Clerks wait for customers inside Wenzhou Private Lending Service Center, in Wenzhou, Zhejiang Province, Oct. 25, 2013. (Photo : Reuters)
Five-year-old P2P company Hongling Chuangtou Ecommerce Co. is planning to go public. The company is now starting preparations for an initial public offering.
Hongling Chuangtou Ecommerce Co. is now setting up its listing in the domestic market and plans to finish this within three years. The company's decision came after the online lender announced earlier this month that a 70-million-yuan debt had gone bad.
The company's founder, Zhou Shiping, announced its plans to publicly trade shares utilizing a "backdoor" listing with an already listed apparel company located in Fujian Province. According to Zhou, more details about the listing will be unveiled in July.
The company's financial statements showed that its total transactions increased 7.6 times to 14.7 billion yuan in 2014. However, in the same year, its bad debts totaled 100 million yuan, which is the largest among China's P2P companies.
Hongling, however, has not lost hope in getting back the 70-million-yuan bad loan to Senhai Gardening Landscape. The company, which also runs the my089.com lending website, announced that it would exhaust all legal means to pay the money.
Competition in the P2P industry in China has been heating up for the past years. By the end of July 2014, there were already around 1,200 P2P platforms nationwide, with 190,000 borrowers and at least 440,000 investors.
However, risk problems in the industry continue to emerge, resulting in 61 bankrupted companies in 2014 and billions of bad debts.
It remains to be seen if going public would help Hongling recoup from its losses.
