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Dianrong factors in IPO: Wall Street Journal
Posted on Tuesday, 05 December 2017 07:12
Only a few months after raising USD 220.00 million in a round of funding, the Wall Street Journal is reporting Chinese peer-to-peer (P2P) lending platform Dianrong has set its sights on a USD 500.00 million-plus listing.

Sources with knowledge of the situation told the newspaper the financial technology (FinTech) company, which was established and is operated by a co-founder of LendingClub, could debut as early as next year.

The bourse in Hong Kong would be the destination of choice for the marketplace’s first-time share sale worth at least half a billion US dollars, they noted.

However, a listing would come at a time when Chinese authorities have clamped down on rules and regulations for the domestic FinTech sector, which has mushroomed in recent years and put pressure on mainstream institutions.

P2P companies have been under scrutiny for providing high rates of interest on loans without carrying out adequate checks and fraud, among other things.

According to a report in June by PricewaterhouseCoopers, P2P lending in China totalled CNY 2,060 billion (USD 392.86 billion) in 2016, representing more than 16.0 per cent of total new loans and almost double the level in 2015.

A publication by KPMG and H2 Ventures, which compiles a list of the year's best global fintech innovators, noted the People’s Republic “continues to dominate the FinTech landscape, representing 5 of the Top 10 fntech companies in 2017”.

Major Chinese players include Ant Financial, Dianrong, Lujiazui International Financial Asset Exchange (Lufax), Ppdai.com, Qudian and Zhong An Online Property and Casualty Insurance.

While the US is a popular destination, if Dianrong went ahead with a Hong Kong debut, it would be tapping into a growing interest from investors in technology listings following a slew of successful debuts in the region recently.

Companies operating in the financial services and computer/Internet sector, as classified by Zephyr, the M&A database published by Bureau van Dijk, have announced or completed 11 Hong Kong IPOs this year.

Zhong An accounted for the largest by value after raising USD 1.52 billion through a sale of a 13.8 per cent stake.

© Zephus Ltd