Tagged: credit

Credit Suisse estimated burst

Credit Suisse (10.87, 0.17, 1.59%) said on Tuesday it expected losses related to the explosion of archegos to reach 4.4 billion Swiss francs (about $4.69 billion), and proposed cutting dividends and executive compensation in 2020.

Credit Suisse estimated burst

Lara Warner, its chief risk officer, and Brian chin, head of investment banking, will leave next month, the bank also said.


Credit Suisse said it currently expects a pre tax loss of about 900 million Swiss francs in the first quarter, “which includes the expenditure of 4.4 billion Swiss francs due to a US based hedge fund’s failure to meet the margin commitment we announced on March 29, 2021.

Hundreds of Billion Stars Company’s song ends?

Yangchun arrives in March as scheduled, but Wuhan Hongxin Semiconductor Manufacturing Co., Ltd. (hereinafter referred to as Wuhan Hongxin), which is in trouble, seems to be still experiencing a cold winter.

Recently, it was reported that Wuhan Hongxin’s senior management informed the internal group that “the company has no plan to resume work and resume production” and required all employees to apply for resignation before leaving get off work on February 28, 2021.

Hundreds of Billion Stars Company's song ends?

According to Qixinbao’s data, after a series of changes, Wuhan Hongxin’s shareholders are currently Wuhan Xingong Technology Development Co., Ltd. and Wuhan Lingkong Port Economic and Technological Development Zone Technology Investment Group Co., Ltd. After equity penetration, the above two companies are controlled by state-owned assets in Dongxihu District, Wuhan.

After the government takes over, how will it deal with this “hot potato”? Is the news of the employee being dismissed true? Does this mean the dissolution of Wuhan Hongxin? On February 28, 2021, a reporter from the “Daily Economic News” came to the Wuhan Hongxin project site and saw that the original signboard with the 13 characters “Wuhan Hongxin Semiconductor Manufacturing Co., Ltd.” had been removed. A Wuhan Hongxin subcontractor told reporters, “It is disbanded and there will be no Hongxin anymore.”

Regarding related matters, on February 28, a reporter from the “Daily Business News” called Wuhan Hongxin’s official telephone number many times, but the calls were all unanswered. On the Wuhan city message board, in response to citizens’ questions about Wuhan Hongxin, the Dongxihu District of Wuhan City’s latest reply on February 8, 2021 (that is, before the Spring Festival) was “The project is being coordinated.”

Site visit: the original Wuhan Hongxin signboard has been removed

Hundreds of Billion Stars Company's song ends?

With an investment of up to 128 billion yuan, it was once launched as a star project in Wuhan and invited Jiang Shangyi, a man in the semiconductor industry who had served in TSMC and SMIC, as the general manager… The once glorious Wuhan Hongxin has now ended up in a feather.

The semiconductor industry information website Jiwei.com reported on the information provided by people familiar with the matter that Wuhan Hongxin’s senior executives notified in the internal group: “Combined with the current situation of the company, the company has no plan to resume work and production. After the company’s research and decision, all employees are requested to do so in 2021. Apply for resignation before the end of work on March 28, and complete the resignation procedures before the end of work on March 5, 2021; leave personnel can apply online.” In response to the above news, the reporter called the company’s official telephone number and several local government department telephone numbers , And went to the scene to inquire, but did not obtain the exact information. On March 1, 2021, a reporter from the “Daily Economic News” called the Propaganda Department of Dongxihu District, Wuhan. The staff said that we did not know about this and did not receive any news. When the reporter asked further, the other party said, “It (Wuhan Hongxin) is in our jurisdiction, but we don’t have any caliber to release it.”

According to previous media reports, under the endorsement of Jiang Shangyi, a large number of engineers came here, and Wuhan Hongxin did not hesitate to double the salary to retain talents. The report also said that among the engineering team, there were a lot of 3 million yuan and 5 million yuan (annual salary). During the peak period, the number of employees in Wuhan Hongxin once expanded to more than 400.

The current number of employees of Wuhan Hongxin is not known. According to the 2019 annual report of Wuhan Hongxin disclosed by the National Enterprise Credit Information Publicity System, the number of employees who paid five insurances at that time was 203.

Facade of Wuhan Hongxin Semiconductor Project Photo source: Photo by reporter Zhang Mingshuang
Is the news of the dismissal of employees true? Does this mean that Wuhan Hongxin is completely dissolved? What is the current situation of Wuhan Hongxin? In order to find out, on the afternoon of February 28, 2021, a reporter from “Daily Business News” came to the site of Wuhan Hongxin Project and saw that the entrances and exits of multiple construction sites had been closed, and the side of the project adjacent to Wangan Avenue was the main entrance of the construction site. , Looking inward from the gate, no one can be seen. When the reporter visited the project on September 3 last year, although the project was in a state of suspension, some people still entered and exited the site.

A large number of vehicles are parked in the office area of ​​Wuhan Hongxin Project in September 2020. Photo source: Photo by reporter Zhang Mingshuang
A security guard at the gate prevented the reporter from entering the construction site. When the reporter asked about the situation of Wuhan Hongxin, the security guard said that there was no Wuhan Hongxin inside, and there was no one on the construction site. Regarding whether Wuhan Hongxin has disbanded employees, it said that he has just arrived and does not know the relevant situation.

Wuhan Hongxin built a prefab house with a red roof and white walls on the side of Linchuanggu Road of the project as the company’s office space. The reporter saw in the office area that there was no car parked in the parking lot at the door, and the door sign composed of 13 characters of “Wuhan Hongxin Semiconductor Manufacturing Co., Ltd.” had been removed.

In the office area of ​​Wuhan Hongxin Project, the signboard at the door has been removed. Photo source: Photo by reporter Zhang Mingshuang
In the office room, a suspected front desk staff member asked the reporter not to enter the office area. The reporter asked whether he was an employee of Wuhan Hongxin, but the staff did not answer. There is a self-service vending machine in the office, but there is no word related to Wuhan Hongxin, and the posted epidemic prevention and control notice also does not indicate the signing party.

When the reporter was visiting the project, only a few security guards were walking around inside and outside the project. The above-mentioned security guards came again and asked the reporter to leave quickly, but they refused to disclose their work unit or service unit.

On February 28, Mr. Zhao (pseudonym), a construction subcontractor of the Wuhan Hongxin project, told reporters that the employees of Wuhan Hongxin have been disbanded and there will be no Hongxin company anymore. The new (shareholder) company is planning to resume work. , But there are other plans for continuing to do semiconductor projects, and it is still unclear.

According to Mr. Zhao, Wuhan Hongxin started to default on the project payment in 2020, (the subcontractor) could feel that the company basically couldn’t stick to it. After inquiring about the information from the company’s internal staff, it was found that the employees were also distracted. Before the Spring Festival of the Year of the Ox, Mr. Zhao also went to Wuhan Hongxin site, and there were dozens of people in the project department. But Mr. Zhao found that everyone was ready to go their separate ways.

There has been some progress in subcontract payment. At present, Mr. Zhao has received about 80% of the subcontract payment, and the remaining project payment will be settled in the second half of this year.

The government department previously replied: the project is being coordinated and promoted

Since July 2020, the government of Dongxihu District of Wuhan City “exposed” Wuhan Hongxin’s capital fracture, which has attracted public attention for more than half a year. During this period, the company has successively experienced changes in personnel and shareholders.

According to Qixinbao’s data, Jiang Shangyi no longer serves as the director and general manager of Wuhan Hongxin. He also issued a statement through his lawyer, claiming that he had resigned from all positions in Wuhan Hongxin due to personal reasons in June 2020, and Wuhan Hongxin had also accepted Jiang Shangyi’s resignation. At present, Jiang Shangyi has returned to SMIC again-in early February 2021, SMIC announced that Jiang Shangyi served as the company’s vice chairman.

Another aspect of Wuhan Hongxin’s changes is the shareholders. In November 2020, Wuhan Xingong Technology Development Co., Ltd. (hereinafter referred to as Wuhan Xingong) replaced the original Beijing Guangliang Blueprint Technology Co., Ltd. and Wuhan Lingkong Port Economic and Technological Development Zone Industrial Development Investment Group Co., Ltd. and became the sole shareholder of Wuhan Hongxin.

By the end of December 2020, Wuhan Xingong’s shareholding has been reduced to 90%, and the other 10% is held by Wuhan Lingkong Port Economic and Technological Development Zone Technology Investment Group Co., Ltd. However, after the equity penetration of the above two shareholders, they were all controlled by the State-owned Assets Supervision and Administration Bureau of the People’s Government of Dongxihu District, Wuhan City. In other words, the state-owned assets of Wuhan Dongxihu have fully taken over Wuhan Hongxin.

So, for the current situation of Wuhan Hongxin, what are the plans of Wuhan Dongxihu District government departments? On February 28, the reporter of “Daily Economic News” saw that Wuhan Hongxin’s official website could no longer be opened. According to the company phone number in the historical snapshot of the webpage, the reporter made multiple calls and no one answered it.

Judging from public information, Wuhan Hongxin is currently entangled in lawsuits and has caused the company’s assets to be frozen. Specifically, in addition to the previously new ASML scanning lithography machine that has not been activated because of the 582 million yuan debt, a civil ruling published by China Judgment Document Network in October 2020 shows that because Shengpin Precision Gas (Shanghai) In the dispute over the sale and purchase contract between the company and Wuhan Hongxin, the People’s Court of Dongxihu District, Wuhan City, Hubei Province ruled to freeze 15.31 million yuan in deposits in Wuhan Hongxin Bank, holding 5% of the equity of a company, and a factory in Wuhan Hongxin.

Image source: Screenshot of Judging Document Network
However, the reporter saw on a recruitment website that just after the Wuhan Hongxin thunderstorm, Wuhan Hongxin was still recruiting in August 2020, and the date of the latest recruitment position was shown as October 16, 2020.

For the future of Wuhan Hongxin, what plans does Wuhan Dongxihu state-owned assets have? On the Wuhan city message board, some citizens also asked about Wuhan Hongxin issue. The latest reply from Dongxihu District of Wuhan City on February 8, 2021 stated that “the project is being coordinated.”

Integrated Circuit Industry: Two Days of Ice and Fire

The thunderstorm in Wuhan Hongxin triggered the concern of relevant departments on investment chaos. In October 2020, the National Development and Reform Commission spokesperson Meng Wei once stated that the National Development and Reform Commission will focus on four areas of work in the next step: one is to strengthen the service and guidance for the construction of major integrated circuit projects, and to do a good job in planning and layout; the second is to speed up implementation Several policies to promote the high-quality development of the integrated circuit industry and the software industry in the new era should promptly introduce supporting measures; the third is to establish a long-term working mechanism of “early combing, early detection, early feedback, and early disposal” to reduce investment risks in major IC projects ; Fourth, in accordance with the principle of “who supports and who is responsible”, those who cause major losses or trigger major risks shall be notified and held accountable.

The integrated circuit industry is still a key industry supported and encouraged by the state. On February 26 this year, at a press conference held by the State Council Information Office, Minister of Science and Technology Wang Zhigang pointed out that the integrated circuit industry is an important foundation for the high-quality development of China’s economy. , It must be the focus of China’s R&D, including scientific and technological work.

According to statistics from the China Semiconductor Industry Association, from January to September 2020, China’s integrated circuit industry sales amounted to 590.58 billion yuan, a year-on-year increase of 16.9%. This growth rate is more than twice the global rate during the same period. In addition, data from the General Administration of Customs shows that in 2020, the value of my country’s imported integrated circuit products is as high as 350.036 billion U.S. dollars, an increase of 14.6% year-on-year; the value of semiconductor manufacturing equipment imported during the same period is 25.351 billion U.S. dollars, an increase of 15.4% year-on-year.

What is the current development situation and industry situation of China’s integrated circuit companies? As a leading domestic integrated circuit manufacturing company, at an investor relations event on February 5, 2021, Zhao Haijun, the co-CEO of SMIC, said that the integrated circuit industry in 2020 can be described as “two days of ice and fire.” On the one hand, the “home economy” triggered by the epidemic has strengthened people’s demand for the Internet of Everything. Chip consumption has far exceeded expectations, and semiconductor companies in various countries are facing rare market opportunities. On the other hand, due to geopolitical factors, the upstream and downstream of the industrial chain are turbulent, the business of global semiconductor companies is facing interruption, and the innovation and development of the entire industry are also affected.

“In the longer term, the international semiconductor ecological environment has undergone tremendous changes in recent years. Moore’s Law, which has supported the vigorous development of electronic products for decades, has approached the physical limit. With the advent of the post-smartphone era, the market’s The requirements are also diversified. There are many types of chips and great changes.” Zhao Haijun said.

At present, various cities are still enthusiastic about the layout of the integrated circuit industry, including Wuhan City where Wuhan Hongxin is located. In October 2020, Wuhan City issued the “Wuhan City’s Several Policies to Accelerate the High-Quality Development of the Integrated Circuit Industry”, encouraging integrated circuit companies, universities and scientific research institutions to build core technology research carriers for integrated circuits, and for newly approved national technological innovations in the field of integrated circuits The center and the State Key Laboratory provide a one-time funding of 5 million yuan.

Eggshell Apartments has been involved in rights protection disputes

Recently, Eggshell Apartments has been involved in rights protection disputes among tenants, landlords and suppliers. On November 16, some media quoted the news of Eggshell’s resigned employees saying that Eggshell Apartments might declare bankruptcy, which caused a heated discussion on social media for a while. WeBank, which cooperated with Eggshell Apartment to “rent loan”, also appeared on the hot search.

On the evening of December 2, WeBank released a plan for repaying the rent of Eggshell Apartments on Weibo.

Eggshell Apartments

WeBank announces repayment plan for eggshell apartment rental loan: interest-free extension to the end of 2023

On the evening of December 2nd, Weizhong Bank released the Eggshell Apartment rent loan repayment plan on Weibo, stating that all customers of the bank affected by the Eggshell Apartment incident will be given the remaining loan principal after the customer’s request and the bank’s confirmation Interest-free extension. Before December 31, 2023, the bank will not deduct or accrue interest, and will not affect credit records.

As of December 1, among the bank’s 161,845 customers renting in Eggshell Apartments, 40077 were confirmed by WeBank after the customer’s request.

WeBank said that based on the current information from all parties, it is estimated that the disposal of problems related to the eggshell apartment incident may last a long time. If the eggshell apartment incident remains unresolved by December 31, 2023, the bank will announce a new customer rights protection plan as appropriate.

At the same time, the bank emphasized in the announcement that in accordance with the “Commercial Bank Law” and “General Rules on Loans” and other relevant laws and regulations, the bank as a commercial bank has no right to exempt loans.


Shanghai Housing Management Bureau interviewed Eggshell Apartments: Require companies to properly handle conflicts and disputes

Just the day before, in response to the situation where the landlord drove away the tenants and the rent of the room was difficult to return in the eggshell apartment, the Shanghai Housing Administration responded that it had interviewed companies and asked them to properly handle conflicts and disputes.

On December 1, the Shanghai Municipal Housing Administration responded to the petition on the Shanghai petition platform, stating that the headquarters of Eggshell Company is in Beijing, and the Beijing Municipal Government is taking the lead in coordinating the crisis resolution plan. In view of the difficulties in the operation of the eggshell company, the company is actively helping itself. At present, the problem of tight cash flow is more prominent. There are indeed problems such as delayed payment of funds and the inability of many services. It will take time for a full recovery.

The Shanghai Municipal Housing Management Bureau stated, “We have interviewed companies and asked them to properly handle conflicts and disputes. At the same time, we are also in communication with Eggshell Company every day and pay close attention to the company’s dynamics.” In addition, the reply indicated that it is about surrendering the lease. For subsequent loan credit issues, tenants can search for the public account “WeBank Rental Consumer Loan” on WeChat and follow the procedures to apply for “Credit Protection”. According to the principle of contract relativity, if the tenant has evidence that the tenant is still within the contract period and has paid rent to the long-term rental apartment enterprise, the landlord shall not interrupt, influence, or drive the tenant by cutting off water, electricity, or changing the door lock . In the case of being driven by the landlord, you should present the relevant contract and payment voucher to negotiate with the landlord whether you can take a step back and make a smooth transition. If the negotiation fails, you can seek help through legal channels such as reporting to the public security organs or applying to the street for mediation, or through legal channels to protect your legitimate rights and interests.

What happened to the long-term apartment?

This is not the first time a long-term rental apartment has experienced a thunderstorm.

Recently, following the bankruptcy and runaway of many parents’ apartment rental agencies, Eggshell Apartments, regarded as a “head enterprise”, broke out about defaulting on supplier accounts, landlord’s rent and tenants being cut off from water and electricity. The company was once known as the second largest long-term rental apartment in China.

The news that made the market a little relieved was that, almost at the same time as the eggshell thunderstorm, Ziruo announced the strategic acquisition of Beike Youth Boutique Apartments on November 30. After the merger is completed, Ziru will operate more than 50 centralized apartment projects in Beijing, Shanghai, Guangzhou, Shenzhen, Nanjing and other cities. In this regard, real estate analyst Yan Yuejin believes that such mergers and acquisitions have become a dawn in the cooling wave of long-term rental apartments this year, indicating that there are still outstanding companies in long-term rental apartments, and similar acquisitions also indicate that the pace of long-term rental apartment development is still not stagnating.


However, a single M&A event cannot completely calm the market sentiment, nor can it solve the problems of “renters” involved in rights protection and the development dilemma of long-term rental apartments. Most market analysts said that most long-term rental apartments in the current market have capital turnover problems, and in the long run, the lack of a sustainable profit model is the most fundamental problem.

“From 2015 to 2018, long-term rental apartments developed rapidly under the encouragement of policies and the support of capital, and now they have entered a period of consolidation. However, the industry once imitated the Internet model’s “only fast but not broken”, and there is nothing in the leasing business itself. Under the sturdy situation, we will hold high, hoping to solve the profit problem through fast listing. This is the problem of many long-term rental apartments.” Li Yujia, chief researcher of the Guangdong Housing Policy Research Center, told a reporter from the Financial Times.

And Zhang Dawei, chief analyst of Centaline Property, said in an interview with our reporter that most of the so-called long-term rental apartments in the market today are fake long-term rental apartments. The two main characteristics of real second landlords are earning rent differentials and embezzling funds. “Long income and short payment” is the biggest feature of this type of enterprise. He emphasized: “The long-term rental apartment we need is by no means such a second-landlord agency.”

Where is the long-term rental apartment?

With the continuous thunderstorms in institutions in the past two years, problems have already emerged. However, there is no clear solution yet. Where is the road for long-term apartment rental?


For the stock companies that have entered the market, it is very important to refrain from the impulse to expand blindly and maintain stable operations. In Li Yujia’s view, most of the apartments that have problems are Internet and entrepreneurial companies, eager for success. Since long-term rental apartments often require a large amount of capital investment in the early stage, once there is a blind impulse to develop quickly and expand the scale, it is easy to encounter a capital chain crisis. He said: “The brand expansion of long-term rental apartment construction promoted by traditional developers is slow, and it is still in the stage of model exploration. It is relatively stable. And companies like Ziru have been deeply involved in the housing leasing field for a long time and have a relatively thorough business understanding. A big advantage.”

The reporter found that the above-mentioned stable enterprises have made some voluntary contraction “structural adjustments” in 2020 when integrating data from multiple sources. Under the impact of the epidemic, changes in the market situation may be the main reason. However, this “shrinkage” does not mean business weakness. Taking Vanke Park Residence as an example, the 2020 mid-year report disclosed that although Park Residence’s urban expansion strategy has contracted in the first half of 2020, from 35 cities in mid-2019 to 33 cities, it has maintained a relatively high occupancy rate. However, in terms of the number of new houses and rental income, BoYu ranks high among the long-term rental companies in the real estate industry. Moreover, the monitoring data of Crane’s rental and sales show that in the first half of 2020, the occupancy rate of Vanke Park Residence’s projects more than 6 months in operation has climbed to 93.7%.

The call to strengthen supervision is also very strong. “Rental loans and other products must be banned,” Zhang Dawei said. The biggest problem with long-term rental apartments is not the increase in rents, but the “funding pool” brought about by financialization. The current long-term rental apartments are no longer a leasing company, but One “financial enterprise”. He pointed out that long-term apartment rental is a term arbitrage game with time as the core element: decoration and sub-leasing are actually just supplements to the capital pool, and products such as “rental loans” transfer the homeowners’ expected rent through platform projects. Under the name of the company, the actual controller can be used, which brings market risks.

In addition to the aforementioned risk prevention policies, it is more important to find a sustainable development path. “During the market cultivation period, without government funding subsidies or policy encouragement, this market is difficult to grow. With the economy stable and demand stable, the rent price increase in the past few years has obviously started to slow down, and some areas even have rent reduction This has a great impact on second-landlord-type rental apartments, because the rent price of the sub-leasing properties of the owner is locked, and under the expectation of stable rent in the future, it is very difficult to make profit.” Zhang Dawei said.

Li Yujia also agreed with this view. “Currently, the cost of acquiring housing is too high, and it is difficult to sustain the long-term rental apartment model of “earning the price difference”.” He said that in the future, housing can be reduced through the use of existing commercial office leasing and the promotion of collective land to build rental housing. Source cost. In addition, he added that the stability of the rental market also depends on the resolute implementation of the policy of “no speculation in housing”.

The main source of income is credit business

Introduction: Regardless of how “successful” each company describes its business model, from the perspective of the most essential income, the main source of revenue and profit for the “big three” of financial technology is credit business.

Origin丨21st Century Business Herald (ID: jjbd21)

Author丨Bao Hui, Wu Shuang

Editors丨Zhou Pengfeng, Chen Siying

Figure / Figure bug

A butterfly in the tropical rainforest of the Amazon River basin, flapping its wings, may cause a tornado in Texas in two weeks.

The butterfly effect abounds in economic life, but no one is as strong and widespread as the shock wave of the suspension of listing of ants, and the subsequent far-reaching impact is even harder to estimate.

On the evening of November 3, the listing of Ant Group on the A-share Science and Technology Innovation Board and the Hong Kong Stock Exchange was suspended due to a series of regulatory interviews and other reasons. According to the original plan, Ant Group will be listed simultaneously in Shanghai and Hong Kong on November 5, and the market value will exceed 2 trillion yuan, making it the largest IPO in the history of the global capital market.

If there were no such accidents, Ant Financial, Lufax and JD.com would have been the three giants of China’s financial technology that collectively landed on the capital market this year.

Before and after the suspension of Ant’s listing, the “Interim Measures for the Management of Online Small Loans (Draft for Solicitation of Comments)” was also published. The “lethal effect” is obvious. Dong Ximiao, chief researcher of the Zhongguancun Internet Finance Research Institute, told the 21st Century Business Herald reporter on November 5 that at present, the new situation of financial technology supervision has the greatest impact on Ant Group, followed by Lufax, and JD Digital has relatively little influence.

“First, Ant Group has the most financial licenses. The financial control measures implemented on November 1 have a great impact on it. To meet the requirements of the financial control measures, major adjustments to the organizational structure and business sectors are required. Jingdong Digital and Lu There are not as many financial licenses as ants under the gold exchange, and the financial control measures have less impact on it. Second, the profit of Ant Group mainly comes from the lending of small loan companies, and the Internet small loan method has hit it hard. Jingdong Digital’s online small loan business The proportion is small and the impact is small.” Dong Ximiao said.

On November 6, the financial stability report released by the central bank once again clarified that it will speed up the improvement of the financial technology regulatory framework in line with my country’s national conditions, resolve regulatory gaps and regulatory arbitrage caused by lagging regulations, accelerate the construction of digital regulatory capabilities, and improve regulatory penetration. Permeability and professionalism. Mountain rain is coming.

Comparison of “Big Three” business models

In terms of business models, the three companies have inherently significant differences.

Relying on Ali’s ecology, Ant Group uses Alipay as the traffic portal to expand the payment scenarios to comprehensive online and offline life scenarios such as people’s clothing, food, housing, transportation, etc., and then use financial services such as credit, wealth management and insurance and technology output to realize traffic monetization. Its customer groups include individuals , Financial institutions, general enterprises, and government departments.

Backed by the JD Group, JD Digital is taking the 2B path, focusing on digital technology, providing digital solutions for financial institutions, merchants and enterprises, governments and other customers.

Relying on Ping An Group, Lufax started with the P2P online loan business, focusing on the two major businesses of retail credit and wealth management, with retail credit as the main source of income and profit.

Echoing the flow is valuation. Before the regulatory interview, Ant Group was valued at more than 2 trillion yuan, and JD Digital was valued at more than 200 billion yuan. Lujin, which has been listed on the New York Stock Exchange, had an estimated market value of 33.79 billion US dollars at the closing price on November 6, which was about 2230. 100 million yuan.

Regardless of how “prestigious” each company describes its business model, from the perspective of the most essential income, the main source of revenue and profit for the “big three” of financial technology is credit business.

According to data from the Ant Group’s prospectus, its micro-credit technology platform revenue has increased from 25% in 2017 to 39% in the first half of 2020, becoming the company’s largest business; the combined revenue of JD Digital’s JD Gold Bar and JD White Bar The proportion has become the largest business in the first half of 2020, increasing to 43%; Lufax’s retail credit has been the main source of income in the past three years and has been on the rise, accounting for more than 80% in both 2019 and the first half of 2020.

Specific to the types of loan business, the three companies have consumer credit and small and micro credit, but the focus is different. Ant Group and JD Digital mainly focus on consumer credit, while Lujin focuses on small and micro credit.

According to data from the prospectus, Ant Group’s credit products include Huabei, Boraibe, and small and micro credit. In the first half of 2020, its consumer credit products accounted for about 80%; JD Digital’s consumer credit products include JD Baitiao and JD Gold bars, and small and micro Credit products include Jingbaobei, Jingxiaodai, Jingcai, etc. Jingdong Baitiao and Jingdong Gold Bar are the main products of the company’s credit business; Lufax’s main products include secured loans and unsecured loans, of which secured loan borrowers are small For micro businesses, unsecured loans include small and micro businesses and personal consumption. Of the new loans in the first half of 2020, 69% are loans to small and micro businesses.

In terms of customer acquisition channels, Ant Group has deployed online consumption scenes through Taobao, Tmall, Taopiao, Amazon, and Vipshop, and offline consumption scenes through Walmart, Carrefour, and Yonghui Supermarket. JD Digital uses apps such as JD.com and WeChat as scenarios for customer acquisition.

Due to the lack of consumption scenarios, Lufax mainly relies on direct sales, cooperative channels, and online and telephone marketing to acquire customers. As of the end of the first half of 2020, the company has more than 56,000 sales staff. Lufax has 48.2%, 39.8%, and 12.0% of customers through direct sales, cooperative channels, and online and telemarketing, respectively. Ping An Ecosystem in the cooperative channel Accounted for over 90%.

In recent years, the cost of acquiring customers for Lufax’s credit business has risen sharply. In 2019 and the first half of 2020, direct sales expenses increased by 78% and 41%, respectively, and cooperative channel expenses increased by 111% and 51%, respectively. The company’s customer acquisition cost rate has shown an upward trend, and the credit business customer acquisition cost/retail credit facilitation service fee has increased from 15% in 2017 to 28% in the first half of 2020.

In terms of breakdown, Lufax’s retail credit facilitation service fees include loan facilitation service fees and post-loan service fees. Loan facilitation services mainly include customer evaluation, technical support and loan matching. Post-loan services include repayment collection, Services such as data collection and management. From 2017 to 2020H1, the proportion of Lufax’s post-loan service fees increased from 67% to 79%, which is the main source of income.

In terms of the number of borrowers, Ant Group has the most. During the 12 months ended June 30, 2020, approximately 500 million users received consumer credit through Ant Group. In the first half of 2020, the annual active number of JD Baitiao was 55.45 million, and Lufax’s cumulative number of borrowers was 13.43 million.

However, in terms of the amount of money, Lufax is the largest, with an unsecured loan of 100,000 to 150,000 yuan and a mortgage of 400 to 650,000 yuan, far exceeding the other two. Ant Huabei’s per capita loan balance is 2,000 yuan, and the average loan size of JD gold bullion customers is 18,000 yuan in the first half of 2020.

At present, the credit business income of Ant Group and Lufax is in the same order of magnitude, far exceeding JD Digital.

From 2017 to 2019, Lufax’s retail credit business revenue was the highest among the three companies, with 15.336 billion yuan, 29.576 billion yuan, and 39.325 billion yuan. In 2019, Ant Group’s credit business income rose sharply, and in the first half of 2020, it will overtake 45.972 billion yuan for Ant and 20.754 billion yuan for Lufax. Jingdong Baitiao, the main credit product of Jingdong Digital, is only 1.794 billion yuan, and Jingdong gold bullion is 2.636 billion yuan.

In the first half of 2020, Ant Group’s net profit is also far ahead of the other two. Among them, Ant’s net profit was 21.923 billion yuan, Lufax’s 7.272 billion yuan, and JD.com lost 680 million yuan.

But in 2018, the net profit of the three companies was not Ant, but Lufax. In 2018, Lufax’s net profit was 13.317 billion yuan, while Ant was 2.156 billion yuan and JD Digital was 128 million yuan. The reasons for the “top number” change of ownership are obvious. Lufax has withdrawn from P2P products in 2019, while Ant Group has started its efforts in 2019, and credit business income has risen sharply.

It is worth noting that in terms of the quality of credit assets, both Ant and Lufax have seen a clear upward trend in their credit overdue rates in recent years. Take 90 days as an example. As of the end of 2017, the end of 2018, the end of 2019 and the first half of 2020, Ant’s consumer credit balance overdue rate was 0.68%, 1.01%, 1.05%, and 2.10%, respectively. The credit balance of small and micro operators was overdue. The rates were 1.10%, 1.67%, 1.57%, 2.05%. Lufax’s general unsecured loan overdue rates are 0.7%, 1%, 1%, and 2.1% respectively. The overdue rates of small and micro credit assets of JD Digital in the same period were 0.83%, 2.10%, 1.33%, and 0.38%.

What is the impact of new regulations on online small loans?

There is no doubt that the online microfinance supervision measures will become one of the most influential new regulations for financial technology giants that mainly rely on credit income.

In principle, small loan companies should not operate across regions, but in recent years, some companies have resorted to online small loan businesses to break through the restrictions of operating regions and expand their business to the whole country; on the other hand, they have incorporated funds through asset securitization and other methods to break through financing Leverage constraints, magnify the leverage. Due to the lack of nationally unified and clear online microfinance business rules, local governments have different standards and standards for microfinance companies’ online microfinance approval, which also caused inter-regional arbitrage problems.

For example, there are currently about 250 small loan companies operating online small loan business, of which nearly 100 are registered in Guangdong Province and Chongqing City. Two small loan companies under Ant Group are both registered in Chongqing. In addition, Jiangsu, Zhejiang, Shanghai and Jiangxi provinces also have many small loan companies operating online small loan business.

Therefore, on November 2, the China Banking and Insurance Regulatory Commission and the People’s Bank of China jointly issued the “Interim Measures for the Administration of Online Small Loans (Draft for Solicitation of Comments)” (hereinafter referred to as the “Draft for Solicitation of Comments”), in terms of operating areas, loan limits, and joint loans , Financing leverage, registered capital, etc., put forward a number of requirements, the previous regulatory policies were comprehensively improved and adjusted, focusing on five aspects:

First, it is emphasized that the online microfinance business should be operated in the provincial administrative region. As a major shareholder, the number of small loan companies that participate in cross-provincial online small loan business shall not exceed two, or the number of small loan companies that hold a controlling stake in cross-provincial online small loan business shall not exceed one.

This rule will cause the Ant Group, which owns two small loan companies, to make adjustments. Regulatory requirements require that the Internet operating platform and registration place be the same, and even if the China Banking and Insurance Regulatory Commission approves its inter-provincial operation, only one can be retained.

Second, online microfinance should adhere to the principle of small amount and decentralization. Personal loans do not exceed 300,000 yuan and the lower one-third of the three-year annual income, and institutional loans do not exceed 1 million yuan. This is a requirement specifically for online small loans. The “lethality” still depends on how the implementation rules are formulated, such as how the annual income is defined.

Third, limit the proportion of joint loans for online small loans. In a single joint loan, the proportion of small loan companies operating online small loan business shall not be less than 30%, in order to restrain small loan companies from expanding too quickly through joint loans.

The credit business of Ant Jingdong and Lufax is mainly based on asset-light loans + joint loans. Third-party financial institutions are their main sources of funds. As of the first half of 2020, the proportion of on-balance sheet loans of Ant Group, JD Digital Technology and Lufax was only 2%, 4% and 0.7% respectively. Under the joint lending model, small loans or consumer finance companies under the three companies only provide A small part of the funds are loaned together with other financial institutions.

“Among the small loan companies under the Ant Group, in issuing joint loans with some small and medium-sized banks, their capital contribution ratio is as low as 5%, and the lowest is only 1%. According to estimates, with the help of the joint loan model, Ant Group passed 36 billion on-balance sheet Approximately 1.8 trillion yuan of joint loans have become the most important tool for its credit expansion, and it also planted greater financial risks. After limiting the proportion of joint loans, Ant Group’s credit expansion model will be severely hit, which has a great impact on it. “Dong Ximiao said.

There are also different views on this market. Wu Xiaoping, a visiting professor at Zhejiang University and former executive general manager of CICC’s institutional business and wealth business, told the 21st Century Business Herald reporter on November 6 that “the contribution ratio of joint loans shall not be less than 30%. It is indeed a big challenge for Ants, because it is at least 100 billion yuan of new registered capital requirements. But judging from the amount of financing proposed by Ant Financial this time, Ants still have the ability to find so much money from the market. Although Now that the IPO has been suspended, I believe that Ants can still obtain funds in the interbank market and other financing markets.”

In the specific implementation, it still depends on how the regulatory rules define the boundary between loan assistance and joint loans, and whether the loan assistance model can bypass this rule.

Fourth, restrict the financing leverage of small online loans. It is clarified that small loan companies operating online small loan business shall not exceed 1 times their net assets through bank loans and shareholder loans; financing through asset securitization and bond issuance shall not exceed 4 times their net assets. It can be seen that small loan companies operating online small loan business have a total leverage ratio of 5 times.

This is consistent with the “Notice”‘s requirements on the leverage ratio of small loan companies, but it has a more obvious impact on the small loan companies under the Ant Group, because it strictly limits its access to funds through asset securitization and promotes its scale expansion. At the same time, the “Draft for Comments” also returned the authority to adjust the leverage ratio of online small loans to the China Banking and Insurance Regulatory Commission to prevent local regulatory deregulation from causing inconsistent standards.

Fifth, raise the capital threshold for operating online small loans. The registered capital of small loan companies engaged in online microfinance is no less than 1 billion yuan, and the registered capital of small loan companies that operate online microfinance across provinces is no less than 5 billion yuan. But this is not very difficult for the “Big Three”.

Dong Ximiao said that the “Draft for Solicitation of Comments” is expected to be released soon after the public solicitation of comments. This will help standardize the operation of online small loan businesses, guide small loan companies to return to the nature of small loans and improve service capabilities. At the same time, it will better serve the real economy. “If the relevant measures are officially implemented, the online microfinance business will usher in a round of major adjustments. Large Internet companies that wantonly expand through the online microfinance business will be significantly impacted. This may be one of the reasons why Ant Group has been suspended from listing. ”

Financial technology regulation shift?

Figure / Figure bug

The industry generally believes that the meeting of the Financial Committee of the State Council on October 31 is a sign of a change in the trend of financial technology regulatory policies. The meeting clearly emphasized that the current rapid development of financial technology and financial innovation must handle the relationship between financial development, financial stability and financial security. We must not only encourage innovation and promote entrepreneurship, but also strengthen supervision, and fully incorporate financial activities into supervision in accordance with the law to effectively prevent risks. Supervisory departments must do their work conscientiously and treat similar businesses and entities equally.

Domestic financial supervision is still dominated by institutional supervision, and there may be room for arbitrage in business. The Ant Group is considered to be familiar with this because of its flexible mechanism.

The draft of the management measures for online small loan companies reflects the idea of ​​shifting from institutional supervision to functional supervision and behavioral supervision. If financial technology companies are involved in bank-like deposit and loan business, they must also have reserves, capital, and leverage. , Liquidity and other regulatory requirements, maintain regulatory consistency, and reduce regulatory gaps and regulatory arbitrage.

This will put Ant and other financial technology companies on the same level of supervision as licensed financial institutions such as banks. In the future, an important part of Ant Financial’s profit, that is, loan assistance business and off-balance sheet assets ABS, etc. may also refer to on-balance sheet loan management.

The Financial Committee meeting held on October 31 also emphasized the need to improve the fair competition review mechanism, strengthen anti-monopoly and anti-unfair competition law enforcement and justice, and enhance the comprehensive market supervision capabilities. It is necessary to establish basic systems and standards for data resource property rights and transaction circulation, and strengthen the protection of personal information. Industry analysts believe that anti-monopoly and strengthening the protection of personal information-all point to the key points of financial technology companies such as Ant Group.

In addition, the financial control group management method that has not yet issued detailed rules is another Damocles sword hanging on the heads of financial technology companies such as Ant.

Although the specific rules have not yet been issued, the “Trial Measures for the Supervision and Administration of Financial Holding Companies” clarify that the capital of financial holding companies, financial institutions controlled by the group, and the group as a whole should be commensurate with the scale of assets and risk levels, and the level of capital adequacy should be based on consolidated management. Basic calculations. It can be seen that the regulatory constraints are mainly leverage control, large risk exposure management and so on.

On November 6, the financial stability report issued by the central bank once again clarified that the financial management department will do a good job in overall planning and coordination, strengthen the top-level design and overall layout of supervision, and accelerate the improvement of the financial technology regulatory framework in line with my country’s national conditions.

First, based on innovative regulatory tools, launch financial technology innovation regulatory tools that meet my country’s national conditions and are in line with international standards as soon as possible;

The second is to take the regulatory rules as the core, and timely introduce targeted regulatory rules to ensure that the financial technology business has rules to follow in business compliance, technical security, risk prevention and control, etc., and resolve regulatory gaps and regulatory arbitrage caused by lagging rules And other issues;

The third is to use digitization as a means to build a digital regulatory reporting platform, adopt artificial intelligence technology to realize formalization, digitization and proceduralization of regulatory rules, accelerate the construction of digital regulatory capabilities, and enhance regulatory penetration and professionalism.

Fintech companies such as Ant, Lufax, and JD.com are still uncertain how they will develop their businesses in the future and how they will adapt to the new regulatory trend.