Let's talk about Qifu Technology's financial report today.

This Q2 performance report is really impressive. The capital markets have even directly voted with confidence, and Qifu Technology's US stocks rose 12%, and Hong Kong stocks rose 17% for two consecutive trading days after the financial report was released.

(Source: Futu Market)

Obviously, the market has already given the answer to whether this performance is good or not with real money and silver.

Looking at its various performance indicators, the total net revenue for the first half of the year was 8.313 billion yuan, a year-on-year increase of 10.64%; the net income was 2.536 billion yuan, a year-on-year increase of 25.38%; the net income attributable to common shareholders of the company was 2.545 billion yuan, a year-on-year increase of 25.26%.

Among them, in the second quarter, the total net revenue was 4.16 billion yuan, a year-on-year increase of 6.28%, and the net income was 1.377 billion yuan, a year-on-year increase of 25.89%.

Combined with the current overall market environment, Qifu Technology's growth rate is indeed a bit beyond expectations.

1. Does Qifu Technology have such resistance to cycles?

In fact, if investors who have been tracking this company for a long time will find that Qifu Technology has shown outstanding operational resilience in a changing economic environment since its establishment.

The semi-annual report submitted this time can even be said to be a microcosm of its long-term stable growth.

Looking directly at the company's historical business scale data chart, you can see more clearly that its business scale is showing a trend of expansion year by year, and it has not shown a significant decline even in economic downturns. (Data source: company financial report)

(Data source: company financial report)

It is worth noting that in this financial report, while Qifu Technology has given the operating results of the past two quarters, it also gave a confident outlook for the next quarter's performance.

It is expected that Qifu Technology will generate a net profit of 1.5 billion yuan to 1.6 billion yuan in the third quarter of this year, and a net profit of 1.55 billion yuan to 1.65 billion yuan after adjustment, a year-on-year increase of 31% to 40%.

The implication here is already very obvious-I have done very well this quarter, and my next performance will continue to be good.

Perhaps many people here may ask, what makes Qifu Technology's performance so strong?

In my opinion, it is still on the right track and has brought about real changes to the industry, and the core behind this is still inseparable from Qifu Technology's continuous investment and innovation in artificial intelligence and financial technology.

As Qifu Technology itself introduced, the company insists on using technological innovation as the driving force, and has always been committed to helping financial institutions improve efficiency and promote the development of inclusive finance through intelligent services and technical means.

In the past, there were many chaos in this industry, such as information asymmetry between financial institutions and consumers, and the lack of digital capabilities of financial institutions, which gave Qifu Technology the opportunity to break through.

It is not difficult to see from this that Qifu Technology's technical capabilities are actually the key to enabling it to continuously adjust, adapt, and even surpass in market changes.

First of all, it has strong data processing and analysis capabilities, can extract valuable information from massive data, provide data support for decision-making, and make precise adjustments in market changes. For example, it turns to a light asset model to respond to changes in the macro environment and reduce capital occupation to improve capital efficiency.

It can be said that the company's light capital model has played a key role in increasing new loan volume and improving loan matching accuracy. Under this model, Qifu technology does not directly assume credit risk, but facilitates loan transactions by providing technical support and services, thereby obtaining service fees.

According to Deutsche Bank's report, about 57% of the loans in the lending scale in 2023 are provided by technology solutions such as the light capital model. Such services that do not assume credit risk help the company effectively resolve risks in unfavorable environments and enhance the profitability of the company's stability.

From a data perspective, as of the end of the second quarter of this year, Qifu Technology has established cooperation with 160 financial institutions to help them provide credit services to more than 53 million small and micro enterprises and individual consumers. This further shows that Qifu's innovative technology solutions have gained widespread recognition and demonstrated huge potential for promoting the popularity of financial services.

(Source: Deutsche Bank)

Meanwhile, Qifu Technology uses advanced technology for risk assessment and forecasting, which can effectively manage and reduce business risks, ensuring that it can operate steadily in the face of market fluctuations.

In this process, the company's management team's firm commitment to technology and long-term management attitudes played a crucial role.

The company regards technological innovation as the core of its strategy, continuously increases research and development investment, promotes technological progress, ensures that the company can maintain its advantages in fierce market competition, and drives it to continue on a benign growth trajectory.

2. Reshaping the new anchor of Qifu's value growth

When evaluating Qifu Technology's future growth potential, the new changes in the industry and a series of actions by Qifu may provide a new perspective for investors.

With the emergence of new technologies and new productivity represented by AI, various industries are undergoing unprecedented changes, and the financial industry is one of them. Obviously, under revolutionary technology, the integration of technology and finance will continue to reshape the mode and efficiency of financial services and bring deeper changes to the industry.

In the past, Qifu Technology used the power of technology to bring innovation and efficiency to financial service models, which has been verified by the results it has achieved. Now with the development of the industry, Qifu Technology has also taken relevant actions.

It can be seen that it started exploring AI as early as possible and even combined its own advantages such as data and user behavior to implement relevant applications.

Among them, as early as 2017, Qifu Technology trained various models that can truly be used in business scenarios through AI algorithm platform and algorithm library. Large-scale model technology, as the core of the company's technological innovation, has now played a key role in risk control, marketing, collection and customer service, product development, and research and development efficiency improvement.

For example, in customer service, collection and other scenarios, its deployment of the AI-Copilot system has increased productivity by up to 4.1% since its launch, the user conversion rate of the seat side has increased by 5.6%, management efficiency has also achieved a 50% increase, and the accuracy of business processing has also increased by 1.2% compared to before use.

In terms of credit assessment, the Argus risk control engine it has created can accurately evaluate users' credit status and risk characteristics, ensuring that every loan can be approved quickly and safely. According to its introduction, based on 0.05 million risk decision rules and 1000 machine learning models, Qifu Technology evaluates 0.12 million risk characteristics every day and conducts tens of millions of model calculations, which directly shortens the approval time to 44 seconds.

Through these achievements, it is not difficult to see its changes in the industry and its own decent strength of technological innovation.

However, looking deeper than the surface, these innovations are not only breakthroughs for Qifu's existing business development, but also give it the ability to output to the industry.

This can be illustrated by its subsidiary, Qifu Numbers.

According to the introduction, the company is an AI-driven digital credit solution service provider, and it helps financial institutions achieve hundreds of billions of fund matching every quarter, accumulating a large amount of data. At the same time, it has also created a technical architecture for financial institution customers, which can provide relevant technical solutions for financial institution customers.

In other words, this company can output its own technical strength and obtain income from financial institution customers, which obviously brings new growth points for Qifu Technology.

It can be seen that with the support of AI capabilities, Qifu Technology not only strengthens its core competitiveness, but also opens up the ceiling for its own growth, and even has the possibility of reshaping its business model.

Obviously, for these new changes of the company, especially the visible potential for future growth, it will be able to bring confidence to the market and provide the capital markets with the opportunity to re-evaluate and understand the company's value.

3. Conclusion

It can be said that Qifu Technology has achieved steady growth in different economic cycles by transforming technological dividends into compound interest. Its technological innovation and AI application achievements have not only brought breakthroughs in its own business, but also provided new ideas and motivation for the development of the entire financial industry.

Under the current AI trend, with the continuous progress of technology and the deepening of applications, there is reason to imagine that Qifu Technology will bring more possibilities to the industry, and its own value growth will also be worth watching, which cannot be ignored by the market.

In addition to its outstanding performance in operation, its series of actions in the capital markets also indicate opportunities.

Earlier this year, the company initiated a new round of stock repurchase plan in the first quarter, planning to repurchase American depositary shares or A-shares worth no more than US$0.35 billion in the next 12 months starting from April 1. It is worth mentioning that from the beginning of this year to August 13, Qifu Technology has accumulated the repurchase of 10.7 million ADS, with a repurchase amount of US$0.211 billion.

In this financial report season, Qifu Technology also announced the 2024 dividend distribution plan for the first half of the year, distributing dividends of $0.30 and $0.60 per share to holders of A-shares and American depositary shares, respectively. Last year, Qifu Technology's total dividend reached US$0.17 billion. Considering that the fully diluted net profit per American depositary share (ADS) in the first half of this year was 8.92 yuan (approximately US$1.22), this also means that Qifu Technology has used nearly 50% of its earnings per share for dividends, which is a very significant move considering the current market environment.

In addition, the resignation of Mr. Hongyi Zhou was a highly anticipated event in this financial report.

For Qifu Technology, this will help it get rid of the embarrassing situation where it is often mentioned with 360 in the past. In fact, although 360 Group provided anti-fraud technology, traffic and data support for Qifu Technology in the early stages of its establishment and development, in the later stage of development, Qifu Technology has gradually become independent in terms of technology and customer acquisition.

The resignation of Mr. Hongyi Zhou also makes the development of Qifu Technology's brand more independent, and the experienced new management team, I believe, will continue to lead the company's rapid development.