According to the information from JD.com's judicial auction platform on October 21, Hebei Happiness Consumer Finance Co., Ltd. (hereinafter referred to as Happiness Consumer Finance) will publicly auction 39.25% of its equity on November 17 with a starting price exceeding 0.44 billion yuan. This is also the first consumer finance company to have its equity publicly auctioned since 2024.

As of the end of June 2024, the assessed value of 39.25% equity of Happiness Consumer Finance was close to 0.63 billion yuan. The starting price of this equity was discounted to about 0.44045 billion yuan based on the assessed value. Using this calculation, the latest assessed value of Happiness Consumer Finance has decreased by 5.53% compared to the assessed value at the end of June 2023.

The equity being auctioned this time comes from Happiness Consumer Finance's second largest shareholder, Shenzhou Youche Co., Ltd. (hereinafter referred to as Shenzhou Youche), which holds 0.25 billion shares of Happiness Consumer Finance, accounting for 39.25% of the total share capital. If the auction is successful, Shenzhou Youche will no longer hold shares in Happiness Consumer Finance.

Rare judicial auction of equity, related to shareholder companies.

Suxirui, a senior researcher at Suxi Intelligence, told Caishilink reporters that the recent auction of equity in Happiness Consumer Finance is closely related to the development of its shareholder, Shenzhou Youche. As early as 2020, Shenzhou Youche had attempted to transfer its 39.25% stake in Hebei Happiness Consumer Finance but was unsuccessful due to ongoing legal disputes and debt issues, resulting in its shares being frozen.

Tianyancha shows that in addition to the first major shareholder, Zhangjiagang Bank, the company's second largest shareholder, Shenzhou Youche and the third largest shareholder, Blue Whale Holdings, have both pledged their equity in Happiness Consumer Finance. Currently, all the equity held by Shenzhou Youche in Happiness Consumer Finance is frozen, with the freezing period from May 17, 2024, to May 16, 2027. At the same time, Blue Whale Holdings' 87 million shares of Happiness Consumer Finance were fully pledged in 2018 and remain in effect.

Xingfu Consumer Finance is the first consumer finance company in Hebei Province. At the beginning of its establishment, Zhangjiakou Bank, Shenzhou Youche, and Blue Whale Holdings Co., Ltd. (referred to as Blue Whale Holdings) held 38%, 33%, and 29% of the shares of Xingfu Consumer Finance, respectively. In January 2019, Xingfu Consumer Finance increased its capital from 0.3 billion yuan to 0.637 billion yuan. After the capital increase, the top three shareholders of Xingfu Consumer Finance remained unchanged, but Zhangjiakou Bank's shareholding ratio increased from 38% to 47.10%, and Shenzhou Youche's shareholding ratio increased from 33% to 39.25%.

Over the long term, the performance of Xingfu Consumer Finance shows a trend of year-on-year growth. According to the assessment report, Xingfu Consumer Finance's operating revenue in 2021, 2022, and 2023 were 0.65 billion yuan, 0.734 billion yuan, and 0.912 billion yuan, respectively, with net profits of 0.135 billion yuan, 0.185 billion yuan, and 0.197 billion yuan. In the first half of 2024, the company's operating income reached 0.491 billion yuan, and the net profit was 75.1877 million yuan. However, for Xingfu Consumer Finance, according to the "Regulations on the Management of Consumer Finance Companies" officially implemented in April this year, in terms of the company's registered capital and the proportion of shares held by major contributors, Xingfu Consumer Finance does not yet meet regulatory requirements.

Expert: It is expected that the auction of equity of consumer finance companies will still be a minority in the later period.

Unlike the equity of other financial institutions, the equity of consumer finance companies is mostly traded in local property rights exchanges, and auctions of equity are not common.

On the current Alibaba and jd.com judicial auction platforms, except for Xingfu Consumer Finance, only Jincheng Consumer Finance's equity has been publicly auctioned. A review shows that Haoze Pure Water International Holdings Co., Ltd. successfully auctioned 3.55% and 1.59% equity in Jincheng Consumer Finance in 2021 and 2023, respectively, with Chongqing Hongguang Advertising Co., Ltd. (later renamed as Chongqing Hongguang Information Technology Co., Ltd.) and Chengdu Tianfu Software Park Co., Ltd. respectively spending 35.9629 million yuan and 18.9 million yuan to win the corresponding equity.

"As a nationwide business license, the consumer finance license needs to be approved at the original CBRC (now the National Banking Regulatory Commission) level. Compared to local financial formats, the entry threshold is more stringent, so auctions are less common." In the view of Su Xiaorui, the "Regulations on the Management of Consumer Finance Companies" officially implemented this year have further increased the requirements for major contributors and non-financial enterprises participating in the equity. Under the joint influence of the historical characteristics of the consumer finance industry and the new regulations, it is expected that the subsequent consumer financial equity auctions will still be a minority phenomenon.