Qifu’s Profit Jumps Nearly 2 Billion—This Goose is Golden,On Verge of Breaking New 52 High!

Recently, $Qifu Technology(QFIN)$  unveiled its 2024 financial report. As a top-tier internet lending assistance platform, its performance shifts and business trajectory always spark industry reflection. In 2024, the company saw revenue and net profit climb by 5.38% and 46.32% year-over-year, respectively. However, loan origination and outstanding loan balances fell by 5.68% and 12.78%, respectively. By the end of 2024, Qifu Technology’s outstanding loan balance stood at 137 billion yuan.  

At their core, internet lending assistance platforms link traffic on one side with funding partners—like banks and consumer finance companies—on the other to issue loans to customers. What’s worth noting is that, after years of growth, leading platforms like Qifu Technology have amassed user bases exceeding 100 million and secured licenses for small loans and financing guarantees. This positions them as both traffic providers and funding sources—a dynamic that shines through in Qifu Technology’s 2024 financials.  

A closer look at the 2024 report reveals that on-balance-sheet loans (financing income) and light-capital referral services have emerged as the company’s new growth drivers, reflecting its dual role as a funding and traffic provider. While several top lending assistance platforms have unique second-growth engines, we’ll explore the others in detail later. “One Internet Finance Goose” has organized Qifu Technology’s financial data into clear tables, highlighting its growth segments and cost breakdowns.  

Two key takeaways from these tables stand out:  

What is this “referral service” that surged 199% year-over-year and made up nearly 39% of total revenue?

In 2024, Qifu Technology’s “referral service” generated 2.843 billion yuan in revenue, a 199% increase from the previous year, marking it as the biggest driver of income growth. Past quarterly reports covered by “One Internet Finance Goose” have touched on this segment. For example, in the Q2 2024 report, referral service fee income hit 623.5 million yuan, up 287.51% year-over-year, with the company attributing the growth to expanded loan facilitation via ICE (Intelligent Credit Engine). In an earlier article (hyperlink: “Interim Measures for Small Loan Management Gradually Impact Customer Acquisition by Lending Assistance Institutions”), “One Internet Finance Goose” also highlighted Qifu Technology’s “Zhixin” (Smart Credit) business. This involves partnerships with peer firms like Juzi Shuke, Chengdu Youka, Bairong Yunchuang, Samoyed, and Duxiaoman through API-driven traffic redirection, as well as quasi-guarantee collaborations with financial institutions or guarantee companies. Essentially, it directs traffic via APIs at the front end while referring loans to peers through its own products at the back end—a now-common strategy in the lending assistance space.

Qifu Technology has been an early adopter of embedded finance channels for customer acquisition, a point frequently noted in its reports over the past two years. In Q4 2024, roughly 47% of new credit-approved users came from these channels. The explosive growth in “referral service” revenue underscores the sheer scale of assets it refers to peer institutions or banks via the “API” model. During its investor call, the company revealed that platform services accounted for about 53% of total loan volume and 58% of the year-end loan balance in 2024.  

Financing income jumped nearly 30% year-over-year.

The “financing income” segment brought in 6.637 billion yuan in 2024, up 29.88% from the prior year. The report ties this increase to a rise in on-balance-sheet loan balances, which can be traced to expanded lending through its “Fuzhou Qifu Network Small Loan Co., Ltd.” (formerly Fuzhou 360 Network Small Loan Co., Ltd.) under its small loan license. The report also disclosed that Qifu Technology issued 15 billion yuan in ABS (asset-backed securities) using this license in 2024. Data compiled by “One Internet Finance Goose” shows issuance costs for these ABS tranches ranged from 2% to 3%.

Earlier this year, the National Financial Regulatory Administration’s Interim Measures for the Supervision and Management of Small Loan Companies outlined that small loan firms issuing ABS must first gain approval from local financial regulators and meet criteria including: (1) robust corporate governance, internal controls, and risk management; (2) a solid reputation with no major violations in the past three years; (3) a strong regulatory rating; and (4) other legal and regulatory requirements. Clearly, Qifu Technology earned approval from Fujian’s financial regulators and met these standards, as its small loan unit has already issued four ABS tranches totaling 3.2 billion yuan this year.  

Acting as a funding source, small loan companies can partner with other funders for joint lending or even wholesale funds to higher-rate lending assistance platforms, generating fixed income or profit shares.  

Both heavy- and light-capital loan facilitation revenues declined year-over-year.

Heavy-capital loan facilitation income was 1.017 billion yuan, and light-capital facilitation and service income was 2.117 billion yuan, totaling roughly 3.134 billion yuan—or 18% of total revenue. Put simply, traditional loan facilitation is no longer Qifu Technology’s mainstay. The company has moved beyond being a conventional lending assistance provider.  

High collection costs.  

Among expenses, facilitation, origination, and service costs were the largest, accounting for about 30% of total spending. The report attributes this rise to elevated collection expenses. Still, Qifu Technology’s collection efficiency has improved quarterly—for instance, Q4 2024 saw a 3.23 percentage point rise in the 30-day recovery rate. Provisions for receivables also increased by 28.91% from 2023, which the report links to the expanded scale of on-balance-sheet loan origination, aligning with the increased lending via its small loan license noted earlier.  

Other notable points (some from the investor call):

Strong demand for AI-driven solutions from financial institutions: The credit tech solutions business added 11 new partners in 2024, bringing the total to 16. Loan volume under this segment grew at a 17% monthly compound rate. Partners have voiced a strong need for AI-driven solutions, prompting Qifu Technology to plan an AI-plus banking agency platform to tackle banks’ core process challenges and boost efficiency.  

User activity improved after September 24, 2024: Q4 loan application rates were 10% higher than Q3. Credit demand rose seasonally in January, particularly among SMEs, dipped during February holidays, and rebounded in March.  

More focus on AI-driven risk decisions: In 2025, the company will channel more traffic into end-to-end AI-driven risk decision processes.  

Rising customer costs: The cost per approved credit line climbed to 312 yuan in Q4 2024, up from 265 yuan the prior quarter.

Share Buyback via Convertible Bond Issuance

On March 25, 2025, Qifu Technology announced the pricing of a US$600 million convertible senior notes offering due 2030, as reported by Globe Newswire from Shanghai, China. The notes, offered to qualified institutional buyers under Rule 144A of the Securities Act of 1933, carry a 0.50% annual interest rate, payable semiannually starting October 1, 2025, and will mature on April 1, 2030 unless repurchased, redeemed, or converted earlier. The company also granted initial purchasers an option to buy an additional US$90 million in notes within 13 days of issuance.  

The net proceeds will fund a share repurchase program, including American Depositary Shares (ADSs) and/or Class A ordinary shares, concurrent with and following the notes’ pricing. This aligns with the newly authorized “March 2025 Share Repurchase Plan,” complementing an existing plan from November 2024. The company expects this move to boost 2025 earnings per ADS immediately upon closing, aided by concurrent repurchases and the notes’ cash-par conversion mechanism. Noteholders can request a full or partial repurchase in cash on April 3, 2028, or upon certain fundamental changes, at 100% of the principal plus accrued interest.  

In conclusion, in an era where traffic is king, a sizable user base unlocks endless business potential. By the end of 2024, Qifu Technology linked with 162 financial institutions, had 261.2 million registered users, 56.9 million users with approved credit lines, and 34.4 million successful borrowers. Looking forward, the company cited ongoing macroeconomic uncertainty and plans a cautious 2025 strategy focused on operational efficiency. For Q1 2025, it projects net profit of 1.75 billion to 1.85 billion yuan and non-GAAP net profit of 1.8 billion to 1.9 billion yuan, up 49% to 58% year-over-year.

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