Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside |
|---|---|---|---|---|---|---|---|
| 8 May, 24 | LX | Buy | USD 1.79 | USD 2.05 | USD 2.2 | 141 days | 22.9% |
Data Powered by EOD Historical Data (“EODHD”).
LexinFintech Holdings Ltd., together with its subsidiaries, provides online consumer finance services in the People's Republic of China. The company offers Fenqile.com, an online consumer finance platform that offers installment purchase and personal installment loans, as well as online direct sales of electronic, home appliance, and general merchandise products with installment payment terms; and Lehua Card for scenario-based lending. It also provides technology-driven platform services for financial institution customers and partners to increase revenues, manage financial risks, improve operating efficiency and service quality, enhance collections, and reduce overall costs; Maiya, a buy-now and pay-later service; and Juzi Licai, an online investment platform. In addition, the company offers technical support and consulting, software development, financing guarantee, and financial technology services. The company was formerly known as Staging Finance Holding Ltd. and changed its name to LexinFintech Holdings Ltd. in March 2017. LexinFintech Holdings Ltd. was founded in 2013 and is headquartered in Shenzhen, the People's Republic of China.
Total registered user base had expanded to 210 million in FY23, marking a notable increase of 10.9% on YoY
Lower Balance sheet risk: Debt/Equity ratio of 0.586x in FY23 vs. industry median of 1.35x
Lower Short-term Liquidity: Current ratio of 1.50x in FY23 vs. industry median of 3.75x
Lower Gross Profitability: Gross Margin 34.6% in FY23 vs. industry median of 75.8%
Cybersecurity Threats, Regulatory Changes, Currency Exchange, and Economic Volatility
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 1.79 | 1.6 | 2.05 | 2.2 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Financials: Over 80 business customers have been served in the fourth quarter of 2023, with an impressive customer retention rate exceeding 85%.
Technical: The stock is expecting movement to target 2 levels, with the current price has broken the resistance level of USD 1.70.
Outlook: Estimated annual GMV for 2024 will at least match that of 2023, reflecting a cautious business strategy amidst weak consumption recovery and prioritization of risk management.
Given aforementioned factors, a "Buy" recommendation has been assigned on the stock at the closing market price of USD 1.79, as on 8 May 2024.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Financial Services Industry: Credit Services
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| LX Lexinfintech Holdings Ltd |
0.11 1.92% | 5.85 | 2.33 | 1.98 | 0.02 | 0.21 | 0.07 | 0.49 |
| V Visa Inc. Class A |
6.12 1.98% | 315.90 | 31.25 | 25.97 | 16.18 | 13.64 | 16.19 | 23.37 |
| MA Mastercard Inc |
6.79 1.31% | 526.75 | 37.04 | 29.50 | 16.14 | 62.35 | 16.47 | 27.24 |
| AXP American Express Company |
5.95 2.07% | 293.73 | 21.83 | 20.04 | 3.53 | 7.21 | 4.18 | |
| PYPL PayPal Holdings Inc |
1.51 1.77% | 86.96 | 15.53 | 12.61 | 2.28 | 3.23 | 2.14 | 9.31 |
Data Powered by EOD Historical Data (“EODHD”).
Note 1: Past performance is neither an indicator nor a guarantee of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and target levels is May 08, 2024. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
Note 4: The report publishing date is as per the Pacific Time Zone.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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