On the evening of June 7, listed company Qianfang Technology announced that Chongqing Ant Consumer Finance Co., Ltd. (hereinafter referred to as "Ant Xiaojin") was officially established in Chongqing on June 4. In addition, the latest update of industrial and commercial information also shows that Chongqing Ant Consumer Finance Co., Ltd. was established on June 4, with Huang Hao as its legal representative, with a registered capital of 8 billion yuan, the highest registered capital among the current consumer finance companies. Ant Technology Group Co., Ltd. is a major shareholder, accounting for 50% of the capital contribution.

According to the regulatory approval on the evening of the 3rd, according to the rectification plan, Ant Group should complete the brand rectification work of "spending" and "borrowing" within six months of the opening of Ant Consumer Finance Company. After the rectification and reform is completed, "spending" and "borrowing" will become the exclusive consumer credit products of the Ant Consumer Finance Company, and the consumer credit issued by other financial institutions with the help of the data and information provided by the Ant Group will no longer be marked with the name "flower" and "borrow".

For the new big players of consumer finance companies, CEO, a medium-sized financial technology company in eastern China, analyzed to Chinese reporters of securities firms that under the changes in the regulatory environment in the past few years, due to the scope of the exhibition industry, business licensing norms, and so on, some "spillover effects" have appeared in large Internet companies, coupled with the improvement of the overall asset quality of the consumer finance industry, bringing some opportunities to other companies. Several people in the industry, including him, believe that although ants "spend" and "borrow" are undertaken by ants, the corresponding customer groups have not changed, so they will not be affected.

"the overall scale of spending and borrowing is 1.7 trillion (by the end of June 2020), and it is estimated that 30 billion of registered capital can be leveraged. Therefore, Ant Consumer Finance Company needs about 51 billion registered capital to undertake the stock. With the continuous transfer of business, there is a large demand for capital increase in the short term, and the follow-up does not rule out the introduction of new investors. But considering the net worth of Ant Group, there is little capital pressure. Dai Zhifeng, chief analyst and head of the finance group of Zhongtai Securities and Banking Industry, introduced.

After Ant Xiaojin starts business, how to undertake trillions of consumer financial business?

An information disclosure by shareholders of Ant Xiaojin listed company shows that Ant Xiaojin has been set up in Chongqing after obtaining regulatory approval.

On the evening of June 7, Qianfang Science and Technology announcement, on June 4, 2021, Ant Xiaojin was officially established in Chongqing. The company participates in the establishment of Ant Xiaojin, with a capital contribution of RMB 560.8 million. To corroborate each other, the latest updates of industrial and commercial information also show that Chongqing Ant Consumer Finance Co., Ltd. was established on June 4, with a legal representative of Huang Hao and a registered capital of 8 billion yuan. the company's business scope includes: issuing personal consumption loans; accepting deposits from shareholders' domestic subsidiaries and domestic shareholders; borrowing from domestic financial institutions; and issuing financial bonds with approval.

The previous approval announcement has revealed the shareholder composition of Ant Xiaojin, the nine major business directions, and the senior management team led by Ant Group Huang Hao.

Specifically, the registered capital of Chongqing Xiaojin is 8 billion yuan, and the shareholding structure is as follows: ant Technology Group Co., Ltd. holds 50%; Nanyang Commercial Bank Co., Ltd. holds 15.01%; Cathay Pacific Shihua Bank (China) Co., Ltd. holds 10%; Ningde Times New Energy Technology Co., Ltd. holds 8%; Beijing Qianfang Technology Co., Ltd. holds 7.01%. China Huarong Asset Management Co., Ltd. holds 4.99%, while Jiangsu Yuyue Medical equipment Co., Ltd. holds 4.99%.

Chongqing Xiaojin is mainly engaged in the following nine major businesses: issuing personal consumption loans, accepting deposits from shareholders' domestic subsidiaries and domestic shareholders, borrowing from domestic financial institutions, approved issuance of financial bonds, domestic interbank lending, consulting related to consumer finance, agency business, agency sales and consumer loan-related insurance products, fixed income securities investment business, other business approved by the Bancassurance Regulatory Commission.

In terms of the board of directors, Huang Hao, president of Ant Group's digital financial business group, will serve as chairman of Ant Xiaojin. Chen Huaisheng, the former person in charge of "borrowing", was appointed general manager of Ant Xiaojin, and Shao Wenlan, general manager of "Huabai" business group and general manager of consumer finance business group, was appointed director of Ant Xiaojin.

What is more widely concerned in the market is that after Ant Xiaojin was approved to open for business, the relevant person in charge of the non-Banking Department of the Banking and Insurance Regulatory Commission said that after Ant Xiaojin opened, it would follow the Ant Group's consumer credit business rectification plan. Orderly undertake two small loan companies (ant flowers, borrowers) in line with the regulatory provisions of consumer credit business. During the one-year transition period since the opening of Ant Xiaojin, the two small loan companies have achieved a steady and orderly market exit.

According to the regulatory requirements, after the rectification and reform is completed, "spending" and "borrowing" will become the exclusive consumer credit products of ants, which means that ants will undertake trillions of ant consumer finance business.

According to Ant Group's prospectus, Ant Group's micro-loan technology platform contributed to a total credit balance of 2.15 trillion yuan in the first half of 2020. Among them, the balance of consumer credit represented by flower and loan (the main bodies are Chongqing Ant small and Micro loan Co., Ltd., Chongqing Ant Shangcheng Micro loan Co., Ltd.) totaled 1.73 trillion yuan. However, the proportion of actual lending or securitization of assets made by financial institutions has reached about 98%.

"the initial registered capital of Ant Consumer Finance is 8 billion yuan. According to the regulatory requirements, it is estimated that 30 billion of the registered capital can be leveraged. Therefore, the Ant Consumer Finance Company needs about 51 billion registered capital to undertake the stock scale. With the continuous transfer of business volume, there is a greater need for capital increase in the short term. Dai Zhifeng analyzed, but considering that the two Internet small loan companies have a combined registered capital of 16 billion and a net asset scale of nearly 40 billion, the Ant Group has little capital pressure. in addition, Ant Xiaojin can also introduce new investors to participate in shares.

Accordingly, Ant Group may shrink Internet small loan companies. Dai Zhifeng believes that according to the requirements of the interim measures for the Administration of Internet Micro-loan Business, the same investor can only control one Internet small loan company. "considering that most of the consumer finance business in the future will be in consumer finance companies, Ant Group is expected to cancel one of them and reduce its registered capital accordingly, or retain a 100% holding Internet small loan company to explore new businesses. "

How big is the impact of the addition of new players by consumer finance companies?

With an initial registered capital of 8 billion yuan, Ant Xiaojin is already a licensed consumer financial institution with the highest registered capital among the start-up consumer financial companies.

Despite the continuous changes in the consumer gold industry recently, following the storm of Shanxi businessmen's Xiaojin personal credit report, the Beijing Banking and Insurance Regulatory Bureau recently issued a notice pointing out that some institutions do not pay enough attention to the protection of consumers' rights and interests, lack of consumer information disclosure and risk tips, unreasonable loan format terms, imperfect loan business process, and so on.

But in fact, it is not only ant consumer finance, but in the past two years, especially in 2020, it is not only the year of continuous clearing of risks in the financial industry, but also the year in which licensed financial institutions of various business types are springing up like bamboo shoots after a spring rain, especially the newly approved consumer finance companies.

During this period, only in 2020, safe consumer finance opened on April 9, XIAOMI consumer finance opened on May 29th, and Sunshine Consumer Finance opened on August 11th. In addition, Chongqing Ant Consumer Finance Co., Ltd., Fubon Consumer Finance Co., Ltd., and Suyin Kaiji Consumer Finance Company have been approved for establishment. In addition, Hainan is actively preparing consumer finance companies. At present, 33 licensed consumer finance companies have been approved for establishment (including opening and exhibition).

This is also the year with the largest number of batches after 2014 (6) and 2016 (7), with gains made by industrial giants, Internet giants and commercial banks.

Recently, the Chinese reporter of the securities firm also learned from the bank that the internal preparatory work of Fubon Consumer Finance Company has been completed, and in terms of personnel appointment, the company's early senior executives are mainly from Vipshop Holdings Limited and Fubon Huayi Bank. In addition, there are regional head institutions such as the Agricultural and Commercial Bank of Shanghai who intend to join the bureau. And the immediate consumer finance company, which is expected to become the "first share of consumer finance", has also made progress in actively preparing for war and breaking through A-shares.

"the long-term growth space of the consumer finance industry comes from the expansion and upgrading of the consumer market, through the introduction of the new consumption trend of industrial shareholder card positions; the shareholder background shows the forward-looking layout of consumer finance business. Dai Zhifeng believes that, taking Ant Xiaojin as an example, the company's shareholder background has both financial and industrial attributes, and can provide both capital-side and asset-side support for consumer financial companies.

Shareholder Fang Ningde era, Qianfang Technology (BABA shares) and Yuyue Medical belong to new energy vehicles, intelligent transportation and household medical equipment industries respectively, corresponding to new energy, big health and other emerging consumer areas, he believes that, as shareholders, in the future, it can provide business scenarios and data support for Ant Consumer Finance Company to jointly develop innovative consumer financial products.

What is the impact of the new big players in consumer finance companies? "under the guidance of supervision, the consumer financial industry in the past two years has been looking for direction and transformation. The new regulatory situation and new rules have brought changes in the scope of the exhibition industry and business licensing norms. This will bring more cooperation opportunities to companies with a high degree of digitalization and a solid foundation. CEO, a medium-sized financial technology company in eastern China, analyzed to brokerage Chinese reporters that although ant "spend" and "borrow" are undertaken by ant Xiaojin, the corresponding customer base has not changed, so it will not be affected; however, with the recovery of the domestic economy after the epidemic, the growth of the new consumer economy, and the overall trend of asset quality in the industry, we are optimistic about the potential and prospects of consumer financial companies with sound business.