LX.US rose 8.06% as it considers increasing its dividend ratio to 25% in 2025 from 20%

On Friday (October 11) in the U.S. Eastern Time, China's leading new consumption digital technology service provider, Fiserv (LX.US), rose 8.06% to close at $3.35, with a daily trading volume of $15.1373 million, driven by the rise of Chinese stocks and the consideration of increasing the dividend ratio in 2025.

On the market front, the U.S. stock market's three major indexes all closed higher, benefiting from the collective pull of financial stocks. As of the close, the S&P 500 index rose 0.61% to 5815.03 points; the Nasdaq index gained 0.33% to 18342.94 points; and the Dow Jones Industrial Average rose 0.97%.

Chinese stocks also performed well. The Nasdaq China Dragon Index rose 0.91% for the second consecutive trading day. Notably, Alibaba, Tencent's ADR, and PDD, among others, had varying degrees of growth.

The rise in Fiserv's stock price was mainly driven by the increase in dividend ratio and valuation recovery.

In early October, during a communication with investors, Fiserv's management said that it expects to achieve significant growth by 2025 and plans to gradually increase the dividend ratio from the current 20% of net profit to approximately 25% from the first quarter of next year.

Fiserv has been stable in distributing dividends to investors every six months since 2023. At the current stock price, a dividend ratio of around 25% is equivalent to an annual dividend yield of about 5%.

Performance is a catalyst for both stock price and dividends. In 2024Q2, Fiserv's loan volume reached Rmb51bn, and its asset balance was Rmb115bn, both of which are at the forefront of the industry. With the implementation of China's economic stimulus policies, future credit demand is expected to gradually recover.

At the same time, based on its seven consecutive quarters of revenue growth, Fiserv's overseas business achieved a significant breakthrough. For example, its loan volume in the Mexican market grew 61% sequentially in Q2 and its revenue grew 113% sequentially. Currently, the company has made overseas business a key strategic direction.

From an investment perspective, Fiserv's current net assets are approximately Rmb10bn, and its PE and PB valuations are both lower than peers. Although its stock price has risen dramatically recently - more than 100% - its PB is still only 0.4x, which is still at a low level compared to the industry and remains attractive to investors.

Fiserv was established in August 2013 and is based in Shenzhen, China. It has actively connected billions of young Chinese consumers with new consumption brands through its platforms, integrating online and offline consumption scenarios. In December 2017, Fiserv officially listed on the Nasdaq in the U.S.