FinVolution(FINV) HTSC·2025-05-22 01:40Investment Rating - The investment rating for the company is "Buy" with a target price of $12.00 [7][8]. Core Insights - The company's Q1 2025 performance showed a net profit of 750 million RMB, exceeding Bloomberg's expectation of 600 million RMB, with a year-on-year increase of 41.4% and a quarter-on-quarter increase of 9.7% [1][4]. - Loan quality has slightly improved, with the first-day overdue rate decreasing to 4.6% and the annualized net profit take rate increasing by 20 basis points to 4.1% [3][4]. - The company maintains a cautious operational approach, with a focus on improving loan quality and increasing the proportion of light capital business, which is expected to drive profit growth in the short term [1][2]. Summary by Sections Q1 2025 Performance - The company reported a net profit of 750 million RMB, which is better than expected, with a quarter-on-quarter increase of 9.7% and a year-on-year increase of 41.4% [1]. - The overdue rate decreased by 10 basis points to 4.6%, indicating improved loan quality [1][3]. - The total loan amount for Q1 2025 was 52.1 billion RMB, with a quarter-on-quarter increase of 8.4% [2]. Loan Quality and Capital Structure - The first-day overdue rate improved to 4.6%, and the 30-day repayment rate remained stable at 89% [3]. - The light capital business's balance proportion increased to 43.0%, which is expected to enhance profit margins due to the absence of income and provision mismatches [2][3]. Profit Forecast and Valuation - The profit forecasts for 2025, 2026, and 2027 have been adjusted to 3.22 billion RMB, 3.91 billion RMB, and 4.02 billion RMB respectively, reflecting a positive outlook [4][6]. - The target price remains at $12.00 based on DCF valuation methodology [4][12].