China’s 2^nd largest property developer launched its own fintech platform HDFAX.COM

Evergrande Group (HKSE:3333) is China’s second-largest real estate developer focused on high-end apartments in tier 1 and tier 2 cities. According to its corporate website, Evergrande has also expanded into the travel, insurance, agriculture, health services and sports industries, and reached RMB 670B in assets on book and 201B revenue in 2015. The Evergrande name has received continuous media attention with its founder Mr. Xu Jiayin being known as one of the wealthiest men in China and  owner of a championship soccer team in Asia.

The company’s leadership had shown interest in providing financial services while building a rich user base of high-income dwellers. Prior to launching its fintech platform, Evergrande acquired a small life insurance company and took control of a mid-size commercial bank. In March 2016, the company launched HDFAX.COM (www.hdfax.com), which owns licenses in the insurance brokerage and factoring businesses and provides services in wealth management, insurance and bond sale, third-party payment and corporate financing.

HDFAX.COM is focused on the P2P business and stresses its role as information intermediate. At this time, only one product is being offered to investors – loan-backed wealth management with 181-day terms and 5.8% annual return. But the user manual on HDFAX.COM revealed additional products may become available in future with the following terms:

While HDFAX.COM has emphasized its role as “information intermediate,” it has done a less-than-exemplary job of disclosing borrower information thus far. First, it appears the platform does not publicly disclose any information on its borrowing process or risk management measures. Second, information for each project lacks detail with only the borrower’s business name and the most basic registration information available. HDFAX.COM seems to be a sort of rough draft of Evergrande’s fintech vision with many improvements needed before the platform can be considered one of the leaders in the space.

P2P platform focused on Shanghai’s local market Renqidai received RMB 20M Series A Investment

Shanghai-based Renqidai focuses on providing real estate mortgages, supply chain financing and operating capital primarily to small businesses and some personal borrowers, mostly in the Shanghai area. Renqidai provides operating capital to small businesses and car loans and credit loans to working class borrowers. Business loans are packaged into four main categories: 8%, 9%, 10% and 12% returns with one-, three-, six-, and 12-month terms respectively. Personal loan products are customized but generally have higher returns.  

Rongtao Investment was the sole investor in Renqidai’s RMB 20M Series A financing. The platform stated that the funds would be used toward product improvement, recruiting and marketing.

Agriculture-focused P2P platform Nongfadai received RMB 90M Pre-A Investment

Founded in March 2015, Nongfadai (NFD) focuses on providing financing to farmers and small agricultural businesses. The central government of China has historically provided special financing to the agriculture sector but usually focuses on large projects like infrastructure and research. NFD helps small agricultural borrowers fund smaller-scale production activities, such as an individual farmer purchasing seeds or a combine owner buying parts. All borrowing is done offline through franchised stores, while the website and APP focuses on investing. The returns are different for each project but generally range from 6% to 12%. Because most projects are related to day-to-day spending, investing terms tend to be under 3 months. According to its website, NFD has over 290,000 online investors and manages over RMB 2.5B.

Bio-scientist Wang Jun and the leading producer of agrochemical formulations NPS Group participated in NFD’s RMB 90M Pre-A financing. Prior to this financing, NPS owned a 31.81% stake in NFD and played key roles in NFD’s growth. In fact, most of NFD’s financial service centers are among the 3,000 NPS direct operating stores.

Trading platform for non-standard financial products Time Value received RMB 20M Series A Investment

Time Value (www.sjjz.com) was founded by a couple of investment bankers from Beijing in 2014. The assets on Time Value are not loans but trust assets, many well-performing with reasonably high returns but only available to institutional investors. The platform makes these non-standard financial products available to public investors, which in turn increases the volatility of these assets. Currently Time Value offers a single investment product that is backed by many trust assets. The 6.3% interest rate is calculated every second, so investors are free to withdraw at any time. According to its website, Time Value managed RMB 186M in investments in March 2016.

The start-up team is made up of experienced bankers and lawyers from established institutions. The financial and legal background of the team is one of its key strengths and what has drawn investors. The two investors in this RMB 20M Series A Investment are A-shares listed industrial company Shenzhen Inovance Technology (stock code:300124) and An Xing Asset Management.