JD Capital Invests 2 billion Yuan in Founding Jiuxin Finance: A Unique P2P Platform
2015-05-04
A fresh force has entered the industry of Internet finance. On May 4, JD Capital (430719) published an announcement about spending 2 billion yuan on establishing Jiuxin Finance (www.jiuxinfinance.com), a wholly-owned Internet finance brand, with the aim to construct a professional and safe Internet financial platform in China and to provide an economic and efficient financing channel for clients, as well as to offer diversified financial services to investors in addition to traditional investment channels.
P2P Upstart from the PE giant, with a power-revealing investment capital of 2 billion yuan
JD Capital, a nationally famous equity investment institution, was listed on the National Equities Exchange and Quotations (NEEQ) in the April of 2014, and became the “first PE stock” in Chinese capital market. According to the publicly disclosed 2014 Annual Report, the volume of equity funds under the management of JD Capital amounted to 31 billion yuan, with an internal rate of return (IRR) exceeding 30%. Up to April, 2015, 45 of JD Capital-invested companies have been listed on various levels of capital markets home and abroad. Seven enterprises invested by funds subsidiary to JD Capital have independently conducted Initial Public Offering (IPO) in 2014 alone, with the return on investment reaching over 10-fold. Star projects like U-tours and Feitian Safe even priced over 100 yuan per share.
Aiming at becoming a big assets management platform, JD Capital started to conduct strategic layout soon after its listing on the NEEQ. Not only did JD Capital established JZ Asset Management, the first public fund with PE backgrounds, it also obtained the license of securities and became the holding company of JZ Security. Recently, JD Capital initiated application for a commercial bank license, and publicly announced that it planned to establish a private bank as initiator. These deployments are not only mutually supportive and beneficial to mutual compensation between platforms, but also an attempt to satisfy various assets management demands of all kinds of investors. The ambition is obvious.
This time, Jiuxin Finance, a brand new P2P initiated by JD Capital, is doubtlessly another renovation for asset management industry in China, leaving a magnificent imaginary space for the industry. This is the second P2P platform established by a large comprehensive finance agency after Ping’an’s Lufax. According to internal information from JD Capital, Jiuxin Finance will form a P2P platform distinct from traditional ones, based on abundant capital support from big shareholders, exclusive superior underlying financial assets and multi-dimensional business and risk control system.
It is worth noticing that the registered capital of Jiuxin Finance is 2 billion yuan, which is over twice that of Lufax (837 million), renewing the record of the P2P industry.
Exclusive high quality financiers enjoying superior asset reserves
According to the announcement, at the early stage, Jiuxin Finance platform mainly provides services according to the borrowing demands of investors of the funds under management, shareholders of the invested companies, and the company’s shareholders. Later on, the scope of clients related to the financing bodies will be gradually expanded, including but are not limited to public funds founded by the company, security companies’ clients, other cooperating agencies’ clients, etc., in order to develop an innovative financial product in line with the internet spirit.
It is known that currently, in terms of sources of borrowers, most P2P platforms are mainly reliant on small loan companies, factoring companies and guarantee companies they cooperate offline. Related person in charge of Jiuxin Finance remarks that, in the traditional mode, a platform’s financing capacity is constrained by its partners; it is hard for the platform to control the quality of the borrowers. On the contrary, Jiuxin Finance boasts high-quality borrowers. Just as the announcement states, its preliminary borrowers are mainly investors of the fund managed by JD Capital, shareholders of the invested companies and the shareholder of the company itself. These borrowers have extremely high personal and corporate credit, and provides full-value financial asset as their guarantee while borrowing from the Jiuxin Finance platform, including the PE fund shares with the highest value adding potential, equity of growing enterprises, and abundant assets in the form of credit and equity assets from public funds and security companies. Based on JD Capital’s professional examination and assessment of the value of private finance assets, exclusive and flexible measures of credit addition, abundant resources and experiences, Jiuxin Finance is expected to provide the most solid safety guarantee for all investors, and devote itself to realizing the perfect balance between safety, liquidity and profitability.
This person in charge also claims that Jiuxin Finance platform enjoys obvious advantages in acquiring superior assets. For example, part of the financing projects are from the giant network of superior resources formed by the nearly 300 JD Capital-invested companies. According to public information, over 60 JD Capital’s investees have gone public or are in the process of listing verification, and nearly 30 enterprises have been listed on the NEEQ.
Unique multi-layer and multi-dimensional business and risk control system
Currently, the biggest concern of regulators and investors in Internet finance is risk control. On January 20, China Banking Regulatory Commission (CBRC) adjusted its structure by setting up a department of banking industry inclusive finance, taking the lead in such endeavor, and P2P is under the supervision of this department.
Different from most P2P platforms operating on traditional credit with relatively single business and logic of risk control, Jiuxin Finance, on the basis of JD Capital’s abundant asset management experiences and leading industrial thinking in the field, interacts with the traditional business of JD Capital in every business, and thus forming a unique multi-layer and multi-dimensional business and risk control system with extremely strong scope economy effect and linkage effect.
Related person in charge of Jiuxin Finance claims that the most prominent feature of this system is that every business of Jiuxin Finance is in the charge of, or participated by the most professional team from related areas. For example, the projects are from JD Capital’s regional project developing system, the largest in China with the widest coverage; the project risk control is based on JD Capital’s top investment and research team and risk control team that covers all industries, as well on the strict project evaluation process; the projects’ post-investment round is managed by specialized professional post-investment team built up by JD Capital itself. Meanwhile, Jiuxin Finance has also built its own risk control team and legal expert team, in order to conduct strict re-evaluation on the borrowing projects on the platform, and provide comprehensive support for product design, pre-financing capital examine and assessment and post-financing assets disposals on the platform. In addition, Jiuxin Finance plans to give full play to the advantage of JD Capital as a comprehensive financial institution, and cooperate with the public funds and security companies subordinated to JD Capital to develop more superior asset channels and enrich its business system.
The person in charge claims that in the future, the core competition of P2P platform lies in whether it can continuously acquire abundant high quality assets, and whether it possess more professional risk control capacity and industrial thinking. Jiuxin Finance will give full play to its advantages in the future and provide safe and high quality finance products with the highest investing value for its investors, forming a unique P2P platform.
JD Capital has always paid intensive attention on the Internet finance industry, and has invested in the 91wutong platform and purchased companies on cloud technology and payment license. It’s been revealed that apart from the large investment on the P2P platform Jiuxin Finance, JD Capital is actively preparing for the foundation of other Internet finance platforms.