FINV - The Absurd Valuation Or Value TrapNYSE:FINV has a consistent history of trading at valuation multiples that are a fraction of the broader market and even its own industry peers. The market has persistently applied a heavy discount, due to a combination of factors:
Geopolitical tensions and an unpredictable regulatory environment have always weighed on Chinese equities.
The entire online lending sector is often viewed with suspicion regarding credit quality and regulatory risk.
Limited analyst coverage and lower institutional ownership often lead to less efficient pricing.
However, the current situation is a clear anomaly. Following the Q3 2025 earnings report, the stock's P/E ratio has collapsed to 3.3x. This is not just cheap; it is at the very bottom of its own historical valuation range, a level only seen once before in the past five years during the post-COVID regulatory crackdown in 2022.
Metric 2022 Low 2025 Current Change
P/E Ratio ~3.2x ~3.3x ~ Even
Stock Price ~$3.50 ~$4.89 +40%
EPS $1.10 $1.50 +36%
Net Income $318M $393M +24%
The market is pricing the stock as if the China slowdown is the only news.
While completely ignoring the good news about record earnings, strong international growth, massive buybacks.
It has punished the stock back to its historical valuation floor, even though the business itself is on much firmer ground. To me it doesn't seem like a value trap.
A value trap is a company that appears cheap but whose fundamentals are in terminal decline. FinVolution is the opposite: a company whose fundamentals are improving but is being priced as if it's in decline.
Disclaimer: I have taken a position in FINV before writing this idea. This is my view and is being shared under the right to expression. Do not mistakenly consider this as my professional advice.
