Digital Finance Platform 9F Eyes $150 Million IPO in New York
9F Inc., a leading digital financial account platform in China, seeks to raise up to $150 million in its initial public offering on Wall Street.
The Beijing-based firm offers loan products, online wealth management products and payment facilitation services. In its preliminary prospectus filed with the U.S. Securities and Exchange Commission Thursday, 9F highlighted its core product named One Card, with which users can utilize their approved credit limits to purchase products from more than three million merchants through China UnionPay and its own online shopping platform One Card Mall. One Card users can also draw cash at approved credit limits to meet other financial needs.
(Source: 9F Inc.)
The company said its revenue in the first quarter reached $179.4 million, up 10 percent from the corresponding period in 2018. Revenue from loan facilitation services was $155.4 million in the first quarter, while post-origination services brought in $12.1 million. Net income was $73.7 million in the three months through March, soaring 89 percent from a year ago.
New York-based consultant Oliver Wyman reported that last year 9F ranked as the first online consumer finance platform in China in terms of outstanding loan balance, which was reported at 55.3 billion yuan ($8 billion) as of Dec. 31.
The firm enjoyed fast growth in 2016 and 2017 but suffered from challenging regulatory environment like other players in the online lending industry. The number of active borrowers on 9F skyrocketed 172 percent from 1.3 million in 2016 to 3.6 million in 2017 and decreased by 36 percent to 2.3 million in 2018. In the first quarter this year, the number of active borrowers on the platform was 600,000, representing a 40 percent decline from 1 million a year ago, according to the report.
9F has diversified its funding sources by developing a direct lending program in 2018. Specifically, 9F turned to institutional funding partners. As a result, the percentage of loan origination volume funded by institutional funding partners to total loan origination volume has increased significantly from approximately 11 percent in the quarter through March to 58 percent for the three months ended June.
The company said it intends to use the proceeds from its IPO for strengthening its ecosystem, broadening product offerings, investing in research and development, international expansion and general corporate purposes. For 9F's international business strategies, it plans to expand investment in Hong Kong and Southeast Asia, applying for additional licenses overseas.
Underwriters on the deal are Credit Suisse Securities (USA) LLC, Haitong International Securities Group Ltd. and 9F Primasia Securities Ltd.
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