Latest news with #QifuTechnology
Yahoo
28-05-2025
- Business
- Yahoo
QFIN Vs BYRN: Which Niche Tech Stock Belongs in Your Portfolio?
Both Qifu Technology, Inc. QFIN and Byrna Technologies Inc. BYRN are lesser-known tech companies. While QFIN is a Chinese AI-driven consumer finance company, BYRN operates in the non-lethal self-defense technology sector, offering innovations and high growth potential. Despite their obscurity, these companies cater to a significantly tech-savvy user base. The comparative analysis of these two companies could benefit investors interested in low-profile tech stocks. QFIN relies on technological advancements to power its risk management practices. The company's AI + Finance strategy is changing the whole dynamic of credit services. In the first quarter of 2025, QFIN reported 15.8% year-over-year growth in loan origination, and its registered user base increased 11.1%. This improvement is led by the company's industry-first Intelligent Agent for Core Credit Business — a system of smart modules that streamline operations, improve risk management and create bespoke financial services. The company utilizes AI models to evaluate vast datasets to identify creditworthy individuals and small and medium enterprises, expanding its customer base while reducing defaults. Qifu Technology has improved its risk metrics by upgrading application and collection scorecards with AI, including LLMs, for real-time user communication data analysis and refinement of partner management. AI and big data are huge parts of QFIN's user acquisition strategy. The company's AI-led marketing strategy has improved its user profiling accuracy across channels, with a conversion rate of new credit line users to new borrowers growing 33% from the year-ago quarter in the first quarter of 2025. Finally, Qifu Technologyutilizes intelligent credit engine technology to operate a light capital model, contributing to its profitability and scalability. BYRN's technological advancements contribute to enhancing its product performance and appeal. The company's patented 'first-shot, pull-pierce' technology ensures that the Byrna launcher is ready to use all the time, addressing major drawbacks of other CO2-led devices. Reliability as such is a massive selling point for personal safety, making the product more appealing to customers and law enforcement, improving brand trust. Byrna Technologies' blunt impact projectile, a patented energy absorption system, is less lethal yet efficient, which is crucial for the company's target markets and sets it apart from competitors. The company employs technology to create designs that are miniature and user-friendly, thereby expanding the market for its products. This strategy enhances accessibility and convenience for a diverse range of users, including those who are uneasy with traditional ammunition. Furthermore, the company is boosting production and is preparing the initiation of its Compact Launcher in mid-2025. Byrna Technologies has augmented launcher production by 33% in the first quarter of 2025, touching 24,000 units per month to meet the increasing market demand and fuel operational expansion. Shifting ammunition production domestically is improving its supply chain and is anticipated to enhance product margins. These technological investments and market initiatives are estimated to drive growth throughout 2025 and in the future, positioning the company for prolonged success. The Zacks Consensus Estimate for Byrna Technologies' fiscal 2025 sales is pegged at $111.7 million, suggesting 30.2% year-over-year growth. The consensus estimate for earnings is pegged at 35 cents, indicating a 12.9% rise from the preceding year's actual. Two estimates for fiscal 2025 have moved north in the past 60 days versus no southward revisions. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Qifu Technology's 2025 sales is pegged at $2.6 billion, implying 7.6% year-over-year growth. The consensus estimate for earnings is pegged at $6.94 per share, indicating 22.6% year-over-year growth. One estimate for 2025 has moved north in the past 60 days versus no southward revisions. Image Source: Zacks Investment Research QFIN's forward earnings multiple is 61.74X, lower than its 12-month median of 92.59X. BYRN's 5.83X is slightly lower than its median of 5.84X. Image Source: Zacks Investment Research Qifu Technology and Byrna Technologies are impressive tech stocks. While QFIN leverages technology by providing credit access to customers, BYRN utilizes technical advancements to design and manufacture less-lethal personal security solutions. BYRN appears to be a more compelling investment option since the personal security device market holds untapped potential, mainly compared with the fintech market, which is competitive and more mature. Furthermore, BYRN, a fundamentally strong stock, is significantly cheaper than QFIN, making it a more compelling opportunity for growth-focused investors today. Byrna Technologies and Qifu Technology both have a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Qifu Technology, Inc. (QFIN) : Free Stock Analysis Report Byrna Technologies Inc. (BYRN) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Entrepreneur
28-05-2025
- Business
- Entrepreneur
3 Growing Global Stocks You May Not Have Considered
Why international companies like Qifu Technology (QFIN) and more may warrant a second look This story originally appeared on WallStreetZen Hot take: There's nothing inherently superior about being a U.S. listed company. Sure, U.S. stocks are more accessible, and tend to attract more attention — but that doesn't mean that there aren't strong prospects elsewhere in the world. Plus, while American stocks have historically been strong performers, hedging to counteract downturns or the effects of geopolitical developments is never a bad idea. That said, let's take a look at some foreign stocks you may not have considered. I located and researched all of the tickers below using our quant ratings system, Zen Ratings. The system tracks 4600+ stocks — most of them are U.S.-based, but there are still some excellently-rated overseas stocks that could make meaningful additions to your portfolio. 1. Qifu Technology (NASDAQ: QFIN) This company operates in a very specific and very interesting niche — artificial intelligence (AI) credit services. The company currently acts as an intermediary, matching clients with financial institutions. While that does limit revenue, this facilitation-driven model is also asset-light. At present, Qifu Technology is partnered with more than 160 financial institutions — and serves more than 250 million clients in China. While the company initially focused on underserved individuals and small businesses, it has since expanded — and we've seen plenty of examples of how strong domestic operations lead to international success for Chinese ventures. QFIN stock has a Zen Rating of A. At present, it ranks in the top 5% of the equities we track — and stocks with this distinction have historically provided an average annual return of 32.52%. In the last 365 days, QFIN shares have outperformed that mark by a wide margin — with a 112.18% return. The average 12-month price target from Wall Street analysts implies a 23.94% upside. We'll have to dive into the stock's Component Grade ratings to decipher why this surge has occurred — and why it might continue. Value is QFIN's strongest suit — the stock is currently trading at a price-to-earnings (P/E) ratio of just 6.48x, and a price-to-earnings growth (PEG) ratio of 0.78x. In this regard, the stock ranks in the top 5% of the equities we keep track of. On account of its current uptrend, the stock also ranks in the top 7% in terms of momentum — and despite strong expansion, it maintains a healthy checkbook, clocking in in the top 10% in terms of Financials. QFIN exists at several interesting intersections — the business model isn't particularly beholden to tariffs and trade disputes, it's an early mover, and software-based. At its present valuation, it's a bargain — and provides a simple way to gain exposure to a dynamic and emerging market while reducing the overall risk of your portfolio. Lastly, the business is on a winning streak — it has posted earnings per share (EPS) beats for 4 consecutive quarters, having outperformed consensus expectations by quite a wide margin in each quarterly report. Based in Singapore, Karooooo (NASDAQ: KARO) maintains a comprehensive cloud-based platform that seeks to optimize fleet management, asset tracking, compliance, and last-mile deliveries. KARO shares also have a Zen Rating of A. The stock ranks in the top 4% of equities — but it has flown under Wall Street's radar thus far, as only 1 analyst covers it. KARO is also currently the 11th highest rated stock in the App industry, which has an Industry Rating of A. That's all well and good — but let's get down to the nitty gritty details. A key reason behind such a high rating is the fact that the company has consistently managed to outperform expectations. Karooooo has provided 7 earnings beats in a row — and each time, EPS outperformed consensus estimates by double digits, percentage-wise. Sentiment — which factors in short interest, insider selling, and analyst revisions, is KARO's strongest rating — in this category, it ranks in the 95th percentile of stocks. However, it also earns high marks in terms of Momentum and Artificial Intelligence — as KARO ranks in the top 13% in both of those categories, indicating the presence of a strong uptrend supported by the findings of a neural network trained on more than 20 years of fundamental and technical data. 3. Taiwan Semiconductor Manufacturing (NYSE: TSM) Our two prior picks were relatively under-the-radar — Taiwan Semiconductor Manufacturing (NYSE: TSM) is anything but. An essential lynchpin in the global semiconductor industry, TSM maintains both a technological advantage as well as the benefits of scale. While the company is a perennial subject of geopolitical risks, the markets evidently find future prospects more enticing — TSM shares have seen a 22.21% gain in the past year. At present, Taiwan Semiconductor Manufacturing stock ranks in the top 14% of equities — netting it a Zen Rating of B. Stocks with that distinction have provided an average annual return of 19.88% since the turn of the century. Wall Street analysts are currently projecting an upside of 19.8% for TSM — roughly in line with the expectations for its Zen Rating. While it does operate in a highly capital-intensive industry, TSM has managed to meet or outperform analyst estimates in the last 9 consecutive quarters. A key driver of this continued outperformance is the semiconductor titan's healthy balance sheet — in terms of Financials, TSM ranks in the top 3% of stocks. At its core, this is a sympathy play — while TSM likely won't see the huge surges to the upside characteristic of Nvidia, for example, it remains a key provider with a stable business model that continues to benefit from high demand from dynamic, growing industries. —> If you're interested in more stocks with strong potential, check out this screener What to Do Next?
Yahoo
27-05-2025
- Business
- Yahoo
Qifu Technology Won the Title of "MOST HONORED COMPANY" for the Second Consecutive Year
SHANGHAI, May 27, 2025 /PRNewswire/ -- Recently, Qifu Technology (Nasdaq: QFIN; Hong Kong Stock Exchange: 3660), a leading Chinese fintech company, has secured the title of "Most Honored Company" in the 2025 Extel Asia (ex-Japan) Best Managed Teams rankings, a global leader in corporate governance and investor relations research (formerly associated with Institutional Investor). The company also topped several sub-categories, including "Best CEO" "Best CFO" and "Best Investor Relations Professional", establishing itself as a prominent benchmark in Asia's fintech sector. Qifu's distinction stems from its synergistic integration of cutting-edge AI technology applications, transparent information disclosure, robust corporate governance, and effective capital market communication, forming a unique competitive edge. The Extel Awards, a renowned benchmark for evaluating corporate management in Asia, are voted by 5,437 fund managers and buy-side analysts, alongside 863 sell-side analysts. The evaluation covers core dimensions such as financial disclosure, corporate governance, executive leadership, and ESG strategy. Its predecessor, the Institutional Investor ranking system, has long been a key reference for global capital markets to assess corporate governance capabilities. In its simultaneously released Q1 2025 financial report, Qifu reported sustained growth in business scale and user engagement: Connected 163 financial institution partners Reached 268 million registered users and 58.4 million credit-approved users Facilitated loan origination of RMB 88,883 million, a 15.8% year-over-year increase The growth is attributed to the deep implementation of its "AI + Finance" strategy. The company is developing the industry's first intelligent agent for core credit business, composed of multiple smart modules that have already driven process reengineering and efficiency improvements across operational scenarios. View original content: SOURCE Qifutech Sign in to access your portfolio
Yahoo
23-05-2025
- Business
- Yahoo
Qifu Technology Delivers Strong Q1 Results, Citi Hikes Price Target
Qifu Technology, Inc. (NASDAQ:QFIN) sentiments have received a significant boost on first-quarter 2025 results coming in better than expected on May 20. The company's financial results affirmed significant growth in user engagement and loan facilitation volumes as it navigated macroeconomic challenges. A financial adviser looking over a portfolio of securities and stocks. China's leading provider of credit tech platforms says it recorded an 11.1% increase in the number of consumers connected by financial institutional partners to 268.2 million. Consequently, the company posted revenue of RMB4,690.7 million (US$646.4 million), an improvement from RMB4,482.3 million in the prior quarter. Net income was RMB1,796.6 million (US$247.6 million), compared to RMB1,912.7 million in the prior quarter. The Chief Executive Officer said first-quarter results were stronger despite ongoing macroeconomic challenges. The better than expected quarterly results came as Qifu Technology increasingly capitalizes on the maturity and efficiency of large language models in the financial sector. In addition, analysts at Citi have reiterated a Buy rating on the stock, and hiked the price target to $58.50 from $55, impressed by the strong Q1 results. While we acknowledge the potential of Qifu Technology, Inc. (NASDAQ:QFIN) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than QFIN and that has 100x upside potential, check out our report about the cheapest AI stock. READ NEXT: and . Disclosure: None. Sign in to access your portfolio
Yahoo
20-05-2025
- Business
- Yahoo
Q1 2025 Qifu Technology Inc Earnings Call
Karen Ji; Senior Director of Capital Markets; Qifu Technology Inc Haisheng Wu; Chief Executive Officer, Director; Qifu Technology Inc Alex Xu; Chief Financial Officer, Director; Qifu Technology Inc Yan Zheng; Chief Risk Officer; Qifu Technology Inc Richard Xu; Analyst; Morgan Stanley Xiaoxiong Ye; Analyst; UBS Emma Xu; Analyst; Bank of America Securities Yun-Yin Wang; Analyst; China Renaissance Yada Li; Analyst; CICC Operator Ladies and gentlemen, thank you for standing by, and welcome to the Qifu Technology First Quarter 2025 Earnings Conference Call. (Operator Instructions) Please also note, today's event is being recorded. At this time, I'd like to turn the conference call over to Ms. Karen Ji, Senior Director of Capital Markets. Please go ahead, Karen. Karen Ji Thank you, Dessi. Hello, everyone, and welcome to Qifu Technology's First Quarter 2025 Earnings Conference Call. Our earnings release was distributed earlier today and is available on our IR website. Joining me today are Mr. Wu Haisheng, our CEO; Mr. Alex Xu, our CFO; and Mr. Zheng Yan, our CRO. Before we start, I would like to refer you to our safe harbor statement in the earnings press release, which applies to this call as we will make certain forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP financial measures to GAAP financial measures. Also, please note that unless otherwise stated, all figures mentioned in this call are in RMB terms. Before we start, we would like to let you know that today's prepared remarks from our CEO will be delivered in English using an AI-generated voice. Now I will turn the call over to Mr. Wu Haisheng. Please go ahead. Haisheng Wu (spoken by AI) Hello, everyone. Thank you for joining us today. In the first quarter of 2025, China's economy showed early signs of a mild recovery under the guiding principles of stabilizing growth, optimizing structure and managing risks. Meanwhile, the global economy is undergoing profound technological transformation and structural changes. In an increasingly complex and volatile environment, we upheld prudent operations, leveraged AI to reshape the credit value chain and achieved high-quality growth, delivering results that surpassed our expectations. By the end of the quarter, our AI-powered credit decision engine and asset distribution platform empowered a total of 163 financial institutions and served more than 58 million users with approved credit lines on a cumulative basis. Total loan facilitation and origination volume on our platform increased by 15.8% year over year. With operational efficiency continuing to improve, our take rate for the quarter reached 5.7%, up 2.2 percentage points year over year. Non-GAAP net income increased by 59.9% year over year to RMB1.93 billion while non-GAAP EPADS on a fully diluted basis rose by 78.5% to RMB13.5. Despite macroeconomic headwinds, we have consistently improved upon our past results and outperformed our market commitments through ongoing evolvement and enhancements to our business. At the start of this year, we began rolling out our AI+ credit strategy at scale aimed at building the industry's first AI agent platform to empower core credit processes. We plan to recruit an additional 100 algorithm engineers by the end of the year and accelerate our transformation into an AI-native organization. We have also established our deep bank division, which is driving the research and development of our AI+ bank agent products to support the intelligent upgrade of financial institutions. In April, we introduced an internal AI agent platform and, by May, deployed 5 digital employees across key functions such as data analytics, operations, compliance, risk management strategy and financial reconciliation. Our AI agent, ChatBI, is now deeply integrated into our intelligent decision-making and business analysis workflows. This agent provides real-time data insights and attribution analysis, empowering us to dynamically optimize our strategy and enhance decision efficiency. Risk management has always been a cornerstone of our business. This quarter, we allocated a small portion of our traffic to pilot an end-to-end risk management framework powered by large language models. By training on historical decision logs using DeepSeek, we achieved a notable improvement in AUC, area under curve, to 0.64, a metric that measures risk tiering ability. We also upgraded our data mining capabilities by incorporating video and other multimodal inputs, enabling richer and more diverse feature representations. On top of that, we developed a user profiling agent that performs consistency checks on user features with over 95% accuracy, supporting differentiated credit lines and pricing based on user profiles. In terms of risk strategy, we maintained a differentiated approach in user operations, driving moderate loan growth while preserving ample risk buffers. With loan volume increasing by 15.8% year over year during the quarter, our C-to-M2 metric, which measures delinquency rates after 30-day collections, remained largely stable at 0.6%. In Q1, we made further upgrades to our intelligent asset distribution platform to improve the precision of fund-asset matching. This helped us boost underwriting efficiency and strike a better balance between risk and return of our loan portfolio. Benefiting from our robust asset quality, we maintained our negotiating leverage on the funding side, resulting in a consistent decline in funding costs. In Q1, we issued RMB6.6 billion in ABS, a year-over-year increase of approximately 25%. With the proportion of ABS in our funding mix growing further, our overall funding costs decreased by an additional 30 basis points sequentially. We expect funding costs for the coming quarters to decrease slightly from Q1 levels. In terms of user acquisition, we have modestly increased our spending and are actively exploring a broader range of channels. In Q1, we added 1.54 million new credit line users, up 6% year over year, with new borrowers increasing approximately 41% year over year to 1.13 million. Our marketing-focused AI agent leverages multimodal recognition technology to analyze user intent in real time, integrate campaign management across multiple channels and enable real-time strategy adjustments. This has significantly improved our user profiling accuracy across channels with the conversion rate of new credit line users to new borrowers increasing by 33% from the same period last year. Our embedded finance business remains a key strategic focus as we continue to expand both the breadth and depth of our channel coverage. In Q1, we added 7 new channels, spanning from leading Internet platforms and various small- and midsized platforms to banks in multiple regions. We are also in the midst of onboarding 2 additional strategic platforms, signaling broader collaboration with leading Internet traffic platforms and unlocking meaningful and incremental growth potential going forward. During the quarter, our new credit line users from the embedded finance channels grew 36% year over year while loan volumes surged by roughly 106%. The overall ROA of these channels improved by 20% on a sequential basis. Regarding our technology solutions business, we established partnerships with 3 additional mid- to large-sized municipal banks in Q1, driving loan volume from this segment to grow by roughly 144% year over year, powered by our FocusPRO credittech platform, our proprietary solution for SME lending, which is built on a 3-tiered credit assessment system, gained meaningful scale in loan facilitation volume and delivered better-than-expected risk performance in Q1. This success has created new opportunities for our market expansion and growth in 2025. We have already received a wide range of inquiries from multiple banks about our AI+ bank agent product and recently entered into strategic partnerships with several of them. As a key component of these partnerships, we will help banks deploy AI agents across a broad range of applications including marketing and customer acquisition, risk management and loan approval, decision analytics, growth operations, compliance reviews, multimodal recognition, remote banking and digital employees, facilitating their digital and intelligent transformation. In April, China's National Financial Regulatory Administration issued a notice on strengthening the management of the Internet loan facilitation business of commercial banks to enhance the quality and the efficiency of financial services. The notice provides clearer guidance for Internet-based lending practices, emphasizing that commercial banks should establish equal mutually beneficial partnerships with platform operators and credit enhancement providers, sharing risk responsibilities and adopting a long-term perspective. We view these guidelines as strong regulatory recognition of the value the loan facilitation model provides. By setting clearer industry standards, the notice is expected to improve the overall health and sustainability of the sector. We will continue to engage in proactive and constructive discussions with regulators, regularly reviewing our practices and upholding prudence and compliance in our operations. The increasingly complex international landscape has added uncertainty to the pace of China's economic recovery. That said, we believe the economy will remain fundamentally resilient over the long run, supported by China's technological innovation, supply chain upgrades and government measures to boost domestic demand. At the press conference held on May 7 this year, the State Council Information Office announced a package of financial policies aimed at stabilizing markets and managing expectations, including guidance for financial institutions to increase support for key consumption verticals. More recently, we are seeing encouraging progress in US-China trade talks. Overall, the macroeconomic and policy landscape is showing signs of stabilization, which will provide a favorable environment for the steady development of the consumer credit industry. As we progress through 2025, we remain cautiously optimistic. In the near term, our focus will be on enhancing operational efficiency, optimizing capital allocation and enhancing shareholder returns. Over the long term, we will continue executing our One Core, Two Wings strategy. We expect our core loan facilitation business to sustain high-quality growth while our technology solutions business will continue to empower financial institutions to accelerate their intelligent transformation through our AI+ strategy. Internationally, we will focus on near-prime segments in markets with relatively stable regulatory environments, leveraging our leading fintech capabilities to build a strong competitive edge. In Q1, we issued USD690 million in convertible senior notes, further expanding our international funding channels and improving capital allocation efficiency. 100% of the proceeds from this issuance will be allocated to share buybacks. Adopting a cash-par settlement structure allows us to significantly reduce the potential dilution to existing shareholders. On the 25th of March pricing date, we concurrently completed a USD227 million share repurchase, resulting in an immediate 3.6% reduction in our share count. Combined with our USD450 million share repurchase program that took effect on the 1st of January, we expect our total repurchases this year to be no less than USD680 million. Based on the current share price, we estimate our total share count will decrease by approximately 11% when compared to the beginning of the year. We are confident in the future of our company and remain dedicated to delivering long-term value to our shareholders. Moving forward, we will continue to prioritize efficient capital allocation and shareholder value creation through recurring share buybacks and dividends. With that, I will now turn the call over to Alex. Alex Xu Thank you, Haisheng. Good morning and good evening, everyone. Welcome to our first quarter earnings call. We started 2025 with a solid Q1 as overall user activities were stronger than normal seasonality. While macro environment appeared stabilizing early in the year, impacts from trade war added uncertainty recently. We will continue to focus on efforts to optimize operations and manage risk exposures in an uncertain market. Total revenue for Q1 was RMB4.69 billion versus RMB4.48 billion in Q4 and RMB4.15 billion a year ago. Revenue from credit-driven service capital-heavy was RMB3.11 billion in Q1 compared to RMB2.89 billion in Q4 and RMB3.02 billion a year ago. The sequential growth was mainly due to increases in on-balance sheet loans and lower early repayment discount. Overall funding costs further declined modestly QoQ as ABS contribute a larger portion of our total funding in Q1. Revenue from platform service capital-light was RMB1.58 billion in Q1 compared to RMB1.59 billion in Q4 and RMB1.14 billion a year ago. The year-on-year growth was mainly due to strong contribution from ICE and other value-added service, more than offsetting the decline in capital-light loan facilitation. Platform service accounts for roughly 56% of quarter ending loan balance. We expect the ratio to be roughly stable in the near term. During the quarter, average IRR of the loans we originated and/or facilitated was 21.4% compared to 21.3% in prior quarter. Looking forward, we expect pricing to be fluctuated around this level for the coming quarters. Sales and marketing expenses increased 13% QoQ and 42% year-on-year. The sequential and year-on-year increase were mainly due to larger volume contribution from API channels in both new and existing users. We added approximately 1.54 million new credit line users in Q1 versus 1.69 million in Q4. We will make timely adjustment to the pace of new user acquisition in the coming months given the volatile macro condition and further optimize our user acquisition channels and improve user engagement and retention. 90-day delinquency rate was 2.02% in Q1 compared to 2.09% in Q4. Day 1 delinquency was 5.0% in Q1 versus 4.8% in Q4. 30-day collection rate was 88.1% in Q1, essentially flat QoQ. Another key risk metric, C-M2, which represent the outstanding delinquency rate after the 30-day collection, increased modestly QoQ to 0.6%, still within our comfortable range. We will remain vigilant to manage overall risk exposure particularly given the latest macro uncertainty and try to maintain relatively stable risk metrics in the coming quarters. At the same time, we continue to take conservative approach to book provisions against potential credit losses. Although new provision for risk-bearing loans in Q1 were approximately RMB2.23 billion versus RMB2.07 billion in Q4, the increase in new provision was mainly due to increases in risk-bearing loan volume QoQ and higher provision booking ratio. Write-backs of previous provisions were approximately 1.14 billion in Q1 versus 1.02 billion in Q4. Provision coverage ratio, which is defined as total outstanding provisions divided by total outstanding delinquent risk-bearing loan balance between 90 and 180 days, were 666% in Q1, a historical high compared to 617% in Q4. Non-GAAP net profit was RMB1.93 billion in Q1 compared to RMB1.97 billion in Q4. Non-GAAP net income per fully diluted ADS were RMB13.53 in Q1 compared to RMB13.66 in Q4 and RMB7.58 a year ago as strong earning growth and proactive share repurchase created significant EPADS accretion. At the end of Q1, total outstanding ADS share count was approximately 134.5 million compared to 142 million at the end of Q4 and 155 million a year ago. Effective tax rate for Q1 was 18% compared to our typical ETR of approximately 15%. The higher-than-normal ETR was mainly due to withholding tax provision related to cash distribution from onshore to offshore. With higher contribution from capital-heavy models, our leverage ratio, which is defined as risk-bearing loan balance divided by shareholders' equity, was 2.7x in Q1, still near the low end of historical range. We expect to see the leverage ratio fluctuated around this level in the near future. We generated approximately RMB2.81 billion cash from operations in Q1 compared to RMB3.05 billion in Q4. Total cash and cash equivalents and short-term investments was RMB14.03 billion in Q1 compared to RMB10.36 billion in Q4. The increase in cash was mainly due to the net proceeds from our USD690 million CB issuance. As we continue to generate strong cash flow from our operation, we will further optimize our capital allocation to support our business initiatives and to return to our shareholders. We started to execute the $450 million share repurchase plan on January 1. As of May 19, 2025, we had in aggregate purchased approximately 4.4 million ADS in the open market for a total amount of approximately USD178 million, inclusive of commissions, at the average price of USD40.2 per ADS, ahead of the time schedule. In addition, on March 25, we successfully priced our USD690 million CB offering and repurchased approximately 5.1 million ADSs concurrently with the aggregate value of approximately USD227 million. The concurrent buyback and the net share settlement mechanism makes CB immediately accretive to EPADS at issuance. Altogether, so far in 2025, we bought back approximately 9.6 million ADS for a total amount of USD405 million, including commissions, at an average price of $42.3 per ADS. The accelerated pace of share repurchase further demonstrate management's confidence and commitment to the future of the company. And the management intend to further use share repurchase to achieve actual EPADS accretion. Finally, regarding our business outlook. Where we observed some tentative signs of marginal improvement in user activity early in the year, macro uncertainties persist. We will continue to take a prudent approach in business planning for 2025 and focus on enhancing efficiency of our operation. For the second quarter of 2025, the company expects to generate non-GAAP net income between RMB.75 billion and RMB1.85 billion, representing a year-on-year growth between 24% and 31%. This outlook reflects the company's current and preliminary view, which is subject to material changes. With that, I would like to conclude our prepared remarks. Operator, we can now take some questions. Operator (Operator Instructions) Richard Xu, Morgan Stanley. Richard Xu (spoken in foreign language) So I'll just do a translation. There's 2 questions. What kind of impact of changes do we expect once the new loan facilitation rules come to -- into effect in October 2025? Secondly is, what's the latest trends QFIN is seeing on the credit quality? How does it compare to second half of 2022 and 2023 when QFIN was -- started to tighten credit risks? And will that impact the total expected loan growth for the year? Haisheng Wu Okay, Richard. Thank you. I can -- let me take your first question, and our CRO will answer your second question. In terms of regulation, in our opinion, the new rules released in April is a positive signal in the sense that regulator recognize the value of loan facilitation platform. The regulator's intention is to promote a more orderly and healthy development of the industry, setting principles and gradually sequencing out the long-tail platforms, which are less capable of complying with the industry standards and meet regulatory requirements. At the same time, the new rules recognize the value of leading loan facilitation platforms and encourage banks to adopt a white-list approach, set clear entry standards and build equal long-term and mutually beneficial partnerships based on risk sharing. In conclusion, with the implementation of the new rules, the industry will become more organized, which will enhance the overall health and sustainability of the loan facilitation sector. As a leading industry player, we believe we will benefit from the less competitive market environment. We will continue to engage in proactive and constructive discussions with regulators, review our practices and operate with prudence and in compliance. And for your second question, Zheng Yan, can you answer it? Yan Zheng (spoken in foreign language) Karen Ji Okay. Let me do the translation for Mr. Zheng. (interpreted) First of all, I want to say that so far, our asset quality has remained largely stable. Our C-to-M2 ratio, which measures the delinquency rate after 30-day collections, has fluctuated within a narrow band, which is in line with our expectations. First, we believe that current situation is completely incomparable to that in the second half of 2022 and 2023. Our average C-to-M2 ratio was 0.64% in the second half of 2022 and 0.69% in the second half of 2023. The volatility in the second half of 2023 was partially due to the macro uncertainties and some line controls by China's telecom careers. In Q1, our C-to-M2 ratio came in at 0.6%, which is significantly better than the second half of 2022 and 2023. And we expect this metric to remain largely stable going forward. Right now, our risk levels remain well under control, and we don't see a need to make any major adjustments to our risk policies. Therefore, as for the loan volume growth on a full year basis, it will largely depend on the consumers' credit demand. In Q1, we saw early signs of a mild recovery in credit demand and overall trends also seem to be stabilizing. However, the consistently changing global trade environment has increased macro uncertainty. While recent US-China talks have shown some encouraging progress, we still need to monitor how things will develop and what kind of impact that will have on China's economy. So we will stay prudent in our operations at this moment. Last, I want to say that our business model is quite diversified, meaning that we can easily shift between asset-heavy and asset-light. That gives us the flexibility to adjust our asset allocation and balance between growth and risk. Based on what we've seen now, our outlook for full year loan volume growth is largely unchanged from what we expected at the early start of the year. Operator Alex Ye, UBS. Xiaoxiong Ye (spoken in foreign language) I will do a translation. So my first question is about the asset quality indicators. And specifically, we saw day 1 delinquency ratio was up by 2 consecutive quarter and now reaching 5.0% in the quarter and then also bringing C-to-M2 ratio to 0.60%. So can you share with more color on the reason behind? And how do you expect this indicator to trend going forward? Second question is on the credit demand trends in the last 2 months since we are seeing more noises coming from the external environment. So just wondering, how has been the QoQ trend in terms of credit demand? Yan Zheng (spoken in foreign language) Karen Ji (interpreted) Okay. First of all, I want to say that the slight fluctuation in our C-to-M2 ratio were in line with our expectations and also well within the target range we have set for our risk performance. Overall speaking, our asset quality is at a healthy level compared to historical trends. As for the increase in the day 1 delinquency rate, it was mainly driven by the change in our loan mix. In Q1, the percentage of loan volume from our embedded finance channel increased by 31% from last quarter. And this business line usually has a higher day 1 delinquency rate compared to our app-based or H5-based business. Also, our overall loan volume was roughly flat QoQ, leading to a smaller portion of early-stage loans, which usually have a lower day 1 delinquency rate. These 2 structural change has led to a slight increase in our day 1 delinquency rate. And our collection rate is very stable, as our CFO just mentioned in his prepared remarks. In April, given the uncertainty around tariff impact, we slightly tightened our credit standards. Since then, our risk indicators have remained stable through both April and May. Moving forward, we will continue to adjust our risk strategy on a dynamic basis. We expect our C-to-M2 ratio for the full year to remain largely stable around 0.6% level based on the assumption that the macro environment doesn't change dramatically. Thank you. Haisheng Wu And in terms of the credit demand, Alex, for the average daily loan volume, April was roughly in line with March. We did see some fluctuation in borrow activities due to the impact of US-China trade tensions. But we proactively expand our customer reach through partnership with diversified channels. We should be able to mitigate the potential decline in credit demand. In May, credit demand slightly decreased sequentially partly due to the May Day holiday. But this is just normal seasonality. Based on what we are seeing now, we expect loan volume in Q2 will be largely on track as we planned at the start of the year. Thank you. Operator Emma Xu, Bank of America Securities. Emma Xu (spoken in foreign language) So with recent China-US trade escalation, how do you assess the potential impact of the tariff tensions in the future? And will you tighten lending standards? And my second question is, what strategy is management currently adopting regarding potential ADR delisting risk? Will you consider a dual primary listing in Hong Kong where you take measures to improve the liquidity of your Hong Kong ticker? Haisheng Wu Okay. In terms of tariffs, we believe the direct impact of tariffs on our business is quite limited. First, the vast majority of our loan volume is in consumer lending. Second, we reviewed the industries of users -- of our users are involved in. In Q1, those related to exports accounted for just around 4% of our total loan volume. Among them, only about 1% were in sectors likely to be significantly impacted by US tariffs. For these users, we have already adjusted our transaction and asset allocation strategies to mitigate potential impact from tariffs. On the policy side, US-China tariff talks have achieved some encouraging progress, and we view that as a positive for both credit demand and asset quality. However, the global trade landscape has been shifting quite a bit this year. And this has added uncertainty to China's macro environment and may affect people's consumption sentiments. Weaker exports could put pressure on areas such as CapEx and household consumption. So in April, out of caution, we slightly tightened our risk strategy. So far, overall risk levels have remained largely stable. We will continue to monitor how the tariff situation impacts risk performance and dynamically adjust our strategy as needed. In addition, our diversified business model also makes us more flexible to react to the potential challenges. And then for your second question, CFO, you can answer it. Alex Xu Sure, Emma. As you know, this ADR delisting basically resurface every few years depending on the US side of the political need. Given that in early May, the US and China entered into at least a tentative kind of agreement on the tariff, so compared to early April, I think the delisting risk clearly kind of reduced by quite a bit. But with that said, we have been carefully evaluating the potential risk of the delisting. I think we're well prepared, and we have a very clear plan to respond what-if kind of a scenario. As you know, in November 2022, we completed the secondary listing in Hong Kong. This basically has given our shareholders more flexibility. They can choose to continue trading in US or move to in Hong Kong market. So even in the worst-case scenario where -- when our ADSs are forced to delist, investors would still be able to trade on our shares seamlessly in Hong Kong. As for liquidity, currently about 99% of our trading volume is in the US market. And in Hong Kong, obviously, it's very, very light. This is mainly because US trading offer investors more flexibility and relatively low transaction costs. However, if a force to delist were to happen, all the tradings would probably naturally shift from the US to Hong Kong. And accordingly, the liquidity in Hong Kong will, for sure, improve significantly. At that point, our Hong Kong listing would automatically convert from a secondary listing to a primary listing in accordance with the Hong Kong Exchange rules, okay? And we only need to file some additional document after that conversion or, I mean, secondary to primary convert happening as after providing the document support. Therefore, we believe the secondary listing that we already have already provides sufficient protection for our shareholders. We will continue to obviously monitor it as the situation evolves and take correct measures based on our ongoing assessment on this matter. Operator Cindy Wang, China Renaissance. Yun-Yin Wang (spoken in foreign language) So in first quarter, the number of new users with approved credit was down 9% sequentially, the CAC up 22%. So what is the reasoning behind it? And since April, the trade war may cause a potential slowdown in loan demand. Has it affected the quality of new borrowers? And have you adjusted customer acquisition strategy? So how do you expect the customer acquisition cost in the second quarter? Haisheng Wu Okay. Cindy, first, the increase in unit customer acquisition cost in Q1 was mainly driven by a change in our business mix. About 30% of our sales expenses came from API channels in the quarter. Unlike other channels, we pay channel fees for both new borrowers and repeat borrowers for API. But when we calculate cost per user, we only count new users, not repeat runs. So when API channels contribute to a higher percentage of loan volume, it pushes up our unit acquisition costs however, the API channels are generating incremental loan volume for the company, and the acquisition cost per loan through API is much lower than in-feed marketing. We are able to recover the cost of -- the cost with just the first loan issuance. In addition, we increased spending on in-feed marketing this quarter to reach higher-quality users. Although these channels usually have higher acquisition costs compared to others, such as app store or data-driven marketing, users from these channels tend to deliver stronger and healthier value in the medium to long term. We have also tried new strategies in this space, carrying our approach to different pricing segments and applying different operations across the full year journey. Furthermore, I want to say that we pay more attention to the efficiency of customer acquisition rather than the cost of customer acquisition. As we optimize the entire acquisition journey, the end-to-end approach has made our targeting more accurate in terms of both user quality and intent. This, in turn, boosts our overall lending efficiency for new users. This quarter, our conversion rate from new credit line users to new borrowers reached 74%, up from around 55% in the same period last year. That is to say that our end-to-end customer acquisition efficiency remains very healthy. Since the start of Q2, users' credit needs have been affected by the ongoing trade tension, which in turn will also have a certain impact on our customer acquisition efficiency. Going forward, we will continue to closely monitor changes in the macro environment and the competitive landscape and adjust our acquisition pace accordingly. We will also carefully evaluate our acquisition cost against the LTV of new users and further optimize our channels to improve efficiency. Thank you. Operator Yada Li, CICC. Yada Li (spoken in foreign language) Then I will do a translation. My question is, given the policy stimulus to promote domestic consumption, looking ahead, how do we view the trend of loan demand, funding and liquidity from bank partners and the company's loan strategy? Amid this recovery environment, can we expect that the company can maintain a low funding cost in the long run and may adopt a more proactive loan strategy in the future? That's all. Haisheng Wu Okay. Yada, since the start of the year, China has rolled out a range of supportive policies aimed at boosting consumption, such as trading subsidies and guidelines for stronger support to consumer lending. These measures have made a positive impact as we can see in the quarter. In the Q1 macro data, retail sales were up 4.6% year over year, beating market expectations. Credit demand on our platform was also slightly better than typical seasonal trends. On the funding side, the government announced cuts to both the interest rate and the reserve ratio in May. So we expect the funding environment to remain relatively supportive this year, with some room for a further decrease in funding costs. In addition, we plan to further expand our ABS issuance and optimize our funding structure. Overall, we expect our funding cost for 2025 to decrease slightly from Q1 levels. And finally, about our lending strategy, I think it really depends on the risk outlook and the customer demand. Although our risk indicators remain largely stable, at the moment, there is still some uncertainty in the broader macro environment. Therefore, we will continue to maintain a prudent strategy, pursuing high-quality and sustainable growth. That's all. Thank you. Alex Xu Yes. Yada, I just want to add one little point here. So as you know, we are very much focused on the take rate of the -- of our portfolio. And as in our previous discussion with the market, we communicate that we continue to see from a full year basis, we'll continue to see improvement this year, '25 versus '24 in terms of the net take rate, assuming there's no dramatic macro changes from now to the year-end. I think that's still the assumption we're looking at, and I think that's still on topic. Thank you. Operator There are no further questions at this time. I'll now hand back to management for closing remarks. Alex Xu Okay. Thank you, everyone, to -- again, to join us for this conference call. If you have any additional questions, feel free to contact us off-line. Thank you. Operator Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect. Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
