How did LX's Q4 2023 earnings surprise investors?

LexinFintech Holdings Ltd. (LX) reported its fourth-quarter and full-year 2024 unaudited financial results on March 18, 2025, which included key metrics such as net income, loan origination, and outstanding loan balance. Here's a detailed analysis of LX's Q4 2023 earnings:

1. **Net Income and Profitability**: LX reported a net income of RMB363 million for Q4 2023, marking a 17% quarter-over-quarter increase. This represents the fourth consecutive quarter of improved profitability, indicating a strong financial performance and the company's prudent operating strategy.
2. **Loan Origination and Balance**: The company's total loan origination reached RMB52 billion, reflecting a 2% quarter-over-quarter increase. The outstanding loan balance stood at RMB110 billion, in line with the company's guidance. These figures suggest a healthy growth in loan origination and a robust loan portfolio, which is a positive indicator for the company's revenue and profitability.
3. **Asset Quality and Risk Management**: LX advanced its risk management upgrading, resulting in a continuous improvement in asset quality. This was evidenced by the decline in risk indicators of both newly originated and overall assets. This consistent enhancement in asset quality, along with ongoing operational refinements, has contributed to the company's sustainable profit growth.
4. **Dividend Policy**: In accordance with its semi-annual dividend policy, the board of directors approved a dividend of US$0.11 per ADS, representing 20% of net income from the second half of 2024. Effective from January 1, 2025, the cash dividend payout ratio will be raised to 25% of net income. This demonstrates the company's commitment to returning value to shareholders and confidence in its financial stability and growth prospects.

Overall, LX's Q4 2023 earnings report showcased the company's strong financial performance, profitability, and strategic focus on asset quality and risk management. The company's consistent improvement in key financial metrics and dividend policy are likely to have positively surprised investors, reflecting a robust and sustainable business model.