Faced with increased macroeconomic fluctuations, Lufax Holdings Limited (LU. N; 06623. HK, hereinafter referred to as Lufax Holdings) still maintains performance resilience.
On March 21st, Lujin Holdings released its 2023 performance report, which showed that the company achieved a revenue of approximately 34.3 billion yuan and a net profit of 1.034 billion yuan last year.
Throughout 2023, Lujin Holdings has served approximately 20.94 million customers, with an empowering loan balance of 315.4 billion yuan and a total of 208 billion yuan in new loans added throughout the year.
In the view of industry insiders, the ability of Lujin Holdings to maintain performance resilience in an environment of increased macroeconomic fluctuations is mainly due to the continuous effectiveness of its business model reform measures of "excellent quality and structure".

In his view, a strong registered capital and balance sheet are also the foundation for the continuous effectiveness of Lujin Holdings' business model transformation. The financial report shows that as of the end of 2023, the leverage ratio of the guarantee subsidiary was 1.8 times, far below the upper limit of 10 times. The capital adequacy ratio of the consumer finance subsidiary is 15.3%. The balance of monetary funds controlled by Lujin is 39.6 billion yuan. This has laid a solid foundation for the development of inclusive credit under the continuous expansion of guarantee models by Lujin Holdings.
  Considering that the business model adjustment has just been completed, we will continue to adopt a prudent business strategy this year.
It is worth noting that Lujin Holdings has also sent out a "huge special dividend" gift package.
On March 21st, Lujin Holdings announced plans to distribute a special dividend worth 10 billion yuan, which can be received in cash or stock.
  In view of the prudent development of the company's business in the short term, the low leverage ratio of various business entities, and the high surplus capital of the company, in order to continue to repay investors and improve the efficiency of fund utilization, the board of directors has approved the distribution of special dividends.
Several securities industry insiders have pointed out that this move may help boost the valuation performance of Lujin Holdings, allowing its stock price to return to a reasonable valuation level more quickly. Behind this, more and more global investment institutions are considering the profit dividends and stock repurchase intensity of listed companies as important evaluation criteria for the long-term investment value of listed companies. The generous "special dividend" gift package from Lujinsuo will help global capital re evaluate the investment potential and allocation value of Chinese enterprises.
The four major risk reduction measures have achieved initial results
Opportunities are always reserved for those who are prepared.
In an environment of increased macroeconomic fluctuations, some fintech companies have seen a significant decline in performance, while others have maintained business resilience.
Faced with the challenges of insufficient demand and increased cost pressure brought about by macroeconomic fluctuations, the approach of Lujin Holdings is to actively respond to changes in the market environment, continuously implement the four major risk reduction reform measures around "excellent quality and structure", complete the transformation of business models, and lay the foundation for the company's medium - and long-term stable development.
The reporter learned that these four risk reduction reform measures are respectively adjusting segmented markets and strengthening product portfolios; Regional strategic adjustment of offline service network; Optimize channel strategy and build an excellent team; Support key industries and optimize risk assessment systems in a targeted manner.
Specifically, on one hand, Lujin Holdings vigorously develops consumer finance, enters diversified segmented markets, and creates a dual engine drive of "consumer finance+small and micro financing" to effectively reduce the risk of high business concentration. On the other hand, it innovates and enriches inclusive financial products, accurately supports small and micro business owners in key areas and industries, better meets multi-level financial needs, and reaches more "long tail customers".
In terms of offline service network regional strategic adjustment, Lujin Holdings continues to emphasize the optimization of financing service structure, and through adjusting the layout, concentrates efforts to provide strategic support to areas with concentrated and active small and micro economies.
In terms of optimizing channel strategy and building an excellent team, LuJinSuo Holdings continues to promote the construction of direct sales teams, consolidate differentiation advantages, gradually establish a high-quality, high-capacity, and professional excellent team, and improve the efficiency and quality of small and micro financing services.
In terms of supporting key industries and optimizing risk assessment systems in a targeted manner, LuJinSuo Holdings closely follows the national strategic orientation, analyzes industry development trends, provides deep industry services, and continues to build differentiated industry operations.

Data shows that throughout 2023, Lujin Holdings provided unsecured loan services to 151000 small and micro business owners, especially increasing precise support for regions and key industries with developed small and micro economies. At the same time, the loan balance of consumer finance companies under Lujin Holdings increased to 37.1 billion yuan by the end of 2023, increasing the proportion of new loans in consumer finance to 34% for the year.
In the eyes of industry insiders, this further enhances the business resilience of Lujin Exchange. Drawing on the experience of economic development in Europe and America, when macroeconomic fluctuations in Europe and America increase, consumer finance and corporate finance show a high degree of complementarity, that is, the relatively low risk of consumer finance can effectively hedge against the impact of macroeconomic factors on corporate credit business, ensuring that the overall performance of financial institutions maintains relatively stable development; In recent years, with the transformation and development of China's economy, many segmented market sectors are still in a relatively fast development period, which has led to relatively good development of related small and micro enterprises. Financial institutions actively layout financial services for small and micro enterprises in these high growth sectors, which can also bring new support to the stable development of their own businesses.
"Although the adjustment of business models inevitably brings about increased operating costs and pain in adapting to new businesses, putting pressure on the company's short-term performance, the capital market's investment value analysis of listed companies focuses more on the medium and long-term dimensions, focusing on the company's business development speed and performance growth after the completion of business transformation. Therefore, the capital market generally supports the business transformation journey held by Lujin, because listed companies can only bring richer returns to shareholders by becoming better and better." A private equity fund manager said frankly.
Distributing billions of special dividends to boost market confidence
It is worth noting that Lujin Holdings has also decided to distribute a special dividend of billions in cash or stock options.
The reporter learned that this is equivalent to Lujin Holdings distributing a special dividend of $1.21 per share (equivalent to $2.42 per ADS), which is a significant increase from the cash dividend of $0.078 per common share ($0.039 per ADS) distributed in mid-2023.
According to the process, each shareholder can choose to convert into shares or receive cash dividends, and the special dividend will be voted on at the shareholders' meeting of Lujin Stock Exchange on May 30th.
Several industry insiders have pointed out that the distribution of billions of special dividends reflects Lujin Holdings' confidence in future performance growth. In the past, in the European and American markets, once a listed company was willing to invest a huge amount of money in distributing special dividends that could choose cash or stocks, it indicated that the management and board of directors of the listed company had high confidence in the future performance growth of the enterprise. Given the completion of various business transformation measures by Lufax, it is not ruled out that the management and board of directors of Lufax believe that the "harvest period" of business transformation will come soon.
The reporter noticed that the current leverage ratio of various business entities controlled by Lujin is relatively low, and it has a high surplus capital, which is also a major factor for Lujin's confidence in issuing special dividends worth billions.
In the view of multiple private equity fund managers, the special dividend of tens of billions issued by Lujin this time will help improve the valuation performance of the company. At present, with the continuous improvement of China's economic fundamentals and the enhancement of corporate profitability, many Chinese concept stocks generally believe that their stock prices are far below their reasonable valuations. By distributing large special dividends or increasing stock buybacks, Chinese concept stocks are also sending signals of undervaluation to the capital market.
"This is bound to attract more attention from overseas investment institutions. Currently, global capital is chasing a stock market with high profit dividends and high stock repurchases. If more and more Chinese listed companies provide high dividends and increase stock repurchases, global capital's favor for Chinese stock assets will also rise." The Hong Kong private equity fund manager mentioned above pointed out.
The reporter learned that as the billion dollar special dividend vote of Lujin Holdings approaches, the capital market is also paying attention to whether important shareholders of Lujin Holdings choose cash or stocks. If important shareholders choose the latter, it will undoubtedly further boost the confidence of the capital market in Lujin Holdings' future performance growth.