Lufax Holding (NYSE: LU ), a provider of financial services in China with a focus on small business owners, got off to a good start in 2025. As recently as mid-March, the stock was up more than 40% YTD thanks to several factors, includingWelcome to my author's site. As an avid follower of SeekingAlpha, I take great interest in articles posted as the subject matter is often something that appeals to me. However, I will sometimes encounter an article that I might not agree with. My purpose is to present an al ...

Core Viewpoint - Lufax Holding (NYSE: LU) is positioned as a BUY due to its strategic alignment with China's anticipated business dominance, the rise of international yuan trade, and its alternative to the SWIFT system [1] Group 1 - The company is well positioned for China's move into a new era of business dominance [1] - Increased international yuan trade is expected to benefit Lufax Holding [1] - Lufax offers an alternative to the SWIFT system, which may enhance its competitive edge [1]

Analyst Background - The analyst has close to 14 years of experience in the financial industry, having worked for an equity research firm in NY, an investment fund in Mexico, and an investment bank in Ireland [1] - Currently a private investor focusing on mature industries such as mining, oil and gas, real estate, and others [1] - The analyst does not invest in business models that are not understood and appreciates M&A deals, deep value investments, and dividend investing [1] - Investments typically target an internal rate of return of close to 5%-7% [1] Investment Approach - The analyst researches small and medium-cap companies in Europe, the United States, and South America [1] - The purpose of writing on Seeking Alpha is to receive feedback from readers about stocks owned [1] - The analyst provides expectations about future EPS, net revenue, FCF, and other financial figures, acknowledging that these could be wrong [1] Lufax Holding (LU) Analysis - Lufax Holding (NYSE: LU) is well positioned to benefit from recent stimulus policies announced in China [3] - The company has been offering business loans in China for many decades, leveraging its business connections and expertise [3] Disclosure - The analyst has a beneficial long position in Lufax Holding (LU) through stock ownership, options, or other derivatives [3] - The article expresses the analyst's own opinions and is not receiving compensation for it (other than from Seeking Alpha) [3] - The analyst has no business relationship with any company whose stock is mentioned in the article [3]

Financial Data and Key Metrics Changes - Total income decreased by 31.1% to RMB 5.5 billion from RMB 8.1 billion, primarily due to a 41.8% decrease in outstanding loan balance, partially offset by an increased take rate [10][11] - Total expenses decreased by 19.2% to RMB 6.3 billion from RMB 7.7 billion, with operating expenses declining by 35.9% to RMB 3 billion [10][11] - A net loss of RMB 725 million was recorded for the third quarter [11] Business Line Data and Key Metrics Changes - Total new loan sales in Q3 were RMB 50.5 billion, flat year-over-year but up 11.7% from the previous quarter, driven by growth in the consumer finance business [6] - New consumer finance loans increased by 27.8% year-over-year, accounting for 52% of total new loan sales [6] - The balance of consumer finance loans represented 22% of the total loan balance of RMB 213.1 billion at the end of Q3 [6] Market Data and Key Metrics Changes - The SME development index declined by 0.3 points quarter-over-quarter to 88.7 in September, indicating ongoing challenges for small business owners [4] - The Business Conditions Index fell from 49.3 in June to 46 in September, reflecting persistent difficulties in the small business sector [4] Company Strategy and Development Direction - The company plans to focus on non-SBO customers and continue growing its consumer finance business to leverage gradual consumption recovery [5] - The acquisition of a nationwide small lending license is expected to reduce funding costs and improve capital management efficiency [8] - The company aims to deepen synergies with Ping An Group to strengthen its market position [9] Management Comments on Operating Environment and Future Outlook - Management expressed hope that recent policy stimulus measures from the Chinese government will positively impact business performance in the long run [3] - The company remains prudent in its strategies due to increased risk exposure associated with the 100% guarantee business model [3] - Volume guidance remains unchanged at RMB 190 billion to RMB 220 billion for loan sales [19] Other Important Information - The C-M3 flow rate of Puhui loans remained stable at 0.9%, while the NPL ratio for consumer finance loans improved to 1.2% from 1.4% [7][21] - The company has no specific plans for additional special dividends following a recent payout but is committed to providing long-term shareholder returns [22] Q&A Session Summary Question: Impact of new policy stimulus on business - Management believes the stimulus will have a positive impact, but it will take time for small business owners to benefit from these measures [18] Question: Business outlook for this year and beyond - Volume guidance remains unchanged, with expectations of improved lifetime profitability despite short-term pressures [19] Question: Latest asset quality performance - Asset quality indicators remained stable, with confidence in future improvements as the loan balance reduction ends [21] Question: Plans for special dividends or shareholder returns - No specific plans for additional special dividends, but management is committed to long-term shareholder returns [22] Question: Increase in credit impairment losses - The increase is attributed to provisions related to loans under the 100% guarantee model and a conservative approach reflecting macroeconomic conditions [25] Question: Trend of funding costs going forward - Funding costs are expected to decrease further due to favorable monetary policy and a diversified license strategy [26]

Financial Performance - Total income for Q3 2024 was RMB 5,543 million (US$ 790 million), a decrease of 31.1% compared to RMB 8,050 million in Q3 2023[24] - Net loss for Q3 2024 was RMB 725 million (US$ 103 million), compared to a net profit of RMB 131 million in the same period of 2023, representing a decline of 653.7%[24] - Total income for the nine months ended September 2024 was RMB 18,483,377, representing a decrease of 32% from RMB 27,398,546 for the same period in 2023[48] - Basic earnings per share for the nine months ended September 2024 was (1.98), compared to 1.51 for the same period in 2023[48] - Net loss attributable to owners of the Group for the three months ended September 2024 was RMB 874,806, compared to a profit of RMB 93,778 in the same period of 2023[48] Loan and Borrower Metrics - Cumulative number of borrowers increased by 24.1% to approximately 24.8 million as of September 30, 2024, up from approximately 20.0 million a year earlier[26] - Total outstanding balance of loans decreased by 41.8% to RMB 213.1 billion as of September 30, 2024, from RMB 366.3 billion a year earlier[26] - Total new loans enabled remained flat at RMB 50.5 billion in Q3 2024, with new consumer finance loans increasing by 27.8% to RMB 26.4 billion[26] - New loan sales in the consumer finance business increased by 27.8% year-over-year, accounting for 52% of total new loan sales in the quarter[29] Expenses and Losses - Total expenses for Q3 2024 were RMB 6,262 million, a decrease of 19.2% from RMB 7,747 million in Q3 2023[25] - Credit impairment losses, finance costs, and other losses increased by 5.9% to RMB 3,279 million in Q3 2024[25] - Total expenses decreased by 19% to RMB 6,262 million (US$ 892 million) from RMB 7,747 million in Q3 2023, primarily due to a 50% reduction in sales and marketing expenses[33] - The company reported credit impairment losses of RMB 3,270,214 for the three months ended September 2024, an increase of 9% from RMB 3,001,108 in the same period of 2023[48] - The company’s total expenses for the nine months ended September 2024 were RMB 19,118,958, a decrease of 22% from RMB 24,667,293 for the same period in 2023[48] Cash and Assets - Cash at bank decreased to RMB 27,039 million (US$ 3,853 million) as of September 30, 2024, down from RMB 39,599 million as of December 31, 2023[38] - Cash at bank decreased to RMB 27,038,935 as of September 2024, down 32% from RMB 39,598,785 as of December 31, 2023[50] - Cash and cash equivalents at the end of the period on September 30, 2024, were RMB 9,964,987,000, down from RMB 18,828,729,000 at the end of the same period in 2023[55] - The net decrease in cash and cash equivalents for the three months ended September 30, 2024, was RMB (10,433,558,000), compared to RMB (6,630,828,000) in the same period of 2023[55] - Total assets as of September 2024 were RMB 206,449,110, down from RMB 237,023,009 as of December 31, 2023, a decrease of approximately 13%[50] - Total liabilities as of September 2024 were RMB 120,108,859, a decrease of 16% from RMB 143,339,227 as of December 31, 2023[50] Business Strategy and Outlook - The company maintains a cautious approach to business strategies while focusing on non-SBO customers and enhancing consumer finance offerings[29] - The estimate for the consolidated loss attributable to owners of the company for the three months ended September 30, 2024, was prepared based on unaudited management accounts[58] - The estimate is required to be reported in accordance with Rule 10 of the Hong Kong Code on Takeovers and Mergers[71] - The estimate has been properly compiled in accordance with the bases adopted by the directors and is consistent with the accounting policies normally adopted by the group[67] - The company reported a net loss attributable to owners for the three months ended September 30, 2024, as part of its profit forecast[71]

YinYangI maintain my Buy investment rating for Lufax Holding Ltd (NYSE:LU) [6623:HK]. LU's shares have pulled back in recent weeks due to the company's poor Q2 bottom line performance and the omission of interim dividends. But Lufax has been making good progress with its strategic pivot, and the company is well-positioned to record positive net income again in FY 2025. As such, I remain bullish on LU with my unchanged Buy rating. The prior June 6, 2024 write-up was focused on LU's Q1 2024 operating metr ...

Lufax Holding Ltd (NYSE:LU) Q2 2024 Results Conference Call August 21, 2024 9:00 PM ET Company Participants Xinyan Liu - Head of Board Office and Capital Markets Yong Suk Cho - Co-CEO & Chairman of the Board Peiqing Zhu - Chief Financial Officer Conference Call Participants Emma Xu - Bank of America Securities Yada Li - CICC Operator Ladies and gentlemen, thank you for standing by, and welcome to the Lufax Holding Second Quarter 2024 Earnings Call. [Operator Instructions] Please note, this event is being re ...

Financial Performance - Total income for Q2 2024 was RMB 5,976 million (US$ 822 million), a decrease of 35.5% compared to RMB 9,270 million in Q2 2023[2] - Net loss for Q2 2024 was RMB 730 million (US$ 100 million), compared to a net profit of RMB 1,004 million in the same period of 2023, representing a decline of 172.7%[3] - Net interest income for Q2 2024 was RMB 2,716 million, a decrease of 19.3% from RMB 3,367 million in Q2 2023[10] - Technology platform-based income decreased by 51.0% to RMB 1,999 million in Q2 2024, primarily due to reduced retail credit service fees[10] - Total income for the three months ended June 2024 was RMB 5,976,217, representing a decline of 35.0% from RMB 9,270,322 in the prior year[31] - Net profit for the three months ended June 2024 was a loss of RMB 729,991, compared to a profit of RMB 1,003,618 in the same period of 2023[31] - Basic earnings per share for the three months ended June 2024 was a loss of RMB 0.69, compared to earnings of RMB 0.84 in the same period of 2023[31] Loan and Borrower Statistics - Total outstanding balance of loans decreased by 44.8% to RMB 235.2 billion as of June 30, 2024, from RMB 426.4 billion a year earlier[5] - New loans enabled in Q2 2024 were RMB 45.2 billion, down 15.5% from RMB 53.5 billion in Q2 2023, while new consumer finance loans increased by 23.6% to RMB 22.1 billion[5] - The cumulative number of borrowers increased by 17.4% to approximately 23.2 million as of June 30, 2024, from approximately 19.7 million a year earlier[5] - The company reported a decrease in customer loans to RMB 112,708,888 as of June 30, 2024, down from RMB 129,693,954 as of December 31, 2023[33] Expenses and Costs - Total expenses decreased by 20% to RMB 6,341 million (US$ 873 million) in Q2 2024 from RMB 7,957 million in Q2 2023[14] - Sales and marketing expenses decreased by 46% to RMB 1,372 million (US$ 189 million) in Q2 2024 from RMB 2,540 million in Q2 2023[15] - General and administrative expenses increased by 3.5% to RMB 511 million (US$ 70 million) in Q2 2024 from RMB 493 million in Q2 2023[15] - Credit impairment losses decreased by 14.6% to RMB 2,560 million (US$ 352 million) in Q2 2024 from RMB 2,998 million in Q2 2023[17] - Finance costs decreased by 90.2% to RMB 13 million (US$ 2 million) in Q2 2024 from RMB 136 million in Q2 2023[17] - Total expenses excluding credit impairment losses, finance costs, and other (gains)/losses decreased by 30% to RMB 3,485 million (US$ 480 million) in Q2 2024 from RMB 4,954 million in Q2 2023[14] Cash and Assets - The Company had RMB 37,114 million (US$ 5,107 million) in cash at bank as of June 30, 2024, down from RMB 39,599 million as of December 31, 2023[20] - Cash and cash equivalents at the end of the period as of June 30, 2024, were RMB 20,398,545, down from RMB 25,459,557 at the beginning of the period[35] - Net cash generated from operating activities for the three months ended June 2024 was RMB 2,997,614, an increase of 50.4% from RMB 1,994,730 in the same period of 2023[35] - The company’s total assets as of June 30, 2024, were RMB 216,930,102, a decrease from RMB 237,023,009 as of December 31, 2023[33] Strategic Initiatives - The company aims to deepen synergies with Ping An Group to enhance market position and operational efficiency[8] - No semi-annual dividend will be paid due to the net loss recorded for the six months ended June 30, 2024[21] Loan Quality - The non-performing loan (NPL) ratio for consumer finance loans was 1.4% as of June 30, 2024, down from 1.6% as of March 31, 2024[7]

Core Insights - Lufax Holding reported earnings per share of -19 cents for the second quarter of 2024 [1] - The company generated revenue of $822.36 million during the same period [1] Financial Performance - Earnings per share decreased to -19 cents, indicating a loss [1] - Revenue for the quarter was reported at $822.36 million, reflecting the company's financial performance [1]

SHANGHAI, Aug. 21, 2024 /PRNewswire/ -- Lufax Holding Ltd ("Lufax" or the "Company") (NYSE: LU and HKEX: 6623), a leading financial services enabler for small business owners in China, today announced its unaudited financial results for the second quarter ended June 30, 2024.Second Quarter 2024 & First Half 2024 Financial HighlightsTotal income was RMB5,976 million (US$822 million) in the second quarter of 2024, compared to RMB9,270 million in the same period of 2023.Net loss was RMB730 million (US$100 mill ...