9F Inc. summited its prospectus Thursday, seeking to raise up to $150 million for its initial public offering on Wall Street.
The Beijing-based company expects to raise $150 million under the proposed symbol of “JFG”, according to its prospectus filed with the U.S. Securities and Exchange Commission Thursday.
The firm serves as a digital financial account platform, offering loan products, online wealth management products, and payment facilitation under a single digital financial account. 9F highlighted its core product named One Card, with which users can utilize their approved credit limits to purchase products from more than three million merchants through China UnionPay and its own online shopping platform One Card Mall. One Card users can also draw down cash from approved credit limits to meet other financial needs.
The company said its revenue in the first quarter reached $179.4 million, up 10 percent from the corresponding period in 2018. Revenue from loan facilitation services was $155.4 million in the first quarter, while post-origination services brought in $12.1 million. Net income was $73.7 million in the three months through March, soaring 89 percent from a year ago.
New York-based consulting firm Oliver Wyman reported that 9F ranked No.1 online consumer finance platform in terms of outstanding loan balance of 55.3 billion yuan, or $8.0 billion, as of December 31, 2018.
The firm enjoyed fast growth in 2016 and 2017 but suffered from challenging regulatory environment like its online lending peers. The number of active borrowers on 9F platform skyrocketed 172 percent from 1.3 million in 2016 to 3.6 million in 2017 and decreased by 36 percent to 2.3 million in 2018. The latest number of active borrowers was 0.6 million for the three months ended March, representing a 40 percent decline from 1.0 million for the same period in 2018.
9F has diversified its funding sources through developing direct lending program since 2018, especially turning to institutional funding partners with $10.4 billion funding limit as of June 30. As a result, the percentage of loan origination volume funded by institutional funding partners to total loan origination volume has increased significantly from approximately 11 percent in the quarter through March to 58 percent for the three months ended June.
The company said it intends to use the proceeds from its IPO for strengthening ecosystem, broadening product offerings, investing in research and development, international expansion and general corporate purposes. For 9F’s international business strategies, it plans to expand investment in Hong Kong and Southeast Asia, applying additional licenses overseas.
Listed underwriters on the deal are Credit Suisse Securities (USA) LLC, Haitong International Securities Group Ltd. and 9F Primasia Securities Ltd.