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SHANGHAI - Qifu Technology, Inc. (NASDAQ: QFIN; HKEx: 3660), a leading AI-empowered Credit-Tech platform in China, has announced the pricing of a $600 million convertible senior notes offering due 2030. The company, currently trading at $3.14 per share with a market capitalization of $249 million, shows promising fundamentals according to InvestingPro analysis, which indicates the stock is currently undervalued based on its Fair Value assessment. The offering, aimed at qualified institutional buyers, will also grant purchasers an option to buy up to an additional $90 million in notes.
The company intends to use the proceeds for repurchasing its American depositary shares (ADSs) and/or class A ordinary shares, in line with a newly authorized share repurchase plan. This new plan, approved by the board of directors, supplements an existing plan announced in November 2024. InvestingPro data reveals the company maintains a healthy financial position with a current ratio of 1.41 and moderate debt levels, with total debt to capital ratio at 0.22, suggesting strong capability to service its obligations.
The notes, offering a 0.50% annual interest rate, are set to mature on April 1, 2030, unless repurchased or converted earlier. With a conversion rate initially set at approximately 16.7475 ADSs per $1,000 principal amount, the notes represent a roughly 35.0% premium over the March 25, 2025, closing price of the company’s ADSs.
Qifu Technology also detailed a concurrent repurchase strategy, where approximately $230 million worth of ADSs will be bought back from certain note purchasers in privately negotiated transactions at the last reported sale price. This move is expected to mitigate dilution from the conversion of the notes and contribute to earnings per ADS accretion.
The company has outlined that the repurchase activities could affect the market price of the ADSs, class A ordinary shares, and the trading price of the notes. The notes, along with the ADSs and shares deliverable upon conversion, have not been registered under the U.S. Securities Act and are being offered under an exemption for qualified institutional buyers.
The closing of the notes offering is anticipated on or about March 27, 2025, subject to standard closing conditions. The announcement made clear that the completion of the offering cannot be assured at this time.
Qifu Technology is recognized for leveraging machine learning and data analytics to provide technology services throughout the loan lifecycle to financial institutions, consumers, and SMEs, aiming to make credit services more accessible and personalized. The company has demonstrated solid performance with a revenue growth of 25% in the last twelve months and maintains a robust gross profit margin of 44%. InvestingPro subscribers can access additional insights, including 6 more ProTips and comprehensive financial metrics that provide deeper understanding of the company’s growth trajectory.
This news report is based on a press release statement from Qifu Technology, Inc.
In other recent news, Qifu Technology has announced a $600 million convertible senior notes offering set to mature in 2030. The company aims to use the proceeds from this offering to repurchase its American depositary shares and class A ordinary shares, under a new share repurchase plan approved by its board of directors. This financial strategy is expected to enhance the company’s earnings per ADS in 2025, contingent on the successful execution of concurrent repurchases. The notes, which are unsecured obligations, include an option for initial purchasers to acquire an additional $90 million within a 13-day window from the issuance date. Holders of these notes have the right to demand repurchase on April 3, 2028, or in certain other situations, at the principal amount plus accrued interest. Qifu Technology may also redeem the notes for cash under specific circumstances, such as changes in tax law or if less than 10% of the notes remain outstanding. The company plans to repurchase a number of ADSs through privately negotiated transactions to support the initial hedges of the notes’ purchasers. These repurchases are anticipated to mitigate potential shareholder dilution upon conversion of the notes.
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