabilities, page F -42

23. We note your response to comment 30.  Please tell us and disclose the following:

 The related outstanding loan balance by product, remaining weighted average
contractual loan term, and delinquency rates for the periods presented to provide
investors with insight into the current status of the performance risk.  Refer to ASC
460-10-50-4;

 Disaggregate net payouts du ring the year between those related to loans originated in
the current year and those originated in the prior year;

 Enhance your guarantee liabilities policy disclosure to clarify how collateral is
considered in your guarantee liability recognized at inception;

 Enhance your disclosure to explain the factors driving the incremental contingent
liability of RMB 109,086,588 for Xiaoying Card loans recognized in the fourth
quarter of 2017, including the underlying vintages to which it relates; and

 Discu ss the factors that drove the decrease in the total provision for Xiaoying Card
loans as a percentage of total related loans facilitated from 29.7% in 2016 to 4.9% in
2017.

Yue (Justin) Tang
X Financial
May 24, 2018
Page  8

 You may contact Michelle Miller at (202) 551 -3368 or David Irving at ( 202) 551 -3321 if
you have questions regarding comments on the financial statements and related matters.  Please
contact David Gessert at (202) 551 -2326 or me at (202) 551 -3391 with any other questions.

Sincerely,

 /s/ Erin E. Martin

Erin E. Martin
Special Counsel
Office of Financial Services

cc:  Li He, Esq.