The Zhitong Finance App learned that US stocks closed on Wednesday (February 10) EST. Driven by factors such as approved Hong Kong asset management licenses and Spring Festival consumption, China's leading new consumer digital technology service provider Lexin (LX.US) rose 10.38%, with a closing price of 11.7 US dollars and a turnover of 664.759 million US dollars on the same day.
The 10.38% increase was Lexin's second biggest increase in the past three months, and this increase was also the 24th largest increase out of 283 Chinese securities on the same day; the turnover of 66.47 million US dollars ranked 6th out of the top 25 overall Chinese securities gains on the same day.
The closing price of 11.7 US dollars also broke the target prices recently set by Lyons Securities and Huaxing Capital. Fifteen days ago, on January 26, after Lexin announced the 2020 transaction volume data and performance guidelines, many investment banks, including Lyons Securities, Haitong Securities, and Huaxing Capital, raised Lexin's ratings. Two of them gave a target price of 11 US dollars.
In the past 13 trading days, Lexin's stock price has performed excellently. It has risen in 10 trading days, and has risen 77.3% in the past 12 trading days. In the future, we can pay more attention to changes in the matching between Lexin's volume and stock prices.
At the news level, the current rise in Lexin's stock price may be due to the approval of Hong Kong's three major asset management licenses, and the impact of the Spring Festival spending boom.
Recently, Orient Wealth, an overseas asset management brand owned by Lexin, obtained Class 1 (securities trading license), Class 4 (securities investment consulting license), and Class 9 licenses (asset management) issued by the Hong Kong Securities Regulatory Commission (SFC). It can set up private equity funds, sell third-party wealth management products, and carry out securities investment consulting services in Hong Kong and other eligible overseas regions. This means that Lexin has obtained a “pass” for the global wealth market.
Xiao Wenjie, CEO of Lexin, said that with the advent of the era of global asset allocation, “Relying on Lexin's fintech advantages and high-quality and stable small and micro consumer finance assets, Orangexin Wealth will help investors select global investment products and achieve overseas asset appreciation.”
On the other hand, the traditional Chinese New Year consumer season that has already begun is also the main driving force behind the current rise in stock prices.
According to market estimates, China's consumer market will exceed 1.1 trillion yuan in 2021, a double-digit increase compared to 2020 at the time of the pandemic.
In 2020, total retail sales of consumer goods in China reached 39.2 trillion yuan, and final consumption accounted for 54.3% of GDP. Consumption is still the “ballast stone” for the stable operation of the Chinese economy.
It is worth noting that China's total retail sales volume surpassed that of the US in the fourth quarter of 2020. It is only a matter of time before it becomes the world's largest consumer in the future. China is ushered in new opportunities in the largest single market, and new consumption has become the main theme.
On January 26, Lexin simultaneously launched three innovative products — Joyful, Buy Duck, and Consumer Accounts. This is an upgrade of Lexin's “New Consumer Platform Strategy” launched in 2019 with the intention of competing for a new $40 trillion consumer circuit. Currently, it seems that the three products have been very popular in the market.
Taking “buying a duck” as an example, it has not only been sought after by the market, but has also won official recognition. On February 4, CCTV's “News Broadcast” reported on Lexin's new “Buy Duck” product, Enjoy Pay Later. According to the report, the new consumption methods and products have adapted to the new and ever-changing needs of consumers, can significantly boost consumption recovery and unleash the potential of domestic demand.
The Zhitong Finance app noticed that “buy duck” is a “spend first, pay later, no interest rate” model, similar to Australia's Afterpay (ASX: APT). The latter was Australia's brightest science and innovation enterprise over the past five years, and since its listing, the company's stock price has increased more than 140 times, which will attract more high-quality customers for Leishin.
Currently, 14 institutions have predicted Lexin's stock prices. 13 have a “buy+increase” rating, and 1 has a “hold” rating, and the buying rating is the highest among fintech securities; the average target price is 11 US dollars, and Lexin has now surpassed it.
Lexin, founded in August 2013, was founded in Shenzhen, China. Lexin opens up a wide range of online and offline consumption scenarios through its platform, connecting hundreds of millions of young Chinese consumers with new consumer brands. Lexin landed on the US NASDAQ in December 2017.