Qifu Technology, Despite Its Positive Quant Factor Grades, Is A Hold For Me

Summary:

• I like aspects of Qifu Technology like its strong non-risk-bearing revenue growth (+277%), solid financials and balance sheet, and shareholder-friendly actions like growing dividends and share buybacks.
• I examined aspects that concern me, like the heavy reliance on risk-bearing revenue (72%) and 100% exposure to China’s regulatory environment through a VIE structure.
• There is also the risk of disruption by AI and ADR-related threats like delisting and financial transparency issues.
• At the end of my research, despite QFIN’s strong fundamentals, it fails my SWAN criteria due to structural and regulatory risks.

Overview of Qifu Technology (NASDAQ:QFIN)

According to the company profile description on Seeking Alpha,

Qifu Technology, Inc., together with its subsidiaries, operates credit-tech platform under the 360 Jietiao brand in the People’s Republic of China.

The company

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