Qifu Technology Q4: Risks Surge to 5-Year High, Traffic Revenue Drops 90%, but the Industry Still Has a Future

(Source: HuBo Finance)

Leading loan assistance industry player Qifu Technology recently released its financial report, showing that the company achieved a total net revenue of 19.205 billion yuan in 2025, an 11.9% increase year-over-year; net profit was 5.976 billion yuan, a slight decrease of 4.3% year-over-year.

In the fourth quarter, due to the implementation of new loan assistance regulations, the company’s asset risk was under pressure, and business scale shrank. However, as an industry leader, the quarterly net profit still exceeded 1 billion yuan. Amid the sluggish “light-asset” business of 24+, value-added services took on the revenue leadership, contributing over half of the light-capital business income.

Quarterly profit still exceeds 10 billion yuan, with projected annual profit reaching 30 billion+

Affected by the new loan assistance regulations, Qifu Technology’s asset risk has significantly increased.

Preliminary indicators show that on the first day of the fourth quarter, the overdue rate reached 6.1%, up 20% from the second quarter, hitting the highest level since Q2 2020; the 30-day recovery rate fell to 84.1%, also the lowest since Q2 2020.

Despite this, compared to Xin Ye Technology, which had only a 0.6 percentage point higher overdue rate on the first day and a 1.9 percentage point lower 30-day recovery rate, the resilience of the leading loan assistance industry remains evident.

Looking at the vintage loss rate (credit loss rate on loans issued), asset risk for loans issued in the second half of 2025 shows a significant upward trend, with risk levels at MOB6 in Q2 2025 reaching a new high since 2020.

Although the company has promptly tightened risk standards and optimized high-quality user screening, it is expected that the C-M2 migration rate in February will return to the levels of July-August 2025. However, management also admits that improving asset quality will require time to verify sustainability.

Based on prudent management principles, the company has significantly increased loan-related provisions, with receivable loan provisions reaching 1.19 billion yuan, a 99% YoY increase and a 42% QoQ increase; meanwhile, the provision coverage ratio fell to 481%, down 132 percentage points from the previous quarter.

Even under the dual pressures of shrinking loan scale and increased provisions, the company still achieved a net profit of 1.016 billion yuan in Q4, surpassing the total of other listed platforms that have announced financial reports so far. Its profitability remains unique.

The company also forecasts that the future take rate will remain around 3%, meaning that if the loan balance stays between 120 billion and 130 billion yuan, annual profits could reach 3.6 to 3.9 billion yuan.

The loan assistance industry still has a future.

Traffic is no longer being bought, but value-added services remain stable

In Q4, the company facilitated total loans of 702.97 billion yuan, with light-capital mode (including ICE Zhixin platform) loans totaling 307.72 billion yuan, down 35.6% YoY, a larger decline than heavy-capital models.

This is because, after the new loan assistance regulations took effect, the company lowered the maximum pricing for Zhixin platform loans from 36% to within 24%. Assets previously priced at 36% became unprofitable under the new pricing system, forcing the company to abandon them.

Due to the sharp decline in light-asset lending business and the reduction in commission ratios, the company’s Q4 loan service fees and referral fees fell to 2.0 billion yuan and 1.0 billion yuan respectively, with referral fees dropping from 1 billion in Q1 to 100 million. The market clearly has no appetite for volume.

Compared to Xin Ye Technology, which reported 6.6/10.18 and 3.6/4.16, its main business performed better. However, considering its scale of hundreds of billions, the profit margin of its credit business is already very low.

While light-capital loan assistance business languished, value-added services demonstrated strong resilience, unaffected by fluctuations in the credit market. In Q4, other service fees reached 360 million yuan, a 112% YoY increase. According to the company, this growth mainly benefited from explosive development in value-added services.

Value-added services mainly include membership benefits, credit reports, insurance, and other intermediary services, with income highly correlated to app activity and user transaction activity. They are minimally sensitive to credit market fluctuations and have become an important profit supplement during industry downturns.

Because of this, when the light-asset business cooled down, the company’s “other service fees” maintained rapid growth. Coupled with the rapid decline in referral and light-asset scale, their proportion in this segment increased to nearly 55%, more than five times higher than the same period last year.

Notably, Qifu Technology upgraded its membership business to the “FuNeng Plan” this quarter, integrating it into the app’s “Life” channel. The “FuNeng Plan” still adopts the “enjoy first, pay later” model, provided by the company’s subsidiary “Qifu Small Loan.”

This means users can pay for membership and other value-added services through Qifu Small Loan, which may cause some related fluctuations in future financial reports.

Overseas expansion planned for a year, expected progress this year

Overseas business is a core part of Qifu Technology’s “One Core, Two Wings” strategy and a key layout for achieving long-term growth and diversified business structure. The company adopts a dual-track approach, focusing on mature markets like the UK and Canada, while also deepening its presence in emerging markets such as Mexico, aiming to balance long-term industry barriers with short-term performance growth.

Among these, the UK is the earliest overseas mature market that Qifu has entered, with nearly a year of deployment and local management in place. However, to date, there has been no substantive news about obtaining licenses or qualifications in the UK. Management stated in a March 2025 conference call that overseas expansion prioritizes markets with mature regulation, stable policies, and sound legal and credit systems.

The new loan assistance regulations announced in April proved to be a forewarning.

Mexico is one of the company’s key overseas markets. The industry entry barrier there is relatively low, with players like YangQianGuan, KuaiNiu, Lexin, and Didi already heavily involved. As a latecomer, Qifu Technology has the advantage of being able to leverage its brand influence and salary advantages to compete for talent. The company plans to expand its overseas team to about 200 people by the end of the year to further strengthen local operations.

Of course, Qifu Technology, which aims to go global, will not be satisfied with just the UK and Mexico. Facing a red ocean at home, the company may enter multiple markets worldwide in the future.