FinVolution Group’s Q1 Surge: A Beacon of Growth in a Struggling Fintech Sector

The fintech sector has faced headwinds in 2025, with macroeconomic uncertainty, regulatory scrutiny, and elevated credit risks dampening investor sentiment. Amid this turbulence, FinVolution Group has emerged as a standout performer, delivering 38.7% year-over-year net profit growth in Q1 2025 and signaling its ability to sustain revenue expansion even as peers stumble. This article explores why FinVolution’s growth story is not just a quarterly blip but a testament to strategic foresight and operational resilience.

Revenue Growth: A Tapestry of Domestic Stability and International Dynamism

FinVolution’s Q1 results reflect a dual-engine growth strategy: stabilizing its core China operations while aggressively expanding into high-growth Southeast Asian markets. Total revenue rose 10% YoY to RMB3.48 billion, driven by a 36.4% surge in international transaction volumes to RMB3.0 billion. This international segment now accounts for 20.4% of total revenue, up from 18.8% a year ago, underscoring its role as the primary growth catalyst.

The company’s “Local Excellence, Global Outlook” strategy is paying dividends. In markets like Indonesia and the Philippines, FinVolution has cultivated partnerships—such as its collaboration with Maya Bank in the Philippines—to deepen financial inclusion. These efforts have fueled a 1.2 million new borrower additions in Q1, pushing the total borrower base to 35.0 million. Notably, this marks the third consecutive quarter of adding over one million borrowers, a rare feat in an industry plagued by saturation concerns.

Sustainability Through Risk Management and Capital Efficiency

While fintech peers grapple with rising delinquency rates and regulatory hurdles, FinVolution has maintained a 90+ day delinquency ratio of 2.04% in China—stable compared to prior quarters. This resilience stems from its capital-light model, which facilitated RMB18.4 billion of China-based transactions without bearing principal risk. Combined with RMB8.5 billion in cash reserves, this model ensures liquidity and flexibility to weather macroeconomic storms.

The shift toward a fee-based revenue stream further insulates the business. Loan facilitation service fees surged to RMB1.48 billion (up from RMB986 million in Q1 2024), while guarantee income dipped to RMB1.10 billion, reflecting a deliberate move away from direct credit exposure. This structural adjustment positions FinVolution to scale without overextending its balance sheet.

Sector Underperformance: Why FinVolution is an Outlier

The broader fintech sector is stagnating. Rising global interest rates are squeezing borrowers’ repayment capacity, while regulatory tightening—particularly in China’s financial services space—has curbed aggressive expansion. Competitors like Enova International and LexinFintech have seen flat or declining revenues, with delinquency rates ticking upward.

FinVolution, however, is insulated by its geographic diversification and local partnerships. For example, its Philippine subsidiary’s tie-up with Maya Bank has unlocked access to unbanked populations, a demographic critical to long-term growth. Meanwhile, its Southeast Asia market is projected to double in value to RMB3 trillion by 2030, offering a runway for sustained expansion.

Valuation: A Buying Opportunity at 6.4x P/E

At a P/E ratio of 6.4x, FinVolution trades at a 30% discount to its five-year average, despite posting 20% YoY EPS growth and a RMB21.1 billion market cap. Analysts at Citigroup recently upgraded the stock to “Buy”, citing its execution discipline and Southeast Asia exposure. Even cautious UBS acknowledges the stock’s undemanding valuation, with a RMB9.00 price target implying 8% upside from current levels.

Risks, but Manageable Ones

No investment is risk-free. Regulatory shifts in China or Southeast Asia could disrupt operations, while rising interest rates might pressure borrower repayment. However, FinVolution’s low delinquency rates, cash-rich balance sheet, and focus on service fees (not risky loans) mitigate these concerns.

Conclusion: Act Now Before the Crowd Catches On

FinVolution’s Q1 results are not just a snapshot of success—they’re a roadmap to future dominance. With 10–15% full-year revenue growth targets, a RMB150 billion addressable market in Southeast Asia, and a valuation that ignores its growth engine, this is a once-in-a-cycle opportunity.

Investors seeking exposure to a fintech leader that thrives where others falter should act swiftly. The stock’s May 20 earnings report will be a catalyst—don’t wait for the crowd to pile in afterward.

Risks: Regulatory changes, macroeconomic downturns, competitive pressures.
Reward: 20%+ EPS growth, undervalued at 6.4x P/E, and a secular growth story.

The verdict is clear: FinVolution is primed to outperform in a struggling sector. Act now before its growth becomes widely recognized.