Qifu Technology Provides Updates on Share Repurchase Plans
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Insights
Qifu Technology's recent announcement of completing their 2023 Share Repurchase Plan and initiating a new 2024 Share Repurchase Plan is a strategic financial move that signals several implications for the company's valuation and investor sentiment. The completion of the previous plan, where nearly $150 million was spent to buy back shares at an average price of $16.02, demonstrates a potential undervaluation of shares or a strategic effort to boost earnings per share (EPS) by reducing the number of shares outstanding. The new plan to repurchase up to $350 million worth of shares represents a significant increase in capital allocated for buybacks, which could be interpreted as confidence by the management in the company's future performance and financial health.
The decision to cancel the repurchased shares will likely improve the company's financial ratios, such as return on equity (ROE), by decreasing the equity base. This move can be attractive to investors looking for companies with efficient capital allocation. However, it is essential to monitor how these buybacks are financed, whether through existing cash reserves or debt, as the latter could increase the company's leverage and risk profile. The timing of these buybacks should also be scrutinized, as repurchasing shares when the stock is overvalued could lead to a destruction of shareholder value.
The broader context of Qifu Technology's share repurchase plans must be considered within the competitive landscape of the Credit-Tech industry in China. The industry is characterized by high competition and rapid innovation and companies often use share buybacks as a tool to manage their capital structure and signal strength to the market. The aggressive increase in the buyback program for 2024 suggests that Qifu Technology is positioning itself as a strong player with a robust balance sheet, which might be a response to industry competition or investor demand for capital returns.
Additionally, the market's reaction to these share repurchase announcements can provide insight into investor expectations and confidence in the company's growth prospects. If the stock price reacts positively, it could indicate that the market approves of the company's strategy and expects future growth. Conversely, a lukewarm or negative market reaction might suggest skepticism about the company's ability to generate long-term value through these buybacks. It will be important to track the stock performance following these announcements and compare it with industry peers to gauge market sentiment.
From a legal standpoint, Qifu Technology's compliance with U.S. Securities Exchange Act rules, specifically Rule 10b-18 and Rule 10b5-1, is important in ensuring that the share repurchases are conducted in a manner that is fair and non-manipulative. These rules set forth the conditions for the timing, price and volume of share repurchases to prevent potential abuses, such as stock price manipulation or insider trading. The company's adherence to these regulations reflects its commitment to corporate governance and legal compliance, which can be a reassuring factor for investors concerned with ethical business practices.
Furthermore, the cancellation of repurchased shares in accordance with applicable rules and regulations suggests that the company is taking steps to avoid any legal pitfalls that may arise from share repurchases, such as breaching foreign ownership limits or affecting voting power distribution. It also underscores the importance of transparency in corporate actions, which can enhance investor trust and potentially lead to a more favorable view of the company's management and board decisions.
SHANGHAI, China, April 02, 2024 (GLOBE NEWSWIRE) -- Qifu Technology, Inc. (NASDAQ: QFIN; HKEx: 3660) (“Qifu Technology” or the “Company”), a leading Credit-Tech platform in China, today provided updates on its share repurchase plans.
On June 20, 2023, the Company announced a share repurchase plan (the “2023 Share Repurchase Plan”), whereby the Company is authorized to repurchase its American depositary shares (“ADSs”) or Class A ordinary shares with an aggregate value of up to US
On March 12, 2024, the board of directors of the Company approved a new share repurchase plan (the “2024 Share Repurchase Plan”), under which the Company may repurchase up to US
About Qifu Technology
Qifu Technology is a Credit-Tech platform in China that provides a comprehensive suite of technology services to assist financial institutions and consumers and SMEs in the loan lifecycle, ranging from borrower acquisition, preliminary credit assessment, fund matching and post-facilitation services. The Company is dedicated to making credit services more accessible and personalized to consumers and SMEs through Credit-Tech services to financial institutions.
For more information, please visit: https://ir.qifu.tech.
Safe Harbor Statement
Any forward-looking statements contained in this announcement are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as the Company’s strategic and operational plans, contain forward-looking statements. Qifu Technology may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (“SEC”), in announcements made on the website of The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including the Company’s business outlook, beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, which factors include but not limited to the following: the Company’s growth strategies, the Company’s cooperation with 360 Group, changes in laws, rules and regulatory environments, the recognition of the Company’s brand, market acceptance of the Company’s products and services, trends and developments in the credit-tech industry, governmental policies relating to the credit-tech industry, general economic conditions in China and around the globe, and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks and uncertainties is included in Qifu Technology’s filings with the SEC and announcements on the website of the Hong Kong Stock Exchange. All information provided in this press release is as of the date of this press release, and Qifu Technology does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
For more information, please contact:
Qifu Technology
E-mail: ir@360shuke.com
FAQ
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