QFINNASDAQThe short version
Qfin Holdings, Inc.
Qifu runs one of China's largest AI-driven consumer-credit platforms, matching 63.6 million approved borrowers with banks and earning fees across the loan's life; after a roughly 70% fall its shares trade below book.
After sliding from a 52-week high near US$46 to about US$13, the ADS spent the first half of 2026 chopping between roughly US$12 and US$17, and changed hands near US$13 in late July.
Mkt cap $2.2BNet cash (CNY) ¥3.5B
US$13.38
ADS price
US$2.75B
2025 revenue
US$46.8B
2025 loans facilitated
63.6M
Credit-approved users
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Snapshot
Qfin Holdings, Inc. in numbers
Price
$13.38as of 2026-07-27
Mkt cap
$2.2B
Net cash (CNY)
¥3.5B
3m ADV
$21.4M
| Year to Dec (CNY) | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|
| Sales | 13.4B | 14.0B | 16.1B | 14.5B | 14.4B | 14.9B |
| EBITDA | – | – | – | 4.1B | 4.8B | 5.5B |
| EBIT | – | – | – | 3.7B | 4.5B | 5.0B |
| EBIT margin | – | – | – | 25.6% | 30.9% | 33.7% |
| EPS | 26.08 | 41.28 | 44.02 | 29.38 | 31.89 | 37.04 |
| Gearing | −15.4% | −12.7% | −3.7% | – | – | – |
Consensus: S&P Capital IQ (CapIQ) · as of 2026-07-27Derived from run data; ratios use the latest price.
IThe business
Business model
A credit platform that increasingly carries the loans itself
2025 revenue by model
Credit-driven (keeps credit risk)US$2B74%
Platform (fee, no credit risk)US$0.7B26%
Credit-driven funds or guarantees loans and keeps the risk; platform passes borrowers to banks for a fee.
- What it does. Qifu matches 63.6 million credit-approved users with banks, earning fees across a loan's life — acquisition, underwriting, servicing, collection. It is a technology platform, not a bank.
- Two engines. Credit-driven services (US$2.0B of 2025 revenue) fund or guarantee loans and keep the credit risk; platform services (US$0.7B) hand borrowers to banks for a near-pure-margin fee.
- Sticky base. Repeat borrowers supplied 93.3% of 2025 volume — a revolving-credit franchise rather than a customer-acquisition treadmill.
Unit economics
The profit engine is shifting onto Qifu's own balance sheet
Balance-sheet intensification
Both shares rose fast in 2025 — more of the profit now sits on loans Qifu owns the losses on.
- Heavier, not lighter. Against the industry's capital-light story, Qifu went the other way in 2025: on-balance-sheet loans climbed from 23% to 34% of the book, and financing income reached 44.5% of revenue.
- Take rate compressing. The net take rate management steers by fell from 5.4% in mid-2025 toward a roughly 3% target by the fourth quarter — earning power repricing in real time.
- Why it matters. More profit now rides on credit outcomes Qifu owns directly, just as those outcomes deteriorate — the tension the rest of the report tests.
Competitive position
The scale leader of China's listed credit-tech field
FY2025 versus listed peers
| Company | Volume (¥bn) | Net income (¥m) | 90d+ delinq. |
|---|---|---|---|
| Qifu (QFIN) | 327.1 | 5,990 | 2.71% |
| FinVolution | 200.3 | 2,500 | 2.85% |
| LexinFintech | 205.0 | 1,677 | 3.1% |
| X Financial | 130.6 | 1,465 | — |
| Jiayin | 129.0 | 1,536 | — |
| Yiren Digital | 67.8 | 55 | — |
Largest volume, more profit than the other five combined, and cleaner credit than its nearest peers.
- Biggest and most profitable. Qifu facilitated ¥327bn (US$46.8B) of loans in 2025 — half again the next peer — and earned ¥5,990m, more than the other five listed rivals put together.
- Cleaner credit. Its 2.71% 90-day-plus delinquency undercut its two nearest-size peers — the empirical signature of a real edge, not a claimed one.
- What scale buys. Cheaper, more diversified funding, a deeper behavioural data record, and embedded distribution — advantages a regulatory cull of sub-scale rivals reinforces.
IIThe record
Track record
Records in revenue and cash — while net income slipped
Operating cash flow (US$B)
Operating cash has risen every year since 2021, to a record US$1.59B in 2025.
- Cash compounding. Revenue grew 12% to US$2.75B (¥19.2B) and operating cash rose 19% to a record US$1.59B (¥11.1B), on a roughly 25% return on equity.
- One line dissents. Net income fell 4% to US$857M as credit and guarantee provisions rose — reserves built against future defaults as the environment tightened.
- The tension. Rising cash with falling accounting profit is the report's core question: whether those reserves prove conservative or merely timely shapes how much earning power is real.
Recent trajectory
Net income has fallen for five straight quarters
Quarterly revenue vs net income (¥B)
Net income peaked at ¥1.91B in 4Q24 and has declined every quarter since, to ¥0.88B in 1Q26.
- Both lines rolled over. Quarterly net income has more than halved from its late-2024 peak; the GAAP margin fell from 42.7% to 22.5% as pricing and provisions turned against it.
- Partly chosen. Management shrank volume 27% year-over-year and cut loan pricing to reset asset quality — near-term profit given away on purpose for a cleaner book later.
- Guided to stop. Second-quarter 2026 non-GAAP profit is guided roughly flat sequentially — the first quarter in over a year without a sequential decline.
Reserve quality
One default estimate sets the reserves — and part of revenue
Total credit and guarantee provisions (¥B)
The 2024 profit record leaned on the lightest provisioning of three years; 2025 rebuilt toward through-cycle.
- One dial, three reserves. A single expected-default estimate — Deloitte's sole 2025 critical audit matter — sets Qifu's loan allowance, its guarantee reserve, and, through variable consideration, part of revenue.
- Sized. A half-point move in that estimate swings reserves by ¥753.6m — about an eighth of 2025 net income. What cannot be independently checked is the estimate itself.
- Flattered base. The 2024 record fell in the lightest-provisioned year of three, so the earnings the market de-rated from were softer than the headline suggested.
IIIThe story now
The 2026 turn
Leading credit signals turned up; earnings have not followed
Risk indicators, Q4 2025 to Q1 2026
| Indicator | Q4 2025 | Q1 2026 | Read |
|---|---|---|---|
| Day-1 delinquency | 6.1% | 5.7% | Leading — improved |
| 30-day collection | 84.1% | 85.8% | Leading — improved |
| C2M2 (post-collection) | 0.97% | 0.8% | Leading — improved |
| 90-day+ delinquency | 2.71% | 3.50% | Lagging — worsened |
The metrics that lead new-loan performance turned up; the backward-looking 90-day-plus rate is still climbing.
- Front book healing, back book not. New-loan FPD7 fell about 20% and day-one delinquency and collection improved as management cut pricing and shrank the book; the lagging 90-day-plus rate kept rising.
- Having returned ~US$0.9bn to holders in 2025 (about 54% of market cap), Qifu paused its share buyback in the first quarter of 2026 — repurchasing only US$577m of convertibles for US$502m of cash — while reported net income fell 51% year-over-year to RMB879.8m and 90-day-plus delinquency rose to 3.50% from 2.71%, even as the company still generated RMB2.1bn of operating cash and cut leverage to 2.4x.
- The tell. With about US$0.71B of net-liquid assets on hand, resuming the buyback at today's sub-book price would create per-share value; its continued absence would say management sees the bear's risk.
Funding and regulation
Its most durable edge runs through the channel regulators now gate
−41%
ICE volume, Q4 2025 QoQ
−85%
Referral fees, Q4 2025 QoQ
35.1%
Funding from top-5 banks
20.9%
Avg APR vs the 24% cap
- Qifu names diversified funding as a core competitive advantage — 167 bank partners, ¥67.6bn of ABS/ABN at a 3-4% cost, and a micro-lending licence self-funding 21.2% of 2025 drawdowns —
- yet the bank-partnership majority of that stack (top-five partners alone are 35.1% of funding) runs through the same whitelist channel the April 2025 rules gate, a bind already visible in a 41% quarter-on-quarter fall in ICE volume and an 85% drop in referral fees in the fourth quarter of 2025.
- Pricing cap is old news. The headline 24% cap was cleared by 2022 — Qifu ran a 20.9% APR; the April 2025 rules bite through funding access and demand, not price.
Governance
Founder control unwound — but insiders own just 1.1%
Founder / insider voting power (%)
20-vote super-voting shares collapsed to one-share-one-vote; the founder's deemed stake was severed in December 2025.
- Cleaner than the group. Over three years Qifu collapsed super-voting control to one-share-one-vote, retired the 360 brand, unwound a multi-billion-yuan related-party deposit, and severed the founder's deemed ownership.
- Aligned by payout, not stake. Directors and officers own only 1.1% and the CEO 0.3%; alignment runs through a 20–30%-of-profit dividend policy and buybacks, not owner-operator skin in the game.
- Survivor's case. The franchise has already absorbed the P2P collapse, the 24% price cap, and the 2025 whitelist — the strongest single argument that the discount is cyclical, not terminal.
IVThe price
Margin of safety
Cheap on every metric — but book and profit lean on one estimate
What backs the price (US$B)
A US$1.6B market value sits against US$3.45B of book and ~US$0.71B of net-liquid assets — 43% of the market cap.
- Qifu trades at 0.47x book (US$1.63bn market value vs US$3.45bn equity) and ~1.9x trailing earnings, yet both the book and the earnings are set by a single unverifiable input — the expected-default estimate Deloitte named its sole 2025 critical audit matter —
- whose 0.5-percentage-point move swings reserves by RMB753.6m (~13% of the RMB5,989.7m net income), so the asset floor is not independent of the earnings risk it is meant to cushion, and only ~US$74m of the group's cash sits at the listed parent.
- The counter. Deloitte tested the estimate with its own specialists, coverage rose rather than fell in 2025, and the ¥753.6m swing is a hypothetical sensitivity, not a realized loss — a discount that is not free money, not a floor already gone.
Scenarios
What today's price implies across bear, base and bull
Illustrative re-rating vs book value
Today
0.47x
Bear — durable impairment
~0.5x or lower
Base — cyclical trough
~0.8–1x book
Bull — clean trough, share winner
~1.5x book
Illustrative arithmetic anchored to US$3.45B book and 2025 profit — the credit path separates the three.
- Base pays without heroics. A company earning even a flat ~US$540M and returning more than half its market value a year compounds from a 0.47x-book start, with the dividend alone near 12% of the price.
- Bear is survivable, not zero. A mid-single-digit ROE where a sub-book multiple is deserved and book leaks as reserves rebuild off the same estimate that governs earnings.
- What decides it. The case is most sensitive to the credit path — whether the leading indicators reach the loss line, or the back book keeps the 90-day-plus rate climbing.
The street
Analyst targets sit well above the quote; the tape decides
Analyst price targets vs quote (US$)
Today
US$13.38
Lowest target
US$14.60
Mean target
US$21.90
Median target
US$22.60
Four strong-buy, seven buy, two hold; even the single lowest target sits above the current price.
- Priced near the bear, covered near the base. The shares trade close to the bear case while the sell-side mean, near US$22, is priced roughly to the base.
- Cash is the aligner. Qifu returned about US$0.9B in 2025 — some 54% of today's market value — and the trailing dividend alone runs near 12% of the price.
- Read against the watchlist. The decision is checkable quarter by quarter on lines that already exist in the release — delinquency, the profit floor, and whether the buyback resumes.
What to watch
A genuinely cheap scale leader, or a trap whose thin book leans on one estimate — the credit path decides
- 0190-day-plus delinquency peaks and rolls over in H2 2026, versus keeps climbing past 3.5%.
- 02Non-GAAP profit holds the guided ¥900–980m sequential floor next quarter, versus breaks lower.
- 03The share buyback resumes at today's sub-book price, versus stays paused.
- 04Whitelist inclusion confirmed at major bank partners, versus a material exclusion.
This distills a guided study built chapter by chapter, from what the business is to what the market asks you to pay.
Compiled from the full report · 2026-07-30 · For information, not investment advice.