Qfin (NASDAQ:QFIN) Releases Quarterly Earnings Results, Misses Estimates By $0.48 EPS

Qfin (NASDAQ:QFIN) released its earnings results on Tuesday. The company reported $0.48 earnings per share for the quarter, missing the consensus estimate of $0.96 by ($0.48), Zacks reports. Qfin had a net margin of 27.48% and a return on equity of 20.85%. The company had revenue of $524.96 million for the quarter, compared to the consensus estimate of $562.45 million.

Here are the key takeaways from Qfin’s conference call:

• Q2 revenue fell to RMB 3.57 billion from RMB 3.91 billion in Q1 and RMB 5.22 billion a year earlier, while non-GAAP net profit declined to RMB 455 million. Results were pressured by lower loan volume and pricing, deleveraging, and a one-off tax expense of approximately RMB 500 million.
• Industry liquidity tightened sharply following a late-June peer event and stricter regulation, prompting Qfin to reduce originations and tighten underwriting. Management expects loan volume to remain below Q2 levels for the foreseeable future, with risk-bearing loan C-M2 potentially rising about 25% sequentially in August and taking two to three quarters to normalize.
• Collection capacity shortages caused by a nationwide regulatory campaign are weighing on recovery efficiency, while external funding costs increased about 25 basis points in July and August. Management expects funding costs to rise further in the second half and issued Q3 non-GAAP net income guidance of only RMB 400 million to RMB 500 million, down 67% to 73% year over year.
• Despite the downturn, Qfin reported improving Q2 credit metrics, including a C-M2 ratio of 0.66% and an 88.1% 30-day collection rate, while reducing acquisition spending and weaker API exposure. Its technology-solutions business also expanded rapidly, with enabled loan volume up approximately 515% year over year to RMB 10.5 billion, supported by new AI projects with banks.

Qfin Stock Up 4.9%

NASDAQ:QFIN opened at $11.53 on Wednesday. The company has a market cap of $1.40 billion, a price-to-earnings ratio of 2.11 and a beta of 0.63. Qfin has a twelve month low of $10.85 and a twelve month high of $32.69. The company has a current ratio of 2.22, a quick ratio of 2.22 and a debt-to-equity ratio of 0.03. The stock has a fifty day simple moving average of $13.65 and a 200-day simple moving average of $13.93.

Insider Buying and Selling

In related news, Director Xiaohuan Chen purchased 4,000 shares of Qfin stock in a transaction that occurred on Tuesday, June 9th. The shares were bought at an average price of $14.41 per share, with a total value of $57,640.00. Following the purchase, the director directly owned 19,000 shares of the company’s stock, valued at approximately $273,790. This represents a 26.67% increase in their position. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. 17.10% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Qfin

A number of large investors have recently bought and sold shares of QFIN. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. acquired a new stake in Qfin in the first quarter valued at $29,000. Parallel Advisors LLC boosted its position in shares of Qfin by 24.1% during the 4th quarter. Parallel Advisors LLC now owns 3,373 shares of the company’s stock worth $65,000 after acquiring an additional 656 shares in the last quarter. Daiwa Securities Group Inc. boosted its position in shares of Qfin by 14.3% during the 4th quarter. Daiwa Securities Group Inc. now owns 5,600 shares of the company’s stock worth $108,000 after acquiring an additional 700 shares in the last quarter. Lansforsakringar Fondforvaltning AB publ increased its holdings in shares of Qfin by 5.4% in the 4th quarter. Lansforsakringar Fondforvaltning AB publ now owns 19,600 shares of the company’s stock valued at $378,000 after acquiring an additional 1,000 shares during the last quarter. Finally, PNC Financial Services Group Inc. increased its holdings in shares of Qfin by 23.4% in the 4th quarter. PNC Financial Services Group Inc. now owns 5,358 shares of the company’s stock valued at $103,000 after acquiring an additional 1,016 shares during the last quarter. Institutional investors own 74.81% of the company’s stock.

Wall Street Analyst Weigh In

Several research firms have commented on QFIN. JPMorgan Chase & Co. dropped their price objective on shares of Qfin from $14.50 to $13.50 and set a “neutral” rating for the company in a research note on Tuesday, August 11th. Bank of America reissued a “neutral” rating and issued a $15.33 target price on shares of Qfin in a research note on Wednesday, May 27th. Zacks Research raised shares of Qfin from a “strong sell” rating to a “hold” rating in a research note on Monday, July 13th. Weiss Ratings downgraded shares of Qfin from a “hold (c-)” rating to a “sell (d+)” rating in a report on Monday, July 13th. Finally, Jefferies Financial Group reissued a “buy” rating on shares of Qfin in a research report on Wednesday. One investment analyst has rated the stock with a Buy rating, four have issued a Hold rating and one has given a Sell rating to the company. According to MarketBeat, the company currently has an average rating of “Hold” and a consensus price target of $16.31.

About Qfin

360 DigiTech, Inc (NASDAQ: QFIN) is a China‐based fintech company that specializes in providing digital lending solutions to underserved consumer and small business markets. Leveraging proprietary credit assessment technologies and big data analytics, the company connects borrowers with a network of financial institutions and investors through its online platform. Its services encompass unsecured consumer loans, installment credit products, and working capital financing for micro and small enterprises.

The company’s flagship platform offers an end‐to‐end digital lending experience, from application and credit evaluation to disbursement and repayment.