Lexin(US:LX) BOCOM International·2025-05-22 11:19Investment Rating - The report assigns a "Buy" rating for the company, Lexin Group (LX US), with a target price of $11.80, indicating a potential upside of 36.1% from the current price of $8.67 [2][11]. Core Insights - The company has shown significant improvement in asset quality and has increased its dividend payout ratio, which is expected to rise from 20% to 25% in November 2024, and further to 30% in the second half of 2025 [6][8]. - The net profit for Q1 2025 reached 430 million RMB, marking a 113.4% year-on-year increase, attributed mainly to a decrease in provisioning expenses [6][7]. - The report anticipates a substantial growth in net profit for 2025, projected at 1.93 billion RMB, representing a 75% year-on-year increase [6][9]. Financial Performance Summary - Revenue for 2023 is reported at 13,057 million RMB, with a year-on-year growth of 32.3%. However, a decline of 4.6% is expected in 2025 [5][13]. - The net profit for 2024 is projected at 1,100 million RMB, with a slight increase to 1,927 million RMB in 2025 [5][13]. - The company’s net take rate improved to 1.58% in Q1 2025, reflecting a 27 basis points increase from the previous quarter [6][7]. Business Metrics - The company’s loan facilitation for Q1 2025 was 51.6 billion RMB, showing a year-on-year decline of 11% but stabilizing since Q2 2024 [6][7]. - The 90-day delinquency rate improved to 3.3%, down by 0.3 percentage points from the previous quarter, indicating an overall enhancement in asset quality [6][7]. - The average loan balance for Q1 2025 was 107 billion RMB, with a year-on-year decrease of 11.7% [6][7]. Forecast Adjustments - The report has adjusted its forecasts for 2025, maintaining the loan facilitation estimate at 218 billion RMB, while increasing the net profit forecast to 1.93 billion RMB, up by 16.1% from previous estimates [9][10].