CNFinance Holdings (CNF) AI Stock Analysis

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CNFinance Holdings

(NYSE:CNF)

62Neutral

CNFinance Holdings exhibits strong technical performance and attractive valuation, which are positive indicators for potential growth. However, the significant revenue decline and high financial leverage are concerning. Improvements in cash flow and profitability offset some risks, but the mixed financial performance tempers the overall score.

CNFinance Holdings (CNF) vs. S&P 500 (SPY)

Market Cap

$53.65M

Dividend YieldN/A

Average Volume (3M)94.08K

Price to Earnings (P/E)2.3

Beta (1Y)1.08

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees897

SectorFinancial

Sector Strength86

IndustryFinancial - Mortgages

Share Statistics

EPS (TTM)N/A

Shares Outstanding68,582,160

10 Day Avg. Volume220,032

30 Day Avg. Volume94,083

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

CNFinance Holdings Business Overview & Revenue Model

Company DescriptionCNFinance Holdings Limited is a leading home equity loan service provider in China, primarily serving small and micro-enterprise owners. The company operates in the financial services sector, focusing on assisting borrowers in securing loans by offering their residential properties as collateral. CNFinance's core services include facilitating loan applications and providing post-loan management services, leveraging its extensive network of branches and a robust technology platform.

How the Company Makes MoneyCNFinance Holdings generates revenue primarily through the facilitation of home equity loans. The company's revenue model is based on charging fees for its services, which include loan facilitation, risk management, and post-loan services. CNFinance earns interest income from the loans it facilitates, taking advantage of the spread between the interest rates charged to borrowers and the costs of securing funding from its financial partners. Additionally, CNFinance may benefit from strategic partnerships with banks and financial institutions that provide the capital for the loans, further enhancing its capacity to serve a broad client base.

CNFinance Holdings Financial Statement Overview

Summary

CNFinance Holdings shows mixed financial performance. Revenue has declined significantly, raising concerns. However, improvements in EBIT and net profit margins, along with increased free cash flow, indicate operational efficiencies and positive cash generation. The high leverage on the balance sheet poses risks, but strategic management could improve financial health.

Income Statement

―

The company has shown a significant decline in total revenue over the years, with a revenue drop from $1,302 million in 2020 to $845 million in 2023. Gross profit margins are negative, indicating potential inefficiencies or high costs. However, the EBIT margin is relatively strong, suggesting operational efficiency in certain areas. Net income has increased from 2022 to 2023, improving the net profit margin, but overall revenue contraction is a concern.

Balance Sheet

The balance sheet reflects high leverage with a debt-to-equity ratio consistently above 2.0, indicating reliance on debt financing. However, the equity ratio suggests a moderate level of asset financing through equity. Return on Equity (ROE) is positive but not particularly strong, reflecting limited return generation on equity capital. Despite these concerns, the company has maintained a reasonable level of stockholders' equity.

Cash Flow

―

The company has demonstrated a healthy increase in free cash flow from 2022 to 2023, indicating improved cash generation capabilities. The operating cash flow to net income ratio is strong, suggesting adequate cash earnings. However, the free cash flow to net income ratio reflects potential areas of improvement in converting profits to cash. Cash flow stability is crucial, given the balance sheet's leverage.

Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
844.57M	1.07B	622.24M	1.30B	1.79B
	Gross Profit
844.57M	-10.00T>	-10.00T>	-172.74B	-10.00T>
	EBIT
564.49M	957.36M	93.77M	162.70M	721.01M
	EBITDA
0.00	0.00	0.00	0.00	0.00
	Net Income Common Stockholders
164.62M	135.35M	65.21M	114.85M	534.64M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.00B	16.40T	3.48B	2.49B	2.49B
	Total Assets
16.36B	14.48B	14.41B	12.20B	13.30B
	Total Debt
8.27B	7.76B	8.06B	5.67B	6.69B
	Net Debt
5.72B	5.84B	5.67B	3.59B	4.85B
	Total Liabilities
12.36B	7.87B	8.30B	5.87B	6.82B
	Stockholders Equity
4.01B	3.89B	3.82B	3.74B	3.60B
Cash Flow		Free Cash Flow
1.59B	829.36M	685.89M	1.12B	1.29B
	Operating Cash Flow
1.71B	919.25M	689.69M	1.12B	1.30B
	Investing Cash Flow
-2.48B	-1.10B	-2.35B	524.05M	4.94B
	Financing Cash Flow
1.01B	-288.16M	1.93B	-1.37B	-7.70B

CNFinance Holdings Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price0.78

Price Trends

50DMA

0.82

Negative

100DMA

0.96

Negative

200DMA

1.06

Negative

Market Momentum

MACD

>-0.01

Negative

RSI

53.06

Neutral

STOCH

52.53

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNF, the sentiment is Neutral. The current price of 0.78 is above the 20-day moving average (MA) of 0.71, below the 50-day MA of 0.82, and below the 200-day MA of 1.06, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 53.06 is Neutral, neither overbought nor oversold. The STOCH value of 52.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CNF.

CNFinance Holdings Risk Analysis

CNFinance Holdings disclosed 87 risk factors in its most recent earnings report. CNFinance Holdings reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

CNFinance Holdings Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VEL	68 Neutral	$624.73M	8.85	13.62%	―	32.62%	16.91%
Sector *	64 Neutral	$12.52B	9.82	7.95%	16985.69%	12.70%	-4.60%
CNF	62 Neutral	$53.65M	2.34	4.11%	―	―	―
PFSI	62 Neutral	$5.07B	15.06	9.32%	1.12%	23.79%	121.61%
GHLD	61 Neutral	$768.06M	8.23	7.97%	3.88%	40.27%	―
ECPG	56 Neutral	$773.79M	―	-16.34%	―	6.78%	33.06%
LDI	48 Neutral	$377.52M	―	-31.41%	―	3.76%	16.19%

* Financial Sector Average

Performance Comparison

CNF

CNFinance Holdings

0.78

-0.87

-52.73%

ECPG

Encore Capital

33.00

-10.24

-23.68%

PFSI

PennyMac Financial

95.82

5.08

5.60%

LDI

loanDepot

1.02

-1.13

-52.56%

VEL

Velocity Financial

16.85

-1.07

-5.97%

GHLD

Guild Holdings

12.41

-0.69

-5.27%

CNFinance Holdings Earnings Call Summary

Earnings Call Date:May 22, 2025

(Q4-2023)

% Change Since: -24.27%|

Next Earnings Date:May 22, 2025

Earnings Call Sentiment Positive

The overall sentiment of the call is cautiously optimistic. Despite challenges in the real estate market and a decline in quarterly net income, CNFinance has demonstrated solid annual growth in loan facilitation and net income, along with decreased interest expenses and improved asset quality. The company's strategic partnerships and technology investments have contributed to its resilience.

Q4-2023 Updates

Positive Updates

Loan Facilitation Growth

CNFinance facilitated loans of RMB 17.3 billion in 2023, representing a year-on-year growth of 18%.

Decrease in Interest Expenses

Interest expenses were 8% lower compared to 2022, contributing to improved financial performance.

Strong Net Income Growth

Net income for 2023 reached RMB 165 million, a year-on-year increase of 21%.

Commercial Bank Partnership Success

Loans originated under the commercial bank partnership totaled RMB 5 billion, with net revenue of RMB 88 million.

Improved Asset Quality

The delinquency ratio dropped from 19.2% in 2022 to 15.6% in 2023.

Negative Updates

Decline in Net Income for Q4

Net income for Q4 decreased by 33% to RMB 19 million from RMB 28 million in the previous year.

Increased Operating Expenses

Total operating expenses increased by 15% in Q4 2023 compared to the previous year.

Challenges in Loan Demand

Loan demand from MSE owners was lower than expected due to uncertainties in the real estate market.

Company Guidance

During the CNFinance Q4 2023 earnings call, the company provided guidance indicating strong year-end results despite challenges in China's macroeconomic and real estate environment. CNFinance facilitated RMB 17.3 billion in loans, marking an 18% year-over-year increase, while net income rose by 21% to RMB 165 million. The company achieved a notable 23% reduction in provisions for credit losses and a decrease in interest expenses by 8% compared to 2022. Additionally, the delinquency ratio improved significantly, dropping from 19.2% at the end of 2022 to 15.6% by the end of 2023. CNFinance's strategy moving forward includes diversifying product offerings, prioritizing asset quality, and enhancing compliance measures, with a target of originating RMB 20 billion in loans for 2024.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.