FinVolution Group (NYSE: FINV)

Sector: Financial Services Industry: Credit Services CIK: 0001691445
Market Cap 1.32 Bn
P/B 0.57
P/E 3.35
P/S 0.67
ROIC (Qtr) 109.71
Div Yield % 0.00
Rev 1y % (Qtr) 6.43
Total Debt (Qtr) 161.19 Mn
Debt/Equity (Qtr) 0.07

About

FinVolution Group, operating under the stock symbol FINV, is a prominent player in the financial services industry. With a focus on providing financial services, the company's operations span across consumer lending, wealth management, and payment solutions. These services are predominantly offered in China, a country with a vast and growing market for financial services. FinVolution's primary source of revenue is its consumer lending business, which encompasses personal loans, credit card loans, and other types of consumer financing. The company's...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 218.83M provides robust 1.36x coverage of total debt 161.19M, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 218.83M provides exceptional 129.48x coverage of minority interest expenses 1.69M, showing strong core operations.
  • Strong tangible asset base of 3.67B provides 22.78x coverage of total debt 161.19M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 213.54M exceeds capital expenditure of 5.29M by 40.35x, indicating strong organic growth funding capability.
  • Tangible assets of 3.67B provide exceptional 19.77x coverage of deferred revenue 185.72M, showing strong service capability backing.

Bear case

  • Operating cash flow of 218.83M barely covers its investment activities of (365.39M), with a coverage ratio of -0.60, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (365.39M) provide weak support for R&D spending of 73.08M, which is -5x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 218.83M provides insufficient coverage of deferred revenue obligations of 185.72M, which is 1.18x, raising concerns about future service delivery capabilities.
  • Operating cash flow of 218.83M barely covers operating expenses of 687.74M with a 0.32 ratio, suggesting thin operational efficiency margins and limited flexibility.
  • Operating cash flow of 218.83M provides only 2.99x coverage of R&D expenses of 73.08M, suggesting vulnerability in maintaining innovation investments.

Peer comparison

Companies in the Credit Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 V Visa Inc. 685.45 Bn 34.17 17.14 25.17 Bn
2 MA Mastercard Inc 520.38 Bn 36.52 16.53 18.98 Bn
3 AXP American Express Co 266.36 Bn 25.27 4.08 59.23 Bn
4 COF Capital One Financial Corp 111.93 Bn 102.41 3.87 51.48 Bn
5 PYPL PayPal Holdings, Inc. 58.35 Bn 11.87 1.78 11.28 Bn
6 SYF Synchrony Financial 32.00 Bn 9.16 3.32 14.43 Bn
7 SOFI SoFi Technologies, Inc. 29.56 Bn 46.17 8.90 2.81 Bn
8 ALLY Ally Financial Inc. 14.44 Bn 52.52 1.83 20.63 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets -0.11 1.03
EV to Cash from Ops. EV/CFO -1.92 4.72
EV to Debt EV to Debt -2.61 2.99
EV to EBIT EV/EBIT -0.88 -246.63
EV to EBITDA EV/EBITDA -1.17 -62.30
EV to Free Cash Flow [EV/FCF] EV/FCF -1.97 7.33
EV to Market Cap EV to Market Cap -0.32 10.21
EV to Revenue EV/Rev -0.21 10.01
Price to Book Value [P/B] P/B 0.57 3.47
Price to Earnings [P/E] P/E 3.35 13.86
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.59
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.22
Dividend per Basic Share Div per Share (Qtr) 0.00 0.68
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 4.82
Interest Coverage Interest Coverage 0.00 -64.96
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 93.06 -85.80
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -4.69 7.91
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 5.47
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 25.66 16.85
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 0.00 -0.69
EBIT Growth (1y) % EBIT 1y % (Qtr) 30.62 33.67
EBT Growth (1y) % EBT 1y % (Qtr) 30.62 1.73
EPS Growth (1y) % EPS 1y % (Qtr) 29.41 -64.54
FCF Growth (1y) % FCF 1y % (Qtr) -21.40 129.37
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 6.95 18.73
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.07 0.23
Cash Payout Ratio Cash Payout Ratio 0.00 0.05
Cash Ratio Cash Ratio 0.00 0.46
Current Ratio Current Ratio 0.00 1.05
Debt to Equity Ratio Debt/Equity (Qtr) 0.07 4.88
Interest Cover Ratio Interest Cover Ratio 0.00 -64.96
Times Interest Earned Times Interest Earned 0.00 -64.96
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.00 -17.83
EBIT Margin % EBIT Margin % (Qtr) 172.88 125.65
EBT Margin % EBT Margin % (Qtr) 24.28 -9.92
Gross Margin % Gross Margin % (Qtr) 80.60 72.34
Net Profit Margin % Net Margin % (Qtr) 20.00 -23.76