Fuqin Fintech, Auto-Backed P2P Lending Platform, Prepares for $20 Million IPO in New York

The Beijing-based lending platform would trade on the Nasdaq Capital Market under the symbol “FQJR."

Author: Anna Vodopyanova   

Fuqin Fintech Ltd., moving toward an initial public offering on Wall Street, has filed a post-effective amendment to its prospectus this week with new terms and a downsized target.

The Beijing company, which facilitates peer-to-peer, auto-secured lending, initially filed for a $51 million IPO in August, seeking to sell up to 8.5 million American depositary shares. The post-effective update, filed Thursday, shows a target of $20 million and a per share price of $5. Fuqin is now seeking to sell from 2 million to 4 million shares.

The company has also provided updated financials. It said revenue for the 12 months through December reached $30 million, up 69 percent year-over-year. Its operating expenses last year also soared, however, rising 83 percent to $31.4 million. The company reported a net loss of $1.4 million for 2018 in contrast to income of $589,000 in 2017.

Fuqin began its lending operations in 2014 matching borrowers and lenders and expanded into the online auto finance marketplace two years later. Through its offices, Fuqin conducts promotion, assistance with lending applications, and installation of GPS devices on automobiles. Its services are marketed to individuals, micro-, small-, and medium-sized enterprises, and sole proprietors. All loans Fuqin issues are secured by the borrowers' cars.

Fuqin has 168 offices in third-, fourth-, and fifth-tier cities in northern China. Although previously the majority of its business – 58 percent in 2017 – was conducted offline, the gears shifted to online operations last year. As of Dec. 31, Fuqin had facilitated $499.4 million in loans online out of the total of $697.6 million. During the full year 2018, it facilitated $358.3 million in loans overall.

In its filing, Fuqin said it had developed its own risk assessment program, Automobile Risk Management System (ARMS). About the system, the company said in its filing, "It has reduced cost in human labor and improved risk management in automobile financing by monitoring the collateral automobiles and the risk of the loans on an all-round, full-time basis. ARMS provides 24/7 online real time monitoring, position tracking, route replay, data management, risk assessment of the car's track record, warnings of abnormal activities, warnings of the risks regarding secondary mortgage, warnings of signal disturbance, and other post-loan management solutions."

The company said it intends to use the proceeds of the stock sale for the expansion of its business by investing in ads and marketing, working capital, and general corporate purposes.

Boustead Securities LLC remains the acting underwriter on the deal.

Fuqin would trade on the Nasdaq Capital Market under the symbol "FQJR."