Core Insights - LexinFintech Holdings (NASDAQ: LX) has seen a significant stock increase since late 2024, but recent economic tensions between the U.S. and China have led to a pullback of over 30% in the stock price [1] Company Summary - The stock performance of LexinFintech Holdings has been remarkable, with a notable rise observed since late 2024 [1] - The recent geopolitical climate, particularly the escalating tensions between the U.S. and China, has negatively impacted the stock, resulting in a decline of more than 30% [1] Industry Context - The evolving economic landscape, influenced by international relations, is affecting stock performance in the fintech sector, highlighting the sensitivity of such companies to geopolitical events [1]

Investment Rating - The report maintains a "Buy" rating for the company [7] Core Insights - The company's net profit for Q4 2024 reached 360 million RMB, showing a year-on-year increase of 2899% and a quarter-on-quarter increase of 17%, slightly exceeding previous expectations [1] - The improvement in loan quality has led to a reduction in credit costs, with the first-day overdue rate decreasing by 4% quarter-on-quarter and credit costs dropping by 4.5% [2][3] - The company is focusing on enhancing profitability rather than expanding its loan issuance, with a loan volume of 52 billion RMB in Q4 2024, reflecting a 2% quarter-on-quarter increase [3] Summary by Sections Financial Performance - The annualized net profit take rate increased by 22 basis points to 1.3% in Q4 2024, driven primarily by lower credit costs [2] - The company expects further profit growth in 2025 as high-risk loans are gradually cleared [1][4] Loan Quality and Credit Costs - The overall first-day overdue rate decreased to 3.6% in Q4 2024, down from 3.7% in Q3 2024, indicating improved loan quality [2] - Credit costs as a percentage of loan balance fell by 14 basis points to 5.56% [2] Loan Issuance and Market Position - The company’s loan issuance growth is slower compared to peers, with a focus on loan quality over volume [3] - The ICP model's development contributed to a 57% quarter-on-quarter increase in technology-enabled service revenue [3] Profit Forecast and Valuation - The report raises the net profit forecasts for 2025, 2026, and 2027 to 2.171 billion, 3.159 billion, and 3.531 billion RMB respectively, with adjustments of +7.5% and +18.0% for 2025 and 2026 [4] - The target price is adjusted to $12, based on a projected 2025 PB of 1.15x [4][8]

交银国际研究 公司更新 | 金融科技 | 收盘价 | | 目标价 | | 潜在涨幅 | 2025 年 3 月 19 日 | | --- | --- | --- | --- | --- | --- | --- | | 美元 | | 10.59 | 美元 | 11.80↑ | +11.4% | | | 乐信集团 (LX US) | | | | | | | | 盈利超预期，预计资产质量保持改善趋势 | | | | | | | 个股评级 买入 1 年股价表现 资料来源 : FactSet 3/24 7/24 11/24 3/25 -50% 0% 50% 100% 150% 200% 250% 300% 350% 400% 450% LX US MSCI中国指数 股份资料 | 52周高位 (美元) | 10.59 | | --- | --- | | 52周低位 (美元) | 1.56 | | 市值 (百万美元) | 1,363.36 | | 日均成交量 (百万) | 5.03 | | 年初至今变化 (%) | 82.59 | | 200天平均价 (美元) | 5.30 | | 资料来源 : FactSet | | 万丽 ...

Financial Performance - For Q4 2024, net income was RMB363 million, a 17% increase quarter-over-quarter, marking the fourth consecutive quarter of improved profitability[5] - Total operating revenue for Q4 2024 was RMB3,659 million, a 4.3% increase from RMB3,509 million in Q4 2023[15] - Gross profit increased by 11.4% from RMB4,513 million in 2023 to RMB5,026 million in 2024[37] - Net income rose by 3.2% from RMB1,066 million in 2023 to RMB1,100 million in 2024[41] - Total operating revenue for the year ended December 31, 2024, was RMB 14,203,594, representing an increase from RMB 13,057,082 in 2023, a growth of approximately 8.8%[64] - Net income for the year ended December 31, 2024, was RMB 1,100,460, compared to RMB 1,065,945 in 2023, reflecting a growth of about 3.2%[66] - The company reported a gross profit of RMB 5,026,228 for the year ended December 31, 2024, up from RMB 4,513,070 in 2023, indicating an increase of approximately 11.4%[64] - The company’s financing income for the year ended December 31, 2024, was RMB 2,010,183, compared to RMB 2,144,955 in 2023, a decrease of approximately 6.3%[64] - The company’s total comprehensive income for the year ended December 31, 2024, was RMB 1,084,446, slightly up from RMB 1,073,242 in 2023, an increase of about 1.0%[66] Loan Origination and Balances - Total loan origination in Q4 2024 reached RMB52 billion, a 2% increase quarter-over-quarter, while outstanding loan balance was RMB110 billion[5] - Total outstanding principal balance of loans decreased by 11.1% to RMB110 billion as of December 31, 2024, compared to RMB124 billion a year earlier[9] - The company expects flat to single-digit growth in total loan origination for 2025, with a significant year-over-year increase in net income driven by margin expansion[8] - The company expects total loan origination for full year 2025 to have flat to single-digit year-on-year growth, depending on macroeconomic conditions[44] User Metrics - The total number of registered users increased to 228 million, an 8.6% rise from 210 million year-over-year, with users holding credit lines reaching 45.1 million, up 6.8%[9] - Active users who utilized loan products in Q4 2024 were 4.7 million, a slight decrease of 0.7% from the same quarter in 2023[9] Revenue Streams - Credit facilitation service income was RMB2,712 million in Q4 2024, a decrease of 0.5% from the previous year, while tech-empowerment service income surged by 41% to RMB602 million[15] - Loan facilitation and servicing fees increased by 26.5% from RMB5,002 million in 2023 to RMB6,326 million in 2024, driven by a higher takerate in the loan facilitation business[31] - Guarantee income rose by 5.7% from RMB2,519 million in 2023 to RMB2,664 million in 2024, attributed to increased cumulative loan origination funded by institutional partners[31] Expenses and Costs - Research and development expenses increased from RMB513 million in 2023 to RMB578 million in 2024, reflecting higher investment in technology development[38] - Provision for financing receivables increased from RMB627 million in 2023 to RMB866 million in 2024, due to higher outstanding loan balances[35] - Funding cost decreased by 36.5% from RMB514 million in 2023 to RMB326 million in 2024, driven by lower funding costs for on-balance sheet loans[34] Shareholder Returns - The cash dividend payout ratio will increase to 25% of net income effective January 1, 2025[8] - The board approved a semi-annual dividend of US$0.055 per ordinary share for the six-month period ended December 31, 2024[43] Balance Sheet Highlights - Total assets decreased from RMB 23,140,791 as of December 31, 2023, to RMB 22,240,779 as of December 31, 2024, a decline of approximately 3.9%[60] - Total current liabilities decreased from RMB 12,324,597 in 2023 to RMB 9,604,374 in 2024, a reduction of about 22.1%[60] - Total shareholders' equity increased from RMB 9,710,082 in 2023 to RMB 10,740,006 in 2024, representing a growth of about 10.6%[60] Operational Efficiency - The company aims to enhance operational strategies and market expansion efforts in the upcoming quarters, focusing on new product development and technology advancements[68]

Financial Data and Key Metrics Changes - As of the end of Q4 2024, the outstanding loan balance was RMB 110 billion, with GMV at RMB 52 billion and revenue at RMB 3.7 billion, reflecting a consistent profit growth trajectory [7][38] - Net income increased by 17% to RMB 363 million, with a net income take rate rising from 1.09% in Q3 to 1.31% in Q4, marking a 22 basis point improvement [38][39] - The revenue take rate improved to 6.22%, a 36 basis point increase from 5.86% in Q3, despite a decrease in the overall APR charged to users [39][40] Business Line Data and Key Metrics Changes - The online consumer finance business saw enhanced customer acquisition strategies, while the e-commerce segment revamped its risk management system, leading to a fast-growing profit trajectory [14][15] - The inclusive finance business, focusing on small business owners in lower-tier cities, has been profitable for three consecutive quarters, with loans from these areas accounting for over 65% of total GMV [15][22] - The overseas business is still in early phases but has shown improved customer acquisition costs and operational stability [15][17] Market Data and Key Metrics Changes - The company reported a 23% quarter-over-quarter increase in GMV from API channels, with a 10% decline in risk for new assets [31] - The overall take rate increased due to improved asset quality, with credit costs decreasing by 5% or RMB 73 million [41][42] Company Strategy and Development Direction - The company aims to prioritize asset quality and profitability enhancement while expanding customer acquisition channels and improving operational efficiency [23][60] - A commitment to increasing the dividend payout ratio to 25% of net profit was announced, reflecting a focus on shareholder returns [24][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving significant profit growth in 2025, despite potential macroeconomic headwinds and seasonality fluctuations [23][63] - The company plans to continue enhancing its risk management system and expects to see a continuous decline in key risk indicators [60][61] Other Important Information - The company invested RMB 151 million in research and development in Q4, focusing on AI technologies to enhance operational efficiency [18][20] - The Intelligent Credit Platform (ICP) gained traction, with loan originations under this model increasing to 14% of total new loan volume [47] Q&A Session Summary Question: What are the business plans for 2025 and the AI-related business layout? - The strategy for 2025 focuses on asset quality and profitability enhancement, with ongoing upgrades to the risk management system and significant growth in net income expected [60][61][64] Question: Can you elaborate on the latest progress in risk management capabilities? - The company has achieved significant improvements in risk management, reaching industry-level capabilities, with key risk indicators showing continued improvement [71][72] Question: What are the trends in unit economics and expectations for OpEx in 2025? - The net profit margin is expected to increase significantly, driven by asset quality improvement and reduced funding costs, while operating expenses will rise at a slower pace than profitability [86][89][91]

Core Viewpoint - LexinFintech Holdings Ltd. reported solid financial results for Q4 2024, demonstrating a commitment to prudent operational strategies and continuous improvement in key performance indicators, including profitability and asset quality [2][3][4]. Financial Performance - For Q4 2024, net income was RMB 363 million, a 17% increase quarter-over-quarter, marking the fourth consecutive quarter of improved profitability [3][24]. - Total loan origination reached RMB 52 billion, a 2% increase quarter-over-quarter, while the outstanding loan balance was RMB 110 billion [3][12]. - Operating revenue for Q4 2024 increased by 4.3% to RMB 3,659 million compared to Q4 2023 [12][25]. - The net income attributable to ordinary shareholders was RMB 363 million, over 100% higher than the same period last year [24][56]. Operational Highlights - The total number of registered users reached 228 million, an 8.6% increase from 210 million in 2023, with users holding credit lines increasing by 6.8% to 45.1 million [9]. - The number of cumulative borrowers with successful drawdown was 33.8 million, a 7.1% increase from 31.5 million in 2023 [9]. - The 90-day+ delinquency ratio improved to 3.6% as of December 31, 2024, down from 3.7% in the previous quarter [9]. Revenue Breakdown - Credit facilitation service income for Q4 2024 was RMB 2,712 million, a slight decrease from RMB 2,727 million in Q4 2023 [12][17]. - Tech-empowerment service income surged by 41.0% to RMB 602 million, driven by increased loan facilitation volume [12][17]. - Installment e-commerce platform service income decreased by 25.0% to RMB 969 million in Q4 2024 compared to RMB 1,292 million in Q4 2023 [9][12]. Cost Management - Funding costs decreased by 24.6% from RMB 76.2 million in Q4 2023 to RMB 57.5 million in Q4 2024, reflecting improved funding efficiency [18][29]. - Processing and servicing costs increased by 13.4% to RMB 583 million, primarily due to higher risk management and collection expenses [19][29]. Future Outlook - The company anticipates flat to single-digit growth in total loan origination for 2025, with a significant year-over-year increase in net income driven by margin expansion [5][37]. - The board approved a dividend of US$0.11 per ADS, representing 20% of net income from the second half of 2024, with plans to increase the cash dividend payout ratio to 25% starting January 1, 2025 [6][36].

Core Viewpoint - LexinFintech Holdings Ltd. reported solid financial results for Q4 2024, demonstrating a commitment to prudent operational strategies and continuous improvement in key performance indicators. Financial Performance - For Q4 2024, net income was RMB 363 million, a 17% increase quarter-over-quarter, marking the fourth consecutive quarter of improved profitability [3][24] - Total loan origination reached RMB 52 billion, a 2% increase quarter-over-quarter, while the outstanding loan balance was RMB 110 billion [3] - Operating revenue increased by 4.3% from RMB 3,509 million in Q4 2023 to RMB 3,659 million in Q4 2024 [12] - Net income attributable to ordinary shareholders was RMB 363 million, over 100% higher than Q4 2023 [24] Operational Highlights - The total number of registered users reached 228 million, an 8.6% increase from 210 million in 2023 [9] - The number of active users who used loan products in Q4 2024 was 4.7 million, a slight decrease of 0.7% from the previous year [9] - Cumulative borrowers with successful drawdown increased to 33.8 million, a 7.1% rise from 31.5 million in 2023 [9] Revenue Breakdown - Credit facilitation service income was RMB 2,712 million in Q4 2024, a slight decrease from RMB 2,727 million in Q4 2023 [12] - Tech-empowerment service income surged by 41.0% to RMB 602 million, driven by increased loan facilitation volume [17] - Installment e-commerce platform service income decreased by 25.0% to RMB 969 million in Q4 2024 [9] Cost Management - Funding costs decreased by 24.6% from RMB 76.2 million in Q4 2023 to RMB 57.5 million in Q4 2024 [18] - Processing and servicing costs increased by 13.4% to RMB 583 million, attributed to higher risk management and collection expenses [19] Future Outlook - For 2025, the company expects flat to single-digit growth in total loan origination, with a significant year-over-year increase in net income driven by margin expansion [5][37] - The board approved a dividend of US$0.11 per ADS, representing 20% of net income from the second half of 2024, with plans to increase the cash dividend payout ratio to 25% starting January 1, 2025 [6]

Core Viewpoint - LexinFintech Holdings Ltd. will report its unaudited financial results for Q4 and fiscal year 2024 on March 18, 2025, after U.S. market closes [1] Group 1: Financial Reporting - The earnings conference call is scheduled for 10:00 PM U.S. Eastern time on March 18, 2025, which corresponds to 10:00 AM Beijing/Hong Kong time on March 19, 2025 [2] - Participants must register online to join the conference call and will receive a dial-in number and unique access PIN upon registration [2] Group 2: Company Overview - Lexin is a leading credit technology-empowered consumer financial service enabler in China, focusing on making financing accessible for young consumers [4] - The company connects consumers with financial institutions through a unique model that includes online and offline channels, an installment consumption platform, and AI-driven credit risk management capabilities [4] - Lexin also provides proprietary technology solutions to financial institutions to support their financial digitization needs [4]

Group 1 - LexinFintech Holdings (NASDAQ: LX) has experienced significant stock growth over the past six months, indicating strong long-term growth drivers [1] - Despite the positive outlook, caution is advised at current stock levels [1] - The overall sentiment remains bullish regarding the company's future prospects [1]

Company Performance - LexinFintech Holdings Ltd experienced a 19 5% year-over-year decrease in total loan origination in the third quarter [2] - The company also reported a decrease in the number of active users during the same period [2] Industry Research Focus - The research primarily focuses on small and mid-cap companies from regions including the United States, Canada, South America, UK, France, and Germany [2] - The research approach emphasizes value investments, targeting companies trading at close to 10x earnings and offering dividend yield [2]