Investment Rating - The investment rating for the company is "Buy" for both US and Hong Kong stocks [7]. Core Views - The company's 1Q25 performance met expectations with revenue of 46.9 billion RMB, reflecting a quarter-over-quarter increase of 4.7% and a year-over-year increase of 12.9%. The net profit attributable to shareholders was 18.0 billion RMB, which was slightly below the previous quarter but showed a significant year-over-year increase of 54.6% [1][4]. - The company is expected to maintain a cautious lending strategy amid industry changes, with a projected moderate growth in loan volume for 2025 [2][3]. - The risk indicators have shown slight fluctuations but remain at healthy levels, with a C-M2 ratio of 0.60% and a provisioning coverage ratio of 666% [3]. Summary by Sections Financial Performance - 1Q25 revenue was 46.9 billion RMB, with a net profit of 18.0 billion RMB, aligning with the company's guidance [1]. - Loan volume for 1Q25 was 889 billion RMB, showing a slight quarter-over-quarter decline of 1.1% but a year-over-year increase of 15.8% [2]. Risk Indicators - The C-M2 ratio increased to 0.60%, while the first-day overdue rate rose to 5.0%. However, these levels are still considered healthy compared to historical averages [3]. - The provisioning coverage ratio improved to 666%, indicating strong profit quality [3]. Profit Forecast - The company has adjusted its net profit forecasts for 2025, 2026, and 2027 to 71 billion RMB, 77 billion RMB, and 82 billion RMB respectively, with target prices set at 55.6 USD and 220.9 HKD [4][11]. Valuation Methods - The target prices are derived from both PE and DCF valuation methods, with a PE of 6.5x for 2025E [11][12].

| 阿里巴巴 | 2986.04 | | --- | --- | | 11 小米焦团_W | 1805 85 | | | No. 1.0 | | | | --- | --- | --- | --- | | 5 | | 拼多多 | 1666.38 | | 6 | 美材 | 美团-W | 1069.68 | | 7 | 網易 | 网易 | 766.11 | 金十图示：2025年05月21日（周三）中国科技互联网公司市值排名TOP 50一览 | 8 | | 京东 | 489.39 | | | --- | --- | --- | --- | --- | | 9 | | 东方财富 | 470.85 | | | 10 | | 中芯国际 | 440.55 | | | II | Bal Char | 百度 | 307.12 | | | 12 | P | 理想汽车 | 302.4 | | | 13 | 85 | 快手-W O | 276.74 | | | 14 | | 腾讯音乐 | 263.47 | -1 + | | 15 | | 贝壳 | 223.45 | -1 3 | | 16 | 80 | 同花顺 | 191.78 | ...

Core Viewpoint - CICC has raised the profit forecast for Qifu Technology-S (03660) for 2025 and 2026 by 2% and 4% respectively, due to optimized funding/credit costs and higher-than-expected loan disbursement in Q1 2025 [1] Financial Performance - Qifu Technology's Q1 2025 revenue increased by 13% year-on-year and 5% quarter-on-quarter to 4.69 billion yuan, while non-GAAP net profit rose by 60% year-on-year but decreased by 2% quarter-on-quarter to 1.93 billion yuan, exceeding previous expectations [2] - The company’s net service fee rate was approximately 5.6%, slightly down from 5.96% in Q4 2024, attributed to a decrease in average funding costs and stable asset quality [4] Loan Disbursement and Customer Acquisition - In Q1 2025, the company optimized customer acquisition channels, adding 7 embedded finance partners, with loan disbursement increasing by 16% year-on-year to 88.9 billion yuan, although the quarter-on-quarter growth rate slightly declined due to seasonal factors [3] - The company expects loan disbursement to grow by 5%-10% year-on-year in 2025, maintaining previous forecasts [3] Shareholder Returns - The company maintains a semi-annual dividend policy, planning to distribute cash dividends of $0.6 and $0.7 per ADS for the first and second halves of 2024 respectively [5] - As of May 19, 2025, the company has repurchased 9.1 million ADS for approximately $404.5 million, with an expected total repurchase amount of no less than $680 million for 2025 [5] Industry Development - The introduction of the "Loan Assistance New Regulations" on April 1 aims to enhance the regulatory framework of the industry, potentially eliminating unreasonable pricing and charging behaviors, which may benefit compliant and well-operating institutions like Qifu Technology [6]

2025年5月20日，奇富科技（纳斯达克：QFIN；港交所：3660）发布2025年第一季度财报。报告期内， 公司净收入总额达到人民币46.9亿元（约合6.46亿美元），较上一季度环比增长4.5%；非公认会计准则 净利润为人民币19.3亿元（约合2.65亿美元），尽管净利润较上季度略有下滑，但整体业绩仍符合市场 预期。 信贷智能体落地 2025年第一季度，奇富科技信贷智能体正式落地，进一步完善了公司在AI信贷领域的战略布局。该智 能体深度融入业务全链条，覆盖数据分析、运营、合规、风险策略、财务对账等核心智能模块，标志着 奇富科技在AI技术应用方面迈出了重要一步，也为金融科技行业树立了新的标杆。 奇富科技信贷智能体的核心在于其AI决策智能模块。该模块基于杜邦分析法、归因分析、预测模型等 经典分析模型，可对利润增长乏力等典型问题进行智能诊断。例如在信贷业务场景中，能自动拆解利润 指标，精准识别病灶，并生成针对性优化方案，将原本需要跨部门协作数周的分析流程压缩至实时响 应。这一功能极大地提升了决策效率，使得奇富科技能够更快地响应市场变化，优化业务策略。在瞬息 万变的金融市场中，这种快速响应和优化能力至关重要，它可以 ...

Financial Data and Key Metrics Changes - In Q1 2025, non-GAAP net income increased by 59.9% year over year to RMB 1.93 billion, while non-GAAP EPS on a fully diluted basis rose by 78.5% to RMB 13.5 [7][28] - Total revenue for Q1 was RMB 4.69 billion, compared to RMB 4.48 billion in Q4 and RMB 4.15 billion a year ago [22] - The take rate for the quarter reached 5.7%, up 2.2 percentage points year over year [7] Business Line Data and Key Metrics Changes - Revenue from credit-driven services was RMB 3.11 billion in Q1, up from RMB 2.89 billion in Q4 and RMB 3.02 billion a year ago [22] - Revenue from platform services was RMB 1.58 billion in Q1, slightly down from RMB 1.59 billion in Q4 but up from RMB 1.14 billion a year ago [23] - Loan facilitation and origination volume increased by 15.8% year over year [7] Market Data and Key Metrics Changes - The company added 1,540,000 new credit line users in Q1, up 6% year over year, with new borrowers increasing approximately 41% year over year to 1,130,000 [12] - The delinquency rate after thirty-day collections (C:M2) remained stable at 0.6% [11][26] - The average internal rate of return (IRR) of loans originated was 21.4%, compared to 21.3% in the prior quarter [23] Company Strategy and Development Direction - The company is focusing on an AI plus credit strategy, aiming to build the industry's first AI agent platform to enhance core credit processes [8] - Plans to recruit an additional 100 algorithm engineers by the end of the year to accelerate transformation into an AI-native organization [8] - The company expects to maintain high-quality growth in its core loan facilitation business while empowering financial institutions through technology solutions [19] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macroeconomic environment, noting early signs of recovery in China's economy [6][18] - The company plans to enhance operational efficiency and optimize capital allocation while maintaining a prudent approach to risk management [18][66] - The outlook for Q2 2025 includes expected non-GAAP net income between RMB 1.75 billion and RMB 1.85 billion, representing year-on-year growth of 24-31% [32] Other Important Information - The company issued RMB 6.6 billion in asset-backed securities (ABS) in Q1, a year-over-year increase of approximately 25% [12] - The effective tax rate for Q1 was 18%, higher than the typical rate of approximately 15% due to withholding tax provisions [28] - The company has initiated a share repurchase program, expecting total repurchases this year to be no less than USD 680 million [20] Q&A Session Summary Question: Impact of new loan facilitation rules and credit quality trends - Management indicated that new regulations are a positive signal for the industry, promoting orderly development and recognizing the value of leading loan facilitation platforms [36] - Asset quality remains stable, with the C2M2 ratio at 0.6%, significantly better than previous periods [39] Question: Asset quality indicators and credit demand trends - The increase in day one delinquency was attributed to changes in loan mix, with a higher percentage from embedded finance channels [44] - Credit demand has shown early signs of recovery, but macro uncertainties persist [47] Question: Impact of US-China trade tensions and potential delisting risk - The direct impact of tariffs on the business is limited, with only a small percentage of loan volume related to exports [50] - The company has a clear plan to address potential ADR delisting risks, including a secondary listing in Hong Kong [54] Question: Customer acquisition costs and strategies - The increase in customer acquisition costs was driven by a change in business mix, with a focus on efficiency rather than just cost [60] - The company plans to adjust acquisition strategies based on macro conditions and customer demand [62] Question: Loan demand trends and funding liquidity - Recent policy measures to boost consumption have positively impacted credit demand, and funding costs are expected to decrease slightly [66] - The company will maintain a prudent lending strategy while pursuing sustainable growth [67]

Financial Data and Key Metrics Changes - Non-GAAP net income increased by 59.9% year over year to RMB 1.93 billion, while non-GAAP EPADS on a fully diluted basis rose by 78.5% to RMB 13.5 [6] - Total revenue for Q1 was RMB 4.69 billion, compared to RMB 4.48 billion in Q4 and RMB 4.15 billion a year ago [20] - Non-GAAP net profit was RMB 1.93 billion in Q1 compared to RMB 1.97 billion in Q4 [26] Business Line Data and Key Metrics Changes - Revenue from credit-driven services was RMB 3.11 billion in Q1, up from RMB 2.89 billion in Q4 [20] - Revenue from platform services was RMB 1.58 billion in Q1, slightly down from RMB 1.59 billion in Q4 [21] - Loan volume from embedded finance channels grew by 36% year over year, while loan volume surged by roughly 106% [13] Market Data and Key Metrics Changes - The company added 1,540,000 new credit line users in Q1, up 6% year over year [11] - Ninety-day delinquency rate was 2.02% in Q1, down from 2.09% in Q4 [23] - The overall ROA of embedded finance channels improved by 20% on a sequential basis [13] Company Strategy and Development Direction - The company is rolling out an AI plus credit strategy aimed at building the industry's first AI agent platform [7] - Plans to recruit an additional 100 algorithm engineers by the end of the year to accelerate transformation into an AI-native organization [7] - The company expects to maintain a low funding cost in the long run while adopting a prudent lending strategy [66] Management Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about the economy, supported by technological innovation and government measures to boost domestic demand [16] - The macroeconomic and policy landscape is showing signs of stabilization, which will provide a favorable environment for the consumer credit industry [16] - The company expects non-GAAP net income for Q2 to be between RMB 1.75 billion and RMB 1.85 billion, representing a year-on-year growth of 24-31% [30] Other Important Information - The company issued RMB 6.6 billion in ABS, a year-over-year increase of approximately 25% [11] - The effective tax rate for Q1 was 18%, higher than the typical rate of approximately 15% due to withholding tax provisions [26] - The company has executed a share repurchase program with a total repurchase expected to be no less than USD 680 million this year [18] Q&A Session Summary Question: Impact of new loan facilitation rules and credit quality trends - Management views the new rules as a positive signal for the industry, promoting orderly development and recognizing the value of leading loan facilitation platforms [34] - Asset quality remains stable, with the C2M2 ratio at 0.6%, significantly better than previous periods [35][36] Question: Asset quality indicators and credit demand trends - The increase in day one delinquency was driven by a change in loan mix, with a higher percentage from embedded finance channels [42] - Credit demand has shown early signs of recovery, but macro uncertainties persist [37][45] Question: Assessment of tariff tensions and ADR delisting risk - The direct impact of tariffs on the business is limited, with only a small percentage of loan volume affected [48] - The company has a clear plan to respond to potential ADR delisting risks, including a secondary listing in Hong Kong [52][54] Question: Customer acquisition costs and strategy adjustments - The increase in customer acquisition cost was driven by a change in business mix, with a higher contribution from API channels [58] - The company will continue to monitor macro changes and adjust acquisition strategies accordingly [62] Question: Loan demand trends and funding liquidity - Recent government policies aimed at boosting consumption have positively impacted credit demand [65] - The company expects funding costs to decrease slightly from Q1 levels and plans to optimize its funding structure [66]

Core Insights - QFIN Technology reported its Q1 2025 financial results, demonstrating a strong performance driven by AI innovations and a commitment to prudent management strategies in a complex market environment [1] - The company is advancing its "AI + Finance" strategy, aiming to create the first intelligent system that empowers core lending operations, which has already begun to enhance business processes and efficiency [1][2] Financial Performance - As of the end of Q1, QFIN Technology connected with 163 financial institutions, providing digital credit services to over 58 million credit users, with a 6% year-on-year increase in new credit users and a 15.8% increase in loan facilitation volume [1] AI-Driven Innovations - The launch of the lending intelligent system integrates various smart modules covering data analysis, operations, compliance, risk strategies, and financial reconciliation, significantly transforming the company's business model [2] - The AI marketing module improved the conversion rate from new credit users to new loan users by 33% year-on-year [2] - The AI compliance module reduced the time required for regulatory document interpretation from 40 hours to 2 hours, with accuracy improving from 68% to 99.2% [2] Risk Control Enhancements - QFIN Technology has developed end-to-end risk control capabilities, achieving an AUC improvement to 0.64 through reinforcement learning on historical decision logs [3] - The user feature verification accuracy reached over 95% through advanced data mining capabilities [3] Strategic Partnerships and Growth - QFIN Technology's subsidiary, QFIN Digital Technology, signed contracts with three mid-to-large city commercial banks, with a 144% year-on-year increase in business scale [4] - The launch of the FocusPRO2.0 platform for digital inclusive credit solutions has led to rapid loan disbursement and exceeded risk control expectations [4] Social Responsibility Initiatives - The company launched the "QFIN Support Program" to assist rural revitalization through interest-free loans for small businesses and farmers, contributing to local economic development [6] - QFIN Technology has been recognized for its efforts in promoting financial technology development and social responsibility, with its CEO participating in high-level forums to discuss opportunities in AI and industry upgrades [6] Future Outlook - The CEO emphasized that AI technology is a core support for the generational leap in fintech, positioning the lending intelligent system as a new growth engine for long-term high-quality development [7] - The intelligent system is expected to facilitate the transition of traditional banks to smart banks, enhancing user experience and commercial efficiency [7]

Company Overview - Qifu Technology is a leading AI-empowered credit-tech platform in China with 584 million cumulative users with approved credit lines[13, 27] - The company has established partnerships with 163 financial institutions[13, 20] - Loan facilitation volume in 1Q25 reached RMB 889 billion, representing a 158% year-over-year increase[13] - Non-GAAP net income in 1Q25 was RMB 1926 million, a 599% year-over-year increase[13] - The company has repurchased US$905 million worth of ADSs cumulatively, leading to a 210% share count reduction[15] Financial Performance - Total net revenue for 1Q25 was RMB 4691 million[62] - Non-GAAP net income for 1Q25 was RMB 1926 million[64] - Platform services contributed 531% to the loan facilitation volume in 1Q25[57] - Platform services contributed 581% to the outstanding loan balance in 1Q25[59] Risk Management - The company maintains robust risk performance, as indicated by delinquency and collection rates[67, 68, 69]

Core Viewpoint - Qifu Technology reported strong financial results for Q1 2025, demonstrating resilience amid macroeconomic challenges, with significant growth in user activity and loan facilitation volume [4][5][35]. Business Highlights - As of March 31, 2025, Qifu Technology connected 163 financial institutional partners and 268.2 million consumers, marking an 11.1% increase from 241.4 million a year ago [4]. - The number of cumulative users with approved credit lines reached 58.4 million, up 11.6% from 52.3 million a year ago [4]. - Cumulative borrowers with successful drawdown totaled 35.5 million, reflecting a 13.8% increase from 31.2 million a year ago [4]. - Financial institutional partners originated 24,401,374 loans through the platform in Q1 2025 [4]. Financial Highlights - Total net revenue for Q1 2025 was RMB 4,690.7 million (US$ 646.4 million), compared to RMB 4,153.2 million in the same period of 2024 [5][9]. - Net income was RMB 1,796.6 million (US$ 247.6 million), an increase from RMB 1,160.1 million in Q1 2024 [28]. - Non-GAAP net income for the quarter was RMB 1,926.2 million (US$ 265.4 million), compared to RMB 1,204.8 million in the same period of 2024 [28]. - The weighted average contractual tenor of loans originated was approximately 10.17 months, slightly up from 10.10 months in Q1 2024 [4]. Revenue Breakdown - Revenue from Credit Driven Services was RMB 3,110.9 million (US$ 428.7 million), up from RMB 3,016.3 million in Q1 2024 [9]. - Loan facilitation and servicing fees under the capital-heavy model were RMB 429.8 million (US$ 59.2 million), significantly higher than RMB 243.8 million in the same period of 2024 [10]. - Financing income increased to RMB 1,817.2 million (US$ 250.4 million) from RMB 1,535.0 million in Q1 2024 [11]. - Revenue from releasing of guarantee liabilities decreased to RMB 778.2 million (US$ 107.2 million) from RMB 1,166.0 million in the same period of 2024 [12]. Operating Costs and Expenses - Total operating costs and expenses were RMB 2,716.0 million (US$ 374.3 million), down from RMB 2,789.1 million in Q1 2024 [17]. - Sales and marketing expenses rose to RMB 591.5 million (US$ 81.5 million) from RMB 415.6 million in the same period of 2024, reflecting increased marketing efforts [19]. - General and administrative expenses increased to RMB 196.5 million (US$ 27.1 million) from RMB 106.4 million in Q1 2024, primarily due to higher share-based compensations [20]. Share Repurchase and Financial Position - The company completed a US$ 690 million convertible notes offering, providing resources to accelerate share repurchase programs [8]. - As of May 19, 2025, approximately 4.4 million ADSs were repurchased for about US$ 178 million under the 2025 Share Repurchase Plan [33]. - The company expects to use remaining net proceeds from the convertible notes offering for further share repurchases [34]. Business Outlook - For Q2 2025, the company anticipates net income between RMB 1.65 billion and RMB 1.75 billion, representing a year-on-year growth of 24% to 31% [35].

Industry Overview - The Technology Services industry has experienced strong growth post-pandemic, driven by the rapid adoption of remote work and advancements in technology such as 5G, blockchain, AI, and ML [1][6] - The industry includes companies involved in software support, data processing, computing hardware, and communications equipment, serving both consumer and business markets [3] Economic Factors - The industry is benefiting from a recovering economy, with GDP growth projected at an annual rate of 2.8% in 2024, up from 2.5% in 2023 [5] - The Services PMI has remained above 50% for 56 out of the last 59 months, indicating healthy economic activity [5] Technological Advancements - The global shift towards digitization is creating opportunities in markets such as 5G, blockchain, and AI, with generative AI expected to grow at a 42% CAGR over the next decade, reaching a $1.3 trillion market by 2032 [6] Industry Performance - The Zacks Technology Services industry ranks 49, placing it in the top 20% of over 246 Zacks industries, indicating a promising outlook [7] - Over the past year, the industry has outperformed the broader Zacks Business Services sector and the S&P 500, returning 42.1% compared to 12% and 12.4% respectively [9] Valuation Metrics - The industry is currently trading at an EV-to-EBITDA ratio of 31.02X, significantly higher than the S&P 500's 16.6X and the sector's 12.03X [12] Company Highlights - **AppLovin Corporation (APP)**: Focuses on a software platform for advertisers, enhancing machine-learning models and AI integration. The company has a Zacks Rank 1 and is expected to see earnings rise 85.2% year over year in 2025, with shares up 340.5% in the past year [20][18][19] - **Priority Technology Holdings (PRTH)**: Operates a platform for financial operations, showing strong growth despite economic challenges. PRTH also holds a Zacks Rank 1, with earnings expected to rise over 100% year over year in 2025, and shares up 116.8% in the past year [24][23] - **Qifu Technology (QFIN)**: A China-based credit tech company improving user acquisition and integrating AI for better credit data analysis. QFIN has a Zacks Rank 1, with earnings expected to rise 22.4% year over year in 2025, and shares up 113.7% in the past year [29][27]