Qfin: When Slow Growth Meets A 0.61 P/B And A 9% Dividend Yield (Rating Upgrade)

Ezequiel Szyrko191 FollowersFollow5ShareSavePlay(13min)CommentsSummaryI upgrade Qfin Holdings from Hold to Buy, targeting a 61% upside on deep undervaluation and a robust 9%+ dividend yield.QFIN trades at 0.60x price/book versus a 1.59x all-time historical average and 1.19x the 5-year average. The sector median stands at 1.34x.Despite macro headwinds and flat loan facilitation, QFIN demonstrates resilience with steady user growth and disciplined cost management.Dividend payout is rising from 20% to 30%, with a forward yield above 9%. Plus, there's still $171M left in the buyback program, which represents 10% of the market cap.Regarding valuation, I'd argue to move the 'center of gravity' from earnings-based valuation models to book value-based ones, since the latter might be more accurate. CHUNYIP WONG/iStock via Getty Images Thesis Update I upgrade Qfin Holdings (QFIN) from Hold to Buy, expecting a 61% upside over the next 12 months. While the company is not showing growth in revenues or earnings, the current valuation dipped to aThis article was written byEzequiel Szyrko191 FollowersFollowMy investing approaches are GARP, Value, and Growth. I closely follow insider buying and buybacks. Also, I pay attention to some technical analysis tools, such as Elliott Wave, EMA crossovers, and chart patterns.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.