Debt Collector YX Asset Recovery Seeks $200 Million U.S. IPO

The largest provider of recovering delinquent credit card receivables in China has filed to become publicly traded on the New York Stock Exchange.

Yaning Ying
    Oct 24, 2019 8:05 PM  PT
Debt Collector YX Asset Recovery Seeks $200 Million U.S. IPO
author: Yaning Ying   

YX Asset Recovery Ltd., which provides nationwide consumer debt collection in China, seeks to raise up to $200 million in an initial public offering on the New York Stock Exchange.

The Changsha-based company, founded in 2015, facilitates collecting delinquent consumer receivables such as credit card debt originated by commercial banks, as well as 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 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 years 2017 and 2018 and the six months ended June 30, 2019, YX reported revenues of $87 million, $110 million and $75 million, respectively. Net income was $18.1 million in 2018, up 13% year-over-year, and $4.7 million in the first half-year in 2019, according to the filing. 

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. 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 in the corresponding period in 2018, YX stated in the prospectus.

Based on data from iResearch, YX was the largest provider of delinquent credit card receivables recovery service in the PRC in terms of the value of receivables under collection, commission and the number of collection specialists employed as of 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% from 46.4 billion yuan at the end of 2013 to 1,273.9 billion yuan at the end of 2018. 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 said. 

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. The pricing terms were not yet disclosed.