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Posted by
Two Blokes Jul 15 -
Filed in
Stock
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XYF is a profitable, fast-growing microfinance company in China, trading at a steep discount (3.5x P/E) despite strong fundamentals and improved risk profile. The business has pivoted from the 2020 P2P crisis, now focusing on prime borrowers, maintaining 25% net margins, and delivering solid revenue and loan growth. Risks include VIE structure, low liquidity, credit risk, and Chinese regulatory uncertainty, but these are over-discounted given XYF's stronger balance sheet and improved asset quality.
