Qfin Holdings, Inc. (QFIN): A Bull Case Theory 

We came across a bullish thesis on Qfin Holdings, Inc. on Archetype Capital’s Substack. In this article, we will summarize the bulls’ thesis on QFIN. Qfin Holdings, Inc.’s share was trading at $19.59 as of December 2nd. QFIN’s trailing P/E was2.85 according to Yahoo Finance.

QFIN represents one of the most compelling opportunities in the Chinese fintech lending sector, which has been oversold due to sector-wide pessimism and investor caution around China. QFIN operates a high-margin, capital-light credit-tech platform connecting financial institutions with consumers and SMEs needing small loans, while also generating fee income through its platform and referral services.

Its business model is resilient: roughly half of its revenue comes from on-balance-sheet lending, while the other half is derived from off-balance-sheet, capital-light loan facilitation, which provides a SaaS-like, high-margin revenue stream. The company’s fundamentals remain solid, with stabilizing credit performance and a growing mix toward the higher-margin platform segment.

Despite a cautious Q3 guide, data-policy headlines, and minor QoQ shifts in mix, QFIN’s cash engine remains intact. Valuation is extremely attractive, with EV/EBIT at 2–3× and P/E at 3×, while net cash and shareholder-friendly returns via dividends (~6%) and potential buybacks further enhance upside. A conservative re-rating to mid-cycle EV/EBIT of 5–6× implies potential equity upside of 2–3× from current levels without requiring acceleration in growth.

Risks include PRC regulatory policy, VIE and HFCAA frameworks, credit-cycle volatility, partner concentration, and potential drift back to heavier lending. However, QFIN’s disciplined management, transparent operations, and shareholder-aligned capital allocation position it to capture the re-rating as sentiment normalizes, making it an undervalued, high-reward fintech investment.

Previously we covered a bullish thesis on Bread Financial Holdings, Inc. (BFH) by Stock Analysis Compilation in November 2024, which highlighted the company’s loan growth, debt reduction, and expanding direct-to-consumer funding. The stock has appreciated approximately 21.33% since coverage. The thesis still stands as BFH remains undervalued. Archetype Capital shares a similar perspective but emphasizes QFIN’s capital-light, high-margin fintech platform in China.

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Disclosure: None.