NasdaqGM:QFIN

Stock Analysis Report

Executive Summary

360 Finance, Inc. operates a digital consumer finance platform under the 360 Jietiao brand in the People’s Republic of China.

Rewards

Trading at 57.4% below its fair value

Earnings are forecast to grow 19.98% per year

Became profitable this year

Risk Analysis

High level of non-cash earnings

Shareholders have been diluted in the past year



Snowflake Analysis

Undervalued with high growth potential.


Similar Companies

Share Price & News

How has 360 Finance's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: QFIN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-5.0%

QFIN

1.8%

US Consumer Finance

1.2%

US Market


1 Year Return

-26.2%

QFIN

20.6%

US Consumer Finance

24.2%

US Market

Return vs Industry: QFIN underperformed the US Consumer Finance industry which returned 21.7% over the past year.

Return vs Market: QFIN underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

QFINIndustryMarket
7 Day-5.0%1.8%1.2%
30 Day-1.9%1.4%3.5%
90 Day2.3%6.7%11.7%
1 Year-26.2%-26.2%22.7%20.6%26.9%24.2%
3 Yearn/a44.7%37.8%53.0%43.2%
5 Yearn/a46.1%35.8%75.3%56.0%

Price Volatility Vs. Market

How volatile is 360 Finance's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is 360 Finance undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: QFIN ($9.47) is trading below our estimate of fair value ($22.23)

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


Price To Earnings Ratio

PE vs Industry: QFIN is good value based on its PE Ratio (3.3x) compared to the Consumer Finance industry average (8.3x).

PE vs Market: QFIN is good value based on its PE Ratio (3.3x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: QFIN is overvalued based on its PB Ratio (1.4x) compared to the US Consumer Finance industry average (1.2x).


Next Steps

Future Growth

How is 360 Finance forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

20.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: QFIN's forecast earnings growth (20% per year) is above the savings rate (1.7%).

Earnings vs Market: QFIN's earnings (20% per year) are forecast to grow faster than the US market (14.3% per year).

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

Revenue vs Market: QFIN's revenue (28% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: QFIN's revenue (28% per year) is forecast to grow faster 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 (38.7%)


Next Steps

Past Performance

How has 360 Finance performed over the past 5 years?

133.3%

Last years revenue growth


Earnings and Revenue History

Quality Earnings: QFIN has a high level of non-cash earnings.

Growing Profit Margin: QFIN became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: QFIN has become profitable over the past 5 years, growing earnings by 0% per year.

Accelerating Growth: QFIN has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: QFIN has become profitable in the last year, making it difficult to compare its past year earnings growth to the Consumer Finance industry (21.8%).


Return on Equity

High ROE: QFIN's Return on Equity (39.5%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is 360 Finance's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: QFIN has a low level of unsold assets or inventory.

Debt Coverage by Assets: QFIN's debt is covered by short term assets (assets are 12x debt).


Financial Institutions Analysis

Asset Level: QFIN's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if QFIN has a sufficient allowance for bad loans.

Low Risk Liabilities: QFIN reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if QFIN has an acceptable proportion of non-loan assets held.

Low Risk Deposits: QFIN has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if QFIN has an appropriate level of bad loans.


Next Steps

Dividend

What is 360 Finance's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.7%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate QFIN's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate QFIN's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if QFIN's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if QFIN's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of QFIN's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of 360 Finance's salary, the management and board of directors tenure and is there insider trading?

1.8yrs

Average management tenure


CEO

Haisheng Wu (36yo)

0.4yrs

Tenure

0

Mr. Haisheng Wu has been President of 360 Finance, Inc. since July 25, 2016 and has been its Chief Executive Officer and Director since August 23, 2019. Mr. Wu worked as a product director at 360 Group sta ...


Management Age and Tenure

1.8yrs

Average Tenure

36yo

Average Age

Experienced Management: QFIN's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

1.3yrs

Average Tenure

43yo

Average Age

Experienced Board: QFIN's board of directors are not considered experienced ( 1.3 years average tenure), which suggests a new board.


Insider Trading

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


Recent Insider Transactions

BuyUS$19,426,74502 Jan 20
FountainVest Partners
EntityCompany
Shares2,023,544
Max PriceUS$9.80

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 36%.


Management Team

  • Christian Arnell

    Investor Relations Officer

    • Haisheng Wu (36yo)

      President

      • Tenure: 0.4yrs
    • Jiang Wu (40yo)

      Chief Financial Officer

      • Tenure: 1.8yrs
    • Yan Zheng (31yo)

      Vice President

      • Tenure: 2.9yrs
    • George Shao

      Head of Investor Relations

      • Matthew Li

        Investor Relations Officer


        Board Members

        • Andy Yan (62yo)

          Independent Director

          • Tenure: 0.5yrs
        • Hongyi Zhou (48yo)

          Chairman of the Board

          • Tenure: 1.3yrs
        • Wei Liu (41yo)

          Director

          • Tenure: 1.3yrs
        • Fan Zhang (38yo)

          Director

          • Tenure: 1.3yrs
        • Gang Xiao (43yo)

          Independent Director

          • Tenure: 1.3yrs
        • Yongjin Fu (48yo)

          Independent Director

          • Tenure: 1.3yrs
        • Haisheng Wu (36yo)

          President

          • Tenure: 0.4yrs
        • Xiaohuan Chen Eric

          Director

          • Tenure: 0.2yrs

        Company Information

        360 Finance, Inc.'s company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: 360 Finance, Inc.
        • Ticker: QFIN
        • Exchange: NasdaqGM
        • Founded: 2016
        • Industry: Consumer Finance
        • Sector: Diversified Financials
        • Market Cap: US$1.362b
        • Shares outstanding: 151.35m
        • Website: https://www.360jinrong.net

        Number of Employees


        Location

        • 360 Finance, Inc.
        • Building B
        • China Diamond Exchange Center
        • Shanghai
        • Shanghai Province
        • 200122
        • China

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        QFINNasdaqGM (Nasdaq Global Market)YesADSUSUSDDec 2018

        Biography

        360 Finance, Inc. operates a digital consumer finance platform under the 360 Jietiao brand in the People’s Republic of China. The company matches borrowers with funding sources; and offers incremental credit assessment, collection, and other services. 360 Finance, Inc. was founded in 2016 and is headquartered in Shanghai, the People’s Republic of China. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/21 01:11
        End of Day Share Price2020/01/17 00:00
        Earnings2019/09/30
        Annual Earnings2018/12/31


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.