YX Asset Recovery Ltd., which provides nation-wide delinquent consumer debt collection in China, seeks to raise $200 million in an initial public offering to list on the NYSE and has not chosen a ticker yet.
The Changsha, China-based company, founded in 2015, provides service of collecting delinquent consumer receivables such as credit card receivables originated by commercial banks, and online receivables originated by online consumer finance companies, according to its prospectus filed Tuesday with the U.S. Securities and Exchange Commission. YX said in the file that its mission is "To be a pioneer in institutionalizing a transparent Chinese consumer credit recovery industry by helping borrowers rebuild credit, maximizing financial institutions' recovery and nurturing a new generation of talent."
For the fiscal years ended December 31, 2017 and 2018 and the six months ended June 30, 2019, YX generated revenues of $87 million, $110 million and $75 million, respectively, according to the filing.
YX has a very experienced team. YX's founder, Man Tan, has more than 15 years of experience in collecting delinquent consumer receivables. As of June 30, 2019, YX had 10,915 full-time collection specialists in its operating centers located in 29 cities in China, which include 1,109 collection specialists who have years of experience and are qualified to conduct direct negotiation with debtors. The monthly average amount collected per collection specialist was $3,989 for the six months ended June 30, 2019, which was 27.5% higher than the corresponding period in 2018. YX stated in the prospectus.
Base on the data from iResearch, YX is the largest provider of delinquent credit card receivables recovery service in the PRC in terms of the total value of receivables under collection and number of collection specialists employed as of June 30, 2019, and full commission for the six months ended June 30, 2019.
Online consumer finance companies in China have undergone substantial expansion in recent years with the total outstanding balance of online receivables growing at a CAGR of 94.0% from RMB46.4 billion at the end of 2013 to RMB1,273.9 billion at the end of 2018. The need for third-party delinquent collection service providers is more prevalent for online consumer finance companies. Base on this industry background, from 2018, YX began to transform from focusing on the collection of credit card receivables for commercial banks to providing more online receivables collection services. In 2017, 2018 and for the six months ended June 30, 2019, YX derived 96.6%, 80.5% and 72.3% of its revenues from the credit card receivables collection services, respectively, and 3.1%, 19.5% and 27.7% from online receivables, respectively. YX provided in the prospectus.
Deutsche Bank Securities Inc., CMB International Capital Corporation Ltd., Raymond James Financial, AMTD Global Markets Ltd. and SunTrust Robinson Humphrey Inc. will act as the underwriters on the expected IPO. No pricing terms were disclosed.