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     Entrepreneur Kurra Bewarse Username: Entrepreneur Post Number: 3365 Registered: 05-2011 Posted From: 65.35.45.47 Rating: N/A |
QFIN is a China-based digital consumer finance platform and the finance partner of the 360 Group, one of the largest internet companies in China. QFIN matches underserved individual borrowers with credit demand to a diversified pool of financial institutions with credit to supply. When the company started out, it initially was providing guarantees to lenders either directly or indirectly. QFIN has been gradually transitioning to a more technology-centric approach. It has been deleveraging its business to a more healthy level. By providing platform services, QFIN substantially reduces its guarantee services and takes no or limited credit risks related the loans it facilitates. In its most recent quarter (3Q20), loans originated through its digital platform grew nearly 18% yr/yr at RMB66 bln despite some regulatory headwinds late in the quarter. During Q3, approx. 28% of the loan origination was such that QFIN bears no or limited principal risk. QFIN expects to accelerate the growth of this part of its business in the coming quarters. Of note, QFIN has been seeing a continued recovery in consumer demand for credit and further improvement in asset quality. In fact, some key leading indicators of asset quality of its customers are at the best levels ever. The stock has been ramping in recent months, but we caution that QFIN strikes us as more of a speculative name because it's based in China, the stock has been volatile and QFIN does assume credit risk. We would be cautious on this one. |