YX Asset Recovery Sets Terms Ahead of Scheduled IPO in New York

Set to become publicly traded on the NYSE next Wednesday, Nov. 20, YX aims to offer its ADSs priced at between $7.75 and $9.75 each.

Author: Anthony Russo   

YX Asset Recovery Ltd., a nationwide consumer debt collector in China, has announced the expected price range of its shares ahead of its initial public offering set for next week in New York.

The Changsha-based company said in its latest filing with the U.S. Securities and Exchange Commission that it plans to sell 9.3 million American depositary shares priced between $7.75 and $9.75 apiece. One ordinary share represents five ADSs.

At its maximum range, YX would raise $90.7 million, lower than the estimated $200 million the company targeted in a filing last month.

The underwriters and co-managers on the deal are CMB International Capital Ltd., Raymond James & Associates Inc., AMTD Global Markets Ltd., SunTrust Robinson Humphrey Inc., Deutsche Bank Securities Inc., China Everbright Securities (HK) Ltd., Wedbush Securities Inc., Prime Number Capital LLC, China Investment Securities Int'l Brokerage Ltd., Guotai Junan Securities (Hong Kong) Ltd., Tiger Brokers (NZ) Ltd. and Fortune (HK) Securities Ltd.

The company said Joe Huaqiao Zhang, the vice chairman and director of YX, has expressed interest in purchasing up to $5 million worth of its ADSs.

Founded in 2015, YX collects consumer receivables, such as credit card receivables from commercial banks and digital receivables originated by online consumer finance companies. As of June, YX was noted as the largest provider of delinquent credit card receivables recovery services in terms of total value, commission and employed collection specialists in China, according to data from market analyst iResearch cited in the filing.

YX stated in its business overview in the prospectus "We believe that delinquent consumer debt collection is crucial to the maintenance of a sound financial environment because debt collection is a mechanism to establish principles and rules governing consumer lending, and facilitates the restoration of credit of the debtors and the establishment of a society built on credit."

The outstanding balance of the credit card market in China in 2018 reached 6.9 trillion yuan, which represented a compound annual growth rate (CAGR) of 31% from 2013, according to a report from iResearch. It is forecasted to grow further to 17 trillion yuan by 2022, at a CAGR of 25%, the report said.

For the six months through June, YX reported revenue of $75 million, up 100% year-over-year. Net income dropped to $4.7 million from $6.9 million in the same period a year ago.

YX has applied to list its ADSs on the New York Stock Exchange under the symbol "YXR" and is set to go public next week, on Wednesday, Nov. 20.

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