Qifu Technology Provides Updates on Share Repurchase Plans

Rhea-AI Summary

Qifu Technology (NASDAQ: QFIN) has provided updates on its share repurchase initiatives. The company has nearly completed its 2024 Share Repurchase Plan, having purchased 15,110,617 ADSs for US$349.99 million at an average price of US$23.14 per ADS. These shares will be cancelled according to applicable regulations.

Additionally, the Board has approved a new 2025 Share Repurchase Plan authorizing the repurchase of up to US$450 million worth of ADSs or Class A ordinary shares over 12 months starting January 1, 2025. The company has established a trading plan under Rule 10b5-1 to facilitate repurchases during the quarterly blackout period beginning January 2, 2025.

Positive

• Complete utilization of US$350 million 2024 share repurchase program
• New larger US$450 million share repurchase program approved for 2025
• Planned cancellation of repurchased shares, potentially improving EPS
• Strategic timing with trading plan for blackout period demonstrates strong execution

Negative

• Significant cash outlay for share repurchases may limit other investment opportunities

Insights

Financial Analyst

The completion of QFIN's $350 million share repurchase program at an average price of $23.14 per ADS demonstrates strong capital allocation and shareholder value focus. The buyback reduced the float by approximately 15.1 million shares, representing about 5% of outstanding shares. More importantly, the announcement of a new $450 million buyback program for 2025 signals management's continued confidence in the company's financial position and undervalued stock price.

The implementation through Rule 10b5-1 trading plans during blackout periods indicates sophisticated execution strategy to maintain consistent buying pressure. With a market cap of $5.86 billion, the new buyback represents nearly 8% of current market value - a meaningful percentage that could help support the stock price while reducing share count. The company's ability to deploy such significant capital for buybacks suggests strong free cash flow generation and healthy balance sheet metrics.

The structured approach using various mechanisms like open market purchases, private transactions and block trades provides flexibility to optimize execution based on market conditions. For retail investors, this systematic capital return program alongside the company's growth initiatives in China's Credit-Tech space presents an interesting value proposition.

Market Research Analyst

This buyback strategy reveals important market positioning dynamics in China's fintech sector. The aggressive repurchase execution in 2024, utilizing nearly 100% of the authorized amount, demonstrates management's strong conviction that QFIN shares trade below intrinsic value. The timing is particularly strategic given the broader challenges in China's consumer credit market and regulatory environment.

The increased authorization to $450 million for 2025 sends a powerful signal about expected cash generation capabilities and business outlook. For context, this represents one of the larger buyback programs among US-listed Chinese fintech companies. The implementation through both Rule 10b-18 and Rule 10b5-1 programs indicates a sophisticated approach to maintaining market stability while navigating compliance requirements for dual-listed companies.

The average purchase price of $23.14 provides an important psychological support level for the stock. With the new program starting January 1, 2025, investors should expect continued price support through systematic buying, particularly during quarterly blackout periods when natural liquidity may be lower.

SHANGHAI, China, Dec. 30, 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 March 12, 2024, the Company’s board of directors (the “Board”) approved a share repurchase plan (the “2024 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$350 million during the 12-month period from April 1, 2024. As of December 30, 2024, the Company had utilized substantially all of the total authorized value for the 2024 Share Repurchase Plan. Specifically, the Company had in aggregate purchased 15,110,617 ADSs in the open market for a total amount of US$349,997,661 (inclusive of commissions) at an average price of US$23.14 per ADS. The Company intends to cancel all of the repurchased shares in accordance with applicable rules and regulations.

On November 19, 2024, the Board approved a new share repurchase plan (the “2025 Share Repurchase Plan”), whereby the Company is authorized to repurchase up to US$450 million worth of its ADSs or Class A ordinary shares over the next 12 months starting from January 1, 2025. The share repurchases may be effected from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and will be implemented in accordance with all applicable rules and regulations, including the requirements of Rule 10b-18 and/or Rule 10b5-1 under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company has entered into a trading plan in accordance with Rule 10b5-1 under the Exchange Act to facilitate repurchases under the 2025 Share Repurchase Plan during the Company’s quarterly blackout period that begins on January 2, 2025.

About Qifu Technology

Qifu Technology is a leading 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

How much did QFIN spend on share repurchases in 2024?

QFIN spent US$349.99 million to repurchase 15,110,617 ADSs at an average price of US$23.14 per ADS in 2024.

What is the size of QFIN's new 2025 share repurchase program?

QFIN's new 2025 share repurchase program authorizes the repurchase of up to US$450 million worth of ADSs or Class A ordinary shares.

When does QFIN's 2025 share repurchase program begin?

QFIN's 2025 share repurchase program begins on January 1, 2025, and will run for 12 months.

What is the average price QFIN paid per ADS in its 2024 buyback program?

QFIN paid an average price of US$23.14 per ADS in its 2024 buyback program.

What will QFIN do with the shares repurchased under these programs?

QFIN intends to cancel all of the repurchased shares in accordance with applicable rules and regulations.