Micro-lenders under JD.com, ByteDance, Meituan and others are accelerating ABS issuance

On October 14, the Shanghai Stock Exchange approved asset-backed securities totaling 3 billion yuan ($412.7 million), issued by a microcredit subsidiary of Chinese e-commerce leader JD.com. This is the third batch of ABS requested by the micro-lender this year, and all three requests have been approved by the exchange, with a total amount of 11.39 billion yuan.

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ABS are an important financing method for micro-lenders due to their low issuance threshold, low cost, and renewable periods. “During the past year and the first half of this year, affected by factors such as the special rectification launched by the government targeting internet platforms, the issuance of ABS by consumer internet companies has been suspended. The current market rally has been mainly driven by the centralized release of the order book of major companies after the restart of the show,” said JinTiansenior researcher at the Institute of Digital Economics of Zhongnan University of Economics and Law.

According to data disclosed by the Shanghai Stock Exchange and the Shenzhen Stock Exchange, Jiemian News found that since the beginning of this year, micro-lenders under five Chinese internet giants, namely TencentByteDance, Baidu, Meituan and JD.comhave been successfully approved to issue ABS in the amount of 39.33 billion yuan, and there are still ABS in the total amount of 55 billion yuan to be issued while they are currently in the feedback stage .

Among them, a micro-lender controlled by ByteDance requested the issuance of three ABS, each worth 10 billion yuan. They are currently in the feedback stage and the latest response deadline for an ABS requested for issuance on the Shanghai Stock Exchange is October 13.

This year, the largest number of ABS was successfully issued for Meituanwhich issued 18 billion yuan, followed by JD.com, with an issue amount of 11.39 billion yuan. Third place is Baiduthe fintech arm of , with an issue amount reaching 10 billion yuan.

TencentThe lending subsidiary of only applied for one ABS, and the amount to be issued is the smallest compared to other small Internet lending companies, which is only 1 billion yuan. At present, this ABS has not been successfully issued at the feedback stage.

In addition, Trip.com and Qihoo 360 respectively have ABS applied this year, which is still in the feedback stage.

In terms of subscribers, CICC and CITIC Securities are the most favored by Internet micro-credit companies, and the number of ABS subscribed by them accounts for more than 50% of the total. China Merchants Securities Asset Management cooperates closely with Meituanmicrocredit subsidiary of. Of the five ABS issued by Meituan this year, four are underwritten by the firm. According to CNABS (China’s asset-backed securities website), the top three corporate ABS underwriters were CITIC Securities, Ping An Securities and CICC this year.

From the perspective of the whole microcredit industry, on October 25, China’s central bank released a statistical data report of microcredit companies in the third quarter of 2022. By the end of September, there were 6,054 such companies in China. The loan balance was 907.6 billion yuan, down 34.7 billion yuan in the first three quarters. The number of employees is 58,467 and the paid-up capital is 770.9 billion yuan.

Yu Baicheng, vice president of 01 Think Tank, pointed out that online micro-lenders mainly provide credit services to individuals and small and micro businesses. In the context of urgent financial support to the real economy, the role of online micro-lenders needs to be further developed, so it is expected that funding channels such as ABS will continue to be supported.

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