Auto-backed P2P Lending Platform Weidai Downsizes IPO Target to $50 Million
Weidai is the largest auto-backed financing provider in China in terms of loan volume, with a market share of approximately 35 percent.
Weidai Ltd., a Hangzhou-based financing platform, updated its regulatory filing today, lowering its proposed initial public offering target to a maximum of $49.5 million.
The company said it seeks to sell 4.5 million of its American depositary shares on the New York Stock Exchange with a price in the range of $9 to $11 per ADS.
The IPO was downsized from the $100 million Weidai targeted in its initial prospectus filed two months ago. According to Bloomberg, Weidai previously planned to raise nearly $400 million when it first announced its plans to list in the U.S. The company did not say whether it had lowered the number of ADSs it seeks to sell or the price per share.
Weidai connects small- and micro-businesses in China with online and institutional lenders. It was the largest auto-backed financing provider in China in terms of loan volume from 2015 to 2017, with a market share of approximately 35 percent last year, according to a report by Oliver Wyman cited in the company's prospectus.
Launched in 2011, Weidai first introduced auto-backed financing in China in the form of a title loan with collateral registration equipped with a GPS, replacing the tradition of keeping automobiles in a lender's custody.
(Source: Weidai's prospectus amended Nov. 7)
The company also provided its most recent financials in today's filing. For the three months through September, it said it has facilitated a loan volume of 17 billion yuan ($2.5 billion), a decrease of 15 percent from the second quarter. As of Sept. 30, its outstanding balance of loans was $3.1 billion and the number of its active online investors was 226,000 compared with 373,000 in June.
Weidai reported revenue of $156.7 million for the third quarter, 81 percent of which was generated from loan facilitation service fees. Income reached $28.3 million, and operating costs and expenses were $96.8 million, the company said.
The company added that it has submitted its inspection report according to the recent regulatory changes in China's peer-to-peer lending industry on Sept. 14.
Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, and Citigroup Global Markets Inc., and AMTD Global Markets Ltd. are acting as underwriters on Weidai's deal.