In order to go back to a listing smoothly, China Telecom, a Hong Kong listed company, recently divested Tianyi e-commerce Co., Ltd. (hereinafter referred to as “Tianyi e-commerce”) and attracted much attention from the market. It is worth mentioning that Tianyi e-commerce is the main operator of China Telecom’s financial business sweet orange finance, which mainly carries out business through Tianyi payment app. After being separated from the listing system, can orange finance still rely on big trees to enjoy the cool?
“Left hand to right hand”
Recently, the change of payment license of China Telecom has caused extensive discussion in the industry. This topic originates from an announcement issued by China Telecom.
On the evening of March 26, China Telecom announced that the company signed an agreement with China Telecom Group on the same day to transfer all the equity of Tianyi e-commerce held by China Telecom with a capital contribution of 500 million yuan to China Telecom Group for a consideration of 3.897 billion yuan.
According to China Telecom, Tianyi e-commerce was established in March 2011, and its main business is to provide payment services for non-financial institutions. In 2019 and 2020, the net profit before tax of Tianyi e-commerce is 84 million yuan and 131 million yuan respectively, and the net profit after tax is 69 million yuan and 114 million yuan. As of February 28, 2021, the value of the net assets of Tianyi e-commerce without audit is about 1.469 billion yuan.
The announcement also mentioned Tianyi e-commerce’s previous capital increase. In June 2020, Tianyi e-commerce was officially listed and traded in Shanghai United Property Exchange. In December of the same year, it signed a capital increase agreement with the investor, and the investor’s paid in capital increase has been completed. After the completion of the capital increase, the proportion of Tianyi e-commerce equity held by China Telecom will be reduced from 78.74% to 64.53%, and the above capital increase plan can only be realized after the approval of the central bank.
In the view of industry insiders, China Telecom’s divestiture is actually “left hand to right hand”, which divests financial business from the listed company system and hands it over to the group. Tianyan data show that China Telecom’s main operator is China Telecom Co., Ltd., which is a wholly-owned subsidiary of China Telecom Group.
In addition to Tianyi e-commerce, China Telecom also transferred all the equity of Tianyi Financial Leasing Co., Ltd. at a price of 175 million yuan.
China Telecom also mentioned in the announcement that the transfer of the two subsidiaries is to smoothly promote the company’s issuance of a shares and listing. According to the difference between the transfer consideration of 4.072 billion yuan and the net book value of 1.332 billion yuan of net assets of the two companies, China Telecom is expected to achieve about 2.74 billion yuan of income, which will help the company’s shareholder value increase.
According to the 64.53% shareholding ratio of China Telecom and the transaction consideration of 3.897 billion yuan, the overall valuation of Tianyi e-commerce is more than 6 billion yuan. Tianyi e-commerce operation of orange finance, including third-party payment, credit, financial management, insurance, funds and other aspects.
Wang Pengbo, a senior analyst in the field of financial technology, said that the stripped part is actually within China Telecom Group, and China Telecom’s move is mainly to meet the audit requirements of going back to A-share listing.
Financial business layout has little impact
Compared with orange finance, ordinary users may be more familiar with “wing payment”. Wing payment is a sub brand of sweet orange finance’s payment business, and its licensing scope covers Internet payment, mobile phone payment, fixed phone payment, prepaid card issuance and acceptance (only online real name payment account recharge), bank card receipt and other businesses.
At present, sweet orange finance mainly relies on the payment app to carry out business. In the financial services section of the app, there are several business sections such as “borrowing money”, “returning credit card”, “orange credit” and “consumption installment”. Taking the loan business as an example, the page shows that sweet orange finance provides users with a number of loan products such as “employee loan”, “particle loan” and “merchant loan”, as well as personal data query service provided by loan supermarket and PENGYUAN credit information.
Among them, employee loans are mainly for loan users with jobs and real estate, including China Telecom employees and non Telecom employees, who need to fill in the relevant information in detail. Merchant loans are exclusive products for payment merchants. Ordinary users can borrow at will and borrow circularly within the limit.
The Beijing Business Daily reporter found that the loan business was mainly carried out through cooperation with banks, consumer finance and other licensed institutions. In July 2019, he also took a stake in Chongqing Zhongan micro loan Co., Ltd.
In view of the impact of China Telecom’s divestiture of Tianyi e-commerce on the financial layout and the next development plan, a reporter from Beijing business daily made a further understanding of sweet orange finance. The other party only replied that the relevant matters were subject to the announcement of the listed company and the relevant instructions of China Telecom.
According to Wang Pengbo’s analysis, the transfer of China Telecom’s financial business to its affiliated companies will not have much impact on the business layout of both sides. Financial technology is still a good breakthrough. Relying on China Telecom, sweet orange finance can directly obtain resources through the promotion of related products in the telecom business hall, which is also the main advantage of sweet orange finance.
“Sweet orange financial online can expand business through the wing payment app, and offline can also embed relevant consumption scenarios through China Telecom’s physical stores. Measures such as capital increase and introduction of new shareholders also show that the company will continue to make efforts in this regard. ” Su Xiaorui, a senior banking observer and financial technology expert, stressed.
How to solve the compliance problem
As the aforementioned analysts said, sweet orange finance, backed by China Telecom, has advantages in financial business promotion. However, how to do a good job in financial business is also a problem that sweet orange finance should consider at present. A reporter from Beijing business daily noticed that on the public platforms such as black cat’s complaints, a large number of users said that sweet orange finance had such behaviors as tying insurance and usury.
A user who has repeatedly borrowed money from the app through Yi payment also told Beijing Business Daily that since 2019, there have been words such as insurance premium, post loan management fee and service fee in many loans of sweet orange finance. In addition to the principal and interest that should be paid every month, the amount of repayment required for other parts is also reflected in the bill, and some related expenses other than interest are not included before the loan Not shown.
Taking the user’s latest loan as an example, the loan is 1800 yuan in 12 phases, and the user should repay 2169.72 yuan in total, including 280 yuan of post loan management fee. According to the loan agreement provided on the payment page, the loan interest rate is 0.09, and the interest payable is 88.92 yuan. The contract does not specify whether the loan interest rate is the annual interest rate or the monthly interest rate, and how to calculate the repayable interest.
For the above problems reflected by users, Beijing Business Daily also conducted a personal test. On the afternoon of March 30, a reporter from Beijing business daily obtained a credit limit of 35000 yuan after completing the relevant credit audit through the loan channel of wingpay app. According to the information displayed on the loan page, the interest rate of the loan is 35%, and insurance, post loan management fees and other expenses are not mentioned. On the loan page, sweet orange finance prompts users to read “relevant loan and insurance / guarantee agreement”, but actually only provides the user service agreement and loan details sheet, and does not explain how to calculate overdue penalty interest and other issues.
As for the issue of tie-in insurance, sweet orange finance once replied to users on the complaint platform that the loan products will be provided with credit guarantee insurance by insurance companies, which belongs to the credit enhancement mode and will affect individual credit amount and credit result. Users can choose whether to use the credit enhancement mode or not, and said that the CIRC has recently published the Interim Measures for the administration of Internet loans of commercial banks (Draft) According to the draft, insurance companies can charge reasonable fees to borrowers in accordance with relevant regulations, and there is no violation of premium rules.
However, from the information provided by the above users, sweet orange finance has a long history of charging service fees. In addition, in the process of personal test by Beijing Business Daily reporters, they did not find the relevant entrance to choose whether to use the credit enhancement mode. In view of the problems reflected by the above users, why the loan agreement does not show detailed loan information, and whether there is any business adjustment in the near future, sweet orange finance has not given an explanation.
Su Xiaorui pointed out that from the information provided by users and the corresponding complaints, there are irregularities in the stock loan business of sweet orange finance. After the separation from the listing system, the advantages brought by China Telecom still exist, and can effectively reduce the obstacles of listed companies back to A-share listing. However, at present, the protection of financial consumers’ rights and interests by sweet orange finance is not enough. In the future development, we should take compliance as the foundation and pay attention to the complaint handling and experience improvement of financial consumers.
Beijing Business Daily reporter Yue Pinyu and Liao Meng
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