Aims to Strengthen Competiveness in the Internet Financing Sector
HONG KONG, May 2, 2014 /PRNewswire/ -- Credit China Holdings Limited ("Credit China" or the "Company") (Stock code: 8207.hk), one of the leading financing service providers in China, announced that it has signed two memorandums of understanding (MOUs) to acquire a P2P business and a certain percentage of the issued share capital of an Internet microfinance business on 1 May 2014. The planned acquisitions will help Credit China become a benchmark enterprise in the P2P financing platform in China and better position itself in the Internet financing sector so as to enhance the Company's overall competiveness.
According to the first memorandum of understanding, Credit China plans to acquire two domain names (www.9888.com and www.9888.cn), a P2P micro finance "Financial Workshop" service platform and the platform's registered users from Beijing Phoenix Credit Management Corporation. Financial Workshop mainly targets individuals, self-employed entrepreneurs and small enterprise borrowers with financial needs of RMB50,000 to RMB2million, and its investors are mainly Internet customers. With the help of Internet technologies, Financial Workshop facilitates the launch of projects, completion of projects and release of loans on the same day. The website has approximately 5,100 registered customers, with approximately 1,600 customers engaging in transactions. Since Financial Workshop's launch in July 2012, its online and offline lending has amounted to more than RMB 400 million.
In addition, Credit China plans to acquire a certain percentage of the issued share capital of Hainan Pioneer Internet Microfinance Limited ("Hainan Internet Microfinance") from Phoenix Asset Management Limited ("Phoenix Asset"). Hainan Internet Microfinance was established in Haikou, Hainan, and has registered capital amounting to RMB 100 million. It was the first microfinance company to be permitted by the Hainan provincial government to release loans through the Internet. It provides high quality financing services to micro enterprises, and is one of the first non-banking financial institutions to obtain an Internet lending license in China. Credit China will be entitled to appoint directors to the board of directors of Hainan Internet Microfinance and to participate in its management.
Traditional microfinance companies spread its businesses regionally and vertically; however, costs increase with the number of customers and operational scale. Hence, these companies encounter bottlenecks in their development. Internet microfinance companies are internet-based, breaking the traditional linear model by reaching customers through technical network platforms without geographic restrictions. As the number of customers and transaction amounts increase, operational costs are further diluted, thus offering lower financing costs and higher financing efficiency to customers.
Mr. Phang Yew Kiat, Co-Chairman of Credit China, said, "Credit China has accumulated risk management experience in traditional financial services to develop its P2P business. By actively seeking merger and acquisition opportunities, including the planned acquisition of Financial Workshop, Credit China aims to accumulate Internet users and expand the size of loans quickly to become the benchmark enterprise in the P2P financing platform in China."
Mr. Raymond Ting, Co-Chairman of Credit China, added, "The acquisition of the customers and businesses of Financial Workshop will further enhance the Company's positioning in the Internet financing sector, create synergies in terms of channels and data with Credit China's existing P2P business involving housing loans and car loans, and will also provide a data port for Hainan Internet Microfinance."
