Qfin Holdings Mixed 1Q26 print; asset quality stabilizing but IRR drag and regulatory overhang caps re-rating

Research evidence excerpt

Qfin Holdings Mixed 1Q26 print; asset quality stabilizing but IRR drag and regulatory overhang caps re-rating

nagement is also assessing Southeast Asia and other high-

potential markets, while emphasizing that overseas operations remain in the early

stage of investment and capability building. Over the medium term, management

believes QFIN can become a truly global fintech company over the next three to

five years, assuming solid execution and continued risk control.

• Technology solutions and AI adoption are being positioned as both growth

and productivity drivers: Management highlighted technology solutions and AI

as longer-term strategic growth and efficiency drivers. Tech solutions loan

volume reached RMB9.96bn in 1Q26, representing sevenfold YoY growth,

which management views as validation of the technology-driven, capital-light

model. QFIN’s credit-focused AI agents have entered initial commercial

deployment, including an “AI Loan Officer” being deployed at a city commercial

bank across retail, SME and corporate business lines. Management also set a

long-term goal to transform QFIN into an AI-native organization by converting

historical documents, strategy libraries and operational experience into structured

context for large language models; as of May, 98.4% of technical personnel were

using AI tokens, and management noted a clear correlation between token usage

and productivity gains.

• The effective tax rate was temporarily elevated due to dividend-related

withholding tax and prudence on tax provisioning: QFIN’s effective tax rate

was 21.6% in 1Q26, above its normalized level of around 15%. Management

attributed the higher-than-normal ETR mainly to withholding tax related to

dividend distribution from onshore to offshore entities, as well as a more prudent