China’s Huixin Credit To List Shares in HK

Offer Price Sets Between HK$1.55 and HK$1.75 per Share To Raise Gross Proceeds up to HK$315 Million

HONG KONG – Huixin Credit (Quanzhou Huixin Micro-Credit) has announced the proposed listing of its shares on the Main Board of the Hong Kong Stock Exchange as part of efforts to further enlarge its capital base and diversify funding sources.

Huixin Credit plans to offer an aggregate of 180,000,000 H shares (subject to the Over-allotment Option), of which 162,000,000 H shares (90%) are international public offer shares (subject to adjustment and the Over-allotment Option) and 18,000,000 H shares (10%) are Hong Kong public offer shares (subject to adjustment), at an offer price range between HK$1.55 per share and HK$1.75 per share.

The Hong Kong public offering will open at 9:00 a.m. on 19 September 2016, Monday and close at 12:00 noon on 22 September 2016, Thursday. Dealings in shares on the SEHK are expected to commence on 30 September 2016, Friday, with the stock code 1577.HK in board lots of 2,000 H shares each. There is an over-allotment option to increase the offering size by 15%, an aggregate of 27,000,000 additional H shares.

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Changjiang Corporate Finance (HK) Limited is the Sole Sponsor. Changjiang Securities Brokerage (HK) Limited is the Sole Global Coordinator, Sole Bookrunner and Sole Lead Manager.

“As one of the first group of pilot microfinance companies, we are primarily dedicated to providing short-term financing solutions to individuals, SMEs and microenterprises in Quanzhou City since our inception. As the 23rd largest metropolis in China in 2015, Quanzhou City is home to a significant number of private manufacturing and services companies and has seen strong continued growth in the number of SMEs and microenterprises,” said Zhou Yongwei, chairman and executive director of Huixin Credit.

He added: “Leveraging on our specialization in the local market, leading position and efficient service offerings, and benefiting from preferential government policies, we have managed to maintain the stable growth of its business and become a preferred provider of solutions for the credit-based short-term financing needs of customers.”

Based in Quanzhou City, Huixin Credit is primarily dedicated to providing local entrepreneurial individuals, SMEs and microenterprises with practical and flexible short-term financing solutions to support their continued development and address their ongoing liquidity needs.

The company’s business scale has expanded rapidly since its inception in 2010, and has built a solid customer base in line with the growth in its business scale. During the Track Record Period, the company had a portfolio of over 600 different customers.

Huixin Credit – China’s Largest Licensed Microfinance Firm in Fujian

According to Ipsos, Huixin Credit was the largest licensed microfinance company in Fujian Province in terms of 2015 revenue, and had a market share of approximately 7.2% in Quanzhou City’s microfinance market in terms of principal amount of outstanding loans as of the end of 2015.

The company was also one of the first group of pilot microfinance companies in Fujian Province. From 2012 to 2015, the Company received an “A+” corporate rating from a credit rating agency designated by China Development Bank.

Huixin Credit primarily offers short-term credit-based loans, which generally had maturity profiles of up to six months and ranged in size from Rmb1.0 million to Rmb10.0 million. The Company generates substantially all of its income by charging interest on the loans. Thriving on its substantial financial strengths, a sound credit rating and the leading market position, the Company has achieved stable growth of interest income and net profit in recent years.

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The Company’s interest income for the years ended 31 December 2013, 2014 and 2015 was RMB78.5 million, RMB134.3 million and RMB135.9 million, respectively, representing a CAGR of approximately 31.6%. For the first quarter of 2016, the Company recorded an interest income of RMB36.2 million. The Company’s net profit was RMB41.1 million, RMB73.5 million and RMB75.3 million for the years ended 31 December 2013, 2014 and 2015, respectively, representing a CAGR of approximately 35.3%. For the first quarter of 2016, the Company recorded a net profit of RMB20.3 million.

“Looking forward, we will seize the opportunities in capital market, further enlarge our capital base and diversify our funding sources. We will also expand our product offerings and customer base, in order to increase our market penetration and capture significant market opportunities in the microfinance sector. Besides, we will selectively expand the geographical coverage of our business and seek opportunities for strategic acquisitions and investments. Furthermore, to pursue sustainable development, we will enhance our corporate governance, and strengthen our risk management efforts and internal controls,” Zhou said. –