QFIN(QFIN) HTSC·2025-05-21 07:00Investment 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].