360 Finance Could Start Hong Listing Process as Soon as December

The digital consumer finance platform needs to meet Hong Kong's requirements before seeking a listing on its exchange.

Author: Anthony Russo   

360 Finance Inc. (Nasdaq: QFIN) could commence its Hong Kong IPO process by the end of the year and has held "intensive" internal discussions regarding its dual listing plan.

The Shanghai-based digital consumer finance platform will first need to meet the Hong Kong Stock Exchange's requirement, which mandates that firms need to have their first listing for at least two years before seeking one on its bourse, as reported by Reuters today. 360 Finance made its debut in Times Square in December 2018, raising $51 million.

The news comes as Sino-U.S. trade tensions remain high. Currently, the U.S. Congress is weighing a bill that could result in Chinese firms to delist from its exchanges in droves. Meanwhile, Hong Kong has been more welcoming by relaxing its listing rules in efforts to bring more tech companies and biotech firms to its market. 

"No matter what changes in capital markets in the U.S. and China, a healthy and technology-driven company will eventually be recognized by investors anywhere," Liu Wei, a senior vice president at affiliate 360 Group, told Reuters Wednesday.

He added, "As long as its business makes tremendous progress and shows good tenacity amid risks." 

Last week, 360 Finance became the largest shareholder Kincheng Bank of Tianjin Co., Ltd., acquiring a 30% stake in the private bank in China for $183 million. Kincheng could grow into a lender with total assets of nearly 100 billion yuan, ($14.15 billion) which is 10 times its current size, according to Liu. 

Founded in 2016, 360 Finance provides online consumer finance products to borrowers. As of March, it had 141.63 million cumulative registered users, up 49% from the same period in 2019. In the three months through March, 360 Finance's revenue reached $449.51 million, up 58% year-over-year. However, net income fell to $25.87 million compared with $107.45 million in the same period in 2019.

The stock in 360 Finance was trading nearly 3% lower at $9.83 per share in early trading Thursday. Its stock is down 40% from its IPO issue price of $16.50 per share. The company will speed up its IPO preparations once it meets Hong Kong's requirements.