360 Finance (QFIN) reported third-quarter earnings recently that showed solid loan origination and revenue growth. Management maintained their RMB 8B-8.5B 2019E revenue guidance this year which we find to be quite conservative given the incremental market share gain QFIN is likely to realize as China’s online lending industry consolidates.
The bottom line
Our view of the Chinese lenders is that a successful and sustainable business model requires a stable traffic flow (i.e., users) that allows the platform to develop a strong risk management model, which allows the company to obtain a lower cost