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Lufax Holding (LU)
NYSE:LU
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Lufax Holding
(NYSE:LU)
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Rating:52Neutral
Price Target:―
Lufax Holding faces significant financial hurdles with declining income and profitability, impacting its overall stock score. Despite operational efficiencies and positive cash flow, the negative valuation metrics and financial instability weigh heavily. Technical analysis and earnings call insights show potential growth areas but also underline persistent challenges. The stock's dividend yield offers some appeal, but broader risks must be managed for improvement.
Positive Factors
Consumer Finance Growth
The significant growth in consumer finance loans indicates a strong demand for Lufax's services, potentially leading to increased market share and revenue stability in the long term.
Improved Asset Quality
Improved asset quality with a lower NPL ratio suggests better risk management, which can enhance financial stability and reduce future credit losses.
Operational Efficiency
A significant reduction in operating expenses demonstrates operational efficiency, which can improve profitability and provide a buffer against revenue fluctuations.
Negative Factors
Declining Revenue
The sharp decline in revenue highlights significant financial challenges, potentially impacting the company's ability to invest in growth and maintain competitive positioning.
Net Loss
A net loss indicates profitability issues, which can strain cash reserves and limit strategic investments, affecting long-term growth prospects.
Increased Credit Impairment Losses
Rising credit impairment losses suggest deteriorating credit conditions, which can lead to higher costs and reduced financial flexibility, impacting future earnings.
Lufax Holding (LU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.43B
Dividend YieldN/A
Average Volume (3M)2.52M
Price to Earnings (P/E)―
Beta (1Y)1.33
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees36,215
SectorFinancial
Sector Strength70
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)N/A
Shares Outstanding866,688,900
10 Day Avg. Volume1,929,301
30 Day Avg. Volume2,515,211
Financial Highlights & Ratios
PEG Ratio-0.08
Price to Book (P/B)0.07
Price to Sales (P/S)0.15
P/FCF Ratio0.42
Enterprise Value/Market Cap0.00
Enterprise Value/Revenue0.00
Enterprise Value/Gross Profit0.00
Enterprise Value/Ebitda0.00
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)2.36
Revenue Forecast (FY)$25.10B
Lufax Holding Business Overview & Revenue Model
Company DescriptionLufax Holding Ltd operates a technology-empowered personal financial services platform in China. It offers loan products, including unsecured loans and secured loans, as well as consumer finance loans. The company also provides wealth management platforms, such as Lufax (Lu.com), Lu International (Singapore), and Lu International (Hong Kong) to the middle class and affluent investors to invest in products and portfolios; retail credit facilitation services platform that offers small business owners with lending solutions; and technology empowerment solutions for financial institutions. Lufax Holding Ltd was founded in 2005 and is headquartered in Shanghai, China.
How the Company Makes MoneyLufax makes money primarily through two main revenue streams: retail credit facilitation and wealth management. In the retail credit facilitation segment, the company generates income by connecting borrowers with financial institutions, earning fees for facilitating loans. Lufax's wealth management segment earns revenue by offering a variety of investment products through its platform, charging management and advisory fees. Additionally, the company benefits from strategic partnerships with financial institutions, leveraging these relationships to expand its product offerings and customer base.
Lufax Holding Earnings Call Summary
Earnings Call Date:Oct 21, 2024
(Q3-2024)
| % Change Since: |
Next Earnings Date:Dec 09, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with notable growth in consumer finance and improved asset quality, but also significant challenges including decreased income and a quarterly net loss. While there are positive developments such as the acquisition of a new lending license, the financial performance shows areas of concern.Q3-2024 Updates
Positive Updates
Growth in Consumer Finance Business
New consumer finance loans increased by 27.8% year-over-year and accounted for 52% of total renewal sales in the third quarter.
Improved Asset Quality
The asset quality of consumer finance loans stayed strong, with the NPL ratio decreasing to 1.2% from 1.4% in the second quarter.
Decreased Operating Expenses
Total operating expenses declined by 35.9% to RMB 3 billion from RMB 4.7 billion.
Decreased Sales and Marketing Expenses
Sales and marketing expenses decreased by 49.9% to RMB 1.1 billion.
New Nationwide Small Lending License
Lufax acquired a nationwide small lending license in July and provided more than RMB 1 billion in loans under this new license.
Negative Updates
Significant Decrease in Total Income
Total income decreased by 31.1% to RMB 5.5 billion from RMB 8.1 billion.
Net Loss for the Quarter
Recorded a net loss of RMB 725 million for the third quarter.
Increased Credit Impairment Losses
Credit impairment losses increased by 9% to RMB 3.3 billion.
Decrease in Technology Platform-Based Income
Technology platform-based income decreased by 49.9% to RMB 1.6 billion.
Challenges in Small Business Loan Demand
Puhui loan demand remained weak due to the complex macro environment faced by small business owners.
Company Guidance
During the third quarter of 2024, Lufax Holding reported a total loan volume of RMB 50.5 billion, marking a 11.7% increase from the previous quarter, despite challenging macroeconomic conditions. The company saw a notable 27.8% year-over-year rise in new consumer finance loans, which represented 52% of total renewal sales. Asset quality remained stable, with the C-M3 flow rate of Puhui loans at 0.9% and a decrease in the NPL ratio of consumer finance loans to 1.2%. Total income declined by 31.1% to RMB 5.5 billion, largely due to a 41.8% reduction in outstanding loan balance, while expenses fell by 19.2% to RMB 6.3 billion. The take rate increased by 1.9 percentage points to 9.7%, driven by an increased proportion of loans under the 100% guarantee model. Despite a net loss of RMB 725 million, Lufax remains optimistic about leveraging its consumer finance and small lending licenses to reduce funding costs and improve its capital management efficiency.Lufax Holding Financial Statement Overview
Summary
Lufax Holding is experiencing financial challenges, with declining revenues and profitability. The income statement reflects negative profit margins, while the balance sheet shows manageable leverage but potential instability due to declining equity. Positive cash flow generation is a strength, but the company must address revenue contraction and manage leverage for long-term health.Income Statement
Lufax Holding's income statement reveals declining revenue trends and negative profit margins. The TTM (Trailing-Twelve-Months) data shows a net loss, with a net profit margin of -16.7% and negative EBIT margin. Revenue has decreased significantly from the previous annual period, indicating financial stress. However, a strong EBITDA margin of 58.6% suggests potential operational efficiency.45
Neutral
Balance Sheet
The balance sheet indicates a moderate level of debt with a debt-to-equity ratio of 0.56, suggesting manageable leverage. The equity ratio stands at 40.9%, indicating a reasonable proportion of equity financing. However, the decline in stockholders' equity and total assets over recent periods could signal potential financial instability.60
Neutral
Cash Flow
The cash flow statement shows a positive free cash flow and a high operating cash flow to net income ratio, indicating strong cash generation relative to reported losses. However, the free cash flow has decreased from the previous year, and the free cash flow to net income ratio is negative due to the net loss.55
Neutral
| Breakdown | TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 31.92B | 41.68B | 69.03B | 65.01B | 50.99B | 43.77B |
| Gross Profit | 13.50B | 28.99B | 55.42B | 48.24B | 41.79B | 38.91B |
| EBITDA | -1.26B | 0.00 | 34.59B | 24.22B | 18.77B | 20.25B |
| Net Income | -3.38B | 886.87M | 8.70B | 16.80B | 12.35B | 13.33B |
Balance Sheet | ||||||
| Total Assets | 206.45B | 237.02B | 349.26B | 360.43B | 248.89B | 149.53B |
| Cash, Cash Equivalents and Short-Term Investments | 28.32B | 39.99B | 44.39B | 35.29B | 24.65B | 7.92B |
| Total Debt | 47.59B | 44.86B | 53.11B | 44.80B | 28.94B | 13.94B |
| Total Liabilities | 120.11B | 143.34B | 254.48B | 265.87B | 165.74B | 101.39B |
| Stockholders Equity | 84.55B | 92.14B | 93.19B | 93.05B | 81.56B | 48.04B |
Cash Flow | ||||||
| Free Cash Flow | 8.65B | 14.98B | 4.33B | 4.83B | 6.91B | 2.01B |
| Operating Cash Flow | 8.70B | 15.03B | 4.46B | 4.99B | 7.12B | 2.19B |
| Investing Cash Flow | -3.41B | -5.94B | 8.45B | 313.82M | -15.00B | -11.01B |
| Financing Cash Flow | -14.04B | -20.55B | -9.92B | -2.45B | 24.87B | -2.61B |
Lufax Holding Technical Analysis
Negative
2.52
Price Trends
3.22
Negative
3.06
Negative
2.98
Negative
Market Momentum
-0.20
Negative
36.36
Neutral
39.44
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LU, the sentiment is Negative. The current price of 2.52 is below the 20-day moving average (MA) of 2.70, below the 50-day MA of 3.22, and below the 200-day MA of 2.98, indicating a bearish trend. The MACD of -0.20 indicates Negative momentum. The RSI at 36.36 is Neutral, neither overbought nor oversold. The STOCH value of 39.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LU.
Lufax Holding Risk Analysis
Lufax Holding disclosed 105 risk factors in its most recent earnings report. Lufax Holding 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
Lufax Holding Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $1.28B | 3.43 | 17.76% | 5.50% | 9.32% | 29.40% | |
70 Outperform | $381.05M | 2.21 | 12.53% | 9.52% | 10.48% | -30.67% | |
68 Neutral | $1.84B | 9.84 | 13.72% | 3.64% | 27.36% | 12.55% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | $805.82M | 7.29 | 6.75% | ― | -62.48% | 1441.74% | |
52 Neutral | $2.43B | ― | ― | ― | ― | ― | |
45 Neutral | $878.07M | -3.36 | -79.90% | ― | 510.69% | -145.92% |
* Financial Sector Average
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Lufax Holding
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.