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United States securities and exchange commission logo
September 22, 2023
Frank Fuya Zheng
Chief Financial Officer
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
Form 20-F
For the Fiscal Year Ended December 31 , 2022
Filed April 27, 2023
File No. 001-38652
Dear Frank Fuya Zheng:
            We have reviewed your filing 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 these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
            After reviewing your response to these comments, we may have additional comments.
Form 20-F for the Fiscal Year Ended December 31, 2022
Introduction, page iii
1.In future filings, clearly disclose how you will refer to the holding company, subsidiaries,
and VIEs when providing the disclosure throughout the document so that it is clear to
investors which entity the disclosure is referencing and which subsidiaries or entities are
conducting the business operations. Refrain from using terms such as “we” or “our” when
describing activities or functions of a VIE. For example, disclose, if true, that your
subsidiaries and/or the VIE conduct operations in China, that the VIE is consolidated for
accounting purposes but is not an entity in which you own equity, and that the holding
company does not conduct operations. Disclose clearly the entity (including the domicile)
in which investors own an interest. In addition to revised disclosure elsewhere, provide
narrative disclosure accompanying the organizational graphic on page 105 responsive to

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this comment. And revise the graphic to identify clearly the entity in which investors own
their interest and the entity(ies) in which the company’s operations are conducted. Please
include your proposed disclosure in your response letter.
2.In future filings, please revise your definition of "China" or "PRC" to remove the
exclusion of Hong Kong and Macau from this definition. Please include your proposed
disclosure in your response letter.
VIE Structure and Risks Relating to Our Corporate Structure, page 1
3.In future filings, please disclose prominently that you are not a Chinese operating
company but a Cayman Islands holding company with operations conducted by your
subsidiaries and through contractual arrangements with a variable interest entity (VIE)
based in China and that this structure involves unique risks to investors. If true, disclose
that these contracts have not been tested in court. Explain whether the VIE structure is
used to provide investors with exposure to foreign investment in China-based companies
where Chinese law prohibits direct foreign investment in the operating companies, and
disclose that investors may never hold equity interests in the Chinese operating company.
Your disclosure should acknowledge that Chinese regulatory authorities could disallow
this structure, which would likely result in a material change in your operations and/or a
material change in the value of your securities, including that it could cause the value of
such securities to significantly decline or become worthless. Provide a cross-reference to
your detailed discussion of risks facing the company and the offering as a result of this
structure. Please include your proposed disclosure in your response letter. Please also file
as exhibits all of the relevant and material contracts. In this regard, we note agreements
identified on page 106 are not filed as exhibits.
4.We note your disclosure that the Cayman Islands holding company controls and receives
the economic benefits of the VIE’s business operations through contractual agreements
between the VIE and your Wholly Foreign-Owned Enterprise (WFOE) and that those
agreements are designed to provide your WFOE with the power, rights, and obligations
equivalent in all material respects to those it would possess as the principal equity holder
of the VIE. We also note your disclosure that the Cayman Islands holding company is the
primary beneficiary of the VIE. However, neither the investors in the holding company
nor the holding company itself have an equity ownership in, direct foreign investment in,
or control of, through such ownership or investment, the VIE. Accordingly, in future
filings, please refrain from implying that the contractual agreements are equivalent to
equity ownership in the business of the VIE. Any references to control or benefits that
accrue to you because of the VIE should be limited to a clear description of the conditions
you have satisfied for consolidation of the VIE under U.S. GAAP. Additionally, your
disclosure should clarify that you are the primary beneficiary of the VIE for accounting
purposes. Please also disclose, if true, that the VIE agreements have not been tested in a
court of law. Please include your proposed disclosure in your response letter.

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5.We note the statement about the Trial Measures on page 4 indicating that your operations
and your ability to raise or utilize funds could be materially and adversely affected if
you "fail to complete the filing with the CSRC in a timely manner or at all." Please revise
future filings to provide a statement of your intention to apply or, if you have applied, a
summary of the status of your application, including the dates when submitted or amended
and any relevant communications. Please provide draft disclosure.
6.We note the statement on page 169 that the PRC is "the applicable foreign jurisdiction
with respect to KPMG Huazhen LLP." In future filings, please disclose the location of
your auditor’s headquarters and whether and how the Holding Foreign Companies
Accountable Act, as amended by the Consolidated Appropriations Act, 2023, and related
regulations affect your company. Please provide draft disclosure.
Risks Associated with the Holding Foreign Companies Accountable Act, page 5
7.We note your disclosure about the Holding Foreign Companies Accountable Act. In future
filings, please expand your risk factors to disclose that the Holding Foreign Companies
Accountable Act, as amended by the Consolidated Appropriations Act, 2023, decreases
the number of consecutive “non-inspection years” from three years to two years, and thus,
reduces the time before your securities may be prohibited from trading or delisted. Update
your disclosure to describe the potential consequences to you if the PRC adopts positions
at any time in the future that would prevent the PCAOB from continuing to inspect or
investigate completely accounting firms headquartered in mainland China or Hong Kong.
Please include your proposed disclosure in your response letter.
Regulation, page 81
8.Please revise this section in future filings to explain whether and how each law, rule and
regulation has had, or may reasonably be expected to have, a material impact on your
business, operations or liquidity. As non-exclusive examples, we note the following:

•In the last paragraph on page 83 you state that online information service providers
must complete registration with local financial regulatory authorities and obtain
appropriate telecommunication business licenses, but you do not address whether
these requirements apply to you or whether you have completed such registrations or
obtained such licenses;
•In the second paragraph on page 84 you state that the Interim Measures stipulate that
information service providers shall not issue "financial products to raise fund or
acting as an agent to sell financial products."  It is unclear how your business does
not involve such information service provider products and services when you
facilitate "online purchasing," "secured loans," online "loan application," verification
of "applicant's information using multiple authentication technologies and internal
and external databases," and so forth;
• In the subsequent paragraph, you reference information service providers receiving a
12 month grace period, but you do not indicate whether you received such a grace

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period;
•You also reference on page 84 guidance provided on October 28, 2016 and state that
the CBRC authorizes local financial regulators to make "detailed implementation
rules regarding filing procedures." However, you do not address the extent to which
you are subject to any procedures or if there have been any updates since 2016;
•In the last paragraph on page 85 you reference activities prohibited by Circular 141,
but it is unclear why you are not deemed to "outsource core business such as user
information collection," "assist[ing] the banking financial institutions to participate in
peer-to-peer online lending," or "assist[ing] to match the loans for students of any
borrower unable to repay";
•In the second paragraph on page 94, you reference a July 7, 2022 publication by the
CAC, but you do not explain whether and how it has had or may have a material
impact on you; and
•On page 95 you discuss August 20, 2021 and September 17, 2021 publications by the
SCNP and CAC, respectively, but you do not explain whether or how they have had
or may have a material impact on you.

We note the third paragraph on page 87 states that you have taken "considerable
measures" to comply with a number of regulations and guidelines. You also give an
example. Please note that your revised disclosure should address each law, rule and
regulation on an individual basis, as material, instead of discussing their impact on a
combined basis. You should also provide sufficient detail instead of referring to
"considerable measures" having been taken. Please provide draft disclosure.
9.In this regard, in future filings, disclose each permission or approval that you, your
subsidiaries, or the VIEs are required to obtain from Chinese authorities to operate your
business. State whether you, your subsidiaries, or VIEs are covered by permissions
requirements from the China Securities Regulatory Commission (CSRC), Cyberspace
Administration of China (CAC) or any other governmental agency that is required to
approve the VIE’s operations, and state affirmatively whether you have received all
requisite permissions or approvals and whether any permissions or approvals have been
denied. Please also describe the consequences to you and your investors if you, your
subsidiaries, or the VIEs: (i) do not receive or maintain such permissions or approvals, (ii)
inadvertently conclude that such permissions or approvals are not required, or (iii)
applicable laws, regulations, or interpretations change and you are required to obtain such
permissions or approvals in the future. Please provide draft disclosure.
10.We note the statement on page 70 that you facilitated loans to 10,276,021 active
borrowers, "each of whom made at least one transaction" on your platform. Please provide
a legal analysis supporting the statements on page 93 that the PRC Data Security Law
does not apply to you and that you believe you are not an "online platform operator"
holding "more than one million users/users' individual information" and are not otherwise
a "critical information infrastructure provider."

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11.In light of recent events indicating greater oversight by the Cyberspace Administration of
China (CAC) over data security, particularly for companies seeking to list on a foreign
exchange, please revise your disclosure to explain how this oversight impacts your
business and listing and to what extent you believe that you are compliant with the
regulations or policies that have been issued by the CAC to date.
Item 5. Operating and Financial Review Prospects
Critical Accounting Policies, Judgement and Estimates, page 123
12.In future filings for applicable critical accounting estimate(s) including your allowance for
credit losses, please explain why each critical accounting estimate is subject to uncertainty
and, to the extent the information is material and reasonably available, how much each
estimate and/or assumption has changed over a relevant period, and the sensitivity of the
reported amounts to the material methods, assumptions and estimates underlying its
calculation. Ensure that the disclosure of your critical accounting estimate(s) is not a
repetition of your significant accounting policies. Refer to Item 5E of Form 20-F.
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections, page 169
13.We note your statement that you reviewed your register of members and public filings
made by your shareholders in connection with your required submission under paragraph
(a). Please supplementally describe any additional materials that were reviewed and tell us
whether you relied upon any legal opinions or third party certifications such as affidavits
as the basis for your submission. In your response, please provide a similarly detailed
discussion of the materials reviewed and legal opinions or third party certifications relied
upon in connection with the required disclosures under paragraphs (b)(2) and (3).
14.In order to clarify the scope of your review, please supplementally describe the steps you
have taken to confirm that none of the members of your board or the boards of your
consolidated foreign operating entities are officials of the Chinese Communist Party. For
instance, please tell us how the board members’ current or prior memberships on, or
affiliations with, committees of the Chinese Communist Party factored into your
determination. In addition, please tell us whether you have relied upon third party
certifications such as affidavits as the basis for your disclosure.
15.We note that your disclosures pursuant to Items 16I(b)(2), (b)(3), (b)(4), and (b)(5) are
provided for your “company or any of the consolidated foreign operating entities.” You
disclose on page 169 that the consolidated foreign operating entities are incorporated or
otherwise organized in the PRC; however, your list of subsidiaries in Exhibit 8.1 appears
to indicate that you have a subsidiary in Hong Kong. Please note that Item 16I(b) requires
that you provide disclosures for yourself and your consolidated foreign operating entities,
including variable interest entities or similar structures.

With respect to (b)(2), please supplementally clarify the jurisdictions in which your
consolidated foreign operating entities are organized or incorporated and provide the

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percentage of your shares or the shares of your consolidated operating entities owned by
governmental entities in each foreign jurisdiction in which you have consolidated
operating entities in your supplemental response.
            We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
            You may contact Lory Empie at 202-551-3714 or Cara Lubit at 202-551-5