LexinFintech: Focus On Downside Risks For Third Quarter Results

Nov. 14, 2022 6:48 AM ETLexinFintech Holdings Ltd. (LX)3 Comments

Summary

  • LexinFintech's actual Q3 2022 earnings might come in below expectations, considering China's retail sales for the quarter and the company's provisioning approach.
  • On the positive side of things, LX's valuations are undemanding, and there are re-rating catalysts for US-listed Chinese companies as a group.
  • I stick with my Hold rating for LexinFintech, after considering both the risk of an earnings miss and the potential for valuation re-rating.
  • Looking for more investing ideas like this one? Get them exclusively at Asia Value & Moat Stocks. Learn More »

CNBC Presents East Tech West - Day 2

Dave Zhong

Elevator Pitch

I have a Hold rating for LexinFintech Holdings Ltd.'s (NASDAQ:LX) stock, which remains unchanged from my prior article for LX published on August 30, 2022.

I lowered my investment rating for LexinFintech from a Buy

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Asia Value & Moat Stocks is a research service for value investors searching for attractive Asia-listed investment opportunities  with a huge gap between price and intrinsic value, leaning towards both deep value balance sheet bargains (i.e. buying assets at a discount e.g. net cash stocks, net-nets, low P/B stocks, sum-of-the-parts discounts) and wide moat stocks (i.e. buying earnings power at a discount in great companies like "Magic Formula" stocks, high quality businesses, hidden champions and wide moat compounders).


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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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