According to Zhitong Finance APP, on Friday (September 28) U.S. stock market closed, driven by factors such as collective rise of China concept stocks, valuation recovery, and significant improvement in operational performance, China's leading new consumer digital technology service provider LexinFintech (LX.US) saw its stock price surge significantly by 16.59% to close at $2.39, with a trading volume of approximately $17.8098 million.

This marks LexinFintech's 4th consecutive trading day of gains, with a previous increase of 13.9% in one trading day, resulting in a total increase of 43.11% over 4 trading days. Post-market data also shows that LexinFintech's stock price rose by another 0.03%.

Not only in terms of stock price, LexinFintech's daily trading volume has exceeded $4 million for the past 4 trading days, the first time since March 2022, and yesterday's trading volume of $17.8 million was also the highest in the past 2 and a half years.

At the market level, the substantial 50 basis point rate cut by the Federal Reserve weakened its stimulus effect on the stock market, and with the easing of U.S. inflationary pressures, the three major U.S. stock indices closed mixed: Dow Jones rose by 0.33%, S&P 500 Index fell by 0.13%, and Nasdaq fell by 0.39%.

In response to a series of consecutive favorable economic policies, the hot China concept stocks have shown strong performance. The Nasdaq Golden Dragon Index rose by nearly 2%, Gaotu Techedu by over 6%, Xpeng by over 5%, PDD Holdings, NIO Inc, and JD.com by nearly 4%.

The rise in LexinFintech's stock price is mainly driven by growth in multiple quarters' financial performance, as well as the impact of valuation recovery.

Impacted by the previous sharp decline of China concept stocks, LexinFintech's stock price has dropped by around 70% from its peak. For comparison, in 2024 Q2, LexinFintech had a revenue of 3.64 billion yuan, an increase of 12.3% on a QoQ basis; Non-GAAP EBIT of 0.31 billion yuan, an increase of 9% on a QoQ basis; Net Income of 0.23 billion yuan, an increase of 12.4% on a QoQ basis. In terms of scale, the company's transaction volume in the second quarter was 51.1 billion yuan; managed loan balance was 115.2 billion yuan; with 2.2 billion users, a 10.2% increase year-on-year.

The growth of LexinFintech's business is primarily due to its digital financial capabilities driven by dual wheels (risk and data).

With the dual-drive of risk data, Lexinfintech's high-quality development is beginning to show results, with performance steadily growing for seven consecutive quarters. It has been listed in the 'Top 500 Service Companies in China' for five times, and has established close cooperation with multiple financial institutions. For instance, in mid-September, Lexinfintech signed a strategic cooperation agreement with Bank of Ningbo and Ningbo Silver Consumer Finance, cooperating deeply in areas such as financial technology, tech exploration, and business innovation.

At the same time, Lexinfintech's international layout has achieved significant results, such as a 61% increase in loan scale and a 113% increase in revenue in the second quarter in the Mexican market.

Boosting investor confidence, Lexinfintech has decided to distribute dividends every six months starting from 2023, with a dividend range of 15%-30% of the net income in the recent six months. For example, this time with a cash dividend of approximately $0.072 per ADS, about 20% of the net income in the first half of 2024.

Despite four consecutive days of sharp increase in trading, Lexinfintech's stock price is still undervalued by the market. Lexinfintech's P/B ratio is only 0.272, almost the lowest among the entire internet finance technology companies. It is estimated that in the next two years, with changes in the regulatory environment and overall increase in the valuation level of peer companies, the company's valuation will also rise.

Founded in August 2013 and based in Shenzhen, China, Lexinfintech has actively connected online and offline extensive consumer scenarios through its platforms, linking millions of young Chinese consumers with new consumer brands. In December 2017, Lexinfintech officially landed on the Nasdaq in the USA.