Fireworks maker shifts to P2P lending
Print Edition
PANDA Fireworks Group Co said it will acquire 51 percent of online peer-to-peer lender Shanghai Jiayin Financial Information Services Co as China’s biggest fireworks maker shifts its focus to Internet financing.
Panda Fireworks, which changed its name to Panda Financial Co, plans to focus on “investment and wealth management of the Internet industry, information service, and the construction material business” after the stake purchase, according to its filing to the Shanghai Stock Exchange yesterday.
The 25-year-old Hunan-based firework maker had a gross margin of 29 percent in 2014, while its one-year-old P2P platform Yinhu.com gave a 54 percent return, Panda Fireworks said in a April 1 filing in response to a regulator’s inquiry on the company’s proposed change of name and focus.
The company plans to sell its fireworks business by the end of 2015 amid shrinking demand and environmental pressures, according to the filing.
P2P lending, which promises higher interest rates and even higher returns without going through the banking system, is booming in China.
The transaction volume rose to a monthly record of 49.3 billion yuan (US$7.9 billion) in March, while the number of these online platforms surged to 1,728 by the end of last month, said Online Lending House, a website that tracks the sector.
As part of China’s “shadow banking,” the industry is poorly regulated as entry barriers are low.
Last year, 275 P2P platforms reported fraud or had difficulties in meeting withdrawals. In the first quarter of this year, 183 P2P platforms folded.
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