With the improvement of the regulatory environment and the promotion of technological progress, China's fintech industry is ushering in new opportunities for development. Recently, Deutsche Bank (Deutsche Bank), a world-renowned investment bank, released a report providing full coverage of China's fintech industry for the first time and giving the industry leader QFIN.US (QFIN.US) a “buy” rating. The target price is $24.5, showing its confidence in Qifu Technology's future growth potential.

Deutsche Bank pointed out in the report that although the fintech industry has faced a strict regulatory environment in the past, the current regulatory environment has stabilized and normalized. The Chinese government clearly promotes the development of the digital economy and the digitalization of finance, providing strong support to the fintech industry. At the same time, technological progress, especially the rapid development of AI, is leading a new round of financial innovation, and fintech companies are continuously improving operational efficiency and customer experience through technological innovation.

In terms of the strengths of industry leaders, the report highlights that large enterprises may benefit more from a more stringent regulatory environment. With higher market entry thresholds and capital requirements, these companies can better adapt to regulatory requirements, thereby gaining an advantage in competition. As China's leading credit technology platform, Qifu Technology is such an industry leader.

The report points out that with its leading position in the online credit field and strong risk control technology capabilities, Qifu Technology has shown strong performance resilience and good growth prospects. Through innovative technical solutions, the company helps financial institutions provide credit services more effectively to consumers and small and micro enterprises, successfully matches potential borrowers with financial institution partners, and optimizes loan approval processes and post-loan management strategies.

In particular, it is worth mentioning that Qifu Technology's capital-light model has played a key role in increasing the volume of new loans and improving the accuracy of loan matching. Of the 2023 matching loan scale, about 57% of the loans were provided through technical solutions such as capital-light models. Such services that do not bear credit risk helped the company effectively mitigate risks in an unfavorable environment and enhanced the stability of the company's profits.

At the same time, Qifu Technology also excelled in maintaining loan quality. By actively adjusting the loan portfolio and improving the loan recovery process, it successfully controlled the overdue rate, laying a solid foundation for the company's long-term growth and profitability.

Furthermore, in terms of dividends, Qifu Technology announced $0.50 and $0.58 per ADS in the first half and second half of 2023, respectively, for a total dividend of US$170 million in 2023. In terms of repurchases, the company has already repurchased ADS with a cumulative repurchase value of US$1499,798 million from June 20, 2023 to April 2, 2024, and the 2023 stock repurchase plan has basically been completed. The company announced on March 12, 2024 that it will add a $350 million repurchase program over the next 12 months. These positive capital market initiatives will provide strong support for the company's stock price.

Deutsche Bank believes that although the fintech industry still faces some potential risks, such as regulation or uncertainty, and a more severe credit environment, etc., as China's consumer finance industry expands and the government stimulates consumer consumption, Qifu Technology, with its excellent risk management capabilities and outstanding market position, can effectively meet these challenges, achieve continuous and steady development, and show higher room for growth and better profitability.