Qfin shares fall as quarterly profit misses estimates

Shares of Qfin Holdings Inc. fell on Friday after the company reported quarterly profit that missed analyst estimates, extending losses from the previous session.

The China-based consumer finance provider posted adjusted net income of $14.2 million for the three months ended March 31, below the $17.5 million forecast from Refinitiv. Revenue totaled $112.7 million, also trailing the $118.4 million estimate.

Qfin attributed the shortfall to slower loan demand and higher credit costs amid a challenging macroeconomic environment in China. The company said delinquency rates on its loan portfolio rose to 2.8% from 2.4% in the prior quarter, reflecting mounting repayment pressures on borrowers.

The stock, which had already declined 3.2% on Thursday, dropped an additional 6.8% in early trading to $12.45, extending losses to a two-week low. Analysts at Citigroup and Goldman Sachs downgraded their ratings on the stock, citing concerns over margin compression and regulatory risks in the sector.

Qfin’s management acknowledged the headwinds but highlighted efforts to tighten underwriting standards and reduce exposure to higher-risk borrowers. The company also reaffirmed its full-year guidance, though it did not provide revised targets following the quarterly miss.

Investors will monitor the company’s next earnings call for further details on its strategy to navigate the current downturn in China’s consumer credit market.