It's hard for companies to be surprised with too many results, but there are still companies that can stand out with their strong business performance. Qifu Technology is one of them.

Recently, Qifu Technology (03660.HK/QFIN.US) announced financial results for the third quarter, and the performance is still online.

According to the data, in the first three quarters, the company achieved total revenue of RMB 12.683 billion, an increase of 7.54% over the previous year, and achieved net profit of RMB 4.335 billion. Looking at a single quarter, it achieved total revenue of 4.37 billion yuan, an increase of 2.08% over the previous year; realized net profit of 1.799 billion yuan.

It is easy to see that Qifu Technology has achieved both revenue and profit growth, and its performance has exceeded market expectations.

At the time the financial report was announced, the company's repurchase action also received a lot of attention from the market. In the author's opinion, the value signal revealed behind this is worth pondering.

1. Continue to make major repurchases and dividends to share the “Rose of Time” with shareholders

As can be seen, under pressure from past performance, many listed Internet companies have increased their repurchases one after another to convey market confidence and respond to market expectations.

However, with the recent improvement in the market environment and the recovery in stock prices of listed companies, the buyback efforts of some companies are not as strong as before, and the repurchase trend is fading away at a speed that can be seen with the naked eye.

This is actually not difficult to understand. The purpose of buying back shares is to boost investor confidence, reduce tradable share capital in the market, and optimize financial indicators to drive up stock prices. Now, driven by favorable macroeconomic policies, etc., after China's assets have experienced a wave of recovery, the cost of repurchases at this time has clearly become less economical. As a result, many listed companies' repurchases have come to an end.

However, even in this context, Qifu Technology's repurchase movement showed a positive side.

As early as March 12 of this year, it adopted a repurchase plan to repurchase American depository shares or Class A common shares with a total value of no more than 0.35 billion US dollars over a period of 12 months from April 1. As of November 19, Qifu Technology has purchased a total of about 13.7 million American Depositary Shares in the open market according to the share repurchase plan. The total amount is about 0.298 billion US dollars (including commissions), and the average price is 21.7 US dollars per American Depositary Share.

As can be seen, the company has carried out related repurchases in the market in an orderly manner and has fulfilled its previous promises.

With the release of the three-quarter report this time, Qifu Technology further announced that through a new share repurchase plan, it will repurchase American depository shares or Class A common shares worth no more than 0.45 billion US dollars within the next 12 months starting January 1 next year.

With more than a month until the new year, Qifu Technology has already laid out ahead of schedule and made a repurchase plan for next year. At the same time, it has further increased the repurchase amount. This decision is extraordinary. In addition to the company's optimism about future market prospects, it also includes greater confidence in its own value. At the same time, this is in line with Qifu Technology's consistent emphasis on shareholder returns, demonstrating its forward-looking outlook in the capital market and long-term commitment to shareholder value.

And this can also be seen from the company's past series of dividend actions.

Earlier, during this year's interim reporting period, Qifu Technology announced a dividend distribution plan to distribute dividends of 0.30 US dollars and 0.60 US dollars per share to shareholders holding Class A common shares and American depository shares, respectively. This is already equivalent to using nearly 50% of its earnings per share for dividends. Last year, Qifu Technology's total dividend distribution reached about 0.17 billion US dollars. The dividend ratio, shown in current stock prices, has also reached nearly 4%.

(Source: Futu Market)

Looking at the entire market, whether in terms of dividend rate or dividend rate level, Qifu Technology can be said to have performed quite generously.

The management also explained the new repurchase plan at the results meeting: “The company's repurchase pace far exceeds market expectations, and the overall shareholder return for 24 is expected to be close to 100% of the 23-year profit. We are confident about the future of the company, and believe that the company's current valuation is still undervalued, so we decided to further increase our buyback efforts and continue to shrink our share capital sharply over the next two years. We will always maintain efficient capital allocation and continue to create value for shareholders through a high percentage of repurchases and dividends.”

2. Value dividend opportunities brought by “certainty”, bet on big models to open up room for growth and imagination

Whether it's a major repurchase or dividend, it requires a large amount of cash support, and Qifu Technology's ability to continue to generously give back to shareholders is obviously inseparable from its excellent financial position and continued growth in performance.

Judging from the company's cash flow situation, Qifu Technology showed very typical “cash cow” characteristics.

Sorting through the company's net present ratio over the years, it is easy to find that this indicator has remained above 1 for a long time. This indicates that the net cash flow from operating activities continues to exceed net book profit. This also means that the company not only has strong profitability, but also has high profit quality, and can effectively convert profits into cash inflows.

(Data source: compiled from the company's financial report)

Furthermore, according to the latest financial data, as of the end of the third quarter of this year, the total amount of cash and cash equivalents of Qifu Technology was about 9.77 billion yuan. Operating cash flow was approximately $2.372 billion.

It can be said that such strong capital reserves and cash flow conditions not only bring sufficient liquidity to Qifu Technology's daily operations, but also provide a solid financial foundation for its actions such as repurchases and dividends in the capital market.

Looking at it now, against the backdrop of a package of macroeconomic policies supporting economic recovery, subsequent improvements in fundamentals are expected to help restore corporate market valuations. For Qifu Technology, which already has a steady and steady performance, the company's higher certainty lies not only in good expectations at the performance level, but also in its willingness to continue to give back to shareholders and provide investors with a stable cash flow.

In fact, judging from the overall trend in the capital market this year, the dividend circuit has become the “bastards” of the market, and along with policy levels such as the new “National Nine Rules”, support “strengthening the supervision of cash dividends from listed companies” and “enhancing dividends stability, sustainability, and predictability, and promoting dividends, pre-dividends, and pre-Spring Festival dividends more than a year.” This will also continue to catalyze the performance of dividend stocks and promote recognition and attention for their long-term investment value.

Judging from this, Qifu Technology, which has shown higher dividend ability and willingness to continue to pay dividends, and continues to actively give back to shareholders through practical actions, I believe it will not be ignored by the market.

In addition to the certainty brought about by performance and repurchase dividends, at a time when AI is hot, Qifu Technology's layout and progress in the big model field are also expected to further stimulate market attention. Judging from capital market trends during the year, related concept stocks were frequently popular. Now, as market hype becomes more rational, investors are also paying more and more attention to companies that have actually implemented or even realized improved operating efficiency and performance growth in the big model field.

Looking at Qifu Technology, until now, the company continued to invest in exploring innovative applications of big models in the financial field, implementing big models in business scenarios such as customer service, software research and development, and credit evaluation to solve the company's difficult pain points in terms of risk, cost reduction, and efficiency improvement. Today, along with the precise adaptation and efficient implementation of its large model and business, Qifu Technology is bringing remarkable results in business operations and financial performance.

Financial reports show that by the end of the 3rd quarter of 2024, 162 financial institutions had achieved intelligent credit using Qifu Technology's large model capabilities, and more than 55 million small and micro enterprises and individual consumers enjoyed digital credit services. Furthermore, in the third quarter, Qifu Financial's big model continued to improve efficiency in areas such as in-terminal interaction, R&D automation, and in-seat customer service, which promoted the company's overall intelligent and efficient operation. It is worth mentioning that in September of this year, Qifu Technology's big model application was also selected for the “Application Practice Insights of AGI in the Financial Field” report published by the China Academy of Information and Communications Technology's “Foundation Building Project” and the InfoQ Research Center, and became a benchmark application for the financial industry's vertical big model.

It can be said that the use of new AI technologies such as big models not only brings new incremental opportunities to Qifu Technology's business, but also further drives the company to reduce costs and increase efficiency and expand profit margins. At the same time, in the medium to long term, the company is also expected to explore more business opportunities in exporting technology to foreign countries and empowering the industry, opening up the ceiling for growth.

Considering the current “AI concept” boom in the capital market, as well as the company's actual implementation of operational optimization and performance growth, I believe it will also bring a new assessment of the company's long-term value. Combining certainty and growth, the value “safety cushion” of Qifu Technology is clearly self-evident.