51 Credit Card’s IPO priced at HKD 8.50 per share

The Hangzhou-based company is set to raise an estimated US$129 million in the flotation.

Screenshot of 51 Credit Card. Image by 51 Credit Card Screenshot of 51 Credit Card. Image by 51 Credit Card

China’s 51 Credit Card, an online credit card management platform, is set to price its IPO at HKD 8.5 per share at the bottom of its indicative range of between HKD8.5 – 11.5, according to various reports.

The company is set to raise an estimated US$129 million in the flotation, according to a Tencent report.

Hangzhou-based 51 Credit Card, citing a report it commissioned Oliver Wyman, a management consultancy, claims to be the largest service of its kind by monthly active users (MAU). It is also the largest peer-to-peer lending platform for credit card users by loan volume.

Founded in 2012 by Chinese serial-entrepreneur Sun Haitao,  the company started with a credit card bill management application and branched out to other financial services in the credit card industry and in online investment services.

The company saw its revenue jump by close to four times to US$342 million (RMB2.27 billion) in 2017 from $85.9 million (RMB571 million) from a year earlier, with the bulk of its revenue jump from credit facilitation and service fee, according to its prospectus.

Its net profit is up nearly 1304% in 2017 from a year earlier, standing at $112 million (RMB 744 million). However, it has been operating in a negative cash-flow for the last three years and its cash and cash equivalents dropped to 1.26 billion yuan in 2017 from 2.1 billion yuan in 2016.

Investors in the company include JD.com, Xiaomi and Chinese venture capital companies GGV Capital, SIG and Meridan Capital China. It also became a unicorn startup in September 2016 after raising US$310 million in a Series C round.

Number of credit cards issued in China is set to grow to 1.05 billion in 2021, a CAGR of 15.6% from 2017 representing growth for the company, according to the same Oliver Wyman report cited in the prospectus.

China recently cracked down on the peer-to-peer (P2P) lending by attempting to roll out a new licensing framework, although there is still a lack of an industry-wide regulatory framework.