Yixin Group Ltd., a Chinese online car lender, filed for a Hong Kong IPO looking to raise $900mn; the deal could value the fintech company at $6.5bn if shares price on the higher end; Yixin Group Ltd. is a unit of NY listed Bitauto and is backed by Baidu Inc., Tencent Holdings Ltd. and JD.com Inc. Source.
With continued low bank rates Chinese consumers have flocked to new fintech firms that offer better returns; lower income individuals use Yu’E Bao money market fund and high net worth individuals use wealth management products; this has helped younger more savvy investors to abandon stocks and real estate, though regulations in China can always change quickly. Source.
New statistics show e-commerce spending in China continues to rise, with projections estimating the average digital buyer will spend RMB12,198 ($1,836) online in 2017, an increase of 7% over 2016; growth is expected to slow to 5% or less after 2017; the forecasts could point to a peak for China's e-commerce giants and also serve as a catalyst for the broad ranging expansion of China's top e-commerce companies. Source
Hexindai, a Chinese fintech company listed on the Nasdaq last Friday; according to the article Chinese firms are getting pressure from investors who want to cash out; tightening regulations are also a factor; Qudian, another firm went public last month and Rong360 may be the next Chinese fintech company to go public; Oliver Wyman reports that the market size for consumer lending will expand to $620 billion by 2020 with a compound annual growth rate of 49%. Source
Actively monitoring fintech in the country, a group of Chinese government agencies has released a white paper on blockchain; similar to other countries, China is investigating ways to utilize blockchain technology in its banking system; the white paper says the country is seeking to define standards by October 2017; speculators think China could be the first central bank to begin utilizing the technology. Source
A report on China's consumer credit finds that consumers are increasing their use of debt with 94% of consumers using credit or a loan in the past year; consumers are borrowing more from internet-based sources with consumers increasing their borrowing from P2P loan providers while also borrowing more for car loans and mortgages; consumers in their 20s appear to be the leading borrowers as a trend towards living in the moment is motivating their spending habits; the report expects the rise in debt to continue, projecting household loans to increase at a rate of 14% for the next five years. Source
A senior Chinese regulatory official said the country needs to come up with better legislation to monitor the market; "FinTech innovations that feature internet, big data and artificial intelligence are exerting profound influence on capital markets," said Huang Wei, assistant chairman of the China Securities Regulatory Commission, at a forum reported by Xinhua; the regulations need to catch up with innovation and ensure that investors are protected. Source.
Shares of Qudian surged almost 48 percent on the first day of trading; the share offering raised about $900mn, making it the largest Chinese listing in the US this year; reaching as high as $35.45 the company ended the day at $29.86; Qudian extends loans to millennials and students for small ticket items like smartphones or concert tickets. Source.
Hywin Financial Holding Group has announced the acquisition of UK wealth manager Azure Wealth; Azure Wealth will change its name to Hywin Wealth and operate as a subsidiary of the financial holding company; according to Managing Partner Massimo Scalabrini, "All other management and operational responsibilities as well as our principles, ethos and investment management philosophy remain unchanged."; the acquisition will provide the UK-based firm with wealth management expansion opportunities in Asia; Hywin Financial Holding Group has over 20 wholly-owned and holding subsidiaries with over 100 billion Chinese yuan ($14.53 billion) in assets under management. Source
Loose credit and consumers who are no longer averse to loans have contributed to the rise in household debt as a share of GDP; numbers have risen from 28% to 40% in the last five years; the share of household loans to overall lending hit 67.5% in the third quarter of 2016, more than twice the share of the year before; China's household debt as a share of GDP is half of what it is in the US, though if the current pace continues it will come close to equaling the US percentage in a few short years. Source