Investment Rating - The report maintains a Buy rating for LexinFintech Holdings (LX US) with a target price of 1.73 [1][2] Core Views - Revenue Take Rate Improvement: LexinFintech's revenue take rate increased significantly, reaching 2.91% in Q2 2024, up 37 bps YoY and 54 bps QoQ, driven by lower financing costs, improved asset quality of new loans, and optimized prepayment conditions [1] - Profitability Trends: Despite a 36% YoY decline in GAAP net profit in Q2 2024, the company saw a 12% QoQ growth in net profit, with revenue increasing 19% YoY and 12% QoQ [1] - Asset Quality Pressure: The 90-day delinquency rate rose to 3.7% in Q2 2024, up 70 bps QoQ, but leading indicators such as the 30-day recovery rate showed slight improvement, suggesting a potential recovery trend in H2 2024 [1] - Loan Volume Decline: Facilitated loan volume decreased 20% YoY and 12% QoQ in Q2 2024, with the loan balance growing only 0.9% YoY and declining 5% QoQ [1] - International Expansion: The company's business in Mexico showed strong growth, although the overall scale remains small [1] Financial Forecast Updates - Facilitated Loan Volume: Forecasts for 2024E, 2025E, and 2026E were revised downward by -5.4%, -5.4%, and -6.3%, respectively, reflecting a more conservative outlook on loan growth [2][8] - Net Take Rate: The net take rate for 2024E, 2025E, and 2026E was adjusted downward by -0.20ppt, -0.21ppt, and -0.28ppt, respectively, due to lower expected profitability [2][8] - Net Income and Profit: Net income forecasts for 2024E, 2025E, and 2026E were revised upward by 12.5%, 9.9%, and 9.2%, respectively, while net profit forecasts were lowered by -12.6%, -18.3%, and -22.2% [2][8] - ROAE: The return on average equity (ROAE) for 2024E, 2025E, and 2026E was revised downward by -1.3ppts, -2.0ppts, and -2.5ppts, respectively [2][8] Business and Financial Performance - Loan Balance: The loan balance grew 0.9% YoY in Q2 2024 but declined 5% QoQ, reflecting a slowdown in loan origination [1][5] - Revenue Growth: Q2 2024 revenue increased 19% YoY and 12% QoQ, driven by higher take rates and improved asset quality [1][5] - Profit Margins: The company's GAAP net profit margin declined 36% YoY but improved 12% QoQ, indicating a potential recovery in profitability [1][5] - Dividend Policy: LexinFintech announced an interim dividend of $0.072 per ADS, representing a 20% payout ratio [1] Industry and Peer Comparison - Peer Ratings: The report covers several financial technology and insurance companies, with most receiving a Buy rating, including QFIN US, FINV US, and LX US [9] - Target Price Upside: Among peers, LexinFintech has a 38.7% potential upside, which is competitive compared to other financial technology companies like QFIN US (9.0% upside) and FINV US (19.8% upside) [9]
乐信：收入take rate显著提升，资产质量趋势有望改善