51 Credit Card Inc. files for HK IPO

51 Credit Card Inc. has recently filed for IPO in Hong Kong.

The company offers personal financial tracking and credit management apps, generating revenues from consumer loans and credit cards issued to its app users by the company or third-party financial institutions.

Consumer loans surpassed the credit card segment in revenue in 2015 and accounted for about 80% of the total revenue in the following two years. The company began turning operating profits in 2016.

Cumulative registered users of 51 Credit Card Manager, its flagship app released in 2012, reached 62 million in 2017, up from 27.5 million in 2015.

Source: Company (*Other revenues include interest income from loans extended by its small loan company and trust funding, and overdue charges.)

Consumer Lending

A majority of their individual investors and borrowers are users of the company’s financial tracking apps. Non-credit-card holders as a percentage of the total borrowers have increased from zero in 2015 to 35.5% in 2017.

The company charges borrowers a “credit facilitation and service fee”, which has become the primary revenue source for the company, and third-party loan offerings “loan referral service fees” based on the size of loans referred by 51 Credit Card, the number of applications or clicks.

Before the incorporation of a small loan company in early 2017, the vast majority of the company’s consumer loan capital was from investors of the peer-to-peer lending platform 51 Renpin, with the rest from institutional investors. In 2017, 77%, 20.3% and 2.7% of the loan capital was from 51 Renpin platform, institutional investors and its own small loan company, respectively.

Its lending platform uses in-house developed systems for credit scoring and pricing, and fraud detection. The consumer loan originations was RMB 815 million, RMB 10.3 billion and RMB 33.9 billion in 2015, 2016 and 2017, respectively.

Credit Card Issuance

Users can compare and apply for credit cards on 51 Credit Card platform where some 500,000, 1.2 million and 2.1 million credit cards were issued in 2015, 2016 and 2017, respectively. The company charges banks a “credit card technology service fee”.

It began issuing co-branded credit cards with banks in April 2017 and would issue more than 100,000 in the rest of the year.

51 Credit Card is expected to enter the insurance market soon as it acquired 95% of insurance broker Shenzhen Zhongrong in November 2017.


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