Grizzly Research short Qifu, says ‘dividend and stock buyback at risk’

In a recently published report, Grizzly Research says it is short Qifu Technology, “a China hustle stock with outright fake financials, fraudulent backers, and an imploding business.” Grizzly says that according to SAIC data it has obtained, Qifu has “astronomically overstated its profit compared to the net income it disclosed in the SEC filings.” “Virtually all of QFIN‘s reported profits might be fake. We urge regulators to investigate the company’s internal data because we suspect fraudulent activities. Given the significant overstatement of profits, we have serious concerns about the long-term sustainability of QFIN’s announced dividend and stock buyback program,” the report reads. “Based on customer complaints, media reports, and our own due diligence, we believe that QFIN consistently issues loans at an annual rate that exceeds the legal limit. This, coupled with the challenges of guaranteeing performance amidst rising delinquency rates, could lead to increased regulatory intervention in China. We anticipate that it’s only a matter of time before the regulator in China takes action against QFIN.”