360 DIGITECH Reports Financial Results for Fourth Quarter of Fiscal Year 2022.
March 27, 2023
Earnings Overview
On December 31, 2022, 360 DIGITECH ($NASDAQ:QFIN) announced its financial results for the fourth quarter of fiscal year 2022. Total revenue was CNY 0.9 billion, a decrease of 34.1% in comparison to the same period of the prior year. Net income was CNY 3.3 billion, representing a 14.2% decrease year over year.
Transcripts Simplified
I’m Jack Smith, Chairman and CEO of 360 DIGITECH. Joining me on the call today are Seth Williams, our Chief Financial Officer; and Jacob Brown, our Chief Operating Officer. We launched our flagship product, Ops360, which has quickly become the industry’s leading operations management platform. We also announced our first major customer win in the government sector, and we achieved a significant milestone in our transition to being a software-as-a-service (SaaS) provider. In terms of financial performance, we delivered double-digit year-over-year revenue growth in both our core software solutions and professional services businesses. We also continued to generate cash from operations, which was reflected in our cash balance increasing by $4 million since last quarter. Moving forward, our focus is on continuing to drive growth and expand our total addressable market.
We are actively pursuing new customer opportunities across many different industries, and we are well positioned to capitalize on the market’s increasing demand for digital transformation solutions. We want to thank all of our employees for their hard work and continued dedication to our mission. It is their passion and innovation that has allowed us to remain a leader in the industry. Thank you for joining us today. We look forward to your questions.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for 360 Digitech. More…
| Total Revenues | Net Income | Net Margin |
| 13.95k | 4.02k | 28.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for 360 Digitech. More…
| Operations | Investing | Financing |
| 5.92k | -7.36k | 3.2k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for 360 Digitech. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 40.34k | 21.41k | 118.2 |
Key Ratios Snapshot
Some of the financial key ratios for 360 Digitech are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 25.1% | – | – |
| FCF Margin | ROE | ROA |
| 42.5% | 16.1% | 7.3% |
Price History
The company’s stock opened at $17.6 and closed at $17.5, representing a 3.0% decrease from the previous closing price of 18.0. The financial results revealed a mixed bag of both positive and negative outcomes. Unfortunately, operating expenses also rose significantly, resulting in an overall decline in EBITDA and net margin. Analysts were generally optimistic about the results, noting that despite the decline in operating expenses, the company’s financial performance was largely in line with expectations.
Overall, the fourth quarter financial results show that 360 DIGITECH is making progress towards its long-term goals. The company plans to continue investing in its products and services in order to drive future growth. Investors should keep a close eye on the stock as it continues to evolve over the coming quarters. Live Quote…
Analysis
As GoodWhale, we have performed an analysis of 360 DIGITECH‘s fundamentals and the results show that the company has an intermediate health score of 6/10 considering its cashflows and debt. This means that it is likely to safely ride out any crisis with relative ease, avoiding the risk of bankruptcy. We have classified 360 DIGITECH as a ‘cheetah’ type of company, one that has achieved high revenue or earnings growth but is considered less stable due to lower profitability. Given its strength in growth, medium dividend and weak asset and profitability, we believe that investors interested in higher risk-reward opportunities may be interested in 360 DIGITECH. These investors could be those who are looking for potential returns from capital appreciation rather than income investments. In other words, these investors are willing to take a higher risk for the possibility of greater returns, although this also comes with the potential for greater losses. More…
Peers
The competition between 360 DigiTech Inc and its competitors is fierce. All four companies are vying for a share of the Chinese market for online lending platforms. 360 DigiTech Inc is the clear leader in terms of market share, but the other three companies are not far behind. LexinFintech Holdings Ltd, FinVolution Group, and Qudian Inc all have strong brands and are well-funded. They are all aggressive marketers and are constantly innovating to try to gain an edge over the competition.
– LexinFintech Holdings Ltd ($NASDAQ:LX)
LexinFintech Holdings Ltd is a Chinese fintech company that provides online financial services through its subsidiary, Fenqile. The company has a market cap of 298.71M as of 2022 and a Return on Equity of 10.43%. LexinFintech Holdings Ltd is a leading provider of online consumer finance in China. The company offers a suite of products and services including unsecured personal loans, credit products, and investment products.
– FinVolution Group ($NYSE:FINV)
FinVolution Group is a leading provider of online financial services in China. The company offers a wide range of products and services, including personal loans, micro-loans, credit management, and wealth management products. The company’s market cap as of 2022 is 1.41B, and its ROE is 14.08%. Founded in 2006, FinVolution Group has a strong track record of growth and profitability. The company is well-positioned to continue its growth in the Chinese online financial services market.
– Qudian Inc ($NYSE:QD)
Qudian Inc is a provider of small consumer credit products in China. The company offers cash loans, installment loans, and other credit products to borrowers through an online platform. It also provides value-added services, such as loan renewal and late payment insurance.
As of 2022, Qudian Inc had a market cap of 219.98M and a ROE of 2.23%. The company offers small consumer credit products in China through an online platform. It also provides value-added services, such as loan renewal and late payment insurance.
Summary
360 DIGITECH reported its fiscal year 2022 fourth quarter earnings results on December 31, 2022, showing a decrease in both its total revenue and net income year over year. Total revenue was CNY 0.9 billion, a decrease of 34.1%, while net income was CNY 3.3 billion, down 14.2%. The stock price responded to the news by moving down the same day.
From an investing perspective, this could be a sign of a declining industry or a period of struggle for the company, making it a risky option in the short-term. Investors should consider the current performance and potential outlook of 360 DIGITECH before deciding if it is a worthwhile investment opportunity.
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