Fintech company Pintec issues US IPO prospectus

Beijing-based Pintec Technology Holdings Ltd, an independent fintech solutions provider, issued a prospectus with the US Securities and Exchange Commission on Monday for an initial public offering on the Nasdaq Stock Market.

The company's top five principal shareholders are Genius Hub, Mandra iBase, New Fortune Fund, Ventech China and Xiaomi Ventures, according to the prospectus.

Pintec's operating history is not long as it launched its first solutions platform in June 2015. In June, it raised $103 million in financing led by Mandra Capital and Sina Corp.

By providing solutions on point-of-sale lending, personal installment lending, SME lending, wealth management and insurance products, it has 179 business partners and 81 financial partners as of March 31, including Qunar, Ctrip, BestPay, Vip.com, Xiaomi, 360 Finance, Anbang Finance and Minsheng Securities, the prospectus said.

Revenues of Pintec are derived from three parts: technical service fees, installment fees and wealth management service fees.

The company has grown rapidly with its total revenues increasing from 54.9 million yuan in 2016 to 568.7 million yuan last year. In addition, its total revenues jumped to 279.4 million yuan in the first quarter of this year from 63.6 million yuan in the same period last year, the prospectus showed.

Furthermore, it turned a profit in the first quarter of this year with a net income of 14.6 million yuan, after suffering net losses of 200.5 million yuan ($29.9 million) in 2016 and 84.9 million yuan in 2017.

A major risk faced by Pintec is while the majority of its total revenues are generated through a limited number of business partners, its partnerships with them are not on an exclusive basis and the contract durations are short, said the company in the prospectus.

Its top five business partners contributed to 70.2 percent, 65.1 percent and 55.3 percent of its total revenues in 2016, 2017, and the first three months of this year, respectively, among which Qunar alone contributed to 55.8 percent, 46.2 percent and 27.2 percent of the total revenues.

Pintec is also facing fierce competitions in the fintech solutions market where both giants and startups are showing their ambition and muscles.

Alibaba's financial affiliate Ant Financial announced on June 19 it will fully open its products, capabilities and technologies to financial institutions, according to a report by The Beijing News.

In the field of consumer finance enablement, Baidu Finance and Pintec share a similar business model, the prospectus said.

In addition, as solutions providers of wealth management and robo-advisory enablement, platforms such as Yingmi.cn and Clipper Advisor are Pintec's adversaries.

It also needs to compete with companies such as Webank, JD Finance and Ping An One Connect in the fields of consumer finance, wealth management and insurance.

Goldman Sachs (Asia) LLC, Deutsche Bank Securities and Citigroup are the joint underwriters for Pintec's IPO.