CICC has initiated coverage on YIXIN (02858) with an Outperform industry rating and a target price of HK$2.25. The valuation is based on a P/E methodology, corresponding to a multiple of 9.5x P/E (based on 2026 estimates). YIXIN is an AI-driven, leading automotive fintech platform in China. The firm forecasts the company's EPS for 2026e/2027e to be RMB 0.21/0.25, respectively, with a projected CAGR of 20% from 2025 to 2027e. The stock is currently trading at 7.0x/5.8x 2026e/2027e P/E. The initiation with an Outperform rating and HK$2.25 target implies 9.5x/7.9x 2026e/2027e P/E and a 36% upside potential.
The research highlights confidence in the company's ability to achieve growth by leveraging its advantages in customer acquisition and risk control, against the backdrop of the automotive finance industry's substantial potential for expansion. Key viewpoints from CICC are as follows:
The company provides comprehensive automotive financial services and fintech solutions to various participants in the automotive financial market. Its business can be segmented by funding sources into: 1) Transaction platform business: Building advanced risk control and customer acquisition channels based on vertical scenario expertise and data accumulation, providing bilateral accessibility for capital and assets; 2) Proprietary financing business: Earning risk premiums by relying on licenses and leading asset-liability matching capabilities. YIXIN launched its fintech business in 2022 and is currently in a phase of rapid expansion for this segment, with fintech business revenue projected to increase 150% year-over-year to RMB 4.5 billion in 2025.
The automotive consumption market holds considerable space, with promising prospects for internet platforms. China's new car market is vast, and the used car market is being revitalized by policy relaxations. Meanwhile, there remains significant room for improvement in China's automotive finance penetration rate (56% in 2023 vs. 90% in the U.S.), indicating substantial incremental demand. Coupled with the "asset shortage" environment on the banking side, third-party fintech platforms are expected to continue benefiting.
Customer acquisition and risk control establish dual advantages for the company in terms of asset scale and quality. In customer acquisition, YIXIN has a deep presence in third- and fourth-tier cities and among long-tail customers, reaching a broader potential client base through its triple offline channels: direct sales teams, Taocheche offline experience stores, and a cooperative dealer network. In risk control, YIXIN's leading AI technology deployment is gradually empowering the entire business chain. The analysis believes YIXIN is poised to achieve concurrent expansion in asset scale and stability in asset quality, leveraging its leading advantages in customer acquisition and risk control.
Potential catalysts include accelerated growth in the fintech business and further integration of AI agents.
Risk factors include fintech business growth falling short of expectations, regulatory policy tightening exceeding expectations, significant fluctuations in asset quality, and macroeconomic volatility exceeding expectations.