360 DigiTech Is Priced For Disaster That Is Very Unlikely To Arrive

  • 360 DigiTech is booming as new initiatives like their embedded finance model and SME lending are taking off.
  • The shift to a capital-light model is providing a secular boost to margins, which are already sky-high with a profit margin of 40%.
  • With the app restored to major app stores and other regulations and proposed regulations seemingly having more bark than bite, the shares are absurdly cheap.
  • There will be a $200M share buyback to boost, but given the regulatory uncertainties, this isn’t for the faint of heart.
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