360 DigiTech (NasdaqGS:QFIN) - Share price, News & Analysis

Q: What is the Fair Price of QFIN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

QFIN ($17.24) is trading below our estimate of [[fair value]] ($127.67)

QFIN fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	4/6
Past Performance	4/6
Financial Health	6/6
Dividends	4/6

QFIN Stock Overview

360 DigiTech, Inc., through its subsidiaries, operates financial technology platform under the 360 Jietiao brand in the People’s Republic of China.

Rewards

Trading at 86.5% below our estimate of its fair value

Earnings are forecast to grow 16.8% per year

Earnings grew by 20.5% over the past year

Risk Analysis

Unstable dividend track record

360 DigiTech Competitors

Nelnet

NYSE:NNI

US$3.2b

Navient

NasdaqGS:NAVI

US$2.1b

SLM

NasdaqGS:SLM

US$4.4b

FinVolution Group

NYSE:FINV

US$1.4b

Price History & Performance

Summary of all time highs, changes and price drops for 360 DigiTech
Historical stock prices
Current Share Price	US$17.67
52 Week High	US$44.11
52 Week Low	US$11.15
Beta	0.61
1 Month Change	21.03%
3 Month Change	2.44%
1 Year Change	-57.65%
3 Year Change	53.39%
5 Year Change	n/a
Change since IPO	7.09%

Recent News & Updates

Jun 23

If EPS Growth Is Important To You, 360 DigiTech (NASDAQ:QFIN) Presents An Opportunity

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...

Jun 21

360 DigiTech: Undervalued Artificial Technology Stock With Certain Risks

360 DigiTech, Inc. is a credit-tech platform that financial institutions use to provide better and targeted products and services to a broader consumer base. Management believes that QFIN could deliver double-digit origination volume amidst the current macro environment. It is quite interesting that clients don’t need a lot of human interaction. Over 83% of collections are executed by robots. The company was incorporated in the Cayman Islands, where shareholders are not that protected.

Shareholder Returns

	QFIN	US Consumer Finance	US Market
7D	14.1%	2.9%	6.6%
1Y	-57.6%	-29.7%	-18.4%

Return vs Industry: QFIN underperformed the US Consumer Finance industry which returned -29.7% over the past year.

Return vs Market: QFIN underperformed the US Market which returned -18.4% over the past year.

Price Volatility

Is QFIN's price volatile compared to industry and market?
QFIN volatility
QFIN Average Weekly Movement	10.5%
Consumer Finance Industry Average Movement	9.1%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.6%
10% least volatile stocks in US Market	3.2%

Stable Share Price: QFIN is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 11% a week.

Volatility Over Time: QFIN's weekly volatility (11%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2016	2,129	Haisheng Wu	https://www.360shuke.com

360 DigiTech, Inc., through its subsidiaries, operates financial technology platform under the 360 Jietiao brand in the People’s Republic of China. The company provides credit-driven services that matches borrowers with financial institution partners enabling financial institution partners to conduct customer acquisition, initial credit screening, advanced risk assessment, collection, and other post-facilitation services; and platform services, including loan facilitation and post-facilitation services to financial institution partners under intelligence credit engine, referral services, and risk management software-as-a-service. It also offers e-commerce loans, enterprise loans, and invoice loans to SME owners.

360 DigiTech Fundamentals Summary

How do 360 DigiTech's earnings and revenue compare to its market cap?
QFIN fundamental statistics
Market Cap	CN¥18.36b
Earnings (TTM)	CN¥5.61b
Revenue (TTM)	CN¥17.36b

3.3x

P/E Ratio

1.1x

P/S Ratio

Is QFIN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
QFIN income statement (TTM)
Revenue	CN¥17.36b
Cost of Revenue	CN¥4.33b
Gross Profit	CN¥13.02b
Other Expenses	CN¥7.41b
Earnings	CN¥5.61b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	36.16
Gross Margin	75.04%
Net Profit Margin	32.34%
Debt/Equity Ratio	3.6%

How did QFIN perform over the long term?

See historical performance and comparison

Dividends

5.0%

Current Dividend Yield

9%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is QFIN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for QFIN?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for QFIN. This is calculated by dividing QFIN's market cap by their current preferred multiple.
What is QFIN's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥18.36b

QFIN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.7x
Enterprise Value/EBITDA	1.3x
PEG Ratio	0.2x

Price to Earnings Ratio vs Peers

How does QFIN's PE Ratio compare to its peers?

QFIN PE Ratio vs Peers

The above table shows the PE ratio for QFIN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	5.3x
NNI Nelnet	7.1x	n/a	US$3.2b
NAVI Navient	3.5x	-21.9%	US$2.1b
SLM SLM	6.8x	-1.3%	US$4.4b
FINV FinVolution Group	3.7x	5.9%	US$1.4b
QFIN 360 DigiTech	3.2x	16.8%	US$2.7b

Forward PE

Price-To-Earnings vs Peers: QFIN is good value based on its Price-To-Earnings Ratio (3.2x) compared to the peer average (5.3x).

Price to Earnings Ratio vs Industry

How does QFIN's PE Ratio compare vs other companies in the US Consumer Finance Industry?

Price-To-Earnings vs Industry: QFIN is good value based on its Price-To-Earnings Ratio (3.2x) compared to the US Consumer Finance industry average (5.7x)

Price to Earnings Ratio vs Fair Ratio

What is QFIN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

QFIN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	3.3x
Fair PE Ratio	13x

Price-To-Earnings vs Fair Ratio: QFIN is good value based on its Price-To-Earnings Ratio (3.2x) compared to the estimated Fair Price-To-Earnings Ratio (13x).

Share Price vs Fair Value

What is the Fair Price of QFIN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: QFIN ($17.24) is trading below our estimate of fair value ($127.67)

Significantly Below Fair Value: QFIN is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: QFIN is good value based on its PEG Ratio (0.2x)

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Future Growth

How is 360 DigiTech forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

16.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: QFIN's forecast earnings growth (16.8% per year) is above the savings rate (1.9%).

Earnings vs Market: QFIN's earnings (16.8% per year) are forecast to grow faster than the US market (13.9% per year).

High Growth Earnings: QFIN's earnings are forecast to grow, but not significantly.

Revenue vs Market: QFIN's revenue (12.2% per year) is forecast to grow faster than the US market (8.4% per year).

High Growth Revenue: QFIN's revenue (12.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: QFIN's Return on Equity is forecast to be high in 3 years time (26.6%)

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Past Performance

How has 360 DigiTech performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

66.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: QFIN has high quality earnings.

Growing Profit Margin: QFIN's current net profit margins (32.3%) are lower than last year (33.3%).

Past Earnings Growth Analysis

Earnings Trend: QFIN's earnings have grown significantly by 66.2% per year over the past 5 years.

Accelerating Growth: QFIN's earnings growth over the past year (20.5%) is below its 5-year average (66.2% per year).

Earnings vs Industry: QFIN earnings growth over the past year (20.5%) exceeded the Consumer Finance industry 17.4%.

Return on Equity

High ROE: QFIN's Return on Equity (34.6%) is considered high.

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Financial Health

How is 360 DigiTech's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: QFIN's short term assets (CN¥29.4B) exceed its short term liabilities (CN¥14.6B).

Long Term Liabilities: QFIN's short term assets (CN¥29.4B) exceed its long term liabilities (CN¥5.0B).

Debt to Equity History and Analysis

Debt Level: QFIN has more cash than its total debt.

Reducing Debt: QFIN's debt to equity ratio has reduced from 145.4% to 3.6% over the past 5 years.

Debt Coverage: QFIN's debt is well covered by operating cash flow (1102.2%).

Interest Coverage: QFIN earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is 360 DigiTech current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

4.95%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: QFIN's dividend (5.08%) is higher than the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: QFIN's dividend (5.08%) is in the top 25% of dividend payers in the US market (4.24%)

Stability and Growth of Payments

Stable Dividend: Too early to tell whether QFIN's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if QFIN's dividend payments are increasing as they only just started paying a dividend.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (9.4%), QFIN's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (14.1%), QFIN's dividend payments are thoroughly covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.4yrs

Average management tenure

CEO

Haisheng Wu (38 yo)

2.83yrs

Tenure

Mr. Haisheng Wu has been the Chief Executive Officer and Director at 360 DigiTech, Inc. (formerly known as 360 Finance, Inc.) since August 23, 2019 and served as its President since July 25, 2016. Mr. Wu w...

Leadership Team

Experienced Management: QFIN's management team is considered experienced (2.4 years average tenure).

Board Members

Experienced Board: QFIN's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31