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China Concept Stocks: Microfinance financial service provider Pan China Financial CNFinance Holdings (CNF)

Shenzhen Fanhua United Investment Group Co., Ltd. (“Fanhua Finance”) was founded in 2006, with a history dating back to 1999, headquartered in Shenzhen, China, with 4,250 full-time employees. It is a company that focuses on A new type of financial service company that helps small and micro businesses develop and specializes in providing small loan financial services for new citizens. At present, Pan China Finance has branches in 42 cities across the country, and its business has covered major economic circles such as the Yangtze River Delta, the Pearl River Delta, the Bohai Rim and the developed regions in the central and western regions.

CNFinance Holdings

Fanhua Financial CNFinance Holdings Limited (CNF):

Founded in 2006, Fanhua Finance has established 73 branches in 42 cities in China. The target customer group is the borrowers who own real estate in China’s first- and second-tier cities.

Fanhua Financial claims to be China’s leading home equity loan service provider (Home Equity Loan Service Provider), and its mission is to “provide China’s individual business owners and small and micro enterprises with annual income of less than 20 million yuan. Enterprise owners, namely “MSE owners”) provide affordable and efficient financing solutions to help them realize their business dreams.”

Once the listing is successful, Fanhua United Financial Group will usher in an overseas listed company after Fanhua Financial Holdings (NASDAQ:FANH), and it will also make the Chinese market usher in the first overseas listing of home equity loans.

Fanhua Financial provides micro-loan financial services for business operations. Its main product is Xingye Loan . From 1999 to 2017, Fanhua Financial’s loan business has served more than 120,000 loan customers, and the accumulated loan amount has exceeded 27 billion. Yuan Renminbi.

CNFinance Holdings Limited (CNF) history:

In 1999, Pan-China United Financial Services Group , which focuses on auto insurance agency and auto loan channel services, was established. With the popularization of automobiles and the implementation of the housing system reform in 1998, real estate has also become a tradable fixed asset. Commercial housing can be purchased through loans. The business map of Fanhua United Financial Services Group has also been changed from the beginning. Automobile peripheral finance expanded to two major business areas: insurance agency and loan business channel services.

In 2004, in order to better concentrate resources on the development of two major types of business, Fanhua United Financial Services Group split Fanhua Insurance Services Group’s main insurance intermediary business, and Fanhua Financial Services Group, which focuses on retail loan business, mainly Loan business based on real estate assets.

In 2006, Fanhua Finance launched the strategic layout of the national distribution network and officially went out of Guangdong to the whole country. In the same year, the famous PE institution CDH Investment also added wings to Fanhua Finance’s national expansion. Pan-China United Financial Services Group registered and established Pan-China Financial Services Group to deepen the financial vertical field, and launched the strategic layout of the national distribution network, mainly engaged in the retail loan industry.

In 2007, Fanhua Financial Holdings Group was listed on NASDAQ (stock code FANH), becoming the first insurance intermediary company in Asia to be listed on major global capital markets. In the past few years of Pan-China Financial’s subdivision operations, Pan-China Insurance has developed rapidly. In October 2007, as the first insurance intermediary company in Asia listed in the United States, Pan-China Insurance successfully sounded the bell on Nasdaq in the United States. Fanhua Insurance Service Group was once renamed Fanhua Enterprise Group and today Fanhua Financial Holding Group, which fully reflects the company’s development direction from traditional insurance services to integrated financial services.

In 2009, Fanhua Financial Services Group established a distribution network covering 16 business organizations in China’s major economic centers including the Yangtze River Delta, the Pearl River Delta and the Bohai Rim. As a pioneer of private financial enterprises, Fanhua Finance took the lead in establishing a service network of 16 business institutions, covering the three core economic zones.

2010 was an important year for Fanhua Financial Services Group to transform from a loan channel service provider to a self-operated loan company. This year Fanhua Financial officially began to independently develop loan products based on real estate mortgages, completing the transition from an intermediary to Party A.

In 2017, strengthen the combination of technology and business, launch the “three major systems” and platform construction.

Prospectus of CNFinance Holdings Limited (CNF):

  1. According to the prospectus, the operating income and net profit of Fanhua Finance in the first three months of 2018 were 599.6 million yuan and 196.7 million yuan, respectively, representing year-on-year growth of 49.6% and 75.6%.
  2. The prospectus shows that Fanhua Finance’s main borrowers are people who own real estate in China’s first- and second-tier cities. In 2016 and 2017, the number of borrowers was 12,983 and 23,705, respectively. The number of borrowers in 2017 increased by 82.6% year-on-year. It is 3949; the average duration of the loan is 50, 66 and 65 months respectively. The loan amount provided usually depends on the creditworthiness of the borrower and the value of the collateral.
  3. According to the prospectus, Fanhua Financial’s total revenue in 2016, 2017 and the first three months of 2018 were 867.3 million yuan, 2.013 billion yuan, and 599.6 million yuan, respectively. The total revenue in 2017 increased by 132.1% year-on-year. Three-month total revenue increased by 49.6% year-on-year; the corresponding net profits were 235.4 million yuan, 532.7 million yuan, and 196.7 million yuan respectively. The net profit in 2017 increased by 126.2% year-on-year, and the net profit in the first three months of 2018 increased by 75.6% year-on-year. .
  4. The prospectus shows that in 2016, 2017, and the first three months of 2018, loans provided through microfinance subsidiaries were 486 million yuan, 789 million yuan, and 6 million yuan, accounting for 5.9%, 4.6%, and 0.3%. . He also said that due to regulatory restrictions and liquidity requirements, it is expected that in the near future, direct loans will still only occupy a small proportion of Pan-China Financial’s business. As of December 31, 2016, December 31, 2017, and the first three months of 2018, 7.8 billion yuan, 16.3 billion yuan and 2.2 billion yuan in housing equity loans were provided under the trust loan model. Each trust plan issues multiple trust products, and senior and subordinate units provide funds in a predetermined proportion. The funds of these senior units come from institutional investors and qualified individual investors.
  5. It is worth noting that in the risk warning section of the prospectus, Fanhua Finance stated that the company may have a major and adverse impact on its business and operating results due to overdue. As of December 31, 2016, December 31, 2017, and March 31, 2018, the outstanding principals of Fanhua Financial’s housing loans were 7.375 billion yuan, 16.674 billion yuan and 16.728 billion yuan, respectively, and the non-performing loan ratio was 1.50%, 1.66% and 1.75%.
  6. The prospectus shows that after deducting underwriting discounts and commissions and estimated expenses, the underwriters choose to purchase additional ADS (American Depositary Shares) in full. Fanhua Financial will receive approximately US$1 million in net income and plans to issue this issue The net income is used for working capital and other general corporate purposes.

CNFinance Holdings Limited (CNF) investment:

Shenzhen Fanhua United Investment Group Co., Ltd. (“Fanhua Finance”) CNFinance Holdings Limited (NYSE: CNF) listed on the New York Stock Exchange on 11/7/2018 (3) IPO with an issue price of US$7.50 and 6.5 million shares issued. Capital of 48.75 million US dollars, Roth Capital Partners/ Shenwan Hongyuan Securities underwriting.

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