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On Wednesday, BofA Securities analyst Emma Xu increased the price target for Qifu Technology (NASDAQ: QFIN) to $52.70 from the previous $50.66. Xu maintained a Buy rating on the company’s stock, which aligns with InvestingPro data showing the company’s strong financial health score of 3.13 (rated as "GREAT") and attractive P/E ratio of 7.65. The revised target follows Qifu Technology’s announcement on Tuesday regarding the issuance of convertible notes to support its March 2025 Buyback Plan. The company also confirmed the pricing of these notes today.
Qifu Technology, currently valued at $6.87 billion, has decided to issue cash-par settled convertible notes, with a total value ranging from $600 million to $690 million. The proceeds are earmarked to fund the company’s March 2025 Buyback Plan, continuing management’s aggressive share repurchase strategy identified by InvestingPro analysts. The notes carry an annual interest rate of 0.50%, with payments due every six months. The initial conversion rate set for the notes is 16.7475 American Depositary Shares (ADS) for every $1,000 of principal, which corresponds to an initial conversion price of approximately $59.71 per ADS. This price signifies a roughly 35% premium over the last closing price of $44.23 per ADS.
The management team at Qifu Technology indicated that the deal attracted substantial interest, being multiple times oversubscribed. As a result, the final size of the issuance is expected to be close to the upper limit of $690 million.
The convertible notes are a financial instrument that allows investors to convert their debt into a predetermined number of shares of the issuing company. The interest rate and conversion terms are typically set at the time of the offering.
This strategic financial move by Qifu Technology aims to strengthen its capital structure and provide additional flexibility for its share buyback program, which is set to take place over the next two years. The company’s ability to secure a higher-than-anticipated amount reflects strong investor confidence in its prospects and financial health.
In other recent news, Qifu Technology’s fourth-quarter results have shown non-GAAP earnings that surpassed consensus estimates. The company has also provided guidance for first-quarter non-GAAP earnings with a midpoint exceeding market expectations. Jefferies analyst Thomas Chong has increased the price target for Qifu Technology shares to $50.00, up from the previous $42.00, while maintaining a Buy rating on the stock. Chong attributes this positive outlook to Qifu Technology’s effective use of artificial intelligence in various operations, including loan applications and user acquisition strategies. Additionally, the company’s strong execution and share buyback program have led Jefferies to revise upward its non-GAAP earnings and EPADS estimates for the full year of 2025. The analyst’s confidence is further supported by the company’s solid quarterly results and promising guidance for the upcoming quarter. These developments reflect a strong commitment to shareholder value, enhancing the analyst’s favorable view of Qifu Technology’s stock.
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