QFIN - Is 360 Finance a Good Stock to Consider Now?
China's online lending industry is out of favor presently, thanks to challenges such as regulatory uncertainties, poor sentiments toward Chinese companies, and negative impacts from the COVID-19 outbreak. Understandably, investors have stayed away from the industry, leaving leading players such as 360 Finance Inc (NASDAQ: QFIN) to trade a low valuation of less than six times earnings. Yet if 360 Finance can overcome these challenges (which I think are temporary), its low valuation offers a good opportunity for long-term investors to consider its shares.
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360 Finance is an online lending platform in China, focusing on lending to underserved borrowers. It acts as the middleman to connect borrowers -- who have established credit histories but are underserved by traditional financial institutions -- and lenders -- institutional partners like banks. In return, it receives a fee after successfully matching those two parties.