U.S. Stock Market News | LexinFintech surges another 26.84%, doubling its stock price in six trading days

According to the Zhitong Finance and Economics APP, on Tuesday (October 1st) Eastern Time, the U.S. stock market closed with the continuous surge of Chinese concept stocks, ongoing valuation recovery, and the upcoming release of Q3 results driving the leading Chinese new consumer digital technology service provider Lexin (LX.US) up by 26.84% to a closing price of $3.45, with a daily turnover of $48.4166 million, nearly double the $25.85 million from the previous day.

Lexin's stock price opened high and continued to rise, reaching a peak of $2.94 before the closing price of $2.72, setting a new high since February 9, 2023. Post-market data also shows a further 0.77% increase in Lexin's stock price.

This marks the sixth consecutive trading day of gains for Lexin, with its stock price rising by 106.6% during this period. The trading volume of $48.4166 million is the highest in 39 months for Lexin, surpassing the previous high of $66.02 million on June 24, 2021.

On the market front, due to increased oil price volatility caused by tensions in the Middle East, the three major U.S. stock indexes fell at the close, with the Dow down 0.41%, the Nasdaq down 1.53%, and the S&P 500 down 0.93%.

Chinese concept stocks continued their upward trend, with the Nasdaq Golden Dragon China Index rising by 5.48%. Among popular Chinese concept stocks, Bilibili rose by over 14%, Li Auto by over 11%, Pinduoduo by over 8%, JD.com by over 7%, XPeng and Nio by over 5%.

The rise in Lexin's stock price is mainly driven by optimistic expectations for the second half-year performance, valuation recovery, and the upcoming release of Q3 results.

Lexin's Q2 2024 financial report shows a revenue of RMB 3.64 billion, a 12.3% increase quarter-on-quarter; net profit attributable to shareholders was RMB 227 million, a 12.4% increase quarter-on-quarter.

Lexin is set to release its Q3 results in November, with the market generally having optimistic expectations for it.

During the Q2 2024 financial report conference call, Lexin CEO Xiao Wenjie stated that in the second half of the year, Lexin will continue to adhere to prudent operation principles, prioritize risk management, and focus on the following: first, on the basis of risk returning to normal levels, promote steady growth in scale and comprehensively enhance profitability; second, leverage the differentiated advantages of its own scenarios to increase user stickiness and enhance user activity; third, actively promote the accelerated development of overseas business, closely monitor and explore more emerging market opportunities.

In the view of the Zhitong Finance and Economics APP, oversold high-quality stocks have always been an important investment opportunity. The simple yet hardcore reason is that investment returns usually come from performance growth, valuation appreciation, and dividends, which are closely related. Oversold high-quality stocks correspond to expectations in these three aspects, making their investment value particularly significant.

In the semi-annual financial report, Lexin continued its bi-annual dividend policy. Based on the closing price of $1.77 before the financial report release (August 27th, Eastern Time), the company's semi-annual dividend yield exceeded 8.1%, far exceeding the yield of mainstream financial products on the market. It can be seen that Lexin is in a "value oasis" with sufficient cost-effectiveness.

Performance is the catalyst for driving stock prices and dividends. Building on seven consecutive quarters of revenue growth, Lexin's overseas business has made significant breakthroughs. For example, in the second quarter, the loan scale in the Mexican market increased by 61% quarter-on-quarter, with revenue increasing by 113%, and the company has now made overseas business an important strategic direction Previously affected by the capital market, LexinFintech has dropped by around 80%. This rebound is a return to value, but based on PE and PB values, it is still at a low level, with relatively large growth potential compared to its peers.

It is reported that LexinFintech was established in August 2013 and is based in Shenzhen, China. It has been actively bridging online and offline broad consumer scenarios through its platforms, connecting millions of young Chinese consumers with new consumer brands. In December 2017, LexinFintech officially landed on the NASDAQ in the United States